Think Tank Raises Concerns Over $4.5 Million Fine Against Telnyx

WASHINGTON, March 17, 2025 – The Free State Foundation, a free-market think tank, is opposing the Federal Communications Commission’s proposed $4.5 million fine against telecommunications provider Telnyx based on due process and rule of law concerns.

The $4.5 million penalty stems from an alleged fraud campaign by a scammer known as “MarioCop,” who used Telnyx’s Voice over Internet Protocol services to make nearly 1,800 illegal robocalls over 17 hours in early 2024.

“While there is no doubt now – after the fact – that MarioCop was engaged in deliberate malicious conduct, Telnyx itself should not be penalized for MarioCop's flagrant actions,” FSF said in a March 12 report.

Telnyx has previously denied wrongdoing. The company called the FCC’s decision “mistaken” and said it swiftly blocked the fraudulent calls within hours of detecting them.

On LinkedIn, Telnyx CEO David Casem said, “If you haven’t heard, Telnyx was wrongfully hit with a proposed $4.5 [million] fine by the [FCC]”​ and added that the company wouldn’t be backing down.

In the FSF report, scholar Seth Cooper criticized the FCC for what he described as “regulation by enforcement,” claiming the agency imposed new compliance expectations through enforcement rather than through clear rulemaking.

The FSF scholar also raised concerns about fairness, noting that many scam calls were directed at FCC officials, staff, and their families, which he said compromised the agency’s impartiality. “No man is allowed to be a judge in his own cause,” Cooper wrote, quoting James Madison.

The case touches on larger legal debates, FSF asserted. It noted that under the Supreme Court’s recent Jarkesy decision, the FCC may lack the authority to impose such fines without a jury trial, as the case appeared to mirror private fraud claims that traditionally require judicial oversight.

Cooper called on the FCC to rescind the fine, focus on apprehending bad actors like MarioCop, and address an alleged FCC-related data breach that may have enabled the scam.

The FCC’s notice against Telnyx is not final, and the company still has the opportunity to challenge the penalty before the commission takes further action.