Every phone call, fax and personal computer connection in North America depends on the services of a little-known company called NeuStar, based in Sterling, Va. The company manages a directory of 500 million telephone numbers in the United States and Canada, says Jeffrey E. Ganek, its chairman and chief executive. The company, a spinoff from Lockheed Martin, had an estimated $430 million in sales in 2007.
Here are excerpts from a conversation:
Q. With the explosion of cellphones, personal digital devices, faxes and PC connections, how does anyone keep track of who is using which number?
A. That explosion is what led the industry and the federal government to create an entity like NeuStar. NeuStar physically directs the routing from every telephone call in North America. You cannot make a telephone call in North America without NeuStar.
You see, in the 1950s, when every call was a voice call and it went from one black dial phone to another, telecommunications was pretty easy. Now there are more than half a billion working telephone numbers in North America. There are more than four billion network endpoints around the world. An endpoint can be a desk voice phone, a mobile handset or a computer or something in between.
Q. Why don’t AT&T or Verizon Communications keep track of all the numbers?
A. Because almost all telephone calls start on one network and terminate on another. Back in the days of the Bell system, it was one engineer who was in charge of the entire network, from black dial telephone to black dial telephone. Now when you call a telephone number, your phone company doesn’t know whether that phone call is destined to a customer of its own or a customer of an entirely independent network. NeuStar tells each telephone company where to send each call.
Q. And it all has to happen in a fraction of a second?
A. It does. Every telephone company in North America has a physical interface into the NeuStar directory system.
Q. Is that how you keep track of the numbers, by having a directory?
A. Exactly. NeuStar is the North American numbering plan administrator. If a telephone company needs the telephone number for one of its end users, they’ve got to come to NeuStar...
Q. What’s the concept of pooling in a nutshell?
A. It used to be when a telephone company needed a number, the smallest block of numbers we could give them was 10,000 numbers, or the equivalent of an entire local exchange. If you were a telephone company and had a single customer in a town, you’d come to me and I’d have to give you an area code, say 422, and all 10,000 numbers that come with that. But we used an advanced technology in the routing database and, for the first time, were able to allocate blocks of 1,000 telephone numbers.
Q. So it was your company that was involved in deciding that some people in Manhattan could not have 212 numbers but instead had to have 646 area codes?
A. I knew that NeuStar was playing an important role in the industry when I saw there was a “Seinfeld” episode on exactly that problem. The fact is, there are only so many telephone numbers associated with any one area code. So with the explosive growth in the number of telephones and network endpoints, there’s been a huge demand, and area codes have been altered.
What’s a fascinating twist on this, it used to be that when you dialed a 212 area code number, you knew you were dialing a telephone number on the island of Manhattan. Now with the coming of voice over the Internet, VoIP, you can dial a 212 telephone number and have the number ring a phone in Buenos Aires or Moscow. The significance of telephone numbers has changed. The system is becoming much more complex and increasingly requires the routing capability of the central directory that NeuStar manages on behalf of all networks...
Q. Why did you spin off from Lockheed Martin in 1999? Why wouldn’t they want to keep you?
A. When NeuStar got started, this business had never existed before. For the first time, rivals from different telephone companies had to sit at a table and say, “For the common good, we need an independent company to provide a trusted routing directory we all will depend upon. Each of us will put information about all our customers and where their telephone calls should be routed into this database.” AT&T, Verizon, TMobile and Comcast don’t trust each other — they are competitors. But they trust NeuStar to hold this very valuable data.
So we needed to manage the trust of those competing carriers, and part of that trust was a contractual pledge that we would be neutral, hence the name. Separately, Lockheed Martin was acquiring Comsat, a carrier. As a result, they had to divest either Comsat or NeuStar. Even the appearance of NeuStar managing telephone numbers in favor of a network owned by the corporate parent would have violated that trust.
A neutral party that makes money off of everybody, and follows everything, and oh, by the way, created by the Federal Government and a major contractor of the D.o'D.
How neutral can ya get?