Earlier this week, Justin told us about the potential $90 million ruling against Simon & Schuster for sending unsolicited text messages promoting the Steven King novel Cell (which itself, ironically, is about the really, really dark side of SMS). The court decreed that the publisher violated the Telephone Consumer Protection Act (TCPA) because messages were sent through an automatic telephone dialing system. Now, legitimate mobile marketing service providers are stepping up to protect their industry–and to protect the integrity of a communication platform with which consumers really do want to be reached.

The company Ez Texting is spearheading lobbying efforts to the U.S. Federal Communications Commission, to protect mobile marketing technology companies from being sued due to the misuse of their services. It has begun an organization called the Mobile Advocacy Coalition, whose website, www.mobileac.org, includes information on how other mobile tech providers can become involved.

Ez Texting’s Shane Neman tells me: “Fax broadcasters and the [cellular] carriers have specific exemptions by the FCC as they are considered to be ‘mere conduits.’ However, SMS aggregators, providers, and software developers do not. We too are merely the technology providers, and yet still can be liable under the law because no specific exemption is exists for us.” Read the rest

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A major lawsuit is rocking the mobile world.

ASCAP, a performance rights organization abbreviated for the American Society of Composers, Authors and Publishers, isn’t happy with AT&T.

The organization claims that the ringtones supported by AT&T violates performance and copyright law when they are played in public.

As a result, ASCAP has filed suit against AT&T.

Although mobile carriers and content providers pay songwriters and music copyright owners a license fee to carry the downloadable ringtones, ASCAP contends it isn’t enough and that additional royalties are due.

Now.

The legal eagles are weighing in on both sides at this hour. And while it isn’t clear exactly what will happen, it’s unlikely that consumers will be deprived of their beloved ring tones as a result of the suit.

After all, if we want to listen to “Ice Ice Baby” when we’re in the middle of grocery shopping and our mom calls, that’s our prerogative entirely.

Not that I would know anything about that.

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Rules, regulations and industry best practices are put in place for a reason, and nowhere are they more important then when it comes to anti-SPAM cases.  An emerging number of cases are being filed for violations of anti-SPAM laws regarding not only landline and cellphone call violations, but for SMS SPAM as well.

One such case is one involving a woman by the name of Laci Satterfield who, in 2007, sued Simon & Schuster in federal court in the Northern District of California for sending an unsolicited text message to her son’s cell phone that advertised the Stephen King horror book Cell.  Her attorneys claimed such text messages violated the Telephone Consumer Protection Act because they were sent through an automatic telephone dialing system. The suit, brought on behalf of a potential class of 60,000 people, sought between $500 and $1,500 for each unsolicited text message Simon & Schuster sent, meaning the publisher faced damages of up to $90 million.

While specific rules and regulations regarding SMS messages are still a bit ambiguous, Simon & Schuster claimed that it didn’t use an auto-dial system, and that no “calls” took place as defined by the federal law.  The company also claimed that Satterfield and other users had given consent by agreeing to the terms of ringtone downloads, and thus had opted-in to receiving further marketing messages.  Originally, Oakland federal district court judge Claudia Wilken sided with Simon & Schuster, though she did not rule on the question of whether a text message constitutes a telephone call- the most important aspect of the case.

Read the rest

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Yesterday the U.S. Senate Judiciary Committee grilled carriers about alleged the price hike–and possible price fixing–of SMS rates. AT&T and Verizon reps spun the whole thing as a price decrease, citing bulk message plans that are more popular than per-message spending. But members of the antitrust subcommittee that conducted the hearing didn’t seem convinced.

“These sharp price increases raise concerns. Are these price increases the result of a lack of competition in a highly concentrated market?” said Sen. Herb Kohl, chair of the Senate Judiciary Committee’s antitrust subcommittee, who had previously expressed concern that the four largest cell phone companies doubled their text message rates from 10 cents in 2006 to 20 cents in 2008.

Sen. Kohl also said, ”These lockstep price increases occurred despite the fact that the cost to the phone companies to carry text messages is minimal–estimated to be less than a penny per message–and has not increased.”

Carrier reps vehemently denied any illegal trust activity. Verizon general counsel Randal Milch said most Verizon Wireless customers subscribe to a texting plan, and as a result they “pay less than a penny per message,” a reduction of almost two-thirds since 2006. ”As the result of the price cuts, usage has grown six-fold,” he said. Read the rest

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The government of Norway has stepped in to put a stop to many SMS plans that charge consumers an on-going premium after they purchase certain things such as ringtones and minor applications for their devices.  Through a crack-down on the industry and the people who regulate it, SMS content providers will be forced to be upfront with consumers about the cost of “on-going messaging plans” from here on out.  If all goes well, other countries, including the US and many European countries, will adopt the same regulation

Hoping to make the entire industry more transparent, the government is forcing providers to come clean about their subscription plans and advertising, as well as allow consumers to bar ongoing services from July 1, 2010.  Beyond that, new regulation will force consumers to verify their acceptance of certain plans twice under a new “double opt-in” policy that will soon take effect.

In Norway, the testing ground for the new policies, the Mobile Premium Services code, jointly created by government and the industry body the Communications Alliance, will require all premium SMS operators to register on a list, and could see repeat offenders fined up to A$250,000 (US$188,718) in the Federal Court.  Having a central registry of operators will make tracking and punishing offenders of the policies much easier and more effective than it has been in the past.  In addition, providers will be banned from dealing with operators not registered on the industry list.

This new code and subsequent policies will be reviewed for a 12-month period to see how everything plays out.  These kind of deceptive practices are ruining legitimate SMS marketing tactics and bringing bad light, one again, to SMS as an advertising medium that in reality is a huge asset to mobile marketing as a whole.

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Apple, AT&T and Verizon Wireless are named along with its partner, mobile music discovery solutions provider Shazam, in a patent lawsuit targeting a Shazam application that purportedly “infringes on under-the-radar firm Tune Hunter’s music identification system.”

Although the eight page complaint doesn’t discuss in detail the problems or accusations pertinent to the individual companies named in the charges, the suit specifically includes Amazon.com, Napster, Motorola, Gracenote, and many others as direct beneficiaries of Shazam’s “alleged infringement.”

In a nutshell, Tune Hunter argues that “nearly a dozen technology companies are contributing to the infringement of the U.S. patent that outlines a music identification/purchasing system, specifically to a method for marking the time and the name of the radio station in portable device such as a key holder, watch, cellular phone, beeper or the like which will allow the user to learn via Internet or regular telephone the name of the song, artist and/or music company by matching the stored data with broadcast archive. The system will allow for purchase of the full length of the identified music item or related music.” Read the rest

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A California-based mobile marketing firm has agreed to pay the Florida Attorney General’s office $1M to avoid legal charges stemming from a variety of mobile content campaigns that were deemed “deceptive and misleading” after several complaints were filed with the AG’s office.

The company in question, “Mobile Messenger,” operates several online campaigns that direct mobile users to sign up for a variety of mobile content subscriptions such as horoscopes, “flirting tips,” and other content targeted more for younger users. The problem lies in the disclosure methods used by Mobile Messenger when signing up its users.

According to the Florida AG, many of the ads and subsequent transaction pages they pointed to failed to conspicuously disclose the true cost of the content. To avoid being faced with charges of violating state “CyberFraud” laws, the company decided to pony up the dough. You may remember, other mobile and online marketing firms have faced similar settlements from the state of Florida- M-Qube, AzoogleAds, and even AT&T have all payed settlements to the tune of $500k, $1M, and $2.5M respectively to the state of Florida. In other words, Florida is serious about its CyberFraud laws, and it intends to send a loud message.

Things like this always shed a bad light on mobile marketing as a whole and feeds in to the criticism that mobile marketing is plauged by deceptive practices and methods when in reality it’s far from the truth. While industry regulation is still evolving, it’s definitely there, and more times than not mobile campaigns are fully compliant, non-obtrusive, and abide by all rules and regulations.

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