By: Andy Regitsky
With the FCC stuck on four commissioners for the foreseeable future, increasingly the ultra-regulatory Federal Trade Commission (FTC) encroaches on our industry. Recently, two actions by that Commission are sure to impact telecommunications providers.
First, the FTC is trying to make it easier for consumers to cancel their enrollment in subscription services. The agency claims that it receives thousands of calls a year from consumers that simply cannot cancel their subscriptions with various companies. Thus, it is proposing a rule called “click to cancel” which would require companies to make it as easy to cancel a subscription as it is to sign up for one. Click to cancel would require:
Companies make it easy to cancel a subscription; A seller must take “no” for an answer and complete the cancellation process if a customer asks them to do so; Sellers must provide an annual reminder before automatically renewing a subscription;
It is unclear how broadband providers who sign customers up for long-term contracts would be affected by this proposal. The questions include what happens to termination liabilities under click to cancel and will they still be permitted to exist? And how will pricing change if we must function in an environment in which a customer purchases special access under a 10-year contract but chooses to terminate the contract after one year? This proceeding is certainly one to watch for the industry!
The FTC is also taking action to stop international robocalls. While its intent can’t be questioned, its once again is usurping the FCC. The FTC has implemented a new “Project Point of No Entry” (PoNE), targeting point of US entry or gateway Voice over Internet Protocol (VoIP) service providers and warning they must work to keep illegal robocalls out of the country. According to the Commission
Through Project PoNE, the FTC is disrupting foreign-based scammers and imposters responsible for blasting U.S. consumers with annoying and unwanted calls. Through Project PoNE, the Commission: 1) identifies point of entry VoIP service providers that are routing or transmitting illegal call traffic, 2) demands they stop doing so and warns their conduct may violate the Telemarketing Sales Rule, and then 3) monitors them to pursue recalcitrant providers, including by opening law enforcement investigations and filing lawsuits when appropriate. (FTC Press Release, April 11, 2023).
The agency claims PoNE is already having a significant impact.
Through the FTC’s enforcement efforts and its collaboration with partners, such as the Industry Traceback Group (ITG), the Federal Communications Commission (FCC), and state attorneys general, Project PoNE has uncovered the activity of 24 target point of entry service providers responsible for routing and transmitting illegal robocalls between 2021 and 2023, in connection with approximately 307 telemarketing campaigns, including government and business imposters, COVID-19 relief payment scams, and student loan debt relief and forgiveness schemes, among others. According to ITG, a single campaign often represents hundreds of thousands or millions of calls. (Id.).
While the FTC claims it is working hand in hand with the FCC, you must wonder exactly how the traditional telecom agency feels about these actions? This comes after the FTC is planning on establishing general rules for companies rather than punishing wrong-doing companies after the fact. It follows the recent Rulemaking by the FTC to crack down on potentially harmful commercial surveillance and lax data security by large tech companies including ISPs.
Meanwhile, after the departure of Gigi Sohn, there is no favorite to be the fifth FCC commissioner. Unfortunately, several groups are lobbying for their preferred candidate to fit their favored identify group. The hope here is that whoever is finally chosen, they are qualified and bring an open mind to the issues.
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