In February, David Casem was reeling from an unexpected government crackdown against his company, a startup that helps its users place calls over the internet. The Federal Communications Commission had accused Telnyx of inadequately vetting customers that had used its service to make scam robocalls targeting the FCC itself.
Normally, a tech executive like Casem would pay or negotiate the proposed fine of nearly $4.5 million and have his business put under a microscope—a major threat for a small startup. But with President Trump in office, Casem decided to fight.
The Trump administration is staunchly anti-regulation, with the President even personally lauding companies that have fought lawsuits brought by their regulators.
The change in attitude in Washington from President Biden has emboldened executives like Casem to do the same. It didn’t matter that Trump's own appointee, FCC Chairman Brendan Carr, had overseen the enforcement action against Telnyx.
So Casem hired lobbyists and political consultants—including P2 Pathway Public Affairs, the influence shop that Elon Musk hired for his own political action committee, America PAC, to help elect Donald Trump. He then flew to D.C. to rally support and find allies in the Capitol.
Last week, Telnyx publicly responded to the FCC and demanded that it rescind the proposed fine. In his response, Casem proclaimed that Telnyx “is a victim of the type of unjust, regulation-by-enforcement we got used to seeing in the Biden administration” and called the case “exactly the kind of lawfare the President has promised to stop.”
The company cited two Trump executive orders, one that called for transparency and the elimination of surprise in federal enforcement actions and another calling for the elimination of unconstitutional regulations.
“Our hope is that it makes it to Chairman Carr's desk and he sees that it's inconsistent with the President's agenda, it's inconsistent with his record, and it ends up being rescinded, and we can move on,” Casem tells Fortune.
An FCC spokesman declined to comment.
Some companies have already found success in pushing back against regulators in the month and half since Trump took office. Just recently, the Securities and Exchange Commission said it would withdraw several lawsuits it had filed under Biden against crypto exchanges for operating as unregistered securities exchanges or lack of proper investor protections. Most notably, the walkback included industry giant Coinbase, which had undertaken an extensive public campaign to challenge the claims against it.
But while these companies may have set a precedent, Telnyx is setting the stage for a wave of what could come next: Direct appeals to President Trump and his agenda.
“I've never seen anything like this in my life,” Kevin Werbach, a law professor at the Wharton School at the University of Pennsylvania who was previously counsel for new technology policy at the FCC, tells Fortune about the fight Telnyx took public last week. “But I expect it will become more common over the next four years,” he added.
Robo-calling
Telnyx’s battle with the FCC stems from a robocall scam by unknown individuals that had targeted officials at the FCC, as well as some of their family members. On Feb. 6, 2024, the FCC says more than a dozen of its staff and some of their family members—which Telnyx says included Chairman Carr, Commissioner Nathan Simington, and former Chairman Ajit Pai—were called on their personal and work numbers, receiving a prerecorded voice message. At least one of them was apparently asked to send $1,000 in Google gift cards to avoid jail time for their “crimes against the state.”
In early February, a couple weeks after Commissioner Carr had been appointed chairman by Trump, the FCC moved against Telnyx. The commission sent a “Notice of Apparent Liability,” or NAL, saying that—while it had not yet conducted a formal investigation—Telnyx “apparently failed to verify the identity of its customer that placed the scam robocalls,” and proposed a nearly $4.5 million fine.
Casem said he was shocked by the action, and had been under the impression the FCC was investigating the robocallers themselves, not his company. “We followed all their rules,” he said, adding: “We were doing what we would think to be best-in-class fraud detection on our side.”
Neither party knows who engineered the robocalls. The people behind the two accounts used fake names, emails with domains based out of Edinburgh, Scotland, and listed addresses in Toronto that were associated with a Sheraton hotel.
Since last month, Telnyx has hired groups like S3 Group and Mercury to help contact and appeal to Trump administration officials, the FCC, and the Office of Management and Budget, according to Casem. He says Telnyx feels “emboldened,” because its arguments are in line with what “Trump has put out there.”
“I think it's certainly more likely to be effective in this administration, because what we're saying is entirely consistent with the president's agenda,” Casem says, adding: “So would we have taken this approach if there was a Harris victory? I mean, there would be no [executive orders]. Things would be a little bit more difficult.”
What remains to be seen is whether such an approach will work, or merely inflame the situation with Chairman Carr and the FCC. Certainly—if Telnyx can successfully get the action dropped—it will make a statement to other companies that run afoul of regulators.
“If the FCC acts in favor of Telnyx, it would be irrational for other firms not to adopt the same approach,” Werbach says.
