Local Number Portability

Posted: 01/1998

Local Number Portability

By Debera Bell-Beam

Phased implementation of local number portability (LNP), a Congressional mandate to be
carried out by the Federal Communications Commission (FCC), has begun with the first
drop-dead date of March 31 for wireline local exchange carriers (LECs) that serve seven
major cities. Initial deployment, broken into five phases, will target the nation’s top
100 metropolitan statistical areas (MSAs). LECs must begin deployment in smaller cities
within six months of a request by another carrier.

Once long-term LNP is in place and operational, consumers will be able to switch local
service providers without changing their phone numbers, a feature particularly attractive
to commercial consumers. Interim measures that allow number portability include remote
call forwarding and inward dialing.

"In many industries worldwide, the power is shifting from the supplier to the
consumer," says Jim Cannavino, president and CEO of Dallas-based Perot Systems Corp.
"Transferring ownership of phone numbers from the telephone service suppliers to the
customer will make it easier for businesses and consumers to manage their local telephone

LNP uses the industry-standard location routing number (LRN), an intelligent network
(IN) technology developed by Lucent Technologies Inc. that assigns a unique 10-digit
number to each telephony switch. LNP services are provisioned on advanced intelligent
network (AIN) elements that replace the dialed telephone number with the LRN. LNP calls
then can be routed to the appropriate switch for connection to the dialed party.

However, to obtain this LRN data and properly provision LNP services, providers must be
connected to regional number portability administration centers (NPACs) that will manage
LNP services and provide LNP call routing data to carriers.

LNP implementation requires modifications to the switching, signaling and advanced
intelligent network (AIN) elements of the public switched network, according to
Mississauga, Ontario-based Nortel (Northern Telecom). Cost estimates vary, with some Bell
companies claiming network upgrades could cost them as much as $2 billion each. And that
doesn’t include other costs such as administration, which the FCC has yet to tag.

Copies of the LNP database are to reside in participating networks, but the master
database is to be maintained by a neutral third party. In this case, two neutral parties
are stepping in to assume that role for the current seven NPAC regions. Each region will
establish its own database.

Perot Systems will implement LNP services for three NPAC regions–the Southeast, West
and West Coast–and Teaneck, N.J.-based Lockheed Martin IMS (LMI) will administer
deployment for the other four regions–the Northeast, Midwest, Mid-Atlantic and Southwest.
Late last year, the FCC selected LMI to serve as administrator of the North American
numbering plan administrator (NANPA) under a five-year contract valued at about $25
million. LMI will oversee assignment of area codes, three-digit central office codes,
carrier identification codes and other numbering resources for the United States, Canada,
Bermuda and much of the Caribbean, according to company reports.

Such a position is not new to LMI, which operated the 800 number administration and
service center (NASC) for five years until October, notes a company spokesman. Number
portability got its start in 1993 when the FCC mandated that 800 numbers no longer
belonged to the phone company that supplied the service. The commission’s reasoning was
that such proprietary ownership discouraged consumers from switching providers because,
prior to portability, commercial users would have to relinquish a number they likely used
to promote their business.

The FCC also requires a neutral, legal entity to select and manage the third-party
administrators. Carrier members of the legal entity, a limited liability corporation
(LLC), must meet the following criteria:

  • Be facilities-based
  • Be able to port numbers within one year of joining or from LNP implementation
  • Pay a share of LLC costs, primarily liability insurance and legal services. ATL
    Communications, Alameda, Calif. reports liability insurance costs from $60,000 to $80,000
    a year plus about the same in legal costs, depending on the LLC.

One issue among many yet to be resolved is how NPAC administration costs will be
allocated among the providers. Some suggest the burden may fall heaviest on the smallest
and least able to absorb relatively staggering costs.

Issues surrounding LNP are being orchestrated by the major carriers, who are forming
the LLCs, as are suggestions for implementation, says Gerry Mueller, director of network
products for Transaction Network Services Inc. (TNS), Reston, Va. As a result, the
concerns of the smaller carriers and the smaller service providers have been either
overlooked or not handled very thoroughly. "One of the things we are trying to do as
a company is to make sure we are on top of everything going on with LNP so we can be of
service to those small carriers and service providers," says Mueller, who adds that
the large carriers are running the show at the smaller carriers’ expense. "There’s a
club, and entry into the club is membership into the LLCs, for which you have to pay a
fairly substantial fee–and that’s daunting to most of the smaller service providers. LLC
members are the folks who are making all the decisions about how LNP is going to be
implemented and, in fact, how it’s going to be priced."

The FCC has determined some NPAC costs will be paid through allocation among service
providers, but it has yet to figure the price tag or set the formula by which each
provider’s charge would be determined. "If you want a voice–and they’re very bold
about this–in how the pricing is going to be done and how the contract terms and
conditions are going to be set and so forth, then join the LLC," Mueller says.

But, Mueller says he is uncertain what exactly LLC membership buys. "Is it buying
me a substantial voice and perhaps some substantial cost savings or is it just buying me
membership in this club?" He further suggests that what is cost prohibitive to a
small carrier is just "chump change" to the larger carriers, a disadvantage that
has far-ranging effects. "If the service provider doesn’t sign a user agreement, he
can’t be scheduled for testing, and things cannot move ahead on his attempts to connect
with a given NPAC."

There’s more, according to Mueller. "The user agreement is where the pricing is
contained. Since the allocation model hasn’t been released, we don’t know what portion of
that multimillion dollar bill is going to be allocated to us. It’s a blank check,"
Mueller says. "They’re saying our contract with the LLCs require that any service
provider that’s going to be connected to the NPAC must sign a user agreement. But, I’m
saying, ‘You’re asking me to sign a blank check.’ And they look at me with basically a
blank stare and say, ‘So, yeah, what’s your point."

The point, says Mueller, is that the cost of playing in this game is just too much for
a small provider and potentially even devastating. In addition to its share of allocated
initiative costs, providers also must consider implementation costs for their own systems.
"When you say, ‘Well, in order to do your routing properly, you have to have a system
that will talk to the NPAC and a system that will do translations for you and so forth,’
you’re talking about multimillion dollar systems," he says. "The cost of the
software can range easily up to a million dollars. The hardware systems can, depending on
how big a platform you need, cost anywhere from $250,000 to $750,000. So, it’s not like
you can put in place a system worth a couple of hundred thousand dollars and function in
this arena."

LNP : At What Cost?

Local number portability (LNP) may make life easier for consumers, who soon will be
able to make telecom buying decisions unhampered by the inconvenience a changed telephone
number presents. For business customers, this will mean thousands of dollars no longer
spent to change letterheads, business cards, directory listings and more if they opt to
change providers. Soon, high-dollar commercial users will find they can quite simply take
their relatively fat-margined business elsewhere if the present service stinks or a
sweeter deal lurks around the corner.

Easy for the consumer, LNP raises fairly complicated and expensive technology issues
for some providers that, with an approaching deadline, are scrambling to come up with
solutions that won’t break the bank.

The question of the hour is, after all: How much will LNP cost?

At this point, nobody can say; but it will be coming from at least two directions: The
FCC will determine allocative administrative costs, and providers will have to purchase
software and hardware network upgrades.

Generally, the phrase "multimillion dollar" couches discussions centered on
the mandated service. And, with the large carriers complaining about LNP-associated costs,
small carriers are quaking.

But companies like Transaction Network Services Inc. (TNS), Reston, Va., are finding
opportunity and a market niche in targeting the smaller service providers with affordable
solutions to the LNP dilemma.

"The AT&Ts and MCIs of the world are going to take care of themselves,"
says Dave O’Connor, vice president of marketing for TNS. "What we bring to the party
is we enable the smaller, second- and third-tier carriers a low-cost, fairly seamless
solution so they can compete against the big guys."

Moving to a different service provider for local services will mean that the calls to
the subscriber must be re-routed to the new service provider’s switch. With implementation
of LNP, the NPA/NXX of the dialed number no longer will be sufficient to route the call to
the destination switching office. Each LNP-capable office now will be assigned to a unique
network identification known as the local routing number (LRN). Subscribers to TNS SS7
services will have access to a nationwide database of LRNs.

Also, when a number is ported, the line information database (LIDB) information will,
in most situations, be moved to a new LIDB provider. Therefore, any services that require
LIDB access for call validation, for example, will need to be directed to the proper LIDB.
Today, the assignment of NPA/NXX is unique to a given service provider so the entire range
of numbers within a specific NPA/NXX will be contained in a single LIDB. The only action
required today of TNS signal transfer points (STPs) is a six-digit global title
translation (GTT) that results in the LIDB query being directed to the proper database.

As LNP is implemented, a new structure must be accommodated to provide accurate and
efficient routing of LIDB queries. Because it is possible that all directory numbers can
be moved, TNS validation services will depend on a 10-digit GTT for routing to the LIDB.
The 10-digit GTT will not be done in TNS STPs. Rather, a new database engine has been
designed to handle that task. Therefore, for both the LRN and GTT tasks, TNS has relieved
the STPs of extra processing functions and allowed them to be used for their intended
function–that of switching SS7 message efficiently.

"We have plans to connect to all of the NPACs," O’Connor says. "We will
use the TNS nationwide Internet Protocol (IP) network, which is a Cisco-based encrypted
router network. We will take the updates from an NPAC into our LSMS."

As a leading developer of SS7 technology, TNS is housing and writing the code for its
own network element management system which will then talk to the boxes that will house
all of the NPAC information. "TNS also will be manufacturing two SCP (service control
point) boxes," O’Connor says. "One will contain LRN information that we receive
from the NPAC, and the other will be a GTT box where we will do six- to 10-digit
translations. That box mainly will be used for LIDB validations. We are also in the
process of manufacturing for retail miniature SCP boxes that will be able to sit next to
the N-1 switch which provides data to the LNP database." N-1 signifies next-to-last
carrier and is the switch that queries the call. In the case of a long distance call, the
interexchange carrier (IXC) queries its LNP database to determine which LEC should receive
the call. The originating carrier is the N-1 for local calls.

"The N-1 switch will be next to a CLEC or carrier switch. That box will be tied
into our IP network as well, and we will be able to funnel down daily or 10- to 15-minute
real-time updates from the NPACs through our LSMS to those boxes, so a carrier can have
the NPAC information it needs for that switch right next to that switch in one of our
SCPs," O’Connor says. "TNS customers already connected to our SS7 network–we
have about 90 carriers connected representing about 150 switches–can do LRN queries to us
by the drink by sending us a query over their existing links to our global LRN box that
will house the entire NPAC," he says. "So instead of having one of our little
boxes beside the switch, they can, on a per dip basis, go into our global database to get
the same information."

TNS’ LNP product also will help alleviate code 50 unbillable and uncollectable calls,
says Aytxa Ramirez, TNS vice president of fraud services. Code 50s are a problem that
specifically plagues the LEC/CLEC billing community and are expected to mushroom as CLECs
turn their focus to residential services.

In LEC/CLEC billing, billing information–generally forwarded from a clearinghouse to
the LEC–is appended to an address and a physical location controlled by the incumbent LEC
(ILEC), which then puts the information on its own customers’ bills. In effect, both the
LEC and interexchange carrier (IXC) share the same customer. But, if the customer has
churned and no forwarding provider is known, the IXC stands to take the loss.

If calls are completed based on a dip into the LIDB, and the information is inaccurate
because the account has been closed (the customer churned), then the IXC is left holding
the bill.

In the case of an uncollectable, the customer has been billed, but the provider has no
way to collect, often for the same reasons. "By having access to the ported number
database, Ramirez says, IXCs now know who owns the ported number, whether it’s a good
billable number and, of course, where to route the call records for billing."

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