By: Noah Westerlund
Over the past 18 months, federal lawmakers have intensified pressure on the Federal Communications Commission (FCC) to do something about the ever-growing issue of unsolicited marketing texts. Given those pressures, the FCC and Federal Trade Commission (FTC) have increased their efforts to regulate carriers’ texting practices.
This regulatory push has significant implications for network marketing companies and their distributors. Essentially the FCC and FTC decided to broaden the net cast by the Telephone Consumer Protection Act of 1991 (TCPA Act) and the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act). The TCPA Act regulates telemarketing, including SMS messages and phone calls, while the CAN-SPAM Act covers email marketing.
Though the FCC aims to protect consumers from text message scams and spam, these stringent measures have presented new challenges for network marketing companies and their distributors, affecting their ability to deliver messages to prospects and even
Regulatory Pressure Has Been Building
In September 2022, the FCC filed a proposal that brought texting under the purview of existing regulations. The proposal required mobile wireless providers to block texts from invalid, unallocated, or unused numbers, as well as numbers on a Do-Not-Originate (DNO) list. The FCC’s intention is to enhance consumer protection and combat the rising menace of text message scams and spam.
Under pressure from regulatory bodies, carriers have introduced new requirements for what they classify as “commercial texts.” Previously, the registration of sending numbers and campaign content was voluntary, but it is now mandatory.
Network marketing companies and distributors must register their numbers and campaigns with carriers to comply with the regulations. This registration process aims to distinguish legitimate commercial messages from unsolicited and misleading ones.
While the goal is to protect consumers, these requirements have posed administrative burdens and potential delays for network marketing companies seeking to communicate with their distributor networks.
Carriers Turn to Automated Filtering
Initially, carriers approached the new requirements with leniency. However, in recent months, carriers have strengthened their enforcement measures to ensure compliance. Verizon has taken the lead in implementing strict filtering practices, and other carriers are expected to follow suit. The filtering process targets unregistered traffic that carriers identify as illicit or commercially related but not properly registered.
Essentially the carriers have implemented automated filtering processes that decide what traffic goes through and what does not. These filters are far from perfect and will often filter out legitimate traffic.
There is an example of a soccer coach who can no longer communicate with his team via text message as he was sending several group messages a week that often-included links to schedules and registration sites. These messages were blocked by the automated software.
While carriers’ filtering practices aim to curb spam and protect consumers, they have inadvertently affected legitimate network marketing messages. Distributors who send messages without proper registration face the risk of having their communications filtered or blocked, hindering their ability to reach their target audience effectively.
In addition, carriers have been reluctant to disclose specific filtering requirements. This lack of transparency has left network marketing companies and distributors frustrated and uncertain how to comply fully. Questions arise regarding the threshold for the number of sends per day or per hour per person, or whether the frequency of specific links passing through the carriers’ networks triggers filtering.
This uncertainty has caused significant challenges for network marketing companies and distributors as they strive to understand and navigate the evolving landscape of compliant texting practices.
To underscore the seriousness of the regulatory measures, the FCC shut down Global UC, a small carrier based in Germany that operated in the U.S. In November, the FCC issued a warning letter to Global UC concerning its robocalls, emphasizing that texts and robocalls are now regarded similarly under the new regulations.
However, Global UC did not take the warning seriously, and one of its executives made a flippant comment publicly. Consequently, in December, the FCC took the unprecedented step of shutting down Global UC’s operations in the U.S. This case serves as a stark reminder to carriers as to the consequences of non-compliance. In turn, the carriers are taking a much more conservative approach to traffic monitoring.
How Does This Affect Your Business?
While many companies haven’t noticed these effects, that doesn’t mean they aren’t there. When a text is blocked there is no message back, there is no warning—the text message is simply never delivered. The only way a distributor or company can determine if the message did or did not go through is to contact the receiver to verify that the message was received.
For many distributors, the ability to quickly send a video link to a prospect via text is central to their ability to do business. Texting has long been an integral part of their communication strategy, allowing them to reach their networks effectively and promote products or opportunities. The new requirements for commercial texts as well as the filtering practices have disrupted these established channels, leading to compliance challenges and decreased communication efficiency.
Network marketing companies now face the task of ensuring that all sending numbers and campaign content are registered with carriers. This registration process, although aimed at weeding out unsolicited and misleading messages, poses administrative burdens and potential delays. Distributors may experience challenges when disseminating time-sensitive information or communicating with their teams, as their messages could be filtered or blocked due to non-compliance.
Moreover, the lack of transparency regarding filtering requirements adds further complexity. Network marketing companies and distributors operate in a dynamic environment that requires frequent communication and information sharing. The uncertainty surrounding the threshold for compliance leaves them unsure about the boundaries they need to adhere to in their messaging strategies.
In this context, network marketing companies and distributors need to adopt a proactive
approach to ensure compliance with the FCC’s regulations. It is crucial to educate distributors about the new requirements, registration
processes, and potential consequences of non-compliance. Companies must provide clear
guidelines and support to ensure that distributors can effectively navigate the evolving regulatory landscape.
What You Can Do
There are several things that companies can do to improve the deliverability of text messages.
First, companies need to make sure that the texting service they use to communicate with their distributor base has provided them with a registered number. In addition, they need to register their campaign. Any SMS provider should be able to walk them through this process. When selecting a service provider, companies should be sure that the company is open to working with network marketing companies. Many well-known providers do not provide services to network marketing companies.
Second, when sharing videos and other collateral materials that are hosted on company sites, make sure those sites have been registered and properly classified by a security company such as Trendmicro.
Trendmicro and other companies like it maintain databases of “safe” domains and will track the reputation of a domain over time. The better the reputation of a domain the higher the likelihood that messages containing a URL referencing this domain will be delivered.
Finally, train distributors on these issues and engage them in proper practices such as refraining from buying marketing lists that haven’t been properly vetted.
The FCC and FTC’s intensified regulations on texting practices have significantly impacted network marketing companies and their distributors. While the aim is to protect consumers from scams and spam, the new requirements and filtering practices have introduced challenges.
The mandatory registration of the sender’s number as well as campaign content, coupled with the lack of transparency regarding filtering criteria, have created uncertainty and administrative burdens for network marketing companies and distributors.
Navigating these regulatory changes requires a proactive approach and a commitment to compliance to ensure effective communication and maintain consumer trust in the network marketing industry.
By staying informed and implementing appropriate measures, network marketing companies and distributors can adapt to the evolving regulatory landscape while maintaining their communication effectiveness and business operations.
Noah Westerlund is President of NOW Technologies.