FCC Proposes New 'Know Your Customer' Rules to Tackle Robocalls, Raises Privacy Concerns

At a glance:

• FCC plans new 'Know Your Customer' rules to combat robocalls, requiring government ID, physical address, full legal name, and existing phone number.
• Proposed rules could end burner phone anonymity, seen as a pro-social tool for refugees and abuse victims.
• FCC seeks to fine telecom providers $2,500 per illegal call, not individual users, raising enforcement concerns.

FCC's Robocall Relief Efforts

In a series of press releases late last month, FCC chairman Brendan Carr emphasized the commission's commitment to combating robocalls, framing it as a top consumer protection priority. This focus comes amid a troubling reality: a U.S. PIRG Education Fund report from late 2023 revealed that Americans received an average of 2.14 billion robocalls per month, with some individuals facing over 100 spam calls daily. While the per-capita rate of six calls per month might seem manageable, the uneven distribution of these calls highlights a significant issue affecting many Americans.

Proposed 'Know Your Customer' Rules

Among the sweeping changes proposed by the FCC is the end of the era of burner phones. Voted on by the commission on April 30, the new rules, as noted by the blog of the D.C. telecom law firm Wiley Rein, would require customers to present a government ID, a physical address, a full legal name, and an existing phone number. While these rules are not yet in force, they would become effective a year after full approval. The FCC is still soliciting comments, with a specific focus on privacy concerns. A May 6 blog post on the website of the civil liberties group Reclaim the Net warns that the result would be an identity-verification regime covering one of the last semi-anonymous communication tools available to ordinary Americans.

Privacy and Pro-Social Concerns

The proposed rules raise significant privacy concerns, particularly regarding the loss of anonymity provided by low-cost prepaid phone service providers. This anonymity has been seen as a pro-social use, allowing individuals in dire situations—such as refugees or people fleeing abusive relationships—to communicate without fear of exposure. The end of this anonymity could have far-reaching implications for privacy and security.

'Red Flags' and Enforcement

In addition to cracking down on anonymity, the FCC has proposed 'red flags' that may trigger scrutiny from the commission. These include using a virtual office, operating a website or using an email address deemed suspicious, and not being traceable to the state claimed in the address provided. Paying for phone service with cryptocurrency could also become a red flag. The FCC's press release about the proposed rule change emphasizes that by screening new and renewing customers, originating voice service providers are in the best position to prevent scammers and other bad actors from flooding telecommunications networks with illegal calls.

Blame on Telecom Providers

The release lays much of the blame at the feet of telecom providers, stating that FCC rules already require originating providers to take 'affirmative, effective' measures to 'know its customers,' and ensure that its services are not used to originate illegal call traffic. However, it claims that some are 'not doing enough,' resulting in 'more illegal calls that defraud Americans and making it difficult to hold the criminals making these [callers] accountable.' Consequently, the enforcement regime these rules would put in place is intriguing. Per Wiley Rein, it would be a fine of $2,500 per call, and against an offending telecom provider—not the customer making the calls. The FCC would basically be deputizing telecom companies as ID verifiers and scrutinizers of user behavior, and they would be highly motivated to crack down on their customers heavily, because $2,500 per call in a country with billions of robocalls per year could be devastating.

What's Next

The FCC's proposed rules have sparked a debate over privacy versus the need to combat robocalls. While the commission's intent to bring relief to consumers is clear, the potential for a privacy invasion is significant. The upcoming comment period will be critical in determining the future of these rules, with privacy advocates likely to raise strong objections.

Related Topics

• Robocall mitigation strategies
• Privacy concerns in telecommunications
• FCC's regulatory approach to consumer protection