From the 1930s until 2015 the entirety telecom law in this country could be written on a cocktail napkin. And really it boiled down to four words: carriers must connect calls.
Communications Act Section 201– the law that built the telephone network– required faithful connection of calls between telecommunications providers. And our phones worked beautifully for decades. A real super power of the American economy.
Beginning in 2015, however, things began to change.
First carriers were empowered to block calls on an opt in basis. Then in 2018– noting that consumers were just too lazy to opt in to call blocking but not too lazy to complain about robocalls to the FCC–the Commission allowed carriers to opt consumers into call blocking without their permission but gave no clear rules regarding what could and could not be blocked. Disaster.
Today we’re living under an insane regime of carrier censorship in which numerous parties in the telecom ecosystem are incentivized to block, label, throttle, track, listen to, and misdirect legitimate calls from American businesses while they let the scam calls from overseas go sailing through. Just a joke.
Still tremendous pressure has been applied to the carriers by the FCC to censor speech in the name of robocall mitigation (this, of course, is why carrier activity here constitutes state action and is a major First Amendment issue.) This culminated in so-called “shut down” orders, like the one that crippled Phone Burner a little while back. (Wait until you hear from Phone Burner CEO on Deserve to Win Ep. 31–unreal story!)
But another offshoot of recent FCC pressure on carriers is the Know Your Customer requirements carriers are required to follow. These rules are intended to prevent bad guys from gaining access to the nation’s telecom networks, which is fine as far as it goes.
There’s just one little wrinkle– although the whole wide watching world knows KYC requirements are a thing nobody knows precisely what is required given the incredibly vague rules on the subject. The FCC has never really explained what is required.
In many way the missing KYC guidance from the Commission mirrors the missing call blocking guidance and missing call labeling guidance. Indeed, as telecom law stretches and grows from a cocktail napkin to a napkin factory worth of rules there is still a ton to be filled in.
While R.E.A.C.H. recently filed a critical petition to help fill in the gaps around what calls and texts can be blocked and labeled and which cannot–i.e. can legal and constitutionally protected speech be blocked by delegees who can license speech based on vague and shifting requirements? (no)– there is currently no effort to define KYC requirements for carriers.
So gifted telecom lawyers– like those at Troutman Amin, LLP— must spend their time crafting policies and procedures for carriers as educated “best guesses” using enforcement actions and state corollary proceedings as guideposts to help keep the nation’s thousands of carriers safe. Not the best situation.
Now enter Telnyx CEO David Casem and his audacious and very public defense of his company’s seeming KYC catastrophe last year.
For anyone who missed it, Telnyx was hit with a $4.5MM proposed penalty from the FCC for failing to conduct proper KYC and allowing an incredibly stupid robocaller onto its network that literally tried to scam the FCC itself. I penned a quick blog yesterday querying whether this was the single dumbest scheme in history.
Except, as David pointed out via LinkedIn maybe it wasn’t dumb at all.
Maybe the “scammer” wasn’t actually trying to trick anyone at the FCC after all. Instead–as David put it– Telnyx was swatted. Some nefarious actor was actually targeting Telnyx by leaving a trail of unmistakable bread crumbs leading back to its door.
In this version of events–which I am filling in for David– MarioCop never intended to make a dollar off the scam. Rather they wanted to see the FCC hammer Telnyx for some reason–and they got exactly what they wanted.
Why would MarioCop do this?
Who knows. Competitor. Jilted former lover. Casey Kasem fan who thinks David spells his name wrong. Whatever.
The point is this was less of a scam than an assassination attempt using the FCC as the rifleman.
So David is frustrated that the FCC took the bait and is defending Telnyx by starlight and morning hues.
This is intriguing and makes for great blog fodder, but even if he’s right that just means MarioCop was able to target Telnyx because of its paper mache KYC process. So they detected a vulnerability and exploited it. Still bad on Telnyx.
But here David counters with an intriguing metaphysical question– what even is KYC?
Essentially David’s position is that the FCC has never defined KYC so who are we (or it?) to question Telnyx’ practices and define it for the first time now.
Hmmm.
He professes to have robust KYC and to have prevented thousands of bad actors from accessing the network over time.
And as to his company accepting bitcoin as payment he insists this is just what any responsible forward-thinking technology-friendly company would do.
Maybe.
I mean Troutman Amin, LLP is still a ways away from accepting Czar Gold as payment– and that’s my own currency! No way we’d accept a lesser brand of crypto like bitcoin. The currency of thieves and dread pirates.
Regardless, I offered to have David on our podcast to share his side of the story in more detail. At first he agreed but then he backed off suspecting I was too favorable to the FCC.
The truth, of course, is that I am favorable to the truth. And I always love hearing from both sides on the issue.
We will follow this very closely and David the invitation to join the podcast is still open! Fascinated by your stout defense here. Even if I am still not entirely sold here, I love to see a fighter do his thing!
Also for anyone who doesn’t yet have a copy of the REVISED 2025 Troutman Amin, LLP TCPA Annual Review, presented by Contact Center Compliance–what are you waiting for?
WE DID IT!: WE UPDATED OUT 2025 TCPA ANNUAL REVIEW AND YOU SIMPLY MUST HAVE ONE RIGHT NOW!
Chat soon.
Discover more from TCPAWorld
Subscribe to get the latest posts sent to your email.
Yes, I agree with your point, that they could well have been targeted as a ‘swatting’ but that still doesn’t excuse the total lack of vetting.
Then there’s this: “We lose thousands of potential legit customers every month…”(!!!!???) Yeah, right!
And yet possibly the worst, most obvious attempt ever to gain access skated right by him!
His justification: well they were still just on ‘trial status’ is the equivalent of holding the door open for the masked, clearly armed suspects into the bank, but stopping them before they got the MGR to open the vault – but AFTER they robbed and traumatized every teller working that day…sheesh
Rather than tell his ‘story’ to TCPA World, he won’t deal with you in person; now that in itself really sums it all up.
The one valid point he made (in my opinion) is about BTC, although it does still imply an invitation to miscreants; it isn’t anonymous – Federal LEO has already cracked blockchain (which by the way records EVERY transaction)…
Suggested reading: “Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency”
https://www.amazon.com/Tracers-Dark-Global-Crime-Cryptocurrency/dp/0385548095
Having over 20 years experience in the space I could almost guarantee this was targeted. While they need to tighten up their KYC, Telnyx doesn’t take robodialer traffic. If anything, they were too lax on their vetting with regards to new accounts and maybe relied too much on analytics to flag robocall patterns after the fact. Had that been a normal (not targeted) campaign, it would have been caught and shut down with no complaints. Nobody sets up an account to make robocalls and then targets the FCC members. Just my 2 cents.
This specific case disturbs me. Someone targeted FCC personnel with these harassment calls. There certainly must be some underlying criminal offense. The FCC has the capability to compel the carriers involved to trace these calls to their source. But, instead, it looks like the FCC just pointed blame at Telnyx and closed the file. True, Telnyx was remiss; but, Telnyx was only the conduit used to facilitate these calls. If I were the FCC, I would investigate until the real scoundrel has been identified and push for maximum criminal penalty. Now, THAT, would send a message that the FCC means business.