Reed Smith Client Alerts

Yesterday, the Federal Communications Commission (FCC) once again demonstrated to businesses the wisdom of that old adage, “be careful what you ask for.” The Telephone Consumer Protection Act (TCPA) protects consumers from unwanted telephone calls and text messages and has created a cottage industry for the plaintiffs’ bar bringing a tsunami of individual and class actions seeking to collect the statutory $500 to $1,500 per-call penalties.

Frustrated, industry groups have long petitioned the FCC to clarify and explain ambiguities that make compliance with the Act extremely difficult, but for a number of years the FCC avoided responding to all but the simplest inquiries. Finally, on June 18, 2015, the FCC responded … and the news is troubling for businesses. In a 3-to-2 decision, divided along party lines, the FCC Commissioners voted to issue a consumer-friendly ruling that will have significant implications for complying with the TCPA. Although the FCC has not yet released its order, highlights from the Commission’s press release show the following:

  • Businesses will have a one-call “safe harbor” to remove reassigned telephone numbers from call lists before liability attaches.
  • An “autodialer” under the Act is determined by capacity to dial random or sequential numbers, meaning that callers cannot skirt the TCPA’s autodialer prohibitions “through changes in calling technology design or by calling from a [set] list of numbers.”
  • Consumers can revoke consent to receive calls and texts “in any reasonable way at any time.”
  • Text messages, including internet-to-phone text messages, are subject to the same consent requirements as voice calls to cellular phones.
  • Telecom providers have a green light to offer ‘do not disturb’ technology to consumers.

In the eyes of the majority at yesterday’s FCC meeting, the spirit of the Commission’s order is simple: consumers should be in control of the calls and texts they receive. With respect to the definition of an autodialer, it appears that the Commission will make clear that technological work-arounds of the statutory definition of an autodialer will not be tolerated. Dialer systems that place calls from lists of numbers, but which have the “capacity” to randomly or sequentially generate calls, now seem to clearly fall within the definition of an autodialer. Likewise, it is anticipated that the Commission’s order will reject any arguments over whether calls are placed by software as compared to hardware, or any difference in the current as compared to the potential capacity of the technology being employed. Although the Commission recognized exceptions—e.g., for calls placed by healthcare providers and fraud alerts by banks—these exceptions are narrow in scope and limited in quantity.

It is unclear exactly when the FCC’s Order will issue and, of course, the exact wording will matter. Nowhere is this more apparent than with respect to reassigned telephone numbers, the second major issue tackled by the Commission Thursday. The majority made it clear that, in situations where a number has been reassigned from one subscriber to another, it is not the intended recipient of the call, but rather the called party, whose consent must be obtained in order to place an autodialed call or send a text. However, the Commission appears to have left open a small safe harbor, where liability will not attach on the first call. That said, there is a lot of uncertainty about how that one free try will operate in practice. Must the one call actually connect to a live person or message that makes clear that the subscriber has changed, or is it simply one call after reassignment regardless of whether that call connects with the recipient?

Interestingly, one aspect of the order announced yesterday that has received less attention than other issues, might result in the most lasting impact. The FCC clarified during the open meeting that its existing rules prohibiting carriers from blocking calls to their customers do not prevent those carriers from responding to customer requests to block unwanted robocalls. In short, telephone carriers are permitted to selectively block calls they deem to be robocalls. This clarification had been requested by a bipartisan group of 39 state attorneys general.

Lastly, one breath of fresh air was the FCC’s clarification that an internet application provider that “plays a minimum role in making a call, such as just providing the application itself, but not the message contents,” is not the maker of the call for the purposes of the TCPA. This will be a welcome relief to platforms and applications that have recently been threatened with TCPA lawsuits. For the most part, however, businesses will face substantial risk to using anything other than a plain old telephone manually dialed by a live agent to place calls or send texts that would otherwise require consent.


Client Alert 2015-168