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FCC Seeks Comment on Consumer-Based TCPA Petition with Potentially Wide-Reaching Effects
In mid-February, the Federal Communications Commission (FCC) released a Public Notice soliciting comment on a request from consumer petitioners for a declaratory ruling or rulemaking related to the “prior express consent” provision of the Telephone Consumer Protection Act (TCPA). If granted, the relief sought could impact a wide variety of businesses that relied upon the current FCC interpretations that are challenged.
In the petition, two consumers seek to reverse two FCC rulings that the provision by a consumer of a telephone number to the caller constitutes “prior express consent” under the TCPA. First, the petitioners challenge a 1992 order in which the Commission determined that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” Second, the petitioners question a 2008 Commission order which concluded that “the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt.” The petitioners claim that the FCC contravened Congressional intent when it adopted these two orders by improperly reading an implied consent provision into the TCPA. As such, they seek a declaratory ruling or a rulemaking that would result in the following: (1) overturning previous interpretations of the prior express consent provision such that implied consent may be given in certain circumstances; and (2) adoption of a uniform standard to satisfy the prior express consent requirement for both cellular and residential telephone numbers. Comments on these requests are due on March 10, 2017 and replies are due on March 27, 2017.
A second consumer-based TCPA petition was also filed in January, but was subsequently withdrawn, in which a consumer plaintiff in a recently dismissed TCPA action sought clarification of the proper application of the FCC’s prior express consent and revocation of consent rules specifically with regard to calls from common carriers. The petitioner was a T-Mobile subscriber who alleged that T-Mobile violated the TCPA by sending him multiple promotional text messages about T-Mobile products, despite numerous requests by the petitioner to stop sending them. The petitioner sued, but the case was referred for arbitration pursuant to the binding arbitration clause in the petitioner’s service agreement with T-Mobile. According to the petition, the arbitrator in the case was persuaded that as a result of the FCC’s long-standing policy that wireless service providers are not required to obtain “additional consent” from their subscribers prior to initiating prerecorded or autodialed calls or messages for which the subscriber is not charged, the Commission’s rules regarding revocation of consent do not apply to T-Mobile with respect to calls and messages sent to subscribers. The petitioner sought the following relief from the FCC: (1) a ruling that a cellular telephone customer can revoke consent to receive text messages from his or her service provider; (2) a ruling that cellular or common carriers are not exempt from the TCPA; and (3) a ruling that clarifies the “prior express consent” exception for wireless service providers. The petition also requested additional relief specific to the dispute with T-Mobile. The FCC had begun a comment cycle on this petition, but the petitioner and T-Mobile filed a joint motion to withdraw it on the ground that the petitioner had filed a motion for reconsideration with the arbitrator, and that pending the outcome of that motion, the parties had resolved their dispute. We will monitor the FCC’s TCPA docket in case the petition is refiled at a later date.
FCC Chairman Pai Offers Ideas for “Aggressive Action” on TCPA Issues
To close out his first week as Chairman of the FCC, Ajit Pai spoke briefly at a meeting of the FCC’s Consumer Advisory Committee on Friday, January 27, 2017, and made clear that one of his priorities will be to address “robocalls,” which are the number one source of complaints to the FCC. However, we expect that his methods will be much different than those employed during Chairman Wheeler’s tenure.
Chairman Pai is a supporter of the TCPA, the federal statute aimed at limiting the number of telemarketing calls that consumers receive. However, he was highly critical of the FCC’s interpretation of the Act under his predecessor. Notably, then-Commissioner Pai issued a scathing dissent to the Commission’s 2015 omnibus TCPA Declaratory Ruling and Order, which in his view, improperly expanded the definition of an “autodialer” and imposed a near-strict liability standard by adopting the one-call safe harbor for calls to reassigned phone numbers. Chairman Pai also dissented in part from the Commission’s determination in a July 2016 declaratory ruling that federal contractors are not persons under the Act and therefore not subject to TCPA liability. In that dissent, he stated that the Commission’s interpretation contradicts the plain meaning of the statute, and “it is odd to suggest that a contractor’s status as a ‘person’ could switch on or off depending on one’s behavior or relationship with the federal government.” Less than a month later, he likewise dissented from the Commission’s order adopting rules to implement a new government debt collection exemption to the TCPA, on the basis that the restrictions the FCC imposed contravened Congress’s intent in creating the exemption.
During his remarks in January, Chairman Pai said “the problem is only getting worse and that’s why I hope the Commission will take aggressive action, hopefully with your counsel, to end it.” He did not detail any particular initiatives that he plans to undertake to address the issue of unlawful telemarketing calls. However, we anticipate that his approach will focus more on industry collaboration rather than unilateral action by the Commission. Some ideas for which he suggested he might seek industry input include establishing a safe harbor for carriers so they can block spoofed calls from overseas without fear of liability and developing a reassigned number database to help legitimate callers avoid dialing the wrong number. Chairman Pai also noted that the Commission may consider overturning the federal contractor exemption in order to “close a potential loophole in [the Commission’s] robocalling regulations.”
A Closer Look at Pai’s Dissent in the 2015 TCPA Declaratory Ruling
With the D.C. Circuit still considering the appeal of the FCC’s 2015 TCPA Declaratory Ruling and Order, Chairman Pai is limited (for now at least) in what he can do to pursue his vision of the TCPA. Nevertheless, with a partial remand of the 2015 Order at least a possibility, it is worthwhile to take a look back at then-Commissioner Pai’s dissent in that proceeding as an indicator of where a Pai-led FCC might take the TCPA.
Autodialers: Pai made clear in his dissent that he believes that under the TCPA’s definition of an “automatic telephone dialing system” (“ATDS”) only equipment that has the capability to dial sequential numbers or random numbers qualifies as an autodialer. “If a piece of equipment cannot do those two things—if it cannot store or produce telephone numbers to be called using a random or sequential number generator and if it cannot dial such numbers—“ Pai asked, “then how can it possibly meet the statutory definition? It cannot.” The principal issue addressed in the 2015 order was whether the statute’s reference to the “capacity” of ATDS equipment referred to the potential capabilities of the equipment. On this front, Pai’s view was clear: He believed that the statutory definition of an ATDS was limited to the equipment’s “present capacity,” not to its potential or theoretical capacity, and his dissent spends much time explaining why the concept of potential capacity was a bridge too far for him.
But one point that can sometimes be missed in that discussion is Pai’s focus on what sort of capacity is relevant. Pai’s interpretation of the statute closely hues to the two specific capabilities listed – the ability to dial random numbers or to dial sequential numbers. The FCC’s interpretation, Pai charged, “transforms the TCPA from a statutory rifle-shot targeting specific companies that market their services through automated random or sequential dialing into an unpredictable shotgun blast covering virtually all communications devices.” Pai was willing to claim victory for the “rifle-shot” set, stating that if today’s callers have abandoned random or sequential dialers due to the TCPA’s prohibition, then the TCPA has “accomplished the precise goal Congress set out for it” and, if parties want to address more modern types of abusive dialing equipment, they should go to Congress for action.
Thus, it seems that, if given the chance to re-assess autodialers, Chairman Pai would focus more narrowly on equipment prominent in the early 1990s when the TCPA was passed and would be less inclined to apply the TCPA’s restrictions to predictive dialers, which Chairman Pai appears to consider as more akin to speed dialers that the FCC’s 1992 TCPA orders concluded were not within the scope of the TCPA’s prohibition.
Reassigned Numbers: Commissioner Pai also dissented from the FCC’s interpretation of “called party” in the context of telephone numbers that have been reassigned from one subscriber to another. Commissioner Pai noted that, with the prevalence of reassignments today, “even the most well-intentioned and well-informed business will sometimes call a number that’s been reassigned to a new person.” Pai rejected the idea that the TCPA imposes strict liability on a caller for calls that reach someone other than the intended recipient of the call. Instead, Pai endorsed the interpretation that the “called party” in the statute refers to the caller’s expected recipient of the call. He argued that this interpretation was clearer and easier for caller to administer, while giving the actual recipient that ability to stop unwanted calls by informing the caller that they’ve reached the wrong party.
Since his dissent, Chairman Pai has indicated his support for the creation of a database to identify reassigned numbers. Such a database, he believes, is within the Commission’s plenary authority over telephone numbers, although he has indicated that Congressional appropriations to run the database may be necessary. Such a database has a long way to go, but it appears that a Pai-led FCC would at least be open to exploring the possibility.
Revocation of Consent: On the issue of revocation of consent, Commissioner Pai objected to what he considered to be an unworkable approach. While Pai supported a consumer’s ability to stop unwanted calls from occurring, he raised concerns with the open-ended process that the 2015 Declaratory Ruling allowed. His dissent famously mocked the FCC’s conclusion, wondering whether a customer at a McDonald’s drive-through could declare “I’m not lovin’ it” and seek to revoke consent to be contacted via an autodialer or robocall. It appears that Chairman Pai would prefer to leave it to the parties to determine reasonable methods to revoke consent, if given the opportunity.
Industry-specific Exemptions: Finally, it is noteworthy that Commissioner Pai also dissented from the portions of the 2015 Declaratory Ruling that created certain exemptions for particular industries or types of calls. He objected to the exemption created for prison phone calls, and questioned whether the specific interpretations supporting it might lead to more robocalls, not fewer. In particular, Commissioner Pai took issue with the interpretation that calls “to set up a billing relationship” were not advertising or telemarketing calls. If this interpretation were followed more broadly, he asked, “What telemarketer will continue to hock goods the old-fashioned way when it can escape the TCPA’s particular constraints on telemarketing by claiming to just set up billing relationships for services not yet performed?” Commissioner Pai’s comments – and his subsequent dissent to the implementing order addressing calls to collect government-backed debts – suggest that the approach of creating specific exemptions to TCPA rules will not be favored by a Pai-led FCC. |