Podcast: How the New FCC Ruling Affects Texting for Businesses and Consumers

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Welcome to our second installment of Zipcast, the podcast that covers the latest trends and hot topics in the fast-moving world of texting for business.

This week, Zipwhip’s Senior Vice President of Technology, James Lapic, joins our host and CMO, Scott Heimes, to discuss how the new Federal Communications Commission (FCC) ruling protects both businesses and consumers against spam text messages.

In episode two of Zipcast, we dive into:

  • The result of the recent FCC ruling and what it means
  • How the classification of texting as an Information Service instead of a Telecommunication Service affects businesses and consumers
  • Why the Telecommunication Service classification could have been harmful to businesses and consumers alike
  • How Zipwhip preserves the integrity of texting as the most preferred B2C communication channel and protects consumers from spam texts
  • What Rich Communication Services (RCS) is and why it’s included in the Information Service classification
  • Why the medium of texting is here to stay

This decision had huge ramifications immediately. For example, the new classification made it impossible for California legislators to place a proposed tax on texting.

Tune in each month for the latest episodes of Zipcast. Don’t forget to follow us on iTunes, Google Play, SoundCloud and Spotify. If you have a suggestion for the show, free to text us at (206) 582-3740 or email zipcast@zipwhip.com.

Missed episode one of Zipcast? Check it out here.

TRANSCRIPT

Scott Heimes: Well, today I have James Lapic, the SVP of Technology at Zipwhip joining me, and it’s great to have you here. 

James Lapic: Thanks. Happy to be here, Scott. 

Scott Heimes: So, tell me a little bit about your role at Zipwhip, and your connection to texting, business texting, which goes a long way back? 

James Lapic: It is a long way. The good news is that texting is still as relevant as when I started in about 15 years ago. So, what I do here is I work on the technology side of the house. So, I run our engineering and technical operations. Been here since the beginning days with the founding level of Zipwhip, had to go figure out how to text enable a business. And before that, I’d actually known our CEO, John, for years. We’d been competitors in the short code space and got that whole ecosystem off the ground. And before that, I actually ran the text messaging infrastructure for Nextel. So, long time, but like I said, happy to be still involved and just as fruitful as the day I started. 

Scott Heimes: It’s such a vibrant industry. And a big part of your role is also managing our relationship with the regulatory bodies in Washington DC, and there was recently a pretty big texting news announcement from the FCC. Can you tell us about that a little bit? 

James Lapic: Yeah. It’s interesting because I never thought I was going to have to be involved in politics as we got going into text messaging and, what turns out in our favor here, is that there’s been a lot of ambiguity about the way texting was classified, and whether or not it was a telecom service, or if it was more of an email-like service, like an information service. And the reason that’s important is there’s a lot of extra regulatory that goes into telecom services, so if you just think about the way that we have problems with robocalls and things today where it feels like the carrier and the government is doing nothing to fix that. The reality is, it’s true. They aren’t really doing anything to fix it because they’ve put these protections in place where they can’t interfere with a phone call. 

Texting has ridden in this gray area for years, and we’ve treated it more like email where we filter it and curate the medium, and there’s always been this risk in the background of, “Well, if it does get classified more like a phone call, what does that mean?” So, we got some clarity this week. Zipwhip has been a huge advocate for the classification that was granted, which is information service. We’re very excited about it and happy to dig into other parts of what that means, Scott. 

Scott Heimes: Yeah, and so it was classified as an information service versus a telecommunication service. So, what does that really mean for business texting? It has advantages around spam and a variety of other things, as well. 

James Lapic: Yeah. So, especially from the Zipwhip side where we see a lot of risk if it went the other way, was that there’s a lot of spam protection and consumer protections that we do today to make sure that when that lock screen on your phone lights up and dings, it’s a legitimate message from a friend or from a business, and it’s not something that you didn’t want. It’s not junk mail like what’s happened to your inbox on email. And it takes a lot of work, between providers like Zipwhip, as well as the carriers to make sure that we’re filtering out a lot of the cruft, because people know that the same way that it’s really effective for a business to communicate with customers, because you get the eyeballs, spammers know that, too. And they know that it’s very hard to unsee a message that pops on your lock screen. So, it takes a lot of effort from all of us. 

So, the nice part about the classification here is that we’re able to continue to do what we’ve been doing with certainty. So, we can keep doing our spam filtration. We can keep doing threat analysis. We can keep staffing up our spam and abuse teams. The other part that I’m really excited about is, if you followed in the news lately, there’s some word that California has been trying to run taxation on texting. They’re trying to tack in an extra tax on it as a telecom service. This really puts a damper on that, and so it leaves it as what it is, more than anything, and we’re really excited about that. 

James Lapic discusses the effect the FCC ruling of December 2018 has on spam textsScott Heimes: And if it has been categorized as a telecommunication service, my understanding is that it would be thought of more like a phone solution, as opposed to an internet solution. And it has all kinds of ramifications around fraud and abuse. Talk more about that. 

James Lapic: Yeah. I think robocalling and the pains that we all get every day, ignoring phone calls, is the worst-case scenario of where it could have gone. Basically, a telecom service, and if it’s classified under title two, what it really boils down to is that you cannot withhold access from somebody from making a call or a text from end to end, and they can’t judge who sent it and why. And this is really good for us because it gives us the certainty that we can keep doing what we’re doing, and the last thing we want is it to turn into the robocall mess today that we can’t seem to get our way out of. And texting is a really good model for how not to get there in the first place. And so, having the certainty of not letting it go over that line is pretty important. 

Scott Heimes: And so, you mentioned earlier that Zipwhip applies an array of different tactics to try and protect the purity of the texting medium. Can you talk more about that, and some of the things that we do to avoid spam? 

James Lapic: Yeah. So, there are a few different aspects to it. Obviously, I won’t share all the secrets, so nobody gets a leg up on us, but the reality is, is it’s a constant battle. We have appliances within our network that are looking for common threats. The ecosystem, the carrier ecosystem actually— I like to equate it the same way that everybody has an antivirus software that has a signature file that shows up every day, we all share a common database with known bad stuff. And so, us being part of the ecosystem there with the operators allows us to get into that and make sure that known junk is kept out of the ecosystem, not matter where it’s trying to enter. So that’s one aspect of it. 

The other, really, is just consumer protection. We do a really diligent job of our onboarding to make sure that people that are coming on to the network are who they say they are, and doing what they say they’re going to do, and you couple that with the consumer protection side of any user on the other end of the business texting user on our end has the ability just to reply “STOP”, and it opts them out of communication until they, themselves, opt themselves back in. So, it’s something that Zipwhip, from the very beginning days realized and decided that we were going to run across the board, across our entire portfolio, and if a customer was always in control, a customer, in this case, being the mobile subscriber, and if they didn’t want to talk to that business, they could opt out. 

And we use that data in a few different ways, as well. We go and look for campaigns that have a really high opt-out rate. We look into why. Zipwhip has a pretty large spam and abuse team that works on this. We have 24/7 resources that are always watching our network and making sure that nothing slips through. 

Scott Heimes: It’s so interesting, isn’t it, that the spamming community is trying hard to find ways to get inside the business texting network and ecosystem. Email was unsuccessful in keeping that out. Why is texting going to be successful, in your mind? 

James Lapic: Yeah, it’s a good question. I think there’s been this rumor that Bill Gates had said something a long time ago about if we charged a penny an email, we wouldn’t have a spam problem. I tend to disagree with that, the more that we see spam and abuse attempts rise on messaging because it doesn’t seem to stop people from trying to get into a medium that’s very successful at getting eyeballs. And so, I think that spammers are just realizing what everybody else realizes, which is that it’s the preferred way to get ahold of people, and you ding their lock screen on their phone and there’s just no way to unsee it once you’ve seen it. 

The other part of it that’s really interesting is that the same way that you can ignore a phone call that you don’t understand on your phone is a robocall, you can just not accept it. In a messaging space, somebody can come in if they’re a bad actor and just say that they’re a bank and say that they’re somebody they’re not in the body of the message. So, there’s a lot of risk there, if you’re not careful about how you protect it. So, I’m not sure how to not let it turn totally into email other than just keep doing what we’re doing and being very diligent about how we do it. 

James Lapic: We’ve always been very mindful, here at Zipwhip, of if we mess this up, people are going to leave and they’re going to go to the next medium, and if people drop texting and go to the next thing, we don’t think that’s good because texting ubiquitous. It’s on every phone throughout the world and, for the most part, it’s free access in most place, so we’d like to see that continue to thrive. 

Scott Heimes: Absolutely. There was a lot of coverage around this FCC ruling and one of the things that kept coming up was text blocking incident through NARAL. Can you uncover that for us a little bit? 

James Lapic: Yeah, so it all originated from the short code space. So, for the super high level, in 2007-ish, the carriers had gotten together to figure out a way to let commercial businesses having a texting solution. So, if you’ve ever gotten a message from a four- or five-digit code that’s not a real phone number, that’s what we call a short code in this industry. So, most people got introduced to them in American Idol. Vote now at 40404, that kind of a thing. 

Scott Heimes: Right. 

James Lapic: And that really brought it to the mainstream. What happens there’s is because it’s kind of this unlimited access into the carrier for the business side, there’s a very stringent onboarding policy that carriers put out in 2007. So, every campaign, they had to preapprove the messaging content and they had to preapprove who was sending it. And it’s a pretty cumbersome process, and there’s humans involved, and at some point, there was some submission by a nonprofit and it didn’t make it all the way through the other end, and some people construed that into a free speech problem, and that’s where the whole petition had started in about 2008. 

So, it’s been rectified, about 13 years ago it’d been rectified, but it’d always been used as this poster child for what could happen if something legitimate wasn’t let through. But we’ve really worked as an industry to make sure that there is equal access coming in. And we’re not trying to fight against free speech in this whole effort. We’re really just trying to fight against people that are trying to scam you out of money or what have you. We don’t want anybody to be tricked and we’re not trying to stop people from communicating with those they want to. 

Scott Heimes: One of the additional positive outcomes that came from this FCC ruling is that RCS, or Rich Communication Services, was also included in the definition of being an information service. So, what does that mean for us? And maybe you can start by explaining what RCS is? 

James Lapic: RCS, we like to think of it—It’s the next version of SMS. It’s SMS 2.0. Some people like to think of it as it’s kind of like email going from a plain text to an HTML version. So now you can have a much richer interaction. It’s been around a long time. It didn’t really get a lot of groundswell adoption until about 18 months ago, and a lot of that’s because there’s rising things in the ecosystem that compete for eyeballs between Facebook messenger and What’s App and some of these other mediums. The carriers know that there is always going to be a really good place for a pre-authenticated app that just works on the phone for you to text with people. And to go advanced and add features into that is what they’re trying to do. 

So, I like to think of RCS as: it gives you a lot of the features that an over-the-top type of service will, but native into your phone. So, everybody will have the ability to send large images, use typing signals so you can see when somebody is responding, whether or not they’ve read the message, and these things will just become native into texting. 

So, we’re excited about it. It still requires all the phones to support it, so it’s been a big 12 months as phones have started to roll out, but we’ve got a lot of work to go. But the good news about it is that we’re seeing all the carriers embrace it. Everybody is adopting it. We’re putting a lot of effort into it, and so Zipwhip had actually advocated to the FCC that it should be included because it is the next version, and what we don’t want to do is go solve our classification issue on SMS and then, in two years when everybody’s phone is switched to RCS, have to go do it again. So, we’re very excited that the commission took our feedback and did something about it. 

Scott Heimes: How long do you think it’ll be before handsets universally have RCS capabilities? 

James Lapic: I think we’re going to hit that tipping point in the next 18 months. The typical cycle is about three years for the whole lifecycle of a phone. And we’ll also see what happens with Apple’s adoption. So, there are rumors that Apple is going to embrace RCS in one of the next releases of iOS, so we think that will be a major influencing point, too, when half of the US market can just flip overnight. That’s going to change the way that others approach it, as well. 

Scott Heimes: And just for perspective for the audience, Apple today has their own proprietary solution called Apple Business Chat, correct? 

James Lapic: Yeah. So, I’d break that into… There are two parts of it. So, everybody has seen the blue bubble versus green bubble experience on just the normal chat application. And really what RCS does is blue bubbles for all. It lets you have that blue bubble type of experience with an Android user that has RCS. And that’s really the base layer of what’s going on. Additionally, as you mentioned, Apple does have a business chat and engagement that they’re trying to do where you can go and communicate with Home Depot or a business, and we see that as something that we’re looking at in our roadmap at Zipwhip of how do we go take advantage of some of these enhanced business features? But at the very base level, we’re really just trying to make sure that when people are interacting with each other over messaging, they’re getting the most features possible. The “is typing”, the large image support, and the like. 

Scott Heimes: So, back to the FCC, I heard you recently attended the annual FCC dinner in Washington, DC? 

James Lapic: I did. I’d never been, and I realized when I got there that the nickname, they give it of Telecom Prom is entirely true. It’s pretty interesting. So, five years ago, when Zipwhip had first gotten into having to deal with policy and politics, I never thought I’d be sharing a table with FCC commissioners and things. So, it was an honor to go, and I’m looking forward to putting that on our annual calendar. 

Scott Heimes: Right on. Well, James, thanks so much for joining us today. It’s been a pleasure. 

James Lapic: Yeah, definitely. Love to do it again. Thank you, Scott.  

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