Newsletters

Customer Support:   (972) 395-3225

Home

Articles, News, Announcements - click Main News Page
Previous Story       Next Story
    
The Canary In The Coal Mine Of Inbound Regulation

by Tim Searcy, CEO, American Teleservices Association - July 23, 2010

  THE CANARY IN THE COAL MINE OF INBOUND REGULATION by TIM SEARCY, CEO, AMERICAN TELESERVICES ASSOCIATION

Sen. Charles Schumer of NY is introducing a bill that will impose a 25 cent tax on every call that comes from the United States and is sent to an offshore agent. The idea is that by increasing the cost of offshore contact centers, companies will move their call center operations back onshore and for those domestic contact centers considering going offshore will stop. Some estimates in CIO Magazine put the potential number of businesses impacted by this legislation at 3 million or more. Of course, the burden of managing this program would fall on the already heavily burdened FTC.

Many writers have come forth to address the impracticality of this unwieldly anti-business tax. Some have gone so far as to say that this kind of tax would actually encourage a shift to lower costs in centers in countries less developed than India or the Philippines. Additionally, many point to the multiple treaties the United States has with trading partners that would be violated by such a protectionistic measure. All of these are fair and interesting arguments with which I wholeheartedly agree and will be using in an aggressive response to this proposal when I am lobbying in Washington.

However, this is not the only issue! If we look downstream, Sen. Schumer’s bill is much more threatening than a simple tax. This is the first federal shot across the bow of regulating inbound contact center activity. There are a number of concerns that this creates:

1. Focus – by putting the focus on jobs, Sen. Schumer is generating a subtle dialog around the regulation of customer service. This has implications in terms of service level agreements, in queue announcement, and the use of automated voice as politicians endeavor to curry political favor from voters with feel good legislation which is poor policy but great politics.

2. Taxation – Not since the USF taxes that were levied against telecom providers and ultimately their customers have we seen taxes used in our industry to penalize or reward behavior. As an enforcement or reward, it is inappropriate and poorly considered to use tax penalties as a means for changing corporate behavior. This type of approach could easily be cross applied to any contact center behavior that the government disagrees with.

3. No information – Sen. Schumer does not provide anything but anecdotal support for why such a tax is necessary. His assertions are the worst kind of gameplaying that occurs in Washington. It is easier to tell people what you think they want to hear than actually craft policy based upon fact. All data I have seen indicates that offshoring is at a relative stand still with roughly equal parts of new work going offshore and other work repatriating to the United States.

4. Discouraging competition – The United States marketplace has maintained for years that it has the best contact centers, best service culture, and the best ability to solve problems using its sophisticated contact centers. Is Sen. Schumer simply declaring that U.S. centers can’t win a fight against foreign providers due to pricing issues? U.S. outsourcers and in house operations have been migrating centers back and forth across the pond and the border for 15 years now. The business decisions may start from a financial perspective, but ultimately, customer satisfaction drives service delivery and location.

This bill is the first. Let me say it again . . . it is the first. We can anticipate more legislation and I assure you ATA will keep you apprised and represent your interests in Washington. It is official, the canary has died in the coal mine, and it is time for us to seek safety.

Until next time, I am on the line.

 
Return to main news page