CXTech Week 21 2024 News and Analysis

The purpose of this CXTech Week 21 2024 newsletter is to highlight, with commentary, some of the news stories in CXTech this week. What is CXTech?  The C stands for Connectivity, Communications, Collaboration, Conversation, Customer; X for Experience because that’s what matters; and Tech because the focus is enablers.

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Covered this week:

  • Podcast 69: Truth in Telecoms. Non-GAAP = Not Real.
  • Podcast 70: TADSummit Innovators, Jonathan Marashlian
  • A2P SMS Campaign Problems
  • Chase is encouraging me not to answer my phone!
  • Telcos are cutting business services, including “voice calling”
  • AT&T paid bribes
  • YouMail Protective Services Releases Watch 2.0
  • Twilio is facing a very interesting new TCPA suit
  • SOMOS files with FCC on “Third Local Number Portability Administrator Selection Process”
  • Its Open Season on Ericsson and Nokia
  • People, Gossip, and Frivolous Stuff

Podcast 69: Truth in Telecoms. Non-GAAP = Not Real.

Covered in this episode:

Podcast 70: TADSummit Innovators, Jonathan Marashlian

This is a long podcast, with a few disagreements, but overall Johnny’s respect for Jonathan shines through. We cover what Jonathan’s businesses provides, and then get down to discussing a broad range of telecom topics including:

  • prepaid calling card history;
  • Jonathan’s learning from that time and what drives his values;
  • Whether the TCPA complaint against Twilio has any teeth;
  • Review of tyntec‘s experiences with US law;
  • Growing domination of a few global telecom companies, through I argue for increased localization given Unifonic‘s regional moats, and Deutsche Telekom Global Carrier‘s recent win of virtualQ from Twilio with SignalWire.
  • A robust discussion on robocalling, SMS spam, and AI. The core difference being a pragmatic ‘any progress is good’, versus people are being hurt urgent action is required with technology.
  • Jonathan’s respect for Eric J. Troutman and Puja J. Amin as their values align on not being Big Law, and the importance of education to help small and medium businesses.

A2P SMS Campaign Problems

Today the dam broke, I’ve had a flood of communications on A2P SMS campaign problems. Campaign Service Providers (CSP) are struggling in the US. Between Twilio with toll-free and Syniverse with 10DLC, CSPs are in the eye of a storm since the beginning of this year that refuses to relent.

There simply is a lack of competition, see our Messaging Monopolies post from last year,

I’ve also had comms with brands on their struggles with A2P SMS at the moment, such as school districts, well-known consumer bands, doctor and dentist offices. They are trying every trick in the book to find a way to make their campaigns work reliably. They are grateful for email and voice calling, and are reminding customers at every contact point to add their email address / phone number to their contact lists.

In conversations so far in attempting to get a clearer explanation on what is going on; brands are finding that if they use one provider their traffic works, and if they use another there is a 25%+ failure rate. Both providers were reliable A2P SMS partners for many years. The same DCA is used for both providers. The investigation continues…

CSPs are increasingly concerned the DCAs Syniverse/Twilio (it’s the same company these days, remember, Google says Twilio owns Syniverse) are playing favorites, CSPs are losing money/face trying to get good traffic delivered in the US. And are losing $millions to breaking point!

I know IP messaging is more challenging in the US compared to internationally, its an organization / regulatory risk issue. I’ve provided intros to people with bags of operational WhatsApp experience internationally, who are surprised at the US WhatsApp situation. A couple of years ago US CSPs struggled to even get a response from WhatsApp in the US. Remember, Meta is not a customer/user focused business, its an advertiser, and focuses on that segment of its paying customers.

One CSP as of 1st May is only offering international SMS to new customers after nearly 6 months of on and off problems with in US. From my conversations this week I think the current competitive environment of CSPs is on the brink of collapse. Its a low margin business, the current lack of reliability, variable performance, and muddled communications is killing the business for CSPs, though DCAs continue to make good money, they get paid regardless.

I’ve never seen such anger and depression in the market across CSPs and brands.

Chase is encouraging me not to answer my phone!

Just received this advert from Chase encouraging me not to answer my phone! See below.

The telecoms industry has a serious problem, YouMail Inc. is trying, I was receiving ‘scam likely’ CallerIDs last week, but that seems to have stopped and the number of robocalls has perhaps dropped this week.

Self Sovereign Identity (SSI) is the root of the solution. Noah Rafalko shared his solution #TNID on the TADSummit podcast.

Why can’t our phones have a Gmail-like experience were all the scams and marketing gumpf never interrupts us. Only the people and brands we know and trust.

My son’s sax teacher called, I didn’t recognize the number as its not in my contact list (my fault, but would be nice if that could process could be automated), so missed the chance to reschedule. PSTN was never this bad, and companies are spending money to encourage me not to answer my phone!

Telcos are cutting business services, including “voice calling”

Its a global trend reflected in the Telstra announcement in cutting business services, including “voice calling.” It’s nice to see such frank explanations coming from the execs.

Quoting Telstra CFO, Michael Ackland, added: “There’s a focus on exiting and migrating out of those legacy products on to growth products. [Voice] calling is a great example where we’re moving out.”

The products that are growing are resales of Microsoft Azure, Amazon Web Services (AWS), RingCentral, etc. They’ve made it easy for telcos to be channel partners, though control over margins will be an issue in the future.

I’ve seen some telcos attempt to use open source to create a low cost voice service for their small medium businesses wanting a no frills employee communications.

BUT it requires the carrier build a competence in open source to manage and maintain that service (what a Techco does in practice), that can be a struggle for some telcos. As soon as they need a technology partner to deliver, it makes more sense to resell.

For mobile telcos the story is a little different. Those that treat a business as simply an address that happens to have 1k accounts attached to it, they just discount more. Those that have historically delivered a package of enterprise comms services are also following the fixed lead in reselling, BUT in some cases using their PSTN services in preference to technology providers VoIP.

It reminds me of the ’80s in BT, the claim was BT stood for Badge Technology. Through that period, most of the hardware was no longer BT made, rather a resale and badged by BT.

What was once the core service (Voice), is becoming a resale, and often it’s not even ‘badged’ because the technology provider has a strong global brand, maybe initially co-branded. Interesting times.

AT&T paid bribes

The US government has provided more detail on how a former AT&T executive allegedly bribed a powerful state lawmaker’s ally in order to obtain legislation favorable to AT&T’s business.

Former AT&T Illinois President Paul La Schiazza is set to go on trial in September 2024 after being indicted on charges of conspiracy to unlawfully influence then-Illinois House Speaker Michael Madigan. AT&T itself agreed to pay a $23 million fine in October 2022 in connection with the alleged illegal influence campaign and said it was “committed to ensuring that this never happens again.”

US government prosecutors offered a preview of their case against La Schiazza in a filing on Friday in US District Court for the Northern District of Illinois. A contract lobbyist hired by AT&T “is expected to testify that AT&T successfully passed two major pieces of legislation after the company started making payments to Individual FR-1.”

The $22,500 bribe was paid in nine monthly installments of $2,500 in 2017, the filing said. The payments were approved by AT&T even though “internal justifications to AT&T’s accounting department for the payments to Individual FR-1 were incomplete, in that they did not mention that Individual FR-1 was the intended recipient of the payments,” the filing said. A “false contract amendment” was allegedly used to conceal the payments.

What I found interesting in this case is:

  • How cheaply elected officials can be bribed, only $22.5k;
  • How AT&T employees were openly discussing on their email the bribe and how to ensure AT&T gets recognition for the payment. Clearly this is business as usual, shouldn’t they be worried about going to prison?;
  • In my interviews on the messaging monopolies and telecom triopoly, bribery was mentioned, I often discounted such allegations as its hard to prove and “Carrier X wouldn’t do that”. Clearly I was being naive.

YouMail Protective Services Releases Watch 2.0

YouMail Protective Services has released Watch 2.0, a new service to help communications providers implement the best industry controls in their networks. Watch 2.0 helps carriers find in near real-time any customer accounts that cause consumer harm by using real, live active consumer evidence from the sizeable YouMail consumer user base, as well as from over ten million active honeypots.

Watch 2.0 leverages this collection of calling data to root out bad calling patterns and to identify bad actors who operate on carrier networks. Only Watch 2.0 is on top of the emerging FCC requirements for providers to stop harming consumers due to shortcomings in their controls and policies to KYT (Know Your Traffic) through KYC (Know Your Customer) and KYUP (Know Your Upstream Provider). The latest FCC policy, announced this week, is to use a Consumer Communications Information Services Threat (C-CIST) classification to provide industry stakeholders with information to enhance their KYC and KYUP processes. The C-CIST classification is a mechanism “to formally name threat actors that are repeatedly using U.S. communications networks to perpetuate the most harmful, illegal schemes against consumers.”

These policies are intended to protect consumers from fraudulent calls, but to work effectively, they require ongoing monitoring of customer traffic and fast action when problematic schemes are discovered. The Watch 2.0 solution provides insight to help determine if problematic calls that have led to a C-CIST classification are being enabled by a carrier network.

Twilio is facing a very interesting new TCPA suit 

In the new complaint–available here Twilio Class Action–a consumer named Michael Anthony claims he received numerous robotext messages and robocalls from numbers owned by Twilio without his consent.

Interestingly he also alleges he spoke with Twilio’s litigation counsel and a paralegal and demanded the messages stop but they continued.

As Twilio is a platform and not the ultimate sender of the messages at issue, TCPA suits of this sort against Twilio are relatively rare. Still they are not unprecedented and at least one proceeded past the pleadings stage.

We discussed this in Podcast 70: TADSummit Innovators, Jonathan Marashlian. While it’s still too early to say what will happen, Section 230 will likely protect them.

Somos files with FCC on “Third Local Number Portability Administrator Selection Process”

I’ve not had time to review this filing in detail. Somos is asking the FCC to address the violation of the Commission’s neutrality regulations by iconectiv.

They state iconectiv is not neutral under the Commission’s rules because it is affiliated with an interconnected VoIP provider – Vonage – that has a strong interest in numbering administration, as evidenced by Vonage’s membership on the North American Numbering Council (“NANC”).

What is interesting is after iconectiv won the LNPA contract, it moved away from its neutrality obligations. Specifically in 2020, iconectiv’s 16.7% equity holder, FP-Icon, became affiliated with four interconnected VoIP providers, making iconectiv an “affiliate.” The Commission approved that ownership structure, but cautioned that “any further change in the . . . overall ownership structure [of iconectiv] may render iconectiv in violation of our neutrality requirements.”. Well, then Ericsson bought Vonage!

I’m surprised this was not brought up at the time of the Ericsson acquisition. iconectiv is a nice money earner for Ericsson and they’ve spent millions ensuring CFIUS (Committee on Foreign Investment in the United States) is OK with them. They must have know this would be brought up at some point.

I’m also surprised members of the messaging ecosystem did not raise similar neutrality concerns about TCR when Kaleyra and then Tata Communications bought them. Granted its not under FCC regulation, but the VON coalition’s filing shows the industry is looking for oversight these days. It’s like the messaging ecosystem had something to hide 😉

Its Open Season on Ericsson and Nokia

I’ve said this for years, 4G is good enough. The industry has spent $650B to discover there are no new revenues with 5G. FWA (Fixed Wireless Access) is substitutive of existing cable and DSL revenues. Finally, carriers are pulling back on spending, but its taken them $650B to get to this point.

Now the analyst firms are “brave” enough to present reality. For example: Research from Omdia, shows Ericsson’s Sales for the first three months of the year fell more than 20%, compared with the year-earlier quarter. Ekholm had evidently grown more bearish by the time Ericsson published its first-quarter report, describing one forecast for the full year of a 4% decline as “a bit optimistic.” Now Omdia has revised down its own outlook after the worse-than-expected start to the year. Previously it had been looking at a 4% to 6% drop. Sales will fall 7% to 9%, according to its latest figures.

We’ve got to listen to the independent experts to avoid a repeat of spending $650B for no new revenues.

People, Gossip, and Frivolous Stuff

Alberto Sagredo Castro is now Lead Implementation Consultant at Sprinklr. I’ve known Alberto since his time at Digium.

Lisa Epstein is now Senior Product Marketing Manager M&E at Amazon Web Services (AWS). I’ve known Lisa since her time at Elemental Technologies.

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