FCC Call Center Outsourcing NPRM

Tony: Hello, I’m Tony Mangino from TC2, and this is Staying Connected—where we talk about what really matters to enterprise customers navigating today’s technology and sourcing decisions.

As our listeners know, laws and regulations related to technology issues can have a direct impact on the cost and delivery of the technology products and services that enterprise customers have to purchase to keep their businesses running. So today we’re going to hear about a new rulemaking from the Federal Communications Commission that could have serious implications for companies with customer service operations and even for large enterprises that receive customer service from their vendors, particularly those regulated by the FCC. I’m joined today by Andrew Brown, the Managing Partner of LB3 and the Chairman of TechCaliber Consulting to discuss what’s going on with the FCC’s proposed call center onshoring rules and the impact it could have on enterprise customers. Andrew, welcome back to Staying Connected.

Andrew: Hey, Tony. Thanks for having me. This one is a bit of a head scratcher, and I think a lot of enterprise customers are going to be pretty surprised by what the FCC is trying to do here.

Tony: Well, let’s get right into it. What exactly is the FCC proposing?

Andrew: So back in March, the FCC released a Notice of Proposed Rulemaking—an NPRM—in a proceeding they called “Improving Customer Service and Protecting Consumers through Onshoring.” The basic idea is that the Commission wants to adopt rules to encourage, really kind of mandate, onshoring of call centers, improvements to customer service standards and deterrence of robocall scams originating from foreign countries.

Tony: OK, so what are the rules they’re proposing? What would companies have to do?

Andrew: I’ll just list some of them to give you a flavor and it’s not a particularly short list… First, all foreign call center staff would have to be proficient in spoken and written “American Standard English”—their term, not mine. Second, providers would have to cap the percentage of customer service calls handled by foreign call centers at some specified level—the NPRM floats 30% as a benchmark. Third, at the beginning of every call handled offshore, they’d have to disclose to the consumer that the call is being handled outside the United States and offer to transfer to a U.S.-based representative and then there are standards proposed for how long that transfer can take, sort of like an SLA covering the number of seconds allowed for the transfer. Fourth, any transaction involving sensitive consumer information—passwords, multi-factor authentication codes, social security numbers, financial account info, stuff like that—would have to be handled exclusively at U.S.-based call centers. Fifth, providers are flatly prohibited from using call centers in “foreign adversary” nations—so no putting your call center in Iran or North Korea. And sixth, they’d have to track and report compliance metrics to the Commission on a periodic basis.

Tony: That’s quite a lot!  So, who exactly do these proposed rules apply to?  Customer service support provided by companies that the FCC regulates—your telecom companies, cable companies, that kind of thing?

Andrew: Right that’s what you’d think.  So the proposed rules would apply to providers of telecom services, wireless services, internet and VoIP, cable television, satellite services that kind of thing.  And they’re also asking about extending these requirements to non-voice channels like online chat, email, and text messages. But here’s where it gets really interesting—and frankly, a little absurd because the Commission asks whether it can or should extend these rules to non-communications products and services.   And they’re asking whether they can use Section 251(e) of the Communications Act—which is the provision that gives the FCC jurisdiction over the North American Numbering Plan—as a basis for regulating essentially any business that uses a U.S. telephone number.

Tony: Wait—so the FCC is saying that because your company has a 1-800 number for customer service, that gives them the authority to tell you where your call center has to be located?

Andrew: Yes, exactly.  And not just a toll free number—basically any number. Under this interpretation, the FCC could condition any business’s access to telephone numbers on compliance with the full suite of proposed call center rules.  We’re talking about retailers, banks, manufacturers, healthcare providers, technology companies—basically every business in America that has a phone number could be subject to English proficiency mandates, percentage caps on foreign call handling, and compliance reporting.  It’s an extraordinary claim of jurisdiction.

Tony: That seems like a massive stretch. What’s the legal basis for that?

Andrew: It’s incredibly thin. Section 251(e) is about telephone number administration—the technical process of allocating and assigning numbers within the North American Numbering Plan. The FCC has historically used this for things like preventing number hoarding, ensuring number portability, and managing allocation of numbering resources. They bear no resemblance to telling a retailer where it has to locate its customer service operation.

Tony: And I assume there’s no precedent for the FCC using this provision this way?

Andrew: Nothing like this. The Commission itself basically says that.  And an interesting and important fact is that there was a bill in Congress called the “Keep Call Centers in America Act of 2025” that was introduced but not enacted. And the Supreme Court has said that agencies should not try to expand their authority over subject matter that Congress has already considered and rejected or addressed differently, which is exactly what the FCC is doing here by bootstrapping its proposed rules for call center customer service on its exclusive jurisdiction over numbering administration–something that isn’t even tangentially related.  That’s not how this is supposed to work.

Tony: Let’s talk about what this means for enterprise customers specifically. Why should our listeners care about this?

Andrew: This matters to enterprise customers in two ways. First, if the FCC actually adopts these rules with this expansive theory of its own authority and jurisdiction then, the rules could apply directly to any large business that maintains global customer service centers handling communications via U.S. telephone numbers.  And remember that telephone numbers don’t just support voice calls.  They are used for all kinds of underlying communications and communications devices even at enterprise scale.  So, the rules would apply in this case to pretty much every customer support model. And it’s also not clear that the FCC has thought very carefully about the single most important innovation in call center support—AI driven models that don’t rely on call centers as we traditionally think of them at all!

Second, even if the final rules are limited to traditional communications providers, enterprise customers that buy telecom and IT services would still feel the impact because their providers would face significant compliance obligations—onshoring mandates, reporting requirements, restrictions on handling sensitive data offshore—and those costs are will certainly get passed through to end users.

Tony: Can you unpack that a bit? If I’m a large enterprise buying telecom services from a major carrier and that carrier now has to onshore call center operations, how does affect me?

Andrew: It means higher costs, potentially worse service, and a whole lot of compliance overhead that someone is going to pay for. Think about the 30% cap on foreign call handling. If a vendor currently handles 60 or 70 percent of its calls offshore—which isn’t a crazy figure—it’s going to have to stand up significant domestic call center capacity very quickly. That’s expensive. And enterprise customers are sophisticated enough to know that they can get perfectly good support—often better support—from well-managed offshore operations that are specifically tailored to their needs. 

Tony: And the enterprise perspective here is different from the consumer perspective that the FCC seems to be focused on.

Andrew: Completely different. The FCC’s rationale is that offshore call centers lead to poor customer service, language barriers, and data security vulnerabilities for consumers.  And look, maybe for a residential customer calling their cable company about a billing issue, there might be some legitimate frustrations and problems. But enterprise customers are in a completely different position. These are sophisticated purchasers of communications services. They negotiate specific terms for service, they have options from multiple providers, and they often prefer partially or wholly offshored call center models to support their global business activities more effectively and at lower cost. They don’t need the government stepping in to tell them what kind of customer support is appropriate for their businesses. They can figure that out themselves.  So, unless the FCC adopts an exemption for support to enterprise customers—which we have asked them to do—there’s going to be a restriction and cost increase in the way they might support global accounts.

Tony: What about the sensitive transaction requirement? That one seems like it could be particularly burdensome.

Andrew: Yeah, the proposal that any transaction involving passwords, multi-factor authentication, social security numbers, or financial account information must be handled exclusively at U.S.-based call centers is incredibly broad. Think about what that covers in practice—virtually every meaningful customer interaction involves some form of identity verification or account access. If you’re an enterprise you or your provider’s support team needs to verify identity before providing support, that call now has to be domestic regardless of where the call started. The compliance logistics of routing calls in real-time based on content are challenging to say the least.

Tony: And the reporting requirements?

Andrew: They want providers to report on the English proficiency of their foreign call center workers, the number or percentage of calls routed to foreign versus domestic centers, transfer rates, wait times, dropped calls—basically the full operational metrics of their call center business. That’s a significant compliance burden if you have to do it, and again, those costs get passed through to customers which matters if you rely on these services from someone else.

Tony: Alright, so big picture—what should enterprise customers be doing right now?

Andrew: A few things. First, pay attention to this proceeding because it could result in rules that impact enterprises one way or another. Second, if you’re relying on offshore call center support from your communications providers—or if you operate your own offshore customer service—you should understand that this NPRM, even if it doesn’t survive legal challenge, signals regulatory interest in this area that isn’t going away. Third, enterprise customers should be pushing hard for an exemption from any rules that are ultimately adopted, because the consumer protection rationale just doesn’t apply to sophisticated business purchasers who can negotiate their own terms. The FCC needs to hear from you, and we’re happy to help you get the message to them.

And honestly, the legal basis seems so weak that there’s a good chance this doesn’t go anywhere or it gets challenged and struck down by the courts even if the FCC adopts rules. This is exactly the kind of agency overreach that courts are now empowered to reject. An agency discovering unprecedented regulatory authority over every American business in a numbering administration provision? I don’t think that’s going to fare well on appeal.

Tony: OK, thanks Andrew. This was really informative and I think a real eye-opener for a lot of our listeners who probably didn’t realize the FCC was trying to regulate call center operations. If you are interested in learning more about this proceeding or its impact on your enterprise, please don’t hesitate to reach out to Andrew, me or any of our LB3 and TC2 colleagues. You can also stay current by subscribing to Staying Connected, checking out our websites, and following us on LinkedIn.