Free Press & Public Knowledge Try to Invent Regulatory Crisis over Sprint Short Codes

by on March 28, 2010 · 9 comments

John Schwartz of The New York Times called me two weeks ago and asked for comment about a potential controversy involving mobile phone provider Sprint and the charitable organization Catholic Relief Services (CRS). The facts were pretty sketchy at the time, but Schwartz told me that CRS was accusing Sprint of blocking Mobile Commons, the company that connects CRS and 100 other nonprofit organizations with text messaging networks, from getting a short code to create a charitable mobile donation program in the wake of the Haiti earthquake. Here’s the basic background that appeared in Schwartz’s March 24th article, Catholic Charity and Sprint Tangle Over Texting“:

[CRS] wanted to try a twist on the technology: when people sent a text message to donate, they got a reply offering to connect them via phone to the charity’s call center. The group hoped that the calls could build a stronger bond with donors, and garner larger contributions as well. But just three days into the effort after the Jan. 12 earthquake, the charity got word that Sprint Nextel was demanding that the “text-to-call” effort be shut down. The charity had 40 days to abandon the feature or lose access to millions of Sprint customers.  Sprint’s original motivations are murky; it said that an intermediary company had failed to properly fill out a form to verify that it was dealing with a legitimate charity.

It didn’t take long for the regulatory activists at Free Press and Public Knowledge to pounce and claim the Federal Communications Commission (FCC) had to intervene to save our souls from the nefarious scum at Sprint. After all, you do know that Sprint hates Haitians, right?  The company obviously wanted to see Haitians starve and not receive any support from charitable organizations.

No, seriously, come on!  How asinine is this storyline?! That’s why, when Schwartz called me about the issue, I felt something else had to be going on here. When he asked me for a quote for the story, here’s what I said, (on the assumption that Sprint probably had some sort of system in place to ensure fraud wasn’t taking place): “most people would say, I want my carrier to be doing a certain amount of policing for potentially harmful or fraudulent activities,” and would hold the carrier responsible if things went wrong.

And, now that all the facts are out, we now know that Sprint had no charity-blocking machinations in mind. Indeed, as I suspected, the company (quite sensibly) has a process in place to make sure that any organization asking for the short code is legit and not a blatant scam artist. Here’s how Sprint explained the situation:

We are simply asking Mobile Commons – the aggregator involved – to adhere to the same reasonable practices with which other entities involved in mobile giving adhere.  Specifically, certify that the charities they work with are 501(c)3 organizations; set up a confirmation process for each short code; and, provide basic information concerning the mobile giving campaign they wish to implement. In turn, this allows us to accurately communicate this information to our wireless customers who call us seeking more detail. Taking these steps also protects our customers and assures that their donations are going where they are intended.

Makes perfect sense to me, especially in light of the unique “text-to-call” service being proposed by CRS and Mobile Commons in this case. If you were a mobile phone operator, wouldn’t you want to a have a process in place to vet short code use so that your users weren’t getting scammed by hucksters? (That’s especially the case in our litigious society, where class-action lawsuits fly at the first whiff of potential trouble.) And as a customer, don’t you hope that your provider has such safeguards in place?  Basically, that’s all that Sprint has done here.

But here’s what I found really surprising, and that you certainly wouldn’t learn if you only listened to the howling in Free Press and Public Knowledge press releases: Sprint never blocked the CRS code at all! A clearly (and legitimately) agitated John Taylor, who handles corporate communications for Sprint, notes:

There is not ONE Sprint customer who has been prevented from using the short code set up by the mobile marketing firm hired by Catholic Relief Services. That’s because the short code is operable on Sprint’s network. (It never was suspended and we never threatened to suspend the code.)

And here’s Sprint’s letter to the FCC responding to the allegations and verifying that the CRS code has been operational and will continue to be so.

Now, let’s get back to the call by Free Press and Public Knowledge for regulatory intervention. They made that call to regulatory arms less than 24 hours after Schwartz’s NYT article appeared. Never mind the sketchy facts, they basically said, we are going full bore forward and requesting action now!  Here’s what they demanded:

“The Commission has an opportunity to establish the rule of law with regard to text messaging and short codes. It can require that carriers deal fairly, and that non-profits and commercial enterprises have the necessary stability and legal protection from unjust and unreasonable discrimination to innovate and explore new ways to use this communications technology. But if the Commission once again turns a blind eye to carrier discrimination by letting the Petition continue to languish, this too will send a message to both carriers and users of short codes, and we can expect such arbitrary discrimination to continue to increase.”

But the problem with this is that the carrier in question (Sprint) was dealing with the situation fairly and in a reasonable, non-discriminatory manner.  The company was applying the same sensible policy in this case they they have applied across the board. And, again, they were not blocking anything at all!

In a truly audacious response to these facts, Harold Feld of Public Knowledge tries to avoid admitting that they were clearly wrong on the facts and instead spins this around to make it all Sprint’s fault. In a response to John Taylor, Feld argues:

the “real story” is that Mobile Commons and CRS must put up with such ridiculous processes and arbitrary treatment at all . That you feel ill-used because the process that you developed and implemented prevented you from discovering that a customer was threatened with a shut off for a relief fund — and that you failed to contact the customer directly after the NYT reporter alerted your company about the problem — emphasizes the phenomenal sense of entitlement carriers have with regard to how they provision what should be a basic service no different from use of an 800 number.

Absurd. What “ridiculous processes and arbitrary treatment” are you talking about, Harold? There’s none here to be found!  Would Free Press and Public Knowledge prefer no process at all?  Again, should any huckster calling themselves a “charity” be able to grab a short code and unwitting “donors” givers straight to their offshore account to pump individual givers’ bank accounts at will?  That seems like bad business to me—for both Sprint and its customers. Indeed, if Sprint didn’t have some policies in place to deal with such things, policymakers would likely be up in arms about it and the FTC would potentially come calling once things went wrong. Or would you put the FCC in charge of monitoring all these things on behalf of carriers? Should the FCC have a whole wing of regulators dealing with standard business practices like fraud prevention? Seriously, why shouldn’t that be handled by private carriers?

Even more outrageous is Feld’s line about carriers’ ”phenomenal sense of entitlement.”  What in the hell is he talking about? The only “sense of entitlement” I can find here is the one on display at Public Knowledge and Free Press, two organizations that apparently believe that they are entitled to instantaneous FCC regulation of communications markets based on asinine and unsubstantiated conspiracy theories. Most troubling of all is the fact they couldn’t even wait 24 hours to check out all the facts and see what the real story was—perhaps, by checking with Sprint!  Instead, they displayed a reckless disregard for the truth in their rush to fire off a letter asking the FCC to bring down the regulatory hammer.

Shame on them both.

  • john b.

    Here's what the man involved says about the facts:

    http://www.freepress.net/files/Alpert_Statement

    He says that Sprint said they would block the short code unless he suspended the CRS program. Jed believes the CRS program was singled out because it was a text-to-call program; Sprint claims this is not true, and they simply needed some paperwork. (Jed denies this.)

    At the heart of the problem is that there is a lack of communication and established process, and people are left in the dark. You're pointing to the fact that no one seems to know what Sprint was trying to do, while that's the problem in the first place.

    In the NARAL incident, you admitted that what Verizon did was stupid. But there, Verizon realized it goofed up it reversed its course, in your view eliminating the need for any regulation. At the time, you wrote, “Sunlight is the best disinfectant.”

    But here, it seems to be your position that Sprint already had a fine system in place, despite the fact that CRS, Mobile Commons, and it seems OpenMarket had no clue about what Sprint was after. Thus, in the face of an apparent failure of process and communication, you seem to believe that there is nothing for the market to correct, and nothing for sunlight to disinfect.

  • Brett Glass

    Ironically, even if Sprint WERE to refuse to issue short codes to parties whose activities it found to be objectionable, it would be protected from regulatory sanctions by Section 230 of the Telecomm Act, which allows any provider of information services to block objectionable content. So, even if PK and Free Press were not lying about what Sprint was doing, the FCC would still not be authorized to step in.

  • http://www.wbklaw.com Mike Sullivan

    I don't understand why Free Press is complaining to the FCC about this in the first place. They should be going to the FTC, since what is at issue is an information service, not a plain old transmission service; and Free Press's complaint about the NARAL and other texting/short-code issues has languished at the FCC. Of course, Free Press ultimately doesn't want to undermine its legal argument that texting and short-codes are somehow common carrier services. It might fare better at the FTC, but it's pursuing a futile FCC complaint instead, with bad facts, in order to protect its position on an abstract legal issue. Is Free Press seriously trying to help Catholic Charities?

  • http://greeninharlem.com anthonyris

    We should be perfectly clear about what happened here. There is a lot of conversation swirling around that is confusing the basic facts:
    - the program was *not* a text-to-give or mobile giving program, so the concern about making sure legitimate charities raising funds doesn't apply at all.

    - the “form” was filled out and submitted upon request. There has never, to date, been a conversation about an “incomplete” form.

    - this was a simple communications program, where supporters of an organization (Catholic Relief Services) had already previously and affirmatively OPTED-IN to receive text messages from the organization.

    - the organization sent a text message to those OPTED-IN supporters. The message included a phone number to call to get an update from the President of CRS on their relief efforts in Haiti. Supporters had to affirmatively reply “call” or click the number to be connected. This is, effectively, a 2nd opt-in.

    - at the end of that message, callers were asked to stay on the line to talk to a live representative of the organization. This is, effectively, a 3rd opt-in.

    So, in the end, this issue arose because an organization wanted to communicate with its opted-in supporters and Sprint rejected it. Replace “Catholic Relief Services” with a retailer, brand or publisher and I think the magnitude of the issue becomes crystal clear.

    .//A.

  • Brett Glass

    Public Knowledge and Free Press claim that it was a “text to give” program, and that Sprint was preventing contributions from reaching Haiti.

  • http://greeninharlem.com anthonyris

    Brett: sorry, but your statement is incorrect. As the NYTimes, PK and Free Press pointed out, this was *not* a text-to-give program. It was a response communication from an organization to its OPTED-IN supporters who ASKED to receive these messages (see below for quotations). Again, replace the words Catholic Relief Services with any retailer, brand or publisher and the issue becomes very clear.

    “In response to the tragedy in Haiti, Catholic Relief Services (CRS) sought to leverage the power of text messaging to go beyond the carrier-approved “text to donate” program… Instead, CRS chose to implement a “text to call” program. With text to call, those who texted the CRS program could request an immediate call- back from CRS.”

    And:

    “Instead of using the “text to give” programs used by groups like the Red Cross, CRS decided to try a “text to call” program. Instead of a text automatically donating a fixed amount, the text to call program used a text to automatically link a potential donor to a real live CRS operator. That operator could answer any questions that the potential donor might have, and even give the potential donor the chance to volunteer with CRS. Also, unlike the text to give programs, there was no $10 limit on donations through text to call.”

  • Brett Glass

    Public Knowledge and Free Press claim that it was a “text to give” program, and that Sprint was preventing contributions from reaching Haiti.

  • http://greeninharlem.com anthonyris

    Brett: sorry, but your statement is incorrect. As the NYTimes, PK and Free Press pointed out, this was *not* a text-to-give program. It was a response communication from an organization to its OPTED-IN supporters who ASKED to receive these messages (see below for quotations). Again, replace the words Catholic Relief Services with any retailer, brand or publisher and the issue becomes very clear.

    “In response to the tragedy in Haiti, Catholic Relief Services (CRS) sought to leverage the power of text messaging to go beyond the carrier-approved “text to donate” program… Instead, CRS chose to implement a “text to call” program. With text to call, those who texted the CRS program could request an immediate call- back from CRS.”

    And:

    “Instead of using the “text to give” programs used by groups like the Red Cross, CRS decided to try a “text to call” program. Instead of a text automatically donating a fixed amount, the text to call program used a text to automatically link a potential donor to a real live CRS operator. That operator could answer any questions that the potential donor might have, and even give the potential donor the chance to volunteer with CRS. Also, unlike the text to give programs, there was no $10 limit on donations through text to call.”

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