Case Could Lead To First Ruling On Whether Companies Have Right To Use Short Codes

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A federal judge in Manhattan is slated to hear arguments on Thursday about wireless carriers' ability to prevent companies from using short codes. The case could lead to the first judicial ruling addressing whether companies have a legal right to use short codes.

The lawsuit, a dispute between T-Mobile and mobile marketing company EZ Texting, began earlier this month when T-Mobile started blocking EZ Texting's access to short codes. EZ Texting alleges that T-Mobile did so because it learned that EZ Texting delivered messages for the site www.legalmarijuanadispensary.com, which gives users information about obtaining medical marijuana in California and other states. EZ Texting alleges that it ended its relationship with that site earlier this month, but that T-Mobile nonetheless refused to restore EZ Texting's short code.

The company is seeking an injunction ordering T-Mobile to stop blocking EZ Texting's short code. It says that T-Mobile's actions have put the company at risk of going out of business. "A mobile marketer's business is not marketable if it cannot promise access to at least the customers of the four major carriers," the company argues in papers filed with the court late last week. "EZ Texting therefore cannot attract new business or retain existing business if it is cut off from such a large portion of the market."

T-Mobile says that it discontinued EZ Texting's short code because it learned that the company did not submit new campaigns for T-Mobile's prior review, in violation of T-Mobile's rules and of recommendations by the industry trade group Mobile Marketing Association.

EZ Texting responds that "numerous mobile marketing companies use shared short codes without ever asking T-Mobile for permission for each program."

"The best example is the Web site Twitter, which allows anyone to sign up for a Twitter account, including businesses and non-profits, and instantly sends text messages to T-Mobile users over T-Mobile's short code ... without Twitter ever seeking approval for T-Mobile or any other carrier."

T-Mobile also argues that it has the right to block EZ Texting's short code because no law prohibits that. The wireless carrier says that text messages are classified as "information services" by the Federal Communications Commission, and information services are not subject to common carrier rules.

EZ Texting disagrees, arguing that the FCC previously said that text messages should be treated as phone calls for purposes of a consumer protection law. The company points to a 9th Circuit ruling that sending unsolicited SMS messages potentially violates the federal Telephone Consumer Protection Act, which prohibits companies from using automatic telephone dialing systems to make calls to cell phones unless the owners have consented.

Some consumer advocates argue that this dispute highlights the need for the FCC to get inovlved. Three years ago, after Verizon Wireless briefly refused to allow abortion rights group NARAL Pro-Choice to use a short code, the groups Free Press and Public Knowledge filed a petition asking the FCC to declare that texting was a "telecommunications" service, subject to common carrier rules.

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