You may love it or you may hate it, but there is little argument about where The Daily Caller sits on the political spectrum. Founded in 2010 by political commentator Tucker Carlson and policy advisor Neil Patel, the 24-hour news website was described at launch as “the conservative answer to The Huffington Post“. Carlson has insisted it is not right-wing, which is true in the sense that it both anticipated and encouraged the rise of unconventional populist politics as epitomized by Donald Trump, and has consequently reaped the reward with a massive online audience. So it is intriguing that Telnyx CEO David Casem has written a lengthy rant for the The Daily Caller about mistakes made by the Federal Communications Commission (FCC) in implementing the US strategy for reducing illegal robocalls.
It would be rare to see such a brutal takedown of a regulator’s anti-scam policies in a specialist telecoms industry outlet, never mind an overtly political publication with a mass following. However, Casem’s article represents the continuation of a trend where widespread public dissatisfaction with scams is being harnessed to specifically influence the Trump administration and its allies. In a piece entitled “President Trump’s Big Beautiful Bill Opens Frontier For Innovation, Now Congress Needs To Finish The Job”, Casem viciously tears into the failings of the US anti-scam strategy. He wrote:
At Telnyx, we sign 100% of our outbound calls. Yet fewer than 30% of those signatures reach the destination. Why? Because the FCC never required full IP interconnection, even though the technology has existed for over two decades. Instead, they buried smaller carriers in legal uncertainty, deterring the very innovation needed to make the framework work.
Meanwhile, FCC 19-51 handed big telcos blanket call-blocking powers. Unsurprisingly, they abused it–monetizing the “solution” through The Campaign Registry, Branded Caller ID, and “reputation” APIs. They’re blocking legitimate calls, hurting commerce, and undermining trust in the phone network itself.
Consumers still get 5 billion robocalls a day. Mobile carriers now generate nearly half of all traceback requests, often for scams that originated on their own networks. And they profit every step of the way.
The irony? These are companies that spend less than 1% of revenue on R&D. Software companies like ours spend closer to 30%. We can’t expect AT&T to innovate. And we shouldn’t let them write the rules.
Wow. I am not going to suggest that Casem is right about everything, but he does make some valid points. At the very least, some of the oft-repeated platitudes about how the big US players intend to reduce scams deserve to be subjected to much more rigorous analysis. The biggest US mobile operators, such as AT&T, spend a lot of money on lobbying politicians through industry associations. He who pays the piper calls the tune. They offer fat salaries to recruit ex-FCC lawyers who live in Washington D.C. and lobby on their behalf. Even if these people were genuinely impartial, their motives and recommendations deserve a lot more scrutiny than they currently receive.
Casem has been on the warpath ever since the FCC proposed a USD4.5mn fine for Telnyx’s alleged know-your-customer (KYC) failings. I have noted many times how industry insiders will repeat the content of FCC press releases as if they are quoting holy scripture, and not the media manipulations of an overly-politicized and sometimes mendacious government agency. The FCC likely expected that Casem would meekly roll over and negotiate a hasty settlement to avoid further damage to the reputation of his business. We should all be grateful that Casem chose to fight the FCC instead. The FCC has singularly failed to state its expectations for KYC controls. They have repeatedly chosen to mislead the public about the absence of any clear KYC rules in the USA. It is arbitrary justice to punish non-compliance when nobody has been told the rules they should comply with. But this fundamental truth has been conveniently ignored by numerous parties who are unwilling to admit that the US anti-scam strategy will always be on shaky ground if there is no agreement about how to distinguish genuine customers from fraudsters.
I can also sympathize with Casem on a personal level. Industry insiders routinely supply me with stories in the hope that I will publish them, but on condition their name is not attached. They worry that their careers will be hurt if they go on the record. They are right to worry. Last year I was hired by the Mobile Ecosystem Forum because they wanted me to keep publishing Commsrisk. I had decided to shut this publication down; they approached me and offered me money to bring it back. But in less than three months, somebody at a US mobile operator had spoken to the CEO of the Mobile Ecosystem Forum to demand changes to a Commsrisk article that had been published a few weeks earlier. I refused. And suddenly it was decided that Commsrisk could not be ‘monetized’ and that MEF did not want it after all.
The article that prompted this intervention from the US telecoms industry was about the US Industry Traceback Group, one of the targets of Casem’s article in The Daily Caller. I had dared to point out the conflict of interest that was created by the FCC giving the monopoly to trace scam calls to a private-sector organization that receives most of its funding from the big US mobile operators, especially as their traces showed more scam calls were originating on US mobile operators than any other kind of telco. Instead of dealing with their problems and prioritizing the wellbeing of their customers, the instinct was to leverage industry connections to silence me. It worked because puny little industry associations cannot survive without the money and access they obtain by kowtowing to the biggest telcos. And it keeps working because anti-scam policies are not written by the professionals who know the most about scams and how to fight them. Anti-scam policies tend to be written by the representatives of those businesses which are willing to pay the most for access and control.
The slogan of The Daily Caller is “your rebels in the swamp”, a play on the “drain the swamp” chant beloved by Trump’s supporters. They feel strongly about unaccountable elites making decisions that are not in the best interests of the general public. You do not have to endorse every conspiracy theory to acknowledge there is a swampy element to telecoms, and to the US telecoms industry in particular. Suspicions should be raised by the merry-go-round of former FCC lawyers who depart for enormous salaries paid by the businesses they previously regulated. It is reasonable to question if the US suffers from regulatory capture.
An unwillingness to talk frankly about failure lends itself to cynics who doubt whether the people who run government and who run big businesses will ever atone for mistakes, or if the elites must always persevere with mistaken policies because anything else will diminish their status. I get that feeling whenever I hear a industry blowhard proclaiming the TRACED Act, a law which Trump passed during his first term, has been a success at reducing scams. The promise of the TRACED Act, as reinforced by the cost-benefit analyses produced by the FCC, is that the money spent on implementing the TRACED Act would be worthwhile because it would reduce the amount Americans lose to scams. Based on that measure, it has failed. Data collated by the US Federal Bureau of Investigation indicates there has been a meteoric rise in the value of scam losses suffered by Americans and enabled by network communications in the period since the TRACED Act became law. But instead of measuring the value of the losses, as would be the point of any cost-benefit analysis of anti-scam controls, the goalposts have been moved by the FCC and comms industry insiders routinely talking about the number of scam calls instead.
The number of scam calls that are connected or blocked is a faulty measure, as should be apparent to any half-decent specialist in fraud prevention. To illustrate, consider the ease with which fraudsters can generate very many short calls for wangiri fraud, and the relative ease with which telcos block them. Wangiri fraud relies on a very high number of calls being made by fraudsters because each call has a low probability of successfully stimulating any income for the fraudster. An anti-scam strategy that concentrates on the number of calls that are blocked, and not on the amount of money being stolen from victims, will inevitably put too much emphasis on blocking high-volume low-yield scams while ignoring more elaborate scams that are more likely to succeed and where the losses to the victim are greater.
One obstacle to draining the swamp in the US telecoms sector is that Trump, and Republicans more generally, are associated with the TRACED Act too. That explains why Casem’s criticism has to focus on how the law has been interpreted and applied by government bureaucrats, rather than saying there is something wrong with the law itself. Similarly populist critiques of government bureaucracy are increasingly being pushed at the Republicans appointed to run the FCC, the elected Republicans they answer to, and the voters who put them into office. None of the populist critiques includes a coherent anti-scam strategy but that is not the goal. There is a lot of mud in the swamp, and the mud is going to be slung at anyone who opposes the changes that various industry players want.
The US sorely needs an impartial and sincere analysis of how to tackle networked scams successfully, ideally by drawing upon examples of anti-scam policies that have delivered measurably superior results elsewhere. Given the state of US politics, it is hard to see who would be trusted to provide such an analysis. The FCC is over-politicized. At the same time, its employees are too easily swayed by the big business interests that court them. The objective and results-oriented leadership that the US lacks will certainly not come from the parties that Casem blasts in his article. Those organizations are all tarnished by a collective failure that they have misleadingly chosen to present as progress. That does not make Casem right about all the changes he wants to see. It does mean there is the potential for the US anti-scam strategy to be affected by Trump-style populist calculations, and the rest of the world should be wary of trusting any of the anti-scam advice currently coming out of the USA.
“President Trump’s Big Beautiful Bill Opens Frontier For Innovation, Now Congress Needs To Finish The Job” can be read here.
