Profile: NeuStar, Inc. (NSR)

NeuStar, Inc. (NeuStar), incorporated in 1998, provide essential clearinghouse services to the communications industry and enterprise customers. The Company’s customers use the databases it contractually maintains in its clearinghouse to obtain data required to successfully route telephone calls in North America, to exchange information with other communications service providers and to manage technological changes in their own networks. NeuStar operates the authoritative directories that manage virtually all telephone area codes and numbers, and it enables the routing of calls among thousands of communications service providers (CSPs), in the United States and Canada. The Company provides clearinghouse services to CSPs, including Internet service providers, mobile network operators, cable television operators, and voice-over Internet protocol (VoIP), service providers. In addition, it provides domain name services, including internal and external managed DNS solutions that play a key role in directing and managing traffic on the Internet, and it manages the authoritative directories for the .us and .biz Internet domains. NeuStar operates the authoritative directory for United States Common Short Codes, part of the short messaging service relied upon by the United States wireless industry, and provide solutions used by mobile network operators worldwide to enable mobile instant messaging for their end users. It operates in two business segments: Clearinghouse and Next Generation Messaging (NGM).

Clearinghouse

NeuStar provides its services from a set of databases, systems and platforms in geographically dispersed data centers, which it refers to collectively as its clearinghouse. First, its clearinghouse databases and capabilities provide CSPs and enterprises with fair, equal and secure access to essential shared resources, such as telephone numbers and domain names. This sharing of data is critical for locating end-users and establishing their identity. Second, its clearinghouse databases and capabilities serve as an authoritative directory to ensure proper routing of voice, advanced data applications and Internet protocol (IP)-based communications, such as mobile instant messaging, regardless of originating or terminating technologies. Third, its customers may access its clearinghouse through standard interfaces. The clearinghouse also enables connections to authoritative operating data for its customers, including CSPs, content providers and enterprises. Its services facilitate the management of networks and services, including the deployment of new technologies and protocols, the balancing of communications traffic across its customers’ internal networks, network consolidation, and the control of instant messaging services, which promote its customers’ ability to create differentiated and value-added services.

Addressing

NeuStar provides a range of addressing services, including telephone number administration, telephone number pooling, Internet domain name services, (such as Ultra Services, .BIZ and .US Domains and Registry Gateway Services) and United States Common Short Codes. The Company maintains the authoritative database of telephone numbering resources for North America. It allocates telephone numbers by geographic location and assigns telephone numbers to telecommunications service providers. NeuStar administer area codes, including area code splits and overlays, and collect and forecast telephone number utilization rates by service providers. As the National Pooling Administrator, it also manages the administration of inventory and allocation of pooled blocks of unassigned telephone numbers by reassigning 1,000-number blocks of assigned but unused telephone numbers to telecommunications service providers requiring additional telephone numbers.

The Company provides these services under fixed-fee annual and cost-plus contracts with the Federal Communications Commission (FCC). In addition to the administrative functions associated with its role as the National Pooling Administrator, it also implements the administration of the allocation of pooled blocks of unassigned telephone numbers through its clearinghouse, including the reallocation of pooled blocks of telephone numbers to the consolidated network of consolidating carriers following a merger or other business combination. It was paid on a per transaction basis for this service during the year ended December 31, 2008.

The Company provides a suite of services that play a key role in directing and managing Internet traffic, and monitoring, testing and measuring the performance of Websites and networks, all of which enable thousands of customers to intelligently and securely control and distribute Internet traffic, and ensuring security, scalability and reliability of websites, email and networks. It is typically paid a recurring monthly fee based on contractually established monthly transaction volumes. NeuStar operates the authoritative registries of Internet domain names for the .biz and .us top level domains. In addition, it is the technical back-end registry operator for the .travel and .tel top-level domains. All Internet communications routing to any of these domains must query a copy of its directory to ensure that the communication is routed to the appropriate destination. It is the exclusive provider of wholesale registration services to domain name retailers for all regions outside of the home countries for the .cn, or the country code top-level domain for China, and .tw, or the country code top-level domain for Taiwan. It is primarily paid on a subscription basis for each name in the registries.

NeuStar operates the authoritative United States Common Short Code registry on behalf of the wireless providers in the United States. United States Common Short Codes are often used by consumer brand companies and organizations to count votes using wireless devices in promotional marketing efforts, such as votes for sporting event most valuable players (MVPs), to register for contests and special offers, to download applications such as ring tones, and are used for product awareness campaigns. It is paid on a subscription basis for each code in the registry.

Interoperability

The Company’s services include wireline and wireless number portability, and order management services. Its clearinghouse is the master, authoritative directory that allows end users in the United States and Canada to change their telephone carrier without changing their telephone numbers. In addition, service providers use this service to change the network identification associated with their end users’ telephone numbers after a merger or consolidation. NeuStar is paid on a per transaction basis for this service. The Company provides centralized clearinghouse services that permit its customers, through a single interface, to exchange essential operating data with multiple CSPs to provision services. NeuStar is paid on a per transaction basis for each order it processes.

Infrastructure and Other

NeuStar’s services include network management and connection services. The customers in the United States and Canada use its clearinghouse to centrally process changes to essential network elements that are used to route telephone calls. In the United States, it is paid on a per transaction basis for this service through December 31, 2008. In Canada, it is paid on a per-transaction basis for these services. Its network management services are used by its customers for a variety of different purposes, such as to replace and upgrade technologies, to balance network traffic and to reroute traffic on alternative networks in the event of a service disruption. It provides standard connections for those CSPs that connect directly to its clearinghouse. It is paid an established fee based on the type of connection.

Next Generation Messaging Services

The Company provides scalable solutions to mobile network operators worldwide, which allow them to manage instant messaging (IM), services provided by Internet service providers and to create their own branded IM services. It is typically paid a monthly fee on a per-active user basis.

The Company competes with Accenture Ltd, Computer Sciences Corporation, Hewlett-Packard Company, International Business Machines Corporation, Noblis, Inc., Nortel Networks Corporation, Pearson Education, Perot Systems Corporation, Telcordia Technologies, Inc., Electronic Data Systems Corporation, Hewlett-Packard Company, IBM, Oracle Corporation, Perot Systems Corporation. Akamai Technologies, Inc., Afilias Limited, F5 Networks, Inc., Keynote Systems, Inc., Gomez, Inc., Nokia Corporation, Colibria AS. Synchronoss Technologies, Inc., Telcordia Technologies, Inc., Syniverse Technologies, Inc., Evolving Systems, Inc. and VeriSign, Inc.