Insights

New Whitepaper Reveals Market Failures in Texting to Toll-Free Causing Consumer Harm

Sep 29, 2016

FOR IMMEDIATE RELEASE

Contact:
Michelle Larsen
mlarsen@somos.com

NEW WHITE PAPER REVEALS MARKET FAILURES IN TEXTING TO TOLL-FREE CAUSING CONSUMER HARM

WASHINGTON, D.C., September 29, 2016 – Toll-Free numbers have been a staple of business and consumer communications for decades, but according to a new study, dysfunction in the growing texting to Toll-Free (TTF) market is harming consumers and businesses.

The study, conducted by QSI Consulting, Inc. and sponsored by Somos, found that although commercial relationships in the mobile-to-mobile texting market have been working well, many of the same monopoly characteristics that plagued traditional voice communications for years, requiring constant oversight by the FCC, are now affecting the TTF market and causing consumer harm.

The study found a market breakdown in three key areas:

• Toll-Free numbers are being text-enabled without the knowledge or consent of the Toll-Free subscriber or carrier. New evidence shows that Toll-Free numbers are being text-enabled without the knowledge or agreement of the authorized subscriber or Toll-Free voice provider.
   
• Aggregator monopoly is stifling innovation and hindering market development. A market monopoly by a single aggregator for text messages involving Toll-Free is harming competition and keeping innovative companies from entering the market.
   
• Market disruption is being caused by a single aggregator’s revenue sharing agreements with the major mobile carriers. The lack of competition has allowed exponentially higher rates to be charged for using the aggregator when compared to carrier networks directly originating and terminating voice calls or mobile-to-mobile texting.

“Our study chronicles significant and demonstrable market failures in the texting to Toll-Free ecosystem. For example, with little effort, we were able to duplicate a scenario in which Toll-Free numbers could be text-enabled without the authorized subscriber’s knowledge or the supporting voice carrier’s concurrence,” said Jim Webber, senior vice president and partner at QSI. “Perhaps more importantly, we were also able to redirect incoming text messages on each of the ‘hijacked’ Toll-Free numbers away from the authorized subscriber and to the unauthorized analyst.”

QSI also found that because a single aggregator serves as the de facto gatekeeper for all Toll-Free texts, it occupies a position in the ecosystem that allows it to collect information about the customers of its competitors and use that information for marketing purposes. There are numerous examples where competing texting to toll-free providers have had their customers solicited by using sensitive information available simply as a result of the aggregator’s relationship with the five largest mobile carriers.

“It is our hope that this white paper paints a clearer picture of the market failure and result in meaningful discussions toward increased consumer welfare, competition, innovation in the TTF marketplace,” said Somos CEO Gina Perini “Order and a level playing field are essential to ensuring the system remains dependable for all those who rely on it, which is why CTIA developed guidelines, leading to the creation of the TSS Registry.”

View and download full white paper here.

Learn more about text to Toll-Free here.

About Somos

Somos, the Toll-Free industry’s top resource for thought leadership, enables Toll-Free service providers, service registrars, routing database providers and SCPs. Somos also manages and administers the Toll-Free Number platform (SMS/800) and operates the industry's only CTIA-endorsed registry for text enabling Toll-Free numbers. As the holder of the FCC SMS/800 Functions Tariff, Somos focuses on empowering Toll-Free Service Providers with the ability to deliver the most credible connections to brands, customers, and communities.

About QSI Consulting, Inc.

QSI Consulting, Inc. is a premier consulting firm that provides innovative solutions to stakeholders associated with regulated network industries. QSI's professionals are dedicated to the success of its clients. Wireline and wireless telecommunications firms of all sizes, federal and state governmental agencies, consumer groups and law firms all trust QSI's strategic vision and research and analysis.

Michelle Larsen

SVP & Chief Experience Officer