XCastLabs’ Response to FTC’s January 2, 2024 Press Release
False allegations made by the Federal Trade Commission. On January 2, 2024, the Federal Trade Commission issued a press release which mischaracterized a Settlement Agreement that XCastLabs (XCast) entered into in December 2023. This three-year long dispute began with the FTC’s false assumption that XCast was a telemarketing company—although the agency later argued in a Federal Court that XCast was a broadband provider and then an “information service provider.” In fact, the company has always been a provider of affordable Hosted PBX services for American small businesses, charities, churches, political groups, and small communities—many of whom are exempt from the DNC Registry or have a perfectly legal need for call centers. The FCC regulates an acceptable call length and has repeatedly repudiated “call duration” as an acceptable metric; the FCC does not require voice providers to screen calls based on the DNC Registry—a fact that should be well-known to the FTC.
The FTC’s press release spun a false narrative that implied XCast was a bad actor caught red-handed in facilitating crimes against innocent people and has now been left cowering in shame for its misdeeds. Nothing could be further from the truth. XCast admitted to no wrongdoing because it had never engaged in the conduct the FTC claimed and therefore agreed to no fine.
XCast’s agreement to the Settlement was the result of a three-year dispute with the Federal Trade Commission. Some important details of that dispute are referenced in the official court filings in the attachments. In summary:
After the FTC sent a draft complaint to XCast in late December 2022, XCast began drafting a proposed rebuttal against the Federal Trade Commission (Attachment A). Before filing the suit, XCastLabs Chair, Patricia Mathis, requested a meeting with a member of the Federal Trade Commission with the hope and expectation of informing a Commissioner of the false claims against XCast.
A pre-arranged March 2023 meeting was presumed to be a private discussion with Commissioner Bedoya. To the complete surprise of XCast’s Chair and Counsel over a dozen attorneys (none of whom had previously been willing to communicate with any employee at XCast about the substance of their allegations) were assembled in the Commissioner’s office. Commissioner Bedoya then allotted Ms. Mathis an abbreviated and often interrupted opportunity to summarize the details and nuances of the three-year dispute. Commissioner Bedoya (who had only recently been appointed to his office) rushed to close the presentation and announced he had “studied” the case and urged XCast to settle the matter. He did not reveal the identity of his tutor(s) or the reasons for his conclusion.
Shortly thereafter, the FTC asked the Justice Department to file a complaint against XCastLabs on its behalf.
XCast’s counsel then filed a counter claim in May 2023 against the FTC (Attachment B) along with a comprehensive sworn Declaration of Ms. Mathis (Attachment C). These sworn statements were based on hundreds of hours of internal review of the company’s policies, procedures and the review of thousands of records that might be associated with the FTC’s claims No wrongdoing was found.
Negotiations between XCast and the Civil Division of the Department of Justice (acting on behalf of the FTC) continued over several months through private meetings, emails, and information with the Court. In December, the DoJ urged XCast to settle the matter before the end of the year to avoid protracted and expensive litigation at the request of the Court. XCast requested final review over any press release made by the FTC and were denied this request.
The final agreement indicated that XCast would only consider a settlement that recognized no wrongdoing by any employee of XCast or any party known to them and would therefore pay no fine. XCast also agreed that that Agreement could be annulled were it ever revealed XCast had lied during our Settlement negotiations. That was an easy concession because the company has never lied about anything to anybody. XCast further agreed to do everything it has already been doing for years in compliance with the rules of the Federal Communications Commission which lawfully regulates its conduct.
On January 2, 2024, the Federal Trade Commission PR department issued a press release claiming that the FTC and DoJ had collaboratively brought another voice provider to justice.
The press release outrageously implied XCast was knowingly associated with some alleged SSA scam when in truth the ITG traceback records had only identified XCast as a mid-path intermediate carrier whose least cost routing network algorithm had accepted an in-transit call from the calling party to the called party—neither of whom could have been known to XCast. The company had long before (July 2021) implemented all the call attestation requirements established by STIR/SHAKEN. This traceback information was not known to XCast until 4Q22 when the ITG finally identified both Upstream and Downstream providers as affiliated industry partners. The ITG had not initially shared this type of information with its cooperating partners.
According to traceback portal data that first became available to XCast in 4Q22, the company did not originate these calls; the cited SSA scam calls were terminated by major American wireless providers. The terminating carrier is required to reveal the Calling Party ID to their own subscriber (called party), who in turn made the personal decision to accept the calls in question.