Subtitle: US #SMSspam club’s EBITDA is $2.4B

The motivation to create this post came in part from a post by James Crawshaw of Omdia on the movie, “The Network”. James referred to the monopolies in America, and how AT&T was broken up and then put together again by bankers with the exception of Verizon (Bell Atlantic) and Lumen (US West). That got me thinking about the growth of messaging monopolies, and what that means for programmable communications.

TCR Monopoly

The Campaign Registry (TCR) is the exclusive partner of the US Mobile operators for “sanctioned” text messaging. Any messaging that is not registered with the TCR is considered spam. As we all experience most days, SMS spam remains a problem. According to Robokiller’s report from August 2023 there were 238.4B delivered spam texts in the US during the trailing 12 months, which works out to 722 spam SMS for every person in the US, whether they have a phone or not.  

Assuming 1c per unregistered SMS, that’s roughly $2.4B per year of pure additional revenue and profit to the US carriers.  I’m sure carriers are also removing some spam texts over their network, for which those texts are also paid, so the numbers could be higher. Given that the network costs are already covered, these A2P surcharges fall straight to the bottom line, that’s $2.4B EBITDA. No wonder the carriers have little to no incentive to stop this, it’s a huge pile of found money.

We’ve covered the problem with the TCR not containing phone numbers in the TCR Trilogy.

There are many issues with the current TCR solution. For example, a DCA (Direct Carrier Access), a text messaging provider having direct connections/agreements with operator(s), can link a specific campaign to a number, and with that information raise complaints of spam for that number, and close down a campaign potentially without the campaign owner’s knowledge. We’re going to come back to this method in a later post. The current critical national communications SMS infrastructure is open to abuse.

One of the issues in registering campaigns is if you are required by law, contract, or security policy not to provide customer identifying data to a third party, namely the TCR.  This is potentially in direct violation HIPAA (Health Insurance Portability and Accountability Act), PII (Personal Identifiable Information), and CPNI (Customer Proprietary Network Information) where federal regulations are broken when the voice provider text enables the same number for their client and is required to provide protected customer data.

Aegis Mobile and its TCR Vetting Monopoly

The TCR effectively uses a single source, Aegis Mobile, for initial “vetting” of a brand into TCR. A brand is any business, any size, profit or non profit, free or paid, conversational, religious, political, and “requires” registration of highly sensitive information to be shared between many domestic and potentially foreign parties without any concern of typically required security protocols to house this data. 

Another issue is whether a CSP (aggregator) has agency for the brand and the authority to represent them? After the brand is registered and vetted, it goes into the “double top secret” database that allegedly no one except the carriers can access.  This potentially means a brand could never find out if someone else is sending spam in their name.

The TCR does not face oversight or regulation afforded to protect sensitive consumer and business data elsewhere. Considering the ever-increasing cyber attacks, TCR creates a highly attractive honey-pot of confidential data across any US businesses wanting to use A2P SMS.  Currently, every sole trader to the largest brands supporting text messaging in any form must comply with the TCR’s processes. 

Let’s review a real-world example using fictitious companies. Why does Home Depok Home Design Services (HDS) and Jenny’s Construction & Design Services (Jenny’s) both pay Aegis to be vetted? The fact that Jenny’s had been in business for 10 years and HDS was just formed and acquired a new Tax ID number didn’t factor in the vetting decision.  HDS informed Aegis about the parent company Home Depok was identified as the parent organization to use the power of the larger brand to increase messaging capacity limits.

What if Jenny’s Construction had a nationwide customer base of 3m and had all opted-in to receive design tips, videos, and be able to purchase building designs in direct competition to HDS? What if Home Depok Home Design Services was losing market share due to Jenny’s tenacious marketing and ability to communicate in a way the customers wanted? That is until this monopoly returned a vetting “Score” which severely limited how many customers Jenny’s could update with a text. Enter HDS using the brand of it’s parent to compete and be provided the customer list that was not directly opted in by HDS but is now free game. 

Aegis assigns the starting score based on an unknown and proprietary method that isn’t industry recognizable, measurable, or accountable. While potentially restricting small businesses from being able to compete with larger brands who “Score” higher and can send out text messages up to 1000x more often to crush perceived competition.

When the score returned by Aegis on a company is too low for the brand to meet the existing text communications needs, they can pay to re-do a basic vet, if for example the information was fat-fingered. The only hope is paying a higher vet fee of 10x the basic toll. This secondary, more costly “vet” process is another black box.

WMC Global is another option for a secondary vet; however, it appears they only account for less than 1% of vetting. A rumor is TCR and Aegis Mobile worked on the same floor of an office building between June 2020 to Jan 2022, though I’ve not been able to corroborate that rumor, only, they are both in the “messaging hotbed” of Virginia/Maryland. 

This block box vetting process could also impact political campaigns. For example, limiting text communications for an underfunded or grassroots political campaign, versus a political political campaign provider with billionaire donors.

There are so many questions the messaging monopoly raises:

• Well-established businesses are now forced to pay more to these messaging monopolies while being required to provide sensitive business information.
• How can a wireless operator leverage monopolies to levy anticompetitive fees and processes on a telephone number which sends to their network and not pay when delivering a message back to the originating network?  
• How can this situation be allowed by elected officials to allow a handful of monopolies to control and restrict, control, and censor a critical communications infrastructure?
• How can a mobile operator receive a text message from a landline gouge for a delivery fee and refuse to deliver a return message if requested to provide a fair reciprocal cost in return?
• Why does the same message sent from a businesses’ text enabled voice lines they have been using for decades, now incur egregious, unnecessary, anti-competitive scoring/vetting, and invasive data requests? The UCaaS providers are also suffering a similar fate.
• Why is the same business able to use their wireless telephone service without registering their business, use case, include stop/help/quit in every message and pay nothing in addition to their  mobile phone plan cost?
• Why can campaigns send messages via Whatsapp, Line, Telegram, iMessage, and all other IP-based messaging services that use the same wireless networks and not be charged for every message, forced to register exposing sensitive customer data, and potentially improperly blocked / limited?

Net Number Monopoly

The field called “Alt-SPID” (alternative service provider ID) was used for identifying a text enabled number within a sanctioned industry administrative database NPAC-Number Portability Administration Center database, run by iConectiv. When Net Number aligned with the other messaging monopolies, this free field was intentionally ignored by carriers when the TCR was launched. Net Number’s database is now anointed as the required place you must load the telephone number to be recognized as text enabled.  This is a requirement to attach a campaign ID from the TCR or the texting will be shut down or will be considered spam.

When loading a number into Netnumber as a customer that doesn’t have a Carrier License, but purchases the telephone number from a licensed non-wireless operator, requires a “Wet Ink” document called an SMS-LOA. This Letter of Authorization is required by Net Number to be signed by the licensed operator in which the OCN is assigned to by the government.

Here is the process to set up an OCN, it’s not for the faint-hearted.

OCN-Company Codes, also referred to as Operating Company Numbers (OCNs) are used like social security numbers to uniquely identify your company and are assigned to all telecommunications service providers. They are used throughout the industry to facilitate the exchange of information. 

​​Net Number is not a government assigned number administrator. That means they are not  recognized, governed, nor overseen by any regulatory authority. Unlike all of the telephone numbers shared and managed today between government appointed number management administrators, carriers, and customers. Net Number has a monopoly that is driven solely by its commercial interests that are not in the public’s best interest. This leads to hamstrung innovation, lack of oversight, potential for data breaches, and an anticompetitive ecosystem.

If you are a licensed traditional operator providing telephone numbers and are being held accountable via government regulations to a defined and regulated privacy standard, it is galling to see rogue monopolies allowed to sidestep and monetize.

Syniverse Duopoly

One of the only two fully connected to all three major mobile networks, DCA-Direct Carrier Aggregator available and one that charges a $15 review fee. Each campaign is manually reviewed. This now creates a significant switching cost between DCAs. Note when I state Syniverse, I also include Twilio as they invested $750M in Syniverse to join the old-boys #SMSspam club.

Example:

• You started with Sinch (the only other fully direct DCA)
• Sinch approves your campaign (I’m assuming with zero review fee as they have not yet stated a charge).
• You decide you don’t like Sinch and want to move your texting to the other exclusive DCA, Syniverse. 
• Let’s say you support 10,000 businesses that went through this process and are up and running with little to zero complaints from end consumers.
• That will cost you or your clients $150,000 USD, just to move your service from one business to another.
• The other issue is it can take approximately 10-12 business days to have each already running campaign reviewed again. 10k campaigns could take weeks to be reviewed.

If you already work with Syniverse, and a prospect uses another aggregator that uses Syniverse, they will charge you even if the campaigns have been approved by Syniverse. This essentially forces brands to work directly with Syniverse or Sinch, limiting competition.

Some Final Questions

If you consider the above statements false and / or misleading:

• Where else can you register a text messaging campaign for A2P outside of TCR?
• Where outside of TCR can you run A2P traffic without having to register at all?
• Where can you ‘vet’ a brand initially outside of Aegis Mobile?
• Where can you load a number to be text enabled outside of Net Number?
• How can you migrate between texting companies without a potentially large financial impact or even a risk of not being re-approved for the prior approved campaign?

Call to Action

Competition in programmable communications is being stifled by a growing number of monopolies, this is perverse. Urgent action is required, the bottom line is SMS spam is not being stopped and its earning #SMSspam Club $2.4B per year.

Go review your wireless bills today and look for “Call Filtering”, “Economic Adjustment Fee”, Call and or robo-call service fees.” most hover around $5-$10 per line, per month.

I read that if you add all the fluff fees up at an average of $5-10 per telephone number per month across the approx 300m subscribers in the USA that totals $1.5b-$3B per month.

Gathering all the information for this post was very difficult. Most brands, enterprises, UCaaS, CPaaS and CCaaS providers have no clue on all the monopolies that exist, even many of the SMS aggregators do not have the span of knowledge in this post.

I’ve published the TCR Trilogy, and through the Truth In Telecoms segment of the TADSummit podcast we’ve started to discuss a few of these issues facing innovators. It’s time for the industry to start commenting, discussing, and expressing your views on what is going on.

If I’m wrong, let me know. If you agree express your support for what is being uncovered here. Change is urgently required. The book-clubs have shown they’re not going to change the situation, only support the messaging monopolies through low-ball questions, if questioned at all.

Check out other articles in this series:

Understanding TCR and Kaleyra Part 2

Understanding TCR and Kaleyra Part 1

The Campaign Registry and Foreign Ownership: A Matter of National Security

Stop the messaging monopolies!