10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	for the fiscal year ended December 31, 2006
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	for the transition period from          to

Commission File No. 001-32548

NeuStar, Inc.

(Exact name of registrant as specified in its charter)

Delaware	52-2141938
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
46000 Center Oak Plaza Sterling, Virginia	20166
(Address of principal executive offices)	(Zip Code)

(571) 434-5400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Class A Common Stock	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ

On February 15, 2007, 74,446,428 shares of NeuStar Class A common stock were outstanding and 17,164 shares of NeuStar Class B common stock were outstanding. The aggregate market value of the NeuStar common equity held by non-affiliates as of June 30, 2006 was approximately $2.39 billion.

DOCUMENTS INCORPORATED BY REFERENCE:

Information required by Part III (Items 10, 11, 12, 13 and 14) is incorporated by reference to portions of NeuStar’s definitive proxy statement for its 2007 Annual Meeting of Stockholders, which NeuStar intends to file with the Securities and Exchange Commission within 120 days of December 31, 2006.

TABLE OF CONTENTS

Item		Description	Page
PART I
	1.	Business		1
	1A.	Risk Factors		14
	1B.	Unresolved Staff Comments		24
	2.	Properties		25
	3.	Legal Proceedings		25
	4.	Submission of Matters to a Vote of Security Holders		25
PART II
	5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		25
	6.	Selected Financial Data		26
	7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
	7A.	Quantitative and Qualitative Disclosures About Market Risk		45
	8.	Financial Statements and Supplementary Data		46
	9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		85
	9A.	Controls and Procedures		85
	9B.	Other Information		88
PART III
	10.	Directors, Executive Officers and Corporate Governance		88
	11.	Executive Compensation		88
	12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		88
	13.	Certain Relationships and Related Transactions and Director Independence		88
	14.	Principal Accounting Fees and Services		88
PART IV
	15.	Exhibits, Financial Statement Schedule		89
Signatures				96

Unless the context requires otherwise, references in this report to “NeuStar,” “we,” “us,” the “Company” and “our” refer to NeuStar, Inc. and its consolidated subsidiaries.

PART I

ITEM 1.   BUSINESS

Overview

We provide the communications industry with essential clearinghouse services. Our customers use the databases we contractually maintain in our 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. We operate the authoritative directories that manage virtually all telephone area codes and numbers, and we enable the dynamic routing of calls among thousands of competing communications service providers, or CSPs, in the United States and Canada. All CSPs that offer telecommunications services to the public at large, or telecommunications service providers, such as Verizon Communications Inc., Sprint Nextel Corporation, AT&T Corp. and AT&T Mobility LLC, must access our clearinghouse to properly route virtually all of their customers’ calls. We provide clearinghouse services to emerging CSPs, including Internet service providers, mobile network operators, cable television operators, and voice over Internet protocol, or VoIP, service providers. In addition, we provide domain name services, including internal and external managed DNS solutions that play a key role in directing and managing traffic on the Internet, and we manage the authoritative directories for the .us and .biz Internet domains. We operate the authoritative directory for U.S. Common Short Codes, part of the short messaging service relied upon by the U.S. wireless industry, and provide solutions used by mobile network operators worldwide to enable mobile instant messaging for their end users.

We were founded to meet the technical and operational challenges of the communications industry when the U.S. government mandated local number portability in 1996. While we remain the provider of the authoritative solution that the communications industry relies upon to meet this mandate, we have developed a broad range of innovative services to meet an expanded range of customer needs. We provide the communications industry in North America with critical technology services that solve the addressing, interoperability and infrastructure needs of CSPs. These services are used by CSPs to manage a range of their technical and operating requirements, including:

•  Addressing.  We enable CSPs to use critical, shared addressing resources, such as telephone numbers, Internet top-level domain names, and U.S. Common Short Codes.

•  Interoperability.  We enable CSPs to exchange and share critical operating data so that communications originating on one provider’s network can be delivered and received on the network of another CSP. We also facilitate order management and work flow processing among CSPs.

•  Infrastructure.  We enable CSPs to manage their networks more efficiently by centrally managing certain critical data they use to route communications over their networks.

Company Information and History

We were incorporated in Delaware in 1998 to acquire our business from Lockheed Martin Corporation. This acquisition was completed in November 1999. Our principal executive offices are located at 46000 Center Oak Plaza, Sterling, Virginia, 20166, and our telephone number at that address is (571) 434-5400.

On June 28, 2005, we effected a recapitalization which involved (i) payment of all accrued and unpaid dividends on all of the then-outstanding shares of preferred stock, followed by the conversion of all such shares into shares of common stock, (ii) the amendment of our certificate of incorporation to provide for Class A common stock and Class B common stock, and (iii) the split of each share of common stock into 1.4 shares and the reclassification of the common stock into shares of Class B common stock. We refer to these transactions collectively as the Recapitalization. Each share of Class B common stock is convertible at the option of the holder into one share of

Class A common stock, and we anticipate that all holders of Class B common stock will ultimately convert their shares into shares of Class A common stock.

On June 28, 2005, we made an initial public offering of 31,625,000 shares of Class A common stock, which included the underwriters’ over-allotment option exercise of 4,125,000 shares of Class A common stock. All the shares of Class A common stock sold in the initial public offering were sold by selling stockholders and, as such, we did not receive any proceeds from that offering. In December 2005, we completed an additional offering of 20,000,000 shares of Class A common stock, all of which were sold by selling stockholders. As such, we did not receive any proceeds from that offering.

Industry Background

Changes in the structure of the communications industry over the past two decades have presented increasingly complex technical and operating challenges. Whereas the Bell Operating System once dominated the U.S. telecommunications industry, there are now thousands of service providers, all with disparate networks. Today these service providers must interconnect their networks and carry each other’s traffic to route phone calls, unlike in the past when a small number of incumbent wireline carriers used established, bilateral relationships. In addition, CSPs are delivering a broad set of new services using a diverse array of technologies. These services, which include voice, data and video, are used in combinations that are far more complex than the historical, uniform voice services of traditional carriers.

The increasing complexity of the communications industry has produced operational challenges, as the legacy, in-house network management and back office systems of traditional carriers were not designed to capture all of the information necessary for provisioning, authorizing, routing and billing these new services. In particular, it has become significantly more difficult for service providers to:

•  Locate end users.  Identify the appropriate destination for a given communication among multiple networks and unique addresses, such as wireline and wireless phone numbers as well as IP and e-mail addresses;

•  Establish identity.  Authenticate that the users of the communications networks are who they represent themselves to be and that they are authorized to use the services being provided;

•  Connect.  Route the communication across disparate networks;

•  Provide services.  Authorize and account for the exchange of communications traffic across multiple networks; and

•  Process transactions.  Capture, process and clear accounting records for billing, and generate settlement data for inter-provider compensation.

Our Clearinghouse

We provide our services from a set of unique databases, systems and platforms in geographically dispersed data centers, which we refer to collectively as our clearinghouse. Our clearinghouse has been designed to provide substantial advantages in meeting the challenges facing the communications industry for both traditional voice and IP networks. First, our clearinghouse databases and capabilities provide competing CSPs 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, our clearinghouse databases and capabilities serve as an authoritative directory to ensure proper routing of voice, advanced data applications and IP-based communications, such as mobile instant messaging, regardless of originating or terminating technologies. Third, our clearinghouse allows CSPs access through standard interfaces. Our clearinghouse also enables connections to authoritative operating data for CSPs and providers of other service elements, including content, entertainment and financial transactions. As a result, it facilitates advanced services, such as multi-media content services and mobile instant messaging. Finally, our services facilitate the management of networks and services, including the deployment of new technologies and protocols, the balancing of communications traffic

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across a CSP’s internal networks, network consolidation, and the control of instant messaging services, which promote a CSP’s ability to create differentiated and value-added services.

To ensure our role as a provider of essential services to the communications industry, we designed our clearinghouse to be:

•  Reliable.  Our clearinghouse services depend on complex technology that is designed to deliver reliability consistent with telecommunications industry standards. Under our contracts, we have committed to our customers to deliver high quality services meeting numerous service levels, such as system availability, response times for help desk inquiries and billing accuracy, consistent with telecommunications industry standards.

•  Scalable.  The modular design of our clearinghouse enables capacity expansion without service interruption and with incremental investment, providing significant economies of scale.

•  Neutral.  We provide our services in a competitively neutral way to ensure that no one telecommunications service provider, telecommunications industry segment or technology or group of telecommunications customers is favored over any other. Moreover, we have committed not to be a telecommunications service provider in competition with our customers.

•  Trusted.  The data we collect are important and proprietary. Accordingly, we have appropriate procedures and systems to protect the privacy and security of customer data, restrict access to the system and generally protect the integrity of our clearinghouse. Our performance with respect to neutrality, privacy and security is independently audited regularly.

NeuStar Services

Addressing

“Addresses” are a shared resource among CSPs. Each communications device must have a unique address so that communications can be routed properly to that device. With the development of new technologies, the number and type of addressing resources increase, and the advent of bundled services, such as voice plus text messaging, may require that multiple addresses be identified for what is intended to be a single, integrated communication to one or more devices used by a single user or a group of users.

For communications to reliably reach the intended users, we believe that the communications industry requires a trusted, authoritative administrator of addressing directories to route communications. Moreover, we believe that CSPs must have fair access to shared addressing resources and must be able to access the administrator’s systems to ensure the proper routing of communications. We provide a range of addressing services to meet these needs, including:

•  Telephone Number Administration.  As the North American Numbering Plan Administrator, we maintain the authoritative database of telephone numbering resources for North America. We allocate telephone numbers by geographic location and assign telephone numbers to telecommunications service providers. We 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, we also manage 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. We provide these services under fixed-fee annual and cost-plus contracts with the Federal Communications Commission, or FCC.

•  Telephone Number Pooling.  In addition to the administrative functions associated with our role as the National Pooling Administrator, we implement the administration of the allocation of pooled blocks of unassigned telephone numbers through our clearinghouse, including the reallocation of pooled blocks of telephone numbers to the consolidated network of consolidating carriers following a merger or other business combination. We are paid on a per transaction basis for this service.

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•  Internet Domain Name Services.

•  Ultra Services.  We provide a suite of services that play a key role in directing and managing Internet traffic, enabling thousands of customers to intelligently and securely control and distribute that traffic, and ensuring security, scalability and reliability of websites and email. We are paid a recurring monthly fee based on contractually established monthly transaction volumes, and a per-transaction fee for transactions processed in excess of these monthly volumes.

•  .BIZ and .US Domains.  We operate the authoritative registries of Internet domain names for the .biz and .us top level domains. All Internet communications routing to a .biz or .us address must query a copy of our directory to ensure that the communication is routed to the appropriate destination. We are paid on a subscription basis for each name in the registries, which together currently contain over two million registered domain names.

•  Registry Gateway Services.  We are the exclusive provider of wholesale registration services to domain name retailers for the .cn (China) and .tw (Taiwan) Internet domains for all regions outside of the home countries. We are paid on a subscription basis for each name sold through the gateway.

•  U.S. Common Short Codes.  We operate the authoritative U.S. Common Short Code registry on behalf of the leading wireless providers in the United States. A Common Short Code is a string of five or six numbers, which serves as the “address” for text messages that are sent from wireless devices to businesses or organizations on a many-to-one basis. U.S. Common Short Codes are often used to count votes using wireless devices in promotional marketing efforts, such as votes for sporting event MVPs, to register for contests, and even to download applications such as ring tones. We are paid on a subscription basis for each code in the registry.

Interoperability

To provide communications across multiple networks involving multiple service providers, industry participants must exchange essential operating data. We believe that our clearinghouse is the most efficient, logistically practical and economical means for each CSP to exchange the large volumes of operating data that are required to deliver communications services between networks. Our services include:

•  Wireline and Wireless Number Portability.  Our clearinghouse is the master, authoritative directory that allows end users 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. We have provided this service for wireline local number portability since 1997, and in 2003 we expanded our service to provide portability of telephone numbers between wireless telecommunications service providers and between wireline and wireless telecommunications service providers. We are paid on a per transaction basis for this service.

•  Order Management Services.  We provide centralized clearinghouse services that permit our customers, through a single interface, to exchange essential operating data with multiple CSPs in order to provision services. We are typically paid on a per transaction basis for each order we process.

Infrastructure and Other

Constant changes in the communications service industry require providers to make frequent and extensive changes in their own network infrastructure. Our infrastructure services are used by CSPs to efficiently reconfigure their networks and systems in response to changes in the market. Our services include:

•  Network Management.  Our customers use our clearinghouse to centrally process changes to essential network elements that are used to route telephone calls. We are paid on a per transaction basis for these services. Our network management services are used by our 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.

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•  Connection Services.  We provide standard connections for those CSPs that connect directly to our clearinghouse. We are paid an established fee based on the type of connection.

•  Service Order Provisioning.  We provide service order provisioning services that enable CSPs to manage their internal systems through an automated interface to our clearinghouse and other shared industry databases. This service eliminates the need for service providers to build and maintain their own internal service order provisioning system. We are paid on a per transaction basis for these services.

•  Mobile Instant Messaging.  Through our recent acquisition of Followap Inc., we provide scalable solutions to mobile network operators worldwide, which allow them to manage instant messaging, or IM, and to create their own branded IM services.

Operations

Sales Force and Marketing

As of December 31, 2006, our sales and marketing organization consisted of approximately 240 people who work together to proactively deliver advanced technologies and solutions to serve our customers’ needs. Our sales teams work closely with our customers to identify and address their needs, while our marketing team works closely with our sales teams to deliver comprehensive services, develop a clear and consistent corporate image and offer a full customer support system.

We have an experienced sales and marketing staff who offer extensive knowledge in the management of telephone numbers and domain name systems, number portability and IP clearinghouse services. We believe we have close relations with our customers, and we know their systems and operations. We have worked closely with our customers to develop solutions such as national pooling, U.S. Common Short Codes, number translation services, and the provisioning of service requests for VoIP providers. Our sales teams strive to increase the services purchased by existing customers and to expand the range of services we provide to our customers.

Customer Support

Our customer support organization operates 24 hours a day, 7 days a week and 365 days a year. It is in charge of implementation of our service offerings from the point at which a contract is signed until the point at which our services are fully operational. Post-delivery, our staff works closely with our customers to ensure that our service level agreements are being met. They continually solicit customer feedback and are in charge of bringing together the proper internal resources to troubleshoot any problems or issues that customers may have. Performance of the group is measured by customer satisfaction surveys as well by the group’s ability to limit service downtime.

Operational Capabilities

We operate geographically diverse state-of-the-art data centers that support our clearinghouse services. Our data centers are custom designed for the processing and transmission of high volumes of transaction-related, time-sensitive data in a highly secure environment. We are committed to employing best-of-breed tools and equipment for application development, infrastructure management, operations management, and information security. These include equipment from International Business Machines Corporation, or IBM, Cisco Systems, Inc., Sun Microsystems, Inc., Dell Inc., and EMC Corporation, and database systems and software from Oracle Corporation and IBM. In general, we subscribe to the highest level of service and responsiveness available from each third party vendor that we use. Further, to protect the integrity of our systems, the major components of our networks are generally designed to eliminate any single point of failure. In addition, we employ encryption and other security techniques that well exceed industry standards.

We consistently exceed our contractual service level requirements, and our performance results are monitored internally and subjected to independent audits on a regular basis for some of our services.

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Research and Development

Our first focus in research and development is to innovate. We understand our customers’ challenges in managing an expanding array of technologies and end-user services across a growing number of CSPs. We employ industry experts in areas of technology that we believe are key to solving these problems. We believe their work has had a profound impact on the communications industry. For instance, we led the industry effort to design the architecture that underlies local number portability, which today is necessary to route virtually all calls in North America.

Our second focus in research and development is to promote open industry standards around innovative solutions that serve our customers’ needs. We are active in industry forums where our technical expertise and neutral position in the industry are valuable in promoting consensus among competing CSPs. We led the development of the Session Initiation Protocol (SIP) technology at the Internet Engineering Task Force. This technology has been adopted by most global industry communication groups, including wireline, wireless, and IP, as the standard for VoIP and other real-time multimedia transmission over IP, such as video, music, and multimedia conferencing, and other enhanced services.

Once the standard has been adopted, our third focus is to develop the standards-based solution that can be delivered industry-wide as a service through our clearinghouse, yielding significant benefits both to the communications industry and us. The communications industry benefits from a uniform solution that can be delivered in a timely fashion in a cost-effective manner. We benefit by introducing new services that leverage our clearinghouse and expand the sources of our revenue. For example, in a collaborative effort with several of the world’s largest Internet Exchange providers, we are currently in the development process for SIP-IX, the first comprehensive suite of services designed to enable direct network-to-network peering between trading partners for voice, video and content services using SIP-based technologies such as IP multimedia subsystem (IMS) and VoIP.

As of December 31, 2006, we had approximately 130 employees dedicated to research and development, approximately 70 of whom were added through our acquisition of Followap. We expense our research and development costs as incurred. Our research and development expense was $7.4 million, $11.9 million and $17.6 million for the years ended December 31, 2004, 2005 and 2006, respectively.

Customers

We serve traditional providers of communications, including local exchange carriers, such as Verizon Communications Inc. and AT&T, Inc.; competitive local exchange carriers, such as XO Holdings, Inc. and Level 3 Communications, Inc.; wireless service providers, such as Verizon Wireless Inc., AT&T Mobility LLC and Sprint Nextel Corporation; and long distance carriers. We also serve emerging CSPs, including Comcast Corporation, Time Warner Telecom Inc., Cox Communications, Inc. and Cbeyond, Inc., and fast-growing emerging providers of VoIP services, such as Vonage Holdings Corp.

In addition to serving traditional CSPs, we also serve a growing number of customers who are either enablers of Internet services or providers of information and content to Internet and telephone users. For example, customers for our managed DNS services include a wide range of both large and small enterprises, including registry operators, such as Afilias Limited, and e-commerce companies, such as Amazon.com, Inc. All Internet service providers rely on our Internet registry services to route all communications to .biz and .us Internet addresses. Domain name registrars, including Network Solutions, Inc., The Go Daddy Group, Inc., and Register.com, Inc. pay us for each .biz and .us domain name they register on behalf of their customers. Wireless service providers rely on our registry to route all U.S. Common Short Code communications, but the bulk of our customers for U.S. Common Short Codes are the information and entertainment content providers who register codes with us to allow wireless subscribers to communicate with them via text messaging. Mobile network operators throughout Europe, including Vodafone Group Plc and Wind Telecomunicazioni SpA, rely on our instant messaging solutions to provide mobile instant messaging to their end users.

Our customers include over 7,300 different entities, each of which is separately billed for the services we provide, regardless of whether it may be affiliated with one or more of our other customers. No single entity accounted for more than 10% of our total revenue in 2006. The amount of our revenue derived from customers

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inside the United States was $159.8 million, $235.5 million and $317.3 million for the years ended December 31, 2004, 2005 and 2006, respectively. The amount of our revenue derived from customers outside the United States was $5.2 million, $7.0 million and $15.7 million for the years ended December 31, 2004, 2005 and 2006, respectively. The amount of our revenue derived under our contracts with North American Portability Management LLC was $130.0 million, $188.8 million and $249.3 million for the years ended December 31, 2004, 2005 and 2006, respectively.

Competition

Our services most frequently compete against the legacy in-house systems of our customers. We believe our services offer greater reliability and flexibility on a more cost-effective basis than these in-house systems.

In our roles as the North American Numbering Plan Administrator, National Pooling Administrator, administrator of local number portability for the communications industry, operator of the sole authoritative registry for the .us and .biz Internet domain names, and operator of the sole authoritative registry for U.S. Common Short Codes, there are no other providers currently providing the services we offer. However, we were awarded the contracts to administer these services in open and competitive procurement processes where we competed against companies including Accenture Ltd, Computer Sciences Corporation, Hewlett-Packard Company, IBM, Mitretek Systems, Inc., Nortel Networks Corporation, NCS Pearson, Inc., Perot Systems Corporation, Telcordia Technologies, Inc. and VeriSign, Inc. We have renewed or extended the term of several of these contracts since we first entered into them. As the terms of these contracts expire, we expect that other companies may seek to bid on renewals or new contracts, and we may not be successful in renewing them. In addition, prior to the expiration of our contracts to provide number portability services, North American Portability Management LLC could solicit, or our competitors may submit, proposals to replace us, in whole or in part, as the provider of the services covered by these contracts. Similarly, with respect to our contracts to act as the North American Number Plan Administrator, the National Pooling Administrator, operator of the authoritative registry for the .us and .biz Internet domain names, and the operator of the authoritative registry for U.S. Common Short Codes, the relevant counterparty could elect not to exercise the extension period under the contract, if applicable, or to terminate the contract in accordance with its terms, in which case we could be forced to compete with other providers to continue providing the services covered by the relevant contract. However, we believe that our position as the incumbent provider of these services will enable us to compete favorably for contract renewals or for new contracts to continue to provide these services.

While we do not face direct competition for the registry of .us and .biz Internet domain names, we compete with other companies that maintain the registries for different domain names, including Afilias Limited, which manages the .org and .info registries, VeriSign, Inc., which manages the .com and .net registries, and a number of managers of country-specific domain name registries (such as .uk for domain names in the United Kingdom).

For the remainder of our services, we compete against a range of providers of interoperability and infrastructure services and/or software, as well as the in-house network management and information technology organizations of our customers. Our competitors, other than in-house network systems, generally fall into three categories:

•  companies that develop and sell software solutions to CSPs, such as Evolving Systems, Inc., MetaSolv, Inc. and NetCracker Technology Corp.;

•  systems integrators such as Accenture Ltd, Electronic Data Systems Corporation, Hewlett-Packard Company, IBM, Oracle Corporation and Perot Systems Corporation, which develop customized solutions for CSPs and in some cases operate and manage certain back-office systems for CSPs on an outsourced basis;

•  with respect to our Ultra services, companies such as Akamai Technologies, Inc., VeriSign, Inc., and F5 Networks, Inc., who provide internal and external managed DNS services;

•  with respect to mobile instant messaging, companies that develop presence and instant messaging solutions, such as Oz Communications, Inc. and Colibria AS; and

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•  with respect to order management services, companies such as CGI Group Inc., Synchronoss Technologies, Inc., Syniverse Technologies, Inc., Telcordia Technologies, Inc. VeriSign, Inc. and Wisor Telecom Corporation, which offer communications interoperability services, including inter-CSP order processing and workflow management on an outsourced basis.

We believe our clearinghouse has inherent advantages relative to discrete software solutions that require sales, customization and ongoing maintenance for CSPs on a one-customer-at-a-time basis. Many companies that have developed discrete software solutions have lacked the scale and financial resources necessary to develop carrier-grade solutions and achieve sufficiently broad customer acceptance to create viable business models. We also believe that our one-to-many clearinghouse can offer more economical services than in-house solutions or outsourcing to a systems integrator. However, many of our current and potential competitors have the financial, technical, marketing and other resources to develop a clearinghouse and compete with us directly with similar services and a similar delivery model.

Competitive factors in the market for our services include breadth and quality of services offered, reliability, security, cost-efficiency, and customer support. Our ability to compete successfully depends on numerous factors, both within and outside our control, including:

•  our responsiveness to customers’ needs;

•  our ability to support existing and new industry standards and protocols;

•  our ability to continue development of technical innovations; and

•  the quality, reliability, security and price-competitiveness of our services.

We may not be able to compete successfully against current or future competitors and competitive pressures that we face may materially adversely affect our business. The market for clearinghouse services may not continue to develop, and CSPs may not continue to use clearinghouse services rather than in-house systems and purchased or internally-developed software.

Employees

As of December 31, 2006, we employed 822 persons worldwide. None of our employees is currently represented by a labor union. We have not experienced any work stoppages and consider our relationship with our employees to be good.

Contracts

We provide many of our addressing, interoperability and infrastructure services pursuant to private commercial and government contracts. Specifically, we provide wireline and wireless number portability, implement the allocation of pooled blocks of telephone numbers and provide network management services pursuant to seven contracts with North American Portability Management LLC, an industry group that represents all telecommunications service providers in the United States. Although the FCC has plenary authority over the administration of telephone number portability, it is not a party to our contracts with North American Portability Management LLC. The North American Numbering Council, a federal advisory committee to which the FCC has delegated limited oversight responsibilities, reviews and oversees North American Portability Management LLC’s management of these contracts. See “— Regulatory Environment — Telephone Numbering.” We recognize revenue under our contracts with North American Portability Management LLC primarily on a per transaction basis. The aggregate fees for transactions processed under these contracts are determined by the total number of transactions, and these fees are billed to telecommunications service providers based on their allocable share of the total transaction charges. This allocable share is based on each respective telecommunications service provider’s share of the aggregate end-user services revenues of all U.S. telecommunications service providers as determined by the FCC. On November 4, 2005, BellSouth Corporation filed a petition seeking changes in the way our customers are billed for services provided by us under our contracts with North American Portability Management LLC. In response to the BellSouth petition, the FCC requested comments from interested parties. As of February 15, 2007, the FCC had not initiated a formal rulemaking process, and the BellSouth petition remains pending. We do not

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believe that this proposed change to the manner in which we bill for services under these contracts would have a material impact on our customers’ demand for these services. Under our contracts, we also bill a revenue recovery collections, or RRC, fee of a percentage of monthly billings to our customers, which is available to us if any telecommunications service provider fails to pay its allocable share of total transaction charges. If the RRC fee is insufficient for that purpose, these contracts also provide for the recovery of such differences from the remaining telecommunications service providers. Under these contracts, users of our clearinghouse also pay fees to connect to our data center and additional fees for reports that we generate at the user’s request. Our contracts with North American Portability Management LLC continue through June 2015.

We also provide wireline number portability and network management services in Canada pursuant to a contract with the Canadian LNP Consortium Inc., a private corporation composed of telecommunications service providers who participate in number portability in Canada. The Canadian Radio-television and Telecommunications Commission oversees the Canadian LNP Consortium’s management of this contract. We bill each telecommunications service provider for our services under this contract primarily on a per-transaction basis. This contract continues through December 2011. The services we provide under the contracts with North American Portability Management LLC and the Canadian LNP Consortium are subject to rigorous performance standards, and we are subject to corresponding penalties for failure to meet those standards.

We serve as the North American Numbering Plan Administrator and the National Pooling Administrator pursuant to two separate contracts with the FCC. Under these contracts, we administer the assignment and implementation of new area codes in North America, the allocation of central office codes (which are the prefixes following the area codes) to telecommunications service providers in the United States, and the assignment and allocation of pooled blocks of telephone numbers in the United States in a manner designed to conserve telephone number resources. The North American Numbering Plan Administration contract is a fixed-fee government contract that was awarded by the FCC in 2003. The contract is structured as a one-year agreement with four one-year options exercisable by the FCC. The FCC has exercised three of these one-year extension options and may extend the contract for two additional one-year periods continuing through July 8, 2008. The National Pooling Administration contract is a cost-plus government contract that was awarded by the FCC in 2001. This contract also is structured as a one-year agreement with four one-year options exercisable by the FCC. The FCC exercised each of the four options, and this contract was due to expire on June 14, 2006. Since that time, the National Pooling Administration contract has been extended for several short-term periods while the FCC conducts a formal rebid of the contract. We expect to compete for a renewal of this contract.

We are the operator of the .biz Internet top-level domain by contract with the Internet Corporation for Assigned Names and Numbers, or ICANN. The .biz contract was originally granted in May 2001. In December 2006, the ICANN awarded to us a renewal of the .biz contract through December 2012. Under the terms of the amended agreement, the .biz contract automatically renews after 2012 unless it has been determined that we have been in fundamental and material breach of certain provisions of the agreement and have failed to cure such breach. Similarly, pursuant to a contract with the U.S. Department of Commerce, we operate the .us Internet domain registry. This contract was awarded in October 2001 for a period of four years, which may be extended by the government for two additional one-year periods. The government exercised the first one-year option in October 2005, and the second one-year option in October 2006. These contracts allow us to provide domain name registration services to domain name registrars, who pay us on a per-name basis. We expect to compete for a renewal of this contract.

We have an exclusive contract with the CTIA — The Wireless Association^® to serve as the registry operator for the administration of U.S. Common Short Codes. U.S. Common Short Codes are short strings of numbers to which text messages can be addressed — a common addressing scheme that works across all participating wireless networks. We were awarded this contract in October 2003 through an open procurement process by the major wireless carriers. The initial term of the contract continued through April 2006, and was renewed automatically for an additional two-year period pursuant to the terms of the contract. Under the terms of the contract, the term automatically renews for additional two-year periods unless terminated in accordance with its terms. We provide U.S. Common Short Code registration services to wireless content providers, who pay us subscription fees per U.S. Common Short Code registered.

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Regulatory Environment

Telephone Numbering

Overview.  The Telecommunications Act of 1996 was enacted to remove barriers to entry in the communications market. Among other things, the Telecommunications Act mandates portability of telephone numbers and requires traditional telephone companies to provide non-discriminatory access and interconnection to potential competitors. The FCC has plenary jurisdiction over issues relating to telephone numbers, including telephone number portability and the administration of telephone number resources. Under this authority, the FCC promulgated regulations governing the administration of telephone numbers and telephone number portability. In 1995, the FCC established the North American Numbering Council, a federal advisory committee, to advise and make recommendations to the FCC on telephone numbering issues, including telephone number resources administration and telephone number portability. The members of the North American Numbering Council include representatives from local exchange carriers, interexchange carriers, wireless providers, manufacturers, state regulators, consumer groups and telecommunications associations.

Telephone Number Portability.  The Telecommunications Act requires telephone number portability, which is the ability of users of telecommunications services to retain existing telephone numbers without impairment of quality, reliability, or convenience when switching from one telecommunications service provider to another. Through a series of competitive procurements, we were selected by a consortium of service providers representing the telecommunications industry to develop, build and operate a solution to enable telephone number portability in the United States. We ultimately entered into seven regional contracts to administer the system that we developed, after which the North American Numbering Council recommended to the FCC, and the FCC approved, our selection to serve as a neutral administrator of telephone number portability. The FCC also directed the seven original regional entities, each comprising a consortium of service providers operating in the respective regions, to manage and oversee the administration of telephone number portability in their respective regions, subject to North American Numbering Council oversight. Under the rules and policies adopted by the FCC, North American Portability Management LLC, as successor in interest to the seven regional consortiums, has the power and authority to negotiate master agreements with an administrator of telephone number portability, so long as that administrator is neutral.

North American Numbering Plan Administrator and National Pooling Administrator.  We have contracts with the FCC to act as the North American Numbering Plan Administrator and the National Pooling Administrator, and we must comply with the rules and regulations of the FCC that govern our operations in each capacity. We are charged with administering numbering resources in an efficient and non-discriminatory manner, in accordance with FCC rules and industry guidelines developed primarily by the Industry Numbering Committee. These guidelines provide governing principles and procedures to be followed in the performance of our duties under these contracts. The communications industry regularly reviews and revises these guidelines to adapt to changed circumstances or as a result of the experience of industry participants in applying the guidelines. A committee of the North American Numbering Council evaluates our performance against these rules and guidelines each year and provides an annual review to the North American Numbering Council and the FCC. If we violate these rules and guidelines, or if we fail to perform at required levels, the FCC may reevaluate our fitness to serve as the North American Numbering Plan Administrator and the National Pooling Administrator and may terminate our contracts or impose fines on us. The division of the North American Numbering Council responsible for reviewing our performance as the North American Numbering Plan Administrator and the National Pooling Administrator has determined that, with respect to our performance in 2005, we “exceeded” and “more than met” our performance guidelines under each such respective review. Similar reviews of our performance in 2006 have not yet been completed.

Neutrality.  Under FCC rules and orders establishing the qualifications and obligations of the North American Numbering Plan Administrator and National Pooling Administrator, and under our contracts with North American Portability Management LLC to provide telephone number portability services, we are required to comply with neutrality regulations and policies. Under these neutrality requirements, we are required to operate our numbering plan, pooling administration and number portability functions in a neutral and impartial manner, which means that we cannot favor any particular telecommunications service provider, telecommunications industry segment or technology or group of telecommunications consumers over any other telecommunications service

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provider, industry segment, technology or group of consumers in the conduct of those businesses. We are examined periodically on our compliance with these requirements by independent third parties. The combined effect of our contracts and the FCC’s regulations and orders requires that we:

•  not be a telecommunications service provider, which is generally defined by the FCC as an entity that offers telecommunications services to the public at large, and is, therefore, providing telecommunications services on a common carrier basis;

•  not be an affiliate of a telecommunications service provider, which means, among other things, that we:

•  must restrict the beneficial ownership of our capital stock by telecommunications service providers or affiliates of a telecommunications service provider; and

•  may not otherwise, directly or indirectly, control, be controlled by, or be under common control with, a telecommunications service provider;

•  not derive a majority of our revenue from any single telecommunications service provider; and

•  not be subject to undue influence by parties with a vested interest in the outcome of numbering administration and activities. Notwithstanding our satisfaction of the other neutrality criteria above, the North American Numbering Council or the FCC could determine that we are subject to such undue influence. The North American Numbering Council may conduct an evaluation to determine whether we meet this “undue influence” criterion.

We are required to maintain complete confidentiality of competitive customer information obtained during the conduct of our business. In addition, as part of our neutrality framework, we are required to comply with a code of conduct that is designed to ensure our continued neutrality. Among other things, our code of conduct, which was approved by the FCC, requires that:

•  we never, directly or indirectly, show any preference or provide any special consideration to any telecommunications service provider;

•  we prohibit access by our stockholders to user data and proprietary information of telecommunications service providers served by us (other than access of employee stockholders that is incident to the performance of our numbering administration duties);

•  our stockholders take steps to ensure that they do not disclose to us any user data or proprietary information of any telecommunications service provider in which they hold an interest, other than the sharing of information in connection with the performance of our numbering administration duties;

•  we not share confidential information about our business services and operations with employees of any telecommunications service provider;

•  we refrain from simultaneously employing, whether full-time or part-time, any individual who is an employee of a telecommunications service provider and that none of our employees hold any interest, financial or otherwise, in any company that would violate these neutrality standards;

•  we prohibit any individual who serves in the management of any of our stockholders to be involved directly in our day-to-day operations;

•  we implement certain requirements regarding the composition of our board of directors;

•  no member of our board of directors simultaneously serve on the board of directors of a telecommunications service provider; and

•  we hire an independent party to conduct a quarterly neutrality audit to ensure that we and our stockholders comply with all the provisions of our code of conduct.

In connection with the neutrality requirements imposed by our code of conduct and under our contracts, we are subject to a number of neutrality audits that are performed on a quarterly and semi-annual basis. In connection with these audits, all of our employees, directors and officers must sign a neutrality certification that states that they are

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familiar with our neutrality requirements and have not violated them. Failure to comply with applicable neutrality requirements could result in government fines, corrective measures, curtailment of contracts or even the revocation of contracts. See “Risk Factors — Risks Related to Our Business — Failure to comply with neutrality requirements could result in loss of significant contracts” in Item 1A of this report.

In contemplation of the initial public offering of our securities, we sought and obtained FCC approval for a “safe harbor” from previous orders of the FCC that required us to seek prior approval from the FCC for any change in our overall ownership structure, corporate structure, bylaws, or distribution of equity interests, as well as certain types of transactions, including the issuance of indebtedness by us. Under the safe harbor order, we are required to maintain provisions in our organizational and other corporate documents that require us to comply with all applicable neutrality rules and orders. However, we are no longer required to seek prior approval from the FCC for many of these changes and transactions, although we are required to provide notice of such changes or transactions. In addition, we are subject to the following requirements:

•  we may not issue indebtedness to any entity that is a telecommunications service provider or an affiliate of a telecommunications service provider without prior approval of the FCC;

•  we may not acquire any equity interest in a telecommunications service provider or an affiliate of a telecommunications service provider without prior approval of the FCC;

•  we must restrict any telecommunications service provider or affiliate of a telecommunications service provider from acquiring or beneficially owning 5% or more of our outstanding capital stock;

•  we must report to the FCC the names of any telecommunications service providers or telecommunications service provider affiliates that own a 5% or greater interest in our company; and

•  we must make beneficial ownership records available to our neutrality auditors, and must certify upon request that we have no actual knowledge of any ownership of our outstanding capital stock by a telecommunications service provider or telecommunications service provider affiliate other than as previously disclosed.

Internet Domain Name Registrations

We are also subject to government and industry regulation under our Internet registry contracts with the U.S. government and ICANN, the industry organization responsible for regulation of Internet top-level domains. We are the operator of the .biz Internet domain under a contract with ICANN originally granted to us in May 2001, which currently runs through December 2012 and renews automatically thereafter unless it has been determined that we have been in fundamental and material breach of certain provisions of the agreement and have failed to cure such breach. Similarly, pursuant to a contract with the U.S. Department of Commerce, we operate the .us Internet domain registry. This contract was granted in October 2001 for a period of four years, with two one-year extension periods exercisable at the option of the U.S. Department of Commerce. The Department of Commerce exercised the first one-year option in October 2005, and the second one-year option in October 2006. Under each of these registry service contracts, we are required to:

•  provide equal access to all registrars of domain names;

•  comply with Internet standards established by the industry;

•  implement additional policies as they are adopted by the U.S. government or ICANN; and

•  with respect to the .us registry, establish, operate and ensure appropriate content on a kids.us domain to serve as a haven for material that promotes positive experiences for children and families using the Internet.

Intellectual Property

Our success depends in part upon our proprietary technology. We rely principally upon trade secret and copyright law to protect our technology, including our software, network design, and subject matter expertise. We enter into confidentiality or license agreements with our employees, distributors, customers, and potential customers and limit access to and distribution of our software, documentation, and other proprietary

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information. We believe, however, that because of the rapid pace of technological change in the communications industry, the legal protections for our services are less significant factors in our success than the knowledge, ability, and experience of our employees and the timeliness and quality of services provided by us. With our entry into the IM market, we may become reliant on patents to protect our technology and our ability to deliver our IM solutions to our customers.

Available Information and Exchange Certifications

We maintain an Internet website at www.neustar.biz. Information contained on, or that may be accessed through, our website is not part of this report. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available on the Investor Relations section of our website under the heading “SEC Filings by NeuStar,” as soon as reasonably practicable after we electronically file such reports with, or furnish those reports to, the Securities and Exchange Commission. Our Principles of Corporate Governance, Board of Directors committee charters (including the charters of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee) and code of ethics entitled “Corporate Code of Business Conduct” also are available on the Investor Relations section of our website. Stockholders may request free copies of these documents, including a copy of our annual report on Form 10-K, by sending a written request to our Corporate Secretary at NeuStar, Inc., 46000 Center Oak Plaza, Sterling, VA 20166. In the event that we make any changes to, or provide any waivers from, the provisions of our Corporate Code of Business Conduct, we intend to disclose these events on our website or in a report on Form 8-K within four business days of such event.

Because our common stock is listed on the NYSE, our Chief Executive Officer is required to make an annual certification to the NYSE stating that he is not aware of any violation by us of the corporate governance listing standards of the NYSE. Our Chief Executive Officer made his annual certification to that effect to the NYSE on July 27, 2006. In addition, we have filed, as an exhibit to this Annual Report on Form 10-K, the certification of our principal executive officer and principal financial officer required under Section 302 of the Sarbanes-Oxley Act of 2002 to be filed with the Securities and Exchange Commission regarding the quality of our public disclosure.

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Many of these risks are beyond our ability to control or predict. These risks and other factors include those listed under “Risk Factors” in Item 1A of this report and elsewhere in this report and include:

•  failures or interruptions of our systems and services;

•  security or privacy breaches;

•  loss of, or damage to, a data center;

•  termination, modification or non-renewal of our contracts to provide telephone number portability and other clearinghouse services;

•  adverse changes in statutes or regulations affecting the communications industry;

•  our failure to adapt to rapid technological change in the communications industry;

•  competition from our customers’ in-house systems or from other providers of addressing, interoperability or infrastructure services;

•  our failure to achieve or sustain market acceptance at desired pricing levels;

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•  a decline in the volume of transactions we handle;

•  inability to manage our growth;

•  economic, political, regulatory and other risks associated with our potential expansion into international markets;

•  inability to obtain sufficient capital to fund our operations, capital expenditures and expansion; and

•  loss of members of senior management, or inability to recruit and retain skilled employees.

ITEM 1A.   RISK FACTORS

Risks Related to Our Business

Failures or interruptions of our clearinghouse could materially harm our revenue and impair our ability to conduct our operations.

We provide addressing, interoperability and infrastructure services that are critical to the operations of our customers. Notably, our clearinghouse is essential to the orderly operation of the U.S. telecommunications system because it enables CSPs to ensure that telephone calls are routed to the appropriate destinations. Our system architecture is integral to our ability to process a high volume of transactions in a timely and effective manner. We could experience failures or interruptions of our systems and services, or other problems in connection with our operations, as a result of:

•  damage to, or failure of, our computer software or hardware or our connections and outsourced service arrangements with third parties;

•  errors in the processing of data by our system;

•  computer viruses or software defects;

•  physical or electronic break-ins, sabotage, distributed denial of service, or DDoS, attacks, intentional acts of vandalism and similar events;

•  increased capacity demands or changes in systems requirements of our customers; or

•  errors by our employees or third-party service providers.

If we cannot adequately protect the ability of our clearinghouse to perform consistently at a high level or otherwise fail to meet our customers’ expectations:

•  we may experience damage to our reputation, which may adversely affect our ability to attract or retain customers for our existing services, and may also make it more difficult for us to market our services;

•  we may be subject to significant damages claims, under our contracts or otherwise, including the requirement to pay substantial penalties related to service level requirements in our contracts;

•  our operating expenses or capital expenditures may increase as a result of corrective efforts that we must perform;

•  our customers may postpone or cancel subsequently scheduled work or reduce their use of our services; or

•  one or more of our significant contracts may be terminated early, or may not be renewed.

Any of these consequences would adversely affect our revenue and performance.

Security breaches could result in an interruption of service or reduced quality of service, which could increase our costs or result in a reduction in the use of our services by our customers.

Our systems may be vulnerable to physical break-ins, computer viruses, attacks by computer hackers or similar disruptive problems. If unauthorized users gain access to our databases, they may be able to steal, publish, delete or modify sensitive information that is stored or transmitted on our networks and that we are required by our contracts

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and FCC rules to keep confidential. A security or privacy breach could result in an interruption of service or reduced quality of service, and we may be required to make significant expenditures in connection with corrective efforts we are required to perform. In addition, a security or privacy breach may harm our reputation and cause our customers to reduce their use of our services, which could harm our revenue and business prospects.

The loss of, or damage to, a data center could interrupt our operations and materially harm our revenue and growth.

Because virtually all of the services we provide require communications service providers to query a copy of our continuously updated databases and directories to obtain necessary routing and other essential operational data, the integrity of our data centers is essential to our business. We may not have sufficient redundant systems or back-up facilities to allow us to receive and process data in the event of a loss of, or damage to, a data center. We could lose, or suffer damage to, a data center in the event of power loss; natural disasters such as fires, earthquakes, floods and tornadoes; telecommunications failures, such as transmission cable cuts; or other similar events that could adversely affect our customers’ ability to access our clearinghouse. We may be required to make significant expenditures to repair or replace a data center. Further, as the scope of services we provide expands or changes, we may be required to make significant expenditures establish new data centers from which we may provide services. Any interruption to our operations due to the loss of, or damage to, a data center could harm our reputation and cause our customers to reduce their use of our services, which could harm our revenue and business prospects.

The failure of the third-party software and equipment used by our customers or that we use to provide our services could cause interruptions or failures of our systems.

We incorporate hardware, software and equipment developed by third parties in our clearinghouse. Our third-party vendors include, among others, IBM and Oracle Corporation for database systems and software, and EMC Corporation and Sun Microsystems, Inc. for equipment. Similarly, to access our clearinghouse and utilize our services, many of our customers rely on hardware, software and other equipment developed, supported and maintained by third-party providers. In addition, we rely on third parties to provide the connection between us and our customers through which we deliver and receive data. As a result, our ability to provide clearinghouse services depends in part on the continued performance and support of the third-party products and services on which we and our customers rely. If these products or services experience failures or have defects and the third parties that supply the products or services fail to provide adequate support, this could result in or exacerbate an interruption or failure of our systems or services. In some cases, failures of third party products or services could subject us to significant damages claims under the service level requirements in our contracts, for which we would have limited or no recourse against the third party who supplied such products or services.

Our seven contracts with North American Portability Management LLC represent in the aggregate a substantial portion of our revenue, are not exclusive and could be terminated or modified in ways unfavorable to us, and we may be unable to renew these contracts at the end of their term.

Our seven contracts with North American Portability Management LLC, an industry group that represents all telecommunications service providers in the United States, to provide telephone number portability and other clearinghouse services are not exclusive and could be terminated or modified in ways unfavorable to us. These seven separate contracts, each of which represented between 8.5% and 13.4% of our total revenue in 2006, represented in the aggregate approximately 74.9% of our total revenue in 2006. North American Portability Management LLC could, at any time, solicit or receive proposals from other providers to provide services that are the same as or similar to ours. In addition, these contracts have finite terms and are currently scheduled to expire in June 2015. Furthermore, any of these contracts could be terminated in advance of its scheduled expiration date in limited circumstances, most notably if we are in default of these contracts. Although these contracts do not contain cross-default provisions, conditions leading to a default by us under one of our contracts could lead to a default under others, or all seven.

We may be unable to renew these contracts on acceptable terms when they are being considered for renewal if we fail to meet our customers’ expectations, including for performance or other reasons, or if another provider offers to provide the same or similar services at a lower cost. In addition, competitive forces resulting from the

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possible entrance of a competitive provider could create significant pricing pressure, which could then cause us to reduce the selling price of our services under our contracts. If these contracts are terminated or modified in a manner that is adverse to us, or if we are unable to renew these contracts on acceptable terms upon their expiration, it would have a material adverse effect on our business, prospects, financial condition and results of operations.

Our contracts with North American Portability Management LLC contain provisions that may restrict our ability to use data that we administer in our clearinghouse, which may limit our ability to offer services that we currently, or intend to, offer.

In addition to offering telephone number portability and other clearinghouse services under our contracts with North American Portability Management LLC, some of our service offerings not related to these contracts require that we use certain data from our clearinghouse. We have been informed by North American Portability Management LLC that they believe that use of this data, which is unrelated to our performance under these contracts, may not be permissible under the current agreements. If we are subject to burdensome terms of access or are not permitted to use this data, our ability to offer new services requiring the use of this data may be limited.

Certain of our other contracts may be terminated or we may be unable to renew these contracts, which may reduce the number of services we can offer and damage our reputation.

In addition to our contracts with North American Portability Management LLC, we rely on other contracts to provide other services that we offer, including the contracts that appoint us to serve as the:

•  North American Numbering Plan Administrator, under which we maintain the authoritative database of telephone numbering resources in North America;

•  National Pooling Administrator, under which we perform the administrative functions associated with the administration and management of telephone number inventory and allocation of pooled blocks of unassigned telephone numbers;

•  provider of number portability services in Canada;

•  operator of the .us registry;

•  operator of the .biz registry; and

•  operator of the registry of U.S. Common Short Codes.

Each of these contracts provides for early termination in limited circumstances, most notably if we are in default. In addition, our contracts to serve as the North American Numbering Plan Administrator and as the National Pooling Administrator and to operate the .us registry, each of which is with the U.S. government, may be terminated by the government at will. If we fail to meet the expectations of the FCC, the U.S. Department of Commerce or our customers, as the case may be, for any reason, including for performance-related or other reasons, or if another provider offers to perform the same or similar services for a lower price, we may be unable to extend or renew these contracts. In that event, the number of services we are able to offer may be reduced, which would adversely affect our revenue from the provision of these services. Each of the contracts listed above establishes us as the sole provider of the particular services covered by that contract during its term. If one of these contracts were terminated, or if we were unable to renew or extend the term of any particular contract, we would no longer be able to provide the services covered by that contract and could suffer a loss of prestige that would make it more difficult for us to compete for contracts to provide similar services in the future.

Failure to comply with neutrality requirements could result in loss of significant contracts.

Pursuant to orders and regulations of the U.S. government and provisions contained in our material contracts, we must continue to comply with certain neutrality requirements, meaning generally that we cannot favor any particular telecommunications service provider, telecommunications industry segment or technology or group of telecommunications consumers over any other telecommunications service provider, industry segment, technology or group of consumers in the conduct of our business. The FCC oversees our compliance with the neutrality requirements applicable to us in connection with some of the services we provide. We provide to the FCC and the

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North American Numbering Council, a federal advisory committee established by the FCC to advise and make recommendations on telephone numbering issues, regular certifications relating to our compliance with these requirements. Our ability to comply with the neutrality requirements to which we are subject may be affected by the activities of our stockholders or other parties. For example, if the ownership of our capital stock subjects us to undue influence by parties with a vested interest in the outcome of numbering administration, the FCC could determine that we are not in compliance with our neutrality obligations. Our failure to continue to comply with the neutrality requirements to which we are subject under applicable orders and regulations of the U.S. government and commercial contracts may result in fines, corrective measures or termination of our contracts, any one of which could have a material adverse effect on our results of operations.

Regulatory and statutory changes that affect us or the communications industry in general may increase our costs or impair our growth.

The FCC has regulatory authority over certain aspects of our operations, most notably our compliance with our neutrality requirements. We are also affected by business risks specific to the regulated communications industry. Moreover, the business of our customers is subject to regulation that indirectly affects our business. As communications technologies and the communications industry continue to evolve, the statutes governing the communications industry or the regulatory policies of the FCC may change. If this were to occur, the demand for our services could change in ways that we cannot easily predict and our revenue could decline. These risks include the ability of the federal government, most notably the FCC, to:

•  increase regulatory oversight over the services we provide;

•  adopt or modify statutes, regulations, policies, procedures or programs that are disadvantageous to the services we provide, or that are inconsistent with our current or future plans, or that require modification of the terms of our existing contracts, including the manner in which we charge for certain of our services. For example, in November 2005, BellSouth Corporation filed a petition with the FCC seeking changes in the way our customers are billed for services provided by us under our contracts with North American Portability Management LLC;

•  prohibit us from entering into new contracts or extending existing contracts to provide services to the communications industry based on actual or suspected violations of our neutrality requirements, business performance concerns, or other reasons;

•  adopt or modify statutes, regulations, policies, procedures or programs in a way that could cause changes to our operations or costs or the operations of our customers;

•  appoint, or cause others to appoint, substitute or add additional parties to perform the services that we currently provide; and

•  prohibit or restrict the provision or export of new or expanded services under our contracts, or prevent the introduction of other services not under the contracts based upon restrictions within the contracts or in FCC policies.

In addition, we are subject to risks arising out of the delegation of the Department of Commerce’s responsibilities for the domain name system to the ICANN. Changes in the regulations or statutes to which our customers are subject could cause our customers to alter or decrease the services they purchase from us. We cannot predict when, or upon what terms and conditions, further regulation or deregulation might occur or the effect future regulation or deregulation may have on our business.

If we do not adapt to rapid technological change in the communications industry, we could lose customers or market share.

Our industry is characterized by rapid technological change and frequent new service offerings. Significant technological changes could make our technology and services obsolete. We must adapt to our rapidly changing market by continually improving the features, functionality, reliability and responsiveness of our addressing, interoperability and infrastructure services, and by developing new features, services and applications to meet

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changing customer needs. We cannot guarantee that we will be able to adapt to these challenges or respond successfully or in a cost-effective way. Our failure to do so would adversely affect our ability to compete and retain customers or market share.

Although we currently provide our services primarily to traditional telecommunications companies, many existing and emerging companies are providing, or propose to provide, IP-based voice services. Our future revenue and profits will depend, in part, on our ability to provide services to IP-based service providers. For example, we are currently developing and conducting trial tests of SIP-IX, a comprehensive suite of services designed to enable direct network-to-network peering between trading partners for voice, video and content services using Session Initiation Protocol (SIP)-based technologies such as IP multimedia subsystem (IMS) and Voice over Internet Protocol (VoIP). There can be no assurance that IP communications will grow in any meaningful fashion, or that SIP-IX will be adopted by potential customers, nor can we guarantee that we will be able to reach acceptable contract terms with customers to provide this service. In addition, we may experience delays in the development of one or more features of SIP-IX, which could materially reduce the potential benefits to us for providing this service.

Our customers face implementation and support challenges in introducing IP-based services, which may slow their rate of adoption or implementation of our solutions.

We have limited or no control over the pace at which communications service providers implement new, complex services, such as instant messaging and other IP-based communications. Moreover, the launch of new IP-based services by communications service providers requires significant capital expenditures by our customers to market and drive adoption by end users. We cannot control the decision over whether such capital expenditures will occur or the timing of such expenditures. In turn, even if CSPs attempt to drive adoption of new IP-based services, our future revenue and profits will also depend, in part, on the wide adoption of such services by end users. The failure of, or delay by, communications service providers to introduce and support IP-based services utilizing our solutions in a timely and effective manner could have a material adverse effect on our business and operating results.

The market for certain of our addressing, interoperability, and infrastructure services is competitive, which could result in fewer customer orders, reduced revenue or margins or loss of market share.

Our services frequently compete against the legacy in-house systems of our customers. In addition, although we are not a telecommunications service provider, we compete in some areas against communications service companies, communications software companies and system integrators that provide systems and services used by CSPs to manage their networks and internal operations in connection with telephone number portability, instant messaging and other communications transactions. We face competition from large, well-funded providers of addressing, interoperability and infrastructure services. Moreover, we are aware of other companies that are focusing significant resources on developing and marketing services that will compete with us. We anticipate continued growth of competition. Some of our current and potential competitors have significantly more employees and greater financial, technical, marketing and other resources than we have. Our competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements than we can. Also, many of our current and potential competitors have greater name recognition that they can use to their advantage. Increased competition could result in fewer customer orders, reduced revenue, reduced gross margins and loss of market share, any of which could harm our business.

Our technology relies in part on the use of open standards, which makes us vulnerable to competition.

We frequently integrate our technology, particularly in the area of instant messaging, with the systems of our CSP customers and with communications devices through the use of open standards. If we are unable to integrate our technology with systems used by our customers or device manufacturers because they do not adopt open standards or otherwise, our revenue may decline. In addition, the failure of, or delay by, the communications industry to create open standards and protocols could have an adverse effect on the communications market in general and, consequently, our business and operating results. Conversely, the proliferation of open standards and protocols could make it easier for new market entrants and existing competitors to introduce products that compete with our solutions, which could adversely affect our business and operating results.

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Our intellectual property could be misappropriated, which could force us to become involved in expensive and time-consuming litigation.

Our ability to compete and continue to provide technological innovation is substantially dependent upon internally developed technology. We rely on a combination of patent, copyright, and trade secret laws to protect our intellectual property or proprietary rights in such technology. Despite our efforts to protect our intellectual property and proprietary rights, unauthorized parties may copy or otherwise obtain and use our products, technology or trademarks. Effectively policing our intellectual property is time consuming and costly, and the steps taken by us may not prevent infringement of our intellectual property or proprietary rights in our products, technology and trademarks, particularly in foreign countries where in many instances the local laws or legal systems do not offer the same level of protection as in the United States.

Our services and solutions may infringe the intellectual property rights of others, subjecting us to claims for infringement, payment of license royalties, or other damages.

Our services and solutions may infringe the intellectual property rights of others, subjecting us to claims for infringement, payment of license royalties, or other remedies. As we expand our business and introduce new services and solutions, there may be an increased risk of infringement and other intellectual property claims by third parties. From time to time, we and our customers may receive claims alleging infringement of intellectual property rights, or may become aware of certain third party patents that may relate to our services and solutions. For example, our instant messaging solutions are designed to conform to Open Mobile Alliance, or OMA, specifications and those of other standards bodies. To the extent that any individual or organization that has contributed intellectual property to OMA or other standards bodies claims that it has retained its rights relating to such intellectual property, we may be subject to claims of infringement by such individuals or organizations, some of which have greater financial resources and larger intellectual property portfolios than our own.

Additionally, some of our customer agreements require that we indemnify our customers for infringement of our intellectual property embedded in their products. Any litigation regarding patents or other intellectual property could be costly and time consuming and could divert our management and key personnel from our business operations. The complexity of the technology involved, and the number of parties holding intellectual property within the communications industry, increase the risks associated with intellectual property litigation. Moreover, the commercial success of our services and solutions may increase the risk that an infringement claim may be made against us. Royalty or licensing arrangements, if required, may not be available on terms acceptable to us, if at all. Any infringement claim successfully asserted against us or against a customer for which we have an obligation to defend could result in costly litigation, the payment of substantial damages, and an injunction that prohibits us from continuing to offer the service or solution in question.

Our failure to achieve or sustain market acceptance at desired pricing levels could impact our ability to maintain profitability or positive cash flow.

Our competitors and customers may cause us to reduce the prices we charge for our services and solutions. The primary sources of pricing pressure include:

•  competitors offering our customers services at reduced prices, or bundling and pricing services in a manner that makes it difficult for us to compete. For example, a competing provider of interoperability services might offer its services at lower rates than we do, or a competing domain name registry provider may reduce its prices for domain name registration;

•  customers with a significant volume of transactions may have enhanced leverage in pricing negotiations with us; and

•  if our prices are too high, potential customers may find it economically advantageous to handle certain functions internally instead of using us.

We may not be able to offset the effects of any price reductions by increasing the number of transactions we handle or the number of customers we serve, by generating higher revenue from enhanced services or by reducing our costs.

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A decline in the volume of transactions we handle could have a material adverse effect on our results of operations.

We earn revenue for the vast majority of the services that we provide on a per transaction basis. There are no minimum revenue requirements in our contracts, which means that there is no limit to the potential adverse effect on our revenue from a decrease in our transaction volumes. As a result, if industry participants reduce their usage of our services from their current levels, our revenue and results of operations will suffer. For example, consolidation in the industry could result in a decline in transactions if the remaining CSPs decide to handle changes to their networks internally rather than use the services that we provide. Moreover, if customer churn between CSPs in the industry stabilizes or declines, or if CSPs do not compete vigorously to lure customers away from their competitors, use of our telephone number portability and other services may decline. If CSPs develop internal systems to address their infrastructure needs, or if the cost of such transactions makes it impractical for a given carrier to use our services for these purposes, we may experience a reduction in transaction volumes. If instant messaging is not broadly adopted by the end users serviced by our customers, revenue from our instant messaging solutions will be adversely impacted. Finally, the trends that we believe will drive the future demand for our clearinghouse services, such as the emergence of IP services, growth of wireless services, consolidation in the industry, and pressure on carriers to reduce costs, may not actually result in increased demand for our services, which would harm our future revenue and growth prospects.

If we are unable to manage our growth, our revenue and profits could be adversely affected.

Our business was founded in 1996 and we have experienced substantial growth since our inception. Sustaining our growth has placed significant demands on our management as well as on our administrative, operational and financial resources. For us to continue to manage our growth, we must continue to improve our operational, financial and management information systems and expand, motivate and manage our workforce. If we are unable to successfully manage our growth without compromising our quality of service and our profit margins, or if new systems that we implement to assist in managing our growth do not produce the expected benefits, we may experience higher turnover in our customer base and our revenue and profits could be adversely affected.

We may be unable to complete suitable acquisitions, or we may undertake acquisitions that could increase our costs or liabilities or be disruptive to our business.

We have made a number of acquisitions in the past, and one of our strategies is to pursue acquisitions selectively in the future. We may not be able to locate suitable acquisition candidates at prices that we consider appropriate or to finance acquisitions on terms that are satisfactory to us. Even if we do identify an appropriate acquisition candidate and pursue an acquisition, we may not be able to successfully negotiate the terms of an acquisition, finance the acquisition or, if the acquisition occurs, integrate the acquired business into our existing business. Acquisitions of businesses or other material operations may require additional debt or equity financing, resulting in the incurrence of additional leverage or dilution to our stockholders.

Acquisitions involve significant risks. In 2006 alone, we acquired UltraDNS Corporation and Followap Inc. If we fail to successfully integrate and support the operations of acquired businesses, or if anticipated revenue enhancements and cost savings are not realized, our business, results of operations and financial condition could be materially adversely affected. Integration of acquired business operations could disrupt our business by diverting management away from day-to-day operations. The difficulties of integration may be exacerbated by the necessity of coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds, integrating systems, products or technologies, integrating internal controls, procedures and policies and combining different corporate cultures. We also may not realize cost efficiencies or synergies or other benefits that we anticipated when selecting our acquisition candidates, and we may be required to invest significant capital and resources after acquisition to integrate, maintain or grow the businesses that we acquire. In addition, we may need to record write-downs from future impairments of goodwill or intangible assets in connection with acquisitions, which could reduce our future reported earnings. We also run the risk of failing to retain key employees of an acquired business or existing key employees. Further, at times, acquisition candidates may have liabilities, neutrality-related risks or adverse operating issues that we fail to discover through due diligence prior to the acquisition, and the

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failure to discover such issues prior to such acquisition could have a material adverse effect on our business and results of operations.

Our expansion into international markets may be subject to uncertainties that could increase our costs to comply with regulatory requirements in foreign jurisdictions, disrupt our operations, and require increased focus from our management.

We recently acquired Followap Inc., a UK-based enterprise, and we intend to pursue international business opportunities in the future. International operations and business expansion plans are subject to numerous additional risks, including economic and political risks in foreign jurisdictions in which we operate or seek to operate, the difficulty of enforcing contracts and collecting receivables through some foreign legal systems, unexpected changes in regulatory requirements and the difficulties associated with managing a large organization spread throughout various countries. If we continue to expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these and other risks associated with our international operations. However, any of these factors could adversely affect our international operations and, consequently, our operating results.

For example, our instant messaging solutions currently target international markets almost exclusively. Risks inherent in conducting business internationally include:

•  differing technology standards and pace of adoption;

•  export restrictions on encryption and other technologies;

•  fluctuations in currency exchange rates and any imposition of currency exchange controls;

•  increased competition by local, regional, or global companies; and

•  difficulties in collecting accounts receivable and longer collection periods.

While we attempt to hedge our currency risk, we may be unable to do so effectively. In addition, international sales could decline due to unexpected changes in regulatory requirements applicable to our business, or differences in foreign laws and regulations, including foreign tax, intellectual property, labor and contract law. Any of these factors could harm our international operations and, consequently, our operating results.

Our senior management is important to our customer relationships, and the loss of one or more of our senior managers could have a negative impact on our business.

We believe that our success depends in part on the continued contributions of our Chief Executive Officer, Jeffrey Ganek, and other members of our senior management. We rely on our executive officers and senior management to generate business and execute programs successfully. In addition, the relationships and reputation that members of our management team have established and maintain with our customers and our regulators contribute to our ability to maintain good customer relations. The loss of Jeffrey Ganek or any other member of senior management could impair our ability to identify and secure new contracts and otherwise to manage our business.

We must recruit and retain skilled employees to succeed in our business, and our failure to recruit and retain qualified employees could harm our ability to maintain and grow our business.

We believe that an integral part of our success is our ability to recruit and retain employees who have advanced skills in the services and solutions that we provide and who work well with our customers in the regulated environment in which we operate. In particular, we must hire and retain employees with the technical expertise and industry knowledge necessary to maintain and continue to develop our operations and must effectively manage our growing sales and marketing organization to ensure the growth of our operations. Our future success depends on the ability of our sales and marketing organization to establish direct sales channels and to develop multiple distribution channels with Internet service providers and other third parties. The employees with the skills we require are in great demand and are likely to remain a limited resource in the foreseeable future. If we are unable to recruit and

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retain a sufficient number of these employees at all levels, our ability to maintain and grow our business could be negatively impacted.

Our ability to access additional capital in the future may be limited.

We have historically relied on outside financing and cash flow from operations to fund our operations, capital expenditures and expansion. We may require additional capital in the future to fund our operations, finance investments in equipment or infrastructure, or respond to competitive pressures or strategic opportunities. However, our neutrality requirements may limit or prohibit our ability to obtain debt or equity financing by restricting the ability of certain parties from acquiring our stock or our debt, or the amount that such parties may acquire. In addition, additional financing may not be available on terms favorable to us, or at all. Further, the terms of available financing may place limits on our financial and operating flexibility. If we are unable to obtain sufficient capital in the future, we may:

•  not be able to continue to meet customer demand for service quality, availability and competitive pricing;

•  be forced to reduce our operations;

•  not be able to expand or acquire complementary businesses; and

•  not be able to develop new services or otherwise respond to changing business conditions or competitive pressures.

Risks Related to Our Common Stock

Our common stock price may be volatile.

The market price of our Class A common stock may fluctuate widely. Fluctuations in the market price of our Class A common stock could be caused by many things, including:

•  our perceived prospects, including the impact of acquisitions or potential acquisitions, and the prospects of the communications and Internet industry in general;

•  differences between our actual financial and operating results and those expected by investors and analysts;

•  changes in analysts’ recommendations or projections;

•  changes in general valuations for communications companies;

•  adoption or modification of regulations, policies, procedures or programs applicable to our business;

•  sales of our Class A common stock by our officers, directors or principal stockholders;

•  sales of significant amounts of our Class A common stock in the public market, or the perception that such sales may occur;

•  sales of our Class A common stock due to a required divestiture under the terms of our certificate of incorporation; and

•  changes in general economic or market conditions and broad market fluctuations.

Each of these factors, among others, could have a material adverse effect on the market price of our Class A common stock. In addition, in recent years, the stock market in general and the shares of technology companies in particular have experienced extreme price fluctuations. This volatility has had a substantial effect on the market prices of securities issued by many companies for reasons unrelated to the operating performance of the specific companies. Some companies that have had volatile market prices for their securities have had securities class action suits filed against them. If a suit were to be filed against us, regardless of the outcome, it could result in substantial costs and a diversion of our management’s attention and resources. This could have a material adverse effect on our business, prospects, financial condition and results of operations.

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Delaware law and provisions in our certificate of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, and the market price of our Class A common stock may be lower as a result.

We are a Delaware corporation, and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our certificate of incorporation and bylaws may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. Our certificate of incorporation and bylaws:

•  authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt;

•  prohibit cumulative voting in the election of directors, which would otherwise enable holders of less than a majority of our voting securities to elect some of our directors;

•  establish a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following election;

•  require that directors only be removed from office for cause;

•  provide that vacancies on the board of directors, including newly-created directorships, may be filled only by a majority vote of directors then in office;

•  disqualify any individual from serving on our board if such individual’s service as a director would cause us to violate our neutrality requirements;

•  limit who may call special meetings of stockholders;

•  prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders; and

•  establish advance notice requirements for nominating candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

In order to comply with our neutrality requirements, our certificate of incorporation contains ownership and transfer restrictions relating to telecommunications service providers and their affiliates, which may inhibit potential acquisition bids that our stockholders may consider favorable, and the market price of our Class A common stock may be lower as a result.

In order to comply with neutrality requirements imposed by the FCC in its orders and rules, no entity that qualifies as a “telecommunications service provider” or affiliate of a telecommunications service provider, as such terms are defined under the Communications Act of 1934 and FCC rules and orders, may beneficially own 5% or more of our capital stock. As a result, subject to limited exceptions, our certificate of incorporation prohibits any telecommunications service provider or affiliate of a telecommunications service provider from beneficially owning, directly or indirectly, 5% or more of our outstanding capital stock. Among other things, our certificate of incorporation provides that:

•  if one of our stockholders experiences a change in status or other event that results in the stockholder violating this restriction, or if any transfer of our stock occurs that, if effective, would violate the 5% restriction, we may elect to purchase the excess shares (i.e., the shares that cause the violation of the restriction) or require that the excess shares be sold to a third party whose ownership will not violate the restriction;

•  pending a required divestiture of these excess shares, the holder whose beneficial ownership violates the 5% restriction may not vote the shares in excess of the 5% threshold; and

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•  if our board of directors, or its permitted designee, determines that a transfer, attempted transfer or other event violating this restriction has taken place, we must take whatever action we deem advisable to prevent or refuse to give effect to the transfer, including refusal to register the transfer, disregard of any vote of the shares by the prohibited owner, or the institution of proceedings to enjoin the transfer.

Our board of directors has the authority to make determinations as to whether any particular holder of our capital stock is a telecommunications service provider or an affiliate of a telecommunications service provider. Any person who acquires, or attempts or intends to acquire, beneficial ownership of our stock that will or may violate this restriction must notify us as provided in our certificate of incorporation. In addition, any person who becomes the beneficial owner of 5% or more of our stock must notify us and certify that such person is not a telecommunications service provider or an affiliate of a telecommunications service provider. If a 5% stockholder fails to supply the required certification, we are authorized to treat that stockholder as a prohibited owner — meaning, among other things, that we may elect to purchase the excess shares or require that the excess shares be sold to a third party whose ownership will not violate the restriction. We may request additional information from our stockholders to ensure compliance with this restriction. Our board will treat any “group,” as that term is defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as a single person for purposes of applying the ownership and transfer restrictions in our certificate of incorporation.

Nothing in our certificate of incorporation restricts our ability to purchase shares of our capital stock. If a purchase by us of shares of our capital stock results in a stockholder’s percentage interest in our outstanding capital stock increasing to over the 5% threshold, such stockholder must deliver the required certification regarding such stockholder’s status as a telecommunications service provider or affiliate of a telecommunications service provider. In addition, to the extent that a repurchase by us of shares of our capital stock causes any stockholder to violate the restrictions on ownership and transfer contained in our certificate of incorporation, that stockholder will be subject to all of the provisions applicable to prohibited owners, including required divestiture and loss of voting rights.

These restrictions and requirements may:

•  discourage industry participants that might have otherwise been interested in acquiring us from making a tender offer or proposing some other form of transaction that could involve a premium price for our shares or otherwise be in the best interests of our stockholders; and

•  discourage investment in us by other investors who are telecommunications service providers or who may be deemed to be affiliates of a telecommunications service provider.

The standards for determining whether an entity is a “telecommunications service provider” are established by the FCC. In general, a telecommunications service provider is an entity that offers telecommunications services to the public at large, and is, therefore, providing telecommunications services on a common carrier basis. Moreover, a party will be deemed to be an affiliate of a telecommunications service provider if that party controls, is controlled by, or is under common control with, a telecommunications service provider. A party is deemed to control another if that party, directly or indirectly:

•  owns 10% or more of the total outstanding equity of the other party;

•  has the power to vote 10% or more of the securities having ordinary voting power for the election of the directors or management of the other party; or

•  has the power to direct or cause the direction of the management and policies of the other party.

The standards for determining whether an entity is a telecommunications service provider or an affiliate of a telecommunications service provider and the rules applicable to telecommunications service providers and their affiliates are complex and may be subject to change. Each stockholder is responsible for notifying us if it is a telecommunications service provider or an affiliate of a telecommunications service provider.

ITEM 1B.   UNRESOLVED STAFF COMMENTS

None.

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ITEM 2.   PROPERTIES

Our corporate headquarters are located in Sterling, Virginia under leases that are scheduled to expire in July and August 2010. We have two five-year renewal options on these leases.

As a result of the Followap acquisition, we now lease operating space in Stainsfield, United Kingdom, Haifa, Israel and Dusseldorf, Germany, which supplement our existing leases in Hong Kong and Singapore. Within the United States, we also lease operating space in North Carolina, the District of Columbia, and California. These domestic and international leases expire on various dates through March 2017. We believe that our existing facilities are sufficient to meet our requirements, and that new space will be available on commercially reasonable terms as we expand.

ITEM 3.   LEGAL PROCEEDINGS

From time to time, we are subject to claims in legal proceedings arising in the normal course of our business. We do not believe that we are party to any pending legal action that could reasonably be expected to have a material adverse effect on our business or operating results.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES

Market for Our Common Stock

Prior to June 29, 2005, there was no established public trading market for our Class A common stock. Since June 29, 2005, our Class A common stock has traded on the New York Stock Exchange under the symbol “NSR.” As of February 15, 2007, our Class A common stock was held by 112 stockholders of record. The following table sets forth the per-share range of the high and low sales prices of our Class A common stock as reported on the New York Stock Exchange for the periods indicated:

	High		Low
Fiscal year ended December 31, 2005
First quarter		N/A		N/A
Second quarter	$	26.67	$	24.50
Third quarter	$	33.02	$	25.35
Fourth quarter	$	32.95	$	28.85
Fiscal year ended December 31, 2006
First quarter	$	32.32	$	27.00
Second quarter	$	37.73	$	28.41
Third quarter	$	33.01	$	25.03
Fourth quarter	$	33.80	$	26.80

There is no established public trading market for our Class B common stock. As of February 15, 2007, our Class B common stock was held by 10 stockholders of record.

Dividends

We did not pay any cash dividends on our Class A or Class B common stock in 2005 or 2006 and we do not expect to pay any cash dividends on our common stock for the foreseeable future. We currently intend to retain any future earnings to finance our operations and growth. Our revolving credit facility limits our ability to declare or pay

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dividends. We are also limited by Delaware law in the amount of dividends we can pay. Any future determination to pay cash dividends will be at the discretion of our board of directors and will depend on earnings, financial condition, operating results, capital requirements, any contractual restrictions and other factors that our board of directors deems relevant.

Performance Graph

The following chart shows how $100 invested in our Class A common stock on June 29, 2005, the day our Class A common stock began trading on the New York Stock Exchange, would have grown through the period ended December 31, 2006, compared with: (a) $100 invested in the Russell 2000 Index, and (b) $100 invested in the NYSE TMT Index, each over that same period. The comparison assumes reinvestment of dividends. The stock performance in the graph is included to satisfy our SEC disclosure requirements, and is not intended to forecast or to be indicative of future performance.

This Performance Graph shall not be deemed to be incorporated by reference into our SEC filings and shall not constitute soliciting material or otherwise be considered filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Company Name/Index	6/29/05		12/31/05		12/31/06
NeuStar, Inc.	$	100	$	117	$	125
Russell 2000 Index	$	100	$	105	$	123
NYSE TMT Index	$	100	$	103	$	126

ITEM 6.   SELECTED FINANCIAL DATA.

The tables below present selected consolidated statements of operations data for each of the five years ended December 31, 2006 and selected consolidated balance sheet data as of December 31, 2002, 2003, 2004, 2005 and 2006. The selected consolidated statements of operations data for each of the three years ended December 31, 2004, 2005 and 2006, and the selected consolidated balance sheet data as of December 31, 2005 and 2006, have been derived from, and should be read together with, our audited consolidated financial statements and related notes appearing in this report. The selected consolidated statements of operations data for each of the two years ended December 31, 2002 and 2003, and the selected consolidated balance sheet data as of December 31, 2002, 2003 and 2004, have been derived from our audited consolidated financial statements and related notes not included in this report. The share and per share data included in the selected consolidated statements of operations data for the years ended December 31, 2002, 2003, and 2004 reflect the 1.4-for-1 split of our common stock effected as part of the Recapitalization, but do not reflect other aspects of the Recapitalization.

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The following information should be read together with, and is qualified in its entirety by reference to, the more detailed information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this report and our consolidated financial statements and related notes in Item 8 of this report.

	Year Ended December 31,
	2002			2003			2004			2005			2006
	(In thousands, except per share data)
Consolidated Statements of Operations Data:
Total revenue	$	90,972		$	111,693		$	165,001		$	242,469		$	332,957
Operating expense:
Cost of revenue (excluding depreciation and amortization shown separately below)		36,677			37,846			49,261			64,891			86,106
Sales and marketing		13,855			14,381			22,743			29,543			47,671
Research and development		6,256			6,678			7,377			11,883			17,639
General and administrative		13,366			11,359			21,144			28,048			34,902
Depreciation and amortization		27,020			16,051			17,285			16,025			24,016
Restructuring charges (recoveries)		7,332			(1,296	)		(220	)		(389	)		—
Asset impairment charge		13,190			—			—			—			—
		117,696			85,019			117,590			150,001			210,334
(Loss) income from operations		(26,724	)		26,674			47,411			92,468			122,623
Other (expense) income:
Interest expense		(6,260	)		(3,119	)		(2,498	)		(2,121	)		(1,300	)
Interest income		1,876			1,299			1,629			2,406			4,024
(Loss) income before minority interest and income taxes		(31,108	)		24,854			46,542			92,753			125,347
Minority interest		1,908			10			—			(104	)		(95	)
(Loss) income before income taxes		(29,200	)		24,864			46,542			92,649			125,252
Provision for income taxes		—			836			1,166			37,251			51,353
Net (loss) income		(29,200	)		24,028			45,376			55,398			73,899
Dividends on and accretion of preferred stock		(9,102	)		(9,583	)		(9,737	)		(4,313	)		—
Net (loss) income attributable to common stockholders	$	(38,302	)	$	14,445		$	35,639		$	51,085		$	73,899
Net (loss) income attributable to common stockholders per common share:
Basic	$	(9.04	)	$	3.09		$	6.33		$	1.48		$	1.02
Diluted	$	(9.04	)	$	0.31		$	0.57		$	0.72		$	0.94
Weighted average common shares outstanding:
Basic		4,236			4,680			5,632			34,437			72,364
Diluted		4,236			76,520			80,237			77,046			78,267

	As of December 31,
	2002			2003			2004			2005		2006
	(In thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and short-term investments	$	21,347		$	63,987		$	63,929		$	103,475	$	58,252
Working capital		3,633			23,630			38,441			113,296		53,970
Goodwill and intangible assets		44,087			54,751			50,703			54,150		257,051
Total assets		132,544			190,245			211,454			283,215		448,259
Deferred revenue and customer credits, excluding current portion		2,910			14,840			13,892			18,463		17,921
Long-term debt and capital lease obligations, excluding current portion		7,722			5,996			7,964			4,459		3,925
Convertible preferred stock, Series B, Series C and Series D		151,458			161,041			140,454			—		—
Total stockholders’ (deficit) equity		(87,300	)		(68,581	)		(31,858	)		186,163		341,146

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ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis in conjunction with the information set forth under “Selected Financial Data” in Item 6 of this report and our consolidated financial statements and related notes in Item 8 of this report. The statements in this discussion related to our expectations regarding our future performance, liquidity and capital resources, and other non-historical statements in this discussion, are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Risk Factors” in Item 1A of this report and “Business — Cautionary Note Regarding Forward-Looking Statements” in Item 1 of this report. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Overview

We continued to experience increased demand for our clearinghouse services in 2006, and we made significant steps to innovate and expand the range and value of the services that we provide to meet the evolving needs of the communications industry. Under our contracts to provide telephone number portability services in the United States, we processed 234.4 million transactions, a growth of 37% over 2005. We believe that this growth in transaction volume demonstrates strong demand for our services from numerous sources, including, most significantly, customers who have been upgrading to next generation technologies, such as Internet Protocol, or IP, systems, and the entry of new service providers. In 2006, we also saw significant demand for our services from content providers to market their products and services using U.S. Common Short Codes.

The growth in demand for our clearinghouse services led to the amendment and extension of our seven contracts with the North American Portability Management LLC under which we provide telephone number portability and other clearinghouse services in the United States. Under these amendments, which we announced in September 2006, these contracts now run until June 2015. Pricing for 2006, including volume-based credits, remained unchanged. For 2007, pricing is $0.91 per transaction regardless of transaction volume. Pricing from 2008 through the expiration of the contracts contains volume-based pricing that ranges from $0.95 per transaction to $0.75 per transaction, with the precise effective rate being determined based on transaction volumes within the applicable calendar year. In July 2006, working with the CTIA, we also expanded the U.S. Common Short Codes directory to include six-digit short codes, enabling an unprecedented number of new codes for providers to establish relationships with mobile customers. In December 2006, we renewed our agreement to operate the .biz registry.

During 2006, we executed on our long-standing strategy to expand the scope of our services and customers through acquisitions. Specifically, in April 2006, we acquired UltraDNS Corporation for $61.8 million in cash. As a result of this acquisition, our Ultra services now play a key role in directing and managing Internet traffic, enabling thousands of our customers to intelligently and securely control and distribute that traffic, and ensuring security, scalability and reliability of websites and email. In November 2006, we announced the acquisition of Followap Inc. for $139.0 million in cash, adding an end-to-end solution for the routing and delivery of mobile instant messaging, or mobile IM. These two acquisitions position us to provide solutions to meet the challenges that our customers face as new and different communications services arise.

Our Company

We were founded to meet the technical and operational challenges of the communications industry when the U.S. government mandated local number portability in 1996. While we remain the provider of the authoritative solution upon which the industry relies to meet this mandate, we have developed a broad range of innovative services that meet an expanded range of customer needs. We provide the communications industry with critical technology services that solve the industry’s addressing, interoperability and infrastructure needs.

These services are now used by CSPs to manage a range of their technical and operating requirements, including:

•  Addressing.  We enable CSPs to use critical, shared addressing resources, such as telephone numbers, Internet top-level domain names, and U.S. Common Short Codes.

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•  Interoperability.  We enable CSPs to exchange and share critical operating data so that communications originating on one provider’s network can be delivered and received on the network of another CSP. We also facilitate order management and work flow processing among CSPs.

•  Infrastructure and Other.  We enable CSPs to manage changes in their own networks more efficiently by centrally managing certain critical data they use to route communications over their own networks.

We derive a substantial portion of our annual revenue on a transaction basis, most of which is derived from long-term contracts.

Our costs and expenses consist of cost of revenue, sales and marketing, research and development, general and administrative, and depreciation and amortization.

Cost of revenue includes all direct materials, direct labor, and those indirect costs related to the generation of revenue such as indirect labor, materials and supplies and facilities cost. Our primary cost of revenue is related to personnel costs associated with service implementation, product maintenance, customer deployment and customer care, including salaries, stock-based compensation and other personnel-related expense. In addition, cost of revenue includes costs relating to developing modifications and enhancements of our existing technology and services, as well as royalties paid related to our U.S. Common Short Code services. Cost of revenue also includes our information technology and systems department, including network costs, data center maintenance, database management, data processing costs, and facilities costs.

Sales and marketing expense consists of personnel costs, such as salaries, sales commissions, travel, stock-based compensation, and other personnel-related expense; costs associated with attending and sponsoring trade shows; costs of computer and communications equipment and support services; facilities costs; consulting fees; costs of marketing programs, such as Internet and print, including product branding, market analysis and forecasting; and customer relationship management.

Research and development expense consists primarily of personnel costs, including salaries, stock-based compensation and other personnel-related expense; consulting fees; and the costs of facilities, computer and support services used in service and technology development.

General and administrative expense consists primarily of personnel costs, including salaries, stock-based compensation, and other personnel-related expense, for our executive, administrative, legal, finance, and human resources functions. General and administrative expense also includes facilities, management information systems, support services, professional services fees, certain audit, tax and license fees.

Depreciation and amortization relates to amortization of identifiable intangibles, and the depreciation of our property and equipment, including our network infrastructure and facilities related to our services.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The preparation of these financial statements in accordance with U.S. GAAP requires us to utilize accounting policies and make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingencies as of the date of the financial statements and the reported amounts of revenue and expense during a fiscal period. The Securities and Exchange Commission considers an accounting policy to be critical if it is important to a company’s financial condition and results of operations, and if it requires significant judgment and estimates on the part of management in its application. We have discussed the selection and development of the critical accounting policies with the audit committee of our board of directors, and the audit committee has reviewed our related disclosures in this report. Although we believe that our judgments and estimates are appropriate and correct, actual results may differ from those estimates.

We believe the following to be our critical accounting policies because they are important to the portrayal of our financial condition and results of operations and they require critical management judgments and estimates about matters that are uncertain. If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operation for future periods could be

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materially affected. See Item 1A of this report, “Risk Factors,” for certain matters that may bear on our future results of operations.

Revenue Recognition

Our revenue recognition policies are in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, Revenue Recognition. We provide the following services pursuant to various private commercial and government contracts.

Addressing.  Our addressing services include telephone number administration, implementing the allocation of pooled blocks of telephone numbers, directory services for Internet domain names and U.S. Common Short Codes, and internal and external managed domain name services. We generate revenue from our telephone number administration services under two government contracts. Under our contract to serve as the North American Numbering Plan Administrator, we earn a fixed annual fee and recognize this fee as revenue on a straight-line basis as services are provided. In the event we estimate losses on our fixed fee contract, we recognize these losses in the period in which a loss becomes apparent. Under our contract to serve as the National Pooling Administrator, we are reimbursed for costs incurred plus a fixed fee associated with administration of the pooling system. We recognize revenue for this contract based on costs incurred plus a pro rata amount of the fixed-fee.

In addition to the administrative functions associated with our role as the National Pooling Administrator, we also generate revenue from implementing the allocation of pooled blocks of telephone numbers under our long-term contracts with North American Portability Management LLC, and we recognize revenue on a per-transaction fee basis as the services are performed. For our Internet domain name services, we generate revenue for Internet domain registrations, which generally have contract terms between one and ten years. We recognize revenue on a straight-line basis over the lives of the related customer contracts.

Following the acquisition of UltraDNS Corporation in April 2006, we generate revenue through internal and external managed domain name services. Our revenue consists of customer set-up fees followed by transaction processing under contracts with terms ranging from one to three years. Customer set-up fees are not considered a separate deliverable and are deferred and recognized on a straight-line basis over the term of the contract. Under our contracts to provide our managed domain name services, customers have contractually established monthly transaction volumes for which they are charged a recurring monthly fee. Transactions processed in excess of the pre-established monthly volume are billed at a contractual per-transaction rate. Each month we recognize the recurring monthly fee and usage in excess of the established monthly volume on a per-transaction basis as services are provided. We generate revenue from our U.S. Common Short Code services under short-term contracts ranging from three to twelve months, and we recognize revenue on a straight-line basis over the term of the customer contracts.

Interoperability.  Our interoperability services consist primarily of wireline and wireless number portability and order management services. We generate revenue from number portability under our long-term contracts with North American Portability Management LLC and Canadian LNP Consortium Inc. We recognize revenue on a per transaction fee basis as the services are performed. We provide order management services consisting of customer set-up and implementation followed by transaction processing under contracts with terms ranging from one to three years. Customer set-up and implementation is not considered a separate deliverable; accordingly, the fees are deferred and recognized as revenue on a straight-line basis over the term of the contract. Per-transaction fees are recognized as the transactions are processed.

Infrastructure and Other.  Our infrastructure services consist primarily of network management and connection services. We generate revenue from network management services under our long-term contracts with North American Portability Management LLC. We recognize revenue on a per transaction fee basis as the services are performed. In addition, we generate revenue from connection fees and system enhancements under our contracts with North American Portability Management LLC. We recognize our connection fee revenue as the service is performed. System enhancements are provided under contracts in which we are reimbursed for costs incurred plus a fixed fee. Revenue is recognized based on costs incurred plus a pro rata amount of the fee.

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Significant Contracts

We provide wireline and wireless number portability, implement the allocation of pooled blocks of telephone numbers and provide network management services pursuant to seven contracts with North American Portability Management LLC, an industry group that represents all telecommunications service providers in the United States. We recognize revenue under our contracts with North American Portability Management LLC primarily on a per-transaction basis. The aggregate fees for transactions processed under these contracts are determined by the total number of transactions, and these fees are billed to telecommunications service providers based on their allocable share of the total transaction charges. This allocable share is based on each respective telecommunications service provider’s share of the aggregate end-user services revenue of all U.S. telecommunications service providers, as determined by the FCC. On November 4, 2005, BellSouth Corporation filed a petition seeking changes in the way our customers are billed for services provided by us under our contracts with North American Portability Management LLC. In response to the BellSouth petition, the FCC solicited comments from other interested parties. As of February 15, 2007, the FCC had not indicated whether it will take any action based on this petition, and the BellSouth petition remains pending. We do not believe that this proposed change to the manner in which we bill for services under these contracts would have a material impact on our customers’ demand for these services. Under our contracts, we also bill a Revenue Recovery Collections, or RRC, fee of a percentage of monthly billings to our customers, which is available to us if any telecommunications service provider fails to pay its allocable share of total transactions charges. If the RRC fee is insufficient for that purpose, these contracts also provide for the recovery of such differences from the remaining telecommunications service providers.

The per-transaction pricing under these contracts provided for annual volume-based credits that were earned on all transactions in excess of the pre-determined annual volume threshold. For 2005 and 2006, the maximum aggregate volume-based credit was $7.5 million, which was applied via a reduction in per-transaction pricing once the pre-determined annual volume threshold was surpassed. When the aggregate credit was fully satisfied, the per- transaction pricing was restored to the prevailing contractual rate. In both 2005 and 2006, the pre-determined annual transaction volume threshold under these contracts was exceeded, which resulted in the issuance of $7.5 million of volume-based credits for both years. In September 2006, we amended our contracts with North American Portability Management LLC. Under these amended terms, there are no volume-based credits that will be applied in 2007 or later fiscal periods.

Contrasted to the application of volume-based credits in 2005 and 2006, billings in 2004 continued at the original contractual rate after the annual volume threshold was surpassed. Billings in excess of the discounted pricing were recorded as customer credits (liability) on the consolidated balance sheet with a corresponding reduction to revenue. In the following year when the credits were applied to invoices rendered, customer credits were reduced with a corresponding credit to accounts receivable. The annual pre-determined volume threshold was surpassed in the fourth quarter of 2004, resulting in the reduction of revenue and recognition of customer credits of $11.9 million in the aggregate for 2004. Further, as part of the amendments to these contracts in December 2003, we agreed to apply the then-current transaction fee retroactively to all 2003 transactions processed and granted credits totaling $16.0 million. These credits were applied to customer invoices over a 23-month period beginning in January 2004. Additionally, we obtained letters of credit totaling $16.0 million in January 2004 to secure a portion of these customer credits. As of December 31, 2005, none of these customer credits were outstanding.

Service Level Standards

Pursuant to certain of our private commercial contracts, we are subject to service level standards and to corresponding penalties for failure to meet those standards. We record a provision for these performance-related penalties when we become aware that required service levels that would trigger such a penalty have not been met, which results in a corresponding reduction of our revenue.

For more information regarding how we recognize revenue for each of our service categories, please see the discussion above under “— Revenue Recognition.”

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Goodwill and Intangible Assets

Our acquisition of our business from the Lockheed Martin Corporation in November 1999 as well as subsequent acquisitions resulted in the recording of goodwill, which represents the excess of the purchase price over the fair value of assets acquired, as well as other definite-lived intangible assets. Under present accounting rules (Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets), goodwill is no longer subject to amortization; instead it is subject to impairment testing criteria. Other acquired definite-lived intangible assets are being amortized over their estimated useful lives, although those with indefinite lives are not to be amortized but are tested at least annually for impairment, using a lower of cost or fair value approach. We test for impairment on an annual basis or on an interim basis if circumstances change that would indicate the possibility of impairment. The impairment review may require an analysis of future projections and assumptions about our operating performance. If such a review indicates that the assets are impaired, an expense would be recorded for the amount of the impairment, and the corresponding impaired assets would be reduced in carrying value.

Impairment of Long-Lived Assets

Our long-lived assets primarily consist of property and equipment and intangible assets. In accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we evaluate the recoverability of our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of such assets may not be recoverable. If an indication of impairment is present, we compare the estimated undiscounted future cash flows to be generated by the asset to its carrying amount. If the undiscounted future cash flows are less than the carrying amount of the asset, we record an impairment loss equal to the excess of the asset’s carrying amount over its fair value. Substantially all of our long-lived assets are located in the United States.

Accounts Receivable, Revenue Recovery Collections, and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount and do not bear interest. In accordance with our contracts with North American Portability Management LLC, we bill an RRC fee of a percentage of monthly billings to our customers. The aggregate RRC fees collected may be used to offset uncollectible receivables from an individual customer. The RRC fees are recorded as an accrued liability when collected. For the period from January 1, 2002 through June 30, 2004, this fee was 3% of monthly billings. On July 1, 2004, the RRC fee was reduced to 2%. On July 1, 2005, the RRC fee was reduced to 1%. Any accrued RRC fees in excess of uncollectible receivables are paid back to the customers annually on a pro rata basis. RRC fees of $2.5 million and $2.9 million are included in accrued expenses as of December 31, 2005 and December 31, 2006, respectively. All other receivables related to services not covered by the RRC fees are evaluated and, if deemed not collectible, are appropriately reserved.

Deferred Income Taxes

We recognize deferred tax assets and liabilities based on temporary differences between the financial reporting bases and the tax bases of assets and liabilities. These deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when such amounts are expected to reverse or be utilized. The realization of deferred tax assets is contingent upon the generation of future taxable income. When appropriate, we recognize a valuation allowance to reduce such deferred tax assets to amounts that are more likely than not to be ultimately realized. The calculation of deferred tax assets (including valuation allowances) and liabilities requires us to apply significant judgment related to such factors as the application of complex tax laws, changes in tax laws and our future operations. We review our deferred tax assets on a quarterly basis to determine if a valuation allowance is required based upon these factors. Changes in our assessment of the need for a valuation allowance could give rise to a change in such allowance, potentially resulting in additional expense or benefit in the period of change.

Income tax provision includes U.S. federal, state and local income taxes and is based on pre-tax income or loss. The provision or benefit for income taxes is based upon our estimate of our annual effective income tax rate. In determining the estimated annual effective income tax rate, we analyze various factors, including projections of our

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annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes and our ability to use tax credits and net operating loss carryforwards.

Stock-Based Compensation

In December 2004, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards, or SFAS, No. 123(R), Share-Based Payment, which requires companies to expense the estimated fair value of employee stock options and similar awards. This statement is a revision to SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion No. 25, or APB No. 25, Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of Cash Flows.

Prior to January 1, 2006, we accounted for our stock-based compensation plans under the recognition and measurement provisions of APB No. 25, and related interpretations, as permitted by SFAS No. 123. Effective January 1, 2006, we adopted SFAS No. 123(R), including the fair value recognition provisions, using the modified-prospective transition method. Under the modified-prospective transition method, compensation cost recognized in fiscal 2006 includes: (a) compensation cost for all stock-based awards granted prior to but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all stock-based awards granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123(R). Under the modified prospective transition method, prior periods are not restated. For stock-based awards subject to graded vesting, we have utilized the “straight-line” method for allocating compensation cost by period. Stock-based compensation expense recognized under SFAS No. 123(R) for 2006 was $11.9 million. At December 31, 2006, total unrecognized estimated compensation expense related to non-vested stock options, non-vested restricted stock and non-vested phantom stock units granted prior to that date was $30.5 million, which is expected to be recognized over a weighted average period of 2.1 years.

In accordance with FASB Staff Position No. FAS 123(R)-3, Transition Election Related to Accounting for Tax Effects of Share-Based Payment Awards, we elected to adopt the alternative method provided in this FASB Staff Position for calculating the tax effects of stock-based compensation pursuant to SFAS No. 123(R). The alternative transition method includes a simplified method to establish the beginning balance of the additional paid-in capital pool related to the tax effects of employee stock-based compensation, which is available to absorb tax deficiencies recognized subsequent to the adoption of SFAS No. 123(R).

Prior to adoption of SFAS No. 123(R), we presented all benefits of tax deductions resulting from the exercise of stock-based compensation as an operating cash flow in the consolidated statements of cash flows. Beginning on January 1, 2006, we changed our cash flow presentation in accordance with SFAS No. 123(R), which requires benefits of tax deductions in excess of the compensation cost recognized (excess tax benefits) to be classified as a financing cash inflow with a corresponding operating cash outflow. For the year ended December 31, 2006, we included $49.5 million of excess tax benefits as a financing cash inflow with a corresponding operating cash outflow. As a result of adopting SFAS No. 123(R) on January 1, 2006, our income before income taxes and net income for the year ended December 31, 2006 were approximately $10.4 million and $7.6 million less, respectively, than if we had continued to account for stock-based compensation under APB No. 25. Basic and diluted net income per common share for the year ended December 31, 2006 were each approximately $0.10 less than if we had not adopted SFAS No. 123(R).

Both prior and subsequent to the adoption of SFAS No. 123(R), we estimated the value of stock-based awards on the date of grant using the Black-Scholes option-pricing model. Prior to the adoption of SFAS No. 123(R), the value of each stock-based award was estimated on the date of grant using the Black-Scholes option-pricing model for the pro forma information required to be disclosed under SFAS No. 123. The determination of the fair value of stock-based payment awards on the date of grant using the Black-Scholes option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, risk-free interest rate and the expected term of the awards.

If factors change and we employ different assumptions in the application of SFAS No. 123(R) in future periods, the compensation expense that we record under SFAS No. 123(R) may differ significantly from what we have

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recorded in the current period. Therefore, we believe it is important for investors to be aware of the high degree of subjectivity involved when using option pricing models to estimate stock-based compensation under SFAS No. 123(R). Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions, are fully transferable and do not cause dilution. Because our stock-based awards have characteristics significantly different from those of freely traded options, and because changes in the subjective input assumptions can materially affect our estimates of fair values, in our opinion, existing valuation models, including the Black-Scholes option-pricing model, may not provide reliable measures of the fair values of our stock-based compensation. Consequently, there is a risk that our estimates of the fair values of our stock-based compensation awards on the grant dates may bear little resemblance to the actual values realized upon the exercise, expiration, early termination or forfeiture of those stock-based awards in the future. Certain stock-based awards, such as employee stock options, may expire worthless or otherwise result in zero intrinsic value as compared to the fair values originally estimated on the grant date and reported in our consolidated financial statements. Alternatively, value may be realized from these instruments that is significantly in excess of the fair values originally estimated on the grant date and reported in our consolidated financial statements. Although the fair value of our stock-based awards is determined in accordance with SFAS No. 123(R) and the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

Acquisitions

We have expanded the scope of our services and increased our customer base through selective acquisitions. Our objective for each acquisition was to expand the scope of the services that we provide and to leverage our clearinghouse capabilities in order to maximize efficiency and provide added value to our customers. The stock consideration described below reflects the 1.4-for-1 stock split effected as part of the Recapitalization, but does not reflect the other aspects of the Recapitalization.

fiducianet, Inc.

In February 2005, we acquired fiducianet, Inc. for $2.2 million in cash and the issuance of 35,745 shares of our common stock for total purchase consideration of $2.6 million. The acquisition of fiducianet enables us to serve as a single point of contact in managing all day-to-day customer obligations involving subpoenas, court orders and law enforcement agency requests under electronic surveillance laws, including CALEA, the USA Patriot Act of 2001 and the Homeland Security Act of 2002. The acquisition was accounted for as a purchase, and we allocated the purchase price principally to customer lists ($2.6 million) and goodwill ($1.1 million) based on their estimated fair values on the acquisition date. Customer lists are included in intangible assets and are being amortized on a straight-line basis over five years. In accordance with SFAS No. 109, Accounting for Income Taxes, or SFAS No. 109, we recorded a deferred tax liability of approximately $1.0 million with a corresponding increase to goodwill.

Foretec Seminars Inc.

In December 2005, we acquired Foretec Seminars Inc., a provider of secretariat services to the Internet Engineering Task Force (IETF), from the Corporation for National Research Initiatives (CNRI) for $875,000 in cash, of which $500,000 is payable upon the achievement of certain milestones, as well as the payment of approximately $213,000 in legal fees incurred by CNRI to establish a public trust to administer IETF-related intellectual property. In accordance with SFAS No. 141, Business Combinations, or SFAS No. 141, the $500,000 payable upon the achievement of certain milestones has been included in the purchase consideration since this amount was determinable as of the date of acquisition. The acquisition was accounted for as a purchase and the purchase price was allocated to net liabilities assumed of approximately $53,000 and goodwill ($929,000) based on their estimated fair values on the acquisition date.

NeuLevel, Inc.

In March 2006, we acquired 10% of NeuLevel, Inc. from Melbourne IT Limited for cash consideration of $4.3 million, raising the Company’s ownership interest from 90% to 100%. The acquisition of the remaining 10% of NeuLevel was accounted for as a purchase business combination in accordance with SFAS No. 141. We allocated

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the purchase price principally to customer lists ($4.1 million) based on their estimated fair values on the acquisition date. Customer lists are included in intangible assets and are being amortized on an accelerated basis over five years. In accordance with SFAS No. 109, we recorded a deferred tax liability of approximately $1.6 million with a corresponding increase to goodwill.

UltraDNS Corporation

On April 21, 2006, we acquired UltraDNS Corporation for $61.8 million in cash and acquisition costs of $0.8 million. The acquisition further expanded our domain name services and our Internet protocol technologies. The acquisition was accounted for as a purchase business combination in accordance with SFAS No. 141. Of the total cash consideration, approximately $6.1 million was distributed to an escrow account for indemnification claims as set forth in the acquisition agreement. All funds remaining in the account will be distributed to the former stockholders of UltraDNS in accordance with the acquisition agreement on the first anniversary of the acquisition.

Of the total purchase price, a preliminary estimate of $9.5 million has been allocated to net tangible assets acquired and $20.0 million has been allocated to definite-lived intangible assets acquired. We utilized a third party valuation specialist to assist management in determining the fair value of the definite-lived intangible asset base. The income approach, which includes an analysis of cash flows and the risks associated with achieving such cash flows, was the primary technique utilized in valuing the identifiable intangible assets. The $20.0 million of definite-lived intangible assets acquired consists of the value assigned to UltraDNS’s direct customer relationships of $14.7 million, web customer relationships of $0.3 million, acquired technology of $4.8 million, and trade names of $0.2 million. We are amortizing the value of the UltraDNS direct and web customer relationships in proportion to the respective discounted cash flows over an estimated useful life of 7 and 5 years, respectively. Both acquired technology and trade names are being amortized on a straight-line basis over 3 years.

Followap Inc.

On November 27, 2006, we acquired Followap Inc. for $139.0 million in cash and acquisition costs of $1.8 million along with the assumption and payment of certain Followap debt and other liabilities of $5.6 million. The acquisition further expanded our Internet protocol technologies, which is a key strategic initiative for us. The acquisition was accounted for as a purchase business combination in accordance with SFAS No. 141. Of the total cash consideration, approximately $14.1 million was distributed to an escrow account for indemnification claims as set forth in the acquisition agreement. All funds remaining in the account will be distributed to the former stockholders of Followap in accordance with the acquisition agreement on the first anniversary of the acquisition.

Of the total estimated purchase price, a preliminary estimate of $3.9 million has been allocated to net tangible liabilities assumed and $30.6 million has been allocated to definite-lived intangible assets acquired. We utilized a third party valuation in determining the fair value of the definite-lived intangible asset base. The income approach, which includes an analysis of cash flows and the risks associated with achieving such cash flows, was the primary technique utilized in valuing the identifiable intangible assets. The $30.6 million of definite lived intangible assets acquired consists of the value assigned to Followap’s customer relationships of $20.8 million and acquired technology of $9.8 million. We are amortizing the value of the Followap customer relationships using an accelerated basis over five years and the value of the acquired technology on a straight-line basis over 3 years.

Current Trends Affecting Our Results of Operations

We have experienced increased demand for our services and solutions, which has been driven by market trends such as the implementation of new technologies, expansion of new applications and end-user services, industry consolidation, increased demand for secure and scalable DNS systems, and increased use of U.S. Common Short Codes. At the same time, our growth will require continued investment by us to keep pace with the evolving needs of the communications industry, and to ensure that we are able to deliver the quality of services that our customers demand.

We expect continued growth in wireless subscribers and competition among mobile network operators, as well as continued development of new wireless applications. As CSPs expand and upgrade their networks and technology to enable the delivery of high-speed wireless services, we anticipate that they will increasingly rely

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on our services, and wireless-related transactions will remain a major contributor to our transaction volume growth. Further, we believe that mobile network operators will continue to launch and support mobile IM, which will result in increased demand for our solutions.

Advancements in the communications industry, such as changes from time division multiplexing, or TDM, to global system for mobile, or GSM, and the proliferation of VoIP service providers and the pervasive industry change to IP-based networks, have driven increased addressing and infrastructure transactions in our clearinghouse. We expect that VoIP service providers will continue to require access to inventories of telephone number resources, which will drive demand for our addressing services. Further, as the industry migrates towards next generation technologies and applications, we anticipate that demand for our infrastructure services will increase.

As the communications industry has changed to meet consumer demands and new technological advancements, consolidation among industry participants has increased. Consolidation requires the integration of disparate systems and networks, which has driven increased demand for our addressing, interoperability and infrastructure services. We anticipate that future consolidations will continue to drive growth in our transaction volumes.

Since becoming a public company in 2005, we have experienced, and will continue to experience, increases in certain general and administrative expenses to comply with the laws and regulations applicable to public companies. These laws and regulations include the provisions of the Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange Commission and the New York Stock Exchange. For example, we have incurred, and will continue to incur, increases in such items as personnel costs, professional services fees, fees for independent directors and the cost of directors and officers liability insurance. We believe that these costs will approximate $3.0 to $3.5 million annually.

In addition, as our scope of services and solutions expands, we must continue to invest in hiring and retaining necessary personnel and building internal infrastructure to manage our anticipated growth, particularly with respect to businesses that we have acquired and will acquire in the future. For example, we made, and anticipate making, substantial investments in additions to our sales force, increased facilities and personnel in international markets, and costs related to the marketing of our expanded services and solutions. This use of resources may affect our operating margins.

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Consolidated Results of Operations

Year Ended December 31, 2005 Compared to the Year Ended December 31, 2006

The following table presents an overview of our results of operations for the years ended December 31, 2005 and 2006.

	2005			2006			2005 vs. 2006
	$			$			$ Change		% Change
	(In thousands, except per share data)
Revenue:
Addressing	$	75,036		$	103,858		$	28,822		38.4%
Interoperability		52,488			56,454			3,966		7.6%
Infrastructure and other		114,945			172,645			57,700		50.2%
Total revenue		242,469			332,957			90,488		37.3%
Operating expense:
Cost of revenue (excludes depreciation and amortization shown separately below)		64,891			86,106			21,215		32.7%
Sales and marketing		29,543			47,671			18,128		61.4%
Research and development		11,883			17,639			5,756		48.4%
General and administrative		28,048			34,902			6,854		24.4%
Depreciation and amortization		16,025			24,016			7,991		49.9%
Restructuring recoveries		(389	)		—			389		(100.0	)%
		150,001			210,334			60,333		40.2%
Income from operations		92,468			122,623			30,155		32.6%
Other (expense) income:
Interest expense		(2,121	)		(1,300	)		821		(38.7	)%
Interest income		2,406			4,024			1,618		67.2%
Income before minority interest and income taxes		92,753			125,347			32,594		35.1%
Minority interest		(104	)		(95	)		9		(8.7	)%
Income before income taxes		92,649			125,252			32,603		35.2%
Provision for income taxes		37,251			51,353			14,102		37.9%
Net income		55,398			73,899			18,501		33.4%
Dividends on and accretion of preferred stock		(4,313	)		—			4,313		(100.0	)%
Net income attributable to common stockholders	$	51,085		$	73,899		$	22,814		44.7%
Net income attributable to common stockholders per common share:
Basic	$	1.48		$	1.02
Diluted	$	0.72		$	0.94
Weighted average common shares outstanding:
Basic		34,437			72,364
Diluted		77,046			78,267

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Revenue

Total revenue.  Total revenue increased $90.5 million due to increases in addressing, interoperability and infrastructure transactions.

Addressing.  Addressing revenue increased $28.8 million due primarily to the expanded range of DNS services offered by NeuStar as a result of the acquisition of UltraDNS in April 2006, and the continued increase in the number of subscribers for U.S. Common Short Codes. This increase in addressing revenue was also driven by the continued implementation and expansion of carrier networks to facilitate new communications services, such as Internet telephony. Specifically, revenue from DNS services increased $18.4 million, consisting of $15.4 million in revenue from NeuStar Ultra Services and a $3.0 million increase in revenue from our other DNS services as a result of an increased number of domain names under management. In addition, revenue from U.S. Common Short Codes increased $8.3 million and national pooling revenue increased $1.7 million.

Interoperability.  Interoperability revenue increased $4.0 million due to an increase in wireline and wireless competition and the associated movement of end users from one CSP to another, and carrier consolidation. Specifically, revenue from number portability transactions increased $4.5 million, partially offset by a decrease of $0.5 million in revenue principally due from our order management services.

Infrastructure and other.  Infrastructure and other revenue increased $57.7 million due to an increase in the demand for our network management services. Of this amount, $55.4 million was attributable to customers making changes to their networks that required actions such as disconnects and modifications to network elements. We believe these changes were driven largely by trends in the industry, including the implementation of new technologies by our customers, wireless technology upgrades, carrier vendor changes and network optimization. The remaining increase of $2.3 million was principally due to other infrastructure services.

Expense

Cost of revenue.  Cost of revenue increased $21.2 million due to growth in personnel, contractor costs to support higher transaction volumes and royalties related to our U.S. Common Short Code services. Of this amount, personnel-related expense increased $6.8 million due to increased personnel to support our customer deployment group, software engineering group and operations group. Included in personnel-related expense for the year ended December 31, 2006 is $1.8 million in stock-based compensation expense; there was no stock-based compensation expense recorded for the year ended December 31, 2005. Contractor costs for software maintenance activities and managing industry changes to our clearinghouse increased $5.4 million. Cost of revenue also increased by $7.1 million principally due to royalty expenses related to U.S. Common Short Code services and revenue share cost associated with our Internet domain names and registry gateway services. Additionally, general data center facility costs increased $1.0 million to support higher transaction volumes and expanded service offerings.

Sales and marketing.  Sales and marketing expense increased $18.1 million due to additions to our sales and marketing team to focus on branding, product launches, expanded DNS service offerings and new business development opportunities, including international expansion. Of this amount, personnel and personnel-related expense increased $16.0 million, and professional fees for product branding increased $0.9 million. Included in personnel-related expense for the year ended December 31, 2006 is $3.9 million in stock-based compensation, as compared to $1.0 million for the year ended December 31, 2005.

Research and development.  Research and development expense increased $5.8 million due to the development of Internet telephony solutions to enhance our service offerings. Of this increase, personnel and personnel-related costs increased $4.5 million due to increased headcount. Included in personnel-related expense for the year ended December 31, 2006 is $1.2 million in stock-based compensation expense; there was no stock-based compensation expense included in research and development expense for the year ended December 31, 2005. In addition, consulting expenses increased $1.2 million due to expanded use of outside consultants to augment our internal research and development resources.

General and administrative.  General and administrative expense increased $6.9 million primarily due to costs incurred to support business growth and costs incurred to comply with our requirements as a public company, including the Sarbanes-Oxley Act of 2002. Specifically, personnel and personnel-related costs increased

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$9.7 million to support business growth and compliance with our requirements as a public company. Included in this personnel-related expense for the year ended December 31, 2006 is $4.9 million in stock-based compensation expense, as compared to $1.7 million for the year ended December 31, 2005. In addition, professional fees increased $0.7 million and general operational costs also increased $3.6 million, which included a $1.5 million increase in bad debt expense related to our Ultra Services and order management services. These increases were partially offset by a $5.8 million reduction of general and administrative expense related to costs and related expenses we incurred in connection with our two public offerings in 2005 for which there was no comparable expense in 2006. These increases were further offset by the reversal of a legal contingency accrual of $1.5 million in the second quarter of 2006 for which there was no comparable reversal in 2005.

Depreciation and amortization.  Depreciation and amortization expense increased $8.0 million due primarily to an increase of $5.0 million in the amortization of identified intangibles, which is primarily a result of our acquisition of UltraDNS and Followap. Additionally, depreciation and amortization expense increased $2.8 million relating to additional capital assets to support operations.

Restructuring recoveries.  In 2005, we recorded a net restructuring recovery of $0.4 million, which included a restructuring recovery of $0.7 million after entering into a sub-lease for our leased property in Chicago with sub-lease rates more favorable than originally assumed when the restructuring liability for the closure of excess facilities was recorded in 2002. This was partially offset by a restructuring charge of $317,000 for the closure of our facility in Oakland, CA, which was completed on October 31, 2005. There were no similar charges during the year ended December 31, 2006.

Interest expense.  Interest expense decreased $0.8 million in 2006 as compared to 2005 due predominantly to a decrease in the principal amount outstanding under notes payable and a decrease in the amount of assets subject to existing capital leases.

Interest income.  Interest income increased $1.6 million due to higher average cash balances.

Provision for income taxes.  Income tax provision in 2006 increased $14.1 million as compared to 2005 due to an increase in net income. Our annual effective statutory rate increased to 41.0% for the year ended December 31, 2006 from 40.2% for the year ended December 31, 2005.

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Year Ended December 31, 2004 Compared to the Year Ended December 31, 2005

The following table presents an overview of our results of operations for the years ended December 31, 2004 and 2005. The share and per share data in the following table reflect the 1.4-for-1 stock split effected as part of the Recapitalization, but do not reflect the other aspects of the Recapitalization.

	2004			2005			2004 vs. 2005
	$			$			$ Change			% Change
	(In thousands, except per share data)
Revenue:
Addressing	$	50,792		$	75,036		$	24,244			47.7	%
Interoperability		34,228			52,488			18,260			53.3	%
Infrastructure and other		79,981			114,945			34,964			43.7	%
Total revenue		165,001			242,469			77,468			47.0	%
Operating expense:
Cost of revenue (excludes depreciation and amortization shown separately below)		49,261			64,891			15,630			31.7	%
Sales and marketing		22,743			29,543			6,800			29.9	%
Research and development		7,377			11,883			4,506			61.1	%
General and administrative		21,144			28,048			6,904			32.7	%
Depreciation and amortization		17,285			16,025			(1,260	)		(7.3	)%
Restructuring recoveries		(220	)		(389	)		(169	)		76.8	%
		117,590			150,001			32,411			27.6	%
Income from operations		47,411			92,468			45,057			95.0	%
Other (expense) income:
Interest expense		(2,498	)		(2,121	)		377			(15.1	)%
Interest income		1,629			2,406			777			47.7	%
Income before minority interest and income taxes		46,542			92,753			46,211			99.3	%
Minority interest		—			(104	)		(104	)		—
Income before minority interest		46,542			92,649			46,107			99.1	%
Provision for income taxes		1,166			37,251			36,085			3094.8	%
Net income		45,376			55,398			10,022			22.1	%
Dividends on and accretion of preferred stock		(9,737	)		(4,313	)		5,424			(55.7	)%
Net income attributable to common stockholders	$	35,639		$	51,085		$	15,446			43.3	%
Net income attributable to common stockholders per common share:
Basic	$	6.33		$	1.48
Diluted	$	0.57		$	0.72
Weighted average common shares outstanding:
Basic		5,632			34,437
Diluted		80,237			77,046

Revenue

Total revenue.  Total revenue increased $77.5 million due to increases in addressing, interoperability and infrastructure transactions. Contributing to this increase was a contractual reduction in the total volume-based

40

credits available to our customers under our contracts with North American Portability Management LLC, which resulted in an $11.9 million reduction in revenue in 2004, compared to a $7.5 million reduction in 2005.

Addressing.  Addressing revenue increased $24.2 million due to the continued implementation of, and expansion of carrier networks to facilitate, new communications services, such as Internet telephony, as well as growth in the use of U.S. Common Short Codes and other wireless data services. Of this amount, revenue from pooling transactions increased $17.3 million, primarily as service providers continued to build inventories of telephone numbers in multiple area codes and rate centers to be able to offer them to Internet and wireless telephony users. In addition, U.S. Common Short Codes revenue increased $5.5 million due to an increase in the number of subscribers for U.S. Common Short Codes. Revenue from our domain name services increased $1.7 million due in large part to the increased number of names under management, partially offset by a reduction of approximately $0.6 million in our administration fees under our contract to serve as the North American Numbering Plan Administrator.

Interoperability.  Interoperability revenue increased $18.3 million due to an increase in wireline and wireless competition and the associated movement of end users from one CSP to another, carrier consolidation, and broader usage of our expanding service offerings such as enhanced order management services for wireless data and Internet telephony providers. Specifically, revenue from number portability transactions increased $10.5 million, and revenue from our order management services increased $7.1 million.

Infrastructure and other.  Infrastructure and other revenue increased $35.0 million due to an increase in the demand for our network management services. Of this amount, $28.9 million was attributable to customers making changes to their networks that required actions such as disconnects and modifications to network elements. We believe these changes were driven largely by trends in the industry, including the implementation of new technologies by our customers, wireless technology upgrades, carrier vendor changes and network optimization. Connection fees and other revenue increased $5.2 million in 2005 due in part to revenue related to one-time functionality improvements that our customers requested.

Expense

Cost of revenue.  Cost of revenue increased $15.6 million due to growth in personnel, contractor costs to support higher transaction volumes and royalties related to our U.S. Common Short Code services. Of this amount, personnel and personnel-related expense increased $8.6 million due to increased personnel to support our customer deployment group, software engineering group and operations group. Contractor costs increased $4.1 million for software maintenance activities and managing industry changes to our clearinghouse. Additionally, cost of revenue increased by $4.1 million due to royalty expenses related to U.S. Common Short Code services and revenue share cost associated with our Internet domain names and registry gateway services. These increases were partially offset by a $1.2 million decrease in facilities expense, maintenance of hardware and software and other clearinghouse expenses.

Sales and marketing.  Sales and marketing expense increased $6.8 million due to additions to our sales and marketing team to focus on branding, product launches and new business development opportunities, including international expansion. Of this amount, personnel and personnel-related expense increased $6.2 million, and costs related to industry events increased $0.3 million.

Research and development.  Research and development expense increased $4.5 million due to the development of Internet telephony solutions to enhance our service offerings. Of this increase, personnel and personnel-related costs increased $3.1 million due to increased headcount, and fees for consultants to augment our internal research and development resources increased $0.9 million.

General and administrative.  General and administrative expense increased $6.9 million primarily due to costs incurred to support business growth and costs incurred in preparation for, and in conjunction with, becoming a public company. We recorded $5.8 million of offering costs related to our public offerings in 2005 and other related expense, which includes legal, accounting and consulting fees. In addition, personnel and personnel-related expense increased $2.0 million, which was partially offset in part by a reduction of $0.7 million in general and administrative facility costs.

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Depreciation and amortization.  Depreciation and amortization expense decreased $1.3 million due to the expiration of certain capital leases.

Restructuring recoveries.  In 2005, we recorded a net restructuring recovery of $0.4 million, which included a restructuring recovery of $0.7 million after entering into a sub-lease for our leased property in Chicago with sub-lease rates more favorable than originally assumed when the restructuring liability for the closure of excess facilities was recorded in 2002. This was partially offset by a restructuring charge of $317,000 for the closure of our facility in Oakland, CA, which was completed on October 31, 2005.

Interest expense.  Interest expense decreased $0.4 million in 2005 as compared to 2004 due to decrease in the number of capital leases.

Interest income.  Interest income increased $0.8 million due to higher average cash balances.

Provision for income taxes.  We recorded a provision for income taxes of $37.3 million in 2005 to reflect the expected 2005 effective tax rate, as compared to $1.2 million in 2004. As of June 30, 2004, we had generated operating profits for six consecutive quarters. As a result of this earnings trend, we determined that it was more likely than not that we would realize our deferred tax assets and reversed approximately $20.2 million of our deferred tax asset valuation allowance. The reversal resulted in the recognition of an income tax benefit of $16.9 million, and a reduction of goodwill of $3.3 million. The benefit was offset by current income tax expense of $7.6 million and deferred income taxes of $10.7 million, resulting in a net income tax expense of $1.2 million for 2004. Our annual effective income tax rate increased from 2.5% for the year ended December 31, 2004 to 40.2% for the year ended December 31, 2005.

Liquidity and Capital Resources

Historically, our principal source of liquidity has been cash provided by operations. In accordance with SFAS No. 123(R), the benefits of tax deductions in excess of compensation cost recognized for the exercise of common stock options (excess tax benefits) are classified as a financing cash inflow and a corresponding operating cash outflow, rather than as an operating cash flow as required prior to the adoption of SFAS No. 123(R). As a result, currently our principal sources of liquidity are cash provided by operating activities and cash inflows relating to excess tax benefits.

Our principal uses of cash have been to fund acquisitions, facility expansions, capital expenditures, working capital, dividend payouts on preferred stock, and debt service requirements. We anticipate that our principal uses of cash in the future will be acquisitions, working capital, facility expansion and capital expenditures.

Total cash and cash equivalents and short-term investments were $58.3 million at December 31, 2006, a decrease from $103.5 million at December 31, 2005. This decrease was due primarily to cash expenditures of approximately $206.8 million to fund the acquisitions of UltraDNS and Followap. This decrease was offset by cash provided by operating activities and cash inflows relating to excess tax benefits.

As of December 31, 2006, we had $4.3 million available under the revolving loan commitment of our bank credit facility, subject to the terms and conditions of that facility. On February 6, 2007, we entered into a credit agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, J.P. Morgan Securities, Inc., as Lead Arranger and as Book Manager, Credit Suisse Securities (USA) LLC, as Syndication Agent, Deutsche Bank Trust Company Americas and Sun Trust Bank, as Documentation Agents and the lenders under the credit agreement. As of February 15, 2007, we had $100.0 million available under the revolving loan commitment of this credit agreement.

We believe that our existing cash and cash equivalents, short-term investments and cash from operations will be sufficient to fund our operations for the next twelve months.

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Discussion of Cash Flows

Cash flows from operations

Net cash provided by operating activities for the year ended December 31, 2006 was $117.4 million, as compared to $61.2 million for the year ended December 31, 2005. This $56.2 million increase in net cash provided by operating activities was principally the result of net changes in operating assets and liabilities of $81.4 million, including an increase of $77.8 million in cash flows due to income tax receivables, and an $18.5 million increase in net income, which was partially offset by a decrease of non-cash adjustments of $43.7 million, including a cash outflow increase of $66.5 million relating to excess tax benefits from stock-based compensation for the year ended December 31, 2006, which is the required presentation under SFAS No. 123(R). In the corresponding period in 2005, we did not record excess tax benefits from stock-based compensation as a cash outflow from operating activities.

Cash flows from investing

Net cash used in investing activities for the year ended December 31, 2006 was $167.8 million, as compared to $46.5 million for the year ended December 31, 2005. This $121.3 million increase in net cash used in investing activities was principally due to an increase of $208.5 million of cash paid for acquisitions, which was partially offset by an increase of the sales of short-term investments totaling $88.0 million.

Cash flows from financing

Net cash provided by financing activities was $62.1 million for the year ended December 31, 2006 compared to net cash used in financing activities of $6.2 million for the year ended December 31, 2005. This $68.3 million increase in net cash provided by financing activities was principally the result of $49.5 million of excess tax benefits from stock-based compensation being recorded as an inflow to cash provided by financing activities during the year ended December 31, 2006, as well as an increase of $14.0 million of proceeds from the exercise of common stock options. In prior periods, excess tax benefits from stock-based compensation were recorded as cash flows provided by operating activities, which was the presentation required prior to our adoption of SFAS No. 123(R). In addition, the overall increase in net cash provided by financing activities resulted from a decrease in 2006 of $6.3 million for the payment of preferred stock dividends in 2005 for which there was no corresponding payment in 2006 and a $3.9 million decrease in repayments of notes payable and capital leases. These reductions in cash used in financing activities from 2005 as compared to 2006 were offset by a decrease of $4.9 million for cash collateralized letters of credit relating to our December 2003 contract amendments with the North American Portability Management LLC.

Contractual Obligations

Our principal commitments consist of obligations under leases for office space, computer equipment and furniture and fixtures. The following table summarizes our long-term contractual obligations as of December 31, 2006.

Payments Due by Period

			Less Than		1-3		4-5		More Than
	Total		1 Year		Years		Years		5 Years
	(In thousands)
Capital lease obligations	$	8,118	$	4,367	$	3,751	$	—	$	—
Operating lease obligations		23,322		6,366		16,133		823		—
Long-term debt		942		768		174		—		—
Total	$	32,382	$	11,501	$	20,058	$	823	$	—

Debt and Credit Facilities

On February 6, 2007, we entered into a new credit agreement, which provides for a revolving credit facility in an aggregate principal amount of up to $100.0 million. Borrowings under this revolving credit facility bear interest,

43

at our option, at either a Eurodollar rate plus a spread ranging from 0.625% to 1.25%, or at a base rate plus a spread ranging from 0.0% to 0.25%, with such spread in each case depending on the ratio of our consolidated senior funded indebtedness to consolidated EBITDA. This new credit agreement expires on February 6, 2012. There were no outstanding borrowings under this facility at February 15, 2007. Borrowings under the revolving credit facility may be used for working capital, capital expenditures, general corporate purposes and to finance acquisitions as permitted by the terms of this credit agreement.

The new credit agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. The new credit agreement requires us to maintain a minimum consolidated EBITDA to consolidated interest charge ratio and a maximum consolidated senior funded indebtedness to consolidated EBITDA ratio. If an event of default occurs and is continuing, we may be required to repay all amounts outstanding under the new credit agreement. Lenders holding more than 50% of the loans and commitments under the new credit agreement may elect to accelerate the maturity of amounts due thereunder upon the occurrence and during the continuation of an event of default.

In addition, the new credit agreement contains terms that enable us to ensure compliance with neutrality obligations to which it is subject, including neutrality-based restrictions on assignment and provisions that allow us to replace or remove a lender or agent to preserve our ability to comply with our neutrality obligations.

Until February 6, 2007, we had a revolving credit facility, which provided us with up to $15 million in available credit. The commitments under this credit agreement were terminated simultaneous with the closing of the new credit agreement on February 6, 2007. This credit agreement provided for a revolving credit facility in an aggregate amount of up to $15 million and was secured by substantially all of our assets, subject to certain previously disclosed limitations. Upon the execution of the new credit agreement on February 6, 2007, letters of credit with a face amount of $9.6 million, issued under this credit agreement remained outstanding after the termination thereof and are supported by cash collateral pledged by us. Borrowings under our former revolving credit facility could be either base rate loans or Eurodollar rate loans. There were no outstanding borrowings under this facility at December 31, 2005 and December 31, 2006; however, total available borrowings were reduced by outstanding letters of credit of $10.7 million and $9.6 million at December 31, 2005 and December 31, 2006, respectively, which reduced the amount we could borrow under the revolving credit facility. Base rate loans bore interest at a fluctuating rate per annum equal to the higher of the federal funds rate plus 0.5% or the lender’s prime rate. Eurodollar rate loans bore interest at the Eurodollar rate plus the applicable margin.

Under the terms of our previous revolving credit facility, we were required to comply with certain financial covenants, such as maintaining minimum levels of consolidated net worth, quarterly consolidated EBITDA and liquid assets and not exceeding certain levels of capital expenditures and leverage ratios. Additionally, there were negative covenants that limited our ability to declare or pay dividends, acquire additional indebtedness, incur liens, dispose of significant assets, make acquisitions or significantly change the nature of our business without the permission of the lender. During 2004, 2005 and 2006, we were not in compliance with certain covenants and obtained waivers for such defaults.

Effect of Inflation

Inflation generally affects us by increasing our cost of labor and equipment. We do not believe that inflation had any material effect on our results of operations during the years ended December 31, 2004, 2005 and 2006.

Recent Accounting Pronouncements

In June 2006, the FASB issued FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, an interpretation of SFAS No. 109. This interpretation clarifies the accounting for income taxes by prescribing that a company should use a more-likely-than-not recognition threshold based on the technical merits of the tax position taken. Tax provisions that meet the more-likely-than-not recognition threshold should be measured as the largest amount of tax benefits, determined on a cumulative probability basis, which is more likely than not to be realized upon ultimate settlement in the financial statements. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition, and explicitly excludes income taxes from the scope of SFAS No. 5, Accounting for Contingencies.

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FIN 48 is effective for fiscal years beginning after December 15, 2006. We are currently assessing the effect of FIN 48 on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 provides enhanced guidance for using fair value to measure assets and liabilities. It clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. We are currently evaluating the impact of SFAS No. 157 on our consolidated results of operations and financial condition.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of December 31, 2005 and 2006.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to market risk associated with changes in foreign currency exchange rates and interest rates. Our exchange rate risk related to foreign currency exchange for 2006 was principally due to our number portability contract with Canadian LNP Consortium, Inc. Based on this agreement, we recognize revenue on a per transaction basis as the services are performed and bill for these services using the Canadian dollar at a fixed exchange rate that is updated annually. As a result, we are affected by currency fluctuations in the value of the U.S. dollar as compared to the Canadian dollar. The net impact of foreign exchange rate fluctuations on earnings was not material for the years ended December 31, 2004, 2005 or 2006, respectively.

Interest rate exposure is primarily limited to the approximately $19.0 million of short-term investments owned by us at December 31, 2006. Such investments consist principally of commercial paper, high-grade auction rate securities and U.S. government or corporate debt securities. We do not actively manage the risk of interest rate fluctuations on our short-term investments; however, such risk is mitigated by the relatively short-term nature of these investments. For the year ended December 31, 2006, a one-percentage point adverse change in interest rates would have reduced our interest income for the year ended December 31, 2006 by approximately $300,000. In addition, we do not consider the present rate of inflation to have a material impact on our business.

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ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		48
Consolidated Balance Sheets as of December 31, 2005 and 2006		49
Consolidated Statements of Operations for the years ended December 31, 2004, 2005 and 2006		51
Consolidated Statements of Stockholders’ (Deficit) Equity for the years ended December 31, 2004, 2005 and 2006		52
Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2005 and 2006		53
Notes to Consolidated Financial Statements		54

46

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

NeuStar, Inc.

We have audited the accompanying consolidated balance sheets of NeuStar, Inc. as of December 31, 2005 and 2006, and the related consolidated statements of operations, stockholders’ (deficit) equity, and cash flows for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of NeuStar, Inc. at December 31, 2005 and 2006, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of NeuStar, Inc.’s internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2007 expressed an unqualified opinion thereon.

As discussed in Note 2 to the consolidated financial statements, effective January 1, 2006, NeuStar, Inc. changed its method of accounting for equity-based compensation.

/s/  Ernst & Young LLP

McLean, Virginia

February 28, 2007

47

NEUSTAR, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	December 31,
	2005		2006
ASSETS
Current assets:
Cash and cash equivalents	$	27,529	$	39,242
Restricted cash		374		—
Short-term investments		75,946		19,010
Accounts receivable, net of allowance for doubtful accounts of $494 and $1,103, respectively		32,426		53,108
Unbilled receivables		6,394		810
Securitized notes receivable		1,074		—
Notes receivable		—		1,994
Prepaid expenses and other current assets		8,054		6,945
Deferred costs		4,819		6,032
Income taxes receivable		14,595		893
Deferred tax asset		12,216		7,641
Total current assets		183,427		135,675
Property and equipment, net		39,627		42,678
Goodwill		51,495		205,855
Intangible assets, net		2,655		51,196
Notes receivable, long-term		—		2,918
Deferred costs, long-term		5,454		4,411
Deferred tax asset, long-term		—		4,500
Other assets		557		1,026
Total assets	$	283,215	$	448,259

See accompanying notes.

48

NEUSTAR, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	December 31,
	2005			2006
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,119		$	3,619
Accrued expenses		38,324			49,460
Deferred revenue		20,006			22,923
Notes payable		1,232			768
Capital lease obligations		5,540			4,367
Accrued restructuring reserve		536			368
Other liabilities		—			200
Total current liabilities		69,757			81,705
Deferred revenue, long-term		18,463			17,921
Notes payable, long-term		1,019			174
Capital lease obligations, long-term		3,440			3,751
Accrued restructuring reserve, long-term		2,572			2,206
Other liabilities, long-term		500			1,356
Deferred tax liability		1,197			—
Total liabilities		96,948			107,113
Minority interest		104			—
Commitments and contingencies		—			—
Stockholders’ equity:
Preferred stock, $0.001 par value; 100,000,000 shares authorized; No shares issued or outstanding as of December 31, 2005 and 2006		—			—
Class A common stock, $0.001 par value; 200,000,000 shares authorized; 68,150,690 shares issued or outstanding as of December 31, 2005; 74,351,200 shares issued and outstanding as of December 31, 2006		68			74
Class B common stock, $0.001 par value; 100,000,000 shares authorized; 199,152 and 18,330 shares issued and outstanding as of December 31, 2005 and 2006, respectively		—			—
Additional paid-in capital		163,741			243,395
Deferred stock compensation		(1,446	)		—
Treasury stock, 756 shares at cost at December 31, 2006		—			(22	)
Retained earnings		23,800			97,699
Total stockholders’ equity		186,163			341,146
Total liabilities and stockholders’ equity	$	283,215		$	448,259

See accompanying notes.

49

NEUSTAR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Year Ended December 31,
	2004			2005			2006
Revenue:
Addressing	$	50,792		$	75,036		$	103,858
Interoperability		34,228			52,488			56,454
Infrastructure and other		79,981			114,945			172,645
Total revenue		165,001			242,469			332,957
Operating expense:
Cost of revenue (excluding depreciation and amortization shown separately below)		49,261			64,891			86,106
Sales and marketing		22,743			29,543			47,671
Research and development		7,377			11,883			17,639
General and administrative		21,144			28,048			34,902
Depreciation and amortization		17,285			16,025			24,016
Restructuring recoveries		(220	)		(389	)		—
		117,590			150,001			210,334
Income from operations		47,411			92,468			122,623
Other (expense) income:
Interest expense		(2,498	)		(2,121	)		(1,300	)
Interest income		1,629			2,406			4,024
Income before minority interest and income taxes		46,542			92,753			125,347
Minority interest		—			(104	)		(95	)
Income before income taxes		46,542			92,649			125,252
Provision for income taxes		1,166			37,251			51,353
Net income		45,376			55,398			73,899
Dividends on and accretion of preferred stock		(9,737	)		(4,313	)		—
Net income attributable to common stockholders	$	35,639		$	51,085		$	73,899
Net income attributable to common stockholders:
Basic	$	6.33		$	1.48		$	1.02
Diluted	$	0.57		$	0.72		$	0.94
Weighted average common shares outstanding:
Basic		5,632			34,437			72,364
Diluted		80,237			77,046			78,267

See accompanying notes.

50

NEUSTAR, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ (DEFICIT) EQUITY

(In thousands)

																				(Accumulated			Total
	Class A				Class B						Additional			Deferred						Deficit)			Stockholders’
	Common Stock				Common Stock						Paid-In			Stock			Treasury			Retained			(Deficit)
	Shares		Amount		Shares			Amount			Capital			Compensation			Stock			Earnings			Equity
Balance at December 31, 2003		—	$	—		5,549		$	5		$	—		$	(28	)	$	—		$	(68,558	)	$	(68,581	)
Common stock options exercised		—		—		611			1			90			—			—			—			91
Deferred stock compensation expense associated with issuance of restricted stock		—		—		—			—			2,187			(2,187	)		—			—			—
Repurchase of common stock		—		—		—			—			—			—			(1,012	)		—			(1,012	)
Return of common stock originally issued for acquisition of NightFire Software, Inc		—		—		—			—			—			—			(113	)		—			(113	)
Compensation expense associated with options issued to nonemployees		—		—		—			—			654			—			—			—			654
Compensation expense associated with repurchase of immature shares		—		—		—			—			982			—			—			—			982
Accretion of preferred stock and related dividends		—		—		—			—			(3,913	)		—			—			(5,824	)		(9,737	)
Amortization of deferred stock compensation		—		—		—			—			—			482			—			—			482
Net income		—		—		—			—			—			—			—			45,376			45,376
Balance at December 31, 2004		—		—		6,160			6			—			(1,733	)		(1,125	)		(29,006	)		(31,858	)
Common stock options exercised		—		—		466			1			246			—			—			—			247
Compensation expense associated with options issued to nonemployees		—		—		—			—			2,214			—			—			—			2,214
Shares issued for acquisition of fiducianet, Inc.		—		—		36			—			388			—			—			—			388
Retirement of treasury stock		—		—		(236	)		—			(1,125	)		—			1,125			—			—
Accretion of preferred stock and related dividends		—		—		—			—			(1,721	)		—			—			(2,592	)		(4,313	)
Issuance of Class B common stock pursuant to conversion of convertible preferred stock		—		—		53,435			53			138,452			—			—			—			138,505
Conversion of Class B common stock to Class A common stock		59,662		60		(59,662	)		(60	)		—			—			—			—			—
Deferred stock compensation expense associated with issuance of restricted stock		5		—		—			—			160			(160	)		—			—			—
Amortization of deferred stock compensation		—		—		—			—			—			447			—			—			447
Common stock options exercised		2,122		2		—			—			7,709			—			—			—			7,711
Warrants exercised		6,362		6		—			—			418			—			—			—			424
Tax benefit from stock option exercises		—		—		—			—			17,000			—			—			—			17,000
Net income		—		—		—			—			—			—			—			55,398			55,398
Balance at December 31, 2005		68,151		68		199			—			163,741			(1,446	)		—			23,800			186,163
Deferred stock compensation reclassification		—		—		—			—			(1,446	)		1,446			—			—			—
Common stock options exercised		5,919		6								19,693			—			—			—			19,699
Stock-based compensation expense		—		—		—			—			11,890			—			—			—			11,890
Conversion of Class B common stock to Class A common stock		181		—		(181	)		—			—			—			—			—			—
Restricted stock issued, net of forfeitures		100		—		—			—			—			—			—			—			—
Repurchase of common stock		—		—		—			—			—			—			(22	)		—			(22	)
Tax benefit from stock option exercises		—		—		—			—			49,517			—			—			—			49,517
Net income		—		—		—			—			—			—			—			73,899			73,899
Balance at December 31, 2006		74,351	$	74		18		$	—		$	243,395		$	—		$	(22	)	$	97,699		$	341,146

See accompanying notes.

51

NEUSTAR, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year Ended December 31,
	2004			2005			2006
Operating activities:
Net income	$	45,376		$	55,398		$	73,899
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		17,285			16,025			24,016
Stock-based compensation		2,118			2,661			11,890
Amortization of deferred financing costs		150			57			5
Tax benefit from stock option exercises		—			17,000			(49,517	)
Deferred income taxes		(6,419	)		(2,289	)		1,448
Noncash restructuring recoveries		(220	)		(389	)		—
Provision for doubtful accounts		960			551			2,041
Minority interest		—			104			95
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(7,697	)		(5,254	)		(21,221	)
Unbilled receivables		139			(5,414	)		5,944
Notes receivable		4,938			4,290			(3,838	)
Prepaid expenses and other current assets		(1,524	)		(1,570	)		2,560
Deferred costs		(869	)		(5,902	)		(170	)
Income tax receivable		—			(14,595	)		63,219
Other assets		(102	)		658			(411	)
Accounts payable and accrued expenses		11,119			7,840			6,263
Income taxes payable		44			(419	)		—
Accrued restructuring reserve		(386	)		(1,551	)		(534	)
Customer credits		(5,459	)		(15,541	)		—
Deferred revenue		5,279			9,542			1,691
Net cash provided by operating activities		64,732			61,202			117,380
Investing activities:
Purchases of property and equipment		(13,271	)		(12,890	)		(13,658	)
(Purchases) sales of investments, net		(41,155	)		(31,036	)		56,936
Businesses acquired, net of cash acquired		—			(2,540	)		(211,072	)
Net cash used in investing activities		(54,426	)		(46,466	)		(167,794	)
Financing activities:
(Release) disbursement of restricted cash		(5,112	)		5,296			374
Proceeds from issuance of notes payable		2,166			—			—
Principal repayments on notes payable		(9,823	)		(5,406	)		(1,443	)
Principal repayments on capital lease obligations		(7,505	)		(5,939	)		(5,998	)
Proceeds from exercise of common stock options		91			5,661			19,699
Proceeds from exercise of warrants		—			424			—
Payment of preferred stock dividends		(30,324	)		(6,262	)		—
Excess tax benefits from stock-based compensation		—			—			49,517
Repurchase of common stock		(1,012	)		—			(22	)
Net cash (used in) provided by financing activities		(51,519	)		(6,226	)		62,127
Net (decrease) increase in cash and cash equivalents		(41,213	)		8,510			11,713
Cash and cash equivalents at beginning of year		60,232			19,019			27,529
Cash and cash equivalents at end of year	$	19,019		$	27,529		$	39,242
Supplemental cash flow information:
Cash paid for interest	$	1,693		$	1,377		$	870
Cash paid for income taxes (net of refunds)	$	7,291		$	37,583		$	(14,172	)

See accompanying notes.

52

NEUSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   DESCRIPTION OF BUSINESS AND ORGANIZATION

NeuStar, Inc. (the Company) was incorporated as a Delaware corporation in 1998. The Company provides the communications industry with essential clearinghouse services. Its customers use the databases the Company 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. The Company operates the authoritative directories that manage virtually all telephone area codes and numbers, and it enables the dynamic routing of calls among thousands of competing communications service providers, or CSPs, in the United States and Canada. All CSPs that offer telecommunications services to the public at large, or telecommunications service providers, must access the Company’s clearinghouse to properly route virtually all of their customers’ calls. The Company also provides clearinghouse services to emerging CSPs, including Internet service providers, mobile network operators, cable television operators, and voice over Internet protocol, or VoIP, service providers. In addition, the Company 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 also manages the authoritative directories for the .us and .biz Internet domains. The Company operates the authoritative directory for U.S. Common Short Codes, part of the short messaging service relied upon by the U.S. wireless industry, and provides solutions used by mobile network operators throughout Europe to enable mobile instant messaging for their end users.

The Company was founded to meet the technical and operational challenges of the communications industry when the U.S. government mandated local number portability in 1996. While the Company remains the provider of the authoritative solution that the communications industry relies upon to meet this mandate, the Company has developed a broad range of innovative services to meet an expanded range of customer needs. The Company provides the communications industry with critical technology services that solve the addressing, interoperability and infrastructure needs of CSPs. These services are now used by CSPs to manage a range of their technical and operating requirements, including:

•  Addressing.  The Company enables CSPs to use critical, shared addressing resources, such as telephone numbers, Internet top-level domain names, and U.S. Common Short Codes.

•  Interoperability.  The Company enables CSPs to exchange and share critical operating data so that communications originating on one provider’s network can be delivered and received on the network of another CSP. The Company also facilitates order management and work flow processing among CSPs.

•  Infrastructure and Other.  The Company enables CSPs to manage their networks more efficiently by centrally managing certain critical data they use to route communications over their own networks.

On June 28, 2005, the Company effected a recapitalization, which involved (i) the payment of $6.3 million for all accrued and unpaid dividends on all of the then-outstanding shares of preferred stock, followed by the conversion of such shares into shares of common stock, (ii) the amendment of the Company’s certificate of incorporation to provide for Class A common stock and Class B common stock, (iii) and the split of each share of common stock into 1.4 shares and the reclassification of the common stock into shares of Class B common stock (collectively, the “Recapitalization”). Each share of Class B common stock is convertible at the option of the holder into one share of Class A common stock.

On June 28, 2005, the Company made an initial public offering of 31,625,000 shares of Class A common stock, which included the underwriters’ over-allotment option exercise of 4,125,000 shares of Class A common stock. All the shares of Class A common stock sold in the initial public offering were sold by selling stockholders and, as such, the Company did not receive any proceeds from that offering. Prior to the Company’s initial public offering, holders of 100,000 shares of Series B Voting Convertible Preferred Stock, 28,569,692 shares of Series C Voting Convertible Preferred Stock, and 9,098,525 shares of Series D Voting Convertible Preferred Stock converted their shares into 500,000, 28,569,692, and 9,098,525 shares of the Company’s common stock, respectively, after which the split by means of a reclassification, as described in clauses (ii) and (iii) of the previous paragraph, was effected.

53

NEUSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The accompanying consolidated financial statements give retroactive effect to the amendment of the Company’s certificate of incorporation to provide for Class A common stock and Class B common stock and the split of each share of common stock into 1.4 shares and the reclassification of the common stock into shares of Class B common stock, as though these events occurred at the beginning of the earliest period presented.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All material intercompany transactions and accounts have been eliminated in consolidation. The Company consolidates investments where it has a controlling financial interest as defined by Accounting Research Bulletin (ARB) No. 51, Consolidated Financial Statements, as amended by Statement of Financial Accounting Standards (SFAS) No. 94, Consolidation of all Majority-Owned Subsidiaries. The usual condition for controlling financial interest is ownership of a majority of the voting interest and, therefore, as a general rule, ownership, directly or indirectly, of more than 50% of the outstanding voting shares is a condition indicating consolidation. Minority interest is recorded in the statement of operations for the share of income or loss allocated to minority stockholders to the extent that the minority stockholder’s investment in the subsidiary does not fall below zero. For investments in variable interest entities, as defined by Financial Accounting Standards Board (FASB) Interpretation No. 46, Consolidation of Variable Interest Entities, the Company would consolidate when it is determined to be the primary beneficiary of a variable interest entity. For those investments in entities where the Company has significant influence over operations, but where the Company neither has a controlling financial interest nor is the primary beneficiary of a variable interest entity, the Company follows the equity method of accounting pursuant to Accounting Principles Board (APB) Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock. The Company does not have any variable interest entities or investments accounted for under the equity method of accounting.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the prior years’ financial statements have been reclassified to conform to the current year presentation.

Fair Value of Financial Instruments

SFAS No. 107, Disclosures about Fair Value of Financial Instruments, requires disclosures of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. Due to their short-term nature, the carrying amounts reported in the consolidated financial statements approximate the fair value for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses. As of December 31, 2005 and 2006, the Company believes the carrying value of its long-term notes receivable approximates fair value as the interest rates approximate a market rate. The fair value of the Company’s long-term debt is based upon quoted market prices for the same and similar issuances giving consideration to quality, interest rates, maturity and other characteristics. As of December 31, 2005 and 2006, the Company believes the carrying amount of its long-term debt approximates its fair value since the fixed and variable interest rates of the debt approximate a market rate.

54

NEUSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash and Cash Equivalents

The Company considers all highly liquid investments, which are readily convertible into cash and have original maturities of three months or less at the time of purchase, to be cash equivalents. Supplemental non-cash information to the consolidated statements of cash flows is as follows:

	Year Ended December 31,
	2004			2005		2006
	(In thousands)
Fixed assets acquired through capital leases	$	8,054		$	3,470	$	5,154
Fixed assets acquired through notes payable		1,359			1,002		—
Accounts payable incurred to purchase fixed assets		125			79		85
Business acquired with common shares (see Note 3)		(113	)		388		—
Dividends to preferred stockholders		2,095			—		—

Restricted Cash

At December 31, 2005 and 2006, approximately $374,000 and $0, respectively, of cash was pledged as collateral on outstanding letters of credit related to 2003 customer credits and lease obligations and was classified as restricted cash on the consolidated balance sheets.

Derivatives and Hedging Activities

The Company recognizes all derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument, in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended. Changes in the fair value of derivative financial instruments are either recognized periodically in the results of operations or in stockholders’ equity as a component of other comprehensive income, depending on whether the derivative financial instrument qualifies for hedge accounting and, if so, whether it qualifies as a fair value hedge or cash flow hedge. Generally, changes in the fair value of the derivatives accounted for as fair value hedges are recorded in the results of operations along with the portions of the changes in the fair values of the hedged items that relate to the hedged risks. Changes in fair value of derivatives accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in other comprehensive income. Changes in fair values of derivatives not qualifying as hedges are reported in the results of operations.

Concentrations of Credit Risk

Financial instruments that are potentially subject to a concentration of credit risk consist principally of cash, cash equivalents, short-term investments and accounts receivable. The Company’s cash and short-term investment policies are in place to restrict placement of these instruments with only financial institutions evaluated as highly creditworthy.

With respect to accounts receivable, the Company performs ongoing evaluations of its customers, generally granting uncollateralized credit terms to its customers, and maintains an allowance for doubtful accounts based on historical experience and management’s expectations of future losses. Customers under the Company’s contracts with the North American Portability Management LLC are charged a Revenue Recovery Collection fee (See Accounts Receivable, Revenue Recovery Collection and Allowance for Doubtful Accounts).

Short-term Investments

Investments in debt and equity securities that have readily determinable fair values are accounted for as available-for-sale securities. Available-for-sale securities are stated at fair value as determined by the most recently traded price of each security at the balance sheet date, with the unrealized gains and losses recorded as a component

55

NEUSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of other comprehensive income. The specific-identification method is used to compute the realized gains and losses on debt and equity securities. As of December 31, 2005 and 2006, the carrying value of the investments approximated their fair value. As of December 31, 2005 and 2006, these investments consisted principally of commercial paper, high-grade auction rate securities and U.S. government or corporate debt securities.

Accounts Receivable, Revenue Recovery Collections and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount and do not bear interest. In accordance with the Company’s contracts with North American Portability Management LLC, the Company bills a Revenue Recovery Collections (RRC) fee to offset uncollectible receivables from any individual customer. The RRC fee is based on a percentage of monthly billings. From January 1, 2003 through June 30, 2004, the RRC fee was 3%. On July 1, 2004, the RRC fee was reduced to 2%. On July 1, 2005, the RRC fee was reduced to 1%. The RRC fees are recorded as an accrued liability when collected. If the RRC fee is insufficient, the amounts can be recovered from the customers. Any accrued RRC fees in excess of uncollectible receivables are paid back to the customers annually on a pro rata basis. RRC fees of $2.5 million and $2.9 million are included in accrued expenses as of December 31, 2005 and 2006, respectively. All other receivables related to services not covered by the RRC fees are evaluated and, if deemed not collectible, are reserved. The Company recorded an allowance for doubtful accounts of $494,000 and $1.1 million as of December 31, 2005 and 2006, respectively. Bad debt expense amounted to $960,000, $551,000 and $2.0 million for the years ended December 31, 2004, 2005 and 2006, respectively.

Deferred Financing Costs

The Company amortizes deferred financing costs using the effective-interest method and records such amortization as interest expense. Amortization of debt discount and annual commitment fees for unused portions of available borrowings are also recorded as interest expense.

Property and Equipment

Property and equipment, including leasehold improvements and assets acquired through capital leases, are recorded at cost, net of accumulated depreciation and amortization. Depreciation and amortization of property and equipment are determined using the straight-line method over the estimated useful lives of the assets, as follows:

Computer hardware	3-5 years
Equipment	5 years
Furniture and fixtures	5-7 years
Leasehold improvements	Lesser of related lease term or useful life

Amortization expense of capital leased assets is included in depreciation and amortization expense in the consolidated statements of operations. Replacements and major improvements are capitalized; maintenance and repairs are charged to expense as incurred.

The Company capitalizes software development and acquisition costs in accordance with Statement of Position (SOP) No. 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.  SOP No. 98-1 requires the capitalization of costs incurred in connection with developing or obtaining software for internal use. Costs incurred to develop the application are capitalized, while costs incurred for planning the project and for post-implementation training and maintenance are expensed as incurred. The capitalized costs of purchased technology and software development are amortized using the straight-line method over the estimated useful life of three to five years. During the years ended December 31, 2005 and 2006, the Company capitalized costs related to internal use software of $8.2 million and $7.9 million, respectively. Amortization expense related to internal use software for the years ended December 31, 2004, 2005 and 2006 was $5.5 million, $3.7 million and $5.8 million, respectively, and is included in depreciation and amortization expense in the consolidated statements of operations.

56

NEUSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Goodwill

Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill and intangible assets that are determined to have an indefinite useful life are not amortized, but instead tested for impairment annually in accordance with the provisions of SFAS No. 142, Goodwill and Other Intangible Assets (SFAS No. 142).

The Company performs its annual impairment analysis on October 1 of each year or more often if indicators of impairment arise. The impairment review may require an analysis of future projections and assumptions about the Company’s operating performance. If such a review indicates that the assets are impaired, an expense would be recorded for the amount of the impairment, and the corresponding impaired assets would be reduced in carrying value. The Company performed its annual impairment test with regard to the carrying value of goodwill on October 1, 2005 and 2006 and determined that goodwill was not impaired at those dates. There were no impairment charges recognized during the years ended December 31, 2004, 2005 or 2006.

Identifiable Intangible Assets

Identifiable intangible assets are amortized over their respective estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up and are reviewed for impairment in accordance with SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets (SFAS No. 144).

The Company’s identifiable intangible assets are amortized as follows:

	Years	Method
Acquired technologies	3 to 4	Straight-line
Customer lists and relationships	3 to 7	Various
Trade name	3	Various

Amortization expense related to intangible assets is included in depreciation and amortization expense in the consolidated statements of operations.

Impairment of Long-Lived Assets

In accordance with SFAS No. 144, a review of long-lived assets for impairment is performed when events or changes in circumstances indicate the carrying value of such assets may not be recoverable. If an indication of impairment is present, the Company compares the estimated undiscounted future cash flows to be generated by the asset to its carrying amount. If the undiscounted future cash flows are less than the carrying amount of the asset, the Company records an impairment loss equal to the excess of the asset’s carrying amount over its fair value. The fair value is determined based on valuation techniques such as a comparison to fair values of similar assets or using a discounted cash flow analysis. There were no impairment charges recognized during the years ended December 31, 2004, 2005 or 2006.

Revenue Recognition

The Company provides the North American communications industry with essential clearinghouse services that address the industry’s addressing, interoperability, and infrastructure needs. The Company’s revenue recognition policies are in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 104, Revenue Recognition. The Company provides the following services pursuant to various private commercial and government contracts.

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Addressing

The Company’s addressing services include telephone number administration, implementing the allocation of pooled blocks of telephone numbers, directory services for Internet domain names and U.S. Common Short Codes, and internal and external managed domain name services. The Company generates revenue from its telephone number administration services under two government contracts. Under its contract to serve as the North American Numbering Plan Administrator, the Company earns a fixed annual fee and recognizes this fee as revenue on a straight-line basis as services are provided. In the event the Company estimates losses on its fixed fee contract, the Company recognizes these losses in the period in which a loss becomes apparent. Under the Company’s contract to serve as the National Pooling Administrator, the Company is reimbursed for costs incurred plus a fixed fee associated with administration of the pooling system. The Company recognizes revenue for this contract based on costs incurred plus a pro rata amount of the fixed-fee.

In addition to the administrative functions associated with its role as the National Pooling Administrator, the Company also generates revenue from implementing the allocation of pooled blocks of telephone numbers under its long-term contracts with North American Portability Management LLC, and the Company recognizes revenue on a per-transaction fee basis as the services are performed. For its Internet domain name services, the Company generates revenue for Internet domain registrations, which generally have contract terms between one and ten years. The Company recognizes revenue on a straight-line basis over the lives of the related customer contracts.

Following the acquisition of UltraDNS Corporation in April 2006, the Company generates revenue through internal and external managed domain name services. The Company’s revenue consists of customer set-up fees followed by transaction processing under contracts with terms ranging from one to three years. Customer set-up fees are not considered a separate deliverable and are deferred and recognized on a straight-line basis over the term of the contract. Under the Company’s contracts to provide its managed domain name services, customers have contractually established monthly transaction volumes for which they are charged a recurring monthly fee. Transactions processed in excess of the pre-established monthly volume are billed at a contractual per-transaction rate. Each month the Company recognizes the recurring monthly fee and usage in excess of the established monthly volume on a per-transaction basis as services are provided. The Company generates revenue from its U.S. Common Short Code services under short-term contracts ranging from three to twelve months, and the Company recognizes revenue on a straight-line basis over the term of the customer contracts.

Interoperability

The Company’s interoperability services consist primarily of wireline and wireless number portability and order management services. The Company generates revenue from number portability under its long-term contracts with North American Portability Management LLC and Canadian LNP Consortium, Inc. The Company recognizes revenue on a per-transaction fee basis as the services are performed. The Company provides order management services (OMS), consisting of customer set-up and implementation followed by transaction processing, under contracts with terms ranging from one to three years. Customer set-up and implementation are not considered separate deliverables; accordingly, the fees are deferred and recognized as revenue on a straight-line basis over the term of the contract. Per-transaction fees are recognized as the transactions are processed.

Infrastructure and Other

The Company’s infrastructure services consist primarily of network management and connection services. The Company generates revenue from network management services under its long-term contracts with North American Portability Management LLC. The Company recognizes revenue on a per-transaction fee basis as the services are performed. In addition, the Company generates revenue from connection fees and system enhancements under its contracts with North American Portability Management LLC. The Company recognizes its connection fee revenue as the service is performed. System enhancements are provided under

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contracts in which the Company is reimbursed for costs incurred plus a fixed fee, and revenue is recognized based on costs incurred plus a pro rata amount of the fee.

Significant Contracts

The Company provides wireline and wireless number portability, implements the allocation of pooled blocks of telephone numbers and provides network management services pursuant to seven contracts with North American Portability Management LLC, an industry group that represents all telecommunications service providers in the United States. The Company recognizes revenue under its contracts with North American Portability Management LLC primarily on a per-transaction basis. The aggregate fees for transactions processed under these contracts are determined by the total number of transactions, and these fees are billed to telecommunications service providers based on their allocable share of the total transaction charges. This allocable share is based on each respective telecommunications service provider’s share of the aggregate end-user services revenues of all U.S. telecommunications service providers, as determined by the Federal Communications Commission (FCC). Under the Company’s contracts, the Company also bills an RRC fee of a percentage of monthly billings to its customers, which is available to the Company if any telecommunications service provider fails to pay its allocable share of total transactions charges. The amount of revenue derived under the Company’s contracts with North American Portability Management LLC was approximately $130.0 million, $188.8 million and $249.3 million for the years ended December 31, 2004, 2005 and 2006, respectively.

The per-transaction pricing under these contracts provided for annual volume-based credits that were earned on all transactions in excess of the pre-determined annual volume threshold. For 2005 and 2006, the maximum aggregate volume-based credit was $7.5 million, which was applied via a reduction in per-transaction pricing once the pre-determined annual volume threshold was surpassed. When the aggregate credit was fully satisfied, the per-transaction pricing was restored to the prevailing contractual rate. In both 2005 and 2006, the pre-determined annual transaction volume threshold under these contracts was exceeded, which resulted in the issuance of $7.5 million of volume-based credits for both years. In September 2006, the Company amended its contracts with North American Portability Management LLC. Under these amended terms, there are no volume-based credits that will be applied in 2007 or later fiscal periods.

Contrasted to the application of volume-based credits in 2005 and 2006, billings in 2004 continued at the original contractual rate after the annual volume threshold was surpassed. Billings in excess of the discounted pricing were recorded as customer credits (liabilities) on the consolidated balance sheet with a corresponding reduction to revenue. In the following year when the credits were applied to invoices rendered, customer credits were reduced with a corresponding credit to accounts receivable. The annual pre-determined volume threshold was surpassed in the fourth quarter of 2004, resulting in the reduction of revenue and recognition of customer credits of $11.9 million in the aggregate for 2004. Further, as part of the amendments to these contracts in December 2003, the Company agreed to apply the then-current transaction fee retroactively to all 2003 transactions processed and granted credits totaling $16.0 million. These credits were applied to customer invoices over a 23-month period beginning in January 2004. Additionally, we obtained letters of credit totaling $16.0 million in January 2004 to secure a portion of these customer credits. As of December 31, 2005, none of these customer credits were outstanding.

Service Level Standards

Pursuant to certain of the Company’s private commercial contracts, the Company is subject to service level standards and to corresponding penalties for failure to meet those standards. The Company records a provision for these performance-related penalties when it becomes aware that required service levels that would trigger such a penalty have not been met, which results in a corresponding reduction to revenue.

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Cost of Revenue and Deferred Costs

Cost of revenue includes all direct materials, direct labor, and those indirect costs related to generation of revenue such as indirect labor, materials and supplies and facilities cost. The Company’s primary cost of revenue is related to personnel costs associated with service implementation, product maintenance, customer deployment and customer care, including salaries, stock-based compensation and other personnel-related expense. In addition, cost of revenue includes costs relating to maintaining the Company’s existing technology and services, as well as royalties paid related to the Company’s U.S. Common Short Code services. Cost of revenue also includes the Company’s information technology and systems department, including network costs, data center maintenance, database management, data processing costs, and facilities costs.

Deferred costs represent direct labor related to professional services incurred for the setup and implementation of contracts. These costs are recognized in cost of revenue on a straight-line basis over the contract term Deferred costs also include royalties paid related to the Company’s U.S. Common Short Code services, which are recognized in cost of revenue on a straight-line basis over the contract term. Deferred costs are classified as such on the consolidated balance sheets.

Research and Development

The Company expenses its research and development costs as incurred. Research and development expense consists primarily of personnel costs, including salaries, stock-based compensation and other personnel-related expense; consulting fees; and the costs of facilities, computer and support services used in service and technology development.

Advertising

The Company expenses advertising as incurred. Advertising expense was approximately $447,000, $809,000 and $1.1 million for the years ended December 31, 2004, 2005 and 2006, respectively.

Stock-Based Compensation

In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, which requires companies to expense the estimated fair value of employee stock options and similar awards. This statement is a revision to SFAS No. 123, Accounting for Stock-Based Compensation, supersedes Accounting Principles Board Opinion No. 25 (APB No. 25), Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of Cash Flows.

Prior to January 1, 2006, the Company accounted for its stock-based compensation plans under the recognition and measurement provisions of APB No. 25, and related interpretations, as permitted by SFAS No. 123. Effective January 1, 2006, the Company adopted SFAS No. 123(R), including the fair value recognition provisions, using the modified-prospective transition method. Under the modified-prospective transition method, compensation cost recognized in fiscal 2006 includes: (a) compensation cost for all stock-based awards granted prior to but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all stock-based awards granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123(R). Under the modified prospective transition method, prior periods are not restated. Both prior and subsequent to the adoption of SFAS No. 123(R), the Company estimated the value of stock-based awards on the date of grant using the Black-Scholes option-pricing models. For stock-based awards subject to graded vesting, the Company has utilized the “straight-line” method for allocating compensation cost by period.

In accordance with FASB Staff Position No. FAS 123(R)-3, Transition Election Related to Accounting for Tax Effects of Share-Based Payment Awards, the Company elected to adopt the alternative method for calculating the tax effects of stock-based compensation pursuant to SFAS No. 123(R), as provided in this FASB Staff Position. The

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alternative transition method includes a simplified method to establish the beginning balance of the additional paid-in capital pool (APIC pool) related to the tax effects of employee stock-based compensation, which is available to absorb tax deficiencies recognized subsequent to the adoption of SFAS No. 123(R).

Prior to adoption of SFAS No. 123(R), the Company presented all benefits of tax deductions resulting from the exercise of stock-based compensation as an operating cash flow in the consolidated statements of cash flows. Beginning on January 1, 2006, the Company changed its cash flow presentation in accordance with SFAS No. 123(R), which requires benefits of tax deductions in excess of the compensation cost recognized (excess tax benefits) to be classified as a financing cash inflow with a corresponding operating cash outflow. For the year ended December 31, 2006, the Company included $49.5 million of excess tax benefits as a financing cash inflow with a corresponding operating cash outflow.

Prior to the adoption of SFAS No. 123(R), the Company recognized the full fair value of phantom stock units and restricted stock awards upon issuance within stockholders’ (deficit) equity. As of December 31, 2005, approximately $1.4 million of deferred compensation costs had been recognized in additional paid-in capital, offset by an equal amount recorded in deferred stock compensation. Pursuant to the adoption of SFAS No. 123(R) on January 1, 2006, the Company reversed previously recorded deferred stock compensation costs and recognized stock-based awards pertaining to phantom stock units and restricted stock awards in accordance with the related awards’ vesting provisions.

Basic and Diluted Net Income Attributable to Common Stockholders per Common Share

Basic net income attributable to common stockholders per common share excludes dilution for potential common stock issuances and is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net income attributable to common stockholders per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes (SFAS No. 109). Under SFAS No. 109, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rate and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Segment Information

The Company currently operates in one business segment; namely providing critical technology services to the communications industry. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker who comprehensively manages the business. The Company does not operate any material separate lines of business or separate business entities with respect to its services. Accordingly, the Company does not accumulate discrete financial information with respect to separate service lines and does not have separately reportable segments as defined by SFAS No. 131, Disclosure About Segments of an Enterprise and Related Information.

Substantially all of the Company’s material identifiable assets are located in the United States. Revenue derived from customers outside the United States was $5.2 million, $7.0 million and $15.7 million for the years ended December 31, 2004, 2005 and 2006.

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Comprehensive Income

There were no material differences between net income and comprehensive net income for the years ended December 31, 2004, 2005 and 2006.

Recent Accounting Pronouncements

In June 2006, the FASB issued FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, an interpretation of SFAS No. 109. This interpretation clarifies the accounting for income taxes by prescribing that a company should use a more-likely-than-not recognition threshold based on the technical merits of the tax position taken. Tax provisions that meet the more-likely-than-not recognition threshold should be measured as the largest amount of tax benefits, determined on a cumulative probability basis, which is more likely than not to be realized upon ultimate settlement in the financial statements. The Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition, and explicitly excludes income taxes from the scope of SFAS No. 5, Accounting for Contingencies. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently assessing the effect of FIN 48 on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 provides enhanced guidance for using fair value to measure assets and liabilities. It clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of SFAS No. 157 on its consolidated results of operations and financial condition.

3.   ACQUISITIONS

fiducianet, Inc.

In February 2005, the Company acquired fiducianet, Inc. (Fiducianet) for $2.2 million in cash and the issuance of 35,745 shares of the Company’s common stock for total purchase consideration of $2.6 million. The acquisition of Fiducianet enables the Company to serve as a single point of contact in managing all day-to-day customer obligations involving subpoenas, court orders and law enforcement agency requests under electronic surveillance laws including the Communications Assistance for Law Enforcement Act, the USA Patriot Act of 2001 and the Homeland Security Act of 2002. The acquisition was accounted for as a purchase, and the results of Fiducianet have been included in the accompanying consolidated statements of operations since the date of the acquisition.

The Company allocated the purchase price principally to customer lists ($2.6 million) and goodwill ($1.1 million) based on their estimated fair values on the acquisition date. Customer lists are included in intangible assets and are being amortized on a straight-line basis over five years. In accordance with SFAS No. 109, the Company recorded a deferred tax liability of approximately $1.0 million with a corresponding increase to goodwill. Goodwill is not deductible for tax purposes.

Foretec Seminars Inc.

In December 2005, the Company acquired Foretec Seminars, Inc. (Foretec) a provider of secretariat services to the Internet Engineering Task Force (IETF), from the Corporation for National Research Initiatives (CNRI) for $875,000 in cash, of which $500,000 is payable upon the achievement of certain milestones, as well as the payment of approximately $213,000 in legal fees incurred by CNRI to establish a public trust to administer IETF-related intellectual property. In accordance with FASB Statement No. 141, Business Combinations (SFAS No. 141), the $500,000 payable upon the achievement of certain milestones has been included in the purchase consideration since this amount was determinable as of the date of acquisition.

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The acquisition was accounted for as a purchase and accordingly, the results of Foretec have been included in the accompanying consolidated statements of operations since the date of the acquisition. The purchase price was allocated to net liabilities assumed of approximately $53,000 and goodwill ($929,000) based on their estimated fair values on the acquisition date. Goodwill is not deductible for tax purposes.

NeuLevel, Inc.

In March 2006, the Company acquired 10% of NeuLevel, Inc. (NeuLevel), from Melbourne IT Limited for cash consideration of $4.3 million, raising the Company’s ownership interest from 90% to 100%. The acquisition of the remaining 10% of NeuLevel was accounted for as a purchase business combination in accordance with SFAS No. 141. The Company allocated the purchase price principally to customer relationships ($4.1 million) based on their estimated fair values on the acquisition date. Customer relationships are included in intangible assets and are being amortized on an accelerated basis over five years. In accordance with SFAS No. 109, the Company recorded a deferred tax liability of approximately $1.6 million with a corresponding increase to goodwill. Goodwill is not deductible for tax purposes.

UltraDNS Corporation

On April 21, 2006, the Company acquired UltraDNS Corporation (UltraDNS) for $61.8 million in cash and acquisition costs of $0.8 million. The acquisition further expanded the Company’s domain name services and its Internet protocol technologies. The acquisition was accounted for as a purchase business combination in accordance with SFAS No. 141 and the results of operations of UltraDNS have been included in the accompanying consolidated statements of operations since the date of acquisition.

Of the total cash consideration, approximately $6.1 million was distributed to an escrow account, of which $6.0 million may be used for indemnification claims as set forth in the acquisition agreement. The other $0.1 million will be used for reimbursement of certain costs of the representative of the former stockholders of UltraDNS. All funds remaining in the account will be distributed to the former UltraDNS stockholders in accordance with the acquisition agreement on the first anniversary of the acquisition.

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Under the purchase method of accounting, the total purchase price as shown in the table below was allocated to UltraDNS’s net tangible and identifiable intangible assets based on their estimated fair values as of April 21, 2006. The excess purchase price over the net tangible and identifiable intangible assets was recorded as goodwill. The preliminary purchase price was allocated as follows (in thousands):

Accounts receivable	$	1,221
Unbilled receivables		360
Prepaid expenses and other current assets		298
Property and equipment		1,020
Other assets		63
Deferred tax assets, net		8,505
Accounts payable		(173	)
Accrued expenses		(1,175	)
Deferred revenue		(472	)
Notes payable		(134	)
Other liabilities		(14	)
Net tangible assets acquired		9,499
Definite-lived intangible assets acquired		20,000
Goodwill		33,126
Total purchase price	$	62,625

Of the total purchase price, a preliminary estimate of $9.5 million has been allocated to net tangible assets acquired and $20.0 million has been allocated to definite-lived intangible assets acquired. The Company utilized a third party valuation specialist to assist management in determining the fair value of the definite-lived intangible asset base. The income approach, which includes an analysis of cash flows and the risks associated with achieving such cash flows, was the primary technique utilized in valuing the identifiable intangible assets. The $20.0 million of definite-lived intangible assets acquired consists of the value assigned to UltraDNS’s direct customer relationships of $14.7 million, web customer relationships of $0.3 million, acquired technology of $4.8 million, and trade names of $0.2 million. The Company is amortizing the value of the UltraDNS direct and web customer relationships in proportion to the respective discounted cash flows over an estimated useful life of 7 and 5 years, respectively. Both acquired technology and trade names are being amortized on a straight-line basis over 3 years.

As a result of the UltraDNS acquisition, the Company recorded net deferred tax assets of $8.5 million in purchase accounting. This balance is comprised primarily of $16.5 million of deferred tax assets related to federal and state net operating losses, capitalized research and development, and certain amortization and depreciation expenses. These deferred tax assets were offset by $8.0 million in deferred tax liabilities resulting from the related intangibles identified from the acquisition. Of the total purchase price, approximately $33.1 million has been allocated to goodwill. Goodwill is not deductible for tax purposes.

The Company has currently not identified any material pre-acquisition contingencies where a liability is probable and the amount of the liability can be reasonably estimated. If information becomes available prior to the end of the purchase price allocation period which would indicate that such a liability is probable and the amounts can be reasonably estimated, such items will be included in the purchase price allocation.

Followap Inc.

On November 27, 2006, the Company acquired Followap Inc. (Followap) for $139.0 million in cash and acquisition costs of $1.8 million along with the assumption and payment of certain Followap debt and other liabilities of $5.6 million. Followap is a leading provider of next-generation communications solutions for network

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operators, delivering interoperability between operators and Internet portals in five different functional areas, which are instant messaging, presence, multimedia gateways, inter-carrier messaging hubs, and services for handset clients. The acquisition was accounted for as a purchase business combination in accordance with SFAS No. 141 and the results of operations of Followap have been included in the accompanying consolidated statements of operations since the date of acquisition.

Of the total cash consideration, approximately $14.1 million was distributed to an escrow account, of which $13.8 million will be used for indemnification claims as set forth in the acquisition agreement. The other $0.3 million will be used for the reimbursement of certain costs and expenses of the representative for the former stockholders of Followap. All funds remaining in the account will be distributed to former Followap stockholders in accordance with the agreement and plan of merger on the first anniversary of the acquisition.

Under the purchase method of accounting, the total purchase price is allocated to Followap’s net tangible liabilities assumed and intangible assets acquired based on their estimated fair values as of November 27, 2006, the effective date of the acquisition. The excess purchase price over the net tangible liabilities and identifiable intangible assets was recorded as goodwill. The preliminary purchase price is allocated as follows (in thousands):

Cash and cash equivalents	$	2,218
Accounts receivable		1,161
Prepaid expenses and other current assets		283
Property and equipment		1,094
Other assets		870
Accounts payable		(707	)
Accrued expenses		(3,223	)
Deferred revenue		(212	)
Other liabilities		(1,019	)
Deferred tax liabilities, net		(4,366	)
Net tangible liabilities assumed		(3,901	)
Definite-lived intangible assets acquired		30,600
Goodwill		119,665
Total purchase price	$	146,364

Of the total estimated purchase price, a preliminary estimate of $3.9 million has been allocated to net tangible liabilities assumed and $30.6 million has been allocated to definite-lived intangible assets acquired. The Company utilized a third party valuation specialist in determining the fair value of the definite-lived intangible asset base. The income approach, which includes an analysis of cash flows and the risks associated with achieving such cash flows, was the primary technique utilized in valuing the identifiable intangible assets. The $30.6 million of definite lived intangible assets acquired consists of the value assigned to Followap’s customer relationships of $20.8 million and acquired technology of $9.8 million. The Company is amortizing the value of the Followap customer relationships using an accelerated basis over five years and the value of the acquired technology on a straight-line basis over 3 years.

As a result of the Followap acquisition, the Company recorded net deferred tax liabilities of $4.4 million in purchase accounting. This balance is comprised of $7.8 million of deferred tax assets primarily related to federal and state net operating losses. These deferred tax assets were offset by $12.2 million in deferred tax liabilities resulting from the related intangibles identified from the acquisition. Of the total purchase price, approximately $119.7 million has been allocated to goodwill. Goodwill is not deductible for tax purposes.

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The Company has currently not identified any material pre-acquisition contingencies where a liability is probable and the amount of the liability can be reasonably estimated. If information becomes available prior to the end of the purchase price allocation period which would indicate that such a liability is probable and the amounts can be reasonably estimated, such items will be included in the purchase price allocation.

Pro Forma Financial Information for acquisitions of UltraDNS and Followap

The unaudited financial information in the table below summarizes the combined results of operations of the Company, UltraDNS and Followap on a pro forma basis, as though the companies had been combined as of the beginning of each of the periods presented. The pro forma financial information is presented for information purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of each of the periods presented. The pro forma financial information for all periods presented also includes amortization expense from acquired intangible assets, adjustments to interest income and related tax effects.

	Year Ended December 31,
	2005		2006
	(In thousands, except
	per share data)
	(Unaudited)
Total revenue	$	267,387	$	344,236
Net income	$	43,703	$	57,201
Net income attributable to common stockholders per common share:
Basic	$	1.14	$	0.79
Diluted	$	0.57	$	0.73

4.   SECURITIZED NOTES RECEIVABLE

The Company has notes receivables for functionality upgrades on behalf of its customers under its Statement of Work (SOW) contracts with North American Portability Management LLC. At the option of these customers, payment of these securitized notes receivable is made over 36 months from completion of the contract. The obligations, which are unsecured, accrue interest monthly on the unpaid balance. The interest charges range from 7.3% to 9.6% per annum. Payments are received from each customer for its pro-rata share of the obligation under the SOW contracts.

5.   DEFERRED FINANCING COSTS

During 2004, 2005 and 2006, the Company did not pay any loan origination fees. Total amortization expense was approximately $150,000, $57,000 and $7,000 for the years ended December 31, 2004, 2005 and 2006, respectively, and is reported as interest expense in the consolidated statements of operations. As of December 31, 2005 and 2006, the balance of unamortized deferred financing fees was $7,000 and $0, respectively, and is included within other noncurrent assets.

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6.   PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands):

	December 31,
	2005			2006
Computer hardware	$	32,608		$	36,178
Equipment		969			1,572
Furniture and fixtures		2,537			1,379
Leasehold improvements		14,781			15,240
Construction in-progress		1,927			1,252
Capitalized software		33,091			39,319
		85,913			94,940
Accumulated depreciation and amortization		(46,286	)		(52,262	)
Property and equipment, net	$	39,627		$	42,678

The Company entered into capital lease obligations of $3.5 million and $5.2 million for the years ended December 31, 2005 and 2006, respectively, primarily for computer hardware.

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2004, 2005 and 2006 was $16.0 million, $14.8 million and $17.8 million, respectively.

7.   GOODWILL AND INTANGIBLE ASSETS

Goodwill consists of the following (in thousands):

	December 31,
	2005		2006
Goodwill	$	51,495	$	205,855

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Intangible assets consist of the following (in thousands):

							Weighted-
							Average
							Amortization
	December 31,						Period
	2005			2006			(in years)
Intangible assets:
Customer lists and relationships	$	3,566		$	43,467			5.6
Accumulated amortization		(1,441	)		(5,817	)
Customer lists and relationships, net		2,125			37,650
Acquired technology		2,208			16,808			3.1
Accumulated amortization		(1,678	)		(3,416	)
Acquired technology, net		530			13,392
Trade name		—			200			3.0
Accumulated amortization		—			(46	)
Trade name, net		—			154
Intangible assets, net	$	2,655		$	51,196

Amortization expense related to intangible assets for the years ended December 31, 2004, 2005 and 2006 of approximately $1.3 million, $1.2 million and $6.2 million, respectively, is included in depreciation and amortization expense. Amortization expense related to intangible assets for the years ended December 31, 2007, 2008, 2009, 2010 and 2011 is expected to be approximately $14.7 million, $13.0 million, $10.9 million, $6.5 million and $5.0 million, respectively.

8.   ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):

	December 31,
	2005		2006
Accrued compensation	$	23,254	$	29,720
RRC reserve		2,501		2,908
Other		12,569		16,832
	$	38,324	$	49,460

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9.   NOTES PAYABLE

Notes payable consist of the following (in thousands):

	December 31,
	2005			2006
Promissory note payable to vendor; principal and interest payable quarterly at 1.73% per annum with a maturity date of April 1, 2006; secured by the equipment financed	$	155		$	—
Promissory note payable to vendor; principal and interest payable quarterly at 2.88% per annum with a maturity date of April 1, 2006; secured by the equipment financed		10			—
Promissory note payable to vendor; principal and interest payable quarterly at 3.87% per annum with a maturity date of April 1, 2006; secured by the equipment financed		30			—
Promissory note payable to vendor; principal and interest payable quarterly at 2.08% per annum with a maturity date of April 1, 2007; secured by the equipment financed		810			164
Promissory note payable to vendor; principal and interest payable quarterly at 0.0% per annum with a maturity date of March 1, 2008; secured by the equipment financed		1,246			693
Promissory note payable to vendor; principal and interest payable quarterly at 6.31% per annum with a maturity date of April 1, 2008; secured by the equipment financed		—			85
		2,251			942
Less: current portion		(1,232	)		(768	)
Notes payable, long-term	$	1,019		$	174

As of December 31, 2006, remaining principal payments under promissory notes payable are as follows (in thousands):

2007	$	768
2008		174
Total	$	942

Revolving Credit Facility

In August 2002, the Company entered into a Revolving Credit Facility (Revolving Credit Facility), which provides the Company with up to $15 million in available credit. Borrowings under the Revolving Credit Facility may be either Base Rate loans or Eurodollar rate loans. Base Rate loans bear interest at a fluctuating rate per annum equal to the higher of the federal funds rate plus 0.5% or the lender’s prime rate. Eurodollar rate loans bear interest at the Eurodollar rate plus the applicable margin. There were no outstanding borrowings under the Revolving Credit Facility at December 31, 2005 and December 31, 2006; however, total available borrowings were reduced by outstanding letters of credit of $10.7 million and $9.6 million at December 31, 2005 and December 31, 2006, respectively (see Note 10), which reduce the amount the Company may borrow under the Revolving Credit Facility. Accordingly, as of December 31, 2005 and 2006, the available capacity under the Revolving Credit Facility was $4.3 million and $5.4 million, respectively.

The Company’s obligations under the Revolving Credit Facility are secured by substantially all of the Company’s assets. Under the terms of the Revolving Credit Facility, the Company must comply with certain

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financial covenants such as maintaining minimum levels of consolidated net worth, quarterly consolidated EBITDA, and liquid assets and not exceeding certain levels of capital expenditures and leverage ratios. Additionally, there are negative covenants that limit the Company’s ability to declare or pay dividends, acquire additional indebtedness, incur liens, dispose of significant assets, make acquisitions or significantly change the nature of the business without permission of the lender. During 2004, 2005 and 2006, the Company was not in compliance with certain covenants and obtained waivers for such defaults. On February 6, 2007, the Company terminated the Revolving Credit Facility (See Note 19).

Receivables Facilities

In October 2003, the Company established a Receivables Facility with a bank (2003 Receivables Facility), pursuant to which it borrowed $10.1 million, secured by, and payable from the proceeds of, its securitized notes receivable (see Note 4). An independent third party administered the collection of the securitized notes receivable. As the securitized notes receivable were collected, the third party paid the bank directly for all secured amounts on a monthly basis, thereby reducing the amounts outstanding under the facility. Minimum payments of $1 million had been due every six months since January 2004, and all amounts outstanding were due February 1, 2007. The Company guaranteed a portion of the 2003 Receivables Facility (less than 10% of the outstanding principal balance) but was otherwise not liable for the collection of amounts owed under the secured securitized notes receivable. The 2003 Receivables Facility bore interest at the reserve adjusted one month LIBOR rate plus 2%. As of December 31, 2006, the rate was 7.33%. As of January 1, 2006, all outstanding obligations under the 2003 Receivables Facility had been performed, and the 2003 Receivables Facility expired in accordance with its terms.

10.   COMMITMENTS AND CONTINGENCIES

Capital Leases

The following is a schedule of future minimum lease payments due under capital lease obligations (in thousands):

2007	$	4,752
2008		2,312
2009		1,854
2010		445
Total minimum lease payments		9,363
Less: amounts representing interest		(1,245	)
Present value of minimum lease payments		8,118
Less: current portion		(4,367	)
Capital lease obligation, long-term	$	3,751

The following assets were capitalized under capital leases at the end of each period presented (in thousands):

	December 31,
	2005			2006
Equipment and hardware	$	18,392		$	18,166
Furniture and fixtures		1,918			334
		20,310			18,500
Less: accumulated amortization		(10,838	)		(10,376	)
	$	9,472		$	8,124

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Operating Leases

The Company leases office space under noncancelable operating lease agreements. The leases terminate at various dates through 2010 and generally provide for scheduled rent increases. Future minimum lease payments under noncancelable operating leases as of December 31, 2006, are as follows (in thousands):

	Operating
2007	$	6,366
2008		6,247
2009		6,059
2010		3,827
2011		823
	$	23,322

Rent expense was $3.0 million, $3.6 million and $4.7 million for the years ended December 31, 2004, 2005 and 2006, respectively.

Contingencies

Currently, and from time to time, the Company is involved in litigation incidental to the conduct of its business. The Company is not a party to any lawsuit or proceeding that, in the opinion of management, is reasonably possible to have a material adverse effect on its financial position, results of operations or cash flows.

11.   RESTRUCTURING CHARGES

Workforce Reduction

The restructuring program during 2005 resulted in workforce reductions of approximately 20 employees which were located in the Company’s Oakland, California office. The Company recorded workforce reduction charges of $317,000 during the year ended December 31, 2005, primarily for severance and fringe benefits.

Closure of Excess Facilities

During 2004, the Company recorded a change in estimate of approximately $220,000 to reduce a previously established restructuring liability in connection with the cancellation of a lease for property abandoned in 2002. This change in estimate was as a result of changes in the Company’s assumptions regarding the time period over which this property would remain vacant. During 2005, the Company recorded a change in estimate of approximately $706,000 to reduce the restructuring liability due to a change in the Company’s assumptions regarding the sub-lease rate for this property.

At December 31, 2005 and 2006, the accrued liability associated with the restructuring and other related charges was $3.1 million and $2.6 million, respectively. Amounts related to the lease termination due to the closure of excess facilities will be paid over the respective lease terms, the longest of which extends through 2011. The Company paid approximately $900,000, $1.9 million and $534,000, in the years ended December 31, 2004, 2005 and 2006, respectively, related to restructuring charges.

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12.   INCOME TAXES

The provision for income taxes consists of the following components (in thousands):

	Year Ended December 31,
	2004			2005			2006
Current:
Federal	$	5,609		$	32,381		$	50,054
State		1,976			5,905			9,129
Total current		7,585			38,286			59,183
Deferred:
Federal		(5,429	)		(876	)		(6,585	)
State		(990	)		(159	)		(1,245	)
Total deferred		(6,419	)		(1,035	)		(7,830	)
Total provision for income taxes	$	1,166		$	37,251		$	51,353

A reconciliation of the statutory United States income tax rate to the effective income tax rate follows:

	Year ended December 31,
	2004			2005			2006
Tax at statutory rate		35.0	%		35.0	%		35.0	%
State taxes		5.1			4.1			4.0
AMT Credit/Tax		(1.0	)		1.6			0.0
Other		0.1			(0.5	)		2.0
Change in valuation allowance		(36.7	)		0.0			0.0
Effective tax rate		2.5	%		40.2	%		41.0	%

As of June 30, 2004, the Company had generated operating profits for six consecutive quarters and had fully utilized its federal net operating loss carryforwards. As a result of this earnings trend and projected operating results over future years, the Company reversed approximately $20.2 million of its deferred tax asset valuation allowance, having determined that it was more likely than not that these deferred tax assets will be realized. This reversal resulted in the recognition of an income tax benefit of $16.9 million and a reduction of goodwill of $3.3 million. Of the total income tax benefit recognized, approximately $14.5 million relates to a federal deferred tax benefit with the remainder representing the state deferred tax benefit.

The Company realized certain tax benefits related to nonqualified and incentive stock option exercises in the amounts of $0, $17.0 million and $49.5 million for the years ended December 31, 2004, 2005 and 2006.

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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income taxes are as follows (in thousands):

	December 31,
	2005			2006
Deferred tax assets:
Domestic NOL carryforwards	$	111		$	21,105
Foreign NOL carryforwards		—			1,011
Restructuring accrual		1,209			1,002
Deferred revenue		6,328			7,887
Accrued compensation		7,535			1,330
Start-up costs		689			—
Stock-based compensation expense		1,119			3,589
Other reserves		1,281			90
Other		777			1,840
Total deferred tax assets		19,049			37,854
Valuation allowance for foreign NOL carryforwards		—			(1,011	)
Total deferred tax assets, net		—			36,843
Deferred tax liabilities:
Unbilled receivables		(3,162	)		(315	)
Depreciation and amortization		(2,575	)		(1,634	)
Identifiable intangibles		(816	)		(20,000	)
Deferred expenses		(1,462	)		(2,693	)
Other		(15	)		(60	)
Total deferred tax liabilities		(8,030	)		(24,702	)
Net deferred tax assets	$	11,019		$	12,141

As of December 31, 2006, the Company had U.S. net operating loss carryforwards for federal tax purposes of approximately $54.8 million. As of December 31, 2006, the Company had foreign net operating loss carryforwards of approximately $4.4 million. The Company’s U.S. net operating loss carryforwards expire, if unused, in various years from 2021 to 2026. The Company’s foreign net operating loss carryforwards can be carried forward indefinitely under current local tax laws.

13.   CONVERTIBLE PREFERRED STOCK

Prior to the Company’s initial public offering on June 28, 2005 (See Note 1), holders of 100,000 shares of Series B Voting Convertible Preferred Stock, 28,569,692 shares of Series C Voting Convertible Preferred Stock, and 9,098,525 shares of Series D Voting Convertible Preferred Stock converted their shares into 500,000, 28,569,692, and 9,098,525 shares of the Company’s common stock, respectively, after which each share of common stock was split by means of a reclassification into 1.4 shares of Class B common stock and subsequently converted, at the election of the holder, into Class A common stock.

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Series B Preferred Stock

The holders of the Series B were entitled to receive preferential cumulative dividends in cash at the rate per share of 6% of stated value ($0.651) or $0.04 per annum, compounded quarterly. Dividends were declared and paid on the Series B. Each share of Series B was convertible into seven shares of common stock, subject to anti-dilution adjustments, and was entitled to that number of votes. Conversion into common stock was automatic in the event of an underwritten public offering (or a combination of offerings) of common stock with gross proceeds to the Company of not less than $50 million (Qualified IPO). In the event of liquidation, dissolution, or winding up of the Company, the holders of the Series B would have received, on par with the holders of the Series C, a liquidation preference of $0.651 per share plus any accrued and unpaid dividends per share. Dividends on the Series B were approximately $4,800 and $2,000 for the years ended December 31, 2004, and 2005, respectively. Accrued and unpaid dividends on Series B were $1,000 at December 31, 2004. All accrued and unpaid dividends were fully paid in cash on June 28, 2005 in connection with the Company’s initial public offering.

The Series B had a deemed liquidation provision included among the rights given to its holders whereby, upon the sale of the Company or substantially all the Company’s assets, the holders of the Series B were entitled to elect to receive a cash payment equal to the liquidation preference or the amount of consideration that would have been payable had the Series B converted to common stock.

Series C Preferred Stock

The holders of the Series C were entitled to receive cumulative dividends in cash at the rate per share of 6% of stated value ($2.956) or $0.18 per annum, compounded quarterly. Dividends were declared and paid on the Series C in preference in respect to other series of stock determined as subordinate. The Series C were convertible to common shares on a 1.4-for-1 basis, subject to anti-dilution adjustments. Upon a Qualified IPO, the Series C would have automatically converted to common stock at the applicable conversion price. Each share of Series C was entitled to the same number of votes as the shares of common stock into which it was convertible. The Company also had the right to redeem, in whole or in part, the Series C outstanding at the Series C redemption price of $2.956 per share, plus an amount equal to any and all dividends accrued and unpaid, with consent of the holders of a majority of the Series C. In the event of liquidation, dissolution, or winding up of the Company, the holders of the Series C would have received, on par with the holders of the Series B, a liquidation preference of $2.956 per share plus any accrued and unpaid dividends per share. Dividends on the Series C were approximately $5.8 million and $2.5 million for the years ended December 31, 2004 and 2005, respectively. Accrued and unpaid dividends on the Series C were approximately $1.3 million at December 31, 2004. All accrued and unpaid dividends were fully paid in cash on June 28, 2005 in connection with the Company’s initial public offering.

The Series C had a deemed liquidation provision included among the rights given to its holders whereby, upon the sale of the Company or substantially all the Company’s assets, the holders of the Series C were entitled to elect to receive a cash payment equal to the liquidation preference or the amount of consideration that would have been payable had the Series C converted to common stock.

Series D Preferred Stock

Holders of the Series D were entitled to receive cumulative dividends in cash at the rate per share of 6% of stated value ($5.935) or $0.36 per annum, compounded quarterly. Dividends were declared and paid on the Series D. Upon a Qualified IPO, the Series D would have automatically converted to common stock at the conversion price applicable at that time. Each share of Series D was entitled to that number of votes as the shares of common stock into which it was convertible.

During the period commencing on August 5, 2006 and ending September 5, 2006, the holders of a majority of the then-outstanding shares of Series D could have required the Company to engage an independent investment banker to seek a third-party purchaser for then-outstanding Series D at not less than the applicable liquidation

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amount or some or all of the Company’s assets or to sell additional securities to fund the redemption of the Series D, such that the holders of such shares would have received the applicable liquidation amount. If the shares of Series D had not been purchased or redeemed by the Company prior to June 5, 2007, the Company would have been required to redeem such shares on that date. If a majority of the holders of Series D did not elect to have their shares redeemed, a certain holder of Series D had a one-month period ending in October 2006 to have required the Company to redeem their shares on June 5, 2009. If the board of directors had determined that funds would not be reasonably available to satisfy the redemption obligation, the Company would not have been required to do so, provided that it increased the dividend rate on shares held by a certain holder of Series D by 0.5% per annum, up to a maximum dividend rate of 15% per annum. Series D was redeemable in amounts equal to the original investment plus accrued and unpaid dividends. The redemption amount of the Series D, $54.0 million plus accrued and unpaid dividends, was accreted to its redemption rate.

In the event of a liquidation, dissolution, or winding up of the Company, the holders of the Series D were entitled to a liquidation preference over holders of all other series of preferred and common stock. The holders of the Series B and C were pari passu and had preference over the common stockholders. Dividends on and accretion of the Series D were approximately $3.7 million and $1.6 million for the years ended December 31, 2004 and 2005, respectively. Accrued and unpaid dividends on the Series D were $817,000, $0 and $0 at December 31, 2004, 2005 and 2006, respectively. All accrued and unpaid dividends were fully paid in cash on June 28, 2005 in connection with the Company’s initial public offering.

14.   STOCKHOLDERS’ (DEFICIT) EQUITY

Preferred Stock

The Company is authorized to issue up to 100,000,000 shares of preferred stock, $0.001 par value per share, in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the rights, preferences, privileges, qualifications, limitations and restrictions of the shares of each wholly unissued series.

Common Stock

The Company is authorized to issue up to 200,000,000 shares of Class A common stock, $0.001 par value per share and 100,000,000 shares of Class B common stock, $0.001 par value per share. Each holder of Class A and Class B common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of Class A and Class B common stock are entitled to receive dividends out of assets legally available at the times and in the amounts as the Company’s board of directors may from time to time determine.

On June 28, 2005, the Company made an initial public offering of 31,625,000 shares of Class A common stock, which included the underwriters’ over-allotment option exercise of 4,125,000 shares of Class A common stock. All the shares of Class A common stock sold in the IPO were sold by selling stockholders and, as such, the Company did not receive any proceeds from the offering. In connection with this transaction, the Company incurred offering costs and other IPO-related expenses of approximately $4.9 million.

On December 6, 2005, the Company completed an additional offering (December 2005 offering) of 20,000,000 shares of Class A common stock. All the shares of Class A common stock sold in the December 2005 offering were sold by selling stockholders and, as such, the Company did not receive any proceeds from that offering. In connection with this transaction, the Company incurred offering costs of approximately $900,000.

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Warrants

In prior years, the Company issued warrants to purchase 6,361,383 shares of common stock at $0.0667 per share in connection with certain debt financings. On December 12, 2005, the Company issued 6,361,383 shares of Class A common stock upon the exercise these warrants in exchange for cash proceeds of approximately $424,000.

Stock-Based Compensation

The Company has two stock incentive plans, the NeuStar, Inc. 1999 Equity Incentive Plan (the 1999 Plan) and the NeuStar, Inc. 2005 Stock Incentive Plan (the 2005 Plan). Under the 1999 Plan, the Company had the ability to grant to its directors, employees and consultants stock or stock-based awards in the form of incentive stock options, nonqualified stock options, stock appreciation rights, performance share units, shares of restricted common stock, phantom stock units and other stock-based awards. In May 2005, the Company’s board of directors adopted the 2005 Plan, which was approved by the Company’s stockholders in June 2005. In connection with the adoption of the 2005 Plan, the Company’s board of directors amended the 1999 Plan to provide that no further awards would be granted under the 1999 Plan as of the date stockholder approval for the 2005 Plan was obtained. All shares available for grant as of that date, plus any other shares under the 1999 Plan that again become available due to forfeiture, expiration, settlement in cash or other termination of awards without issuance, will be available for grant under the 2005 Plan. Under the 2005 Plan, the Company may grant to its directors, employees and consultants awards in the form of incentive stock options, nonqualified stock options, stock appreciation rights, shares of restricted stock, restricted stock units, performance awards and other stock-based awards. The aggregate number of shares of Class A common stock with respect to which all awards may be granted under the 2005 Plan is 6,044,715, plus any shares available for issuance under the 1999 Plan. As of December 31, 2006, 4,682,399 shares were available for grant or award under the 2005 Plan.

The term of any stock option granted under the 1999 Plan or the 2005 Plan may not exceed ten years. The exercise price per share for options granted under these Plans is not less than 100% of the fair market value of the common stock on the option grant date. The board of directors or Compensation Committee of the board of directors determines the vesting of the options, with a maximum vesting period of ten years. Options issued generally vest with respect to 25% of the shares on the first anniversary of the grant date and 2.083% of the shares on the last day of each succeeding calendar month thereafter. The options expire seven to ten years from the date of issuance and are forfeitable upon termination of an option holder’s service.

The board of directors or Compensation Committee of the board of directors has granted and may in the future grant restricted stock to directors, employees and consultants. The board of directors or Compensation Committee of the board of directors determines the vesting of the restricted stock, with a maximum vesting period of ten years. Restricted stock issued generally vests in equal annual installments over a four-year term.

Stock-based compensation expense recognized under SFAS No. 123(R) for the year ended December 31, 2006 was $11.9 million. As of December 31, 2006, total unrecognized compensation expense related to non-vested stock options, non-vested restricted stock and non-vested phantom stock units granted prior to that date is estimated at $30.5 million, which the Company expects to recognize over a weighted average period of approximately 2.1 years. Total unrecognized compensation expense as of December 31, 2006 is estimated based on outstanding non-vested stock options, restricted stock and phantom stock units, and may be increased or decreased in future periods for subsequent grants or forfeitures.

The following table illustrates the effect on net income attributable to common stockholders and net income attributable to common stockholders per common share if the Company had applied the fair value recognition provisions of SFAS No. 123(R) to stock-based employee compensation for the years ended December 31, 2004 and 2005. The pro forma disclosure for the years ended December 31, 2004 and 2005 utilized the Black-Scholes option-

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pricing model to estimate the value of the respective options with such value amortized to compensation expense over the options’ vesting periods.

	Year Ended December 31,
	2004			2005
	(In thousands, except per share data)
Pro forma basic net income attributable to common stockholders:
Basic net income attributable to common stockholders, as reported	$	35,639		$	51,085
Add: stock-based compensation expense included in reported net income attributable to common stockholders		2,065			1,607
Deduct: total stock-based compensation expense determined under fair value-based method for all awards		(6,707	)		(6,282	)
Pro forma basic net income attributable to common stockholders	$	30,997		$	46,410
Pro forma diluted net income attributable to common stockholders:
Basic net income attributable to common stockholders, as reported	$	35,639		$	51,085
Dividends on and accretion of convertible preferred stock		9,737			4,313
Diluted net income attributable to common stockholders		45,376			55,398
Add: stock-based compensation expense included in reported net income attributable to common stockholders		2,065			1,607
Deduct: total stock-based compensation expense determined under fair value-based method for all awards		(6,707	)		(6,282	)
Pro forma diluted net income attributable to common stockholders	$	40,734		$	50,723
Net income attributable to common stockholders per common share:
Basic — as reported	$	6.33		$	1.48
Basic — pro forma	$	5.50		$	1.35
Diluted — as reported	$	0.57		$	0.72
Diluted — pro forma	$	0.51		$	0.66

The above pro forma disclosures are provided for 2004 and 2005 because, in contrast to the presentation for the year ended December 31, 2006, stock-based compensation expense was not recognized using the fair-value method under SFAS No. 123(R) during the periods presented. Pro forma disclosure has not been presented for the year ended December 31, 2006 because stock-based compensation expense has been recognized by the Company in accordance with the fair-value method set forth in SFAS No. 123(R) for such period.

The Company has utilized the Black-Scholes option-pricing model for estimating the fair value of stock options granted during the years ended December 31, 2004 and 2005, as well as for option grants during all prior periods. The weighted-average fair value of options at the date of grant for options granted during the years ended December 31, 2004 and 2005 was $3.92 and $11.19, respectively.

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As a result of adopting SFAS No. 123(R) on January 1, 2006, the Company’s income before income taxes and net income for the year ended December 31, 2006 were approximately $10.4 million and $7.6 million less, respectively, than if the Company had continued to account for stock-based compensation under APB No. 25. Basic and diluted net income per common share for the year ended December 31, 2006 were each approximately $0.10 less than if the Company had not adopted SFAS No. 123(R). Upon the adoption of SFAS No. 123(R), the Company continued to utilize the Black-Scholes option pricing model for estimating the fair value of stock options granted during the year ended December 31, 2006. The weighted-average fair value of options at the date of grant for options granted during the year ended December 31, 2006 was $12.24. The following are the weighted-average assumptions used in valuing the stock options granted during the year ended December 31, 2006, and a discussion of the Company’s assumptions.

Dividend yield	0.00	%
Expected volatility	38.56	%
Risk-free interest rate	4.68	%
Expected life of options (in years)	4.56

Dividend yield — The Company has never declared or paid dividends on its common stock and does not anticipate paying dividends in the foreseeable future.

Expected volatility — Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. Given the Company’s limited historical stock data from its initial public offering in June 2005, the Company has used a blended volatility to estimate expected volatility. The blended volatility includes the average of the Company’s preceding weekly historical volatility from its initial public offering to the respective grant date, the Company’s preceding six-months market implied volatility and an average of the Company’s peer group preceding weekly historical volatility consistent with the expected life of the option. Market implied volatility is the volatility implied by the trading prices of publicly available stock options for the Company’s common stock. The Company’s peer group historical volatility includes the historical volatility of companies that are similar in revenue size, in the same industry or are competitors.

Risk-free interest rate — This is the average U.S. Treasury rate (with a term that most closely resembles the expected life of the option) for the quarter in which the option was granted.

Expected life of the options — This is the period of time that the options granted are expected to remain outstanding. This estimate is derived from the average midpoint between the weighted average vesting period and the contractual term as described in the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment.

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Stock Options

The following table summarizes the Company’s stock option activity:

				Weighted-
				Average
				Exercise
	Shares			Price
Outstanding at December 31, 2003		12,716,593		$	2.37
Options granted		2,983,173			6.69
Options exercised		(611,118	)		0.15
Options forfeited		(713,006	)		3.91
Outstanding at December 31, 2004		14,375,642			3.29
Options granted		1,149,844			20.33
Options exercised		(2,588,631	)		3.07
Options forfeited		(315,302	)		6.10
Outstanding at December 31, 2005		12,621,553			4.81
Options granted		1,547,200			31.10
Options exercised		(5,919,098	)		3.33
Options forfeited		(332,927	)		10.26
Outstanding at December 31, 2006		7,916,728			10.83
Exercisable at December 31, 2006		4,382,608			3.86
Exercisable at December 31, 2005		8,692,844			2.41
Exercisable at December 31, 2004		8,561,121			1.46

The following table summarizes information regarding options outstanding at December 31, 2006:

					Weighted-
	Options Outstanding				Average		Options Exercisable
	Number		Weighted-		Remaining		Number		Weighted-
	of		Average		Contractual		of		Average
	Options		Exercise		Life		Options		Exercise
Range of Exercise Price	Outstanding		Price		(In Years)		Exercisable		Price
$ 0.00 - $ 3.20		2,313,264	$	0.28		3.52		2,313,264	$	0.28
$ 3.21 - $ 6.24		888,018		4.44		6.07		729,109		4.41
$ 6.25 - $ 6.41		858,898		6.25		7.48		328,233		6.25
$ 6.42 - $ 8.38		1,213,799		6.43		6.97		637,050		6.43
$ 8.39 - $10.86		452,132		9.25		7.97		164,932		9.94
$10.87 - $22.00		462,717		22.00		8.49		129,002		22.00
$22.01 - $30.20		1,146,200		30.04		6.32		44,560		28.60
$30.21 - $34.84		581,700		32.94		6.99		36,458		31.95
		7,916,728		10.83		5.97		4,382,608		3.86

The aggregate intrinsic value of options exercised for the years ended December 31, 2004, 2005 and 2006 was $3.5 million, $59.0 million and $161.4 million, respectively. The aggregate intrinsic value for all options outstanding under the Company’s stock plans as of December 31, 2006 was $171.6 million. The aggregate

79

NEUSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

intrinsic value for options exercisable under the Company’s stock plans as of December 31, 2006 was $125.2 million.

In June 2004, the Company entered into an agreement with an employee which gave the employee the right to put 210,000 shares of common stock to be received upon the exercise of vested stock options back to the Company at $4.82 per share. In July 2004, the employee exercised vested stock options for 210,000 shares of common stock and put the shares back to the Company in August 2004. The Company recognized stock-based compensation expense of $982,000 on the date the put right was granted in accordance with FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, an Interpretation of ABP 25. The shares repurchased were held in treasury as of December 31, 2004 and were retired in May 2005.

In February 2005, the Company granted fully vested options to nonemployees for the purchase of 22,400 shares of common stock at a weighted average exercise price of $10.86 per share. The Company recognized compensation expense of approximately $180,000. The fair value of these awards was calculated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: expected life of the award equal to the remaining contractual life; volatility 63.11%; risk-free interest rate, 3.38%; and dividend yield of 0.00% during the option term.

In March 2005, an employee of the Company changed status to a consultant and, in accordance with the terms of that employee’s original option agreement, continued to vest in 26,250 options as of March 29, 2005. As a result, the Company re-measured the fair value of the vested options and recognized compensation expense of approximately $331,000. The fair value of this award was calculated on the modification date using the Black-Scholes option-pricing model with the following weighted average assumptions: expected life of the award equal to the remaining contractual life; volatility 63.11%; risk-free interest rate, 3.43%; and dividend yield of 0.00% during the option term.

In March 2005, the Company accelerated the vesting of certain options issued to nonemployees. This acceleration enabled the optionholders to vest immediately in approximately 102,000 options, which otherwise would have vested over the options’ original vesting period, generally 48 months. In connection with this acceleration, the Company recorded approximately $1.6 million as compensation expense based on the fair value of the options on the date of acceleration. The fair value of these awards was remeasured on the acceleration date using the Black-Scholes option-pricing model with the following weighted average assumptions: expected life of the award equal to the remaining contractual life; volatility 63.11%; risk-free interest rate, 3.72%; and dividend yield of 0.00% during the option term. As of March 31, 2005, all options granted to nonemployees had vested. Prior to this acceleration, the Company recognized compensation expense of approximately $249,000 and $644,000 for the years ended December 31, 2003 and 2004.

Phantom Stock Units

In July 2004, the board of directors granted 350,000 phantom stock units to one of the Company’s executive officers. Under the terms of the phantom stock agreement, these phantom stock units will vest in full on December 18, 2008. Upon vesting, this executive officer will be entitled to receive one share of the Company’s Class A common stock for each phantom stock unit. The vesting of these phantom stock units may accelerate if the Company experiences a change of control and certain other conditions are met. The aggregate intrinsic value for these phantom stock units as of December 31, 2006 was $11.4 million. If the executive officer’s employment with us is terminated because of death or disability at any time, or if the executive officer’s employment is terminated by us without cause or by the executive officer for good reason after December 18, 2005, the phantom stock unit will vest on a pro-rata basis, based on the date that the executive officer’s employment is terminated.

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NEUSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restricted Stock

The following table summarizes the Company’s non-vested restricted stock activity:

				Weighted-
				Average
				Grant Date
	Shares			Fair Value
Outstanding at December 31, 2004		—		$	—
Restricted stock granted		5,000			31.95
Restricted stock vested		—			—
Restricted stock forfeited		—			—
Outstanding at December 31, 2005		5,000			31.95
Restricted stock granted		102,490			31.37
Restricted stock vested		(2,367	)		31.43
Restricted stock forfeited		(1,900	)		30.57
Outstanding at December 31, 2006		103,223			31.41

The aggregate intrinsic value of options exercised for the year ended December 31, 2006 was approximately $70,000. The aggregate intrinsic value for all restricted stock outstanding under the Company’s stock plans as of December 31, 2006 was $3.3 million.

Restricted Stock Units

In July 2006, the Compensation Committee of the board of directors issued 27,170 restricted stock units to the Company’s non-management directors. The aggregate intrinsic value of the restricted stock units granted totaled $880,000. For those directors who were elected at the 2006 Annual Meeting of Stockholders, as well as incumbent directors whose terms did not expire in 2006, these restricted stock units were granted on July 1, 2006. For those directors appointed by the Company’s board of directors on July 26, 2006, the date of grant was July 27, 2006. These restricted stock units will fully vest on the first anniversary of the date of grant. Upon vesting, each director’s restricted stock units will be automatically converted into deferred stock units, which will be delivered to the director in shares of the Company’s stock six months following the director’s termination of Board service. Upon the resignation of one of the Company’s directors on July 26, 2006, 3,259 restricted stock units were forfeited. The aggregate intrinsic value for these restricted stock units as of December 31, 2006 was approximately $776,000.

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NEUSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

15.   BASIC AND DILUTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS PER COMMON SHARE

The following table provides a reconciliation of the numerators and denominators used in computing basic and diluted net income attributable to common stockholders per common share (in thousands, except per share data):

	Year Ended December 31,
	2004			2005			2006
Basic net income attributable to common stockholders per common share:
Net income	$	45,376		$	55,398		$	73,899
Dividends on and accretion of convertible preferred stock		(9,737	)		(4,313	)		—
Basic net income attributable to common stockholders	$	35,639		$	51,085		$	73,899
Basic net income attributable to common stockholders per common share	$	6.33		$	1.48		$	1.02
Diluted net income attributable to common stockholders per common share:
Basic net income attributable to common stockholders	$	35,639		$	51,085		$	73,899
Dividends on and accretion of convertible preferred stock		9,737			4,313			—
Diluted net income attributable to common stockholders	$	45,376		$	55,398		$	73,899
Diluted net income attributable to common stockholders per common share	$	0.57		$	0.72		$	0.94
Weighted average common shares outstanding — basic		5,632			34,437			72,364
Dilutive effect of:
Stock options for the purchase of common stock		7,515			10,163			5,903
Conversion of preferred stock and accrued dividends payable into common stock		60,801			26,453			—
Warrants for the purchase of common stock		6,289			5,993			—
Weighted average common shares outstanding — diluted		80,237			77,046			78,267

16.   EMPLOYEE BENEFIT PLANS

The Company has a 401(k) Profit-Sharing Plan for the benefit of all employees who meet certain eligibility requirements. This plan covers substantially all of the Company’s full-time employees. The plan documents provide for the Company to make matching and other discretionary contributions, as determined by the board of directors. The Company recognized contribution expense totaling $1.5 million, $2.0 million and $2.4 million for the years ended December 31, 2004, 2005 and 2006, respectively.

17.   RELATED PARTY TRANSACTIONS

During the years ended December 31, 2004, 2005 and 2006, the Company received professional services from a company owned by a family member of the Chairman and CEO of the Company. The services were related to tenant improvements in the Company’s leased office spaces. The amounts paid to the related party during the years ended December 31, 2004, 2005 and 2006 were approximately $117,000, $99,000 and $292,000, respectively. As of December 31, 2005 and 2006, the Company owed $0 and $58,000 for outstanding payables to this party.

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NEUSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company has an agreement with Melbourne IT Limited (MIT), a former holder of a 10% interest in NeuLevel, whereby MIT serves as a registrar for domain names within the .biz top-level domain. During the years ended December 31, 2004, 2005 and 2006, the Company recorded approximately $512,000, $684,000 and $837,000, respectively, in revenue from MIT related to domain name registration services and other nonrecurring revenue from IP claim notification services and pre-registration services.

18.   QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

	Quarter Ended
	Mar. 31,		Jun. 30,		Sep. 30,			Dec. 31,
	2005		2005		2005			2005
	(In thousands, except per share data)
Summary consolidated statement of operations:
Total revenue	$	57,792	$	62,296	$	58,960	(1)	$	63,421	(1)
Income from operations		24,475		23,016		21,692			23,285
Net income		14,631		13,883		13,057			13,827
Net income attributable to common stockholders		12,488		11,713		13,057			13,827
Net income attributable to common stockholders per common share — basic	$	2.08	$	1.45	$	0.22		$	0.22
Net income attributable to common stockholders per common share — diluted	$	0.19	$	0.18	$	0.17		$	0.18

	Quarter Ended
	Mar. 31,		Jun. 30,			Sep. 30,			Dec. 31,
	2006		2006			2006			2006
	(In thousands, except per share data)
Summary consolidated statement of operations:
Total revenue	$	76,163	$	82,263	(1)	$	82,509	(1)	$	92,022
Income from operations		30,275		32,728			27,930			31,690
Net income		18,285		19,952			17,104			18,558
Net income attributable to common stockholders
Net income attributable to common stockholders per common share — basic	$	0.26	$	0.28		$	0.23		$	0.25
Net income attributable to common stockholders per common share — diluted	$	0.24	$	0.26		$	0.22		$	0.24

(1) Revenue for the quarters ended September 30, 2005, December 31, 2005, June 30, 2006 and September 30, 2006 reflects contractual pricing discounts based on pre-established annual aggregate transaction volume targets under the Company’s contracts with North American Portability Management LLC, which had an impact of $5.0 million, $2.5 million, $2.1 million and $5.4 million, respectively.

19.   SUBSEQUENT EVENTS

On January 8, 2007, the Company acquired certain assets of I-View.com, Inc. (d/b/a MetaInfo) for cash consideration of $1.7 million. The acquisition of MetaInfo expands the Company’s enterprise domain name systems (DNS) services. The acquisition was accounted for as a purchase. The Company is currently in the process of completing its preliminary purchase price allocation.

On February 6, 2007, the Company entered into a new credit agreement, which provides for a revolving credit facility in an aggregate principal amount of up to $100 million. Borrowings under this revolving credit facility bear interest, at the Company’s option, at either a Eurodollar rate plus a spread ranging from 0.625% to 1.25%, or at a

83

base rate plus a spread ranging from 0.0% to 0.25%, with such spread in each case depending on the ratio of the Company’s consolidated senior funded indebtedness to consolidated EBITDA. This new credit agreement expires on February 6, 2012. Borrowings under the revolving credit facility may be used for working capital, capital expenditures, general corporate purposes and to finance acquisitions as permitted by the terms of this credit agreement.

The new credit agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. The new credit agreement requires the Company to maintain a minimum consolidated EBITDA to consolidated interest charge ratio and a maximum consolidated senior funded indebtedness to consolidated EBITDA ratio. If an event of default occurs and is continuing, the Company may be required to repay all amounts outstanding under the new credit agreement. Lenders holding more than 50% of the loans and commitments under the new credit agreement may elect to accelerate the maturity of amounts due thereunder upon the occurrence and during the continuation of an event of default.

Until February 6, 2007, the Company had a revolving credit facility, which provided it with up to $15 million in available credit. The commitments under this credit agreement were terminated simultaneous with the closing of the new credit agreement on February 6, 2007 (See Note 10).

84

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.   CONTROLS AND PROCEDURES

Attached as exhibits to this Form 10-K are certifications of our Chief Executive Officer and Chief Financial Officer, which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended. This “Controls and Procedures” section includes information concerning the controls and controls evaluation referred to in the certifications. The report of Ernst & Young LLP, our independent registered public accounting firm, regarding management’s assessment of internal control over financial reporting, and its audit of our internal control over financial reporting is set forth below in this section. This section should be read in conjunction with the certifications and the Ernst & Young report for a more complete understanding of the topics presented.

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” as of the end of the period covered by this Form 10-K. The controls evaluation was conducted under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Disclosure controls are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed to reasonably assure that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our quarterly evaluation of disclosure controls includes an evaluation of some components of our internal control over financial reporting, and internal control over financial reporting is also separately evaluated on an annual basis for purposes of providing the management report which is set forth below.

The evaluation of our disclosure controls included a review of the controls’ objectives and design, our implementation of the controls and their effect on the information generated for use in this Form 10-K. In the course of the controls evaluation, we reviewed identified data errors, control problems or indications of potential fraud and, where appropriate, sought to confirm that appropriate corrective actions, including process improvements, were being undertaken. This type of evaluation is performed on a quarterly basis so that the conclusions of management, including the Chief Executive Officer and Chief Financial Officer, concerning the effectiveness of the disclosure controls can be reported in our periodic reports on Form 10-Q and Form 10-K. Many of the components of our disclosure controls are also evaluated on an ongoing basis by our finance organization. The overall goals of these various evaluation activities are to monitor our disclosure controls, and to modify them as necessary. Our intent is to maintain the disclosure controls as dynamic systems that change as conditions warrant.

Based upon the controls evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Form 10-K, our disclosure controls were effective to provide reasonable assurance that information required to be disclosed in our Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the SEC, and that material information related to NeuStar and its consolidated subsidiaries is made known to management, including the Chief Executive Officer and Chief Financial Officer, particularly during the period when our periodic reports are being prepared. We reviewed the results of management’s evaluation with the Audit Committee of our Board of Directors.

Management Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining effective internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the

85

company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles; and (iii) provide reasonable assurance regarding authorization to effect the acquisition, use or disposition of company assets, as well as the prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Management assessed our internal control over financial reporting as of December 31, 2006, the end of our fiscal year. Management based its assessment on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies and our overall control environment. This assessment is supported by testing and monitoring performed by our finance organization.

Based on this assessment, management has concluded that our internal control over financial reporting was effective as of the end of the fiscal year to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

Our independent registered public accounting firm, Ernst & Young LLP, audited management’s assessment and independently assessed the effectiveness of the company’s internal control over financial reporting. Ernst & Young has issued an attestation report, which is included at the end of this section.

Inherent Limitations on Effectiveness of Controls

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Other inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control over Financial Reporting

On a quarterly basis we evaluate any changes to our internal control over financial reporting to determine if material changes occurred. There were no changes in our internal controls over financial reporting during the quarterly period ended December 31, 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

86

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Board of Directors and Stockholders

NeuStar, Inc.

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that NeuStar, Inc. maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). NeuStar, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that NeuStar, Inc. maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, NeuStar, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of NeuStar, Inc. as of December 31, 2005 and 2006, and the related consolidated statements of operations, shareholders’ (deficit) equity, and cash flows for each of the three years in the period ended December 31, 2006 and our report dated February 28, 2007 expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

McLean, Virginia

February 28, 2007

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ITEM 9B.   OTHER INFORMATION

None.

PART III

ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information about our directors and executive officers and our corporate governance is incorporated by reference to our definitive proxy statement for our 2007 Annual Meeting of Stockholders, or our 2007 Proxy Statement, which is anticipated to be filed with the Securities and Exchange Commission within 120 days of December 31, 2006, under the headings “Board of Directors,” “Executive Officers and Management” and “Governance of the Company.” Information about compliance with Section 16(a) of the Exchange Act is incorporated by reference to our 2007 Proxy Statement under the heading “Section 16(a) Beneficial Ownership Reporting Compliance.” Information about our Audit Committee, including the members of the Audit Committee, and Audit Committee financial experts, is incorporated by reference to our 2007 Proxy Statement under the heading “Governance of the Company.” Information about the NeuStar policies on business conduct governing our employees, including our Chief Executive Officer, Chief Financial Officer and our controller, is incorporated by reference to our 2007 Proxy Statement under the heading “Governance of the Company.”

ITEM 11.   EXECUTIVE COMPENSATION

Information about director and executive officer compensation is incorporated by reference to our 2007 Proxy Statement, under the headings “Governance of the Company.”

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required by Item 12 of this report is incorporated by reference to our 2007 Proxy Statement, under the headings “Beneficial Ownership of Shares of Common Stock” and “Equity Compensation Plan Information.”

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by Item 13 of this report is incorporated by reference to our 2007 Proxy Statement, under the heading “Governance of the Company.”

ITEM 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES

Information about the fees for professional services rendered by our independent auditors in 2005 and 2006 is incorporated by reference to the discussion under the heading “Audit and Non-Audit Fees” in our 2007 Proxy Statement. Our audit committee’s policy on pre-approval of audit and permissible non-audit services of our independent auditors is incorporated by reference from the discussion under the heading “Governance of the Company.”

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PART IV

ITEM 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this report:

(1)

	Page
Report of Independent Registered Public Accounting Firm		48
Consolidated Financial Statements covered by the Report of Independent Registered Public Accounting Firm:
Consolidated Balance Sheets as of December 31, 2005 and 2006		49
Consolidated Statements of Operations for the years ended December 31, 2004, 2005 and 2006		51
Consolidated Statements of Stockholders’ (Deficit) Equity for the years ended December 31, 2004, 2005 and 2006		52
Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2005 and 2006		53
Notes to the Consolidated Financial Statements		54

(2)

Schedule for the three years ended December 31, 2004, 2005 and 2006:
II — Valuation and Qualifying Accounts	91

(a) (3) and (b) Exhibits required by Item 601 of Regulation S-K:

89

NEUSTAR, INC.

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

	As of December 31,
	2004			2005			2006
	(In thousands)
Allowance for Doubtful Accounts
Beginning Balance	$	84		$	468		$	494
Additions		960			551			2,041
Reductions(1)		(576	)		(525	)		(1,432	)
Ending Balance	$	468		$	494		$	1,103
Deferred Tax Asset Valuation Allowance
Beginning Balance	$	20,209		$	—		$	—
Additions		—			—			1,011
Reductions		(20,209	)		—			—
Ending Balance	$	—		$	—		$	1,011

(1) Includes the reinstatement and subsequent collections of accounts receivable that were previously written-off.

90

Exhibits identified in parentheses below are on file with the SEC and are incorporated herein by reference. All other exhibits are provided as part of this electronic submission.

Exhibit Number			Description of Exhibit
	(2	.1)	Agreement and Plan of Merger, dated as of April 19, 2006, by and among NeuStar, Inc., UDNS Merger Sub, Inc., UltraDNS Corporation, and Ron Lachman as the Holder Representative, incorporated herein by reference to Exhibit 2.1 to our Current Report on Form 8-K, filed April 25, 2006.
	(2	.2)	Agreement and Plan of Merger, dated as of November 27, 2006, by and among NeuStar, Inc., Followap Inc., B&T Merger Sub, Inc. and Carmel V.C. Ltd. And Sequoia Seed Capital II L.P. (Israel), as Holder Representatives, incorporated herein by reference to Exhibit 2.1 to our Current Report on Form 8-K, filed November 27, 2006.
	(3	.1)	Restated Certificate of Incorporation, incorporated herein by reference to Exhibit 3.1 to Amendment No. 7 to our Registration Statement on Form S-1, filed June 28, 2005 (File No. 333-123635).
	3	.2	Amended and Restated Bylaws.
	(10	.1)	Contractor services agreement entered into the 7th day of November 1997 by and between NeuStar, Inc. and North American Portability Management LLC, as amended, incorporated herein by reference to (a)Exhibit 10.1 to our Quarterly Report on Form 10-Q, filed August 15, 2005; (b) Exhibit 10.1.1. to our Annual Report on Form 10-K, filed March 29, 2006; (c) Exhibit 10.1.2 to our Quarterly Report on Form 10-Q, filed August 14, 2006; (d) Exhibit 10.1.3 to our Quarterly Report on Form 10-Q, filed August 14, 2006**; (e) Exhibit 99.1 to our Current Report on Form 8-K, filed September 22, 2006; and (f) Exhibit 10.1.4 to our Quarterly Report on Form 10-Q, filed November 14, 2006.
	10	.1.1	Amendments to the contractor services agreement by and between NeuStar, Inc. and North American Portability Management LLC, as amended.
	(10	.2)	Contractor services agreement, restated as of June 1, 2003, by and between Canadian LNP Consortium Inc. and NeuStar, Inc., as amended, incorporated herein by reference to (a) Exhibit 10.2 to Amendment No. 6 to our Registration Statement on Form S-1, filed June 28, 2005 (File No. 333-123635); (b) Exhibit 10.2.1 to our Quarterly Report on Form 10-Q, filed August 15, 2005; (c) Exhibit 10.2.1 to our Annual Report on Form 10-K, filed March 29, 2006; (d) Exhibit 10.2.2 to our Annual Report on Form 10-K filed March 29, 2006; and (e) Exhibit 10.2.3. to our Quarterly Report on Form 10-Q, filed August 14, 2006.**
	10	.2.1	Amendment, entered into as of December 20, 2006, to the contractor services agreement between Canadian LNP Consortium Inc. and NeuStar, Inc.**
	10	.2.2	Amendment, entered into as of December 20, 2006, to the contractor services agreement between Canadian LNP Consortium Inc. and NeuStar, Inc.**
	10	.2.3	Amendment, entered into as of February 1, 2007, to the contractor services agreement between Canadian LNP Consortium Inc. and NeuStar, Inc.**
	(10	.3)	National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission, effective June 14, 2001, incorporated herein by reference to (a) Exhibit 10.3 to Amendment No. 6 to our Registration Statement on Form S-1, filed June 28, 2005 (File No. 333-123635); (b) Exhibit 10.3.1 to our Quarterly Report on Form 10-Q, filed August 15, 2005; (c) Exhibit 10.3.2 to our Current Report on Form 8-K, filed September 15, 2005; (d) Exhibit 10.3.3 to our Quarterly Report on Form 10-Q, filed November 14, 2005; (e) Exhibit 10.3.4 to our Quarterly Report on Form 10-Q, filed August 14, 2006; and (f) Exhibit 10.3.5 to our Quarterly Report on Form 10-Q, filed November 14, 2006.
	10	.3.1	Amendments to the National Thousands-Block Pooling Administration agreement awarded to NeuStar, Inc. by the Federal Communications Commission.

91

Exhibit Number			Description of Exhibit
	(10	.4)	North American Numbering Plan Administrator agreement awarded to NeuStar, Inc. by the Federal Communications Commission, effective July 9, 2003, incorporated herein by reference to (a) Exhibit 10.4 to Amendment No. 7 to our Registration Statement on Form S-1, filed June 28, 2005 (File No. 333-123635); (b) Exhibit 10.4.1 to our Current Report on Form 8-K, filed September 15, 2005; (c) Exhibit 10.4.1 to our Annual Report on Form 10-K, filed March 29, 2006; (d) Exhibit 10.4.2 to our Quarterly Report on Form 10-Q, filed August 14, 2006; and (e) Exhibit 10.4.3 to our Quarterly Report on Form 10-Q, filed November 14, 2006.
	10	.4.1	Amendments to the North American Numbering Plan Administrator agreement awarded to NeuStar, Inc. by the Federal Communications Commission.
	(10	.5)	.us Top-Level Domain Registry Management and Coordination agreement awarded to NeuStar, Inc. by the National Institute of Standards and Technology on behalf of the Department of Commerce on October 26, 2001, incorporated herein by reference to (a) Exhibit 10.5 to Amendment No. 7 to our Registration Statement on Form S-1, filed June 28, 2005 (File No. 333-123635); (b) Exhibit 10.5.1 to our Quarterly Report on Form 10-Q, filed November 14, 2005; (c) Exhibit 10.5.2 to our Quarterly Report on Form 10-Q, filed November 14, 2005; and (d) Exhibit 10.5.3 to our Quarterly Report on Form 10-Q, filed November 14, 2006.
	10	.5.1	Amendment to .us Top-Level Domain Registry Management and Coordination agreement awarded to NeuStar, Inc. by the National Institute of Standards and Technology on behalf of the Department of Commerce on October 26, 2001.
	10	.6	Registry Agreement by and between the Internet Corporation for Assigned Names and Numbers and NeuStar, Inc., dated as of December 18, 2006.
	(10	.7)	Common Short Code License Agreement made and entered into October 17, 2003, by and between the Cellular Telecommunications and Internet Association and NeuStar, Inc., incorporated herein by reference to (a) Exhibit 10.7 to Amendment No. 7 to our Registration Statement on Form S-1, filed June 28, 2005 (File No. 333-123635);** (b) Exhibit 10.7.1 to our Annual Report on Form 10-K, filed March 29, 2006; and (c) Exhibit 10.7.2 to our Quarterly Report on Form 10-Q, filed November 14, 2006.
	(10	.8)	NeuStar, Inc. 1999 Equity Incentive Plan (the “1999 Plan”), incorporated herein by reference to Exhibit 10.8 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.9)	NeuStar, Inc. 2005 Stock Incentive Plan (the “2005 Plan”), incorporated herein by reference to Exhibit 10.9 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.10)	Incentive Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Jeffrey Ganek, incorporated herein by reference to Exhibit 10.10 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.11)	Incentive Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Mark Foster, incorporated herein by reference to Exhibit 10.11 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.12)	Nonqualified Stock Option Agreement under the 1999 Plan, made as of March 26, 2002, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004, incorporated herein by reference to Exhibit 10.13 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†

92

Exhibit Number			Description of Exhibit
	(10	.13)	Incentive Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Jeffrey Ganek, incorporated herein by reference to Exhibit 10.14 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.14)	Incentive Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Mark Foster, incorporated herein by reference to Exhibit 10.15 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.15)	Nonqualified Stock Option Agreement under the 1999 Plan, made as of June 6, 2002, by and between NeuStar, Inc. and Jeffrey Ganek, incorporated herein by reference to Exhibit 10.16 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.16)	Nonqualified Stock Option Agreement under the 1999 Plan, made as of January 16, 2003, by and between NeuStar, Inc. and John Malone, as amended as of December 18, 2003 and as of June 22, 2004, incorporated herein by reference to Exhibit 10.19 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.17)	Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Jeffrey Ganek, as amended as of June 22, 2004, incorporated herein by reference to Exhibit 10.20 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.18)	Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004, incorporated herein by reference to Exhibit 10.21 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.19)	Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Mark Foster, as amended as of June 22, 2004, incorporated herein by reference to Exhibit 10.22 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.20)	Incentive Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and John Malone, as amended as of June 22, 2004 and May 20, 2005, incorporated herein by reference to Exhibit 10.23 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.21)	Nonqualified Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Jeffrey Ganek, as amended as of June 22, 2004, incorporated herein by reference to Exhibit 10.24 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.22)	Nonqualified Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Michael Lach, as amended as of June 22, 2004, incorporated herein by reference to Exhibit 10.25 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.23)	Nonqualified Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and Mark Foster, as amended as of June 22, 2004, incorporated herein by reference to Exhibit 10.26 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†

93

Exhibit Number			Description of Exhibit
	(10	.24)	Nonqualified Stock Option Agreement under the 1999 Plan, made as of December 18, 2003, by and between NeuStar, Inc. and John Malone, as amended as of June 22, 2004 and May 20, 2005, incorporated herein by reference to Exhibit 10.27 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.25)	Incentive Stock Option Agreement under the 1999 Plan, made as of June 22, 2004, by and between NeuStar, Inc. and Jeffrey Babka, as amended as of May 20, 2005, incorporated herein by reference to Exhibit 10.28 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.26)	Nonqualified Stock Option Agreement under the 1999 Plan, made as of June 22, 2004, by and between NeuStar, Inc. and Jeffrey Babka, as amended as of May 20, 2005, incorporated herein by reference to Exhibit 10.29 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.27)	Phantom Stock Unit Agreement under the 1999 Plan, made as of July 19, 2004, by and between NeuStar, Inc. and Michael R. Lach, incorporated herein by reference to Exhibit 10.30 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.28)	Nonqualified Stock Option Agreement under the 1999 Plan, made as of April 10, 2000, by and between NeuStar, Inc. and Ken Pickar, incorporated herein by reference to Exhibit 10.34 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.29)	Nonqualified Stock Option Agreement under the 1999 Plan, made as of February 14, 2005, by and between NeuStar, Inc. and Jim Cullen, incorporated herein by reference to Exhibit 10.35 to Amendment No. 1 to our Registration Statement on Form S-1, filed April 8, 2005 (File No. 333-123635).†
	(10	.30)	Loudoun Tech Center Office Lease by and between Merritt-LT1, LLC, Landlord, and NeuStar, Inc., Tenant, incorporated herein by reference to Exhibit 10.37 to Amendment No. 2 to our Registration Statement on Form S-1, filed May 11, 2005 (File No. 333-123635).
	(10	.31)	Credit Agreement, dated as of February 6, 2007, among NeuStar, Inc., JPMorgan Chase Bank, N.A., and other lenders, incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K, filed February 9, 2007.
	(10	.32)	Guarantee Agreement dated February 6, 2007 among certain subsidiaries of NeuStar, Inc. in favor of JPMorgan Chase Bank, N.A., as administrative agent for the lenders, incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K, filed February 9, 2007
	(10	.33)	NeuStar, Inc. Annual Performance Incentive Plan, incorporated herein by reference to Exhibit 10.40 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.34)	NeuStar, Inc. 2005 Key Employee Severance Pay Plan, incorporated herein by reference to Exhibit 10.41 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	10	.35	Executive Relocation Policy.†
	(10	.36)	Employment Continuation Agreement, made as of April 8, 2004, by and between NeuStar, Inc. and Jeffrey Ganek, incorporated herein by reference to Exhibit 10.43 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.37)	Employment Continuation Agreement, made as of April 8, 2004, by and between NeuStar, Inc. and Mark Foster, incorporated herein by reference to Exhibit 10.44 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.38)	Form of Restricted Stock Agreement under the 2005 Plan, incorporated herein by reference to Exhibit 10.45 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.39)	Form of Nonqualified Stock Option Agreement under the 2005 Plan, incorporated herein by reference to Exhibit 10.46 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†

94

Exhibit Number			Description of Exhibit
	(10	.40)	Form of Incentive Stock Option Agreement under the 2005 Plan, incorporated herein by reference to Exhibit 10.47 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.41)	Summary of relocation arrangement with Jeffrey A. Babka, incorporated herein by reference to Exhibit 10.48 to Amendment No. 3 to our Registration Statement on Form S-1, filed May 27, 2005 (File No. 333-123635).†
	(10	.42)	Form of Indemnification Agreement, incorporated herein by reference to Exhibit 10.49 to Amendment No. 5 to our Registration Statement on Form S-1, filed June 10, 2005 (File No. 333-123635).†
	(10	.43)	Summary Description of Non-Management Director Compensation incorporated herein by reference to Exhibit 99.1 to our Current Report on form 8-K, filed April 14, 2006.†
	(10	.44)	Form of Directors’ Restricted Stock Unit Agreement, incorporated herein by reference to Exhibit 99.2 to our Current Report on Form 8-K, filed April 14, 2006. †
	21	.1	Subsidiaries of NeuStar, Inc.
	23	.1	Consent of Ernst & Young LLP.
	24	.1	Power of Attorney (included on the signature page herewith).
	31	.1	Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	(99	.1)	Update to the Functional Requirements Specification, which is attached as Exhibit B to the contractor services agreement by and between NeuStar, Inc. and North American Portability Management, LLC, filed with the Securities and Exchange Commission as Exhibit 10.1 and Exhibit 10.1.1 to this annual report on Form 10-K, incorporated herein by reference to Exhibit 99.1 to our Annual Report on Form 10-K, filed March 29, 2006.
	(99	.2)	Update to the Interoperable Interface Specification, which is attached as Exhibit C to the contractor services agreement by and between NeuStar, Inc. and North American Portability Management, LLC, filed with the Securities and Exchange Commission Exhibit 10.1 and Exhibit 10.1.1 to this annual report on Form 10-K, incorporated herein by reference to Exhibit 99.2 to our Annual Report on Form 10-K, filed March 29, 2006.

†	Compensation arrangement.
**	Confidential treatment has been requested or granted for portions of this document. The omitted portions of this document have been filed with the Securities and Exchange Commission.

95

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 1, 2007.

NEUSTAR, INC.

By:  /s/  Jeffrey E. Ganek

Jeffrey E. Ganek

Chairman of the Board of Directors

and Chief Executive Officer

We, the undersigned directors and officers of NeuStar, Inc., hereby severally constitute Jeffrey E. Ganek and Martin K. Lowen, and each of them singly, our true and lawful attorneys with full power to them and each of them to sign for us, in our names in the capacities indicated below, any and all amendments to this Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 1, 2007.

Signature	Title
/s/  Jeffrey E. Ganek Jeffrey E. Ganek	Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)
/s/  Jeffrey A. Babka Jeffrey A. Babka	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
/s/  James G. Cullen James G. Cullen	Director
/s/  Andre Dahan Andre Dahan	Director
/s/  Joel P. Friedman Joel P. Friedman	Director
/s/  Ross K. Ireland Ross K. Ireland	Director
/s/  Dr. Kenneth A. Pickar Dr. Kenneth A. Pickar	Director
/s/  Michael J. Rowny Michael J. Rowny	Director
/s/  Hellene S. Runtagh Hellene S. Runtagh	Director

96

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

OF

NEUSTAR, INC.

ARTICLE I
OFFICES

     The address of the registered office of NeuStar, Inc. (the “Corporation”) in the State of Delaware is 1209 Orange Street in the City of Wilmington, County of New Castle. The name of the Corporation’s registered agent at such address is The Corporation Trust Company. The Corporation may also have such other offices at such other places, within or without the State of Delaware, as the Board of Directors may from time to time designate or the business of the Corporation may require.

ARTICLE II
STOCKHOLDERS

     Section 1. Annual Meeting.

     (a) An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, on such date, and at such time as the Board of Directors shall each year fix, which date shall be within 13 months of the last annual meeting of stockholders.

     (b) Nominations of persons for election to the Board of Directors and the proposal of business to be transacted by the stockholders may be made at an annual meeting of stockholders only (i) pursuant to the Corporation’s notice with respect to such meeting (or any supplement thereto), (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of record of the Corporation who was a stockholder of record at the time of the giving of the notice provided for in the following paragraph, who is entitled to vote at the meeting and who has complied with the notice procedures set forth in this section.

     (c) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of the foregoing paragraph, (i) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (ii) such business must be a proper matter for stockholder action under the General Corporation Law of the State of Delaware, (iii) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the Corporation with a Solicitation Notice, as that term is defined in subclause (C)(iii) of this paragraph, such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the Corporation’s voting shares reasonably believed by such stockholder or beneficial holder to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice and (iv) if no Solicitation Notice relating thereto has been timely provided pursuant to this section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this section. To be timely, a stockholder’s notice

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shall be delivered to the Secretary at the principal executive offices of the Corporation not less than 90 or more than 120 days prior to the first anniversary (the “Anniversary”) of the date on which the Corporation first mailed its proxy materials for the preceding year’s annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not later than the close of business on the later of (I) the 90th day prior to such annual meeting or (II) the 10th day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth (A) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person as would be required to be disclosed in solicitations of proxies for the election of such nominees as directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such person’s written consent to being named in the proxy statement as nominee and to serve as a director if elected; (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of such business, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class and number of shares of the Corporation that are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of the Corporation’s voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the Corporation’s voting shares to elect such nominee or nominees (an affirmative statement of such intent, a “Solicitation Notice”).

     (d) Notwithstanding anything in paragraph (c) of this Section 1 to the contrary, in the event that the number of directors to be elected to the Board of Directors is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least 100 days prior to the Anniversary, a stockholder’s notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

     (e) Only persons nominated in accordance with the procedures set forth in this Section 1 shall be eligible to serve as directors and only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this section. The chairman of the meeting shall have the power and the duty to determine whether a nomination or any business proposed to be brought before the meeting has been made in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such

2

defectively proposed business or nomination shall not be presented for stockholder action at the meeting and shall be disregarded.

     (f) For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

     (g) Notwithstanding the foregoing provisions of this Section 1, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section 1. Nothing in this Section 1 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

     Section 2. Special Meetings.

     (a) Special meetings of the stockholders, other than those required by statute, may be called at any time by the Chairman of the Board or the President or by the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board. For purposes of these Bylaws, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. The Board of Directors may postpone or reschedule any previously scheduled special meeting.

     (b) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder of record of the Corporation who is a stockholder of record at the time of giving of notice provided for in this paragraph, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in Section 1 of this Article II. Nominations by stockholders of persons for election to the Board of Directors may be made at such a special meeting of stockholders if the stockholder’s notice required by paragraph (c) of Section 1 of this Article II shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

     (c) Notwithstanding the foregoing provisions of this Section 2, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters set forth in this Section 2. Nothing in this Section 2 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

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     Section 3. Notice of Meetings. Notice of the place, if any, date, and time of all meetings of the stockholders, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, shall be given, not less than 10 nor more than 60 days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the Delaware General Corporation Law or the Certificate of Incorporation of the Corporation).

     When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than 30 days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, notice of the place, if any, date, and time of the adjourned meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.

     Section 4. Quorum. At any meeting of the stockholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Where a separate vote by a class or classes or series is required, a majority of the shares of such class or classes or series present in person or represented by proxy shall constitute a quorum entitled to take action with respect to that vote on that matter.

     If a quorum shall fail to attend any meeting, the chairman of the meeting may adjourn the meeting to another place, if any, date, or time.

     Section 5. Organization. Such person as the Board of Directors may have designated or, in the absence of such a person, the Chairman of the Board or, in his or her absence, the President of the Corporation or, in his or her absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman of the meeting appoints.

     Section 6. Conduct of Business. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order. The chairman shall have the power to adjourn the meeting to another place, if any, date and time. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting.

     Section 7. Proxies and Voting. At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in

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writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. A proxy shall be deemed signed if the stockholder’s name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the stockholder or the stockholder’s attorney-in-fact. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary of the Corporation. A proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by the Corporation.

     The Corporation may, and to the extent required by law, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent required by law, shall, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. Every vote taken by ballots shall be counted by a duly appointed inspector or inspectors.

     All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast affirmatively or negatively.

     Section 8. Stock List. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder for a period of at least 10 days prior to the meeting in the manner provided by law.

     The stock list shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law. This list shall presumptively determine the identity of the stockholders entitled to examine the list and to vote at the meeting and the number of shares held by each of them.

ARTICLE III
BOARD OF DIRECTORS

     Section 1. Number of Directors; Qualifications. Subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, the number of directors constituting the Whole Board shall be not less than three nor more than fifteen, as fixed

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from time to time by vote of a majority of the Whole Board; provided, however, that the number of directors shall not be reduced so as to shorten the term of any director at the time in office; provided, further, that the number of directors constituting the Whole Board shall be eight until otherwise fixed by a majority of the Whole Board. In the event that the service by any individual on the Corporation’s board of directors would cause the Corporation to violate any of the neutrality requirements to which the Corporation is subject under the applicable laws, regulations, rules and orders of the Federal Communications Commission, such individual shall not qualify to serve as a director of the Corporation and, if applicable, such individual shall cease to be a member of the board of directors immediately.

     Section 2. Newly Created Directorships and Vacancies. Subject to the rights of the holders of any series of preferred stock then outstanding, any vacancies in the Board of Directors for any reason, and any directorships resulting from any increase in the number of directors, may be filled by the Board of Directors, acting by a majority of the directors then in office, although less than a quorum, and any directors so chosen shall hold office until the next election of the class for which such directors have been chosen and until their successors shall be elected and qualified.

     Section 3. Regular Meetings. Regular meetings of the Board of Directors shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all directors. A notice of each regular meeting shall not be required.

     Section 4. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President or by a majority of the Whole Board and shall be held at such place, on such date, and at such time as they or he or she shall fix. Notice of the place, date, and time of each such special meeting shall be given to each director by whom it is not waived by mailing written notice not less than five days before the meeting or by telephone or by telegraphing or telexing or by facsimile or electronic transmission of the same not less than 24 hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

     Section 5. Quorum. At any meeting of the Board of Directors, a majority of the total number of the Whole Board shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof.

     Section 6. Participation in Meetings By Conference Telephone. Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such Board of Directors or committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting.

     Section 7. Conduct of Business. At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board of Directors may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present, except as otherwise provided herein or required by law. Action may be taken by the Board of

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Directors without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

     Section 8. Compensation of Directors. Unless otherwise restricted by the Corporation’s Certificate of Incorporation, the Board of Directors shall have the authority to fix the compensation of the directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or paid a stated salary or paid other compensation as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed compensation for attending committee meetings.

     Section 9. Powers. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. The Board of Directors shall exercise all of the powers and duties conferred by law except as provided by the Certificate of Incorporation or these Bylaws.

     Section 10. Resignations. Any director may resign at any time upon notice given in writing or by electronic transmission. The resignation shall take effect at the time specified therein, and if no time is specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective.

ARTICLE IV
COMMITTEES

     Section 1. Committees of the Board of Directors. The Board of Directors may from time to time designate committees of the Board of Directors, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board of Directors and shall, for those committees and any others provided for herein, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.

     Section 2. Conduct of Business. Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third of the members shall constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in

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writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

ARTICLE V
OFFICERS

     Section 1. Generally. The officers of the Corporation may consist of a Chairman of the Board, a President, a Chief Operating Officer, one or more Vice Presidents, a Chief Financial Officer, a Secretary, one or more Assistant Secretaries and such other officers as may from time to time be appointed by the Board of Directors. In the event there are two or more Vice Presidents, then one or more may be designated as Executive Vice President, Senior Vice President, or other similar or dissimilar title. At the time of the election of officers, the directors may by resolution determine the order of their rank. Officers shall be elected by the Board of Directors, which shall consider that subject at its first meeting after every annual meeting of stockholders. Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any number of offices may be held by the same person. The salaries of officers elected by the Board of Directors shall be fixed from time to time by the Board of Directors or by such officers as may be designated by resolution of the Board of Directors.

     Section 2. Chairman of the Board. The Chairman of the Board shall be the chief executive officer of the Corporation. Subject to the provisions of these Bylaws and to the direction of the Board of Directors, he or she shall have the responsibility for the general management and control of the business and affairs of the Corporation and shall perform all duties and have all powers which are commonly incident to the office of chief executive or which are delegated to him or her by the Board of Directors. He or she shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Corporation.

     Section 3. President. The President shall perform all duties and have all powers which are commonly incident to the office of president or which are delegated to him or her by the Board of Directors. Subject to the direction of the Board of Directors and the Chairman of the Board, the President shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized.

     Section 4. Chief Operating Officer. The Chief Operating Officer shall have general responsibility for the management and control of the operations of the Corporation and shall perform all duties and have all powers which are commonly incident to the office of chief operating officer or which are delegated to him or her by the Board of Directors. Subject to the direction of the Board of Directors and the Chairman of the Board, the Chief Operating Officer shall have power to sign all contracts and other instruments of the Corporation which are authorized and shall have general supervision of all of the other officers (other than the Chairman of the Board, the President or any Vice Chairman), employees and agents of the Corporation.

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     Section 5. Vice President. Each Vice President shall have such powers and duties as may be delegated to him or her by the Board of Directors. In the absence or disability of the President, the Vice Presidents in order of their rank as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President.

     Section 6. Chief Financial Officer. The Chief Financial Officer shall have the general care and custody of the funds and securities of the Corporation, and shall deposit all such funds in the name of the Corporation in such banks, trust companies or other depositories as shall be selected by the Board. He shall receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever. He shall exercise general supervision over expenditures and disbursements made by officers, agents and employees of the Corporation and the preparation of such records and reports in connection therewith as may be necessary or desirable. He shall, in general, perform all other duties incident to the office of Chief Financial Officer and such other duties as from time to time may be assigned to him by the Board.

     Section 7. Secretary. The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose; and shall perform like duties for the standing committees when required by the Board of Directors. He shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or these Bylaws. He shall keep in safe custody the seal of the Corporation, and when authorized by the Board, affix the same to any instrument requiring it, and when so affixed it shall be attested by his signature or by the signature of an Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature.

     Section 8. Assistant Secretary. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors, or if there be no such determination, the Assistant Secretary designated by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

     Section 9. Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.

     Section 10. Removal. Any officer of the Corporation may be removed at any time, with or without cause, by the Board of Directors.

     Section 11. Action with Respect to Securities of Other Corporations. Unless otherwise directed by the Board of Directors, the Chief Executive Officer or any officer of the Corporation authorized by the Chief Executive Officer shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other Corporation in which this Corporation may

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hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other Corporation.

     Section 12. Corporate Funds and Checks. The funds of the Corporation shall be kept in such depositories as shall from time to time be prescribed by the Board of Directors. All checks or other orders for the payment of money shall be signed by the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer or such other person or agent as may from time to time be authorized and with such countersignature, if any, as may be required by the Board of Directors.

ARTICLE VI
STOCK

     Section 1. Certificates of Stock. Each stockholder shall be entitled to a certificate signed by, or in the name of the Corporation by, the Chief Executive Officer, President or a Vice President, and by the Secretary or an Assistant Secretary, certifying the number of shares owned by him or her. Any or all of the signatures on the certificate may be by facsimile. The Board of Directors shall have the power to appoint one or more transfer agents and/or registrars for the transfer or registration of certificates of stock of any class, and may require stock certificates to be countersigned or registered by one or more of such transfer agents and/or registrars.

     Section 2. Transfers of Stock. Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 4 of Article VI of these Bylaws, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefor. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented, both the transferor and transferee request the Corporation to do so. The Board of Directors shall have the power and authority to make such rules and regulations as it may deem necessary or proper concerning the issue, transfer and regulation of certificates for shares of stock of the Corporation.

     Section 3. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may, except as otherwise required by law, fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than 60 nor less than 10 days before the date of any meeting of stockholders, nor more than 60 days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment of rights or to exercise any rights of change, conversion or exchange of

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stock or for any other purpose, the record date shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto.

     A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

     Section 4. Lost, Stolen or Destroyed Certificates. In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity.

     Section 5. Regulations. The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish.

     Section 6. List of Stockholders Entitled to Vote. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 219 of the Delaware General Corporation Law or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

     Section 7. Dividends. Subject to the provisions of the Certificate of Incorporation, the Board of Directors may at any regular or special meetings, declare dividends upon the stock of the Corporation either (a) out of its surplus, as defined in and computed in accordance with Sections 154 and 244 of the Delaware General Corporation Law or (b) in case there shall be no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Before the declaration of any dividend, the Board of Directors may set apart, out of any funds of the Corporation available for dividends, such sum or sums as from time to time in their discretion may be deemed proper for working capital or as a reserve fund to meet contingencies or for such other purposes as shall be deemed conducive to the interests of the Corporation.

     Section 8. Registered Stockholders. Prior to the surrender to the Corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the Corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. The Corporation shall not be bound to recognize any equitable or other claims to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.

ARTICLE VII
NOTICES

     Section 1. Notices. Notice to stockholders may be given personally, by mail, or by electronic transmission in accordance with Section 232 of the Delaware General Corporation Law. If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. Notice shall be deemed to have been given to all stockholders of

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record who share a post office or street or electronic mail address if notice is given in accordance with the “householding” rules set forth in Rule 14a-3(e) under the Exchange Act and Section 233 of the Delaware General Corporation Law. An affidavit of the Secretary or Assistant Secretary or of the transfer agent or other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Notice to the Corporation shall be deemed given when received by the Secretary of the Corporation.

     Section 2. Waivers. A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such person, whether given before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting shall constitute waiver of notice except attendance for the sole purpose of objecting to the timeliness of notice.

ARTICLE VIII
MISCELLANEOUS

     Section 1. Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

     Section 2. Corporate Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Chief Financial Officer or by an Assistant Secretary.

     Section 3. Reliance upon Books, Reports and Records. Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters which such director or committee member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

     Section 4. Fiscal Year. The fiscal year of the Corporation shall be as fixed by the Board of Directors.

     Section 5. Time Periods. In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

     Section 6. Electronic Transmission. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a

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recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

     Section 7. Section Headings. Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

     Section 8. Inconsistent Provisions; Changes in Delaware Law. If any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. If any of the provisions of the General Corporation Law of the State of Delaware referred to above are modified or superseded, the references to those provisions is to be interpreted to refer to the provisions as so modified or superseded.

ARTICLE IX
INDEMNIFICATION OF DIRECTORS AND OFFICERS

     The Corporation shall be authorized to indemnify and hold harmless each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any proceeding, by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation or is or was a director, officer, employee or agent of the Corporation serving at the request of the Corporation as a director, officer, trustee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, agent or trustee or in any other capacity while serving as a director, officer, employee, agent or trustee, and the Corporation may indemnify each such person to the fullest extent authorized by the Delaware General Corporation Law against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such person in connection with such proceeding.

ARTICLE X
AMENDMENTS

     These Bylaws, or any of them, may be altered, amended or repealed, and new Bylaws may be made, (i) by the Board, by vote of a majority of the number of directors then in office as directors, acting at any meeting of the Board or by written consent, or (ii) by the stockholders, at any annual meeting of stockholders, without previous notice, or at any special meeting of stockholders, provided that notice of such proposed amendment, modification, repeal or adoption is given in the notice of special meeting. Any Bylaws made or altered by the stockholders may be altered or repealed by either the Board or the stockholders.

ARTICLE XI
CONDUCT OF BUSINESS

     In the conduct of its business and other corporate matters, the Corporation shall take such actions as are necessary to comply with the neutrality requirements to which the Corporation is

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subject under the applicable laws, regulations, rules and orders of the Federal Communications Commission. In the case of an ambiguity in the application of any of the provisions of this Article XI, the Board of Directors shall have the power to determine the application of the provisions of this Article XI with respect to any situation based on the facts reasonably believed in good faith by it. In the event Article XI requires an action by the Board of Directors and the Corporation’s Certificate of Incorporation and these Bylaws fail to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken.

Date of Adoption: February 27, 2007

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EX-10.1.1

Exhibit 10.1.1

December 4, 2006

Mel Clay, NAPM LLC Co-Chair
BellSouth
675 W. Peachtree St. N.E.
Room 20G40
Atlanta, GA 30375

Tim Decker, NAPM LLC Co-Chair
Verizon
600 Hidden Ridge
MC: HQE02N40
Irving, TX 75038

Re: Modifications to the Scheduled Service Unavailability (SSU) Window

Dear Mel and Tim:

On November 14, 2006, the LNPA-WG issued a recommendation for service provider maintenance windows. As a result, the NPAC SSU window must be conformed to the LNPA-WG’s recommendation. Therefore, effective on January 1, 2007, and for one (I) year thereafter, the following modifications to Paragraph 1 (Amendment to Exhibit G) of Exhibit 1 (Attachment 3 to SOW 25) of SOW 31 shall take effect:

1.	The “20 Hour Requirement” is hereby suspended,
2.	The “Sunday Requirement” is hereby amended to read:

0 hours for any day other than Sunday within the month (the “Sunday Requirement”).

3. The “6 am Requirement” is hereby renamed the “SSU Window Requirement”, and amended to read:

§ NeuStar’s Scheduled Service Unavailability must commence no earlier than and be completed no later than the following schedule:

i.	For the first Sunday of each month, no earlier than 00:00:00 CT and no later than 09:00:00 CT
ii.	For subsequent Sundays of each month, no earlier than 00:00:00 CT and no later than 07:00:00 CT

4. The “Single Event Requirement” is hereby suspended.

So long as the foregoing is in effect, the NAPM and NeuStar also agree to the following modification to Paragraph 3 (Additional Obligations) of Exhibit 1 (Attachment 3 to SO W25) of SOW 31:

5.	The requirement for an “Advanced Notification” is hereby suspended.
6.	The requirement that a “Post Mortem Report” included Planned Down Time (Start and End Time) and Duration is hereby suspended.

NAPM and NeuStar agree that SLR-21 (Scheduled Service Unavailability Notification) in Exhibit G (Service Level Requirements) under each of the seven (7), regional Contractor Services Agreement for NPAC/SMS (the “Master Agreement(s)”) shall be suspended so long as this letter is in effect, except that Scheduled Service Unavailability Notification shall be sent for maintenance (both routine and non-routine) taken outside the window set forth in the “SSU Window Requirement,” If the terms and conditions of the Master Agreements require it, then the NAPM and NeuStar shall amend Exhibit G to reflect the foregoing without prejudice to NeuStar.

This letter supersedes the October 12, 2005 letter between the parties.

This letter shall automatically renew for additional one (1) year periods unless either party provides the other with written notice of its intention not to renew no later than thirty (30) days prior to the expiration of the then-applicable one (1) year period.

If the NAPM agrees with this letter, please counter-sign below and return an original to my attention. As always, I am happy to discuss this matter with you in further detail.

Sincerely yours,		Acknowledged and agreed:
/s/ Michael O’Connor		/s/ Mel Clay
Michael O’Connor		Mel Clay
VP, Customer Relations		Co-Chair
NeuStar, Inc.		NAPM LLC
Date:	5 Dec 2006	Date:	12/11/2006
		/s/ Tim Decker
		Tim Decker
		NAPM LLC Co-Chair
		Date:	12/11/2006

CC (via PDF):	Gary Sacra, NAPM LLC Project Executive
	Paula Jordan, NAPM LLC Project Executive
	Ron Steen, NAPM LLC Project Executive
	Gene Saulmon, NAPM LLC CIC Chair
	Dan Sciullo, NAPM Counsel

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

Pursuant to Instruction 2 to Item 601 of Regulation S-K, NeuStar, Inc. has filed an agreement with the Northeast Carrier Acquisition Company, LLC, which is one of seven agreements that are substantially identical in all material respects other than the parties to the agreements. North American Portability Management, LLC succeeded to the interests of Northeast Carrier Acquisition Company, LLC and each of the other entities listed below. The following list identifies the other parties to the six agreements that have been omitted pursuant to Instruction 2 to Item 601:

• LNP, LLC (Midwest)

• Southwest Region Portability Company, LLC

• Western Region Telephone Number Portability, LLC

• Southeast Number Portability Administration Company, LLC

• Mid-Atlantic Carrier Acquisition Company, LLC

• West Coast Portability Services, LLC

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

STATEMENT OF WORK UNDER

CONTRACTOR SERVICES AGREEMENT

FOR

NUMBER PORTABILITY ADMINISTRATION CENTER / SERVICE
MANAGEMENT SYSTEM

MODIFICATION OF ESCROW AGREEMENT

AND

ESTABLISHMENT OF A LETTER OF CREDIT

CONFIDENTIAL

Page 1

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

STATEMENT OF WORK
UNDER
CONTRACTOR SERVICES AGREEMENT FOR NPAC/SMS

Modification of Escrow Agreement

1.0 PARTIES

This SOW (this “Statement of Work” or “SOW”) is entered into pursuant to both Article 13 and Article 30 of, and upon execution shall be a part of, each of the seven separate Contractor Services Agreements for Number Portability Administration Center/Service Management System, as amended and in effect immediately prior to the SOW Effective Date (each such agreement referred to individually as the “Master Agreement” and collectively as the “Master Agreements”), by and between NeuStar, Inc., a Delaware corporation (“Contractor”), and the North American Portability Management LLC, a Delaware limited liability company (the “Customer”), as the successor in interest to and on behalf of the respective limited liability companies listed below for the separate Service Areas (referred to individually as a “Subscribing Customer” and collectively as “Subscribing Customers”).

• Mid-Atlantic Carrier Acquisition Company, LLC

• LNP, LLC (Midwest)

• Northeast Carrier Acquisition Company, LLC

• Southeast Number Portability Administration Company, LLC

• Southwest Region Portability Company, LLC

• West Coast Portability Services, LLC

• Western Region Telephone Number Portability, LLC

2.0 EFFECTIVENESS AND DEFINED TERMS

This SOW shall be effective as of the 1^st day of September 2006 (the “SOW Effective Date”), conditioned upon execution by Contractor and Customer on behalf of all Subscribing Customers. The number in the upper left-hand corner refers to this SOW. Capitalized terms used herein without definition or which do not specifically reference another agreement shall have the meanings as defined in the Master Agreement.

3.0 SCOPE OF ADDITIONAL SERVICES

Contractor shall perform the Additional Services set forth herein. The Additional Services under this SOW consist exclusively of the work set forth in Section 8.0 below. The Additional Services under this SOW, including the subject matter hereof, are not, and shall not be interpreted as, an Enhancement to the NPAC/SMS Software.

CONFIDENTIAL

Page 2

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

4.0 OUT OF SCOPE SERVICES

This SOW contains the agreed upon terms and conditions that shall govern Contractor’s performance of the Additional Services described herein. The Additional Services provided for in this SOW shall not be interpreted, implied, or assumed to include any other service(s), including additional or changed services, not specifically described in Article 3 (Scope of Additional Services) above. Any and all requested or required services or change orders (hereinafter “Out of Scope Services”) may be provided in accordance with the Master Agreement and, specifically, Article 13 (Additional Services) of the Master Agreement.

5.0 APPLICABLE DOCUMENTS

The following internal documents are applicable to the Additional Services contemplated under this SOW:

               Functional Requirements Specifications

               Requirements Traceability Matrix

               System Design

               Detailed Design

               Integration Test Plan

               System Test Plan

               NPAC Software Development Process Plan

               User Documentation

6.0 IMPACTS ON MASTER AGREEMENT

None	Master Agreement
None	Exhibit B Functional Requirements Specification
None	Exhibit C Interoperable Interface Specification
None	Exhibit E Pricing Schedules
None	Exhibit F Project Plan and Test Schedule
None	Exhibit G Service Level Requirements
None	Exhibit H Reporting and Monitoring Requirements
None	Exhibit J User Agreement Form
None	Exhibit K External Design
None	Exhibit L Infrastructure/Hardware
þ	Exhibit M Software Escrow Agreement
None	Exhibit N System Performance Plan for NPAC/SMS Services
None	Disaster Recovery
None	Back Up Plans
None	Gateway Evaluation Process (Article 32 of Master Agreement)

CONFIDENTIAL

Page 3

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

7.0 COMPENSATION AND PAYMENT

Except as otherwise specifically set forth in Exhibit M of the Master Agreement, this SOW does not entitle Contractor to compensation.

8.0 MASTER AGREEMENT MODIFICATIONS

8.1 Software Escrow Modification

Under Statement of Work No. 11 (SOW11), effective February 1, 1999, Contractor performed certain Additional Services specifically for the expansion of the current LNPA Billing and Collection Operations and System to support the requirements mandated in the FCC’s Matter of Telephone Number Portability, Third Report and Order, CC Docket 95-116, RM 8535, FCC 98-82. Under its express terms, the Additional Services set forth in Statement of Work No. 11 are not an Enhancement to the NPAC/SMS, as defined in the Master Agreements.

Nonetheless, Contractor and Customer have agreed to deposit into escrow certain customized code (the “Customized Modules”) relating to, but separate from, Contractor’s third party billing software (the “Third Party Billing Software”) used by Contractor to operate the LNPA Billing and Collection Operations and System. Consequently, the Parties hereby amend Exhibit A (Materials to be Deposited) to Exhibit M (Software Escrow Agreement) of the Master Agreement as set forth herein. Nothing contained in this SOW shall be interpreted to require, under the Master Agreement or otherwise, the deposit into escrow of the Customized Modules or Third Party Billing Software.

8.2 Escrow Agent

The Parties hereby acknowledge that Section 8.1 (Entire Agreement) of the Software Escrow Agreement allows Contractor and Customer to amend Exhibit A (Materials to be Deposited) of Exhibit M (Software Escrow Agreement) without the escrow agent’s consent. However, if and to the extent that any modifications to the Software Escrow Agreement (i.e., Exhibit M to the Master Agreement) set forth herein require assent by the escrow agent identified therein, Contractor and Customer agree to in good faith cooperate in causing the escrow agent to assent to the modifications set forth and agreed to herein.

8.3 Modifications

Exhibit M to the Master Agreement is hereby amended as follows:

     (a) Add the following to the end of the list that comprises Exhibit A to Exhibit M of the Master Agreement:

• The Customized Modules, if any, supplementing the Third Party Billing Software that Contractor deploys for billing LNP customers.

     (b) Add the following at the end of Section 1.1 (Obligation to Make Deposit):

CONFIDENTIAL

Page 4

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

Contractor and Customer may agree from time to time to the inclusion of other materials to Exhibit A hereunder as Escrow Materials, whether or not required to be deposited by the NPAC/SMS Agreements.

     (c) Delete and replace in its entirety subparagraph (d) to Section 1.5 (Contractor’s Representations) with the following:

d. The Escrow Materials consist of all materials required by the NPAC/SMS Agreement to be deposited with Escrow Agent and any other materials that Contractor and Customer may otherwise agree to include as Escrow Materials, whether or not required to be deposited by the NPAC/SMS Agreement.

9.0 ESTABLISHMENT OF LETTER OF CREDIT

Customer and Contractor agree to the establishment of an irrevocable, stand-by letter of credit (the “Letter of Credit”) for the benefit of the Customer as resolution of a disagreement between Contractor and the Customer over escrow obligations concerning Third Party Billing Software used by NeuStar to bill Allocated Payors. For the avoidance of doubt, the rights to the Letter of Credit described in this Article 9 are enjoyed by the Customer, and are not extended individually to the Subscribing Customers.

9.1 Background

SOW11 provided for the performance of Additional Services for “the expansion of the current LNPA Billing and Collection Operations and System to support the requirements mandated in the FCC’s Matter of Telephone Number Portability, Third Report and Order,” which Additional Services the Parties expressly provided in SOW11 “are not an Enhancement to the NPAC SMS.” Contractor purchased the Third Party Billing Software from PeopleSoft, now known as Oracle USA (“Oracle”), under a license agreement (the “License Agreement”). Customer requested that Contractor deposit into escrow the Third Party Billing Software. Contractor responded that it has no rights from Oracle under the License Agreement to either deposit the Third Party Billing Software into escrow or otherwise transfer a license to such Third Party Billing Software to any third party, including Customer.

9.2 Limited Transfer Right

On or about September 26, 2005, Oracle USA, as successor in interest to PeopleSoft, informed Contractor and the Customer that it would agree to a modification to the License Agreement with Contractor for the Third Party Billing Software to allow a limited transfer right to the Customer, under terms and conditions substantially in conformance with the following (the “Amended Terms”);

Divestiture. If another company is created through a divestiture or reorganization of Customer’s business (“Divested Entity”) or in the event of the bankruptcy, insolvency, impending dissolution of Licensee as an ongoing business or in the event of the

CONFIDENTIAL

Page 5

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

termination of one or more of the agreements between the NAPM LLC and NeuStar, Inc., such Divested Entity may use a portion of the licenses provided under this Ordering Document for up to six months, on notice to Oracle, provided that the Divested Entity is not a competitor of Oracle and the Divested Entity agrees in writing to the terms and conditions of this Ordering Document. During this period, the Divested Entity may use the Programs for either their business operations or Customer’s business operations. If the Divested Entity wishes to continue its use of the Programs at the end of the time period specified above, the Divested Entity must execute a mutually agreeable Ordering Document with Oracle which will govern its use of the Programs.

Customer has expressed to Contractor its concern that the Amended Terms may require Customer to make payment to Oracle for an unsatisfied Contractor obligation or liability to Oracle. Contractor represents that as of June 30, 2005, the annual maintenance fee for the billing portion for the Third Party Billing Software under the License Agreement equals One Hundred Forty Two Thousand, Three Hundred Twenty Five Dollars ($142,325) (the “Maintenance Fee”), subject to a four percent (4%) annual escalation (the “Escalation Factor”).

9.3 Agreement to Establish Letter of Credit

In order to resolve any remaining concerns of the parties with respect to the Third Party Billing Software, Customer and Contractor hereby agree as follows:

a.	Contractor will cause an amendment to the License Agreement to incorporate in substantial form the Amended Terms.
b.	Contractor shall agree that it will assign the License Agreement to the Customer without recourse if requested by the Customer upon the occurrence of an Assignment Event, and such refusal to assign the License Agreement to the Customer shall be reason for a draw of the full amount of the Letter of Credit by Customer.
c.	Contractor will establish a single Letter of Credit for the benefit of the Customer, but not the Subscribing Customer, in the aggregate amount of the greater of (i) $200,000 or (ii) the amount of the Maintenance Fee subject to the Escalation Factor (such greater amount the “Escrow Amount”).
d.	The Escrow Amount shall be available for the sole purpose of Customer making payment to Oracle in satisfaction of unsatisfied Contractor obligations or liabilities under the License Agreement, and for no other purpose.
e.	Contractor will notify the Customer of any material change in either (a) the Maintenance Fee or (b) the Escalation Factor within thirty (30) days after receipt by Contractor of written notification from Oracle. Contractor shall use commercially reasonable efforts to update the Escrow Amount of the Letter of Credit promptly to evidence the modified Maintenance Fee and/or Escalation Factor, and provide that in the event such Letter of credit cannot be updated, such failure shall be reason for a draw of the Escrow Amount by the Customer
f.	Contractor shall use commercially reasonable efforts to implement the Letter of Credit as specified herein within sixty (60) days after the last day of execution below.

CONFIDENTIAL

Page 6

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

In consideration of the foregoing, Customer hereby acknowledges and agrees as of the SOW Effective Date that the Third Party Billing Software, with the exception of Customized Modules prepared by Contractor, including any Customized Modules that may be created in the future, and which are not otherwise subject to third party rights, are not subject to the escrow requirements of Section 9.4 under the current Master Agreements, including by way of SOW11. The rights and obligations of Contractor and Customer under this Paragraph 9.3 shall not be affected by Contractor’s choice of vendor for the Third Party Billing Software, so long as Contractor otherwise complies with the requirements set forth in this Paragraph 9.3.

10.0 MISCELLANEOUS

10.1 Except as specifically modified and amended hereby, all the provisions of the Master Agreement and the User Agreements entered into with respect thereto, and all exhibits and schedules thereto, shall remain unaltered and in full force and effect in accordance with their terms. From and after the SOW Effective Date hereof, any reference in the Master Agreement to itself and any Article, Section or subsections thereof or to any Exhibit thereto, or in any User Agreement to itself or to the Master Agreement and applicable to any time from and after the SOW Effective Date hereof, shall be deemed to be a reference to such agreement, Article, Section, subsection or Exhibit, as modified and amended by this. From and after the SOW Effective Date, Statement of Work shall be a part of the Master Agreement, including its Exhibits, and, as such, shall be subject to the terms and conditions therein. Each of the respective Master Agreements with respect to separate Service Areas remains an independent agreement regarding the rights and obligations of each of the Parties thereto with respect to such Service Area, and neither this SOW nor any other instrument shall join or merge any Master Agreement with any other, except by the express written agreement of the Parties thereto.

10.2 This SOW may be executed in two or more counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

10.3 If at any time hereafter a Customer, other than a Customer that is a party hereto desires to become a party hereto, such Customer may become a party hereto by executing a joinder agreeing to be bound by the terms and conditions of this SOW, as modified from time to time.

10.4 This SOW is the joint work product of representatives of Customer and Contractor; accordingly, in the event of ambiguities, no inferences will be drawn against either party, including the party that drafted the Agreement in its final form.

10.5 This SOW sets forth the entire understanding between the Parties with regard to the subject matter hereof and supercedes any prior or contemporaneous agreement, discussions, negotiations or representations between the Parties, whether written or oral, with respect thereto. The modifications, amendments and price concessions made herein were negotiated together and collectively, and each is made in consideration of all of the other terms herein. All such

CONFIDENTIAL

Page 7

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

modifications, amendments and price concessions are interrelated and are dependent on each other. No separate, additional or different consideration is contemplated with respect to the modifications, amendments and price concessions herein.

[THIS SPACE INTENTIONALLY LEFT BLANK]

CONFIDENTIAL

Page 8

Statement of Work No. 50 (NE)			September 1, 2006
SOW:	o	No
	þ	Yes

IN WITNESS WHEREOF, the undersigned have executed this SOW:

CONTRACTOR: NeuStar, Inc.
By:	/s/ Michael O’Connor
Its:	VP-Customer Relations
Date:	29 Jan 2007

CUSTOMER: North American Portability Management, LLC, as successor in interest to and on behalf of Northeast Carrier Acquisition Company, LLC

By:	/s/ Melvin Clay
Its:	NAPM LLC Co-Chair
Date:	10/23/06
By:	/s/ Tim Decker
Its:	NAPM LLC Co-Chair
Date:	1/26/07

Page 10

EX-10.2.1

Exhibit 10.2.1

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

STATEMENT OF WORK

FOR

IMPLEMENTATION OF RELEASE 3.3 WITH CHANGE ORDERS
358, 386, 392 AND 393 AND MODIFICATIONS TO EXHIBIT G

UNDER

CONTRACTOR SERVICES AGREEMENT FOR NUMBERING
ADMINISTRATION CENTER / SERVICE MANAGEMENT
SYSTEM

CONFIDENTIAL

Page 1

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

STATEMENT OF WORK

UNDER

CONTRACTOR SERVICES AGREEMENT FOR NUMBERING
ADMINISTRATION CENTER / SERVICE MANAGEMENT SYSTEM

Implementation of Release 3.3 with Change Orders 358, 386, 392
and 393 and Modifications to Exhibit G

1. PARTIES

This Statement of Work (this “SOW”) is entered into pursuant to Article 13 and Article 30 of, and upon execution shall be a part of, the Contractor Services Agreement for Number Portability Administration Center/Service Management System (the “Master Agreement”) by and between NeuStar, Inc., a Delaware corporation (“Contractor”) and the Canadian LNP Consortium, Inc., a corporation incorporated under the laws of Canada (the “Customer”).

2. EFFECTIVENESS

This SOW shall be effective as of the 1st day of November, 2006 (the “SOW Effective Date”) only upon execution of this SOW by Contractor and Customer. The number in the upper left-hand corner refers to this SOW. Undefined capitalized terms used herein shall have the meanings ascribed by the Master Agreement.

3. ADDITIONAL SERVICES

3.1 Implementation of Release 3.3

Contractor has implemented and maintains Release 3.3 in both the production and disaster recovery sites of the Canadian service area as of April 9, 2006, which implementation, for greater certainty, was and shall be, at no cost to the Customer or any Canadian User, except as set forth in Section 7 below. Notwithstanding the foregoing, Customer and the Canadian Users have independently determined that there is an existing requirement in the Canadian service area for the functionality contained in the Change Orders (as defined in Section 3.2 below), and have requested the implementation of such Change Orders by Contractor pursuant to this SOW.

Page 2

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

Notwithstanding the foregoing, and for greater certainty, Release 3.3 forms part of the Canadian NPAC/SMS and is subject to the terms and conditions of the Master Agreement, as amended.

3.2 Additional Services

Contractor shall perform the Additional Services set forth herein. The Additional Services under this SOW consist exclusively of the work set forth below (collectively, the “Software Development Work”) necessary to implement the change orders (the “Change Orders”) set forth below in Section 3.4, which Change Orders Contractor has already incorporated and implemented in Release 3.3 of the NPAC/SMS Software (“Release 3.3”), and which Software Development Work Contractor has already performed for other customers. The Additional Services under this SOW are an Enhancement to the Canadian NPAC/SMS Software as defined in the Master Agreement. Customer and Contractor each agree that following deployment of Release 3.3 in the Canadian service area, except with respect to “Embedded Functionalities” (defined below) and the Change Orders implemented pursuant to this SOW, Canadian Users will not be granted or entitled to access or use any of the functionalities of any of the other change orders in Release 3.3 (the “Excluded Change Orders”), until Customer executes and delivers a Statement of Work with and to Contractor with respect to such Excluded Change Orders, as set forth below. Until such time and without execution of such a Statement of Work by and between Customer and Contractor, Canadian Users shall be granted and shall be entitled to access and use, in addition to the Change Orders, only those functionalities of Release 3.3 which either: (1) do not implement the Excluded Change Orders; or (2) which implement the Excluded Change Orders but which are inherent or embedded in Release 3.3 which are not severed and which must be accessed or used to access and use the other functionalities of Release 3.3, including the Change Orders (such inherent or embedded functionalities referred to as the “Embedded Functionalities”).

3.3 Software Development Work

The Software Development Work includes the following activities already performed for other customers of Contractor as of the SOW Effective Date: NPAC/SMS requirements definition; NPAC/SMS system design; NPAC/SMS code and unit test; NPAC/SMS system integration test; NPAC/SMS system and regression test; program management; quality assurance; configuration control and documentation management.

3.4 Change Orders

Page 3

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

Contractor shall implement and provide to Customer the functionality of the North American Numbering Council (NANC) Change Orders set forth below.

• NANC 358 — Change SPID Definition

The current ASN.1 definition allows the SPID to be variable 1-4 alphanumeric characters. The current behavior in the NPAC requires SPID to be four alphanumeric characters, as defined in the current data model in the FRS — a “New Service Provider ID, Character (4), Old Service Provider ID, Character (4)”, and the GDMO “Valid values are the Facilities Id (or OCN) of the service provider.”

This Change Order will correct the ASN.1 definition to match the current implementation.

• NANC 386 — Single Association for SOA/LSMS

Currently, the FRS does NOT address the number of concurrent connections to the NPAC using the same CMIP association function and specific bit mask value. Therefore, there are no requirements to either support or deny this functionality. Because change order ILL-5 was proposed during the initial implementation of the NPAC, the NPAC partially supports multiple associations. This partial implementation can allow a situation where there are one or more non-functional CMIP associations between a SOA/LSMS and the NPAC. This situation causes an unnecessary consumption of NPAC resources (and possibly SOA/LSMS resources as well).

This Change Order will remedy this situation by only allowing a single CMIP association between a SOA/LSMS and the NPAC, for any given association function and specific bit mask value. In the update, if a valid association is active, and a new association request with the same bit mask is sent from a SOA/LSMS to the NPAC, the NPAC will abort the first association, and process the request for the second association.

• NANC 392 — Removal of Cloned Copies of SVs and NPBs

Currently, the FRS requires the NPAC to create cloned copies of SVs and NPBs (a pre-change snapshot, with a new ID and status = old) when various updates are performed (modifies, NPA Splits, SPID Migrations, etc.). This is in addition to updating the data on the “real” SV/NPB. These cloned copies are never broadcast

Page 4

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

to the SOA or LSMS, so neither system knows about these SVs/NPBs. Additionally, some Service Providers have stated that the current functionality is confusing because of the cloned copies, which are returned in a query, since the SOA or LSMS does not know about these ported numbers and their associated “intermediate” SV-IDs.

This Change Order will remedy this situation by eliminating the “intermediate” records. The known/broadcasted records will remain in the NPAC, based on current functionality, and will continue to be updated when modified to reflect the current SV/NPB data.

• NANC 393 — NPAC Performance Requirements

The LNPAWG’s Architecture Planning Team evaluated performance numbers and performance requirements, based on porting projections published in the NFG Model (NPAC Forecasting Group). These projections were used along with available actual volume (top 5 SOA participation percentages, peak/offpeak volume percentages, mix of activates/modifies/disconnects, busy hour/busy day, etc.), to obtain updated performance requirements for the NPAC/SMS.

The current FRS performance requirements do not fully account for sustained and peak performance requirements. This Change Order provides NPAC/SMS performance requirements to account for sustained, peak, and total bandwidth numbers. These new numbers represent a clarification of the measurement of NPAC performance.

These changes are reflected in the FRS with the deletion of assumptions AR6-1 and AR6-2, the addition of assumptions AR6-3, AR6-4, AR6-5, and AR6-6, the deletion of requirement R6-29.1, the updating of requirements R6-28.1, R6-28.2, and R6-29.2, and the addition of requirements RR6-107, RR6-108, and RR6-109. These updated NPAC performance requirements, as specified in the revised FRS, affect Exhibit G and Article 31 of the Master Agreement, which shall be amended accordingly as provided herein.

3.5 Acceptance

If not accepted sooner by Customer, the Additional Services shall be deemed to have been accepted (“Acceptance”) upon the absence of Critical Defects (as defined herein) in Release 3.3 as implemented hereunder as of thirty (30) days after the SOW Effective Date. For purposes of this Section 3.3, a “Critical Defect” shall mean any functional

Page 5

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

defect in the Canadian NPAC/SMS that prevents one or more Users from performing a create, activate, modify, or delete of a ported number record. The Critical Defect must be reproducible by Customer and Contractor, and one for which no acceptable alternative functionality can be identified.

4. OUT OF SCOPE SERVICES

This SOW contains the agreed upon terms and conditions that shall govern Contractor’s performance of the Additional Services described herein. The Additional Services provided for in this SOW shall not be interpreted, implied, or assumed to include any other service(s) (hereinafter “Out of Scope Services”), which Out of Scope Services shall be provided in accordance with the Master Agreement and, specifically, Article 13, Additional Services.

5. APPLICABLE DOCUMENTS

The following internal documents are applicable to the Additional Services contemplated under this SOW:

Ö	Functional Requirements Specifications
N/A	Requirements Traceability Matrix
N/A	External Design
N/A	System Design
N/A	Detailed Design
N/A	Integration Test Plan
N/A	System Test Plan
N/A	Software Quality Assurance Program Report
N/A	User Documentation
N/A	Software Configuration Management Plan
N/A	Standards and Metrics

6. IMPACTS ON MASTER AGREEMENT

The following portions of the Master Agreement are impacted by this SOW:

None	Master Agreement
Ö	Exhibit B Functional Requirements Specification
None	Exhibit C Interoperable Interface Specification
None	Exhibit E Pricing Schedules

Page 6

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

None	Exhibit F Project Plan and Test Schedule
Ö	Exhibit G Service Level Requirements
None	Exhibit H Reporting and Monitoring Requirements
None	Exhibit I Key Personnel
None	Exhibit J User Agreement Form
None	Exhibit K External Design
None	Exhibit L Infrastructure/Hardware
None	Exhibit M Software Escrow Agreement
None	Exhibit O Statement of Work Cost Principles

7. COMPENSATION

7.1 Obligation

Upon Acceptance of the Additional Services set forth in this SOW, Contractor shall be entitled to be compensated for the Additional Services described herein in the amount and on the terms and conditions described below. Such compensation shall be the obligation of each applicable User. For the purposes of and in accordance with Section 23.3 of the Master Agreement (“Users Liability for Payments”), Additional Services, to the extent actually performed, shall be considered to be services performed prior to any effective date of termination. Accordingly, and notwithstanding any other provisions to the contrary in the Master Agreement or any exhibit attached thereto, but subject to Section 23.3 of the Master Agreement, in the event any amounts owed pursuant to this SOW remain outstanding upon any termination or expiration of the Master Agreement or this SOW, such amounts shall be immediately due and payable by the applicable User, as provided for herein.

7.2 Pricing

The Change Orders have been incorporated into Release 3.3 of the NPAC/SMS Software under Statements of Work in all United States Service Areas, for the prices set forth in Table 1 below.

The Change Orders have been subject to pricing in accordance with the Statements of Work listed in Table 1. The “Aggregate Change Order Price” set forth in Table 1 refers to that portion of the “SOW Price” in the applicable SOW allocated to the identified Change Order. Contractor has billed the seven United States “Subscribing Customers” equally for the Aggregate Change Order Price.

Page 7

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

The pricing (the “SOW Price”) for Customer under this SOW shall be a non-recurring charge equal to a one-eighth share of the Aggregate Change Order Price corresponding to each Change Order, as set forth below in Table 1 as the “Customer Share”, whereby the Canadian price is calculated using the currently-specified conversion rate of 1.1274 in accordance with SOW46 Revision 2.

			Aggregate Change
			Order Price		Customer Share		Customer Share
Change Order	SOW		($US)		(US$)		(CA$)
NANC 358		SOW49R1	$	[***]	$	[***]	$	[***]
NANC 386		SOW49R1	$	[***]	$	[***]	$	[***]
NANC 392		SOW49R1	$	[***]	$	[***]	$	[***]
NANC 393		SOW49R1	$	[***]	$	[***]	$	[***]
TOTAL			$	[***]	$	[***]	$	[***]

Table 1

Contractor represents and warrants that the Aggregate Change Order Prices for each Change Order were calculated and billed under Statements of Work for the NAPM under similar, but not identical terms and conditions. Contractor acknowledges and agrees that the pricing for the Additional Services corresponding to Change Orders have been derived and calculated in material compliance with Exhibit O of the Master Agreement.

For greater certainty, the pricing set forth herein shall be specific and applicable to this SOW 55(CA) only, and shall not constitute or be construed as any form of precedent or course of dealing between the Parties with respect to the method of allocation of Statement of Work costs as between customers of the Contractor, or the applicability of Exhibit O generally, and further shall not be accepted or be deemed to be accepted by the Parties as applicable to any other Statement of Work that may be entered into between the Parties.

7.3 Payment

Contractor shall prepare invoices and bill Users the Non-Recurring Charge, as directed by Customer in an Allocation Model and in accordance with the Master Agreement and NPAC/SMS User Agreements thereunder. Contractor shall prepare invoices in accordance with the Master Agreement invoicing, which may include invoicing for charges under other Statements of Work agreed to pursuant to Article 13 of the Master

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Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

Agreement, on the last day of a calendar month and shall send such invoice to each User for the amount of its User charges. Contractor shall include a summary of the charges under this SOW in the monthly billing report issued to Customer. All invoices shall be due and payable within forty-five (45) days of the date of the invoice. Late payments will be subject to a one and one-quarter percent (1.25%) interest charge per month, or, if lower, the maximum rate permitted by law.

7.4 Disputes

Any billing disputes shall be promptly presented to Contractor in reasonable detail, in writing. Any requests for adjustment shall not be cause for delay in payment of the undisputed balance due. User may withhold payment of any amounts which are subject to a bona fide dispute; provided it shall pay all undisputed amounts owing to Contractor that have been separately invoiced to User. If re-invoice occurs following the thirty (30) day payment schedule, then such invoice for the undisputed amount shall be paid within ten (10) business days of receipt by User. User and Contractor shall seek to resolve any such disputes expeditiously, but in any event within thirty (30) days after receipt of notice thereof. All disputed amounts ultimately paid or awarded to Contractor shall bear interest from the thirtieth (30th) day following the original invoice date.

7.5 Taxes

Each User shall remit to or reimburse Contractor for any taxes that it is obligated to pay by law, rule or regulation or under this SOW or its respective NPAC/SMS User Agreement.

8. MODIFICATIONS TO EXHIBIT G

8.1 Background

NANC 393 provides consistent SOA to NPAC and NPAC to LSMS transaction requirements, for sustained rates, and adds a region-wide performance requirement. The SOA rate doubles; the LSMS rate effectively remains constant (but reflects the 4.0 CMIP transactions/second sustained LSMS transaction rate rather than the peak 5.2 CMIP transaction (i.e., 25 TNs per second) rate. The overall impact of NANC 393 is an enhanced performance requirement.

Because the current Functional Requirements Specification (“FRS”) performance requirements do not fully account for sustained and peak performance requirements, NANC 393 provides NPAC/SMS performance requirements to account for sustained,

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Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

peak, and total bandwidth numbers. These new numbers represent a clarification of the measurement of NPAC performance. These changes are reflected in the FRS with the deletion of assumptions AR6-1 and AR6-2, the addition of assumptions AR6-3, AR6-4, AR6-5, and AR6-6, the deletion of requirement R6-29.1, the updating of requirements R6-28.1, R6-28.2, and R6-29.2, and the addition of requirements RR6-107, RR6-108, and RR6-109. The updated NPAC performance requirements, as specified in the revised FRS, affect Exhibit G under the Master Agreement.

Upon the completion of all the activities set forth above and the implementation of NANC 393 in the Canadian Service Area, the changes to SLR5 set forth below in Section 8.2 and the changes to SLR6 set forth in Section 8.3 shall take effect on the first day of the month following the latest date of signature of this SOW by either Party.

8.2 SLR 5 Change

As a result of the update to NPAC performance requirement R6-28.1 and the addition of performance requirement RR6-107, SLR5 — SOA to NPAC Interface Transaction Rates (Customer) of Exhibit G (Service Level Requirements) under the Master Agreement applicable in the Canadian Service Area is hereby amended by deleting in its entirety the “Service Commitment Level” entry for SLR 5 — SOA to NPAC Interface Transaction Rates (Customer) in this Service Area and replacing it with the following:

To the extent there is sufficient load, maintain, for 95% of the CMIP transactions, a rate of 4 CMIP transactions per second (sustained) for each SOA to NPAC SMS interface association; however, this interface requirement does not apply when there are at least 40 CMIP transactions per second (sustained) for a single NPAC/SMS region. Neither criterion applies if throughput is impacted by delays caused by all Users.

8.3 SLR 6 Change

As a result of the deletion of requirement R6-29.1 and the update to NPAC performance requirement R6-29.2 and introduction of performance requirements RR6-108 and RR6-109, the “Service Commitment Level” entry for SLR 6 — NPAC to LSMS Interface Transaction Rates (Customer) in the Canadian Service Area is deleted in its entirety and replaced with the following:

To the extent there is sufficient offered load, maintain, for 95% of the CMIP transactions, a rate of 4 CMIP transactions per second (sustained) over each NPAC/SMS to LSMS interface association; however, this

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Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

interface requirement does not apply when there are at least 156 CMIP transactions per second (sustained) for a single NPAC/SMS region. Neither criterion applies if throughput is impacted by delays caused by all Users.

8.4 Modification of Article 31

R6-29.1 and R6-29.2 formed the basis for the final milestone throughput goal of 25 TN’s per second. Contractor represents that it has achieved well in excess of 25 TNs per second in laboratory tests. Therefore, Contractor and Customer agree that the first Paragraph of Article 31, as introduced by Article 19 of that certain Amending Agreement, effective March 31, 2003, is hereby rescinded in its entirety.

9. MISCELLANEOUS

9.1 Counterparts

This SOW may be executed in two or more counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

9.2 Continuation of Master Agreement and User Agreement

Except as specifically modified and amended hereby, all the provisions of the Master Agreement and the User Agreements entered into with respect thereto, and all exhibits and schedules thereto, shall remain unaltered and in full force and effect in accordance with their terms. From and after the date hereof, any reference in either the Master Agreement to itself and any Article, Section or subsections thereof or to any Exhibit thereto, or in any User Agreement to itself or to the Master Agreement and applicable to any time from and after the date hereof, shall be deemed to be a reference to such agreement, Article, Section, subsection or Exhibit as modified and amended by this SOW. From and after the SOW Effective Date, this SOW shall be a part of the Master Agreement and, as such, shall be subject to the terms and conditions therein.

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Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

9.3 Entire Agreement

This SOW sets forth the entire understanding between the Parties with regard to the subject matter hereof and supersedes any prior or contemporaneous agreement, discussions, negotiations or representations between the Parties, whether written or oral, with respect thereto.

[THIS SPACE INTENTIONALLY LEFT BLANK]

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Amendment No. 55 (CA)		Date: November 1, 2006
SOW:	oNo
	þYes

IN WITNESS WHEREOF, the undersigned have executed and delivered this Statement of Work:

CONTRACTOR: NeuStar, Inc.

Signature:	/s/ Michael O’Connor
	Name:	Michael O’Connor
	Title:	VP—Customer Relations

Date: 19 December 2006

CUSTOMER: Canadian LNP Consortium, Inc.

Signature:	/s/ Jacques Sarrazin
	Name:	/s/ Jacques Sarrazin
	Title:	President

Date: December 20, 2006

Payment Term (check one): þ Lump Sum

Page 13

EX-10.2.2

Exhibit 10.2.2

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Amendment No. 58 (CA)		Date: November 1, 2006
SOW:	o No
	þ Yes

STATEMENT OF WORK

FOR

IMPLEMENTATION OF NANC 399 AND NANC 400 CHANGE
ORDERS IN THE CANADIAN SERVICE AREA

UNDER

CONTRACTOR SERVICES AGREEMENT FOR NUMBERING
ADMINISTRATION CENTER / SERVICE MANAGEMENT
SYSTEM

CONFIDENTIAL

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Amendment No. 58 (CA)		Date: November 1, 2006
SOW:	o No
	þ Yes

STATEMENT OF WORK

UNDER

CONTRACTOR SERVICES AGREEMENT FOR NUMBERING
ADMINISTRATION CENTER / SERVICE MANAGEMENT SYSTEM

Implementation of NANC 399 and NANC 400 Change Orders
in the Canadian Service Area

1. PARTIES

This Statement of Work (this “SOW”) is entered into pursuant to Article 13 of, and upon execution shall be a part of, the Contractor Services Agreement for Number Portability Administration Center/Service Management System (the “Master Agreement”) by and between NeuStar, Inc., a Delaware corporation (“Contractor”) and the Canadian LNP Consortium Inc., a corporation incorporated under the laws of Canada (the “Customer”).

2. EFFECTIVENESS

This SOW shall be effective as of the 1^st day of November, 2006 (the “SOW Effective Date”) only upon execution of this SOW by Contractor and Customer. The number in the upper left-hand corner refers to this SOW. Undefined capitalized terms used herein shall have the meanings ascribed by the Master Agreement.

3. ADDITIONAL SERVICES

          3.1 Additional Services

Contractor shall perform the Additional Services set forth herein. The Additional Services under this SOW consist exclusively of the work set forth below (collectively, the “Software Development Work”) necessary to implement the change orders (the “Change Orders”) set forth below in Section 3.3. The Additional Services under this SOW are an Enhancement to the Canadian NPAC/SMS Software as defined in the Master Agreement.

          3.2 Software Development Work

The Software Development Work includes the following activities already performed as

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Amendment No. 58 (CA)		Date: November 1, 2006
SOW:	o No
	þ Yes

of the SOW Effective Date: NPAC/SMS requirements definition; NPAC/SMS system design; NPAC/SMS code and unit test; NPAC/SMS system integration test; NPAC/SMS system and regression test; program management; quality assurance; configuration control and documentation management.

          3.3 Change Orders

Contractor shall implement and provide to Customer the functionality of the North American Numbering Council (NANC) Change Orders set forth below.

•	NANC 399 — Additional SV and Number Pooled Block Fields
	The NPAC/SMS will provide an SV Type indicator for each SV and Pooled Block record [if Pooling is implemented]. This new indicator shall initially distinguish every TN and Pooled Block as being served by Wireline Service, Wireless Service, VoIP, or VoWIFI service. The SV Type indicator will be able to distinguish additional “types” as deemed necessary in the future by adding additional values. This information will be provisioned by, for example, the SOA and broadcast to the LSMS upon activation of the SV or Pooled Block and upon modification of the SV for those SOA and LSMS associations optioned “on” to send and receive this data. The SV Type indicator will be added to the Bulk Data Download file, available to a Service Provider’s SOA/LSMS. This field will be supported across the interface on an opt-in basis only and will be functionally backward compatible. Upon adoption in the NPAC, the field will be initialized in all existing NPAC records based on the Service Provider “/” indicator embedded in the SP Name field during installation of the release. As SPs opt-in to the field, this new data will be available to them off-line (via bulk data download) and not over the interface, such that no NPAC transactions will result. If necessary, service providers can override the defaulted initial SV Type by performing a modify action on the SV.
	The NPAC/SMS shall provide an Alternative SPID field for each SV and Pooled Block record. This new field shall identify (if applicable) a reseller associated with each ported or pooled TN or Pooled Block via their 4-digit SPID. This field will be supported across the interface on an opt-in basis only and will be functionally backward compatible. This information shall be provisioned by, for example, the SOA and broadcast to the LSMS upon activation of the SV or Pooled Block and upon modification of the Alternative SPID. The Alternative

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Amendment No. 58 (CA)		Date: November 1, 2006
SOW:	o No
	þ Yes

SPID field shall be added to the Bulk Data Download file, available to a Service Provider’s SOA/LSMS.

• NANC 400 — URI Fields for Voice, MMS, PoC and Presence

The NPAC/SMS will provide the ability to provision Voice, Multimedia Messaging Service (MMS), Push to Talk Over Cellular (PoC) and Presence URIs fields for each SV and Pooled Block record [if Pooling is implemented].

This information will be provisioned by the SOA and broadcast to the LSMS upon activation of the SV or Pooled Block and upon modification for those SOA and LSMS associations optioned “on” to send and receive this data.

These fields shall be added to the Bulk Data Download file, and be available to a Service Provider’s SOA/LSMS.

These fields will be supported across the interface on an opt-in basis only and will be functionally backward compatible.

          3.4 Clarification

NANC 399 adds the SVType and Optional Data fields. Within the Optional Data field, the Change Order provides one parameter (i.e., “Alternative SPID”). NANC 400 adds four more parameters to the Optional Data field, each of which represents a Uniform Resource Indicator (URI). The parameters in the Optional Data field are provided in the form of an XML string within a CMIP attribute.

          3.5 Replacement of “Alternative SPID” with “Optional Data” Terminology

Consistent with changes already made in the Contractor’s production version of the Canadian NPAC/SMS Software, “Alternative SPID” will have the more precise designation of “Optional Data”.

          3.6 Acceptance

If not accepted sooner by Customer, the Additional Services with respect to each Change Order shall be deemed to have been accepted (“Acceptance”) upon the absence of Critical Defects (as defined herein) in Change Order functionality as of thirty (30) days after the date on which a User’s production profile setting is changed as a result of a

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Amendment No. 58 (CA)		Date: November 1, 2006
SOW:	o No
	þ Yes

request by such User to “opt-into” functionality of the relevant Change Order in the Canadian Service Area.¹ Contractor shall advise Customer in writing of such change of a User production profile to permit Customer to verify that there are no Critical Defects. For purposes of this Section 3.3, a Critical Defect shall mean any functional defect in the Canadian NPAC/SMS Software that prevents one or more Users from performing a create, activate, modify, or delete of a ported number record. The Critical Defect must be reproducible by Customer and Contractor, and one for which no acceptable alternative functionality can be identified.

4. OUT OF SCOPE SERVICES

This SOW contains the agreed upon terms and conditions that shall govern Contractor’s performance of the Additional Services described herein. The Additional Services provided for in this SOW shall not be interpreted, implied, or assumed to include any other service(s) (hereinafter “Out of Scope Services”), which Out of Scope Services shall be provided in accordance with the Master Agreement and, specifically, Article 13, Additional Services.

5. PROJECT PHASES

There are no project phases for this SOW. NeuStar shall implement the Enhancement in Canada in a regularly-scheduled Canadian NPAC/SMS maintenance window, but no later than April 30, 2007, following the full execution of this SOW. This date will constitute the “SOW Completion Date”. If an existing User intends to make use of any of the functionality provided in the Change Orders that make up the Enhancement, then vendor ITP Testing and User Turn-Up Testing (new functionality testing) will be required before the User’s profile is changed to indicate its ability to use the functionality made possible by the Change Orders.

6. APPLICABLE DOCUMENTS

The following internal documents are applicable to the Additional Services contemplated under this SOW:

Ö	Functional Requirements Specifications
N/A	Requirements Traceability Matrix
N/A	External Design

¹ With respect to NANC 400, Acceptance shall be measured from the date on which a User’s production profile setting is changed for at least one of the parameters provided by the Change Order.

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Amendment No. 58 (CA)		Date: November 1, 2006
SOW:	o No
	þ Yes

N/A	System Design
N/A	Detailed Design
N/A	Integration Test Plan
N/A	System Test Plan
N/A	Software Quality Assurance Program Report
Ö	User Documentation
N/A	Software Configuration Management Plan
N/A	Standards and Metrics

7. IMPACTS ON MASTER AGREEMENT

The following portions of the Master Agreement are impacted by this SOW:

None	Master Agreement
Ö	Exhibit B Functional Requirements Specification
Ö	Exhibit C Interoperable Interface Specification
None	Exhibit E Pricing Schedules
None	Exhibit F Project Plan and Test Schedule
None	Exhibit G Service Level Requirements
None	Exhibit H Reporting and Monitoring Requirements
None	Exhibit I Key Personnel
None	Exhibit J User Agreement Form
None	Exhibit K External Design
None	Exhibit L Infrastructure/Hardware
None	Exhibit M Software Escrow Agreement
None	Exhibit O Statement of Work Cost Principles

8. COMPENSATION

Except for [***] there are [***].

9. CONTINUING CERTIFICATION TESTING

          9.1 Additional Fees.

Continued Certification Testing is required as described in SOW 24 Rev. 3. If an existing User intends to make use of any of the functionality provided in Change Orders that make up the Enhancement, then vendor ITP Testing and User Turn-Up Testing (new functionality testing) will be required before its NPAC/SMS User profile is changed to

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Amendment No. 58 (CA)		Date: November 1, 2006
SOW:	o No
	þ Yes

indicate its ability to use the functionality made possible by the Change Orders. This testing is performed as Supported Testing on the industry test bed.

          9.2 Low-Tech Interface Testing (“LTI Testing”)

LTI Testing is done on an ad hoc basis using existing support staff. The charge for LTI Testing is billed directly to the User conducting the LTI Testing in 4-hour blocks at the rate of [***] Dollars (US$[***]), which equals [***] Canadian Dollars and [***] Cents (CA$ [***]) under SOW46 Revision 2, which sets forth a conversion factor equal to 1.1274 for the period of June 1, 2006 to May 31, 2007, per block. There is no requirement to reserve testing blocks, thus there is no provision for a reservation deadline or cancellation fee.

          9.3 Surrogate Turn-Up Testing

A User may authorize a third-party to perform TUT testing on its behalf. Such surrogate TUT Testing may be performed using SOA/LSMS hardware and software of no greater capability than the SOA/LSMS hardware and software to be used by the User on behalf of which the surrogate testing is being performed.

          9.4 Self-Certification is not Acceptable

All TUT and ITP Testing performed for the purpose of Continuing Certification must be performed in conjunction with Contractor dedicated test support personnel.

          9.5 Disputes

Any billing disputes shall be promptly presented to Contractor in reasonable detail, in writing. Any requests for adjustment shall not be cause for delay in payment of the undisputed balance due. User may withhold payment of any amounts which are subject to a bona fide dispute; provided it shall pay all undisputed amounts owing to Contractor that have been separately invoiced to User. If re-invoice occurs following the thirty (30) day payment schedule, then such invoice for the undisputed amount shall be paid within ten (10) business days of receipt by User. User and Contractor shall seek to resolve any such disputes expeditiously, but in any event within less than thirty (30) days after receipt of notice thereof. All disputed amounts ultimately paid or awarded to Contractor shall bear interest from the thirtieth (30th) day following the original invoice date.

          9.6 Taxes

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Amendment No. 58 (CA)		Date: November 1, 2006
SOW:	o No
	þ Yes

Each User shall remit to or reimburse Contractor for any taxes that it is obligated to pay by law, rule or regulation or under this Amendment or its respective NPAC/SMS User Agreement.

10. MISCELLANEOUS

          10.1 Counterparts

This SOW may be executed in two or more counterparts and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

          10.2 Continuation of Master Agreement and User Agreement

Except as specifically modified and amended hereby, all the provisions of the Master Agreement and the User Agreements entered into with respect thereto, and all exhibits and schedules thereto, shall remain unaltered and in full force and effect in accordance with their terms. From and after the date hereof, any reference in either the Master Agreement to itself and any Article, Section or subsections thereof or to any Exhibit thereto, or in any User Agreement to itself or to the Master Agreement and applicable to any time from and after the date hereof, shall be deemed to be a reference to such agreement, Article, Section, subsection or Exhibit as modified and amended by this SOW. From and after the SOW Effective Date, this SOW shall be a part of the Master Agreement and, as such, shall be subject to the terms and conditions therein.

          10.3 Entire Agreement

This SOW sets forth the entire understanding between the Parties with regard to the subject matter hereof and supersedes any prior or contemporaneous agreement, discussions, negotiations or representations between the Parties, whether written or oral, with respect thereto.

[THIS SPACE INTENTIONALLY LEFT BLANK]

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Amendment No. 58 (CA)		Date: November 1, 2006
SOW:	o No
	þ Yes

IN WITNESS WHEREOF, the undersigned have executed and delivered this Statement of Work:

CONTRACTOR: NeuStar, Inc.
Signature:	/s/ Michael O’Connor
	Name:	Michael O’Connor
	Title:	VP—Customer Relations
Date:  1 Feb 2007
CUSTOMER: Canadian LNP Consortium Inc.
Signature:	/S/ J.R. Sarrazin
	Name:	J.R. Sarrazin
	Title:	President
Date: Feb 1/07

Payment Term (check one):      o Lump Sum o 36-month Financing þ Not Applicable

Page 9

EX-10.2.3

Exhibit 10.2.3

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Canadian LNP Consortium Inc.

Jacques R. Sarrazin, President

Telephone: (613) 823-0144 Facsimile: (613) 823-1169 JR.Sarrazin@reogers.ca

December 18, 2006

NeuStar, Inc.
46000 Center Oak Plaza
Sterling, VA 20166 USA

Attention:	Michael O’Connor Vice President, Customer Relations
Re:	Amendment No. 59

Dear Mr. O’Connor:

We write with reference to our meeting of October 3, 2006, at which meeting the Canadian LNP Consortium Inc. (“Customer”) and NeuStar, Inc. (“NeuStar”) discussed a number of matters concerning the Contractor Services Agreement for NPAC/SMS entered into by and between NeuStar and Customer effective as of May 19, 1998, as amended (the “Master Agreement”), including SOW 52 (CA) (Test Bed), SOW 54 (CA) (WNP Implementation), and SOW 55 (CA) (Implementation of NPAC/SMS Rel. 3.3) (the “Instant SOWs”). In this letter (“Letter Agreement”), the Customer and NeuStar wish to formalize the understandings reached by the parties during the October 3 discussions.

All capitalized terms not defined herein shall have the meanings ascribed thereto in the Master Agreement.

In consideration of the mutual agreements of the Parties, the premises and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Customer and NeuStar agree as follows, provided that Customer and NeuStar reach final agreement on and execute the Instant SOWs:

1. Amendment to Exhibit E of Master Agreement

The Master Agreement is hereby amended as follows:

(a) In Schedule 1, Section 2 of Exhibit E, under the Service Element entitled “TN Porting Event”, the following is hereby added beneath the table entitled “TN Porting Event Charges”:

PRIVILEGED AND CONFIDENTIAL

Page 1

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“Notwithstanding the pricing set forth in the above table (the “Standard Pricing”) if, in any calendar year during the term of the Agreement, the number of TN Porting Events executed by or on behalf of Canadian Users in such calendar year exceeds [***] , the TN Porting Event price for all TN Porting Events occurring in that calendar year only shall equal the price set forth immediately to the right of the Tier (or Tiers) corresponding to the cumulative TN Porting Events set forth below.

					Price in USD for
					each TN Porting
					Event Within Tier
					for Annual Volume
					Exceeding [***] in
Applicable Tiers	Tier Start*		Tier End*		a Calendar Year
Tier 1		0		2,200,000	$	[***]
Tier 2		2,200,001		4,400,000	$	[***]
Tier 3		4,400,001		6,600,000	$	[***]
Tier 4		6,600,001		8,800,000	$	[***]
Tier 5		8,800,001		11,000,000	$	[***]
Tier 6		11,000,001		13,200,000	$	[***]
Tier 7		13,200,001		15,400,000	$	[***]
Tier 8		15,400,001		17,600,000	$	[***]
Tier 9	17,600,001 and above			N/A	$	[***]

While the foregoing temporary pricing (“Temporary Pricing”) for annual TN Porting Events applies to all TN Porting Events executed in such calendar year in which the total number of TN Porting Events exceeds [***] , such temporary pricing shall be computed, apportioned, and paid after the end of the calendar year in which the total number of TN Porting Events exceeds $ [***] . As a result, Contractor shall, within sixty (60) days after the end of such calendar year (or within sixty (60) days of the date of expiry or termination of this Agreement, if such expiry or termination does not occur at the end of a calendar year), pay to Customer, or, if directed by Customer, to the Canadian Users in accordance with such direction, that amount equal to $ [***] .

Notwithstanding the foregoing, if, in any calendar year, the number of TN Porting Events executed by or on behalf of Canadian Users in such calendar year exceeds [***] , then the Temporary Pricing for all TN Porting Events occurring in that calendar year only shall equal the price set forth immediately to the right of the Tier (or Tiers) corresponding to the cumulative TN Porting Events set forth below.

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					Price in USD for
					each TN Porting
					Event
					for Annual Volume
					Exceeding [***] in
Applicable Tiers	Tier Start*		Tier End*		a Calendar Year
Tier 1		0		2,200,000	$	[***]
Tier 2		2,200,001		4,400,000	$	[***]
Tier 3		4,400,001		6,600,000	$	[***]
Tier 4		6,600,001		8,800,000	$	[***]
Tier 5		8,800,001		11,000,000	$	[***]
Tier 6		11,000,001		13,200,000	$	[***]
Tier 7		13,200,001		15,400,000	$	[***]
Tier 8		15,400,001		17,600,000	$	[***]
Tier 9	17,600,001 and above			N/A	$	[***]

While the foregoing Temporary Pricing for annual TN Porting Events applies to all TN Porting Events executed in such calendar year in which the total number of TN Porting Events exceeds [***], such temporary pricing shall be computed, apportioned, and paid after the end of the calendar year in which the total number of TN Porting Events exceeds [***]. As a result, Contractor shall, within sixty (60) days after the end of such calendar year (or within sixty (60) days of the date of expiry or termination of this Agreement, if such expiry or termination does not occur at the end of a calendar year), pay to Customer, or, if directed by Customer, to the Canadian Users in accordance with such direction, that amount equal to [***] $ [***]. For greater certainty, such payments shall be issued in Canadian funds at the then prevailing exchange rate prescribed under this Agreement, and shall be paid to or as directed by Customer, which direction shall be delivered by Customer to Contractor within the first thirty (30) days of the end of each calendar year.”

(b) The second and third sentences in the paragraph immediately following Schedule 1 of Exhibit E are hereby deleted in their entirety.

2. Development of Future Functionality

NeuStar covenants and agrees to make commercially reasonable efforts to develop and implement all future functionality for the NPAC/SMS such that any Non-acquired Functionality can, despite being implemented in the Canadian NPAC/SMS, be rendered inaccessible to the Canadian Users. For the purposes of this paragraph 2, “Non-acquired Functionality” shall mean all future functionality, including, without limitation, functionality contained in future releases of NPAC/SMS Software, which is implemented in the Canadian NPAC/SMS in cases where the Customer or the Canadian Users have elected not to purchase such functionality. Notwithstanding the foregoing sentence, and for greater certainty and without limiting the fifth paragraph of Article 2 of the Master Agreement or the second paragraph of Section 13.3 of the Master Agreement, if such Non-acquired Functionality cannot be so rendered inaccessible, and any such Non-acquired Functionality is implemented in the Canadian NPAC/SMS, the Customer

Page 3

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

and the Canadian Users will not be required to pay for, or directly or indirectly incur any obligation in relation to, any Non-acquired Functionality that it elects not to purchase.

3. Alternate Pricing Formula

NeuStar and Customer each covenant and agree to make commercially reasonable efforts to meet and cooperate with each other and such other third parties as the Parties may mutually agree, and consider in good faith the feasibility, development, and implementation of a pricing formula and/or allocation mechanism for the recovery of development costs by NeuStar from the Customer and NeuStar’s other NPAC/SMS customers, including in connection with Statements of Work, which accounts for and reflects the respective interests of both of the Parties, including, without limitation, the relative size, impact, requirements, and demands of the Canadian service area and the Canadian Users upon NeuStar and NeuStar’s resources, including without limitation the NPAC/SMS, and such other factors as either Party may deem relevant.

4. Statements of Work to Implement NANC Change Orders 399 and 400

The Customer agrees to the implementation by NeuStar, in the Canadian NPAC/SMS Software, of NANC Change Orders 399 and 400, pursuant Statements of Work to be executed and delivered by the parties and containing such terms and conditions as are acceptable to the Customer, acting reasonably. Subject to the foregoing, such Statements of Work shall reflect the following terms:

     (a) NANC Change Order 399

• [***]

• 2 new fields: “SV Type” and “Optional Data”

• turned on state

     (b) NANC Change Order 400

• [***]

• 4 additional parameters for Optional Data field

• turned on state

5. Binding Agreements

The Parties expressly acknowledge and agree that all terms and conditions contained herein, shall constitute binding and enforceable obligations of the Parties, and the Master Agreement shall and is hereby amended in accordance with the terms and conditions set forth herein.

6. Consideration

Page 4

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

Except as amended by this Letter Agreement, the Master Agreement (including, without restriction, the obligations of the Contractor related to the Canadian NPAC/SMS) is ratified by the parties hereto. The modifications and amendments made in this Letter Agreement were negotiated together, are interrelated with, and each is made in consideration of all of the other terms and conditions herein, including, without restriction, the obligations of the Contractor related to the Canadian NPAC/SMS in this Letter Agreement.

7. Miscellaneous

(a) The contents of this letter, the existence of negotiations between the parties, and all other matters contemplated hereunder, including use of Confidential Information, shall be subject to the confidentiality obligations set forth in Article 15 of the Master Agreement (the terms of which are incorporated by reference herein).

(b) Any press releases relating to the subject matter of this letter will be issued only as agreed to in writing between the Customer and NeuStar. Nothing contained in this letter will be construed as conferring upon either party, expressly or by implication, any right or license to use in advertising, publicity, promotion, marketing, or other similar activity, any name, trade name, trademark, or other designation including any abbreviation, contraction, or simulation of the other.

(c) Each party agrees to comply with all applicable laws and is responsible, at its sole cost and expense, for obtaining any and all governmental licenses and approvals applicable to such party that may be required in connection with this letter.

(d) This letter shall be construed and enforced according to the substantive laws of the Province of Ontario, and the laws of Canada applicable therein, and the parties agree to be subject to the jurisdiction of the courts in the Province of Ontario if a suit is commenced in connection with this letter.

(e) The parties are under no legal impediment to the entry of and execution of their respective obligations under this letter, and each officer executing and delivering this letter has full power and authority to do so.

(f) Each party shall bear its own costs and expenses in connection with all matters relating to this letter, including without limitation fees for its respective legal counsel, brokers, accountants and other professional advisors. Neither party is authorized or empowered to obligate the other, nor to incur any costs or expenses on behalf of the other.

(g) This letter, consisting of the above terms and conditions, constitutes the entire agreement between the parties with respect to its subject matter. It may only be changed or supplemented by a written amendment signed by the authorized representatives of the parties. If any part of this letter is found invalid or unenforceable by a court of competent jurisdiction, the remainder of this letter shall be interpreted so as to reasonably effect the intention of the parties.

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

(h) This letter, and any amendment, supplement, restatement or termination of any provision of this letter, may be executed and delivered in any number of counterparts, each of which when executed and delivered is an original but all of which taken together constitute one and the same instrument, and this letter may be delivered by facsimile.

[The next page is the signature page]

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in places marked “[***]” and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

IN WITNESS WHEREOF, each of the Parties has, by its duly authorized representative, executed and delivered this Letter Agreement as of the date first set forth above.

Canadian LNP Consortium Inc.
Signature:	/s/ Jacques Sarrazin
	Name:	Jacques Sarrazin
	Title:	President
Date: December 20, 2006
NeuStar, Inc.
Signature:	/s/ Michael O’Connor
	Name:	Michael O’Connor
	Title:	VP-Customer Relations
Date: 19 Dec 2006

Page 7

EX-10.3.1

Exhibit 10.3.1

	Federal Communications Commission Washington, D.C. 20554
	September 8, 2006

Thomas M. Koutsky
Chair, North American Numbering Council
c/o Phoenix Center for Advanced Legal and Economic Public Policy Studies
5335 Wisconsin Avenue, NW
Suite 440
Washington, D.C. 20015

Ms. Amy L. Putnam
Director, Number Pooling Services
NeuStar, Inc.
3519 North Fourth Street
Harrisburg, PA 17110

Dear Mr. Koutsky and Ms. Putnam:

     This letter addresses a recommendation by the North American Numbering Council (NANC) that NeuStar, Inc. (NeuStar), the current Pooling Administrator, serve as the Interim Routing Number Authority (Interim RNA) for the pseudo Automatic Number Identification (p-ANI) codes¹ used for routing emergency calls.² After review of the materials supplied by the NANC, the Wireline Competition Bureau (Bureau) agrees with the NANC’s recommendation and finds it would be in the public interest to assign NeuStar to be the Interim RNA. Furthermore, the Bureau concludes that the p-ANI administration function falls within the broad scope of NeuStar’s existing Pooling Administration Contract.³ Accordingly, the Bureau hereby

1	A p-ANI is a number, consisting of the same number of digits as Automatic Number Identification (ANI), that is not a North American Numbering Plan (NANP) telephone directory number and may be used in place of an ANI to convey special meaning to the selective router, public safety answering point (PSAP), and other elements of the 911 system. See IP-Enabled Services, E911 Requirements for IP-Enabled Service Providers, WC Docket Nos. 04-36, 05-196, First Report and Order and Notice of Proposed Rulemaking, 20 FCC Rcd 10245, 10252-53, para. 17 (2005) (VoIP 911 Order); 47 C.F.R. § 9.3.
2	See Letter from Hoke Knox and Karen Mulberry, pANI Issues Management Group Co-Chairs, to Robert C. Atkinson, NANC Chair (Sept. 2, 2005) in Letter from Robert C. Atkinson, NANC Chair, to Thomas J. Navin, Chief, Wireline Competition Bureau, FCC (Sept. 8, 2005) (NANC Sept. 8 Letter); p-ANI Issues Management Group, NANC, pANI Interim Assignment Guidelines for ESQK (issued Sept. 1, 2005) (Initial Interim Guidelines) in NANC Sept. 8 Letter. The Initial Interim Guidelines were revised by the NANC on December 5, 2005. See Letter from Robert C. Atkinson, NANC Chair, to Thomas J. Navin, Chief, Wireline Competition Bureau, FCC (Jan. 5, 2005) at 2; p-ANI Issues Management Group, NANC, pANI Interim Assignment Guidelines for ESQK (revised Dec. 5, 2005) <http://www.nanc-chair.org/docs/nowg/Jan06_pANl_Guidelines_(Revised).doc> (Interim Guidelines).
3	See generally Pooling Administrator — NeuStar, FCC Contract No. CON01000016, signed by Sonna Stampone, Contracting Officer, Federal Communications Commission (dated June 15, 2001) (Contract). We note that the Thousands-Block Pooling Contractor Technical Requirements are set forth in Section C of the Contract. See id. Section C (Contract Technical Requirements).

directs NeuStar to perform the p-ANI administration function. NeuStar must perform this function in accordance with the NANC’s Interim Guidelines and the instructions in this letter. This assignment is interim in nature until a permanent p-ANI solution is in place, the expiration of NeuStar’s performance as Pooling Administrator, or further notice, whichever occurs first.

     As you know, the Federal Communications Commission (FCC) ordered providers of interconnected voice over Internet Protocol (VoIP) service to supply their customers with enhanced 911 capabilities.⁴ The NANC proposes temporary measures for the administration and issuance of p-ANI resources. Specifically, the NANC recommends that NeuStar administer the p-ANI function on an interim basis until NANC’s p-ANI Issue Management Group proposes a permanent recommendation. In addition, the NANC proposes Interim Guidelines that would apply to the Interim RNA’s administration of p-ANI resources, and to entities that seek to obtain p-ANI from the Interim RNA.

     The Bureau accepts, as set forth below, the NANC’s proposed temporary measures for the administration and issuance of p-ANI resources. The Bureau recognizes, however, that a permanent solution to this issue will best serve the public interest. The Bureau therefore directs the NANC to advise the Bureau, no later than October 10, 2006, as to the date the NANC will recommend to the Bureau such a permanent solution.

     The Bureau agrees with the NANC that NeuStar should serve as the Interim RNA. Given its experience as the Pooling Administrator, NeuStar is qualified to perform this role. Moreover, the Contract encompasses this additional function. The Contract in general assigns NeuStar responsibilities over assignment of thousands-block numbering resources — pools smaller than ten-thousands blocks or central office codes administered pursuant to other agreements.⁵ In addition, Section 2.5 of the Contract provides that the FCC “may issue rules, requirements, or policy directives in the future, which may increase, decrease or otherwise modify the functions to be performed by the contractor.”⁶ Section 2.5.1 further states that “the FCC, the NANC, and/or the [Industry Numbering Committee] may establish NANP numbering resource plans, administrative directives, assignment guidelines (including modifications to existing assignment guidelines) and procedures that may have an effect on the functions performed by the contractor.”⁷

     The Bureau therefore directs NeuStar to serve as Interim RNA until: (1) a permanent p-ANI solution is in place; (2) the expiration of NeuStar’s performance as Pooling Administrator; or (3) further notice, whichever occurs first. During this interim period, however, NeuStar is not the sole provisioner of p-ANI resources. Carriers or other entities that have been voluntarily providing p-ANI may continue to do so until a permanent solution is found.

4	See generally VoIP 911 Order, 20 FCC Rcd 10245.
5	Contract Technical Requirements, § 1.1.
6	Id, §2.5.
7	Id., § 2.5.1; see also id., § 1.4 (“The contractor shall also ensure that domestic numbering administration shall be effective.”).

     The Bureau further requires NeuStar, in its capacity as Interim RNA, to comply with the NANC’s Interim Guidelines, except as explained in this paragraph. Section 3.3 of the Interim Guidelines states that Part 52 of the FCC’s rules⁸ (which governs numbering) does not apply to p-ANI except as provided in the Interim Guidelines.⁹ NeuStar shall not follow this section. Until the Commission determines that Part 52 does not apply to p-ANI or makes some other ruling on the topic, we require NeuStar to operate consistently with the requirements of Part 52.¹⁰ Accordingly, an entity seeking p-ANI from NeuStar must have appropriate authority to access numbering resources in general. The entity must be licensed or certified by the FCC or a state commission to operate as a telecommunications carrier and must provide NeuStar with evidence of such authority.¹¹ Thus, “Eligible Users,” as defined in the Interim Guidelines, shall be no broader than indicated in this paragraph. Furthermore, NeuStar may assign p-ANI to VoIP service providers that can provide such evidence of carrier status as well as to carriers that provide wholesale 911-related services to VoIP service providers. Requests for waivers of this requirement may be filed by any entity that certifies that it fully remits 911 emergency service fees into all state and local 911 funds, and fully contributes into universal service mechanisms.

     Finally, the Bureau directs NeuStar to submit a Change Order Proposal on this issue to begin the contract modification process. Section 2.5.3 of the Contract directs that “within a period of not more than 30 calendar days” from the date that the FCC modifies the functions to be performed by the contractor, “[t]he contractor shall... provide the Contracting Officer, state PUCs, and the NANC with written notice regarding these changes and summarize the potential impact of the changes upon service and cost, if any.”¹² Therefore, NeuStar must submit the Change Order Proposal within 30 calendar days of the date of this letter.

     Please let me know if you have any questions regarding this matter.

Sincerely,
 

/s/ Thomas J. Navin  

Thomas J. Navin 

Chief
Wireline Competition Bureau 

8	47 C.F.R. §52.1 et seq.
9	Interim Guidelines, § 3.3.
10	Cf. Numbering Resource Optimization, CC Docket No. 99-200, Report and Order and Further Notice of Proposed Rulemaking, 15 FCC Rcd 7574, 7591, paras. 31-32 (2000) (placing wireless E911 emergency service routing digits (ESRD/ESRK) in the general category of administrative numbers, which includes “any numbers used by carriers to perform internal administrative or operational functions necessary to maintain reasonable quality of service standards”).
11	Id. at 7615, para. 97.
12	Contract Technical Requirements, § 2.5.3.

pANI
Interim Assignment
Guidelines
for ESQK

Prepared by the pANI IMG
for the NANC

Revised December 5, 2005

Issued September 1, 2005

pANI Interim Assignment Guidelines for ESQK September 14, 2005

Table of Contents

		Page
Section
1	Preface		3
2	Disclaimer and Limitation of Liability		4
3	Purpose and Scope of This Document		4
4	Assumptions and Constraints		5
5	Assignment Principles		7
6	Criteria for the Assignment of ESQK Numbers		8
7	ESQK Assignment Functions		8
8	Responsibilities of ESQK Number Applicants and Holders		9
9	Assignment Procedures		10
10	Interim 9-1-1 RNA Responsibilities		11
11	Conflict Resolution and Appeals Process		12
12	Maintenance of These Guidelines		12
13	Future Considerations		13
14	Glossary		14

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

Preface

On October 5, 1995, the Federal Communications Commission (FCC) established the North American Numbering Council (NANC), by filing its charter with Congress, to provide advice and recommendations to the FCC and other governments (including Canada and Caribbean countries) on numbering issues.

Since its inception, the Council has provided the Commission with critically important recommendations regarding numbering issues. These recommendations have addressed a myriad of issues, including wireline/wireless integration for local number portability, abbreviated dialing arrangements, the neutrality of toll free database administration, the feasibility of local number portability for 500/900 numbers, methods for optimizing the use of numbering resources, the assignment of Feature Group D Carrier Identification Numbers to switch-less resellers, and technical specifications for a National Pooling Administrator and the North American Numbering Plan Administrator. Recently the Council has been reviewing the issue of integrating the numbering resource needs of IP enabled service providers, commonly referred to as Voice over Internet Protocol (VoIP), into the existing numbering resource rules and regulations. The council has recently provided recommendations to the FCC on VoIP Service Providers’ Access Requirements for NANP Resource Assignments.

On June 3, 2005 the FCC issued the First Report and Order under FCC docket 05-196 that requires VoIP providers to supply enhanced 9-1-1 (E9-1-1) service capabilities to their customers. When evaluating the access of VoIP users to Public Service Answering Points (PSAPs) several parallels to the access of wireless users to PSAPs can be seen; primarily the users can be nomadic and the telephone number assigned to the user may be foreign to the PSAP the call should be directed to. The wireless industry has traditionally addressed these issues through the use of pseudo ANIs (pANI) to establish access for a nomadic user with a foreign telephone number to the correct PSAP. It is anticipated that VoIP will use a similar methodology to provide VoIP user’s access to PSAPs.

On July 25, 2005 the Alliance for Telecommunications Industry Solutions (ATIS) Emergency Service Interconnection Forum (ESIF) submitted to the industry and to NANC a set of “Routing Number Authority (RNA) for pANIs Used for Routing Emergency Calls — pANI Assignment Guidelines and Procedures’”¹. On August 5, 2005 the NANC Future of Numbering Working Group established the pANI Issue Management Group (IMG) to address the request by ESIF and provide a recommendation to NANC.

The IMG concurs with the basic recommendations of the ESIF to establish an Interim 9-1-1 Routing Numbering Administrator (Interim 9-1-1 RNA) to administer pANI numbering resources and envisions this to be a two stage process.

¹ © 2005 by Alliance for Telecommunications Industry Solutions) created by the Emergency Services Interconnection Forum (ESIF).

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

Stage I consists of this document (which incorporates concepts and information from the ESIF document and uses it along with ATIS Industry Numbering Committee (INC) document templates) to provide interim guidelines for the issuance of resources from the North American Numbering Plan (NANP) to enable VoIP services providers to comply with the requirements of FCC Order 05-196.

Stage II will be the development of complete guidelines and administrative procedures by INC, in cooperation with the ESIF, for the use of pANIs in all modes of communication.

The interim guidelines will apply to the Interim 9-1-1 RNA and any entities that seek to obtain numbers from the Interim 9-1-1 RNA until such time as the INC in cooperation with the ESIF can develop and publish complete guidelines and administrative procedures concerning pANIs.

NANC members include representatives from local exchange carriers (LECs), inter-exchange carriers, wireless providers, manufacturers, state regulators, VoIP providers, consumer groups, and telecommunications associations.

1 Disclaimer and Limitation of Liability

The information provided in this document is directed solely to professionals who have the appropriate degree of experience to understand and interpret its contents in accordance with generally accepted engineering or other professional standards and applicable regulations. No recommendation as to products or vendors is made or should be implied.

2 Purpose and Scope of This Document

In an effort separate from this IMG, the ESIF, a technical committee of ATIS, has been evaluating the need to standardize the specific numbers used in the implementation of pANIs, specifically Emergency Service Query Keys (ESQKs) for use during VoIP 9-1-1 calls. The purpose of this document is to define the interim guidelines that shall be used by any entity that is assigning ESQKs for VoIP. The duration of this interim period shall be decided separately by NANC.

ESIF has recommended², and the INC has concurred³ that ESQKs

•	Should be in the format of NPA-NXX-XXXX and that they should be from the number sets of NPA-211-XXXX and NPA-511-XXXX if the NPA-211-XXXX is exhausted.
	and

2	ESIF Issue 25 on the Use of Pooled or Ported Numbers as ESRKs
3	INC Issue 429 Non-Dialable ESRDs or ESRKs

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

• Should be from the pools of NPA’s that are valid for the Selective Router they will be used for.

These guidelines recommend that ESQKs (pANIs utilized for VoIP) should be from the pools of NPA-211-XXXX or NPA-511-XXXX with 211 being utilized before 511.

This document specifies interim guidelines developed with ESIF for the assignment of ESQK to those Eligible Users complying with the FCC order requiring VoIP customers to have access to enhanced 9-1-1 (E9-1-1). The designated interim ESQK Numbering Administrator (referred to as “Interim 9-1-1 RNA”).

These guidelines apply only to the assignment of ESQKs within geographic numbering plan areas (NPAs) under the jurisdiction of the FCC. This does not preclude a future effort to address non-geographic NPAs in the same guidelines. ESQKs are assigned for use at a Selective Router for which the VoIP Service Provider (VSP) has approval from the 9-1-1 Governing Authority⁴ to route E9-1-1 traffic for termination to a PSAP. While the ultimate delivery of any call to a PSAP must be based upon the geographical location of the originating caller, by necessity the association of the geographical location, of the originating telephone number and the ESQK is typically made at an Emergency Routing Data Base (ERDB).

In areas where E9-1-1 System Service Providers (E9-1-1 SSPs)⁵ had performed this function prior to the establishment of the Interim 9-1-1 RNA, that role may continue until such time as a permanent 9-1-1 RNA is determined. In developing these guidelines, ESIF and the pANI IMG foresee that these entities should only exist during the transition period until a permanent 9-1-1 RNA is established.

3 Assumptions and Constraints

The development of these guidelines includes the following assumptions and constraints:

3.1 pANIs (and specific to these guidelines, ESQKs) in the format NPA-NXX-XXXX are by definition⁶ in the format of a Central Office code and are therefore administered by the North American Numbering Plan Administrator⁷ under Guidelines developed by the INC⁸.

3.2 In Stage II the NXX-211-XXXX and NXX-511-XXXX should be identified in 47 C.F.R. § 52.13.(d) as a unique sub-set of NANP resources known as pANIs.

4	The term “9-1-1 Governing Authority” means “an entity designated under state law or regulation to have decision-making and oversight responsibilities for a 9-1-1 Emergency Number System for one or more PSAPs.”
5	Generally speaking, an E9-1-1 SSP is in the majority of cases an ILEC but there are other entities that perform that function.
6	47C.F.R. § 52.7(c)
7	47C.F.R. § 52.15(a)
8	47C.F.R. § 52.15(d)

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

3.3	Although pANIs are believed to be a North American Numbering Plan resource the existing requirements of “47 C.F.R. § 52 Numbering” do not apply unless specifically indicated in these interim guidelines. The specific sections of 47 C.F.R. § 52 that should apply to pANIs will be determined in Stage II.
3.4	These interim guidelines are for use in cooperation with various North American Numbering Plan numbering guidelines developed by the INC and the recommendations of ESIF and NANC.
3.5	The Interim 9-1-1 RNA will work with other entities administering ESQKs to transition administrative functions to the Interim 9-1-1 RNA according to a mutually agreeable timetable for transition.
3.6	ESQK numbering resources shall be assigned to permit the most effective and efficient use of a finite numbering resource in order to prevent premature exhaust. Efficient resource management and number conservation are necessary due to the industry impacts of expanding the numbering resource.
3.7	If at any point the FCC rules require regulatory certification, the applicant must be able to demonstrate that regulatory authorization has been obtained for the issuance of ESQK numbering resources.
3.8	These guidelines do not address the issue of who will fulfill the role of Interim 9- 1-1 RNA. The NANC pANI IMG developed these interim guidelines with ESIF without any assumption on who should be the Interim 9-1-1 RNA.
3.9	The NANC developed these interim guidelines as a temporary guide for the industry pending development of permanent INC guidelines in cooperation with ESIF.
3.10	Administrative assignment of the ESQK numbering resource to an ESQK holder does not imply ownership of the resource by the Interim 9-1-1 RNA, nor does it imply ownership by the ESQK holder to which it is assigned.
3.11	Interim 9-1-1 RNA and numbering resource administrators are responsible for managing numbering resources in accordance with these guidelines and the orders of applicable regulatory authorities.
3.12	An applicant is not required to provide any additional explanation or justification of items to which he/she has certified. However, that explanation/justification alone may not provide the Interim 9-1-1 RNA with sufficient information upon which to make a decision regarding pANI number assignment, and additional dialog and written documentation may be required. The Interim 9-1-1 RNA is still obligated to reply within five business days. [
3.13	Should the FCC delegate authority to state commissions, state commissions shall have access to Eligible Users’ inventory assignments and their use of ESQKs in each Selective Router for the purpose of ensuring the correct application of these numbering resources. Should the FCC delegate authority to state commissions, state commissions may request an accounting of inventories from the Eligible Users operating within their states, and Eligible Users must comply with such state commission requests. Entities that fail to comply with a state commission request for ESQK information shall be denied ESQKs should the FCC delegate such authority to state commissions.

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

3.14	The Interim 9-1-1 RNA will survey existing usage to ensure that unique ESQKs are being assigned.
3.15	These guidelines do not describe the method by which the unique ESQKs as identified in this document are transmitted across and processed by networks. Such arrangements may be contained in other standards, documents, or business agreements.

4 Assignment Principles

The assignment principles defined below will be used by any entity assigning ESQKs during the interim period.

4.1	An Eligible User is any entity that provides the appropriate documentation identified in these guidelines for the need for ESQKs to perform routing or data retrieval functions associated with emergency services. In the context of these guidelines, an Eligible User shall include a VSP or an entity providing VPC service acting on behalf of VSP(s). An entity that has not obtained approval from the 9-1-1 Governing Authority will not be considered an Eligible User.
4.2	ESQKs are assigned for use at a Selective Router for which the Eligible User has approval to route E9-1-1 traffic for termination to a PSAP or an Emergency Service Zone (ESZ) within a PSAP.
4.3	ESQK NPA-211-XXXX should be used before ESQK NPA-511-XXXX unless ESQKs from NPA 211 have been assigned and are being used where the NPA will coincide with the NPA of the Selective Router. These ESQKs shall be considered non-dialable in the Eligible User’s network.
4.4	ESQKs are assigned uniquely to individual Eligible Users.
4.5	At the discretion of the 9-1-1 Governing Authority, a VPC operator that processes 9-1-1 calls originating from various VSP networks is not required to acquire and use separate ESQKs for each VSP as long as the VPC enables clear identification of the originating VSP in the display of the caller’s information at the PSAP.
4.6	ESQKs will be assigned in contiguous ranges (where possible), and in quantities requested by the applicant. However, the Interim 9-1-1 RNA does not guarantee that all ESQKs will be assigned in contiguous ranges.
4.7	Any entity assigning ESQKs will:

4.7.1	Assign ESQKs in a fair, timely and impartial manner to any Eligible User.
4.7.2	Assign ESQKs on a first come, first served basis from the available pool.
4.7.3	Make all ESQK assignments in conformance with these guidelines.
4.7.4	Treat all information received from applicants as proprietary and confidential. The Interim 9-1-1 RNA is permitted to provide the contact information for the assigned user of any given ESQK(s) to law

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

enforcement agencies, PSAPs, and E9-1-1 SSPs as well as any state or federal agency that has direct regulatory responsibilities over E9-1-1.

4.8 Information that is requested of an Eligible User in support of an ESQK application shall be uniform and kept to a minimum.

5 Criteria for the Assignment of ESQK Numbers

The assignment criteria in the following sections shall be used by the Interim 9-1-1 RNA in reviewing an ESQK assignment request from an Eligible User for initial and/or additional ESQKs.

5.1	ESQKs are assigned to entities for use at a Selective Router for which the Eligible User has approval from the 9-1-1 Governing Authority to route E9-1-1 traffic for termination to a PSAP.
5.2	The potential Eligible User must self-certify that it is able to route traffic to the appropriate Selective Router before receiving its first grant of ESQK numbering resources.
5.3	The potential Eligible User must submit an ESQK request form certifying that a need exists for the assignment for use with a specific Selective Router.
5.4	The Interim 9-1-1 RNA will not issue ESQKs to an Eligible User without an Operating Company Number (OCN)9. The OCN cannot be shared with another Eligible User.
5.5	All applications for numbering resources must include the company name, company headquarters address, OCN, parent company’s OCN(s), and the primary type of business in which the numbering resources will be used.10
5.6	All applications for numbering resources must include a National Emergency Number Association (NENA) provided Company ID to be associated with the ESQKs
5.7	ESQKs will not be reserved.
5.8	Information that is requested of an Eligible User in support of an ESQK application shall be maintained by the Interim 9-1-1 RNA.

6 ESQK Assignment Functions

The Interim 9-1-1 RNA (s) shall:

6.1	Produce and make available upon request information regarding ESQK Administration processes, guidelines, interfaces and services.
6.2	Provide, upon request of the ESQK applicant, information on how to obtain documents related to pANI Numbering Administration by either referring the applicant to web sites where it will be possible to download electronic copies or

9	FCC 01-362, 47 C.F. R. § 52.15 (g)(4).
10	FCC 00-104, 47 C.F.R. § 52.15 (g)(1).

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

	OCN must be provided, if applicable12. The applicant can get OCN information by calling NECA.13
7.2	A NENA provided Company ID to be associated with the ESQKs.
7.3	The information associated with ESQK assignment may change over time. Such changes may occur, for example, because of the transfer of an ESQK from a VSP to a VPC.
7.4	The holder of ESQKs assigned by the Interim 9-1-1 RNA, or acquired by merger or acquisition, must use the ESQKs consistent with these guidelines. If the Eligible User no longer provides service in the area, the Eligible User must notify the Interim 9-1-1 RNA.
7.5	The Interim 9-1-1 RNA will retain copies of such notifications and deliver them to the permanent 9-1-1 RNA for use in reclamation proceedings. The Interim 9-1-1 RNA must be immediately notified of any changes to the information contained in the application.

8 Assignment Procedures

Entities requesting initial ESQK assignments and entities already assigned one or more ESQKs shall comply with the following:

8.1 An ESQK Applicant requesting resources from the Interim 9-1-1 RNA, shall:

a)	provide the VoIP ESQK Interim Request Form (attached as an Exhibit to these interim guidelines) that it is an Eligible User:
b)	complete the ESQK application form per these guidelines.

8.2 An applicant must apply to the Interim 9-1-1 RNA (contact details provided below). An applicant should follow all application instructions found on the application form. At a minimum, the form will request:

a)	The full legal name of the applicant as it appears on the VESA certification, interconnection agreement, letter of certification, or legal documents provided to any regulatory authority having oversight.
b)	Any names under which the applicant does business (d/b/a’s)
c)	The name and contact information (address, telephone number, and email address) of the individual making the request on behalf of the Applicant;
d)	A list of the NPAs associated with the relevant Selective Router for which ESQKs are needed;
e)	A list of the PSAPs to which the ESQKs requests are related, including the state, county, and municipality in which the PSAP is located; and
f)	The quantity of ESQKs being requested for each NPA.

12

FCC 01-362, 47 C.F.R. § 52.15 (g)(4).

13

NECA assigns Company Codes that may be used as OCNs. Companies with no prior CO Code or Company Code assignments may contact NECA (800 524-1020) to be assigned a Company Code(s). Since multiple OCNs and/or Company Codes may be associated with a given company, companies with prior assignments should direct questions regarding appropriate OCN usage to the Telcordia™ Routing Administration (TRA) on 732 699-6700.

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

8.3 Any applicant denied an ESQK assignment under these guidelines has the right to appeal that decision (see Section 11 for procedures).

9 Interim 9-1-1 RNA Responsibilities

9.1	The Interim 9-1-1 RNA will track and monitor ESQK assignments and assignment procedures, and recommend appropriate and timely changes to these guidelines, if they are found to result in inefficient or inappropriate use or assignment of ESQKs. However, any changes to these guidelines must be approved by the INC with guidance by ESIF if appropriate.
9.2	The Interim 9-1-1 RNA will not engage in audits or reclamation.
9.3	Initial Implementation: Before it begins assigning ESQKs, the Interim 9-1-1 RNA must ensure that the ESQKs it assigns are not presently in use. Because it is believed that few ESQKs have been assigned from the 211 NXXs, the Interim 9-1-1 RNA will assign ESQKs only from the 211 NXX unless extenuating circumstances exist. To avoid duplication, the Interim 9-1-1 RNA will first perform the following steps in order until it can determine what numbers are available to be assigned:

1.	Ask existing mobile position center (“MPC”) and VPC vendors to provide a list of all the entities that have been assigned pANIs in the 211 NXX, and the entity (and contact information) that assigned the pANI.
2.	Ask each wireless service provider to respectively identify the entity that provides pANIs to it.
3.	Ask each E9-1-1 SSP to identify any pANI and entity that it has assigned a p-ANI to from the 211 code. In addition, ask each E9-1-1 SSP to identify any other entities that may perform pANI assignments within its territory (including independents).

9.4	Once it has compiled a list of entities that assign numbers, the Interim 9-1-1 RNA will canvass those entities to determine what, if any, pANIs they have assigned from the 211 NXX. The remaining available pANIs in the 211-NXX in all NPAs will constitute the available pool from which the Interim 9-1-1 RNA will assign ESQKs.
9.5	The Interim 9-1-1 RNA will ensure the completeness of each application and accompanying documentation before it assigns resources.
9.6	The Interim 9-1-1 RNA will process each application within 5 business days, on a first in, first out basis, and inform the applicant of the result by an identifiable email form. If the application is denied, the Interim 9-1-1 RNA will provide a detailed explanation of the denial.

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

10 Conflict Resolution and Appeals Process

10.1	Every attempt will be made at the time of assignment to avoid conflicts with existing pANIs.
10.2	Disagreements may arise between parties affected by these interim guidelines in the context of the administration and management of these guidelines. In all cases, the parties will make reasonable, good faith efforts to resolve such disagreements among themselves, consistent with the interim guidelines, prior to pursuing any appeal.
10.3	If a conflict is determined to exist, the following escalation process should be followed:

a)	The affected party should contact the entity with whom the conflict exists and attempt a resolution
b)	If resolution cannot be achieved among the involved affected parties, the issue should be escalated in the following order:

i.	the Interim 9-1-1 RNA for a recommended solution;
ii.	The state regulatory authority having oversight, if any;
iii.	the NANC;
iv.	the FCC .

10.4	Questions regarding interpretation or clarification of these Interim Guidelines may be referred to NANC for resolution. Unless otherwise mutually agreed to by the parties, these questions will be submitted in a generic manner protecting the identity of the appellant.
10.5	Reports on any resolution resulting from the above options, the content of which will be mutually agreed upon by the involved parties, will be kept on file by the Interim 9-1-1 RNA. At a minimum, the report will contain the final disposition of the appeal, e.g., whether or not an ESQK was assigned.

11 Maintenance of These Guidelines

11.1	These guidelines may be updated to reflect changes in industry practices or national regulatory directives.
11.2	Requests for changes to these guidelines should be directed to the appropriate industry forum, currently the INC.

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pANI Interim Assignment Guidelines for ESQK September 14, 2005  

12 Future Considerations

The issues identified in this section will not be the responsibility of the Interim 9-1-1 RNA, however it is imperative that these issues be examined when adopting permanent guidelines.

12.1 pANI Number Resource Management

a)	The Interim VoIP Architecture for Enhanced 9-1-1 Services (i2) currently posted on the NENA web site for public review/comment contains ESQK processing, utilization and administration principles proposed as industry standard. The final i2 standard should be a consideration in the development of permanent guidelines.
b)	With over 6000 PSAPs and an unknown number of Eligible Users, it is vital that the permanent 9-1-1 RNA employ pANI allocation practices that support the efficient and effective use of the pANI numbering resources.

12.2 Segregating wireless (ESRKs) and VoIP (ESQK) pANI Numbering Resources

a)	There are substantial benefits from segregating wireless pANIs (ESRKs) and VoIP pANIs (ESQKs) into separate NXX codes. Accordingly, they should be so segregated wherever possible. As a general matter ESQKs should not be drawn from an NXX that has already been opened for ESRKs, and when a code is exhausted for either ESQKs or ESRKs, it is preferable to open a new code rather than to assign ESQKs and ESRKs from the same code.
b)	Public safety agencies rely on the particular NXX to make important distinctions. For example, where 511 (or 211) is used for ESRKs, 511 on a “No Record Found” query identifies the caller as wireless. If 511 were used in the same area for ESQKs, this distinction would be lost.
c)	Public safety agencies also key on the NXX to create reports. If ESRKs and ESQKs are drawn from the same NXX, creating such reports for wireless-only or VoIP-only will not be possible. In some cases these reports are used to ensure accurate billing.

12.3 Other Consideration

Should the CLLI code associated with the relevant Selective Routers and the appropriate NPAs be identified on the ESQK request form?

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

13 Glossary

9-1-1 Governing Authority	An entity designated under state law or regulation to have decision-making and oversight responsibilities for a 9-1-1 Emergency Number System for one or more PSAPs.
Applicant	Eligible Users who submit a ESQK Request to the Interim 9-1-1 RNA for the purpose of being assigned ESQKs for their use.
Central Office (CO) Code	The sub-NPA number in a TN, i.e., digits D-E-F of a 10-digit NANP Area address. Central office codes are in the form “NXX,” where N is a number from 2 to 9 and X is a number from 0 to 9. Central office codes may also be referred to as “NXX codes.” (47 C.F.R. § 52.7(c))
Conservation	Consideration given to the efficient and effective use of a finite numbering resource in order to minimize the cost and need to expand its availability in the introduction of new services, capabilities and features.
E9-1-1 System Service Providers (E9-1-1 SSP)	Generally speaking, an E9-1-1 SSP is in the majority of cases an ILEC but there are other entities that perform that function.
Eligible User	An Eligible User is any entity that provides the appropriate documentation identified in these guidelines for the need for ESQKs to perform routing or data retrieval functions associated with emergency services. In the context of these guidelines, an Eligible User shall include a VSP or an entity providing VPC service acting on behalf of VSP(s). An entity that has not obtained approval from the 9-1-1 Governing Authority will not be considered an Eligible User.
Emergency Services Interconnection Forum (ESIF)	ESIF, of the Alliance for Telecommunications Industry Solutions (ATIS), is the primary venue for the telecommunications industry, public safety and other stakeholders to generate and refine both technical and operational interconnection issues to ensure life-saving E9-1-1 services are available for everyone in all situations. ESIF enables many different telecommunications entities to fully cooperate and interconnect with each other to determine the best practices and solutions necessary to effectively and promptly deploy E9-1-1 services nationwide. ESIF’s mission is to facilitate the identification and resolution of both technical and operational issues related to the interconnection of telephony and emergency services networks.

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

Emergency Service Query Key (ESQK)	Emergency Service Query Key (ESQK) — The ESQK identifies a call instance at a VPC, and is associated with a particular SR and PSAP combination. The ESQK is delivered to the E9-1-1 SR and as the calling number/ANI for the call to the PSAP. The ESQK is used by the SR as the key to the Selective Routing data associated with the call. The ESQK is delivered by the SR to the PSAP as the calling number/ANI for the call, and is subsequently used by the PSAP to request ALI information for the call. The ALI database includes the ESQK in location requests sent to the VPC. The ESQK is used by the VPC as a key to look up the location object and other call information associated with an emergency call instance. The ESQK is expected to be a ten-digit North American Numbering Plan Number.
Industry Numbering Committee (INC)	A standing committee of the Alliance for Telecommunications Industry Solutions (ATIS) that provides an open forum to address and resolve industry-wide issues associated with the planning, administration, allocation, assignment and use of numbering resources and related dialing considerations for public telecommunications within the North American Numbering Plan (NANP) area.
North American Numbering Council (NANC)	North American Numbering Council — On October 5, 1995, the Federal Communications Commission (FCC) established the North American Numbering Council (NANC), by filing its charter with Congress, to provide advice and recommendations to the FCC and other governments (including Canada and Caribbean countries) on numbering issues.
NANP (North American Numbering Plan)	A numbering architecture in which every station in the NANP Area is identified by a unique ten-digit address consisting of a three-digit NPA number, a three digit central office number of the form NXX, and a four-digit line number of the form XXXX.
NANPA (North American Numbering Plan Administration)	With divestiture, key responsibilities for coordination and administration of the North American Numbering/Dialing Plans were assigned to NANPA. These central administration functions are exercised in an impartial manner toward all industry segments while balancing the utilization of a limited resource.

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

NANP Area

Consists of the United States, Canada and the Caribbean countries (American Samoa, Anguilla, Antigua, Bahamas, Barbados, Bermuda, British Virgin Islands, Canada, Cayman Islands, Dominica, Dominican Republic, Grenada, Jamaica, Montserrat, St. Kitts & Nevis, St. Lucia, St. Vincent & Grenadines, Turks & Caicos Islands, Trinidad & Tobago, and the United States (including Puerto Rico, the U.S. Virgin Islands, Guam and the Commonwealth of the Northern Mariana Islands).

Numbering Plan Area (NPA)

Numbering Plan Area, also called area code. An NPA is the 3 - -digit code that occupies the A, B, and C positions in the 10-digit NANP format that applies throughout the NANP Area. NPAs are of the form NO/ 1X, where N represents the digits 2-9 and X represents any digit 0-9. After 1/1/95, NPAs will be of the form NXX. In the NANP, NPAs are classified as either geographic or non-geographic,

a)	Geographic NPAs are NPAs which correspond to discrete geographic areas within the NANP Area.
b)	Non-geographic NPAs are NPAs that do not correspond to discrete geographic areas, but which are instead assigned for services with attributes, functionalities, or requirements that transcend specific geographic boundaries. The common examples are NPAs in the N00 format, e.g., 800.

Operating Company Number (OCN)	An Operating Company Number is a four place alphanumeric number that uniquely identifies providers of local telecommunications service. OCN assignments are required of all Service Providers in their submission of utilization and forecast data (FCC 00-104, ¶ 41 and Public Notice DA 00-1549). Relative to CO Code assignments, NECA assigned Company Numbers may be used as OCNs. Companies with no prior CO Code or Company Number assignments contact NECA (800 524-1020) to be assigned a Company Number(s). Since multiple OCNs and/or Company Numbers may be associated with a given company, companies with prior assignments should direct questions regarding appropriate OCN usage to the Telcordia™ Routing Administration (TRA) on 732 699-6700.
Pseudo-Automatic Number Identification (pANI) Codes	Used generically in this document to include any of the other more specifically descriptive acronyms associated with numbers used for routing emergency calls today, such as but not limited to: ESRD, ESRK, ESQK, PSAP routing numbers, etc.
Service Provider	The term “service provider” refers to a telecommunications carrier or other entity that receives numbering resources from the NANPA, a Pooling Administrator or a telecommunications carrier for the purpose of providing or establishing telecommunications

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

	service (FCC 00-104, § 52.5 (i)).
Unassignable Code	An unassignable number is an NXX code designated by the administrator which will not be made available for assignment to any number applicant. For example, the number “9-1-1” will not be assigned as a central office code so as to avoid potential conflict, with emergency services.
VPC	VoIP Positioning Center.
Wireless E9-1-1 ESRD/ESRK Number	A 10-digit number used for the purpose of routing an E9-1-1 call to the appropriate Public Service Answering Point (PSAP) when that call is originating from wireless equipment. The Emergency Services Routing Digit (ESRD) identifies the cell site and sector of the call origination in a wireless call scenario. The Emergency Services Routing Key (ESRK) uniquely identifies the call in a given cell site/sector and correlates data that is provided to a PSAP by different paths, such as the voice path and the Automatic Location Identification (ALI) data path. Both the ESRD and ESRK define a route to the proper PSAP. The ESRK alone, or the ESRD and/or Mobile Identification Number (MIN), is signaled to the PSAP where it can be used to retrieve from the ALI database, the mobile caller’s call-back number, position and the emergency service agencies (e.g., police, fire, medical, etc.) associated with the caller’s location. If a NANP TN is used as an ESRD or ESRK, this number cannot be assigned to a customer.

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

VoIP Interim ESQK Request Form

		*Required Entries
Applicant Information
Applicant Company () Legal Name	*
DBA Name(s) (if any)	*
Operating Company Number (OCN)	*
NENA ID	*
Contact Name	*
Contact Address1	*
Contact Address2
Contact City	*
Contact State	*
Contact Zip	*
Contact Telephone Number	*
Contact E-Mail Address	*
PSAP Information
PSAP Name	*
PSAP State	*
PSAP County
PSAP Municipality
9-1-1 Governing Authority Contact Name	*
9-1-1 Governing Authority Contact Tel#	*
9-1-1 Governing Authority Contact E-mail
# ESQKs Requested
Valid NPAs for the area being served	*
NPA in which ESQK(s) have been requested	*
Total Number of ESQKs Requested	*

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pANI Interim Assignment Guidelines for ESQK September 14, 2005

Applicant Certification

I hereby certify that I have read the “pANI Interim Assignment Guidelines for ESQK” and meet the criteria required to obtain the requested number of ESQKs.

VSP Authorized Electronic Signature, or

VPC Authorized Electronic Signature

Assignment (To be Completed by Interim 9-1-1 RNA)

A list of the ESQKs assigned
Date Assigned	Assigned By	*
Interim 9-1-1 RNA Contact Name		*
Interim 9-1-1 RNA Contact Telephone Number		*
Interim 9-1-1 RNA E-mail Address		*

By applying for this resource, the applicant hereby certifies that it has obtained approval from the appropriate 9-1-1 Governing Authority to provide routing or data retrieval for E9-1-1 traffic to the applicable PSAP. Should it later be determined that such authority has not been obtained, the applicant will be reported to the FCC and the appropriate state commission, and may be denied further resources.

Page 19

National Pooling Administration

Change Order Proposal #46
(INC Issue 517 — “Denying NXX assignment to a service
provider that has opted into pooling”)

Companion to NANPA Change Order #6

September 19, 2006

NeuStar, Inc. 46000 Center Oak Plaza
Sterling VA, 20166

Nat’l PAS — Change Order #46 (INC Issue 517) September 19, 2006

Table of Contents

1 Introduction	3
2 Industry Numbering Committee (INC) Proposed Changes	4
3 The Proposal	8
4 Assumptions and Risks	8
5 Cost	8
6 Conclusion	9

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -ii-

Nat’l PAS — Change Order #46 (INC Issue 517) September 19, 2006

1 Introduction

1.1 Purpose and Scope

In accordance with NeuStar’s National Pooling Administration contract¹ and our constant effort to provide the best support and value to both the FCC and the telecommunications industry, NeuStar, as the National Pooling Administrator (PA), hereby submits this Change Order Proposal to the Federal Communications Commission (FCC) for approval. This change order complies with the contractual requirements set forth in Attachment B, Section C of the Thousands-Block Pooling Contractor Technical Requirements, dated November 30, 2000, Sections 2.5 through 2.5.4, which read as follows:

2.5 Changes in the Environment

The FCC may issue rules, requirements, or policy directives in the future, which may increase, decrease or otherwise modify the functions to be performed by the contractor. The contractor is additionally subject to the provisions of the changes clause in Section I.

2.5.1 Process

Accordingly, after a contractor is selected, the FCC, the NANC and/or the INC may establish NANP numbering resource plans, administrative directives, assignment guidelines (including modifications to existing assignment guidelines), and procedures that may have an effect on the functions performed by the contractor.

2.5.2 Changes

The contractor shall review changes when numbering resource plans, administrative directives, assignment guidelines, and procedures are initiated or modified to determine if there is any impact on the functions that they must perform.

2.5.3 Notifications

The contractor shall then, within a period of not more than 30 calendar days from said event (e.g., the date INC places an issue into Final Closure), provide the Contracting Officer, state PUCs, and the NANC with written notice regarding these changes and summarize the potential impact of the changes upon service and cost, if any.

2.5.4 Roles

The NANC shall review the notice and provide a recommendation to the FCC regarding the effect of the contractor’s notice and supporting documentation.

The contractor shall comply with state regulatory decisions, rules and orders with respect to pooling, as applicable, as long as they are not in conflict with FCC decisions, orders, and rules and are within state jurisdiction.

¹ FCC Contract Number CON01000016

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -3-

Nat’l PAS — Change Order #46 (INC Issue 517) September 19, 2006

This document provides the information required by the contract, such as identifying the new requirements of the expanded scope of work as a result of the Industry Numbering Committee’s (INC) disposition of Issue 517 and NANPA change order #6 by offering our proposed solution, and addressing its cost, risks, and assumptions. This change order is being created at the request of the FCC prior to the INC final closure (section 2.5.3. of the technical requirements).

2 The Industry Numbering Committee (INC) Proposed Changes

On June 6, 2006, INC placed issue 517 into Initial Closure. In response, NANPA submitted change order #6 to address how this issue affects both the NANP Administration System (NAS) and NANPA operations. To comply with INC issue 517 and the NANPA change order #6, the PA will need to produce daily information that will allow NANPA to determine the specific OCNs that are currently participating in pooling in optional pooled rate centers, which is discussed in the proposal section of this change order. The FCC has requested that the Pooling Administrator submit this change order proposal at this time to enable the FCC to understand the complete process.

• Issue 517: Denying NXX assignment to SP that has OPTED into Pooling

The official INC issue statement is stated below and can also be found on the ATIS website (www.atis.org):

A) ISSUE STATEMENT

NANPA has no way of knowing whether an SP has opted into pooling in a specific rate center, so it is possible for that SP to request CO code resources in a rate center in which they have already opted into participation in pooling.

B) FOLLOWING RESOLUTION FROM INC

The following changes were made to the COCAG and the TBPAG to resolve this issue:

COCAG Changes:

A new section 3.10 was created:

3.10 If an SP has chosen to participate in thousands-block number pooling in a voluntary rate center outside of the top 100 MSAs, the SP cannot withdraw from pooling in a voluntary rate center once the SP has submitted a forecast, a donation, or has been assigned a thousands-block. Once an SP chooses to participate in thousands-block number pooling in a voluntary rate center, all numbering requests must be submitted directly to the PA.

4.1.1 The applicant must certify a need for NANP numbers, e.g., provision of wireline or wireless service in the Public Switched Telephone Network.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -4-

Nat’l PAS — Change Order #46 (INC Issue 517) September 19,2006

In order to obtain CO codes, an applicant must submit or have submitted a North American Numbering Plan Numbering Resource Utilization/Forecast (NRUF) Report (See NRUF Reporting Guidelines) to the NANPA for the NPA(s) in which the CO code(s) is being requested.² This requirement shall not apply in instances where an NPA has been implemented since the last NRUF Report and the Service Provider has submitted a NRUF Report for the NPA(s) previously serving the geographic areas involved.

The applicant must submit an NXX request form certifying that a need exists for an NXX assignment to a point of interconnection or a switching entity due to routing, billing, regulatory, or tariff requirements. The NXX request form must provide an Operating Company Number (OCN), which uniquely identifies the applicant. The NANPA will not issue numbering resources to a carrier without an OCN.³ The OCN cannot be shared with another service provider.

If NANPA determines from the report provided by the PA that an applicant is participating in pooling in that rate center, NANPA will deny the application. Once an applicant chooses to participate in thousands-block number pooling in a voluntary rate center, all numbering requests must be submitted directly to the PA.

5.2 Receive and process applications (CO Code (NXX) Assignment Request Form Part 1) for CO codes (NXX) within the geographic NPA(s) for which the CO Code Administrator is responsible.

For rate centers transitioning to pooling:

• The CO Code Administrator will only process NXX requests received at least 33 calendar days prior to the Pool Start Date.

• Within the 33 calendar days prior to Pool Start Date, applications for codes/blocks will not be accepted. However within this 33-day interval, the NANPA will continue to process code applications for:

• CO codes awarded via lottery;

• LRN requests;

• full CO code request for a single customer;

• CO code expedite requests;

• petition/safety valve requests;

• any requests from non-pooling capable carriers; and

• PA requests to the NANPA.

After Pool Start Date, all pooling-capable carriers will apply to the PA for numbering resources.

Once an SP chooses to participate in thousands-block number pooling in a voluntary rate center, all numbering requests must be submitted directly to the PA. NANPA will not assign a CO code (NXX) to an SP for a voluntary pooled rate center in which that SP has

² FCC 00-104, § 52.15 (f) (4) (5).

³ FCC 01-362, §52.15(g)(4).

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -5-

Nat’l PAS — Change Order #46 (INC Issue 517) September 19, 2006

either submitted a forecast to the PA, submitted a donation to the PA. or has been assigned a thousands-block in that rate center.

TBPAG Changes:

2.4 These administration guidelines apply only to the assignment of thousands-blocks to Block Applicants providing service within specific rate areas:

a)	where SP Location Routing Number (LRN) Local Number Portability (LNP) has been implemented;
b)	where thousands-block number pooling has been mandated by the appropriate regulatory body;
c)	where an SP has chosen to participate in thousands-block number pooling in a voluntary rate center outside of the top 100 MSAs, the SP cannot withdraw from pooling in a voluntary rate center once the SP has submitted a forecast or donation, or has been assigned a thousands-block. Once an SP chooses to participate in thousands-block number pooling in a voluntary rate center all numbering requests must be submitted directly to the PA4.

5.1.1 The PA, upon request, shall provide information and answer questions for clarification regarding thousands-block number pooling administration processes, procedures, interfaces, and services. Additionally, the PA shall provide, upon request of the thousands-block number pooling participant, information on how to obtain documents related to thousands-block number pooling administration. This can be accomplished by either referring the SP to web sites where it will be possible to download electronic copies, or by providing electronic copies via e-mail.

The PA shall:

a)	be responsible for activities associated with industry inventory pool establishment;
b)	assure the availability, based upon industry established criteria, of numbering resources within the industry inventory pool for a given rate area;
c)	add to the resources in the industry inventory pool when necessary by requesting additional CO Codes from the CO Code Administrator using Months to Exhaust Certifications Worksheet-1000 Block Level (Appendix 4);
d)	work with the CO Code Administrator in the planning and implementation of NPA code relief (e.g., update the PA’s industry database to reflect any changes

⁴ The PA will provide a report to NANPA of the SPs participating in pooling in a voluntary rate center outside of the top 100 MSAs. If NANPA determines from the report that an SP is participating in pooling in a voluntary rate center, NANPA will deny a CO Code application for that rate center.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -6-

Nat’l PAS — Change Order #46 (INC Issue 517) September 19, 2006

resulting from NPA relief activity). For specific details, see NPA Code Relief Planning & Notification Guidelines (ATIS-0300061);

e)	provide copies of the Thousands-Block Number (NXX-X) Pooling Administration Guidelines (ATIS-0300066) when requested by Block Applicants, including timely notification of changes;
f)	assist the CO Code Administrator in analyzing and helping to resolve problems related to misrouted calls and calls that cannot be completed;
g)	track reported switch cut-overs and thousands-block reassignments and perform other operational functions (e.g., thousands-block reclamation);
h)	make available on their web site the PA-recognized holidays and distribute as necessary;
i)	log and track all thousands-block applications using a tracking mechanism which will enable the PA and Block Applicant to identify a specific thousands-block request; and
j)	build and maintain an industry data base which includes appropriate security for confidential data. The database will be accessible through an appropriate mechanism and, at a minimum, include the following information:
1)	all pooled thousands-blocks in the industry inventory pool (i.e., NPA-NXX-X level information displayed),
2)	status of the thousands-blocks (i.e., allocated/assigned, available),
3)	identification of the SP to which the thousands-block has been allocated, whether or not a thousands-block is contaminated,
4)	user profile(s) that contain the SP contact information, OCN, and level of access permitted. An SP may need multiple individual profiles and passwords (See Appendix 5 — User Profile Application).
k)	set the “Pool Indicator” on the CO Code ACD screen in BIRRDS for those NXX codes from which thousands-blocks have been donated to the pool after Block Donation Date.
l)	provide a report to NANPA of the SPs participating in pooling in a voluntary rate center outside of the top 100 MSAs. NANPA shall deny any CO Code application from an SP that is participating in pooling in a voluntary rate center.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -7-

Nat’l PAS — Change Order #46 (INC Issue 517) September 19, 2006

3 The Proposal

NeuStar’s National Pooling Administrator has reviewed INC issue 517 and NANPA Change Order #6 from both the operational and technical perspectives. The proposal set forth below will conform to the changes in the INC guidelines and the NANPA change order while meeting the requirements of the industry in a cost-effective and efficient manner.

Solution

To satisfy the requirements identified in the INC issue, the PA will produce daily information that will allow NANPA to determine specific OCNs that are currently participating in pooling in optional pooled rate centers. On a daily basis, the National Pooling Administrator (PA) will provide NANPA with a file containing the following information: NPA, rate center(s) where pooling is voluntary (also known as optional), and the Operating Company Number(s) (OCN) of those service providers that are participating in pooling in the identified voluntary rate center(s).

4 Assumptions and Risks

Part of the PA’s assessment of this change order is to identify the associated assumptions and consider the risks that can have an impact on our operations. This change order does not affect the system nor will it have any impact on our day-to-day application-processing operations.

5 Cost

As with any change order proposal, we also considered the associated costs that would potentially be incurred in implementing the proposed solution. These costs include the resources required to complete the milestones on a timeline for implementing the processes and system delineated in this change order. The timeline includes preparation, proper documentation updates, development, testing, monitoring, and execution of the solution. The anticipated cost to implement this proposed solution is $3200.00, which includes the price for the overtime staff hours that will be required to perform this task. The PA staff members are already carrying heavy workloads, due to the steady rise in volumes, which have increased significantly over the past few months. We respectfully request that this change order be approved giving the PA authorization to charge straight overtime for the staff members involved in the project.

The alternative would be to hire a temporary employee for this project, but we have considered and rejected that option because it would not facilitate timely completion of the project, or keep costs down, for the following reasons:

•  it would add the time of posting the position, interviewing, and obtaining the appropriate security clearance for the person

•  training time would be needed.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -8-

Nat’l PAS — Change Order #46 (INC Issue 517) September 19,2006

6 Conclusion

In conclusion, the Pooling Administrator offers a viable solution that meets the requirements of both INC issue 517 and the NANPA change order #6. In accordance with our contract terms, and we request that the FCC review and approve this change order.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -9-

Contract No. CON01000016

Modification No. Twenty-Four (24)

Page 4 of 4

1. FAR Clause 52.217-9, Option to Extend the Term of the Contract, is hereby incorporated for the Option Periods and reads as follows:

52.217-9 Option to Extend the Term of the Contract (Mar 2000)

(a) The Government may extend the term of this contract by written notice to the Contractor within five (5) business days; provided that the Government gives the Contractor a preliminary written notice of its intent to extend at least seven (7) business days before the contract expires. The preliminary notice does not commit the Government to an extension.

(b) If the Government exercises this option, the extended contract shall be considered to include this option clause.

(c) The total duration of this contract, including the exercise of any options under this clause, shall not exceed five (5) months.

National Pooling Administration

Change Order Proposal #44

(INC Issue #486 — “Contaminated or Pristine Assigned
Block Returns”)

December 7, 2005

NeuStar, Inc.	46000 Center Oak Plaza
	Sterling VA, 20166

Nat’l PAS — Change Order #44 (INC Issue 486) December 7, 2005

Table of Contents

1	Introduction	3
2	Industry Numbering Committee’s Proposed Change	4
3	The Proposal	6
4	Assumptions and Risks	6
5	Cost	6
6	Conclusion	6

© NeuStar, Inc. 2005 NeuStar Proprietary and Confidential - ii -

Nat’l PAS — Change Order #44 (INC Issue 486) December 7, 2005

1 Introduction

1.1 Purpose and Scope

In accordance with NeuStar’s National Pooling Administration contract¹ and our constant effort to provide the best support and value to both the FCC and the telecommunications industry, NeuStar, as the National Pooling Administrator (PA), hereby submits this change order proposal to the Federal Communications Commission (FCC) for approval. This change order complies with the contractual requirements set forth in Attachment B, Section C of the Thousands-Block Pooling Contractor Technical Requirements, dated November 30, 2000, Sections 2.5 through 2.5.4, which read as follows:

2.5 Changes in the Environment

The FCC may issue rules, requirements, or policy directives in the future, which may increase, decrease or otherwise modify the functions to be performed by the contractor. The contractor is additionally subject to the provisions of the changes clause in Section I.

2.5.1 Process

Accordingly, after a contractor is selected, the FCC, the NANC and/or the INC may establish NANP numbering resource plans, administrative directives, assignment guidelines (including modifications to existing assignment guidelines), and procedures that may have an effect on the functions performed by the contractor.

2.5.2 Changes

The contractor shall review changes when numbering resource plans, administrative directives, assignment guidelines, and procedures are initiated or modified to determine if there is any impact on the functions that they must perform.

2.5.3 Notifications

The contractor shall then, within a period of not more than 30 calendar days from said event (e.g., the date INC places an issue into Final Closure), provide the Contracting Officer, state PUCs, and the NANC with written notice regarding these changes and summarize the potential impact of the changes upon service and cost, if any.

2.5.4 Roles

The NANC shall review the notice and provide a recommendation to the FCC regarding the effect of the contractor’s notice and supporting documentation.

¹ FCC Contract Number CON01000016

© NeuStar, Inc. 2005 NeuStar Proprietary and Confidential - 3 -

Nat’l PAS — Change Order #44 (INC Issue 486) December 7, 2005

The contractor shall comply with state regulatory decisions, rules and orders with respect to pooling, as applicable, as long as they are not in conflict with FCC decisions, orders, and rules and are within state jurisdiction.

This document provides the information required by the contract, such as identifying the new requirements of the expanded scope of work as a result of the Industry Numbering Committee’s (INC) disposition of Issue 486, offering our assumptions and proposed solution, and addressing its cost and risks.

2 Industry Numbering Committee’s Proposed Change

On November 25, 2005, INC placed Issue 486 into Final Closure. As a result of this resolution of INC Issue 486, a remarks field was added to the Part 1A form. Therefore, PAS will need to be updated to reflect the addition of the remarks field.

INC Issue 486 Contaminated or Pristine Assigned Block Returns

Quoted below are the INC official issue statement and final resolution, which can also be found on the ATIS website (http://www.atis.org):

A) Issue Statement

Today, when the PA assigns a thousands-block to a block holder, the PA must complete the ‘Block Contaminated (Yes or No)” field on the Part 3 form. However, when blocks are returned back to the Pool via the Part 1A form, the block holder does not need to indicate if the block is contaminated or not. Therefore, changes should be made to the TBPAG and the Part 1A form, requiring block holders to indicate if the thousands-block being disconnected is contaminated or pristine.

B) Final Resolution

The following underlined text was added to the TBPAG Section 9.1.2:

9.1.2 The Block Holder to which a thousands-block(s) has been assigned from the industry inventory pool shall return the thousands-block(s) via the Part 1A form to the PA if:

a)	it is no longer needed by the entity for the purpose for which it was originally assigned;
b)	the service it was assigned for is disconnected; or

© NeuStar, Inc. 2005 NeuStar Proprietary and Confidential - 4 -

Nat’l PAS — Change Order #44 (INC Issue 486) December 7, 2005

c) the thousands-block(s) was not placed in service within six months of the original block effective date returned on the Part 3 and entered onto the BCR/BCD screen in BIRRDS.

The block holder is required to notate in the Remarks field on the Part 1A form whether the thousands-block is contaminated or pristine.

In addition, a new “Remarks” field is to be added to Part 1A as shown below:

1.5 Type of Request

Initial block for rate center: Yes                    , If Yes attach evidence of authorization and proof
of capability to provide
Service within 60 days

Growth block for rate center: Yes                    , If Yes, attach months to exhaust worksheet

Change block: Yes                    , If Yes, indicate NPA-NXX-X, type of and reason for change:

Disconnect block: Yes                      , If Yes, list NPA-NXX-X                                        

Remarks:

I hereby certify that the above information requesting an NXX-X block is true and accurate to the best of my knowledge and that this application has been prepared in accordance with the Thousands-Block (NXX-X) Pooling Administration Guidelines AT1S-0300066

Signature of Block Applicant Title Date     

© NeuStar, Inc. 2005 NeuStar Proprietary and Confidential - 5 -

Nat’l PAS — Change Order #44 (INC Issue 486) December 7, 2005

3 The Proposal

NeuStar’s National Pooling Administrator has reviewed INC Issue 486 from both the operational and technical perspectives. The proposal set forth below will conform to the changes in the INC guidelines and meet the requirements of the industry in a cost-effective and efficient manner.

Solution

Add a new remarks field to the Part 1A form in PAS to allow the block holder returning the thousands-block to indicate whether the thousands-block is contaminated or pristine.

4 Assumptions and Risks

Part of the PA’s assessment of this change order is to identify the associated assumptions and consider the risks that can have an impact on our operations.

This change order affects only the system, and would have no impact on our day-to-day operations.

5 Cost

As with any change order proposal, we also considered the associated costs that would potentially be incurred in implementing the proposed solution. These costs include the resources required to complete the milestones on a timeline for implementing the processes and system delineated in this change order. The timeline includes preparation, proper documentation updates, development, testing, monitoring, and execution of the solution.

The cost to implement our proposed solution would be $ 4,793.00.

6 Conclusion

In conclusion, the Pooling Administrator offers this viable solution to conform the PAS to INC Issue 486, and, in accordance with contract terms, requests that the FCC review and approve this change order.

© NeuStar, Inc. 2005 NeuStar Proprietary and Confidential - 6 -

National Pooling Administration

Change Order Proposal #47
(INC Issue 516 — “Update the TBPAG Part 4 Form”)

October 10, 2006

NeuStar, Inc.	46000 Center Oak Plaza
	Sterling VA, 20166

Nat’l PAS — Change Order #47 (INC Issue 516) October 10, 2006

Table of Contents

1	Introduction .	3
2	Industry Numbering Committee (INC) Proposed Changes	4
3	The Proposal	6
4	Assumptions and Risks	6
5	Cost	6
6	Conclusion	6

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential - ii -

Nat’l PAS — Change Order #47 (INC Issue 51 6) October 10, 2006

1 Introduction

1.1 Purpose and Scope

In accordance with NeuStar’s National Pooling Administration contract¹ and our constant effort to provide the best support and value to both the FCC and the telecommunications industry, NeuStar, as the National Pooling Administrator (PA), hereby submits this Change Order Proposal to the Federal Communications Commission (FCC) for approval. This change order complies with the contractual requirements set forth in Attachment B, Section C of the Thousands-Block Pooling Contractor Technical Requirements, dated November 30, 2000, Sections 2.5 through 2.5.4, which read as follows:

2.5 Changes in the Environment

The FCC may issue rules, requirements, or policy directives in the future, which may increase, decrease or otherwise modify the functions to be performed by the contractor. The contractor is additionally subject to the provisions of the changes clause in Section I.

2.5.1 Process

Accordingly, after a contractor is selected, the FCC, the NANC and/or the INC may establish NANP numbering resource plans, administrative directives, assignment guidelines (including modifications to existing assignment guidelines), and procedures that may have an effect on the functions performed by the contractor.

2.5.2 Changes

The contractor shall review changes when numbering resource plans, administrative directives, assignment guidelines, and procedures are initiated or modified to determine if there is any impact on the functions that they must perform.

2.5.3 Notifications

The contractor shall then, within a period of not more than 30 calendar days from said event (e.g., the date INC places an issue into Final Closure), provide the Contracting Officer, state PUCs, and the NANC with written notice regarding these changes and summarize the potential impact of the changes upon service and cost, if any.

2.5.4 Roles

The NANC shall review the notice and provide a recommendation to the FCC regarding the effect of the contractor’s notice and supporting documentation.

The contractor shall comply with state regulatory decisions, rules and orders with respect to pooling, as applicable, as long as they are not in conflict with FCC decisions, orders, and rules and are within state jurisdiction.

¹ FCC Contract Number CON01000016

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -3-

Nat’l PAS — Change Order #47 (INC Issue 516) October 10, 2006

This document provides the information required by the contract, such as identifying the new requirements of the expanded scope of work as a result of the Industry Numbering Committee’s (INC) disposition of Issue 516 by offering our proposed solution, and addressing its cost, risks, and assumptions.

2 Industry Numbering Committee (INC) Proposed Changes

On September 22, 2006, INC placed issue 516 into Final Closure. As a result of this resolution of INC Issue 516, the Part 4 Confirmation of NXX-X Block in Service form was updated to add additional fields and correspond to the NANPA Part 4 form. Because of these changes, PAS will need to be updated to reflect the changes of the Part 4 form.

• Issue 516: Update the TBPAG Part 4 Form

The official INC issue statement is stated below and can also be found on the ATIS website (www.atis.org):

A) ISSUE STA TEMENT

The TBPAG Thousands-Block Application Form — Part 4 Confirmation of NXX-X Block In Service dated 8/6/01 currently does not have the Company Name or OCN fields on the form. Based on feedback the PA received from a state regulator it would be of value to the regulators if the TBPAG Part 4 form was updated to include those fields.

Also, to be consistent with the COCAG Part 4 forms, additional updates should be made to the TBPAG Part 4 form as well.

B) FOLLOWING RESOLUTION FROM INC

The following text changes were made to the TBPAG Thousands-Block Application Form Part 4:

Thousands-Block Number Pooling Administration Guidelines (TBPAG) Thousands-Block
(NXX-X) .Confirmation Form
Part 4

Confirmation of NXX-X Block In Service (Required)

By signing below, I certify that the block (NXX-X) specified in Section 1 below is, activated and assignment of the numbers has commenced and is being used for the purpose specified in the original application.²

² FCC 00-104§ 237.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -4-

Nat’l PAS — Change Order #47 (INC Issue 516) October 10, 2006

Company Name:

OCN:

Print Name of Authorized Representative of Company/Entity	Signature
Company Name:
Telephone Number:
Email:
Fax Number:
	Date
1. NPA-NXX-X block:	Rate Center:
2. Switch Identification (SwitchingEntity /POI) 3:
3. Original Effective Date:
4. In Service Date4:

Note: State commissions may request proof from all block holders that an NXX-X block, has been activated and assignment of the numbers has commenced.⁵

3	This is an 11-character descriptor of the switch provided by the owning entity for the purpose of routing calls. It is the 11-character COMMON LANGUAGE Location Identification (CLLI™) of the switch/POI shown on the Part 1A form.
4	A code or block for which local routing information has been input to the LERG Routing Guide and the carrier has begun to activate and assign numbers within the NXX code or NXX-X block to end users (FCC 00-104,¶240). This form must be submitted to the PA within six months of the original effective date returned on the Part 3, and entered on the BCR/BCD screen in BIRRDS or reclamation procedures will commence.
5	FCC 00-104¶237.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -5-

Nat’l PAS — Change Order #47 (INC Issue 516) October 10, 2006

3 The Proposal

NeuStar’s National Pooling Administrator has reviewed INC issue 516 from both the operational and technical perspectives. The proposal set forth below will conform to the changes in the INC guidelines while meeting the requirements of the industry in a cost-effective and efficient manner.

Solution

In order to address the changes in the TBPAG, the PA will modify the current Part 4 Confirmation of NXX-X Block in Service form in PAS, to include the following new fields: company name, OCN, telephone number, email address, fax number, rate center, and original effective date. The system will be modified to enable the telephone number, email address, and fax number to be pre-populated from the PAS user’s profile. The company name, OCN, and rate center will be pre-populated based on the current thousand block assignment information in PAS. In addition, the form content will be updated to reflect the additional changes from INC.

4 Assumptions and Risks

Part of the PA’s assessment of this change order is to identify the associated assumptions and consider the risks that can have an impact on our operations.

This change order affects only the system, and would have no impact on our day-to-day operations.

5 Cost

As with any change order proposal, we also considered the associated costs that would potentially be incurred in implementing the proposed solution. These costs include the resources required to complete the milestones on a timeline for implementing the processes and system delineated in this change order. The timeline includes preparation, proper documentation updates, development, testing, monitoring, and execution of the solution.

The cost to implement our proposed solution would be $5296.00.

6 Conclusion

In conclusion, the Pooling Administrator offers a viable solution that meets the needs of INC issue 516, and, in accordance with our contract terms, we request that the FCC review and approve this change order proposal.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -6-

National Pooling Administration

Change Order Proposal #49

(Issue 523: Pooled Blocks Pending Verification of LERG Assignee Responsibilities)

December 15, 2006

NeuStar, Inc.	46000 Center Oak Plaza
	Sterling VA, 20166

Nat’l PAS — Change Order #49 (INC Issue 523) December 15, 2006

Table of Contents

1	Introduction	3
2	Industry Numbering Committee (INC) Proposed Changes	4
3	The Proposal	5
4	Assumptions and Risks	6
5	Cost	6
6	Conclusion	6

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -ii-

Nat’l PAS—Change Order #49 (INC Issue 523) December 15,2006

1 Introduction

1.1 Purpose and Scope

In accordance with NeuStar’s National Pooling Administration contract¹ and our constant effort to provide the best support and value to both the FCC and the telecommunications industry, NeuStar, as the National Pooling Administrator (PA), hereby submits this Change Order Proposal to the Federal Communications Commission (FCC) for approval. This change order complies with the contractual requirements set forth in Attachment B, Section C of the Thousands-Block Pooling Contractor Technical Requirements, dated November 30, 2000, Sections 2.5 through 2.5.4, which read as follows:

2.5 Changes in the Environment

The FCC may issue rules, requirements, or policy directives in the future, which may increase, decrease or otherwise modify the functions to be performed by the contractor. The contractor is additionally subject to the provisions of the changes clause in Section I.

2.5.1 Process

Accordingly, after a contractor is selected, the FCC, the NANC and/or the INC may establish NANP numbering resource plans, administrative directives, assignment guidelines (including modifications to existing assignment guidelines), and procedures that may have an effect on the functions performed by the contractor.

2.5.2 Changes

The contractor shall review changes when numbering resource plans, administrative directives, assignment guidelines, and procedures are initiated or modified to determine if there is any impact on the functions that they must perform.

2.5.3 Notifications

The contractor shall then, within a period of not more than 30 calendar days from said event (e.g., the date INC places an issue into Final Closure), provide the Contracting Officer, state PUCs, and the NANC with written notice regarding these changes and summarize the potential impact of the changes upon service and cost, if any.

2.5.4 Roles

The NANC shall review the notice and provide a recommendation to the FCC regarding the effect of the contractor’s notice and supporting documentation.

The contractor shall comply with state regulatory decisions, rules and orders with respect to pooling, as applicable, as long as they are not in conflict with FCC decisions, orders, and rules and are within state jurisdiction.

¹ FCC Contract Number CON01000016

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential - 3 -

Nat’l PAS — Change Order #49 (INC Issue 523) December 15, 2006

This document provides the information required by the contract, such as identifying the new requirements of the expanded scope of work as a result of the Industry Numbering Committee’s (INC) disposition of Issue 523 by offering our proposed solution, and addressing its cost, risks, and assumptions.

2  Industry Numbering Committee (INC) Proposed Changes

On November 17, 2006, INC placed issue 523 into Final Closure. As a result of this resolution of INC Issue 523, PAS will no longer accept a Part 4 for a block that is assigned to the LERG Assignee from an NXX where the LERG Assignee has not confirmed to the PA that the NXX has been activated in the PSTN, loaded in the NPAC, and all other LERG Assignee responsibilities have been fulfilled.

Issue 523: Pooled Blocks Pending Verification of LERG Assignee Responsibilities

The official INC issue statement is stated below and can also be found on the ATIS website (www.atis.org):

A) ISSUE STATEMENT

Today, there are pending “RED” blocks in PAS from pooled codes for which the PA has not received the email verification from the LERG assignee that the LERG assignee has activated the code in the PSTN, loaded it in the NPAC, and has fulfilled all other LERG assignee responsibilities. However, in some cases, Part 4 form(s) have been submitted for the blocks.

The LERG Assignee continues to receive the PSTN email notifications and the status of the blocks in PAS remain pending even though there are Part 4 form(s) on file.

Text need to be added to section 7.5.4 of the TBPAG to state that PAS will not accept a Part 4 form until the PA has received the email response from the LERG Assignee

B) FOLLOWING RESOLUTION FROM INC

The following modifications were made to Section 7.5.4 of the TBPAG:

7.5.4 PA and LERG Assignee Tasks

• On the original Part 3 NXX effective date, PAS will automatically generate an e-mail to the LERG Assignee asking that the LERG Assignee verify that the pooled NXX has been activated in the PSTN. This means the LERG Assignee confirms that facilities and translations are in place and a call through test² was successfully performed. The LERG Assignee is required to send an e-mail response to the PA within five (5) business days indicating the status of the NXX.

• If the LERG Assignee confirms the NXX has been activated in the PSTN, loaded in the NPAC, and all other LERG Assignee responsibilities have been fulfilled, the PA shall, within 2 business days, change the status of the blocks in PAS to ‘available for assignment’ to any SP.

² See ATIS-0300032, Network Interconnection Interoperability Forum Reference Document, Part 10

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential - 4 -

Nat’l PAS — Change Order #49 (INC Issue 523) December 15, 2006

•	If the LERG Assignee fails to respond, or tells the PA that the NXX has not been activated in the PSTN, the status of the blocks in PAS remains unchanged. PAS will continue to generate an e-mail message to the LERG Assignee requesting status of the NXX. This e-mail will be sent every 10th calendar day until the LERG Assignee responds to the PA with a confirmation that the NXX has been activated in the PSTN, loaded in the NPAC, and all other LERG Assignee responsibilities have been fulfilled or until the code is reclaimed by the CO Code Administrator.
	PAS will not accept a Part 4 form for a block assigned to the LERG Assignee from an NXX for which the LERG Assignee has not confirmed to the PA that the NXX has been activated in the PSTN, loaded in the NPA, and all other LERG Assignee responsibilities have been fulfilled. Once the LERG Assignee confirms that the NXX has been activated in the PSTN, loaded in the NPAC, and all other LERG Assignee responsibilities have been fulfilled, the PA shall, within 2 business days, change the status of the NXX in PAS and then the LERG Assignee will be able to successfully submit a Part 4 form into PAS.
	PAS will accept a Part 4 form for a block assigned to a block holder that is not the LERG Assignee on or after the LERG Effective Date of the block. However, the PA will not change the status of any remaining blocks in PAS to ‘available for assignment’ until the PA receives the confirmation e-mail from the LERG Assignee that the NXX has been activated in the PSTN, loaded in the NPAC, and all other LERG Assignee responsibilities have been fulfilled.

3 The Proposal

NeuStar’s National Pooling Administrator has reviewed INC issue 523 from both the operational and technical perspectives. The proposal set forth below will conform to the changes in the INC guidelines while meeting the requirements of the industry in a cost-effective and efficient manner.

Currently, when new codes are opened for pooling for LRN purposes or pool replenishment purposes, the LERG assignee is supposed to notify the PA via email once the NXX has been activated in the PSTN and loaded in the NPAC. Upon this notification, the PA updates the code activation indicator in PAS from “no” to “yes.” However, LERG assignees sometimes submit a Part 4 withouth having sent the notification. Other service providers that are assigned blocks from such a code may not be able to activate them. Therefore the TBPAG was revised as a result of INC issue 523 to require that the LERG assignee notify the PA of the code activation status prior to submitting the Part 4.

Solution

In order to satisfy the requirements of INC issue 523, PAS will be modified to either accept or reject the Part 4 from the LERG assignee based on the code activation indicator in PAS. If the code activation indicator in PAS is marked as “yes” and all other Part 4 criteria have been met, then PAS will accept the Part 4 from the LERG assignee. If the code activation indicator in PAS is marked as “no”, PAS will reject the Part 4 from the LERG assignee and provide a rejection message to the user:

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential - 5 -

Nat’l PAS — Change Order #49 (INC Issue 523) December 15, 2006

In addition, additional language will be added to the PSTN Reminder email notifying the LERG Assignee of the possible rejection of any Part 4 submissions for blocks associated with codes not activated in the PSTN.

Even though the code activation indicator in PAS is “no,” as long as all other Part 4 criteria have been met, the Part 4 will continue to be accepted from a block holder who is not also the LERG assignee.

4 Assumptions and Risks

Part of the PA’s assessment of this change order is to identify the associated assumptions and consider the risks that can have an impact on our operations.

This change order affects only the system, and would have no impact on our day-to-day operations.

5 Cost

As with any change order proposal, we also considered the associated costs that would potentially be incurred in implementing the proposed solution. These costs include the resources required to complete the milestones on a timeline for implementing the processes and system delineated in this change order. The timeline includes preparation, proper documentation updates, development, testing, monitoring, and execution of the solution.

The cost to implement our proposed solution would be $2381.00

6 Conclusion

In conclusion, the Pooling Administrator offers a viable solution that meets the needs of INC issue 523 and is in accordance with our contract terms. Therefore, we request that the FCC review and approve this change order.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential - 6 -

National Pooling Administration

Change Order Proposal #50

(Issue 527: Blocks with Effective Dates earlier than the NXX

activation date of associated LRN)

December 15, 2006

NeuStar, Inc.	46000 Center Oak Plaza
	Sterling VA, 20166

Nat’l PAS — Change Order #50 (INC Issue 527)

December 15, 2006

Table of Contents

1	Introduction	3
2	Industry Numbering Committee (INC) Proposed Changes	4
3	The Proposal	4
4	Assumptions and Risks	5
5	Cost	5
6	Conclusion	5

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential -ii-

Nat’l PAS — Change Order #50 (INC Issue 527)

December 15, 2006

1 Introduction

1.1 Purpose and Scope

In accordance with NeuStar’s National Pooling Administration contract¹ and our constant effort to provide the best support and value to both the FCC and the telecommunications industry, NeuStar, as the National Pooling Administrator (PA), hereby submits this Change Order Proposal to the Federal Communications Commission (FCC) for approval. This change order complies with the contractual requirements set forth in Attachment B, Section C of the Thousands-Block Pooling Contractor Technical Requirements, dated November 30, 2000, Sections 2.5 through 2.5.4, which read as follows:

2.5 Changes in the Environment

The FCC may issue rules, requirements, or policy directives in the future, which may increase, decrease or otherwise modify the functions to be performed by the contractor. The contractor is additionally subject to the provisions of the changes clause in Section I.

2.5.1 Process

Accordingly, after a contractor is selected, the FCC, the NANC and/or the INC may establish NANP numbering resource plans, administrative directives, assignment guidelines (including modifications to existing assignment guidelines), and procedures that may have an effect on the functions performed by the contractor.

2.5.2 Changes

The contractor shall review changes when numbering resource plans, administrative directives, assignment guidelines, and procedures are initiated or modified to determine if there is any impact on the functions that they must perform.

2.5.3 Notifications

The contractor shall then, within a period of not more than 30 calendar days from said event (e.g., the date INC places an issue into Final Closure), provide the Contracting Officer, state PUCs, and the NANC with written notice regarding these changes and summarize the potential impact of the changes upon service and cost, if any.

2.5.4 Roles

The NANC shall review the notice and provide a recommendation to the FCC regarding the effect of the contractor’s notice and supporting documentation.

The contractor shall comply with state regulatory decisions, rules and orders with respect to pooling, as applicable, as long as they are not in conflict with FCC decisions, orders, and rules and are within state jurisdiction.

¹ FCC Contract Number CON01000016

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential - 3 -

Nat’l PAS — Change Order #50 (INC Issue 527)

December 15, 2006

This document provides the information required by the contract, such as identifying the new requirements of the expanded scope of work as a result of the Industry Numbering Committee’s (IN’s) disposition of Issue 527 by offering our proposed solution, and addressing its cost, risks, and assumptions.

2 Industry Numbering Committee (INC) Proposed Changes

On November 17, 2006, INC placed issue 527 into Final Closure. As a result of this resolution of INC Issue 527, a footnote was added to the Part 1A form to remind service providers that the effective date of a block should not precede the activation date of the NXX related to the LRN provided for the newly assigned block.

Issue 527: Blocks with Effective Dates earlier than the NXX activation date of associated LRN

The official INC issue statement is quoted below and can also be found on the ATIS website (www.atis.org):

A) ISSUE STATEMENT

The NANC LNPA WG provided a correspondence GS-536 noting that there were cases where SPs were requesting and getting block effective dates that were earlier than the activation date of the NXX related to the LRN provided for the newly assigned block. This results in the network not being able route to the newly assigned block on the effective date.

B) FOLLOWING RESOLUTION FROM INC

The following footnote viii was added to the Part 1A Form Section 1.3 of the TBPAG:

1.3 Dates

Date of Applicationⁱ:                    Requested Block Effective Date^viii                     Request Expedited Treatment? (See Section 8.6) Yes                     No                    

^viiiPlease ensure that the NPA-NXX of the LRN to be associated with this block(s) is/will be active in the PSTN prior to the effective date of the block(s):

3 The Proposal

NeuStar’s National Pooling Administrator has reviewed INC issue 527 from both the operational and technical perspectives. The proposal set forth below will conform to the changes in the INC guidelines while meeting the requirements of the industry in a cost-effective and efficient manner.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential - 4 -

Nat’l PAS — Change Order #50 (INC Issue 527)

December 15, 2006

Solution

To satisfy the requirements of the amended Thousands-Block Pooling Administration Guidelines, the Part 1A form will be modified in PAS to include a footnote associated with the requested block effective date. The footnote will read “Please ensure that the NPA-NXX of the LRN to be associated with this block(s) is/will be active in the PSTN prior to the effective date of the block(s).” In addition, the date on the Part 1A form will be modified in PAS to reflect the new date of the form.

4 Assumptions and Risks

Part of the PA’s assessment of this change order is to identify the associated assumptions and consider the risks that can have an impact on our operations.

This change order affects only the system, and would have no impact on our day-to-day operations.

5 Cost

As with any change order proposal, we also considered the associated costs that would potentially be incurred in implementing the proposed solution. These costs include the resources required to complete the milestones on a timeline for implementing the processes and system delineated in this change order. The timeline includes preparation, proper documentation updates, development, testing, monitoring, and execution of the solution.

The cost to implement our proposed solution would be $2381.00

6 Conclusion

In conclusion, the Pooling Administrator offers a viable solution that meets the needs of INC issue 527 and is in accordance with our contract terms. Therefore, we request that the FCC, review and approve this change order.

© NeuStar, Inc. 2006 NeuStar Proprietary and Confidential - 5 -

EX-10.4.1

Exhibit 10.4.1

NANP Administration Services

Scope of Work Change Proposal # 6

INC Issue 517 — Denying NXX Assignment to a Service
Provider that has opted into Pooling

July 7, 2006

NeuStar, Inc.	46000 Center Oak Plaza
	Sterling, VA 20166

NANPA — Scope of Work Change #6 Proposal — INC Issue 517

Table of Contents

1 Introduction	1
1.1 Purpose and Scope	1
1.2 Modification of Guidelines	1
2 Proposed Industry Numbering Committee (INC) Scope of Work Change	2
3 NeuStar’s Proposed Solution	3
4 Assumptions and Risks	4
5 Cost Assumptions and Summary	5
6 Conclusion	5

© NeuStar, Inc. 2006 iii

NANPA — Scope of Work Change #6 Proposal — INC Issue 517

1    Introduction

1.1    Purpose and Scope

In accordance with NeuStar’s contract¹ and our constant effort to provide the best support and value to both the Federal Communications Commission (FCC) and the telecommunications industry, NeuStar, as the North American Numbering Plan Administrator (NANPA), hereby submits this scope of work change to the FCC for approval. This scope of work change is in compliance with NANPA’s Change Management protocol and most importantly per requirements as outlined in NANP Administrator Solicitation SOL03000001, Section H.9, Item 5, which states the following:

“If and when a change to the NANPA system is adopted by the NANC or the INC, the contractor’s liaison shall ensure that the proposed change is forwarded to the Contracting Officer and the Contracting Officer’s Technical Representative (COTR). No change shall be binding until such modification is issued, nor shall the Government be liable for any costs associated with a system change until such modification is issued.”

1.2 Modification of Guidelines

Pursuant to NeuStar’s contact, the NANPA shall participate in the development and modification of guidelines and procedures, which may affect the performance of the NANPA functions. These changes may be derived from regulatory directives and/or modifications to guidelines. In addition, new guidelines may be developed as appropriate to comply with regulatory directives. The NANPA shall adopt and implement any changes that are consistent with regulatory directives after they are officially adopted, recognizing that some may constitute a change in the scope of work.

When the Industry Numbering Committee (INC) places any changes to its guidelines in initial closure, the NANPA shall submit an assessment regarding the impact of scope of work, time and costs to the INC, the North American Numbering Council (NANC) and the FCC within 30 days.²

This document provides detailed information pertaining to the INC’s requirement submitted on June 8, 2006. This change order document covers the required subject matters such as explaining the industry’s requirements, proposed solution, costs and risk and assumptions.

1	Contract Number CON03000016 and the NANPA Technical Requirements Document, March 2003.
2	NANPA Technical Requirements Document, March 2003, Section 2.10, Modification of Guidelines.

© NeuStar, Inc. 2006 1

NANPA — Scope of Work Change #6 Proposal — INC Issue 517

2 Proposed Industry Numbering Committee (INC) Scope of Work Change

During the June 6-8, 2006 INC meeting, INC Issue 517 was accepted. It was resolved and went to Initial Closure on June 8, 2006. This issue affects both the NANP Administration System (NAS) and NANPA operations.

• Issue 517: Denying NXX assignment to SP that has OPTED into Pooling

The official INC issue statement is stated below and can also be found on the ATIS website:

A) ISSUE STATEMENT

NANPA has no way of knowing whether an SP has opted into pooling in a specific rate center, so it is possible for that SP to request CO code resources in a rate center in which they have already opted into participation in pooling.

B) FOLLOWING RESOLUTION FROM INC

The following changes were made to the COCAG and the TBPAG to resolve this issue:

A new section 3.10 was created:

3.10     If an SP has chosen to participate in thousands-block number pooling in a voluntary rate center outside of the top 100 MSAs, the SP cannot withdraw from pooling in a voluntary rate center once the SP has submitted a forecast, a donation, or has been assigned a thousands-block. Once an SP chooses to participate in thousands-block number pooling in a voluntary rate center, all numbering requests must be submitted directly to the PA.

4.1.1 The applicant must certify a need for NANP numbers, e.g., provision of wireline or wireless service in the Public Switched Telephone Network.

In order to obtain CO codes, an applicant must submit or have submitted a North American Numbering Plan Numbering Resource Utilization/Forecast (NRUF) Report (See NRUF Reporting Guidelines) to the NANPA for the NPA(s) in which the CO code(s) is being requested.³ This requirement shall not apply in instances where an NPA has been implemented since the last NRUF Report and the Service Provider has submitted a NRUF Report for the NPA(s) previously serving the geographic areas involved.

The applicant must submit an NXX request form certifying that a need exists for an NXX assignment to a point of interconnection or a switching entity due to routing, billing, regulatory, or tariff requirements. The NXX request form must provide an Operating Company Number

³ FCC 00-104, § 52.15 (f) (4) (5).

© NeuStar, Inc. 2006 2

NANPA — Scope of Work Change #6 Proposal — INC Issue 517

(OCN), which uniquely identifies the applicant. The NANPA will not issue numbering resources to a carrier without an OCN.⁴ The OCN cannot be shared with another service provider.

If NANPA determines from the report provided by the PA that an applicant is participating in pooling in that rate center, NANPA will deny the application. Once an applicant chooses to participate in thousands-block number pooling in a voluntary rate center, all numbering requests must be submitted directly to the PA.

5.2 Receive and process applications (CO Code (NXX) Assignment Request Form Part 1) for CO codes (NXX) within the geographic NPA(s) for which the CO Code Administrator is responsible.

For rate centers transitioning to pooling:

• The CO Code Administrator will only process NXX requests received at least 33 calendar days prior to the Pool Start Date.

• Within the 33 calendar days prior to Pool Start Date, applications for codes/blocks will not be accepted. However within this 33-day interval, the NANPA will continue to process code applications for:

• CO codes awarded via lottery;

• LRN requests;

• full CO code request for a single customer;

• CO code expedite requests;

• petition/safety valve requests;

• any requests from non-pooling capable carriers; and

• PA requests to the NANPA.

After Pool Start Date, all pooling-capable carriers will apply to the PA for numbering resources.

Once an SP chooses to participate in thousands-block number pooling in a voluntary rate center, all numbering requests must be submitted directly to the PA. NANPA will not assign a CO code (NXX) to an SP for a voluntary pooled rate center in which that SP has either submitted a forecast to the PA, submitted a donation to the PA, or has been assigned a thousands-block in that rate center.

3 NeuStar’s Proposed Solution

In order to implement INC Issue 517 for the central office code application processing, NANPA proposes modifying the NANP Administration System. We believe that our proposed solution set forth below will enable us to properly assign and deny resources in accordance with the INC Issue 517 in the most efficient and effective manner possible.

⁴ FCC 01-362, § 52.15 (g)(4).

© NeuStar, Inc. 2006 3

NANPA — Scope of Work Change #6 Proposal — INC Issue 517

Solution:

On a daily basis, the National Pooling Administrator (PA) will provide NANPA a file containing the following information: NPA, rate
center(s) where pooling is voluntary (also known as optional), and the Operating Company Number(s) (OCN) of those service providers that are participating in pooling in the identified voluntary rate center(s). This information will be loaded into NAS.

When the applicant begins the application process and enters the NPA, rate center, OCN and application type (i.e., initial or growth code), NAS will perform a validation check using the information provided by the PA to determine if the submitting service provider is participating in pooling in the identified rate center. If the service provider is participating in pooling in the identified rate center, NAS will respond with a validation error, informing the applicant that it must submit its application for resources to the PA. NAS will not permit the applicant to proceed any further in the application process. If the service provider is not participating in pooling according to the PA information, then the application will be accepted and processed.

If the service provider initiates participation in a voluntary pooling rate center (e.g., submits a thousand block forecast to the PA) on the same day it submits an application for an initial/growth code directly into NAS, the application would normally be accepted by the system because NANPA only receives a daily file from the PA. To account for this situation, NAS will perform a scan of all pending initial/growth code applications (ones in which the pooling pass-thru box is not checked) at the time the updated PA file is loaded into the system. Any pending application matching the information in the PA file will be highlighted in the system and denied by the Code Administrator.

4 Assumptions and Risks

Part of the NANPA’s assessment of this change order is to identify the associated assumptions and consider the risks that can have an impact on our operations.

Assumptions:

1.	NANPA assumes that the PA will provide the required information on a daily basis. If there are any problems or issues that result in updated information not being available, NAS will use the most recent PA information made available to NANPA.
2.	NANPA assumes when carriers call to request information relating to a service provider’s participation in pooling, NANPA will only be required to explain this new central office code assignment process. Questions concerning the PA information must be directed to the PA.
3.	NANPA assumes the information provided to it by the PA is true and accurate.

If the process expands beyond these assumptions, the NANPA reserves the option of filing a revised change order proposal to address the additional expansion.

© NeuStar, Inc. 2006 4

NANPA — Scope of Work Change #6 Proposal — INC Issue 517

Risks

This process relies on the PA for the data identifying the NPAs, voluntary pooling rate centers and participating service providers (as identified via an OCN). The accuracy of NAS validations on initial and growth code applications is only as reliable as the information provided by the PA. In addition, daily update of this data is critical for NAS to properly accept/denied central office code assignment requests.

Impact on Operations

The proposed solution impacts NAS by requiring the system to perform additional functions not identified in the contract. Specifically, these functions include:

1.	Accessing the daily PA file containing the NPAs, voluntary pooling rate centers and the participating service providers (OCNs);
2.	Updating the NAS database with the PA information;
3.	Checking central office assignment applications against the PA information;
4.	Returning a validation error for those initial/growth central office code applications in which the NPA, rate center and OCN correspond with information provided by the PA;
5.	Scanning pending assignment requests to identify applications in which the NPA, rate center and OCN matches the data provided by the PA; and,
6.	Addressing additional calls and emails that result from the implementation of the new validation.

5 Cost Assumptions and Summary

The proposed solution for implementation of the INC Issue 517 requires changes in NAS in order for the system to identify and reject applications for initial/growth codes from service providers that participate in pooling in voluntary pooling rate centers. NANPA has determined that the cost associated with implementing this change in NAS is $16,096.96.

6 Conclusion

NeuStar, as the NANPA, hereby seek the FCC’s approval for this Scope of Work Change in order for proper communication protocols to be executed by which the industry can be made aware that NANPA is accommodating this Scope of Work change order.

© NeuStar, Inc. 2006 5

NANP Administration Services

Scope of Work Change Proposal # 7

INC Issue 454 — Criteria Service Providers Must Meet to
Obtain Growth 900 NXX

September 25, 2006

NeuStar, Inc.	46000 Center Oak Plaza
	Sterling, VA 20166

NANPA — Scope of Work Change #7 Proposal — INC Issue 454

Table of Contents

1 Introduction	1
1.1 Purpose and Scope	1
1.2 Modification of Guidelines	1
2 Proposed Industry Numbering Committee (INC) Scope of Work Change	2
3 NeuStar’s Proposed Solution	2
4 Assumptions and Risks	3
5 Cost Assumptions and Summary	3
6 Conclusion	3

© NeuStar, Inc. 2006 iii

NANPA — Scope of Work Change #7 Proposal — INC Issue 454

1 Introduction

1.1 Purpose and Scope

In accordance with NeuStar’s contract¹ and our constant effort to provide the best support and value to both the Federal Communications Commission (FCC) and the telecommunications industry, NeuStar, as the North American Numbering Plan Administrator (NANPA), hereby submits this scope of work change to the FCC for approval. This scope of work change is in compliance with NANPA’s Change Management protocol and requirements as outlined in NANP Administrator Solicitation SOL03000001, Section H.9, Item 5, which states the following:

“If and when a change to the NANPA system is adopted by the NANC or the INC, the contractor’s liaison shall ensure that the proposed change is forwarded to the Contracting Officer and the Contracting Officer’s Technical Representative (COTR). No change shall be binding until such modification is issued, nor shall the Government be liable for any costs associated with a system change until such modification is issued.”

1.2 Modification of Guidelines

Pursuant to NeuStar’s contact, the NANPA shall participate in the development and modification of guidelines and procedures, which may affect the performance of the NANPA functions. These changes may be derived from regulatory directives and/or modifications to guidelines. In addition, new guidelines may be developed as appropriate to comply with regulatory directives. The NANPA shall adopt and implement any changes that are consistent with regulatory directives after they are officially adopted, recognizing that some may constitute a change in the scope of work.

When the Industry Numbering Committee (INC) places any changes to its guidelines in initial closure, the NANPA shall submit an assessment regarding the impact of scope of work, time and costs to the INC, the North American Numbering Council (NANC) and the FCC within 30 days.²

This document provides detailed information pertaining to the INC’s requirement which was moved into initial closure on August 31,2006. This change order document explains the industry’s requirements, describes NANPA’s proposed solution and related assumptions, risks and costs.

1	Contract Number CON03000016 and the NANPA Technical Requirements Document, March 2003.
2	NANPA Technical Requirements Document, March 2003, Section 2.10, Modification of Guidelines.

© Neu Star, Inc. 2006 1

NANPA — Scope of Work Change #7 Proposal — INC Issue 454

2 Proposed Industry Numbering Committee (INC) Scope of Work Change

During the August 22-24, 2006 INC meeting, INC Issue 454 was resolved and went to Initial Closure on August 31, 2006. This issue affects both the NANP Administration System (NAS) and NANPA operations.

• Issue 454: Criteria Service Providers (SP) Must Meet to Obtain Growth 900 NXX

The official INC issue statement is stated below and can also be found on the ATIS website:

A) ISSUE STATEMENT

The 900 NXX Assignment Guidelines do not provide adequate criteria an SP must meet in order to obtain a growth NXX.

B) FOLLOWING RESOLUTION FROM INC

The 900 NXX Assignment Guidelines, as well as the 900 NXX Forms (Parts A, B, and C) were amended to clarify the process and requirements for applying for and obtaining additional 900 NXX assignments. The modified 900 NXX Forms are attached.

3 NeuStar’s Proposed Solution

In order to implement INC Issue 454 for the 900 NXX Code application processing, NANPA proposes modifying the NANP Administration System to accommodate the changes the INC made to the 900 NXX Part A — Assignment Request/Return Notification/Information Change; the 900 NXX Part B — 900 NXX Code Disposition Form; and the 900 NXX Part C —Certification of 900 NXX Code In Service Form.

Solution:

NANPA will incorporate the text changes the INC made to the 900 NXX Forms (Part A, B, and C) into the NAS. The changes direct that an initial request shall be limited to no more than 5 NXX codes, and no more than 5 NXX codes can be requested at any one time. In order for an applicant to request additional codes, the applicant must first certify that all previously assigned codes are in service and the code holder has submitted its Part C “Confirmation of 900 NXX Code in Service” to the NANPA. The applicant also must certify the need for the additional codes requested and advise of plans to activate new services requiring individual codes within six months of the date of the request on the Part A form.

The proposed changes to the 900 NXX Assignment forms result in text changes to the Part A, B and C forms in NAS. However, there are no new data fields on the forms that require changes to the NAS database.

©NeuStar, Inc. 2006 2

NANPA — Scope of Work Change #7 Proposal — INC Issue 454

4 Assumptions and Risks

Part of the NANPA’s assessment of this change order is to identify the associated assumption and consider the risks that can have an impact on its operations.

Assumptions:

• NANPA assumes the information provided to it by the applicant is true and accurate.

• If the process expands beyond these assumptions, the NANPA reserves the option of filing a revised change order proposal to address the additional expansion.

Risks:

• Multiple text changes to the 900 NXX Parts A, B and C forms will need to be reviewed to ensure NAS forms duplicate the changes made by the industry.

Impact on Operations:

The proposed solution impacts NAS by requiring text changes to the three 900 NXX Assignment forms. In addition, the process relies on the NANPA to convey these changes to 900 NXX applicants.

5 Cost Assumptions and Summary

The proposed solution for implementation of the INC Issue 454 requires changes in NAS in order for the system to match the text changes the INC has made to the 900 NXX Assignment Forms. NANPA has determined that the cost associated with implementing this change in NAS is $1,768.19.

6 Conclusion

NeuStar, as the NANPA, hereby seeks the FCC’s approval for this Scope of Work Change in order for proper communication protocols to be executed by which the industry can be made aware that NANPA is accommodating this Scope of Work change order.

© NeuStar, Inc. 2006 3

NANPA — Scooe of Work Change #7 Proposal — INC Issue 454

3.1 900 NXX CODE FORMS

3.1.1 PART A

     ASSIGNMENT REQUEST/RETURN NOTIFICATION/INFORMATION CHANGE

The applicant and the code administrator acknowledge that the information other than identifying the applicant and any code assigned to that applicant, contained on this request form is sensitive and will be treated as confidential. The information in this form shall be treated as proprietary and will only be shared with 900 NXX code administrator personnel and/or regulators.

1.	Name of entity requesting code assignment/return notification/information change:
2.	Applicant Contact Information:

Name:
Street Address:	Room:
City, State/Province,
Country
Zip/Postal Code

Phone No.:                      Email:                      FAX No.:                     
Company Name:                                                            
Operating Company Number (OCN):¹                     
Access Customer Name Abbreviation (ACNA):                     
Carrier Identification Code (CIC):                     

¹ Required per FCC 00-429 Section 52.15 (g) (3) (iv).

© NeuStar, Inc. 2006 4

NANPA — Scope of Work Change #7 Proposal — INC Issue 454

3.	900 NXX Code Request
3a.	Is certification or authorization required to provide 900 NXX service in the intended service area?

Yes                            No                     

If yes, does your company have such certification or authorization?

Yes                            No                     

If yes, indicate type and date of certification (e.g., letter of authorization, license, Certification of Public Convenience, etc.):

If no or pending, explain:

3b.	Type of Request (check one)
	900 NXX Code request (also complete Sections 3c and 3d)
	900 NXX Code return (also complete Section 3e)
	900 NXX Code information change (also complete Section 3f)
3c.	900 NXX Code Request Information (see Section 5 of the Guidelines)

There will be no maximum placed on the total number of codes assigned to each carrier. No more then five NXX codes shall be requested per application form. No more than five NXX codes can be requested at any one time.

An initial request shall be limited to five NXX codes.

To request additional codes, the applicant will be required to; (Issue 454)

1. Certify that all previously assigned codes are in service and the code holder has submitted its Part C, “Confirmation of 900 NXX Code in service Form.” to the NANPA. (Issue 454)

2. Certify the need for the additional codes requested and advise of plans to activate new services requiring individual codes within six months of the date of the reuest on the Part A form (Issue 454)

Assignment Preferences	In Service Date
(1)
(2)
(3)

© NeuStar, Inc. 2006 5

NANPA — Scope of Work Change #7 Proposal — INC Issue 454

(4)

(5)

Expected in service date(s) (must be within 6 months of assignment) (issue 454)

3d. Current 900 NXX Code Assignments

List current 900 NXX Code(s) already assigned:

Have all the above 900 NXXs been placed in service, and has a Part C, “Confirmation of 900 NXX Code In Service Form,” been submitted for each 900 NXX Code? (Issue 454)

Yes                            No                     

If no, please list the 900 NXXs not placed in service and the reasons why.(Issue 454)

3e. Code Return Notification

The following 900 NXX code(s) are being returned to the list of available NXX codes:

Effective date:                                         

3f. Code Information Change

900 NXX Codes affected:

Reasons for change:

           Merger/Acquisition

           Company Name Change

           Contact Information Change

           Other

Explanation:                                                             

Effective date:                                                            

© NeuStar, Inc. 2006 6

     NANPA — Scope of Work Change #7 Proposal — INC Issue 454

These NXX code(s) were formerly administered by:

     Company Name:                                                             

     Contact Name:                                        

     Street Address:                                          Room:                     

     City, State/Province,                                                             

           Country:                                                            

     Zip/Postal Code:                                         

     Phone:                                          Email:                                          

     FAX:                                        

     OCN:                         ACNA:                         CIC:                     

(Issue 454) I hereby certify that the above information is true and accurate to the best of my knowledge, that the assigned 900 NXX code (s) will be used in the provisioning of 900 service as a public telecommunications service, and that this application has been prepared in accordance with the “900 NXX Code Assignment Guidelines.” (Issue 454)

Signature of Authorized Representative of Code Applicant/Holder

Name/Title

Date

3.2 900 NXX FORMS

3.2.1 PARTS

900 NXX CODE APPLICATION DISPOSITION FORM

Applicant Information

     Name:                                                             

     Street Address:                                          Room:                    

     City, State/Province:                                         

     Country:                                        

     Zip/Postal Code :                                        

     Phone No.:                      Email:                     

     FAX No.:                                        

     Company Name:                                                                                  

     Operating Company Number (OCN):                    

     Access Customer Name Abbreviation (ACNA):                    

     Carrier Identification Code (CIC):                    

© NeuStar, Inc. 2006 7

NANPA — Scope of Work Change #7 Proposal — INC Issue 454

     Date of Application:                     

     Date of Receipt of Request:                     

     Date of Response to Request:                     

Disposition of Code Request

Code request approved. 900 NXX code(s) assigned:

     Form complete, code request denied

Explanation:

     Form incomplete. Additional information required in the following section(s):

Explanation:

Code(s) returned:

Effective:

Signature of Code Administrator	Date
Street Address	Room

City, State/Province

Country

Zip/Postal Code

Phone No.:                                            Email:                                         

FAX No.:                                                            

© NeuStar, Inc. 2006 8

NANPA — Scope of Work Change #7 Proposal — INC Issue 454

3.3 900 NXX CODE FORMS

3.3.1 PART C

CONFIRMATION OF 900 NXX CODE IN SERVICE FORM (Issue 454)

By signing below, I certify that the 900 NXX code(s) specified below are in service and that the NXX code(s) are being used for the purpose specified in the original application (See Section 5, “Responsibilities of Code Applicants and Holders” in the 900 NXX Code Assignment Guidelines).

Authorized Representative of Code Holder (Print)

Operating Company Number (OCN)                     

Signature
Title	Date
Service Trouble Reporting Contact Name:
Service Trouble Reporting Number:

900 NXX Code Date of Application In Service Date

© NeuStar, Inc. 2006 9

NANP Administration Services

Scope of Work Change Proposal # 8

INC Issue 496 — Update COCAG Section 6.3.1 Information

Changes for Rate Center Changes

November 22, 2006

NeuStar, Inc.	46000 Center Oak Plaza
	Sterling, VA 20166

NANPA — Scope of Work Change #8 Proposal — INC Issue 496

Table of Contents

1     Introduction	1
1.1     Purpose and Scope	1
1.2     Modification of Guidelines	1
2     Proposed Industry Numbering Committee (INC) Scope of Work Change	2
3     NeuStar’s Proposed Solution	3
4     Assumptions and Risks	4
5     Cost Assumptions and Summary	4
6     Conclusion	5

© NeuStar, Inc. 2006

iii

NANPA — Scope of Work Change #8 Proposal — INC Issue 496

1 Introduction

1.1 Purpose and Scope

In accordance with NeuStar’s contract¹ and our constant effort to provide the best support and value to both the Federal Communications Commission (FCC) and the telecommunications industry, NeuStar, as the North American Numbering Plan Administrator (NANPA), hereby submits this scope of work change to the FCC for approval. This scope of work change is in compliance with NANPA’s Change Management protocol and most importantly per requirements as outlined in NANP Administrator Solicitation SOL03000001, Section H.9, Item 5, which states the following:

“If and when a change to the NANPA system is adopted by the NANC or the INC, the contractor’s liaison shall ensure that the proposed change is forwarded to the Contracting Officer and the Contracting Officer’s Technical Representative (COTR). No change shall be binding until such modification is issued, nor shall the Government be liable for any costs associated with a system change until such modification is issued.”

1.2 Modification of Guidelines

Pursuant to NeuStar’s contact, the NANPA shall participate in the development and modification of guidelines and procedures, which may affect the performance of the NANPA functions. These changes may be derived from regulatory directives and/or modifications to guidelines. In addition, new guidelines may be developed as appropriate to comply with regulatory directives. The NANPA shall adopt and implement any changes that are consistent with regulatory directives after they are officially adopted, recognizing that some may constitute a change in the scope of work.

When the Industry Numbering Committee (INC) places any changes to its guidelines in initial closure, the NANPA shall submit an assessment regarding the impact of scope of work, time and costs to the INC, the North American Numbering Council (NANC) and the FCC within 30 days.²

This document provides detailed information pertaining to the INC’s requirement submitted on October 27, 2006. This change order document covers the required subject matters such as explaining the industry’s requirements, proposed solution, costs and risk and assumptions.

1	Contract Number CON03000016 and the NANPA Technical Requirements Document, March 2003.
2	NANPA Technical Requirements Document, March 2003, Section 2.10, Modification of Guidelines.

© NeuStar, Inc. 2006

1

NANPA — Scope of Work Change #8 Proposal — INC Issue 496

2 Proposed Industry Numbering Committee (INC) Scope of Work Change

During the October 19, 2006 INC meeting, INC Issue 496 was resolved and went to Initial Closure on October 27, 2006. This issue affects NANPA operations.

• Issue 496: Update COCAG Section 6.3.1 Information Changes for Rate Center Changes

The official INC issue statement is stated below and can also be found on the ATIS website:

A) ISSUE STATEMENT

“When a SP requests to move a code(s) from one rate center to another, Section 6.3.1 Information Changes of the COCAG requires that the SP must certify to the NANPA that there are no ported numbers within the code(s). Section 3.9 of the COCAG states that SPs cannot change the rate center on a code that contains ported TNs because of the impact to customer calling patterns and associated charges, and the fourth paragraph of Section 6.3.1 states that SPs cannot change the rate center on a pooled code if blocks have been assigned to any SP other than the LERG Assignee.

Unfortunately, experience has shown that some SPs may not understand the implications of changing the rate center on a pooled code or a code that contains ported TNs, and the SP may simply supply the certification to NANPA without actually checking the LNP database. Similar to the process of NANPA’s verification that there are no ported TNs in a returned code before approving disconnect of the code, NANPA should also verify that there are no ported TNs in a code when an SP requests a rate center change.

NANPA could run an NPAC report to determine if there are ported numbers within a code for which the rate center change has been requested. If the code contains ported numbers, then NANPA will deny the request for a rate center change. If the code contains pooled blocks but no ported numbers and the LERG Assignee is the only SP with blocks from the code, then NANPA may approve the rate center change.”

B) FOLLOWING RESOLUTION FROM INC

The following text changes were made to the COCAG, Section 6.3.1 and Section 13 (Glossary):

6.3.1 Information Changes

SPs that wish to move CO codes from one rate center to another must submit a Part 1 to the CO Code Administrator. Upon receipt of the Part 1 for an NXX that has been activated, the CO Code Administrator will request that the NPAC produce an ad hoc report, generated during off-peak hours, that identifies the SPs and associated quantities of ported TNs or pending ports within the code(s). The CO Code Administrator will not request an ad hoc report if the SP is requesting a rate center change for a code that has not reached its LERG Routing Guide effective date.

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NANPA — Scope of Work Change #8 Proposal — INC Issue 496

If the report shows that there are ported TNs or pending ports, then the CO Code Administrator will issue a Part 3 Denial to the applicant. If the report shows that there are no ported TNs or pending ports, then the CO Code Administrator will issue a Part 3 Acceptance to the applicant with instructions to the Applicant to immediately remove the NXX from the NPAC to ensure that no porting occurs between the time the ad hoc report was produced and the effective date of the rate center change. On the effective date of the rate center change, the Applicant must immediately add the NXX to the NPAC to ensure that porting can resume.

13.0 Glossary

NPAC SMS	The Number Portability Administration Center (NPAC) Service Management
	System (SMS) is a database that contains routing
	information on ported TNs and pooled blocks and facilitates the updating
	of the routing databases of all subtending SPs in the portability area.

3 NeuStar’s Proposed Solution

In order to implement INC Issue 496, NANPA personnel will need to request an ad hoc report from the NPAC whenever a service provider submits an application to change the rate center associated with an in-service central office code. Presently, NANPA relies upon the certification of the service provider that the code in question has no active or pending ports. INC Issue 496, which requires NANPA to obtain an ad hoc report for all service provider requests to change the rate center for an in-service code, is a new requirement for NANPA.

For each CO code application requesting a rate center change on an in-service code, NANPA will: 1) review the application for accuracy and completeness, 2) prepare and submit a request to NPAC for an ad hoc report, 3) suspend the service provider application in the NANP Administration System (NAS), 4) compile and analyze the information contained in the ad hoc report and 5) return a Part 3 (“Administrator Confirmation”) to the service provider.

Steps 2, 3 and 4 are new requirements for NANPA when processing these types of requests. In addition, NANPA personnel will be required to provide new standard verbiage within the Part 3 remarks field generated by the NAS when providing the required disposition to the applicant. Also, NANPA has learned through its experience with the return code with ported telephone number (TN) process that additional interaction (e.g., email, phone calls) will be required between the NANPA CO Code Administrator and the service provider whenever a code application involves the disposition of ported TNs.

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NANPA — Scope of Work Change #8 Proposal — INC Issue 496

4 Assumptions and Risks

As part of the NANPA’s assessment of this change order, NANPA is required to identify the associated assumptions and risks that can have an impact on its operations.

Assumptions:

• NANPA assumes the information provided to it by the applicant is true and accurate.

• NANPA assumes the NPAC ad hoc report is true and accurate.

• NANPA assumes that the current process it uses to request an ad hoc report from the NPAC will remain the same as it is today for requesting such a report for central office code returns.

• NANPA will request an ad hoc report for all applications requesting a rate center change. (Note: Per industry guidelines, rate center consolidations and additions do not require service providers to submit an application to NANPA).

• If the process expands beyond these assumptions, the NANPA reserves the option of filing a revised change order proposal to address the additional expansion.

Risks:

• NANPA relies upon the information in the NPAC ad hoc report to make its determination to approve or deny a request. Any inaccuracies in NPAC data may result in the incorrect disposition of the request.

Impact on Operations:

The proposed solution impacts NANPA operations by requiring NANPA personnel to take additional time and effort to complete an application requiring a rate center change. Further, NANPA must now rely on an outside entity (NPAC) to complete this transaction that is presently accomplished without external information.

5 Cost Assumptions and Summary

The proposed solution for implementation of the INC Issue 496 requires changes in NANPA operations. NANPA personnel must verify there are not active or pending ports on all code applications requesting a rate center change. NANPA has determined that the cost associated with implementing this change is $4,956.00 per year or $413.00 per month.

To determine this cost, NANPA identified the quantity of applications involving a rate center change since January 2005 and used that information to calculate an average monthly quantity of such applications.³ NANPA then factored into this average monthly quantity the possibility that service providers will delegate the responsibility of identifying active or pending ports on a code

³ NANPA excluded rate center changes due to consolidations and the creation of new rate centers.

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NANPA — Scope of Work Change #8 Proposal — INC Issue 496

to NANPA, rather than performing this work themselves, as is presently required per industry guidelines. After identifying the additional steps required to process a rate center change request, NANPA calculated the additional processing time required for each CO code application requesting a change in rate center. With this information, NANPA determined a cost per application and multiplied that result by the projected average monthly quantity of rate center change requests.

6 Conclusion

NeuStar, as the NANPA, hereby seeks the FCC’s approval for this Scope of Work Change. Upon approval by the FCC, NANPA can notify the industry that NANPA is accommodating this Scope of Work change order.

© NeuStar, Inc. 2006

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NANP Administration Services

Scope of Work Change Proposal # 9

INC Issue 522: Revisions to Procedures for Submitting the
Part 4 Form for Dedicated Non-pooled codes

November 22, 2006

NeuStar, Inc.	46000 Center Oak Plaza
	Sterling, VA 20166

NANPA — Scope of Work Change #9 Proposal — INC Issue 522

Table of Contents

1     Introduction	1
1.1     Purpose and Scope	1
1.2     Modification of Guidelines	1
2     Proposed Industry Numbering Committee (INC) Scope of Work Change	2
3     NeuStar’s Proposed Solution	2
4     Assumptions and Risks	3
5     Cost Assumptions and Summary	3
6     Conclusion	3

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NANPA — Scope of Work Change #9 Proposal — INC Issue 522

1 Introduction

1.1 Purpose and Scope

In accordance with NeuStar’s contract¹ and our constant effort to provide the best support and value to both the Federal Communications Commission (FCC) and the telecommunications industry, NeuStar, as the North American Numbering Plan Administrator (NANPA), hereby submits this scope of work change to the FCC for approval. This scope of work change is in compliance with NANPA’s Change Management protocol and most importantly per requirements as outlined in NANP Administrator Solicitation SOL03000001, Section H.9, Item 5, which states the following:

“If and when a change to the NANPA system is adopted by the NANC or the INC, the contractor’s liaison shall ensure that the proposed change is forwarded to the Contracting Officer and the Contracting Officer’s Technical Representative (COTR). No change shall be binding until such modification is issued, nor shall the Government be liable for any costs associated with a system change until such modification is issued.”

1.2 Modification of Guidelines

Pursuant to NeuStar’s contact, the NANPA shall participate in the development and modification of guidelines and procedures, which may affect the performance of the NANPA functions. These changes may be derived from regulatory directives and/or modifications to guidelines. In addition, new guidelines may be developed as appropriate to comply with regulatory directives. The NANPA shall adopt and implement any changes that are consistent with regulatory directives after they are officially adopted, recognizing that some may constitute a change in the scope of work.

When the Industry Numbering Committee (INC) places any changes to its guidelines in initial closure, the NANPA shall submit an assessment regarding the impact of scope of work, time and costs to the INC, the North American Numbering Council (NANC) and the FCC within 30 days.²

This document provides detailed information pertaining to the INC’s requirement submitted on October 27, 2006. This change order document covers the required subject matters such as explaining the industry’s requirements, proposed solution, costs and risk and assumptions.

¹ Contract Number CON03000016 and the NANPA Technical Requirements Document, March 2003.

² NANPA Technical Requirements Document, March 2003, Section 2.10, Modification of Guidelines.

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NANPA — Scope of Work Change #9 Proposal — INC Issue 522

2 Proposed Industry Numbering Committee (INC) Scope of Work Change

During the October 19, 2006 INC meeting, INC Issue 522 was resolved and went to Initial Closure on October 27, 2006. This issue affects the NANP Administration System (“NAS”).

• Issue 522: Revisions to Procedures for Submitting the Part 4 Form for Dedicated Non-pooled codes

The official INC issue statement is stated below and can also be found on the ATIS website:

A) ISSUE STATEMENT

Service Providers that designate dedicated codes obtained through the Pooling Administrator as non-pooled codes should be allowed to submit Part 4s for these codes directly to NANPA.

B) FOLLOWING RESOLUTION FROM INC

The resolution of the issue is to allow a SP that has applied to the Pooling Administrator (“PA”) for a dedicated NPA-NXX in a pooling area, and has received that NPA-NXX, to submit the Part 4 “Confirmation of CO Code in Service” directly to the NANPA via NAS. Currently, the SP is required to submit the Part 4 “Confirmation of CO Code in Service” directly to the PA.

3 NeuStar’s Proposed Solution

INC Issue 522 requires NANPA to send the “Administrators Response — Receipt of Part 4” (i.e., “Part 5”) to the PA if the service provider submits a “Confirmation of CO Code In-Service” (i.e., “Part 4”) directly to the NANPA for a non-pooled, dedicated code that was originally requested via the PA.

Solution:

A new field will be added to the Part 4 in which the service provider submitting the Part 4 can indicate that the code is a non-pooled, dedicated code in a pooling area. If this field is populated, NAS will automatically forward the Part 5 to the service provider and the PA. If this field is not populated, the Part 5 will only be sent to the service provider.

In addition, NANPA will update the standard verbiage associated with the Part 4 reminder notice that is automatically generated by NAS. Presently, if a Part 4 has not been received by NANPA during the first five months following the original effective date as indicated on the Part 3, a reminder notice will be sent to the code assignee. The notice is sent no later than one month prior to the end of the 6^th month and provides direction to the code assignee on submitting the Part 4. The text of the reminder notice must be updated to reflect the option for the service provider to submit a Part 4 directly to the NANPA if the code is a non-pooled, dedicated code.

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NANPA — Scope of Work Change #9 Proposal — INC Issue 522

4 Assumptions and Risks

As part of the NANPA’s assessment of this change order, NANPA is required to identify the associated assumptions and risks that can have an impact on its operations.

Assumptions:

• NANPA assumes that the service provider will properly identify the code as a non-pooled, dedicated code and populate the non-pooled dedicated code field on the Part 4 to trigger the automatic forwarding of NANPA’s disposition to the PA.

• NANPA assumes that service providers may return the Part 4 form for a non-pooled, dedicated code to either the PA or the NANPA. The service provider would not submit the same Part 4 form to both administrators.

Risks:

• If the service provider fails to indicate on the Part 4 that the involved code is a non-pooled, dedicated code, no notification will be sent by NAS to the PA. Failure to provide such a notification to the PA may result in a code being placed on a state reclamation list. A state regulatory commission may contact a service provider about an assigned code not being placed in service within industry prescribed time frames when in fact the code is in service.

5 Cost Assumptions and Summary

The proposed solution for implementation of the INC Issue 522 requires changes in NAS in order for the system to automatically send a Part 5 to both the PA and the service provider when the Part 4 is associated with a non-pooled, dedicated code. NANPA has determined that the cost associated with implementing this change in NAS is $5,028.00.

6 Conclusion

NeuStar, as the NANPA, hereby seeks the FCC’s approval for this Scope of Work Change. Upon approval by the FCC, NANPA can notify the industry that NANPA is accommodating this Scope of Work change order.

© NeuStar, Inc. 2006

3

EX-10.5.1

Exhibit 10.5.1

EX-10.6

Exhibit 10.6

.BIZ Registry Agreement
(8 December 2006)

Registry Agreement

This REGISTRY AGREEMENT (this “Agreement”) is entered into as of 18 December 2006 by and between Internet Corporation for Assigned Names and Numbers, a California nonprofit public benefit corporation (“ICANN”), and NeuStar, Inc. a Delaware corporation.

ARTICLE 1 INTRODUCTION

Section 1.1 Effective Date. The Effective Date for purposes of this Agreement shall be 8 December 2006.

Section 1.2 Top-Level Domain. The Top-Level Domain to which this Agreement applies is .biz (“TLD”).

Section 1.3 Designation as Registry Operator. Upon the Effective Date, until the Expiration Date as defined in Section 4.1 hereof, ICANN shall continue to designate NeuStar, Inc. as the sole registry operator for the TLD (“Registry Operator”).

ARTICLE 2 REPRESENTATIONS AND WARRANTIES

Section 2.1 Registry Operator’s Representations and Warranties.

2.1 (a) Organization; Due Authorization and Execution. Registry Operator is a corporation, duly organized, validly existing and in good standing under the laws of Delaware, and Registry Operator has all requisite power and authority to enter into this Agreement. All corporate approvals and actions necessary for the entrance by Registry Operator into this Agreement have been obtained and this Agreement has been duly and validly executed and delivered by Registry Operator.

2.1 (b) Statements made During Negotiation Process. The factual statements made in writing by both Parties in negotiating this Agreement, were true and correct in all material respects at the time . A violation or breach of this subsection shall not be a basis for termination, rescission or other equitable relief, and, instead shall only give rise to a claim for damages.

Section 2.2 ICANN’s Representations and Warranties.

2.2 (a) Organization; Due Authorization and Execution. ICANN is a nonprofit public benefit corporation duly organized, validly existing and in good standing under the laws of California. ICANN has all requisite corporate power and authority to enter

into this Agreement. All corporate approvals and actions necessary for the entrance by ICANN into this Agreement have been obtained and this Agreement has been duly and validly executed and delivered by ICANN.

ARTICLE 3 COVENANTS

Section 3.1 Covenants of Registry Operator. Registry Operator covenants and agrees with ICANN as follows:

3.1 (a) Preserve Security and Stability.

3.1 (a)(i) ICANN Temporary Specifications or Policies. Registry Operator shall comply with and implement all specifications or policies established by the ICANN Board of Directors on a temporary basis, if adopted by the ICANN Board of Directors by a vote of at least two-thirds of its members, so long as the ICANN Board of Directors reasonably determines that immediate temporary establishment of a specification or policy on the subject is necessary to maintain the Stability or Security (as defined in Section 3.1(d)(iv)(G)) of Registry Services or the DNS (“Temporary Specification or Policies”). Such proposed specification or policy shall be as narrowly tailored as feasible to achieve those objectives. In establishing any specification or policy under this provision, the ICANN Board of Directors shall state the period of time for which the specification or policy is temporarily adopted and shall immediately implement the Consensus Policy development process set forth in ICANN’s Bylaws. ICANN shall also issue an advisory statement containing a detailed explanation of its reasons for adopting the temporary specification or policy and why the Board believes the specification or policy should receive the consensus support of Internet stakeholders. If the period of time for which the specification or policy is adopted exceeds 90 days, the ICANN Board shall reaffirm its temporary adoption every 90 days for a total period not to exceed one year, in order to maintain such policy in effect until such time as it shall become a Consensus Policy as described in Section 3.1(b) below. If during such one year period, the temporary policy or specification does not become a Consensus Policy meeting the standard set forth in Section 3.1(b) below, Registry Operator shall no longer be required to comply with or implement such temporary policy or specification.

3.1 (b) Consensus Policies.

3.1 (b)(i) At all times during the term of this Agreement and subject to the terms hereof, Registry Operator will fully comply with and implement all Consensus Policies found at http://www.icann.org/general/consensus-policies.htm, as of the Effective Date and as may in the future be developed and adopted in accordance with ICANN’s Bylaws and as set forth below.

3.1 (b)(ii) “Consensus Policies” are those specifications or policies established (1) pursuant to the procedure set forth in ICANN’s Bylaws and due process, and (2) covering those topics listed in Section 3.1(b)(iv) below. The Consensus Policy development process and procedure set forth in ICANN’s Bylaws may be revised from time to time in accordance

with ICANN’s Bylaws, and any Consensus Policy that is adopted through such a revised process and covering those topics listed in Section 3.1(b) (iv) below shall be considered a Consensus Policy for purposes of this Agreement.

3.1 (b)(iii) For all purposes under this Agreement, the policies identified at http://www.icann.org/general/consensus-policies.htm shall be treated in the same manner and have the same effect as “Consensus Policies.”

3.1 (b)(iv) Consensus Policies and the procedures by which they are developed shall be designed to produce, to the extent possible, a consensus of Internet stakeholders, including the operators of gTLDs. Consensus Policies shall relate to one or more of the following: (1) issues for which uniform or coordinated resolution is reasonably necessary to facilitate interoperability, Security and/or Stability of the Internet or DNS; (2) functional and performance specifications for the provision of Registry Services (as defined in Section 3.1(d)(iii) below); (3) Security and Stability of the registry database for the TLD; (4) registry policies reasonably necessary to implement Consensus Policies relating to registry operations or registrars; or (5) resolution of disputes regarding the registration of domain names (as opposed to the use of such domain names). Such categories of issues referred to in the preceding sentence shall include, without limitation:

3.1 (b)(iv)(A) principles for allocation of registered names in the TLD (e.g., first-come, first-served, timely renewal, holding period after expiration);

3.1 (b)(iv)(B) prohibitions on warehousing of or speculation in domain names by registries or registrars;

3.1 (b)(iv)(C) reservation of registered names in the TLD that may not be registered initially or that may not be renewed due to reasons reasonably related to (a) avoidance of confusion among or misleading of users, (b) intellectual property, or (c) the technical management of the DNS or the Internet (e.g., establishment of reservations of names from registration);

3.1 (b)(iv)(D) maintenance of and access to accurate and up-to-date information concerning domain name registrations;

3.1 (b)(iv)(E) procedures to avoid disruptions of domain name registration due to suspension or termination of operations by a registry operator or a registrar, including procedures for allocation of responsibility for serving registered domain names in a TLD affected by such a suspension or termination; and

3.1 (b)(iv)(F) resolution of disputes regarding whether particular parties may register or maintain registration of particular domain names.

3.1 (b)(v) In addition to the other limitations on Consensus Policies, they shall not:

3.1 (b)(v)(A) prescribe or limit the price of Registry Services;

3.1 (b)(v)(B) modify the standards for the consideration of proposed Registry Services, including the definitions of Security and Stability (set forth below) and the standards applied by ICANN;

3.1 (b)(v)(C) for two years following the Effective Date, modify the procedure for the consideration of proposed Registry Services;

3.1 (b)(v)(D) modify the terms or conditions for the renewal or termination of this Agreement;

3.1 (b)(v)(E) modify ICANN’s obligations to Registry Operator under Section 3.2 (a), (b), and (c);

3.1 (b)(v)(F) modify the limitations on Temporary Specifications or Consensus Policies;

3.1 (b)(v)(G) modify the definition of Registry Services;

3.1 (b)(v)(H) modify the terms of Sections 7.2 below; or

3.1 (b)(v)(I) alter services that have been implemented pursuant to Section 3.1(d) of this Agreement (unless justified by compelling and just cause based on Security and Stability.

3.1 (b)(vi) Registry Operator shall be afforded a reasonable period of time following notice of the establishment of a Consensus Policy or Temporary Specifications or Policies in which to comply with such policy or specification, taking into account any urgency involved. In the event of a conflict between Registry Services (as defined in Section 3.1(d)(iii) below), on the one hand, and Consensus Policies developed in accordance with this Section 3.1(b) or any Temporary Specifications or Policies established pursuant to Section 3.1(a)(i) above, on the other hand, the Consensus Polices or Temporary Specifications or Policies shall control, notwithstanding any other provisions contained within this Agreement.

3.1 (c) Handling of Registry Data.

3.1 (c)(i) Data Escrow. Registry Operator shall establish at its expense a data escrow or mirror site policy for the Registry Data compiled by Registry Operator. Registry Data, as used in this Agreement, shall mean the following: (1) data for domains sponsored by all registrars, consisting of domain name, server name for each nameserver, registrar id, updated date, creation date, expiration date, status information, and DNSSEC related key material (if Registry Operator implements DNSSEC); (2) data

for nameservers sponsored by all registrars consisting of server name, each IP address, registrar id, updated date, creation date, expiration date, and status information; (3) data for registrars sponsoring registered domains and nameservers, consisting of registrar id, registrar address, registrar telephone number, registrar e-mail address, whois server, referral URL, updated date and the name, telephone number, and e-mail address of all the registrar’s administrative, billing, and technical contacts; (4) domain name registrant data collected by the Registry Operator from registrars as part of or following registration of a domain name; and (5) the DNSSEC-related material necessary to sign the .biz zone (e.g., public and private portions of .biz zone key-signing keys and zone-signing keys)(if Registry Operator implements DNSSEC). The escrow agent or mirror-site manager, and the obligations thereof, shall be mutually agreed upon by ICANN and Registry Operator on commercially reasonable standards that are technically and practically sufficient to allow a successor registry operator to assume management of the TLD. To this end, Registry Operator shall periodically deposit into escrow all Registry Data on a schedule (not more frequently than weekly for a complete set of Registry Data, and daily for incremental updates) and in an electronic format mutually approved from time to time by Registry Operator and ICANN, such approval not to be unreasonably withheld by either party. In addition, Registry Operator will deposit into escrow that data collected from registrars as part of offering Registry Services introduced after the Effective Date of this Agreement. The schedule, content, format, and procedure for escrow deposits shall be as reasonably established by ICANN from time to time, and as set forth in Appendix 1 hereto. Changes to the schedule, content, format, and procedure may be made only with the mutual written consent of ICANN and Registry Operator (which neither party shall unreasonably withhold) or through the establishment of a Consensus Policy as outlined in Section 3.1(b) above. The escrow shall be held under an agreement, substantially in the form of Appendix 2, as the same may be revised from time to time, among ICANN, Registry Operator, and the escrow agent.

3.1 (c)(ii) Personal Data. Registry Operator shall notify registrars sponsoring registrations in the registry for the TLD of the purposes for which Personal Data (as defined below) submitted to Registry Operator by registrars, if any, is collected, the intended recipients (or categories of recipients) of such Personal Data, and the mechanism for access to and correction of such Personal Data. Registry Operator shall take reasonable steps to protect Personal Data from loss, misuse, unauthorized disclosure, alteration or destruction. Registry Operator shall not use or authorize the use of Personal Data in a way that is incompatible with the notice provided to registrars. “Personal Data” shall refer to all data about any identified or identifiable natural person.

3.1 (c)(iii) Bulk Zone File Access. Registry Operator shall provide bulk access to the zone files for the registry for the TLD to ICANN on a continuous basis in the manner ICANN may reasonably specify from time to time. Bulk access to the zone files shall be provided to third parties on the terms set forth in the TLD zone file access agreement reasonably established by ICANN, which initially shall be in the form attached as Appendix 3 hereto. Changes to the zone file access agreement may be

made upon the mutual written consent of ICANN and Registry Operator (which consent neither party shall unreasonably withhold).

3.1 (c)(iv) Monthly Reporting. Within 20 days following the end of each calendar month, Registry Operator shall prepare and deliver to ICANN a report providing such data and in the format specified in Appendix 4. ICANN may audit Registry Operator’s books and records relating to data contained in monthly reports from time to time upon reasonable advance written notice, provided that such audits shall not exceed one per quarter. Any such audit shall be at ICANN’s cost, unless such audit shall reflect a material discrepancy or discrepancies in the data provided by Registry Operator. In the latter event, Registry Operator shall reimburse ICANN for all reasonable costs and expenses associated with such audit, which reimbursement shall be paid together with the next Registry-Level Fee payment due following the date of transmittal of the cost statement for such audit.

3.1 (c)(v) Whois Service. Registry Operator shall provide such whois data as set forth in Appendix 5.

3.1 (d) Registry Operations.

3.1 (d)(i) Registration Restrictions.

3.1 (d)(i)(A) Registry Operator shall reserve, and not register any TLD strings (i) appearing on the list of reserved TLD strings attached as Appendix 6 hereto or (ii) located at http://data.iana.org/TLD/tlds-alpha-by-domain.txt for initial (i.e., other than renewal) registration at the second level within the TLD.

3.1(d)(i)(B) Registry Operator shall apply, monitor, and enforce the restrictions on registration in the Registry TLD. Appendix 11 sets forth the restrictions to be applied and sets forth the manner by which these restrictions shall be applied, monitored, and enforced. Changes to the restrictions may be made only with the mutual written consent of ICANN and Registry Operator (which neither party shall unreasonably withhold).

3.1 (d)(ii) Functional and Performance Specifications. Functional and Performance Specifications for operation of the TLD shall be as set forth in Appendix 7 hereto, and shall address without limitation DNS services; operation of the shared registration system; and nameserver operations. Registry Operator shall keep technical and operational records sufficient to evidence compliance with such specifications for at least one year, which records ICANN may audit from time to time upon reasonable advance written notice, provided that such audits shall not exceed one per quarter. Any such audit shall be at ICANN’s cost.

3.1 (d)(iii) Registry Services. Registry Services are, for purposes of this Agreement, defined as the following: (a) those services that are both (i)

operations of the registry critical to the following tasks: the receipt of data from registrars concerning registrations of domain names and name servers; provision to registrars of status information relating to the zone servers for the TLD; dissemination of TLD zone files; operation of the registry zone servers; and dissemination of contact and other information concerning domain name server registrations in the TLD as required by this Agreement; and (ii) provided by the Registry Operator for the .biz registry as of the Effective Date as set forth on Appendix 9; (b) other products or services that the Registry Operator is required to provide because of the establishment of a Consensus Policy (as defined in Section 3.1(b) above); (c) any other products or services that only a registry operator is capable of providing, by reason of its designation as the registry operator; and (d) material changes to any Registry Service within the scope of (a), (b) or (c) above.

3.1 (d)(iv) Process for Consideration of Proposed Registry Services. Following written notification by Registry Operator to ICANN that Registry Operator may make a change in a Registry Service within the scope of the preceding paragraph:

3.1 (d)(iv)(A) ICANN shall have 15 calendar days to make a “preliminary determination” whether a Registry Service requires further consideration by ICANN because it reasonably determines such Registry Service: (i) could raise significant Security or Stability issues or (ii) could raise significant competition issues.

3.1 (d)(iv)(B) Registry Operator must provide sufficient information at the time of notification to ICANN that it may implement such a proposed Registry Service to enable ICANN to make an informed “preliminary determination.” Information provided by Registry Operator and marked “CONFIDENTIAL” shall be treated as confidential by ICANN. Registry Operator will not designate “CONFIDENTIAL” information necessary to describe the purpose of the proposed Registry Service and the effect on users of the DNS.

3.1 (d)(iv)(C) ICANN may seek expert advice during the preliminary determination period (from entities or persons subject to confidentiality agreements) on the competition, Security or Stability implications of the Registry Service in order to make its “preliminary determination.” To the extent ICANN determines to disclose confidential information to any such experts, it will provide notice to Registry Operator of the identity of the expert(s) and the information it intends to convey.

3.1 (d)(iv)(D) If ICANN determines during the 15 calendar day “preliminary determination” period that the proposed Registry Service, does not raise significant Security or Stability (as defined below), or competition issues, Registry Operator shall be free to deploy it upon such a determination.

3.1 (d)(iv)(E) In the event ICANN reasonably determines during the 15 calendar day “preliminary determination” period that the Registry Service might raise significant competition issues, ICANN shall refer the issue to the appropriate governmental competition authority or authorities with jurisdiction over the matter within five business days of making its determination, or two business days following the expiration of such 15 day period, whichever is earlier, with notice to Registry Operator. Any such referral communication shall be posted on ICANN’s website on the date of transmittal. Following such referral, ICANN shall have no further responsibility, and Registry Operator shall have no further obligation to ICANN, with respect to any competition issues relating to the Registry Service. If such a referral occurs, the Registry Operator will not deploy the Registry Service until 45 calendar days following the referral, unless earlier cleared by the referred governmental competition authority.

3.1 (d)(iv)(F) In the event that ICANN reasonably determines during the 15 calendar day “preliminary determination” period that the proposed Registry Service might raise significant Stability or Security issues (as defined below), ICANN will refer the proposal to a Standing Panel of experts (as defined below) within five business days of making its determination, or two business days following the expiration of such 15 day period, whichever is earlier, and simultaneously invite public comment on the proposal. The Standing Panel shall have 45 calendar days from the referral to prepare a written report regarding the proposed Registry Service’s effect on Security or Stability (as defined below), which report (along with a summary of any public comments) shall be forwarded to the ICANN Board. The report shall set forward the opinions of the Standing Panel, including, but not limited to, a detailed statement of the analysis, reasons, and information upon which the panel has relied in reaching their conclusions, along with the response to any specific questions that were included in the referral from ICANN staff. Upon ICANN’s referral to the Standing Panel, Registry Operator may submit additional information or analyses regarding the likely effect on Security or Stability of the Registry Service.

3.1 (d)(iv)(G) Upon its evaluation of the proposed Registry Service, the Standing Panel will report on the likelihood and materiality of the proposed Registry Service’s effects on Security or Stability, including whether the proposed Registry Service creates a reasonable risk of a meaningful adverse effect on Security or Stability as defined below:

Security: For purposes of this Agreement, an effect on security by the proposed Registry Service shall mean (1) the unauthorized disclosure, alteration, insertion or destruction of Registry Data, or (2) the unauthorized access to or

disclosure of information or resources on the Internet by systems operating in accordance with all applicable standards.

Stability: For purposes of this Agreement, an effect on stability shall mean that the proposed Registry Service (1) is not compliant with applicable relevant standards that are authoritative and published by a well-established, recognized and authoritative standards body, such as relevant Standards-Track or Best Current Practice RFCs sponsored by the IETF or (2) creates a condition that adversely affects the throughput, response time, consistency or coherence of responses to Internet servers or end systems, operating in accordance with applicable relevant standards that are authoritative and published by a well-established, recognized and authoritative standards body, such as relevant Standards-Track or Best Current Practice RFCs and relying on Registry Operator’s delegation information or provisioning services.

3.1 (d)(iv)(H) Following receipt of the Standing Panel’s report, which will be posted (with appropriate confidentiality redactions made after consultation with Registry Operator) and available for public comment, the ICANN Board will have 30 calendar days to reach a decision. In the event the ICANN Board reasonably determines that the proposed Registry Service creates a reasonable risk of a meaningful adverse effect on Stability or Security, Registry Operator will not offer the proposed Registry Service. An unredacted version of the Standing Panel’s report shall be provided to Registry Operator upon the posting of the report. The Registry Operator may respond to the report of the Standing Panel or otherwise submit to the ICANN Board additional information or analyses regarding the likely effect on Security or Stability of the Registry Service.

3.1 (d)(iv)(I) The Standing Panel shall consist of a total of 20 persons expert in the design, management and implementation of the complex systems and standards-protocols utilized in the Internet infrastructure and DNS (the “Standing Panel”). The members of the Standing Panel will be selected by its Chair. The Chair of the Standing Panel will be a person who is agreeable to both ICANN and the registry constituency of the supporting organization then responsible for generic top level domain registry policies. All members of the Standing Panel and the Chair shall execute an agreement requiring that they shall consider the issues before the panel neutrally and according to the definitions of Security and Stability. For each matter referred to the Standing Panel, the Chair shall select no more than five members from the

Standing Panel to evaluate the referred matter, none of which shall have an existing competitive, financial, or legal conflict of interest, and with due regard to the particular technical issues raised by the referral.

3.1 (e) Fees and Payments. Registry Operator shall pay the Registry-Level Fees to ICANN on a quarterly basis in accordance with Section 7.2 hereof.

3.1 (f) Traffic Data. Nothing in this Agreement shall preclude Registry Operator from making commercial use of, or collecting, traffic data regarding domain names or non-existent domain names for purposes such as, without limitation, the determination of the availability and health of the Internet, pinpointing specific points of failure, characterizing attacks and misconfigurations, identifying compromised networks and hosts and promoting the sale of domain names, provided however, that such use does not permit Registry Operator to disclose domain name registrant or end-user information or other Personal Data as defined in Section 3.1(c)(ii) that it collects through providing domain name registration services for any purpose not otherwise authorized by this agreement. In this regard, in the event the TLD registry is a “thick” registry model, the traffic data that may be accessible to and used by Registry Operator shall be limited to the data that would be accessible to a registry operated under a “thin” registry model. The process for the introduction of new Registry Services shall not apply to such traffic data. Nothing contained in this section 3.1(f) shall be deemed to constitute consent or acquiescence by ICANN to an introduction by Registry Operator of a service employing a universal wildcard function. To the extent that traffic data subject to this provision is made available, access shall be on terms that are nondiscriminatory.

3.1 (g) Cooperation. The parties agree to cooperate with each other and share data as necessary to accomplish the terms of this Agreement.

Section 3.2 Covenants of ICANN. ICANN covenants and agrees with Registry Operator as follows:

3.2 (a) Open and Transparent. Consistent with ICANN’s expressed mission and core values, ICANN shall operate in an open and transparent manner.

3.2 (b) Equitable Treatment. ICANN shall not apply standards, policies, procedures or practices arbitrarily, unjustifiably, or inequitably and shall not single out Registry Operator for disparate treatment unless justified by substantial and reasonable cause.

3.2 (c) TLD Zone Servers. In the event and to the extent that ICANN is authorized to set policy with regard to an authoritative root server system, it will use best efforts to ensure that (i) the authoritative root will point to the TLD zone servers designated by Registry Operator for the Registry TLD throughout the Term of this Agreement; and (ii) any changes to the TLD zone server designation submitted to ICANN by Registry Operator will be implemented by ICANN within seven days of submission.

3.2 (d) Nameserver Changes. Registry Operator may request changes in the nameserver delegation for the Registry TLD. Any such request must be made in a format, and otherwise meet technical requirements, specified from time to time by ICANN. ICANN will use commercially reasonable efforts to have such requests

implemented in the Authoritative Root-Server System within seven calendar days of the submission.

3.2 (e) Root-zone Information Publication. ICANN’s publication of root-zone contact information for the Registry TLD will include Registry Operator and its administrative and technical contacts. Any request to modify the contact information for the Registry Operator must be made in the format specified from time to time by ICANN.

ARTICLE 4 TERM OF AGREEMENT

Section 4.1 Term. The initial term of this Agreement shall expire on December 31, 2012, the “Expiration Date,” as extended by any renewal terms.

Section 4.2 Renewal. This Agreement shall be renewed upon the expiration of the term set forth in Section 4.1 above and each later term, unless the following has occurred: (i) following notice of breach to Registry Operator in accordance with Section 6.1 and failure to cure such breach within the time period prescribed in Section 6.1, an arbitrator or court has determined that Registry Operator has been in fundamental and material breach of Registry Operator’s obligations set forth in Sections 3.1(a), (b), (d) or (e); Section 5.2 and (ii) following the final decision of such arbitrator or court, Registry Operator has failed to comply within ten days with the decision of the arbitrator or court, or within such other time period as may be prescribed by the arbitrator or court. Upon renewal, in the event that the terms of this Agreement are not similar to the terms generally in effect in the Registry Agreements of the 5 most reasonably comparable gTLDs (provided however that if less than five gTLDs are reasonably comparable, then comparison shall be made with such lesser number, and .com, info, .net and .org are hereby deemed comparable), renewal shall be upon terms reasonably necessary to render the terms of this Agreement similar to such terms in the Registry Agreements for those other gTLDs. The preceding sentence, however, shall not apply to the terms of this Agreement regarding the standards for the consideration of proposed Registry Services, including the definitions of Security and Stability and the standards applied by ICANN in the consideration process; the terms or conditions for the renewal or termination of this Agreement; ICANN’s obligation to Registry Operator under Section 3.2(a), (b) and (c); the limitations on Consensus Policies or Temporary Specifications or Policies; or the definition of Registry Services. In addition, upon renewal, registry fees payable to ICANN may be reasonably modified so long as any increase in such fees shall not exceed the average of the percentage increase in registry fees for the five most reasonably comparable TLDs (or such lesser number as provided above) during the prior three year period;

Section 4.3 Changes. While this Agreement is in effect, the parties agree to engage in good faith negotiations at regular intervals (at least once every three calendar years following the Effective Date) regarding possible changes to the terms of the Agreement, including to Section 7.2 regarding fees and payments to ICANN. In addition, ICANN shall consider and discuss with Registry Operator other appropriate changes to pricing and related terms under the Agreement in the event ICANN shall obtain further independent data from professional experts providing analysis of the pricing of domain name registrations and competitive market considerations. The failure by Registry Operator to agree to an increase in registry fees or other terms shall not constitute a violation of this provision.

Section 4.4 Failure to Perform in Good Faith. In the event Registry Operator shall have been repeatedly and willfully in fundamental and material breach of Registry Operator’s obligations set forth in Sections 3.1(a), (b), (d) or (e); Section 5.2, and arbitrators in accordance with Section 5.1(b) of this Agreement repeatedly have found Registry Operator to have been in fundamental and material breach of this Agreement, including in at least three separate awards,

then the arbitrators shall award such punitive, exemplary or other damages as they may believe appropriate under the circumstances.

ARTICLE 5 DISPUTE RESOLUTION

Section 5.1 Resolution of Disputes.

5.1 (a) Cooperative Engagement. In the event of a disagreement between Registry Operator and ICANN arising under or out of this Agreement, either party may by notice to the other invoke the dispute resolution provisions of this Article V. Provided, however, that before either party may initiate arbitration as provided in Section 5.1(b) below, ICANN and Registry Operator must attempt to resolve the dispute by cooperative engagement as set forth in this Section 5.1(a). If either party provides written notice to the other demanding cooperative engagement as set forth in this Section 5.1(a), then each party will, within seven calendar days after such written notice is deemed received in accordance with Section 8.6 hereof, designate a single executive officer as its representative under this Section 5.1(a) with full authority to act on such party’s behalf to resolve the dispute. The designated representatives shall, within 2 business days after being designated, confer by telephone or in person to attempt to resolve the dispute. If they are not able to resolve the dispute during such telephone conference or meeting, they shall further meet in person at a location reasonably designated by ICANN within 7 calendar days after such initial telephone conference or meeting, at which meeting the parties shall attempt to reach a definitive resolution. The time schedule and process set forth in this Section 5.1(a) may be modified with respect to any dispute, but only if both parties agree to a revised time schedule or process in writing in advance. Settlement communications within the scope of this paragraph shall be inadmissible in any arbitration or litigation between the parties.

5.1 (b) Arbitration. Disputes arising under or in connection with this Agreement, including requests for specific performance, shall be resolved through binding arbitration conducted as provided in this Section 5.1(b) pursuant to the rules of the International Court of Arbitration of the International Chamber of Commerce (“ICC”). The arbitration shall be conducted in the English language and shall occur in Los Angeles County, California, USA only following the failure to resolve the dispute pursuant to cooperative engagement discussions as set forth in Section 5.1(a) above. There shall be three arbitrators: each party shall choose one arbitrator and, if the two arbitrators are not able to agree on a third arbitrator, the third shall be chosen by the ICC. The prevailing party in the arbitration shall have the right to recover its costs and reasonable attorneys’ fees, which the arbitrators shall include in their awards. Any party that seeks to confirm or vacate an arbitration award issued under this Section 5.1(b) may do so only pursuant to the applicable arbitration statutes. In any litigation involving ICANN concerning this Agreement, jurisdiction and exclusive venue for such litigation shall be in a court located in Los Angeles County, California, USA; however, the parties shall also have the right to enforce a judgment of such a court in any court of competent jurisdiction. For the purpose of aiding the arbitration and/or preserving the rights of the parties during the pendency of arbitration, the parties shall have the right to seek a temporary stay or injunctive relief from the arbitration panel or a court, which shall not be a waiver of this agreement to arbitrate.

Section 5.2 Specific Performance. Registry Operator and ICANN agree that irreparable damage could occur if any of the provisions of this Agreement was not performed in accordance

with its specific terms. Accordingly, the parties agree that they each shall be entitled to seek from the arbitrators specific performance of the terms of this Agreement (in addition to any other remedy to which each party is entitled).

Section 5.3 Limitation of Liability. ICANN’s aggregate monetary liability for violations of this Agreement shall not exceed the amount of Registry-Level Fees paid by Registry Operator to ICANN within the preceding twelve-month period pursuant to this Agreement. Registry Operator’s aggregate monetary liability to ICANN for violations of this Agreement shall be limited to fees, and monetary sanctions under Section 4.4, if any, due and owing to ICANN under this Agreement within the preceding twelve-month period. In no event shall either party be liable for special, indirect, incidental, punitive, exemplary, or consequential damages arising out of or in connection with this Agreement or the performance or nonperformance of obligations undertaken in this Agreement, except as provided pursuant to Section 4.4 of this Agreement. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, REGISTRY OPERATOR DOES NOT MAKE ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES RENDERED BY ITSELF, ITS SERVANTS, OR ITS AGENTS OR THE RESULTS OBTAINED FROM THEIR WORK, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE 6 TERMINATION PROVISIONS

Section 6.1 Termination by ICANN. ICANN may terminate this Agreement if and only if: (i) Registry Operator fails to cure any fundamental and material breach of Registry Operator’s obligations set forth in Sections 3.1(a), (b), (d) or (e); or Section 5.2 within thirty (30) calendar days after ICANN gives Registry Operator written notice of the breach, which notice shall include with specificity the details of the alleged breach; and (ii) (a) an arbitrator or court has finally determined that Registry Operator is, or was, in fundamental and material breach and failed to cure such breach within the prescribed time period and (b) following the decision of such arbitrator or court, Registry Operator has failed to comply with the decision of the arbitrator or court.

Section 6.2 Bankruptcy. This Agreement shall automatically terminate in the event Registry Operator shall voluntarily or involuntarily be subject to bankruptcy proceedings.

Section 6.3 Transition of Registry upon Termination of Agreement. Upon any termination of this Agreement as provided in Sections 6.1 and 6.2, the parties agree to work cooperatively to facilitate and implement the transition of the registry for the TLD in accordance with this Section 6.3. Registry Operator shall agree to provide ICANN or any successor registry authority that may be designated for the TLD with any data regarding operations of the registry for the TLD necessary to maintain operations that may be reasonably requested in addition to that data escrowed in accordance with Section 3.1(c)(i) hereof.

Section 6.4 Rights in Data. Registry Operator shall not be entitled to claim any intellectual property rights in Registry Data. In the event that Registry Data is released from escrow as set forth in Section 3.1(c)(i), rights, if any, held by Registry Operator in the data shall automatically be licensed on a non-exclusive, irrevocable, royalty-free, paid-up basis to ICANN or to a party designated in writing by ICANN.

Section 6.5 No Reimbursement. Any and all expenditures, capital investments or other investments made by Registry Operator in connection with this Agreement shall be at Registry Operator’s own risk and ICANN shall have no obligation to reimburse Registry Operator for any such expense, capital expenditure or investment. Registry Operator shall not be required to

make any payments to a successor registry operator by reason of registry fees paid to Registry Operator prior to the effective date of (i) any termination or expiration of this Agreement or (ii) transition of the registry, unless any delay in transition of the registry to a successor operator shall be due to the actions of Registry Operator.

ARTICLE 7 SPECIAL PROVISIONS

Section 7.1 Registry-Registrar Agreement.

7.1 (a) Access to Registry Services. Registry Operator shall make access to Registry Services, including the shared registration system, available to all ICANN-accredited registrars, subject to the terms of the Registry-Registrar Agreement attached as Appendix 8 hereto. Registry Operator shall provide all ICANN-accredited registrars following execution of the Registry-Registrar Agreement, provided registrars are in compliance with such agreement, operational access to Registry Services, including the shared registration system for the TLD. Such nondiscriminatory access shall include without limitation the following:

7.1 (a)(i) All registrars (including any registrar affiliated with Registry Operator, if any) can connect to the shared registration system gateway for the TLD via the Internet by utilizing the same maximum number of IP addresses and SSL certificate authentication;

7.1 (a)(ii) Registry Operator has made the current version of the registrar toolkit software accessible to all registrars and has made any updates available to all registrars on the same schedule;

7.1 (a)(iii) All registrars have equivalent access to customer support personnel via telephone, e-mail and Registry Operator’s website;

7.1 (a)(iv) All registrars have equivalent access to registry resources to resolve registry/registrar or registrar/registrar disputes and technical and/or administrative customer service issues;

7.1 (a)(v) All registrars have equivalent access to data generated by Registry Operator to reconcile their registration activities from Registry Operator’s Web and ftp servers;

7.1 (a)(vi) All registrars may perform basic automated registrar account management functions using the same registrar tool made available to all registrars by Registry Operator; and

7.1 (a)(vii) The shared registration system does not include, for purposes of providing discriminatory access, any algorithms or protocols that differentiate among registrars with respect to functionality, including database access, system priorities and overall performance.

7.1 (a)(viii) Such Registry-Registrar Agreement may be revised by Registry Operator from time to time, provided however, that any such revisions must be approved in advance by ICANN.

7.1 (b) Registry Operator Shall Not Act as Own Registrar. Registry Operator shall

not act as a registrar with respect to the TLD. This shall not preclude Registry Operator from registering names within the TLD to itself through a request made to an ICANN-accredited registrar.

7.1 (c) Restrictions on Acquisition of Ownership or Controlling Interest in Registrar. Registry Operator shall not acquire, directly or indirectly, control of, or a greater than fifteen percent ownership interest in, any ICANN-accredited registrar.

Section 7.2 Fees to be Paid to ICANN.

7.2 (a) Registry-Level Transaction Fee.

7.2 (a)(i) Commencing on January 1, 2007, Registry Operator shall pay ICANN a Registry-Level Fee. Subject to Sections 7.2(a)(ii) and (iii) below, such fee shall equal the Transaction Fee set forth in the table below multiplied by the number of annual increments of an initial or renewal domain name registration (including renewals associated with transfers from one ICANN-accredited registrar to another) during the applicable calendar quarter:

YEAR	TRANSACTION FEE
2007	US$0.15
2008	US$0.15
2009	US$0.20
2010	US$0.20
2011	US$0.25
2012	US$0.25

7.2 (a)(ii) Commencing in 2009, for calendar quarters during the Term for which the average annual price of registrations during the quarter is between US$3.01 and US$4.99, the Registry-Level Fee shall be the lesser of (a) the transaction fee provided in 7.2.a.1 or (b) US$0.15 plus US $0.01 for each increase by US$0.20 above $3.01 in the average price of domain name registrations, multiplied by the number of annual increments of an initial or renewal domain name registration during such quarter (including renewals associated with transfers from one ICANN-accredited registrar to another); and

7.2 (a)(iii) Following two consecutive calendar quarters during which the average annual price of registrations during the quarter is US$3.00 or less (disregarding for these purposes any registry-offered discounts or marketing incentives having the short term effect of lowering the average annual price of domain name registrations), Registry Operator may request the parties enter good-faith negotiations to review and renegotiate the fee obligation considering all relevant factors including but not limited to Registry Operator’s business needs as well as ICANN’s financial requirements.

7.2 (b) Payment Schedule. Registry Operator shall pay the Registry-Level Fees specified in Section 7.2(a) and Section 7.2(c), if applicable, by the 20^th day following the end of each calendar quarter (i.e., on April 20, July 20, October 20 and January 20 for the calendar quarters ending March 31, June 30, September 30 and December 31) of the year to an account designated by ICANN.

7.2 (c) Variable Registry-Level Fee. For fiscal quarters in which ICANN does not collect a variable accreditation fee from all registrars, upon receipt of written notice from ICANN, Registry Operator shall pay ICANN a Variable Registry-Level Fee. The fee will be calculated by ICANN, paid to ICANN by the Registry Operator in accordance with the Payment Schedule in Section 7.2(b), and the Registry Operator will invoice and collect the fees from the registrars who are party to a Registry-Registrar Agreement with Registry Operator. The fee will consist of two components; each component will be calculated by ICANN for each registrar:

7.2 (c)(i) The transactional component of the Variable Registry-Level Fee shall be specified by ICANN in accordance with the budget adopted by the ICANN Board of Directors for each fiscal year but shall not exceed US $0.25.

7.2 (c)(ii) The per-registrar component of the Variable Registry-Level Fee shall be specified by ICANN in accordance with the budget adopted by the ICANN Board of Directors for each fiscal year, but the sum of the per- registrar fees calculated for all registrars shall not exceed the total Per- Registrar Variable funding established pursuant to the approved 2004- 2005 ICANN Budget.

Provided, however, that Registry Operator shall only be required to pay the fees set forth in paragraph (c) above, in the event that ICANN elects to collect the Variable Registry-Level Fee from all ICANN-Accredited Registrars. For the avoidance of doubt, Registry Operator shall not be required to collect the per-registrar component of the Variable Registry-Level Fee from any registrar unless it is required to do so for all registrars.

7.2 (d) Interest on Late Payments. For any payments pursuant to Section 7.2(a) thirty days or more overdue past the time period for payment set forth in Section 7.2 (b), Registry Operator shall pay interest on late payments at the rate of 1.5% per month or, if less, the maximum rate permitted by applicable law. Registry Operator shall not be required to pay interest on late payments under Section 7.2(c), provided that Registry Operator is in good faith making reasonably diligent efforts to collect the underlying payments from those registrars party to a Registry-Registrar Agreement with Registry Operator.

Section 7.3. Pricing for Domain Name Registrations and Registry Services.

(a) Pricing. From the Effective Date through six (6) months following the Effective Date, the price to ICANN-accredited registrars for new and renewal domain name registrations and for transferring a domain name registration from one ICANN-accredited registrar to another, shall

not exceed a total fee of US$6.00 (the “Maximum Service Fee”). Commencing on 1 January 2007, the Maximum Service Fee charged during a calendar year for each annual increment of a new and renewal domain name registration and for transferring a domain name registration from one ICANN-accredited registrar to another, may not exceed the Maximum Service Fee during the preceding calendar year multiplied by 1.10. The same Service Fee shall be charged to all ICANN-accredited registrars for new and renewal domain name registrations. Volume discounts and marketing support and incentive programs may be made if the same opportunities to qualify for those discounts and marketing support and incentive programs is available to all ICANN-accredited registrars.

(b) Adjustments to Pricing for Domain Name Registrations. Registry Operator shall provide no less than six months prior notice in advance of any price increase for domain name registrations and shall continue to offer domain name registrations for periods of up to ten years. Registry Operator is not required to give notice of the imposition of the Variable Registry-Level Fee set forth in Section 7.2(c).

ARTICLE 8 MISCELLANEOUS

Section 8.1 Indemnification of ICANN.

8.1 (a) Registry Operator shall indemnify, defend, and hold harmless ICANN (including its directors, officers, employees, and agents) from and against any and all third-party claims, damages, liabilities, costs, and expenses, including reasonable legal fees and expenses, arising out of or relating to: (a) ICANN’s reliance, in connection with its decision to delegate the TLD to Registry Operator or to enter into this Agreement, on information provided by Registry Operator in its application for the TLD; (b) Registry Operator’s establishment or operation of the registry for the TLD; (c) Registry Operator’s provision of Registry Services; (d) collection or handling of Personal Data by Registry Operator; (e) any dispute concerning registration of a domain name within the domain of the TLD for the registry; and (f) duties and obligations of Registry Operator in operating the registry for the TLD; provided that Registry Operator shall not be obligated to indemnify, defend, or hold harmless ICANN to the extent the claim, damage, liability, cost, or expense arose due to a breach by ICANN of any obligation contained in this Agreement. For avoidance of doubt, nothing in this Section 8.1 shall be deemed to require Registry Operator to reimburse or otherwise indemnify ICANN for the costs associated with the negotiation or execution of this Agreement, or with the monitoring or management of the parties’ respective obligations under this Agreement. Further, this section shall not apply to any request for attorney’s fees in connection with any litigation or arbitration between or among the parties.

8.1 (b) For any claims by ICANN for indemnification whereby multiple registry operators (including Registry Operator) have engaged in the actions or omissions that gave rise to the claim, Registry Operator’s aggregate liability to indemnify ICANN with respect to such claim shall be limited to a percentage of ICANN’s total claim, calculated by dividing the number of total domain names under registration with Registry Operator within the TLD (which names under registration shall be calculated consistently with Section 7.2 hereof for any applicable quarter) by the total number of domain names under registration within all TLDs for which the registry operators thereof that are engaging in the same acts or omissions giving rise to such claim. For the avoidance of doubt, in the event that a registry operator is engaged in the same acts or omissions giving rise to the claims above, but such registry operator(s) do not have the same or similar indemnification obligations to

ICANN at set forth in 8.1(a) above, the number of domains under management by such registry operator(s) shall nonetheless be included in the calculation in the preceding sentence.

Section 8.2 Indemnification Procedures. If any third-party claim is commenced that is indemnified under Section 8.1 above, notice thereof shall be given to ICANN as promptly as practicable. Registry Operator shall be entitled, if it so elects, in a notice promptly delivered to ICANN, to immediately take control of the defense and investigation of such claim and to employ and engage attorneys reasonably acceptable to the indemnified party to handle and defend the same, at the indemnifying party’s sole cost and expense, provided that in all events ICANN shall be entitled to control at its sole cost and expense the litigation of issues concerning the validity or interpretation of ICANN policies or conduct. ICANN shall cooperate, at its own cost, in all reasonable respects with Registry Operator and its attorneys in the investigation, trial, and defense of such claim and any appeal arising there from; provided, however, that the indemnified party may, at its own cost and expense, participate, through its attorneys or otherwise, in such investigation, trial and defense of such claim and any appeal arising there from. No settlement of a claim that involves a remedy affecting ICANN other than the payment of money in an amount that is indemnified shall be entered into without the consent of ICANN. If Registry Operator does not assume full control over the defense of a claim subject to such defense in accordance with this Section, Registry Operator may participate in such defense, at its sole cost and expense, and ICANN shall have the right to defend the claim in such manner as it may deem appropriate, at the cost and expense of Registry Operator.

Section 8.3 No Offset. All payments due under this Agreement shall be made in a timely manner throughout the term of this Agreement and notwithstanding the pendency of any dispute (monetary or otherwise) between Registry Operator and ICANN.

Section 8.4 Use of ICANN Name and Logo. ICANN grants to Registry Operator a non-exclusive royalty-free license to state that it is designated by ICANN as the Registry Operator for the Registry TLD and to use a logo specified by ICANN to signify that Registry Operator is an ICANN-designated registry authority. This license may not be assigned or sublicensed by Registry Operator.

Section 8.5 Assignment and Subcontracting. Any assignment of this Agreement shall be effective only upon written agreement by the assignee with the other party to assume the assigning party’s obligations under this Agreement. Moreover, neither party may assign this Agreement without the prior written approval of the other party, which approval shall not be unreasonably withheld. Notwithstanding the foregoing, ICANN may assign this Agreement (i) in conjunction with a reorganization or re-incorporation of ICANN, to another nonprofit corporation organized for the same or substantially the same purposes, or (ii) as may be required pursuant to the terms of that certain Memorandum of Understanding between ICANN and the U.S. Department of Commerce, as the same may be amended from time to time. Registry Operator must provide notice to ICANN of any subcontracting arrangements, and any agreement to subcontract portions of the operations of the TLD must mandate compliance with all covenants, obligations and agreements by Registry Operator hereunder. Any subcontracting of technical operations shall provide that the subcontracted entity become party to the data escrow agreement mandated by Section 3.1(c)(i) hereof.

Section 8.6 Amendments and Waivers. No amendment, supplement, or modification of this Agreement or any provision hereof shall be binding unless executed in writing by both parties. No waiver of any provision of this Agreement shall be binding unless evidenced by a writing signed by the party waiving compliance with such provision. No waiver of any of the provisions of this Agreement or failure to enforce any of the provisions hereof shall be deemed or shall

constitute a waiver of any other provision hereof, nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided.

Section 8.7 No Third-Party Beneficiaries. This Agreement shall not be construed to create any obligation by either ICANN or Registry Operator to any non-party to this Agreement, including any registrar or registered name holder.

Section 8.8 Notices, Designations, and Specifications. All notices to be given under or in relation to this Agreement shall be given either (i) in writing at the address of the appropriate party as set forth below or (ii) via facsimile or electronic mail as provided below, unless that party has given a notice of change of postal or email address, or facsimile number, as provided in this agreement. Any change in the contact information for notice below shall be given by the party within 30 days of such change. Any notice required by this Agreement shall be deemed to have been properly given (i) if in paper form, when delivered in person or via courier service with confirmation of receipt or (ii) if via facsimile or by electronic mail, upon confirmation of receipt by the recipient’s facsimile machine or email server. Whenever this Agreement shall specify a URL address for certain information, Registry Operator shall be deemed to have been given notice of any such information when electronically posted at the designated URL. In the event other means of notice shall become practically achievable, such as notice via a secure website, the parties shall work together to implement such notice means under this Agreement.

If to ICANN, addressed to:
Internet Corporation for Assigned Names and Numbers
4676 Admiralty Way, Suite 330
Marina Del Rey, California 90292
Telephone: 1-310-823-9358
Facsimile: 1-310-823-8649
Attention: President and CEO
With a Required Copy to: General Counsel
Email: (As specified from time to time.)

If to Registry Operator, addressed to:
NeuStar, Inc.
46000 Center Oak Plaza
Sterling, VA 20166
Telephone: 1-571-434-5400
Facsimile: 1-571-434-5735
Attention: Sr. Director, Law, Advanced Services and Business Development
NeuStar, Inc.
With a Required Copy to: General Counsel
Email: (As specified from time to time.)

Section 8.9 Language. Notices, designations, determinations, and specifications made under this Agreement shall be in the English language.

Section 8.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 8.11 Entire Agreement. This Agreement (including its Appendices, which form a part of it) constitutes the entire agreement of the parties hereto pertaining to the operation of the TLD and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, between the parties on that subject. In the event of a conflict between the

provisions in the body of this Agreement and any provision in its Appendices, the provisions in the body of the Agreement shall control.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives.

     INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS

By:	/s/ Dr. Paul Twomey
	Dr. Paul Twomey
	President and CEO
Date:

     NEUSTAR, INC.

By:	/s/ Richard Tindal
	Richard Tindal
	Vice President
Date: 12/19/06

EX-10.35

Exhibit 10.35

Relocation Policy

It is the policy of NeuStar, Inc. to pay for reasonable and necessary expenses of relocating an employee, when such a move is at the request of the Company. These expenses include the relocation of spouse / domestic partner and eligible dependents.

Once you have made the important decision to accept a company transfer, Human Resources will provide you with the information to expedite your move to the new assignment. Outlined are specifics involved in the relocation process. Our goal is to make this a positive experience utilizing the services and counseling assistance we can provide throughout your relocation. Neustar utilizes the services of Interstate Relocation Services a third party relocation company.

The policy applies to all full-time employees relocating between NeuStar locations. The policy also may apply to new hires if relocation is part of the employment offer.

A relocation qualifies under this policy when:

1)	The period of the reassignment is expected to be twelve (12) months or longer.
2)	The relocation is at the request of the Company.
3)	The change in commuting distance between the original work location and the destination work location is 50 miles or more based on the shortest common route.

Relocation Repayment Agreement

Relocating an employee requires a substantial investment by Neustar. If you voluntarily elect to terminate your employment, cancel your move, or are terminated with cause within 12 months of the effective date of your transfer, you agree to immediately repay the relocation dollars reimbursed and/or advanced, including all expenses that were directly billed to Neustar.

You must sign and return the Relocation Repayment Agreement before any relocation benefits can be processed. Your Human Resources representative will then notify Interstate Relocation of your move. You will be contacted promptly by your designated Interstate Relocation Counselor to review your benefits and determine your individual needs

Relocation Expense Allowances

Shipment of Household Goods

Your Interstate Counselor will coordinate the shipment of your household goods. You should inform your Interstate Counselor upon securing a new address and identifying a moving day. Neustar will pay the van line directly for the cost to move your household goods and personal effects. These services include packing, unpacking, transport and replacement insurance.

Special Shipping Charges

The company will reimburse relocation expenses incurred for the movement of two (2) automobiles, appliance services, as well as an extra pick-up at origin or extra delivery at destination.

Certain personally owned “means of transportation” (recreational vehicles, boats, airplanes, dune buggies, etc.) are excluded from the moving allowances.

Storage

The company will reimburse for the costs incurred for storage up to a maximum of 90 days. Prior approval is required

Final Move of Employee and Dependents

Coach airfare is provided to transport the employee and dependents to the new location. If the employee prefers to drive a personally owned vehicle to the new location, the company will reimburse mileage driven at the current IRS excludable rates. Up to two (2) vehicles may be authorized for this means of transportation.

Temporary Living Expense

The company will reimburse reasonable living expenses while waiting to move to a permanent residence. Temporary living expenses are covered for up to ninety (90) days. Any expenses beyond ninety (90) days must be authorized by the appropriate functional V.P.

House Hunting Trip

In order for you (and your spouse / Domestic Partner) to choose a community and a home, you may take up to two (2) trips to visit the new location for a maximum of eight (8) days. You will be reimbursed for coach airfare, hotel, phone, car rental and meals. Should you use your personal automobile the trip mileage (at the current mileage reimbursement rate) will be reimbursed.

Purchase of New Residence

The company will reimburse allowable relocation expenses for expenses relating to the purchase of a new primary residence, provided you were previously a homeowner, up to a maximum of 3% of purchase price. These expenses, if incurred, may include the following:

• Legal fees

• Title search and insurance

• Inspection fee

• Transfer taxes

• Tax stamps

• Survey fees

• Appraisal fee

• Recording fee

• Credit checks

• Loan origination fee, loan service charge or mortgage origination fee

Property taxes and interest will not be included in the reimbursement.

Sale of Current Residence

The Company will reimburse normal and customary expenses associated with the sale of your current, primary residence, not to exceeded 6% of the sales price.

Miscellaneous Relocation Expenses

The company recognizes that there may be other additional / incidental costs associated with relocation not covered under any of the above provisions. To compensate for these expenses, the employee can be allotted up to $7,500. This miscellaneous allowance is normally paid upon the move-in at the new residence.

Taxes

As a reminder, under the U.S. tax laws, all reimbursed relocation expenses with the exception of reimbursement for the cost of moving your household goods, personal effects (including in-transit storage expenses) and the cost of traveling to the new location (including lodging but excluding meals and mileage reimbursement up to allowable IRS excludable rates), is considered taxable income for U.S. citizens, permanent residents, and persons holding certain U.S. work authorizations. Taxable expenses include such items as: house hunting trips, temporary lodging, real estate fees, cost associated with the sale and purchase of a house, meal expenses, security deposits, and expenses of getting or breaking a lease. During the calendar year, the company will reimburse you for taxable relocation expenses. Since these expenses are taxable, the company will provide you with the appropriate federal, state, local and FICA / Medicare tax, based on the supplementary compensation wage tax rates. The Payroll Department will send you a statement explaining all taxes deposited on your behalf and included in your W-2. We encourage you to refer to the IRS Publication 521, Moving Expenses, for more information.

Authorization / Approval

Human Resources must approve all relocation expenses.

If the relocation is between two different departments the department receiving the employee is responsible for the relocation.

To qualify for reimbursement, all expenses must be incurred within one year from date of relocation expense.

Documentation

The Relocation Expense Report must be submitted with original receipts in order to obtain reimbursement.

Employees who accept relocation under these terms are required to sign a Relocation Agreement. If the employee voluntary terminates or is terminated for cause, the employee will be responsible for reimbursing the Company the amount of all relocation moneys paid to you or others on your behalf, as provided for in the Relocation Agreement.

EX-21.1

Exhibit 21.1

Subsidiaries of the Registrant

Company Name	Jurisdiction of Organization
Followap GmbH	Germany
Followap Inc.	Delaware
Followap Limited	United Kingdom
Followap R&D (2000) Ltd.	Israel
NeuLevel, Inc.	Delaware
NeuStar Secretariat Services, LLC	Delaware
UltraDNS Corporation	Delaware

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-128418) pertaining to the 1999 Equity Incentive Plan and the 2005 Stock Incentive Plan of NeuStar, Inc. of our reports dated February 28, 2007, with respect to the consolidated financial statements and schedule of NeuStar, Inc., NeuStar, Inc.’s management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of NeuStar, Inc., included in the Annual Report (Form 10-K) for the year ended December 31, 2006.

	/s/ Ernst & Young LLP
McLean, Virginia February 28, 2007

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jeffrey E. Ganek, certify that:

1.	I have reviewed this annual report on Form 10-K of NeuStar, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 1, 2007	/s/ Jeffrey E. Ganek
	Jeffrey E. Ganek
	Chairman and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Jeffrey A. Babka, certify that:

1.	I have reviewed this annual report on Form 10-K of NeuStar, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 1, 2007	/s/ Jeffrey A. Babka
	Jeffrey A. Babka
	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. 1350

Pursuant to 18 U.S.C. 1350, each of the undersigned certifies in his capacity as an officer of NeuStar, Inc. that, to the best of his knowledge:

1.	The annual report on Form 10-K of NeuStar, Inc. for the year ended December 31, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	Information contained in such annual report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of NeuStar, Inc.

March 1, 2007	By:	/s/ Jeffrey E. Ganek
		Jeffrey E. Ganek Chief Executive Officer
March 1, 2007	By:	/s/ Jeffrey A. Babka
		Jeffrey A. Babka Chief Financial Officer

     This written statement is being furnished to the Securities and Exchange Commission as an exhibit to such Form 10-K. A signed original of this statement has been provided to NeuStar, Inc. and will be retained by NeuStar, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.