Category Archives: Regulation – What is it Good For?

Supreme Court Rules on ISPs and Copyrights

The Supreme Court ruled in favor of Cox Communications in the longstanding lawsuit by Sony that sought to hold Cox liable for customers who download copyrighted material. The Court’s ruling was unanimous, which is a big win for ISPs. The Supreme Court went further and said that ISPs would only be liable if they intended for their service to be used for copyright infringement.

The Supreme Court’s ruling goes back to a 2018 lawsuit where Sony sued Cox when the ISP refused to disconnect customers who were reported to be downloading music. The record labels insisted that Cox should permanently disconnect any customer who engages in repeated copyright infringement. Cox argued this would turn ISPs into Internet policemen who would have to monitor and punish customers who engage in copyright infringement. That doesn’t just mean people who download copies of music, but could also apply to movies, games, books, pirated sports events, and copyrighted written materials. A Virginia Court agreed with the music labels and found Cox liable for both contributory and vicarious copyright infringement and awarded the record companies an astonishing $1 billion in damages.

Cox appealed the ruling, and the Fourth Circuit U.S. Court of Appeals reversed the penalties for vicarious infringement and vacated the $1 billion of damages. This was still a troublesome ruling for Cox because the company was still considered to be liable for contributory damages for actions taken by its customers.

ISPs would be in an uncomfortable position if the Court had ruled in favor of the music labels. ISPs don’t monitor customer usage because that would mean looking closely at everything that customers do. The music labels wanted Cox and other ISPs to react to complaints made by copyright holders. That might make sense in a perfect world, but complaints to ISPs rarely come directly from copyright holders. Instead, there is an entire industry that makes a living by issuing takedown requests for infringements of copyrighted materials.

The music companies expected Cox to cut off subscribers after only a few violations of copyright. The permanent loss of a customer would be a severe financial penalty for Cox. It would be a severe penalty for the public, where a household would lose broadband in a world where a lot of markets have only one realistic choice of fast broadband. It’s not hard to imagine a scenario where a teenager or visitor to a home violates copyrights and gets the entire household disconnected from broadband. The music industry was trying to avoid the harder solution, which is to legally pursue and seek fines for people who violate copyright.

The ruling has wider implications than just for ISPs and record labels. Social media platforms are filled with news articles, video clips, and other copyrighted materials that users post. The Court’s ruling was an affirmation that companies are not liable for users who abuse online services by downloading or posting copyrighted material. Ultimately, the people who violate copyright should be held liable, regardless of how hard that is to implement.

This ruling doesn’t take online platforms off the hook for responding to takedown requests to block copyrighted materials. However, the ruling does lower the potential for copyright holders to seek huge dollar judgments against ISPs that refuse to act as copyright policemen.

WiFi Router Ban

The FCC issued a ban on March 23 on all consumer-grade routers made in foreign countries. A router is the device in your home that connects your ISP broadband to the WiFi that almost everybody uses to connect devices in the home. Businesses use routers to direct ISP broadband around the business on fiber or copper networks. The ban covers all new brands and models of routers except those that have been granted a Conditional Approval by the Department of Defense or the Department of Homeland Security.

The ban comes after the White House convened an interagency group comprised of government security experts, which collectively decided that new routers made overseas “pose unacceptable risks to national security of the United States and the safety and security of United States persons”. There have been previous technology bans for security reasons, such as a ban on using software from Kaspersky Lab, and telecommunications services provided by China Telecom and China Mobile International USA. It’s worth noting that the FCC cannot decide to ban any equipment or service and can only do so if directed by national security agencies.

The ban noted that malicious actors have exploited security gaps in foreign-made routers to attack households, disrupt networks, engage in espionage, and steal intellectual property. The notice says that foreign-made routers were involved in cyberattacks from Volt, Flax, and Salt Typhoon.

The ban does not stop consumers from using existing routers. It doesn’t stop retailers from selling existing stocks of routers or from continuing to buy routers that previously have been approved by the FCC’s equipment authorization process. All that is blocked is any new models or generations of routers.

Router manufacturers can petition the DoD or DHS for conditional approval, which would allow them to apply to the FCC for equipment authorization for new routers. There are no manufacturers today that have this conditional approval.

It’s hard to know where this ban will lead, but this could become a big concern for ISPs, since most ISPs provide a WiFi router for new customers. Many cable companies and fiber builders build the router into the modem. Any ISP that is currently using a router that has not been approved by the FCC is in trouble, because according to this ban, they can’t give an unauthorized router to a new customer. Every ISP should be checking this week to make sure the routers they are providing have been blessed by the FCC.

This has longer-term implications since virtually all routers are made overseas, including those made by American companies like TP-Link, which manufactures its routers in Vietnam. Manufacturers routinely upgrade and improve routers every few years, and American ISPs will be stuck with older routers if the government doesn’t approve any new brands or models of routers.

One unspoken intent of the order is probably to promote the manufacture of routers in the U.S. I have to wonder if an American-made router would be any less susceptible to hacking than a foreign-made one. If not, I’m not sure what this ban will accomplish, other than making it more expensive to get routers. It will be interesting to see if any router companies move manufacturing to the U.S. due to this ruling. A more likely outcome might be that American consumers won’t be able to get some of the newest routers that are available to the rest of the world.

States Addressing Affordability

I recently wrote a blog about the new legislation approved in New Mexico that will fund a low-income program similar to the now-defunct federal Affordable Connectivity Program (ACP). The New Mexico program provides a subsidy of up to $30 per month to help qualified households afford a home broadband connection. The new LITAP program is being funded by a monthly surcharge of around $1.50 added to telephone, VoIP, and cellular bills.

State legislatures across the country are recognizing that good broadband adoption is vital for a robust economy and have tackled or are considering plans to make broadband more affordable.

In June of last year, the Oregon legislature passed HB 3148, which strengthens support for low-income broadband customers. The legislation increased the monthly subsidy for low-income households for broadband from $10 to $15 per month. On Tribal lands, the subsidy is increasing to $40. When added to the federal Lifeline subsidy, residents get a total reduction of broadband bills of $24.95. The program also allows a one-time subsidy of $100 to help low-income households buy a computer or tablet.

Like in New Mexico, the Oregon program is funded through the Oregon Telephone Assistance Program (OTAP), which is funded from the existing Residential Services Protection Fund (RSPF) that is supported by surcharges on retail telecommunications bills. All ISPs in the state are required to participate in the plan.

California also has a new low-income broadband plan. The California LifeLine Home Broadband Pilot Program is a three-year program designed to make home broadband more affordable. The program officially launched on January 26 of this year.

The California program offers a $20 discount for qualified homes to help pay for standalone broadband. The subsidy is $30 if used for a bundle of broadband and telephone service. The program also covers up to $39 to cover the installation cost of enrolling with an ISP. The California program is also funded by surcharges on customer bills through the California Lifeline program.

The Connecticut legislature also passed legislation that implements a plan in reaction to the end of the federal ACP plan and that creates affordable broadband for qualified low-income households. Connecticut took a different approach from the other states and is mandating that ISPs offer at least one affordable plan for low-income households.

The Net Equality Program requires ISPs to offer a broadband plan to eligible households for a rate of $40 that must deliver speeds of at least 100/5 Mbps for the first year of the plan and 100/20 Mbps after that. The plan goes into effect this month on a voluntary basis and becomes mandatory for ISPs by October 1 of this year. The $40 rate can be adjusted annually by the rate of inflation. The program is administered by the Office of Consumer Counsel.

If Congress is unwilling to tackle broadband affordability, then states will have to step up. I have to think other states are discussing the topic, and I’d love to hear from folks about other efforts.

Disaster Regulatory Policy

There has been a lot of talk over the last year at the state and national level about lowering the regulatory and paperwork barriers for ISPs building rural networks funded by BEAD grants. I don’t know any rural ISP that doesn’t think this is a good idea. Any efforts that can simplify processes like permitting, pole attachments, and environmental studies would be a big benefit for a rural construction effort.

There is another situation that probably warrants easier and simpler paperwork. Many communities have disaster and emergency plans that describe ways to ensure public safety and that government functions after a natural disaster. I think these plans should include ways to make it easier to restore electric utilities and communications networks after a disaster.

This topic came to mind as I am watching the stakeholders in Western North Carolina work to identify issues that hindered recovery and repair efforts after the region was devastated by Hurricane Helene. The damage from Helene was the worst imaginable for the communications networks. Power went down across the region. A lot of cell towers were knocked out of service. Over 1,700 miles of fiber were destroyed, including the backbone fiber paths that brought broadband to and from the area. Some roads were washed away by flooding, while many other roads were blocked by downed trees and landslides. Huge numbers of utility poles were knocked down or badly damaged.

As you might imagine, the local government’s ability to conduct anything resembling business as usual disappeared with the storm. Government communications were out like everybody else, and the local government properly turned its attention to public safety and getting people out of harm’s way.

Normal processes that would work after a less extreme disaster were not sufficient after this major disaster. For example, nobody at the local level was prepared to deal with the huge numbers of repair crews that poured into the area a few days after the storm. One issue that slowed down the out-of-town repair crews was the paperwork and contracts that had to be executed before a crew could begin to work. Local governments needed to identify incoming crews so they could eventually be compensated. Somebody had to verify that incoming linemen were certified to work in the power space. Incoming crews needed to provide proof that they carried the needed level of insurance. Even after an emergency, the local government wanted to make sure that crews understood any local ordinances and rules related to rights-of-way, safety, and other related issues.

Another issue that quickly arose was the paperwork and processes normally required for permitting and for rights-of-way. Permits are normally required for construction activities like digging up any portion of a roadway or erecting new utility poles. As every ISP knows, permitting means dealing with multiple government entities. The federal government controls Interstate highways, and in this region, the roads through national parks, forests, and the Blue Ridge Parkway. The State controls access to state highways and roads through State parks. The county controls access to county roads, and cities control access to city streets that are not under one of the other jurisdictions. This region is also full of privately owned roads in rural areas. There were also the usual complications associated with working to cross bridges and railroad tracks.

There were also a lot of other questions that are being raised. For example, does it make sense to replace a washed-away cabinet or hut in a flood plain without elevating it or locating it outside of the flood plain? What’s the right way to rebuild infrastructure where the old infrastructure was completely washed away by a flood?

Local governments, utilities, ISPs, first responders, and many other stakeholders in the region are working this year to understand what could have been done better. For example, a lot of the required paperwork for incoming crews could have been done online in the cloud. But that would have required some agency outside of the region to process the paperwork. It would mean incoming crews from around the country would have needed to know where to find such paperwork. Some of the normal requirements for paperwork could have been relaxed, and that probably means creating an ordinance that gives city and county officials the ability to declare a communications emergency that would ease rules for permitting and construction. Perhaps the biggest challenge of all is making any needed changes across multiple layers of government.

I’m impressed with the work being done in this region to look at improving our response to the next disaster. The discussions are going to continue throughout this year. The issues being discussed are things that local governments across the country should be thinking about – before they are struck by disaster.

Light Spectrum Licensing

There is an interesting spectrum battle going on between cell carriers and satellite companies. The heart of the contention is spectrum in the Upper Microwave Flexible Use Service (UMFUS) bands, specifically the 24 GHz (GigaHertz), 28 GHz, upper 37 GHz, 39 GHz, 47 GHz, and 50 GHz bands. These frequency bands are generally referred to as millimeter wave spectrum.

Satellite companies use some of this spectrum today via a shared arrangement with cellular companies that have purchased some of this spectrum in FCC auctions. Satellite companies are seeking greater use of this spectrum to communicate between satellites and ground stations, which is a growing concern as the number of different satellite providers and the overall number of satellites in the sky increases. Satellite companies want access to more shared spectrum using a process the FCC calls ‘light licensing’, which is a process to register new ground stations with relatively little paperwork.

The big cellular carriers don’t want any expanded use of light licensing. Like many spectrum disputes, at the heart of the issue is money. AT&T, T-Mobile, and Verizon each spent roughly $2 billion in millimeter wave spectrum auctions, and these companies would like to require satellite companies to come to them to negotiate individual site licenses for the spectrum, presumably as a way to recover some of their investment in the spectrum.

To some degree, at least so far, the millimeter wave spectrum has been a bust for cell companies. Millimeter wave spectrum comprises very short waves that can deliver immense amounts of data. You might remember the ads on TV in 2019 when Verizon touted gigabit speeds on the new Samsung Galaxy S10 smartphone. It was impossible that year to watch a sporting event without seeing these ads multiple times.

At the time, Verizon had deployed millimeter wave spectrum in a few downtown areas of a handful of cities in the hope that faster speeds would lure customers to buy a more expensive subscription to get access to faster cellphone speeds. The trial was largely a bust since it turned out that millimeter wave spectrum is blocked by everything in the outdoor cellular environment, even the body of a cellular customer. But the real issue was that the public had little appetite to pay for faster cellular speeds and still doesn’t today. Cellphones don’t run apps that need superfast downloads, and existing 4G networks at the time easily delivered video streams.

Cellular carriers argue that letting satellite companies use the spectrum for more ground stations diminishes their licenses. Satellite companies counter by pointing out that there are almost no outdoor uses of the spectrum today, and most applications are being used to wirelessly move a lot of data indoors.

This will change to some extent now that Verizon has purchased Starry, which is the only carrier to make extensive use of millimeter wave spectrum outdoors. It seems likely that Verizon plans to expand the Starry model and technology, which is only used today in a few markets.

This fight is a good example of the spectrum battles we are going to see over the next few years that tend to pit large, important constituencies against each other. I expect a lot of loud spectrum battles as the FCC tries to find 800 MHz of mid-range cellular spectrum for auction – almost all spectrum in this range is already used by somebody other than the cell carriers.

The FCC is forced to choose, in this case, between cell carriers and satellite companies. My bet is that the satellite companies will be allowed to use more spectrum under the light licensing rules. This is partly because they currently seem to have a favored status at this FCC, but also because the cell carriers have never utilized the millimeter spectrum in any meaningful way. This also might be a precursor to a future where the FCC decides that multiple parties can more easily share spectrum.

Fixing Federal Permitting

The House of Representatives recently approved H.R. 5419, a bill introduced by Representative Tom Kean of New Jersey. Titled the Enhancing Administrative Reviews of Broadband Deployment Act, the bill would attempt to improve the process of getting permits for broadband on federal land. The bill has been referred to the Senate Committee on Energy and Natural Resources.

Specifically, the bill would direct the Department of the Interior and the Department of Agriculture to conduct a comprehensive review of administrative barriers involved in reviewing applications to use federal rights-of-way. The two agencies would have a year to report their findings of the review to Congress, along with a plan on how the agencies can provide the needed staffing to review rights-of-way applications in a timely manner. The bill correctly recognizes that applications to build broadband on federal lands can be incredibly slow, to the point of creating hurdles that can stop broadband projects.

Looking back through old blogs, I see at least two other attempts by past administrations to improve access to federal lands for broadband.

In 2012, President Obama signed Executive Order 13616 that tried to make it easier to build fiber on federal lands. In a process that sounds similar to the one contemplated by the new legislation, the EO established a Broadband Deployment on Federal Property Working Group that was given a year to create a report to describe how to streamline applications for broadband on federal lands. The GAO was tasked with creating a standard set of forms and fees to apply for building broadband on federal lands. Finally, the EO ordered that all federal agencies implement a Dig Once policy that required placing conduit as part of any road projects on federal land.

In 2018, President Trump signed Executive Order 13821 that directed all federal agencies to seek to reduce barriers to capital investment, remove obstacles to broadband services, and more efficiently employ government resources related to broadband. The EO directed the General Services Administration to evaluate the effectiveness of the GSA Common Form Application used to get permission to locate broadband facilities on Federal land. Finally, the EO specifically directed the General Services Administration to complete the creation of a common form and master contract for placing wireless facilities on federal lands.

This repeating cycle of relooking at the same issues makes me wonder if this will ever be solved. And even if this legislation finally solves the issue, it will be far too late for BEAD implementation. BEAD grants are finally starting to be awarded this year, and those grants will have a four-year shot clock. For now, NTIA says that it does not expect to extend any grants beyond the four-year window.

This is not to belittle the legislation. Perhaps Congress can make progress on the issue when executive orders have failed. It just seems like the timeline contemplated by the legislation won’t provide solutions in time to make meaningful changes for broadband projects that will likely be underway this year. I hate to be pessimistic, but I have to wonder if the legislation or any executive orders will filter down to the dozens of agencies in charge of rights-of-way in various parts of the federal government.

What Happened to Accelerated BEAD?

The BEAD road has been a long one. BEAD was first created by Congress in November 2021, meaning we’re now more than four years into the program. There are now a handful of BEAD projects under construction in a few states, but in most places, the BEAD grant program is still mired in the paperwork process that precedes releasing funds to ISPs.

To contrast BEAD with other large broadband programs, two large federal grant programs were approved by Congress in March 2021 as part of the American Rescue Plan Act of 2021 (ARPA). I estimate that the Coronavirus State and Local Recovery Fund (SLFRF) funded at least $9 billion in fiber projects. The Capital Project Funds (CPF) funded at least $11.5 billion in fiber projects. These programs were initiated only nine months before BEAD, yet the construction for awards for both programs must be completed by the end of this year.

That is blazingly faster than the BEAD timeline. BEAD proponents will rattle off a list of reasons why BEAD has taken so long, and I’ve even talked to some people who think the long BEAD timeline was intentional. A few States like Louisiana now have BEAD construction underway. But on the whole, there are still a lot of states that haven’t yet pulled the trigger.

In case you haven’t seen it, NTIA has a website that tracks the last major hurdles for each state to final federal approval. This website shows

  • Three states – California, Illinois, and Oklahoma – are still waiting for approval from NTIA for their Final Proposal that describes the BEAD grants they want to award.
  • 15 states and territories have NTIA final approval but are still waiting for NIST (National Institute of Standards and Technology) to approve the paperwork. NIST’s role is to make sure the grant paperwork is complete and meets the requirements of the original BEAD legislation.
  • 15 more states and territories have made it through NTIA and NIST approval, but still have not signed a contract with NTIA on the use of the BEAD funding. There is no way to know how much of this delay might be the typical delay from state and NTIA lawyers haggling over contracts versus states that are having disputes over contract requirements.
  • 23 states and territories have made it through all of these steps and are free to begin negotiating contracts with grant winners. I’ve heard from ISPs in some states that getting through the contract issue requires a lot of final paperwork and effort, but this seems to differ by state.

You might recall that before the election in 2024, Louisiana had made it through the BEAD process and was ready to start making grant awards. There were three or four other states that were very close behind.

When the new administration came in, one of the first things we heard from Howard Lutnick, the Secretary of Commerce, was that the BEAD process would be accelerated to put the grant funds to use. He was highly critical of the prior administration that hadn’t yet connected any households to broadband by the end of 2024. Everybody in the industry was hoping that NTIA was going to speed up the process.

However, the BEAD process went into a deep freeze while the NTIA decided what it wanted to do with the program. It took until June 6 last year before NTIA announced new Benefit of the Bargain rules. By then, almost all of the states had conducted BEAD grant application rounds and had identified potential winners. The Benefit of the Bargain required states to start over. It set a cap on the BEAD grant awards in every state, and many original potential winners dropped out of the grant process. We’re now back close to the same place the program would have been a year ago, with a number of states having BEAD winners. It’s pretty easy to argue that NTIA added nearly an additional year to the BEAD process. NTIA will say it was worth it since a lot less funding is being awarded. I’d bet the folks who will wait an extra year to see construction, or those who are now getting satellite instead of fiber, aren’t big fans of the extra delays.

FCC Alert on Cybersecurity Risks

The FCC recently took the unusual step of warning telecom companies about an increased risk of ransomware attacks. The FCC is warning telecom companies to regularly patch their systems, enable multifactor authentication, and segment their networks to avoid falling victim to ransomware attacks. The alert cited data that shows a fourfold increase in attacks on telecom companies from 2022 to 2025.

In the alert, the FCC said it has become aware over the past year of increased ransomware incidents involving small-to-medium-sized communications companies. These attacks have disrupted service, exposed company and customer information, and have locked ISPs and carriers out of critical files.

The FCC alert talks about how ransomware works and offers advice on how to protect against the problem. The FCC also offers advice on how to respond to a ransomware scammer, including advice for contacting the FCC and the FBI.

The most interesting recommendation was to monitor the cybersecurity practices of your critical vendors, which I take to mean vendors who supply network electronics or software systems. The FCC warns that a significant number of telecom intrusions have come from weaknesses in systems supplied by vendors. I’m not really sure how a small ISP is supposed to monitor this, because every major vendor you work with is going to swear that they have safe practices.

The FCC alert includes all of the standard cybersecurity practices related to regularly backing up data and training employees to avoid phishing and other bad practices. They also say that every ISP ought to have an incident response plan of how to deal with cybersecurity problems and to test it regularly.

An appendix to the FCC alert lists some best practices that are being recommended by the FCC’s Communications Security, Reliability, and Interoperability Council. This is a group formed that includes the FCC,  large ISPs, and carriers. This list recommends taking additional steps like requiring validation of software patches before using them.

This Council also strongly recommends using the least-privilege principle (PoLP) for network access. This is a process that limits access to critical software systems only to those who need access. It also involves granting minimum access rights so that users can only access the parts of a system they need while blocking access elsewhere. It can mean granting people temporary access only for the duration of a needed task. Finally, this means granting access by job function, and not by user identity.

I’s obviously impossible to fully protect a company from external attacks, as was witnessed when the Salt Typhoon hackers gained access to a number of giant corporations and government agencies that supposedly have world-class cybersecurity. But it’s worth reviewing your practices and systems, because of the downside of being unlucky enough to be a victim of one of these attacks.

The FCC’s Spectrum Challenge

The FCC has been tasked by Congress to find and auction 800 megahertz of mid-range spectrum. This was a key element of the One Big Beautiful Bill that planned to use the proceeds from spectrum auctions to offset other costs created by the bill. The bill specifically requires the FCC to auction 100 megahertz of spectrum in the upper C-Band, located at 3.98 – 4.2 GHz.

The new requirement to auction that spectrum has resulted in a strong response from the aviation industry and the Federal Aviation Administration (FAA). This new controversy is a perfect example of the challenges the FCC is going to face as it tries to free up 800 megahertz of spectrum. Proposing to change any mid-range spectrum is going to rile up controversy and opposition from those who care about a given spectrum band.

In this case, the FAA’s concern is about interference. Apparently, they don’t want to take any chance of interference from cellular companies that would negatively affect airline altimeters. I think anybody who flies is on the FAA’s side – if they are concerned, I am concerned.

The FAA released new altimeter standards in 2023 that required changes to altimeters to be able to ignore any interference from the lower C-Band spectrum located at 3.7-3.98 GHz. Even though there is a gap between the lower C-band and the 4.2-4.4 GHz band that is used for altimeters, the FCC was worried about interference.

The FAA immediately reacted when Congress directed the FCC to auction off the 3.98 – 4.2 GHz band that sits directly adjacent to the altimeter spectrum. The FAA recognizes the reality that there are radios that don’t do a great job of fitting precisely in the spectrum band they are supposed to use.

The FAA warns that existing altimeters, including those that were retrofitted to meet the 2023 changes, are not going to be able to filter out interference from the upper C-Band spectrum. The FAA tracks reports of interference, and by the summer of 2025, it had received 659 reports of potential C-band interference. After analyzing the reports, the FAA identified 118 events that were directly attributable to lower C-band interference, and this was for spectrum that is not directly adjacent to the altimeter spectrum bands.

The FCC has a major dilemma since Congress specifically ordered the upper C-band spectrum to be auctioned. I’m not sure how the agency can resolve this other than by getting Congress to change the directive. The FCC could spend a lot of money to move altimeters to a different spectrum band, but there aren’t any convenient bands that meet the criteria. This would likely require the FCC to fund new altimeters.

Other wireless users are already starting to lobby to leave certain bands of spectrum alone as the FCC searches for 800 MHz of mid-range spectrum. Rural WISPs and others are already heavily lobbying for the FCC to leave CBRS spectrum alone, which is currently being used for rural broadband. The really big fight is going to come if the FCC wants to take any portion of the unlicensed 6 GHz spectrum that is being used for WiFi 7. The military had originally said it would go along with some changes in the mid-range spectrum bands, but already seems to be retracting from that commitment.

I don’t envy the FCC’s job of auctioning the spectrum as directed by Congress. I predict big lobbying battles and probably big lawsuits before much spectrum actually makes it to an auction.

Onshoring Customer Service

In one of the oddest actions I ever remember seeing at the FCC, the agency plans to vote on rules later this month that will curtail the use of overseas customer service by companies regulated by the FCC. I describe this as odd because it’s not clear to me that the FCC has the authority to tell ISPs, cellular carriers, and cable companies how to operate their day-to-day business. The FCC press release refers to  customer service, but I assume this also applies to overseas technical support.

The FCC is considering the following changes:

  • Onshoring Incentives. The FCC will encourage carriers to return call-center jobs to the U.S.
  • English Proficiency Standards. They are considering a requirement that foreign-based customer service agents must be proficient in American Standard English.
  • Location Disclosure. Companies must disclose to customers if an agent is located overseas.
  • Right to Transfer. Customers must be given an option to transfer to a U.S.-based agent.
  • Call Volume Caps. The FCC wants to limit the percentage of calls that can be handled by foreign agents.

The FCC says its proposed action is for security purposes since foreign call centers present a higher risk of not protecting customers’ personal data. The FCC insinuates that overseas call centers have been linked to the rise of robocalls and fraud, which may be true, but I’ve never heard of this before. The FCC says the changes are also intended to create U.S. job growth.

A quick review of the biggest carriers shows that Charter already uses 100% U.S.-based customer service agents. The FCC made the company agree to onshore customer service for its merger with Cox, but that was something the company had already promised when it first announced the Cox merger. Verizon mostly uses U.S. agents but has some limited overseas customer service. The big companies that will impacted the most are Comcast, AT&T, and T-Mobile, each of which uses a lot of overseas customer service agents. I’ll be curious to find out how smaller ISPs send this work overseas.

There is little doubt that this will be popular with many in the public. It’s not hard to find complaints on the web of customers who don’t like talking to somebody overseas. However, there are also a lot of online complaints about big companies like Charter, which uses U.S.-based customer service. I’ve always wondered how much people dislike overseas agents compared to the degree that they don’t like talking to any agents who use prepared scripts to answer questions.

One of the first things that came to mind when I read this is that it might provide an incentive for the big carriers that use overseas agents to transition to AI customer service. That would eliminate overseas workers, but it might also eliminate U.S. jobs. My gut feeling is that we are still not close to a day when a company can safely hand customer service completely to AI, but that doesn’t mean that some companies won’t try it. I suspect the public will hate talking to AI even more than talking to a live person, here or overseas.

The biggest question that will have to be answered is whether the FCC has the authority to order this. I can’t think of any section of the FCC code that would give the agency the authority to mandate the manner in which ISPs and carriers conduct day-to-day business. It will be interesting to see if anybody challenges them on this.

I also find it curious that this doesn’t feel like the light-touch regulation that was promised by the current FCC Chairman. This seems like new regulations that will add a lot to the cost of regulatory compliance. As I said at the beginning of the blog, it’s an odd idea on many fronts.