On March 4, 2026, FCC Chairman Brendan Carr announced a sweeping proposal targeting the offshoring of American call center operations, a practice that has quietly reshaped the U.S. customer service landscape over the past three decades.
Framed as a consumer protection initiative during National Consumer Protection Week, the proposal would encourage businesses to repatriate call center jobs, impose new transparency and language-proficiency requirements on overseas operations, and explore novel enforcement tools, including tariffs and bonds, to combat illegal robocalls originating from foreign call centers.
Many industry observers would argue that the announcement arrives several years too late. Roughly 70% of U.S. businesses currently outsource at least one department, including customer service and call center operations, to locations abroad.
The Chairman's Proposal: Onshoring Call Center Jobs
The centerpiece of the proposal is a Notice of Proposed Rulemaking (NPRM) that will seek public comment on ways to encourage and facilitate the onshoring of call center operations. Chairman Carr framed the issue as both an economic and consumer protection imperative: "Americans get frustrated when they call a U.S. business and end up connecting with a call center located abroad. Language and communications barriers often make it difficult" to resolve issues effectively. The FCC will vote this month on reforms designed to incentivize communications providers regulated by the agency to bring call center jobs back to the United States.
The FCC's regulatory jurisdiction positions the agency to impose requirements on telecommunications carriers and other communications providers it directly regulates. However, the proposal stops short of outright banning offshore call centers, instead relying on disclosure mandates, consumer choice mechanisms, and market-based incentives.
The Commission is seeking comment on the scope of its legal authority and how existing rules apply to foreign call centers operated by FCC-regulated companies.
The Chairman's statement outlines several potential regulatory actions:
Disclosure Requirements: The Commission is apparently considering a rule requiring companies to inform consumers when their calls are being routed to an overseas call center, a transparency measure intended to give callers the information they need to make informed decisions about the handling of their communications and personal data.
Consumer Option to Transfer: Another contemplated rule is to provide consumers with the option to switch to a U.S.-based representative if they are connected to a foreign call center. This mirrors provisions that have appeared in previously proposed but never enacted federal legislation, most notably the bipartisan United States Call Center Worker and Consumer Protection Act, which has been introduced in various sessions of Congress.
English Proficiency Requirements: The FCC will explore a requirement that call takers at communications providers be proficient in "Standard American English." This provision, likely to generate significant debate, addresses longstanding consumer complaints about difficulty communicating with overseas agents.
Limits on Offshore Call Volume: The Commission is also considering potential limitations on the volume of calls handled by international call centers for FCC-regulated companies.
Enhanced Data Safeguards: Recognizing the heightened risk to personal information when consumer data is processed overseas, the proposal calls for stronger safeguards for personal data at foreign call center locations.
Tariffs or Bonds to Deter Illegal Robocalls: Perhaps the most novel element of the proposal is its exploration of the "targeted use of tariffs or bonds" to discourage illegal robocalls originating from abroad. This approach, if adopted, would represent a significant expansion of the FCC's enforcement toolkit.
The Charter/Cox Precedent
The announcement came just days after the FCC approved Charter Communications' $34.5 billion acquisition of Cox Communications on February 27, 2026. As a condition of approval, Charter committed to relocating all offshore job functions currently performed by Cox back to the United States within 18 months.
Chairman Carr characterized the deal as a model: "This deal means that jobs are coming back to America that had been shipped overseas. It means that modern, high-speed networks will get built out in more communities across rural America. And it means that customers will get access to lower priced plans." The Charter/Cox commitment effectively previewed the broader onshoring push that the March NPRM formalizes as proposed policy across the regulated communications industry.
The Broader Call Center Context
The call center proposal fits within a larger pattern of consumer-facing initiatives under Chairman Carr's leadership. Over the past year, the FCC has taken aggressive action against illegal robocalls, including removing over 1,200 voice service providers from the Robocall Mitigation Database in August 2025 for failing to comply with mitigation plan requirements, effectively disconnecting them from the U.S. phone network.
In October 2025, the Commission adopted a Further Notice of Proposed Rulemaking addressing caller ID verification, foreign-originated call labeling, and modifications to TCPA consent revocation rules. Chairman Carr has characterized foreign call centers as a critical link in the robocall ecosystem, noting that "foreign call centers have also contributed to the rampant influx of overseas scam calls, training staff that later use those skills to defraud consumers."
The data security dimension of the proposal is grounded in well-documented incidents. In 2015, the FCC levied a $25 million fine against AT&T, its largest privacy enforcement action at the time, after call center employees in Mexico, Colombia, and the Philippines accessed over 280,000 customer accounts without authorization and sold the information to third parties for use in handset unlock fraud.
Over the past several years, numerous industry and law enforcement organizations have catalogued a litany of fraud schemes emanating from foreign call centers, including Indian call center operations that generated hundreds of millions of dollars in losses from IRS impersonation scams, and a Jamaican lottery fraud traced directly to skills acquired at legitimately offshored call centers in the 1990s.
How did We Get Here?
Chairman Carr’s proposal begs the question: why have so many U.S. companies elected to offshore their call center operations in the first place? The modern call center traces its origins to the 1960s, but the industry took off in 1973 with the invention of the Automatic Call Distributor (ACD), which enabled the routing and management of high volumes of inbound calls, laying the technological foundation for industrialized customer service.
The introduction of toll-free 1-800 numbers in the 1980s dramatically expanded call volumes. By the 1990s, call centers had become ubiquitous across industries such as banking, insurance, telecommunications, airlines, and retail, and employed millions of Americans. By the early 2000s, approximately 4 million Americans, or roughly 3% of the U.S. workforce, were employed in customer service or call center roles.
The mass migration of call center work overseas began in earnest in the late 1990s and accelerated through the 2000s. Several converging forces drove this shift:
- Telecommunications liberalization and falling costs: The deregulation of telecommunications markets, particularly in India, dramatically reduced the cost of international voice and data transmission, making it technically and economically feasible to route calls across the globe.
- Cost arbitrage: The wage differential was (and still is) staggering. A call center agent in India could be hired for less than $7,500 annually, compared to approximately $19,000 or more in the United States. Filipino call center workers earned roughly one-quarter of their U.S. counterparts' wages.
- Educated, English-speaking labor pools: India and the Philippines both possessed large populations of college-educated, English-speaking workers, a critical prerequisite for customer-facing voice operations serving American consumers.
- Government incentives: The Philippines' Special Economic Zone Act of 1995 created dedicated economic zones with tax holidays and streamlined regulations to attract foreign BPO investment. India similarly liberalized its telecom and IT sectors to court international business.
India was the first major destination. American Express and GE Capital pioneered the trend in the early 1990s, establishing back-office and call center operations in Gurgaon, near New Delhi. GE eventually saved over $350 million annually by offshoring approximately 900 different processes to India. By 2002, more than a quarter of Fortune 500 companies, including GE, American Express, British Airways, HSBC, Citibank, and AT&T, were shifting back-office and customer service operations to India. India's call center and BPO sector employed 353,000 people by March 2000 and 505,000 by March 2003, generating revenues exceeding $3.9 billion in fiscal year 2003.
The Philippines emerged as India's principal competitor in the late 1990’s and eventually surpassed it. The Philippine industry grew explosively through the 2000s, driven by strong government support, cultural alignment with Western (particularly American) markets, and a large English-speaking workforce. By 2010, the Philippines dethroned India as the "call center capital of the world," according to IBM's Global Location Trends report. More than 1,000 call center operations were running in the Philippines by 2015, with three-quarters of the $23 billion sector servicing U.S. firms.
India and the Philippines were far from alone. Other countries also attracted offshored call center work, including Mexico, the Dominican Republic, Costa Rica, Honduras, Jamaica, and, in recent years, Latin American and African nations seeking to capitalize on time zone alignment and emerging digital infrastructure.
The consequences for American communities were severe. Call centers had been viewed during the 1990s and 2000s as a replacement for lost manufacturing employment. Local governments committed millions in taxpayer-funded incentives, cash grants, facility construction, property tax abatements, and training subsidies to attract call center employers. When those employers subsequently moved operations offshore, communities were left bearing the cost.
The Current Landscape
Today, approximately 66% to 70% of U.S. companies outsource at least one department, resulting in roughly 300,000 American jobs outsourced annually. The global outsourcing services market was estimated at approximately $3.8 trillion in 2024. While automation, AI, and the COVID-era shift to remote work have begun to alter the calculus, reducing the cost advantage of offshore labor and enabling more distributed domestic workforces, offshore outsourcing remains deeply embedded in American business operations.
The FCC's March 2026 proposal represents the most significant federal regulatory effort to date to directly address the offshoring of call center jobs in the communications sector, moving beyond the purely legislative approaches that have stalled in Congress for over a decade.
What Comes Next
Once announced, the NPRM will open a public comment period during which industry stakeholders, consumer advocacy organizations, labor unions, and the general public can weigh in on the proposal's scope, legal authority, and practical implementation. Key questions will include whether the FCC has sufficient jurisdictional reach to impose onshoring requirements or preferences beyond the telecommunications carriers it directly regulates, whether English proficiency mandates raise legal or trade-agreement concerns, and whether tariff or bond mechanisms are workable enforcement tools against illegal robocall traffic.
The proposal is also certain to face scrutiny from Commissioner Anna Gomez and other critics who have questioned the scope of FCC authority under Chairman Carr's leadership. Regardless of the ultimate regulatory outcome, the proposal signals a clear policy direction: the era of frictionless call center offshoring in the regulated communications sector may be drawing to a close.
