FCC Clarifies Rules on Unwanted Robocalls and Spam Texts

On July 10, 2015, a divided Federal Communications Commission (Commission) released the more than 100-page Order¹ it adopted last month addressing 21 separate petitions and other requests that "sought clarity on how the Commission interprets the Telephone Consumer Protection Act (TCPA), closing loopholes and strengthening consumer protections already on the books."² The TCPA generally requires prior express consent for non-emergency autodialed, prerecorded, or artificial voice calls to wireless phone numbers, and for artificial or prerecorded telemarketing calls to residential wireline numbers.³ The Commission stated that the rulings "were informed by thousands of consumer complaints about robocalls the FCC receives each month," which is "the largest category of complaints received by the Commission, numbering more than 215,000 in 2014."⁴

Release of the Order probably will not end the debate over the issues it addresses, despite the Commission's intended clarifications. Indeed, the differences of opinion among the Commissioners themselves, which led to their divided vote on the Order,⁵ suggest how contentious the debate could become. In his dissent from the Order, Commissioner Pai called the TCPA the "poster child for lawsuit abuse," and predicted that the Order would unfairly target legitimate business communications without punishing deceptive robocalls from "scam artists."⁶ In Commissioner Pai's view, the Order is vastly overbroad in its implications for restricting communications. For example, he believes it could be interpreted as classifying smartphones and tablets as "automatic telephone dialing systems" (ATDS), subjecting messages sent from those devices to the TCPA's strictest consent requirements.⁷ Commissioner O'Rielly, who dissented in part, noted how difficult it would be for companies to track when consent is revoked by consumers who attempt to do so orally.⁸ 

Media and other companies reportedly are trying to determine how the restrictions will affect marketing, promotions and other outreach initiatives.⁹ Some have claimed that the new rules will merely encourage more TCPA class action lawsuits.¹⁰ In fact, ACA International, the association of credit and collection professionals, has already filed a lawsuit challenging the Order in the US Court of Appeals for the DC Circuit, and others reportedly are likely to file additional lawsuits or to seek reconsideration of the Order at the Commission.¹¹

Highlights of the Order

"Autodialer" Definition:The TCPA defines an ATDS as "equipment which has the capacity-(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers."¹² The Order reaffirms that an ATDS is any technology with the capacity to store or produce and dial random or sequential numbers, "even if it is not presently used for that purpose, including when the caller is calling a set list of numbers." (¶ 10)

The Order concludes that equipment that can originate Internet-to-phone text messages to wireless numbers via email or via a wireless carrier's web portal is an ATDS under the TCPA. (¶¶ 108-111) However, the Order does not define the "exact contours of the 'autodialer' definition or seek to determine comprehensively each type of equipment that falls within the definition." (¶¶ 17-18)

The Order also reaffirms that "predictive dialers" fall within the definition of ATDS. As noted in the Order, the Commission had previously explained that predictive dialers can be:

The Order further clarifies that callers may not circumvent the TCPA by dividing ownership of dialing equipment (e.g., by using equipment that divides the storage and calling functions between two companies). (¶¶ 10, 23-24)

Text/Calling Apps: The Order notes that the TCPA's consent requirement applies to short message service (SMS) text messages, and clarifies who is deemed to make a call under the TCPA when text services are used. (¶¶ 25, 27) In resolving a petition filed by YouMail as part of the Order, the Order notes that YouMail's app is "reactive in nature" and allows users to choose to send an "auto-reply" message. (¶ 31) Thus, the Order concludes that "YouMail does not make or initiate a call when one of its app users uses its service to send an automatic text in response to a voicemail left by someone who called the YouMail app user." (Id.) In resolving a petition filed by TextMe regarding its texting app, the Order concludes that TextMe does not make or initiate a call when one of its app users chooses to send an "invitational text message" by following these affirmative steps: (a) tap a button that permits the user to invite friends; (b) choose whether to invite all friends or individually selected contacts; and (c) choose to send the invitational text message by selecting another button. (¶¶ 36-37) The Order describes the practices of petitioner Glide as an example of the making or initiation of a text. The Order concludes that "Glide makes or initiates the invitational text messages by taking the steps physically necessary to send each invitational text message or, at a minimum, is so involved in doing so as to be deemed to have made or initiated them." (¶ 35)

Collect Call Services: With regard to collect call services, the Order clarifies that "where a caller provides the called party's phone number to a collect call service provider and controls the content of the call, he is the maker of the call, rather than the collect call service provider who connects the call and provides information to the called party that is useful in determining whether he or she wishes to continue the call." (¶ 26) The Order explains that "collect calling service providers that use prerecorded messages, on a single call-by-call basis, to provide call set-up information when attempting to connect a collect call to a residential or wireless telephone number may do so under the TCPA without first obtaining prior express consent from the called party." (¶ 40)¹³

Consent: The Order includes the following clarifications regarding consent:

• Consumers do not consent to autodialed or prerecorded calls, including texts, to a wireless phone number simply by being in the contact list of another person's wireless phone. (¶¶ 47, 51-52)
• A party may revoke consent at any time and through any reasonable means. (¶ 47; see also ¶¶ 55-70)
• If a question arises as to whether prior express consent was provided, the burden is on the caller to prove that it obtained the necessary prior consent. (¶ 47)
• Prior express consent is not revoked merely by porting a number from wireline to wireless service, assuming that the prior consent satisfies all of the consent requirements for a call to a wireless number and absent indication from the consumer that he wishes to revoke consent. (¶ 54) 
• The Order clarifies that the TCPA requires "the consent not of the intended recipient of a call, but of the current subscriber (or non-subscriber customary user of the phone) and that caller best practices can facilitate detection of reassignment before calls." (¶ 72) A "non-subscriber customary user of the phone" is a person "included in a family or business calling plan." (¶ 73)
• The "prior-express-written-consent requirements apply for each call made to a wireless number, rather than to a series of calls to wireless numbers made as part of, for example, a marketing or advertising campaign as a whole." (¶ 100)
• A one-time text message sent immediately after a consumer's request for the text does not violate the TCPA and the Commission's rules (e.g., a consumer who sees an advertisement and responds by texting "discount" to the retailer, who replies by texting a coupon). (¶¶ 103-106) Specifically, such a text is not telemarketing so long as it "(1) is requested by the consumer; (2) is a one-time only message sent immediately in response to a specific consumer request; and (3) contains only the information requested by the consumer with no other marketing or advertising information." (¶ 106 (emphasis in original))
• "Internet-to-home text messages, including those sent using an interconnected text provider, require consumer consent." (¶ 108)
• Consent is required for "text messages sent from text messaging apps that enable entities to send text messages to all or substantially all text-capable US telephone numbers, including through the use of autodialer applications downloaded or otherwise installed on mobile phones." (¶ 116)
• The consent requirements do not apply to certain "pro-consumer messages about time-sensitive" financial issues that are not charged to the wireless consumer, namely for calls and text messages concerning risk of fraud or identity theft, possible breaches of the security of personal information, steps consumers can take to prevent or remedy harm caused by data security breaches, and actions needed for receipt of money transfers. (¶¶ 125-133) However, such calls and messages by financial institutions must comply with certain conditions, including, among others: (a) calls and messages must not include "any telemarketing, cross-marketing, solicitation, debt collection, or advertising content"; (b) messages must be concise, generally not more than 160 characters (or one minute, for voice calls); (c) there may not be more than three messages per event over a three-day period; (d) there must be an opt-out mechanism and opt-out requests must be honored immediately; (e) calls and messages must state the name and contact information of the financial institution; and (f) calls and messages must be sent, if at all, only to the wireless telephone number provided by the customer. (¶ 138)
• "The provision of a phone number to a healthcare provider constitutes prior express consent for healthcare calls subject to HIPAA by a HIPAA-covered entity and business associates acting on its behalf, as defined by HIPAA, if the covered entities and business associates are making calls within the scope of the consent given, and absent instructions to the contrary." (¶ 141) "[W]here a party is unable to consent because of medical incapacity, prior express consent to make healthcare calls subject to HIPAA may be obtained from a third party." (¶ 142) However, "just as a third party's ability to consent to medical treatment on behalf of another ends at the time the patient is capable of consenting on his own behalf, the prior express consent provided by the third party is no longer valid once the period of incapacity ends." (Id.)
• The consent requirements also do not apply to certain free calls and text messages to consumers "for which there is exigency and that have a healthcare treatment purpose, specifically: appointment and exam confirmations and reminders, wellness checkups, hospital pre-registration instructions, pre-operative instructions, lab results, post-discharge follow-up intended to prevent readmission, prescription notifications, and home healthcare instructions." (¶ 146) However, the exemption is subject to certain conditions, including, among others: (a) calls and messages must not include "any telemarketing, solicitation, or advertising; may not include accounting, billing, debt collection, or other financial content; and must comply with HIPAA privacy rules"; (b) messages must be concise, generally not more than 160 characters (or one minute, for voice calls); (c) a healthcare provider may initiate only one message or call per day, up to a maximum of three voice calls or text messages combined per week from a specific healthcare provider; (d) there must be an opt-out mechanism and opt-out requests must be honored immediately; (e) calls and messages must state the name and contact information of the health care provider; and (f) calls and messages must be sent, if at all, only to the wireless telephone number provided by the patient. (¶ 147)

Reassigned Wireless Telephone Numbers: The Order clarifies that if a caller has no knowledge of reassignment and a reasonable basis to believe it has valid consent, the caller may initiate one call after reassignment as a way to gain actual or constructive knowledge of the reassignment and cease future calls to the new subscriber. (¶ 72) If the one call yields no actual knowledge of reassignment, the Commission will deem the caller to have constructive knowledge of such. (Id.)  A caller has the burden of demonstrating that he had a reasonable basis to believe he had consent, and that he did not have knowledge of reassignment prior to or at the time of the one-additional-call window. (¶ 85)

"Call Blocking" Technology: The Order provides that nothing in the Communications Act or its implementing regulations prohibits Voice over Internet Protocol (VoIP) providers or carriers from implementing and offering consumers (through an informed opt-in process) technology that can block unwanted robocalls. (¶¶ 152-154) The Order encourages carriers, VoIP providers, and independent call-blocking service providers to avoid blocking calls from public safety entities such as, but not limited to, Public Safety Answering Points. (¶ 152)

Although the Order may be helpful in providing more insight into the Commission's position on certain issues, such as the definition of an ATDS, it is unlikely, at least in the foreseeable future, to settle questions and resolve debates over what communications practices are or should be permissible without consumer consent, and the lines between those practices that require prior express written consent and those that require a less affirmative declaration of consumer consent. As noted, opponents are already challenging the Order in court and may request that the Commission reconsider its decision. Action under the TCPA merits careful monitoring, and those using communications channels that may subject their calls or text messages to TCPA restrictions would do well to review their practices in light of the new Order to ensure continued compliance.