BOGUS?: Is TCR’s Foreign Ownership A Threat To National Security? They Just Retained Latham & Watkins to Convince the FCC They Are Not

So like a kid on Christmas morning I was reading all the EXCELLENT comments filed by small businesses advising the FCC on the impact of the TCPA’s one-to-one consent ruling today.

Really really nice stuff.

But then I stumbled upon a comment filed by Latham & Watkins in the record. And I thought, how odd. And when I cracked it open I could have not have been more delighted to see the Campaign Registry defending itself, publicly, before the Commission.

And not very well either…

In all of  the hubub over the recent FCC TCPA rulings I had entirely missed something critical and fun and fascinating.

Back on January 26, 2024 a company called Telecommunications Company
Repatriation Acquisition LLC. (Acquisition) filed a letter with the FCC challenging that the TCR’s foreign ownership as a threat to national security.

Now I have heard many many nasty things about the TCR. And, in fairness, much of it was from disgruntled callers and platforms that could not get their campaigns timely approved. But it did always seem odd to me that a foreign owned entity was cataloging American text campaigns–particularly political campaigns–and issuing “trust scores” determining how often a business could speak and, seemingly, to whom.

Make no mistake, the TCR process is horrifying even if it was American owned–clearest licensing scheme you’re ever going to see and a complete and total violation of the First Amendment–but the fact that the parent company was foreign-owned was… well… weird to me.

But the Czar has too many fights on his hand to be trying to solve all the world’s problems–you’ll have to wait for 2026 for that–so I let it go.

he just keeps winning…

But Acquisition didn’t.

And in their letter to the FCC back in January they absolutely blast the idea of TCR being permitted access to so much data–and holding such a pivotal role in America’s text message ecosystem–yet they are closely aligned with China and other foreign countries that don’t exactly take privacy rights as seriously as Americans might like.

And then there’s the part about the transfer to Tata Communications–who only five months later was subject to a massive cease and desist from the FTC for carrying–you guessed it–illegal robocalls from foreign countries.

Hmmmm.

Now look, I am not educated enough to fully weigh in on these issues. So I invite you to read both Acqusition’s comment (here: TCR Acquisition Letter_) and TCR’s response (here: TCR Acquisition Letter) but here are a couple of high points and my OPINION on what I see in there:

1. Aquisition says TCR’s Foreign Ownership is A National Security Threat– TCR Says that’s “Nonsense” and “Xenophobic”

Per Acquisition:

“Because The Campaign Registry is now or at one time has been owned and controlled by investors based in the People’s Republic of China, Italy and India, the national security and data privacy implications should have been obvious to every wireless carrier in the United States.

Essentially every political texting campaign in the U.S., at the state, local and federal level, must be approved by The Campaign Registry prior to sending campaign messages to essentially anyone’s mobile phone number. The same is true for not for profit entities and commercial entities who engage in 10DLC texting campaigns. And yet, at no time in any FCC filings or media reports did any of our Nation’s major wireless carriers express any concerns regarding the foreign ownership of the Campaign Registry. At the same time, it is fair to surmise that most U.S. mobile customers had never even heard of this foreign-based entity that was supposed to be protecting them from unwanted and unlawful text messages.”

Per TCR:

“That contention is at odds with basic legal tenets and policy principles—and its xenophobic underpinnings are offensive.”

TCR goes on to explain that lots of carriers are foreign owned. The German carrier Deutsche Telekom, for instance, holds a majority stake in T-Mobile,12 and before its acquisition by T-Mobile, Sprint likewise was majority-owned by a foreign company, Japan’s SoftBank Group. So what’s the big deal?

The Czar’s take:

I get it. Lots of critical American infrastructure is owned by foreigners. Maybe that’s cool. Maybe it isn’t. But when you start talking about REGISTRTION of CAMPAIGNS–i.e. political and business speech–and handing that information over to foreign companies that’s a problem.

What bothers me the most about TCR’s response is that IT NEVER DENIES DATA FROM THE AMERICAN SUBSIDIARY IS PROVIDED TO THE FOREIGN PARENTS. I expected to see that in the response. I didn’t. (Did I miss it Latham?) That is a pretty big issue in my view.

2. Acquisition Says TCR’s New Owner Let a Bunch of Robocalls into the Country–TCR Says that’s “Beside the Point” and the FTC Didn’t Really Do Anything About it So No Biggie

Per Acqusition:

Kaleyra/Tata Communications (TCR parent companies) completed a merger on October 5, 2023. 

Yet less than two months later, on November 27, 2023, the Federal Trade Commission issued a “Cease and Desist” letter to Tata Communications (America), Inc., which stated in pertinent part as follows: “We have determined that Tata Communications (America) Inc. is apparently routing and transmitting illegal robocall traffic, directly or indirectly, for entities involved in” a bunch of fraud campaigns.

TCR responds:

Just as the operations of TCR’s parents are irrelevant to its ability to provide such services, the operations of TC America—which is commonly owned but independently managed—are beside the point. In any event, TCR Acquisition’s claims yet again are bogus. The FTC’s letter, one of several sent to international gateway providers, directed TC America, insofar as it was “routing and transmitting illegal robocall traffic knowingly,” to stop doing so.21 But as the company explained in its response to the FTC, TC America does not knowingly transmit or route illegal robocall traffic; to the contrary, TC America takes a variety of steps, consistent with the Commission’s rules and guidance, to prevent carriage of such traffic on its network. Tellingly, upon receipt of TC America’s response to its inquiry, which detailed the company’s exhaustive robocall mitigation efforts, the FTC decided to take no further action. 

My take:

Besides the point? besides the point? The new owner of the TCR–whose literal job it is to prevent scam robocalls– was just subject to a cease and desist order for letting SCAM ROBOCALLS TRAVERSE THEIR NETWORK and that’s beside the point???

The arrogance. My goodness. That’s #biglaw for you.

TCR’s response that Tata “didn’t know” it was doing anything illegal is hardly comforting and the claim that the FTC has taken no further action should have a great big YET at the end of it. (This just happened in November, 2023 remember.)

This entire part is weak. Not good. Defensive. And unpleasant to read. How about taking some responsibility? Owning an oversight and promising to do better?

3. Acquisition Says TCR’s Data is Critical–TCR Says it Doesn’t Actually Own any Infrastructure So “Nonsense”

Acquisition says:

Because the Campaign Registry owns no FCC issued licenses or authorizations (to my knowledge, at least), the FCC has no direct regulatory authority over it. Yet, the functions that the Campaign Registry are supposed to perform — the vetting and screening of every commercial, political and not for profit texting campaign that uses 10 digit numbers – are obviously critical to all U.S. mobile users. It should have been obvious to federal governmental authorities at a variety of different agencies (the FCC, Treasury, the Justice Department, DHS) that anything other than U.S. ownership of this critical infrastructure would place its critical functions largely beyond the reach of pertinent regulatory authorities. 

TCR says:

“TCR Acquisition claims that TCR’s “operations and network constitute ‘critical infrastructure’ … that undoubtedly handles sensitive and confidential customer and carrier data.” Nonsense. TCR plays a limited role in the messaging ecosystem. It does not own or operate a communications network or provide any communications service, foreclosing any contention that it operates “critical infrastructure” within the meaning the U.S. Government ascribes that term. Rather, TCR maintains a registry that enables mobile carriers to authenticate the identity of entities that send application-to-person messages via 10-digit numbers. 

My take:

Maintaining a registry that enables mobile carriers to authenticate the identity of entities that send a2p messages via 10DLC is… ummm… pretty critical. Not sure what sort of sleight of hand TCR hopes to pull off here but ask any small business who can’t get their text messages out right now–TCR matters. It is a massive gateway (and headache) for SMS outreach. And pretending like TCR’s role is no big deal is… weird, offputting, insincere, and credibility straining.

Just my two cents. And I’m just the best known telecom lawyer in the world.

We’ll keep a close eye on this and see if these folks want to join the podcast to hug it out. More to come.

Chat soon.