Regulators Target Companies That Connect Robocalls From Overseas

The new FCC rules require that these companies register with the agency and adopt a robocall mitigation program, including monitoring for illegal calls and blocking other phone companies that have been flagged by authorities as transmitting potentially illegal calls. Eventually, if they don’t act to curb illegal calls, they could be blacklisted by the FCC and cut off from the telephone network.

“We need to cut these calls off before they reach our shores, our homes and our phones,” FCC Chairwoman

Jessica Rosenworcel

said Thursday.

Some observers of the telecom sector question whether the FCC can effectively enforce the new rules. In the past, the agency has allowed telecom providers too much discretion about what goes on their networks, said

Margot Saunders,

senior counsel at the consumer advocacy group National Consumer Law Center.

“If the FCC punishes the providers, slams the door on providers for allowing the calls through, then the calls will stop,” she said, but if the FCC doesn’t, “the calls will continue, as they have.”

Telecom industry groups generally support the FCC’s anti-robocall initiative and have urged the agency to consider rules similar to the ones adopted Thursday.

The federal government’s efforts to target gateway providers have been under way since at least 2019, following the creation of an industry group that traces illegal calls. Call traces are necessary because the modern telephone system consists not just of giants such as

AT&T Inc.,

but also of a web of small, internet-based providers, some of whom specialize in routing calls in bulk. A phone call can bounce between eight companies or more before reaching its destination.

Call-tracing data from the trade association USTelecom’s Industry Traceback Group revealed that small U.S. providers were significant conduits for illegal calls.

Based in part on that data, the FCC has begun publicly identifying some of the companies as sources of robocalls and demanding they stop or face sanctions. The Federal Trade Commission, Justice Department and state attorneys general have brought cases against telecom providers for facilitating robocalls.

Yet robocalls persist. YouMail Inc., which tracks robocalls through a smartphone app, estimates nearly four billion were placed in April.

Many robocalls come into the U.S. from overseas, bearing a U.S. number in the Caller ID field. That kind of call can have a legitimate use, such as when a company’s foreign-based customer-service representative wants to contact a U.S. customer. But such calls are an attractive way for scammers to pose as legitimate.

The FCC is trying to construct a regulatory regime that it can use to cut off providers repeatedly identified as conduits of illegal calls. The rules, adopted Thursday in a bipartisan and unanimous FCC vote, impose a series of new obligations on phone companies involved in bringing foreign-originating calls onto the U.S. network.

Central to the regime is a requirement that these companies register with the FCC and take steps to stop illegal calls—whether the companies are based in the U.S. or not. If the agency decides a company isn’t doing enough to mitigate the problem, it can direct other providers not to take the companies’ call traffic.

“That’s a significant mechanism that the FCC could leverage,” said Kevin Rupy, a telecommunications lawyer at Wiley Rein LLP. Such an FCC action, he said, would effectively mean “you’re out of the voice business.”

One aspect of the regulation caused a stir. Last year the trade group CTIA, whose members include

Verizon Communications Inc.,

AT&T, and

T-Mobile US Inc.,

asked the FCC to delay the rules for foreign-based telecom providers, saying the rules could cut off legitimate calls from Americans traveling abroad. The FCC rejected the CTIA petition Thursday, calling the concerns overstated. CTIA declined to comment.

The new rules governing overseas calling will take effect in the coming months, and the FCC is considering further proposals to close what it called potential loopholes.

Write to Ryan Tracy at [email protected]