Telco Investigated for Illegal Robocalls Uses Defamation Law to Silence Critics

It is a matter of public record that prosecutors have investigated whether Avid Telecom, a US comms provider, has handled illegal robocalls. For example, a court petition filed by the Office of the Attorney General of Indiana on November 1, 2022, states:

The Office of the Attorney General is currently conducting an investigation into whether the policies and actions of Avid Telecom constitute a violation of the Telemarketing Sales Rule… the Telephone Consumer Protection Act… Indiana’s Telephone Solicitation of Consumers Act…. or the Regulation of Automatic Dialing Machines Act… by providing assistance to those that violate the above provisions.

This article needed to open with straightforward facts lest anyone be tempted to sue Commsrisk. In December, Avid Telecom LLC and its CEO, Michael Lansky, filed two separate defamation suits. They were against:

  • ZipDX LLC and its CEO, David Frankel. Frankel is well known within the anti-robocall community in the USA, not least because ZipDX is the only business to have offered themselves as an alternative to the Industry Traceback Group of US Telecom.
  • TransNexus LLC, one of the STIR/SHAKEN Certificate Authorities in the USA.

In both instances, Avid claimed that it had wrongly been smeared by businesses which wanted to generate positive publicity for themselves. Avid describes itself as an ‘industry leader’ of efforts to prevent illegal robocalls, and is in compliance with FCC rules requiring them to adopt STIR/SHAKEN and file a robocall mitigation plan with the regulator. However, per their complaint against TransNexus:

Yet, despite Avid Telecom’s careful compliance with all applicable laws, the company has been victimized by politicians, industry groups, and other unsavory entities who are motivated by profit and/or to score points in the media and with the public by targeting robocall companies.

One such company is TransNexus. On November 15, 2022, TransNexus published a transcript of a skype conversion showing one of the participants seeking to break the law by “masking” illegal robocalls and legitimate calls so they would not get “flagged” by federal investigatory agencies. However, rather than identifying the actual participant in the skype, TransNexus published a doctored version that alleged one of the parties to be Michael Lansky, the CEO of Avid Telecom. TransNexus’s doctored transcript was published on its blog, and then picked up and republished on numerous other platforms.

It is a fact that TransNexus did publish that transcript on its blog, then hurriedly removed it later. I contacted TransNexus on November 18 to ask why they had pulled that particular blog, but they chose not to respond. Evidently they were afraid they had got themselves into trouble and did not want to reveal the seriousness of their failings to me. They also chose to ignore the many demands made by Avid.

In an effort to mitigate its damages, Avid Telecom and Mr. Lansky sent a letter on November 16, 2022, demanding that TransNexus immediately take each of the following actions: (i) execute and deliver to Avid Telecom the “Statement of Apology and Retraction” attached as Exhibit B — no other publication of the Statement is to be made by TransNexus without Avid Telecom’s express prior written consent; (ii) provide complete data identifying each and every location in which the TransNexus Blog was published, whether in an electronic or paper format, including all websites, blogsites or other social media or similar venues of any kind; (iii) provide complete data identifying each and every person to whom the TransNexus Blog was delivered, either electronically (e.g., by email) or in a hard copy format; (iv) provide complete data as to the number of visitors to each website and blogsite on which the TransNexus Blog was published; (v) remove all versions on the TransNexus Blog in all forms, print or electronic, from all published locations and certify that such removal has occurred; (vi) identify each and every person, and/or entity of any kind (private or governmental) that provided any information, content and/or data to TransNexus that was utilized in the drafting or the presentation of the TransNexus Blog; and (vii) identify each and every person, and/or entity of any kind (private or governmental) that requested, encouraged or was otherwise involved in the decision to draft and/or to publish the TransNexus Blog.

TransNexus has failed to undertake any of these actions. TransNexus published a statement it calls a “retraction,” but which fails to actually give readers a clear understanding of how the original post was false, and which falsely claims that TransNexus relied on incorrect public documents. The public documents were, of course, correct, and it was TransNexus that altered them.

Avid’s complaint stated the business had lost customers as a consequence of TransNexus’ blog, and that the damage exceeds USD75,000 in value. That TransNexus pulled their blog soon after publication gives reason to believe Avid’s complaint is justified. It is harder to judge how to measure the harm done because of the rate at which industry insiders share news and opinions using email and social media. If I saw the offending article, then many others must have seen it too, whilst few will have bothered to circulate TransNexus’ subsequent retraction.

The complaint made by Avid against ZipDX and Frankel differs because it attacks the character of one man. Avid imply that Frankel is a loner with delusions about the role he plays in safeguarding phone users from illegal calls.

Frankel is a self-anointed robocalling vigilante.

Frankel does not have, nor has he ever had, any legal authority to create, interpret, or enforce any state or federal policy, law or regulation of any kind or on any issue, including robocalling.

Frankel is on a quest to destroy the reputations of telecommunications carriers that he unilaterally deems as noncompliant with his own metrics…

Frankel, directly and through his company ZipDX, has engaged in a relentless and cynical pattern of libel and slander against Avid Telecom, repeatedly accusing the company of illegal activity on a massive scale.

Not only has Frankel defamed Avid Telecom to trade associations, business groups in the telecom industry, and the public at large, but he has also undertaken a campaign, both direct and indirect, to encourage numerous federal agencies and state law enforcement officials to commence crippling investigations and enforcement actions against Avid Telecom, which have been specifically predicated on Defendants’ false and defamatory statements.

Avid goes on to refer to Frankel as the “highest profile national advocate against illegal robocalling”. They argue he is posturing for profit.

Frankel has used his public platform to promote ZipDX as a provider of consulting services and a software program that purports to identify and thereby to limit the number of illegal robocalls to a variety of government and private clients.

Avid Telecom and Lansky have learned that the decision not to purchase Defendants’ software program brings serious negative consequences. When Avid Telecom failed to respond promptly and positively to Defendants’ solicitation, it was… targeted… with… a campaign of defamatory statements to high profile telecommunications associations and forums as well as specific and direct demands that Avid Telecom’s key customers cease doing business with the company.

Avid goes on to claim that the investigation by the Attorney General of Indiana is a direct result of the misinformation supplied by Frankel. The damage done to Avid’s reputation is claimed to be the reason that Inteliquent and NUSO refused to continue carrying Avid’s calls. Avid are seeking ‘multiple millions of dollars’ in damages from ZipDX and Frankel.

I do not intend to follow these cases closely because I am not a lawyer and because the USA is full of lawyers who already consider themselves the ultimate experts on every conceivable topic. On the contrary, the biggest single problem facing the US telecoms industry is the superabundance of lawyers who permit no room for common sense. The USA has passed tough-sounding laws that were meant to reduce illegal robocalls, backed up by the vague threat that telcos will be cut off if they do not improve. But the problem with vague laws and vague threats is that not even lawyers are willing to assess who is fully compliant and who is not complaint. On the contrary, the industry ends up in a situation when most businesses are somewhat non-compliant, or at least uncertain if they can prove they have done enough. To give one simple example, any fool can file pointless anti-robocall mitigation plans if nobody specifies the minimum expectations for any of these plans. Another example would involve asking why big telcos that clearly failed to meet STIR/SHAKEN deadlines received no punishment but Twilio was threatened with near-immediate disconnection because it could not provide evidence of customer consent of a type not previously established as a norm.

Those of you who work in the auditing profession will appreciate there are two significantly different models for getting people to do the right thing: a rules-based approach, and a principles-based approach. In a rules-based system, you are allowed to keep doing the same thing so long as you have not broken the literal rules, even if you are not following the spirit of those rules. A principles-based system demands an evaluation of whether the principles were followed as intended, leading to valid concerns that such an approach can be more subjective, but also acknowledging that it can be impractical to articulate every detail of every rule in advance. Listing every rule to distinguish good traffic from bad traffic is far beyond the capabilities of US lawyers, which is why they keep implying somebody else should make the distinction for them. The legalistic culture of the USA is obsessed with rules, which leads to wholly predictable failures like a group of experts insisting that STIR/SHAKEN will reduce illegal robocalls once implemented, then the same group of experts insisting that the adoption of know your customer (KYC) controls are needed a mere two years after STIR/SHAKEN was implemented. Both were needed at the same time, but it is much easier to write a rule demanding the implementation of STIR/SHAKEN than it is to write a rule stipulating the minimum requirements for KYC, as Twilio must now appreciate.

The lawyers at the top of the FCC have actively encouraged the development of an enforcement model which expects telcos to block other telcos based on hearsay and other grades of evidence that would not be deemed adequate in a court of law. It was inevitable that somebody was going to use the law to hit back, testing the limits of when it is permissible to say a telco is responsible for bad traffic without having proven it is responsible for bad traffic. Based upon my own interactions with David Frankel, it was predictable that he would end up being a central actor in a legal test case. Some of the things Frankel has said about how to distinguish good traffic from bad traffic are stupidly wrong, but this has not discouraged him from saying these things to whomever is willing to listen. Frankel brazenly seeks to exert influence over which telcos may remain in business through the new quasi-legal formula of excluding telcos from STIR/SHAKEN and/or denying them interconnects with other telcos. He ran ahead in exactly the way the FCC hoped others would run ahead, whilst their own lawyers hung back, wary of doing anything that might get them in trouble.

Avid Telecom’s use of defamation law shows how the US will still have to go back and make decisions about principles, including the key principles of when a business is allowed or obliged to act on the unproven suspicion that traffic is illegal. These principles will be explored by lawyers in a court concerned with defamation because more suitable experts, such as fraud managers and network engineers, were not given the freedom to deliberate. Legal explorations like these often fail to give complete answers at the first attempt, even if all the litigants remain in court long enough to force an actual judgment. The severe mistakes made by the lawyers running the FCC will ripple on and on, long after the promise of reduced robocalls has been quietly abandoned.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.