Industry efforts to tamp down on spam marketing communications continue this month, as Sprint and T-Mobile join AT&T in announcing a rate hike on text messages from certain mass senders. As part of the effort to push SMS/MSS marketing traffic into the Ten Digit Long Code (10DLC) system, Sprint and T-Mobile have announced surcharge increases for marketing campaigns which have not signed up with The Campaign Registry. AT&T announced similar increases one month prior.
The Campaign Registry is an industry group backed by major and minor carriers, VoIP providers and other information technology companies. Under its 10DLC system, Campaign Service Providers (CSPs) that transmit mass texting campaigns, or Application to Person (A2P) campaigns, must first register with the Campaign Registry. Entities (i.e., Brands) wishing to send high-volume SMS or MMS must also be registered. Finally, individual text marketing campaigns must be registered and vetted for compliance with all applicable rules. A failure to submit business information to the Registry requires the sender to pay a significant surcharge per text. The Registry collects a range of data from businesses including the physical address, employer identification number (EIN), website, contact information, and other data designed to verify the real existence of the registering company, as well as provide customers, plaintiffs’ lawyers, and regulators with the ability to track down the business.
Businesses which are unwilling to submit this information are assessed at various rates, which the three major providers are now increasing. Currently, T-Mobile assesses a $0.004 surcharge per unregistered SMS message, which is set to increase by $0.001 every two months, beginning June 1, 2023, until it reaches $0.008 on December 1, a 100% increase. Sprint’s current per-text assessment of $0.013 will likewise increase by $.001 every two months beginning on June 1, 2023, until reaching $0.017, an increase of about 31%. AT&T is raising its rate in a more drastic way than its competitors, from $0.004 to $0.01, an increase of 200%.
The coordinated effort to raise surcharges on businesses which do not agree to the 10DLC disclosure scheme may raise antitrust and other legal and regulatory concerns. However, given the virtually universal animosity toward unwanted and often fraudulent text messages, neither regulator nor the courts are likely to be sympathetic to complaints by businesses which seek to continue SMS campaigns without either registration or at least proof of an alternative Campaign vetting process. Too many businesses have abused their relative anonymity to send unvetted or even fraudulent SMS campaigns. In February, the Federal Communications Commission (FCC) took decisive action against One Eye LLC, which had been a persistent source of illegal robocalls. With its power under 47 CFR § 64.1200(n), the FCC gave all carriers until June 10, 2023, to cease doing business with the LLC. The FCC is taking enforcement seriously and will likely continue to take significant steps towards businesses which produce, or even offer the bona fide risk of producing, robocalls and robotexts. The Federal Trade Commission (FTC) has been prosecuting senders of fraudulent texts since at least 2013. Businesses which rely on SMS marketing should seriously consider the costs of remaining outside of the 10DLC system at the present time.
For questions or additional information about this update, please contact your assigned attorney, or Jonathan S. Marashlian, firstname.lastname@example.org.