Two Telecom Companies Work Their Networks in DC

Federal Communications Commission chairman Tom Wheeler. The agency is deciding between two competing bids to route millions of phone calls in the country . (Flickr/ALA Washington Office)

Federal Communications Commission chairman Tom Wheeler. The agency is deciding between two competing bids to route millions of U.S. phone calls. (Flickr/ALA Washington Office)

It takes a lot of networking to route phone calls for the U.S. government. To that end, two companies vying for a nearly half-billion dollar contract to run the Number Portability Administration Center have brought on board new teams of lobbyists to win regulators over.

One of the firms being considered for the contract by the Federal Communication Commission is Neustar, a small Virginia company that currently manages the network, having benefited from a no-bid contract ever since the 1990s when the government first created the routing infrastructure.

The other is Telcordia Technologies, a U.S. subsidiary of Sweden-based Ericsson. A private advisory panel, the North American Numbering Council, recently recommended that the FCC hire Telcordia — but security agencies including the F.B.I., the Secret Service and the Drug Enforcement Agency have expressed concern over handing the routing system for U.S. phone calls to a foreign company.

Both firms are investing heavily in appealing to Washington policymakers. Neustar, which made $446 million last year through the FCC contract — roughly half its total revenue — spent more than $410,000 on lobbying during the first half of 2014. In the second quarter alone, the company’s lobbying expenses reached $220,000 — more than it has ever spent on K Street in an entire year. Much of the money went to two firms it hired for the first time this year: Covington & Burling and Hogan Lovells, two leading lobbying institutions. Among those working on Neustar’s behalf is Gerard Waldron, a former senior counsel for the House Subcommittee on Telecommunications and Finance.

Those amounts do not include the undisclosed cost of a 45-page report that Neustar commissioned from Michael Chertoff, a former secretary of the Department of Homeland Security who is affiliated with Covington but is not a registered lobbyist. He wrote in the report that giving the contract to a foreign agency “would be a counterintelligence bonanza for adversaries of the nation,” according to the New York Times.

A few months after Neustar made its new hires, Telcordia followed suit. The company registered  a new lobbying firm in May, Levick Strategic Communications. After spending nothing on advocacy for years, it laid out $30,000 in the second quarter for “competitive bidding for local number portability database management,” lobbying filings indicate.

Neustar head Lisa Hook told the Times that the FCC’s new bidding process was putting her company at a disadvantage. But the company seems to understand that putting the ball in the nimble hands of lobbyists might help it come out ahead.

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About The Author

Lalita Clozel

Lalita is the Center's summer 2014 reporting intern. She is originally from France and graduated from the University of Pennsylvania in 2013, with a degree in economics and philosophy.