I was pleased to see the report in today's Communications Daily [subscription required] that Telnyx, which is contesting a $4.5 million forfeiture proposed by the FCC, has been reinstated in good standing by the Industry Traceback Group (ITG). ITG, established by USTelecom, works collaboratively with voice service providers to combat illegal calls by tracing them back to their origin.
A Free State Foundation Perspectives, published March 12, 2025, explained in detail why the FCC's proposed forfeiture, based on a claim that Telnyx failed to satisfy the agency's "Effective Measures" rule for blocking illegal calls, raises serious rule of law concerns implicating fundamental due process and fair notice constraints. As the FSF Perspectives states: "This is because it appears Telnyx, and other providers for that matter, could not have known in advance the requirements of the rule Telnyx is charged with violating."
In this instance, if not rescinded, the proposed forfeiture, in effect, would transform the "Effective Measures" rule by imposing more stringent yet unspecified requirements and a higher liability standard than that which the Commission previously established through notice-and-comment rulemakings. As such, the FCC's proposed forfeiture smacks of "regulation by enforcement." This is because regulated entities are deprived of the ability to know and follow the law, contrary to the requirement of fair notice and the prohibition of unfair surprise that are recognized in Supreme Court's Fifth Amendment Due Process Clause jurisprudence.
As the FSF Perspectives observed:
These due process concerns are at the core of President Trump's newly reinstated Executive Order 13892 – "Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication." The very first sentence reads: "Regulated parties must know in advance the rules by which the Federal Government will judge their actions." The EO goes on to declare that regulated entities should not be subjected to a civil administrative enforcement action or adjudication absent prior public notice of "the legal standards applicable to that conduct." Indeed, the EO directs that agencies "shall afford regulated parties the safeguards described in this order, above and beyond those that the courts have interpreted the Due Process Clause of the Fifth Amendment to the Constitution to impose."
Indeed, considering its vagueness and open-endedness, the FCC itself should "DELETE" the "Effective Measures" rule that Telnyx is claimed to have violated. In accordance with President Trump's April 9 Presidential Memorandum, "Directing the Repeal of Unlawful Regulations," this likely unlawful rule, which inherently invites abuse on the basis of lack of due process and fair notice, should be repealed on the agency's own initiative.
In the meantime, and more immediately, the FCC should act now to rescind the proposed Telenyx forfeiture. Hopefully, ITG's reinstatement is a positive indication in that regard.
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