Neutrality

Neustar's Defining Characteristic

Under FCC rules and orders establishing the qualifications and obligations of the North American Numbering Plan (NANP) Administrator and National Pooling Administrator, and under our contracts with North American Portability Management, LLC to provide telephone number portability services, Neustar is required to comply with neutrality regulations and policies. Under our neutrality standards, 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 communications service provider, telecommunications industry segment or technology or group of telecommunications consumers over any other service 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. Also, Neustar is required to maintain complete confidentiality of all 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 service provider;
• We prohibit access by our stockholders to user data and proprietary information of service providers served by us (other than access of employee stockholders that is incident to the performance of our numbering administration duties);
• We must ensure that no user data or proprietary information from any service provider is disclosed to us, other than the sharing of information that is obtained in connection with the performance of our duties;
• We must not share confidential information about our business services and operations with employees of any service provider;
• We refrain from simultaneously employing, whether full time or part time, any individual who is an employee of a 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 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 familiar with our neutrality requirements and have not violated them.