Jonathan Marashlian: The Legal Landscape Emerging for Robocalls Under the TRACED Act

Requirements for voice service providers emerging from the TRACED Act and the Federal Communications Commission orders that followed have changed the risks and threats to voice service providers.

Voice service providers have just passed some major milestones: Certifying SHAKEN and/or robocall mitigation in the FCC database and refusing calls from unregistered upstream providers. Does that mean it is time to kick back and relax?

Not at all. The legal landscape in the new STIR/SHAKEN era is much larger and more diverse than mere technical compliance with FCC requirements.

We are already seeing clear and unmistakable signs that compliance with the bare minimum requirements established by the FCC—implementing STIR/SHAKEN and robocall mitigation plan procedures—is insufficient to mitigate the myriad of business risks arising from the government onslaught against the scourge of illegal robocalling.

Reading the tea leaves, the biggest risk or threat is likely to come through enforcement actions by state attorneys general and civil litigation initiated by private parties. Wherever the legal landscape provides the opportunity to recover damages, class action plaintiff’s lawyers and attorneys for large enterprise consumers of voice services, such as call center operators, are certain to seize upon those opportunities.

‘Know your Customer’ rules come to the telecom industry

We anticipate that questions around the meaning of and extent to which the “Know Your Customer” requirements apply in different contexts will ultimately be answered through litigation and enforcement, and less so through the FCC regulatory rulemaking process. Questions around damages and who is or can be held responsible for originating, passing, or terminating illegal robocalls are also going to be fleshed out by regulatory enforcement and private litigation.

Perhaps the most significant risk, even more so than the FCC, are the federal and state consumer protection laws that are being developed around robocall mitigation. Starting with the Federal Trade Commission (FTC), where the FTC’s strict “known or should have known” standard is applied to hold voice service providers accountable for illegal robocallers using their networks.

Many service providers and telecom consultants pore over FCC regulations to try and understand the requirements. Is that sufficient? Are there other things they need to worry about?

FCC regulations are a good starting point and, telecommunications providers should stay abreast of updated regulations and releases. However, FCC regulatory compliance alone may not be enough to defend an action if provider’s face the FTC and state attorneys general’s “known or should have known” standard or the creative, evolving litigation strategy of the plaintiff’s bar.

Marriott filed a lawsuit in federal court against unknown perpetrators, “John Does,” who made illegal robocalls misusing Marriott’s name. Why would Marriott do that? What’s the point?

This is sheer speculation, but as often turns out, the actual perpetrators who harmed Marriott likely will be insolvent or outside the reach of Marriott. By using “John Does,” Marriott preserves its ability to amend its complaint to implead carriers and providers that carried or transported the fraudulent traffic.

Marriott could rely on the FTC’s “known or should have known” standard to show underlying carriers are the “John Does” that profited from bad actors (now insolvent or extra-judicial). It’s unlikely Marriott would commence this litigation without a strategy outside positive public relations for pursuing bad actions; rather, the “John Does” will likely turn out to be carriers of bad traffic who settle Marriott’s claims.

The Call Authentication Trust Anchor Working Group issued Caller ID Authentication Best Practices, which the FCC published and endorsed as voluntary measures. Then the Fourth Report and Order on Robocall Prevention mandated affirmative obligations to prevent service providers from originating robocalls. It seems like momentum is building toward holding service providers responsible for knowing their customers and the nature of their calls.

Based on recent trends, there is certainly momentum in that direction and Know Your Customer will likely continue to grow in importance. Thus, providers should ensure they have a good KYC policy in place, particularly as new risks emerge, and scrutiny grows. However, as discussed above, this appears largely driven by the FTC and state attorney general actions.

Of note, the Industry Traceback Group in July 2021 published a Policies and Procedures booklet with a best practices section. All voice service providers should review the booklet, and particularly the best practices. Accountability will keep mounting and the weakest link—the weakest KYC policy—will be the first to break, and that provider will be accountable and “holding the bag.”

Jonathan Marashlian is Managing Partner of Marashlian & Donahue, PLLC, The CommLaw Group, a full-service telecom law firm located in the Washington, D.C., area catering to businesses operating in and around the dynamic and diverse communications and information technology industries. Their clients include providers of VoIP, wireless and traditional telecommunications services, SaaS-based and cloud computing technologists and Internet-of-Things application and network vendors. The CommLaw Group has formed a Robocall Mitigation Response Team to help clients achieve the level of compliance needed to avoid the emerging threats of litigation and regulatory enforcement. Jonathan S. Marashlian may be reached by email or by phone at 703-714-1313.

A prior version of this piece was published on October 6, 2021, on TransNexus. This lightly-edited Expert Opinion is reprinted with permission. Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.