Telnyx were the victim of a campaign by a criminal, MarioCop, that targeted the FCC’s employees and their family members with robocalling. Check out the Telnyx NAL response, and detailed NAL response document to understand the case, https://telnyx.com/nal-response-press-release-s3-final.pdf.
Telnyx was setup. Mariocop (the criminal) targeted most ranking people in the FCC and their families. 365 unique phone numbers associated with Commission offices, staff, and former staff. including: Chairman Brendan Carr, Commissioner Nathan Simington, Former Chairman Ajit Pai, Chiefs of staff, legal and policy advisors in the offices of Chairman Carr, former Chairwoman Rosenworcel and former Chairman Pai, and Commissioners Simington, Gomez and Starks, The list goes on. This was not about spamming, it was about targeting Telnyx.
The FCC were victims, judge, and jury. I’d be pissed if my family was targeted. However the FCC should have recused themselves because they and more importantly their families were targeted.
Telnyx’ reputation has been damaged. Telnyx’s CEO has received death threats, and Telnyx has lost customers, was suspended from its role as a supporting partner of the ITG, and was placed on probation by the i3Forum. Which have now been reinstated,
Sign-up / KYC is a balancing act. Telnyx sign-up is not easy, they’ve sponsored TADHack in the past, they use Sift Science. They avoid mobile numbers as burner phones are commonly used. Accepting BTC for a trial account is unusual, they changed that. But their processes worked up until this targeting against the FCC.
What shocked me was how the industry joined in kicking Telnyx, ignoring the oddities of the case, and more importantly there is no KYC bar. As discussed with Jason Welch on the TADSummit Podcast. He brings a highly informed opinion on the reality of KYC, Know Your Customer. It’s easy to assume your opinion of KYC is definitive, Jason helps us understand the reality. There is no KYC.
I had people ask why I was “carrying David’d bags?” I was simply doing what was right, they were set up, and given the lack of a KYC bar as defined by the regulator, coupled with all the facts of the case. There should not have been a fine, the industry needs to act together on key issues, The court found for AT&T and Telnyx on the fines.
There was a Newsmax interview with David Casem, which was published and then withdrawn within hours. This was an odd case from start to finish, David is still waiting to find out if the fine had been officially withdrawn, even though its now illegal.
Now onto the interview. Telnyx were founded in 2009 by CEO David Casem and COO Ian Reither specializing in call center system installations using Asterisk. From 2010 to 2013, we evolved into the business of reselling voice minutes (recurring revenue), becoming a fully licensed telecommunications carrier along the way.
Investors include Founders Fund, the venture capital firm co-founded by Peter Thiel. Founders Fund participated in one of Telnyx’ funding rounds, alongside Drive Capital and Glynn Capital. Maybe it’s connecting too many dots, but David was exceptionally strong in his defense against the FCC’s fine from the get-go. Perhaps some of his investors advised he had a strong case supported by others like AT&T?
Results count, and The Fifth Circuit’s AT&T v. Federal Communications Commission ruling confirms what David said all along: the Commission’s in-house process for imposing fines, like the $4.5M proposed against Telnyx, is unconstitutional. The FCC cannot act as prosecutor, judge, and jury (and, in this case, victim) while denying regulated entities their rights under Article III and the Seventh Amendment.
Johnny highlights Telnyx is a unicorn, was targeted in this attack, and speculated on possible suspects, David defers on such speculation. Johnny asks on how they compare to Twilio. David focuses on the core difference, Twilio is a software company dependent on AWS and carrier partners. While Telnyx is a carrier, owns the infrastructure, and ultimately the value of the software will commoditize over time. HD Voice will become more important, especially as AI is used in more use cases, Hence, Telnyx advantage will grow.
On the messaging side, its commoditized, hence all the fraud and misbehaviour to squeeze cash out of a declining business,
David drew an interesting analogy to Cloudflare in owning infrastructure, Which leads to higher gross margins. Twilio attempts to dominate the US, to achieve high gross margins. We have an interesting battle emerging in the US on who will dominate in the medium to long term.
In the near term David is focused on a tight binding between communications and AI infrastructure, removing latency, and in the limit enabling conversations with agents, that are better than with people.
In comparison to Bird, who are focused on SaaS automation using agents. Telnyx is infrastructure focused, delivering the best agent communications infrastructure, While solving the multi-network, and compliance issues.
Interestingly, Twilio does not keep David up at night, even though they go regularly head to head. Its new entrants, like VAPI (props to VAPI for keeping David up at night). David sees his edge in agent orchestration., given their focus on comms and AI infrastructure. This discussion is getting interesting on emerging infrastructure layers, and their integration.
On VAPI the assumption is Twilio will buy them, given the Bessemer connection. Let’s see.
David shared a philosophy of Telnyx in charging its customers less, so they can do more with Telnyx. Price is definitely the issue with voice AI. On Telnyx rapidly adopting verticals: Healthcare, logistics, and finance,
Johnny couldn’t help himself in trying to sell tynec yet again. David responded with, not today. David, fought the FCC, and won, with the help of AT&T. Well done David!
