News Analysis
Research Report
The 2026 State of CX Outsourcing
The Gist
- FCC targets offshore support models. A March proposal would require disclosure when customer calls are routed overseas and would let consumers request a U.S.-based representative.
- Contact center operations face new scrutiny. The FCC is also weighing stronger safeguards for sensitive customer data and seeking comment on broader limits tied to offshore call center use.
- CMSWire readers should watch the fallout. If advanced, the proposal could reshape outsourcing strategy, staffing models, compliance planning and customer experience expectations across telecom and adjacent service operations.
The Federal Communications Commission is preparing to vote this month on a proposal that would put offshore call center practices squarely in the regulatory spotlight, with potentially significant implications for contact center leaders.
Disclose when a call is routed overseas. Let consumers switch to a US-based representative.
Funded regulation? Likely not. Major impact on contact centers. Definitely yes.
In a March 4 blog post previewing the FCC's March agenda, Chairman Brendan Carr said the agency will consider a measure designed to improve customer service at call centers by encouraging onshoring and increasing accountability. The proposal would require disclosure when calls are routed overseas, give consumers the option to switch to a U.S.-based representative and add stronger safeguards for personal data.
Carr noted nearly 70% of U.S. businesses outsource at least one department, including customer service and call center operations to locations abroad. As a result, he added, too many Americans have struggled to resolve an issue with a representative due to cultural and language barriers.
"Overseas customer service centers also raise concerns about protecting consumers’ personal information," Carr said. "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 FCC is expected to vote on the proposal at its March meeting. If adopted, it would open a formal comment process and set up a closer fight over how far the agency can go in reshaping offshore customer service operations.
The significance goes well beyond telecom policy. The proposal speaks directly to issues that have become central in contact center strategy: where service work happens, how trust is maintained, what customers expect from support interactions and how far organizations can push labor arbitrage before customer experience and compliance concerns catch up.
Table of Contents
- FCC Puts Offshore Call Center Practices Under Review
- Why This Matters for Contact Center Leaders
- The Bigger Strategic Takeaway: CX Governance at Stake
- Wake-Up Call for CX Leaders?
- FCC Offshore Call Center Vote Looms Large
FCC Puts Offshore Call Center Practices Under Review
Carr framed the item as a consumer protection move during National Consumer Protection Week this week, arguing that offshore call center arrangements can create service friction, data security concerns and fraud risks. In the blog post, he said too many Americans struggle to resolve issues because of cultural and language barriers, while overseas operations can also raise questions about how personal information is handled.
Under the proposal, covered communications providers would be required to disclose when a consumer call is being handled by an offshore call center, transfer consumers to a U.S.-based center upon request, track and report compliance and handle transactions involving sensitive customer data only at contact centers located in the United States.
The FCC is also seeking comment on whether the rules should extend beyond voice to channels such as online chat, text and email, as well as whether targeted tariffs or bonds could further discourage illegal robocalls tied to foreign call center activity.
Related Article: Will AI Cost More Than Offshore Human Agents in Customer Service?
Why This Matters for Contact Center Leaders
Even though the proposal is aimed at FCC-regulated communications providers, the broader signal is hard to miss. Regulators are putting the structure of customer service operations under a brighter light, and that changes the conversation for leaders responsible for CX, trust and service economics.
For telecom providers directly under FCC oversight, the operational implications could be immediate if the proposal advances. Routing logic, agent disclosures, escalation workflows, workforce planning and data-handling procedures may all need to be revisited. Providers that rely heavily on offshore support may also need to assess how exposed they are if U.S.-based transfer requests become common or if sensitive interactions must be handled domestically.
For the wider contact center industry, the proposal adds momentum to a trend already underway: support organizations are being judged not only on cost and efficiency, but also on transparency, security and customer confidence. That raises new questions about when offshore models make sense, when AI can absorb routine work and when brands may decide domestic support is worth the higher cost.
"This is where our CX leaders also need to remember that core part of their role that often gets deprioritized: advocacy," said Trish Wethman, chief experience officer at Pontem Tech Partners. "The rise of scams and data theft has consumers on edge and this legislation — for better or worse — will provide them with a feeling of empowerment and control. Coming from the financial services space, I can confidently assert that consumers will almost always opt-out of an out-sourced experience and not just for 'cultural or language barriers' but because they tend to include more friction and risk for the consumer."
What the FCC Proposal Could Mean for Contact Center Leaders
Editor's note: The table below outlines the main elements of the FCC's proposed offshore call center item and why they matter to customer service, compliance and CX leaders.
| Proposal area | What the FCC is considering | Why it matters |
|---|---|---|
| Call location disclosure | Providers would disclose when a customer interaction is being handled by an offshore call center. | Adds transparency to support interactions and could affect customer sentiment, scripting and routing design. |
| U.S.-based transfer option | Consumers could request to switch to a U.S.-based representative. | Could increase demand for domestic staffing, queue segmentation and revised workforce models. |
| Sensitive data handling | Certain transactions involving sensitive customer data could be restricted to U.S.-based centers. | Creates new compliance, data governance and operational handoff requirements. |
| Compliance tracking | Providers would track and report compliance with any adopted rules. | Raises reporting expectations and may require new audit trails and performance controls. |
| Broader channel scope | The FCC is seeking comment on extending rules to chat, text and email support. | Could widen the impact from voice operations to full omnichannel contact center service environments. |
| Robocall deterrence | The agency is seeking comment on targeted tariffs or bonds tied to foreign call center risks. | Links customer service operations to the FCC's broader anti-fraud and robocall enforcement agenda. |
The Bigger Strategic Takeaway: CX Governance at Stake
The immediate story is regulatory. The bigger story is strategic. As service organizations face more pressure to prove trustworthiness, transparency and operational control, the old offshore-versus-onshore debate starts to look less like a pure cost discussion and more like a CX governance issue.
Contact center leaders are already balancing AI adoption, labor costs, rising customer expectations and stricter data stewardship demands. The FCC's proposal adds another variable: regulators may increasingly expect companies to show not just that service is available, but that it is accountable, secure and aligned with consumer preferences.
Regulators are reacting to a pattern of bad experiences that leaders should have corrected long before any rulemaking entered the picture, according to Justin Robbins, founder and principal analyst at Metric Sherpa.
"The sheer volume of customer work today demands a global support footprint; there is no credible way to meet demand at scale without it," Robbins told CMSWire. "Location should not be the battleground. Customers care about three things: clarity from who is helping them, confidence that their data is handled responsibly and resolution to whatever led to their contact in the first place. When companies chase cost and allow those three to erode, the experience degrades no matter where the agent sits. That is the pressure point here."
Human from a different country or a non-human, customers simply want trustworthy customer service. That much we know is true; whether a government-forced customer experience mandate is the answer, that we don't know.
"It’s interesting to see this from FCC. Great service means having a trust paradox," Sharath Narayana, CEO and co-founder of Sanas, a Speech AI company, said in an email to CMSWire. "People want to talk to people they trust, so that explains low AI adoption irrespective of how good AI systems have become. When you know you aren’t talking to a human trust deficit expands and no real problems are solved."
Wake-Up Call for CX Leaders?
Wethman told CMSWire that CX leaders who have leaned too heavily into offshore models in order to produce lower cost-to-serve magic tricks are now going to have to play catch-up. How so? They must embrace some of the many AI-powered solutions that can help achieve the same goals with an equal, or perhaps better, experience.
The hesitance to do so up until now seems to have been grounded mostly in the ability to create quick wins on the P&L, but there is also a lingering element of the 'old school' way of doing business: lucrative contracts that go to BPOs where relationships run deep; customer preference be damned.
- Trish Wethman, chief experience officer
Pontem Tech Partners
FCC Offshore Call Center Vote Looms Large
While the regulation is unlikely to receive direct funding, contact center leaders should prepare for significant operational changes.
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Compliance Becomes Strategic
The proposal reflects a broader regulatory trend positioning compliance as a competitive differentiator rather than a back-office function. Recent years have seen the FCC strengthen rules around consent, call authentication and consumer rights, particularly under the Telephone Consumer Protection Act. The offshore routing disclosure requirement follows this pattern of increased transparency and consumer control.
Operational Impact Expected
Contact center leaders will need to reassess staffing models, routing logic and customer experience strategies to maintain compliance. The changes are expected to drive higher operational costs, new training requirements and increased focus on trust and transparency in customer interactions.
Industry observers suggest proactive adaptation will prove more effective than reactive compliance efforts as the regulatory landscape continues to evolve.