Early Comments Question FCC's Authority to Hand Down Onshoring Rules
Industry groups told the FCC last week that it doesn’t have the authority it asserts to require companies to move offshore call centers back to the U.S. Commissioners unanimously approved an NPRM on the issue in March (see 2603260046), and comments are already coming in, though they’re not due until Tuesday after the agency extended the deadline.
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The Enterprise Communications Advocacy Coalition noted that the FCC grounds its purported authority in the Telephone Consumer Protection Act, sections of the Communications Act, the Truth in Caller ID Act and its general rulemaking and public interest authorities. Those statutes “could conceivably authorize the Commission to regulate unlawful calling practices, deter robocalls, and impose obligations on communications service providers to protect consumers,” the group said. But the NPRM “contemplates requirements that regulate internal business operations and workforce decisions rather than communications or calling practices.”
The coalition also questioned whether the FCC’s proposed rules clearly identify the problem that the agency hopes to solve. The NPRM suggests “sweeping, structural regulation of customer service operations without establishing record evidence demonstrating a systemic failure that justifies the breadth of those mandates,” it said. The rulemaking instead relies on “generalized assertions that consumers are ‘often’ dissatisfied with offshore call centers and that the Commission ‘receives numerous complaints.’”
The Ad Hoc Telecom Users Committee said the FCC proposes to rely on Section 251(e) of the Communications Act to regulate the business practices of any company using a telephone number. That would be “an extraordinary claim of jurisdiction over seemingly every business in America, an astonishing interference by the Commission with the general economy,” the committee argued. Nothing in the section “explicitly grants the Commission, or suggests Congress intended to grant the Commission, regulatory authority over the substantive business practices of entities that merely use telephone numbers.”
The National Association of Software and Service Companies said many offshore service providers are “independent entities outside the United States and … not themselves directly regulated by the Communications Act.” The FCC should focus on risk-based protections, the Indian trade group said. “The NPRM appears to assume that offshore operations inherently present elevated fraud or consumer protection risks. However, geographic location alone is not a reliable proxy for compliance quality, fraud prevention, cybersecurity maturity, or customer service performance.”
The U.S.-India Strategic Partnership Forum said the Communications Act doesn’t “clearly authorize the Commission to dictate where customer service functions are performed, who performs them, or how covered providers structure their internal staffing and vendor operations.” It also questioned whether the FCC has authority over offshore vendors with whom regulated carriers contract. The agency should “refrain from adopting rules that regulate labor allocation and operational design under the guise of communications regulation.”
David Williams, president of the Taxpayers Protection Alliance, said the proposed rules would require "a complete overhaul of longstanding models for customer service operations that already function well.” U.S. companies “would likely need to hire more domestic agents, overhaul existing contracts with offshore vendors, and prepare for more compliance” requirements, he argued. “This NPRM would attempt to fix a problem that doesn’t exist while increasing costs for subscribers.”