By Simon Woodhead
I’ve always loved the US market because of its straightforwardness. One doesn’t have Regulators beating around the bush, making ever evolving excuses why you can’t have a given resource, they just come out and say it – you’re a dirty foreigner. You know exactly where you are, which I like. It is a complicated market too with dozens of private companies administering different bits, but they’re all administered by someone called Dorris who has done it for 30 years or more and is lovely – as long as you know who and where Dorris is, things are very easy – she doesn’t care or judge who you are. We’ve made massive progress in this environment, but the market is not well, is not healthy and is rapidly becoming a no-go zone. It needs a light shining on it, which I’ll attempt to do.
The US has a problem with Robocalls, to a far higher level than we see in the UK or other markets. They also have a problem with fraud and the kind of spoofing local number type issues we’re all too familiar with. For all the negative press around STIR/SHAKEN though, they’ve made huge progress in reducing some of these call vectors and forcing nerdowells out the market with practices like traceback and the threat of serious fines. That’s good isn’t it? Well yes, and no.
We believe in a fair and transparent marketplace in every market we operate. We don’t like oligopolies. We don’t like lobbying. We don’t like double-standards. Most of all, we don’t like the kind of unfairness that comes from the commingling of all three.
The reality is, the US has the means to stop illegal Robocalls overnight, but it chooses not to. Why might that be?
One thing we see going on is STIR/SHAKEN being used as a sales harvesting tool. If you are an oligopolist, 58% of the calls coming into your network are now signed, a little under half of those by the underlying customer. Imagine if on the pretence of combatting Robocalls, you restricted capacity or disadvantaged terms to that originating network whilst simultaneously soliciting the traffic directly… What if the call profile was undesirable and you could really crank up the commercials before terminating that network’s contract altogether? The underlying traffic would have little choice but to contract directly, and at much higher margin. Without naming names, we believe this is going on, with some farcical anecdotes such as one network blocking traffic and restricting capacity for its own outsourced credit control function carried by another operator.
The FCC and other agencies are coming out with new rules every day, but they’re rules that only seem to apply to the little guy. Maybe that is unsurprising when the oligopolists staff the steering committees and standards bodies. We hear often of the revolving door of staff leaving oligopolists to work in a regulatory role, before returning to much more highly paid roles at the oligopolist. What are they being rewarded for achieving? We understand that some serious evidence has been gathered here and we look forward to it making its way through the judicial process, as all we have is hearsay, albeit very believable hearsay.
Of course, however created, rules are meant to be followed but they don’t seem to apply to the oligopolists. Take for example the decision within the FCC that licensees cannot be more than 10% foreign owned. As dirty foreigners, albeit dirty foreigners that meet the gold standard in compliance and tackling the actual problem, this is something we have struggled with for a few years. Yet, while we struggle with that, two oligopolists are entirely foreign owned and nobody cares. Yes, they have domestic management and staff so perhaps the rule can be overlooked? Well, so do we, and we’re told it doesn’t matter – the rule relates to ownership. I’m often heard saying this policy is racist but it is actually something far worse – a racist would discriminate equally.
Then there is the actual problem – US numbers being allocated overseas and then used on international calls making their way back into the US. We recognise the problem and have understood when the various regulatory bodies have insisted we do not allocate outside the US in our business. We don’t, yet the oligopolists do. It has been estimated that as much as 18% of their revenues can be associated with offshore diallers. While some of these diallers operate within legal constraints, others don’t. One has to wonder why this rule doesn’t get enforced more widely given it is the very root of the problem? Investigating and confirming that profit number would be a good place to start.
In terms of terminating calls, the tightening of standards and the risks of revocation of accounts has driven a lot of undesirable operators out of business, as well as legitimate businesses who were just collateral damage. According to our Industry Traceback Group portal, 57% of tracebacks have led to contract termination. So those standards are applied universally right? Well no, operator X may impose very strict standards on traffic, and ultimately terminate contracts where in violation of them. However, if you’d like to pay a little more, they’ll happily wash this traffic through . Shhhh, don’t tell anyone.
It has been estimated that as much as 75% of the traffic that terminates into the USA, is not truly conversational traffic, but indeed robo generated traffic, and possibly only 25% of that robo generated traffic is legit – by my maths that suggests over 50% of the traffic that terminates in the USA is illegitimate and likely being terminated nowadays at supra-normal rates.
So what we have here is a land and margin grab by the oligopolists under the banner of consumer protection with the full support of the grown-ups. But that banner is a lie, because if they wanted to stop the actual problem, it could be done overnight. It’d just cost them a chunk of profit. I wonder why that hasn’t happened? Not hard to work out is it!
There’s a very easy two step solution to the entire Robocall issue, and the US is in the best place globally to do this given existing technologies in use. It looks like this:
- Forbid the allocation of US numbers to non-US entities. This requires actual KYC to combat it being circumvented with a $200 Delaware corporation and nominee address. Other countries do this incredibly effectively and it doesn’t suppress legitimate offshoring or introduce collateral damage as we’re filtering allocations not calls – we don’t care if the party allocated a US number outsources a function to India, as long as they themselves are onshore.
- Enforce the population of CNAM – a system in the US where a name can be associated with a number which gets displayed on handsets. This’d need a penalty structure to ensure appropriate KYC by operators but the consumer experience would be lovely. If they know who is calling or recognise the name, they’ll take the call, but no longer can they be fooled by a local-looking number allocated to an offshore criminal.
I wonder when those in the US charged with questioning the regulatory process will raise some of these issues. We’d love to see the criminals out of business and the market given the opportunity to work.
