In its petition, TextMe requests that the Commission: (1) clarify the meaning of the term "capacity" as used in the TCPA’s definition of "automatic telephone dialing system" ("ATDS") and (2) clarify that users of TextMe’s service, instead of TextMe itself, make or send calls or text messages for purposes of the TCPA. Alternatively, TextMe requests that the Commission clarify that third-party consent obtained through an intermediary satisfies the TCPA’s “prior express consent” requirement for calls and texts to wireless numbers.

This petition marks the latest effort from entities seeking clarification on the definition of an ATDS. And while the Commission has begun to address some of the nearly two dozen TCPA petitions remaining on its docket, it has yet to resolve many critical questions that could provide much needed clarity for telemarketers and class action plaintiffs alike. One such question is the applicability of the TCPA to text messaging. FCC Commissioner Michael O’Rielly recently expressed hesitation in applying the TCPA to text messaging, since Congress enacted the TCPA before the first text message was ever sent. The TextMe case provides the Commission with an opportunity to consider the issue anew, so interested parties may consider addressing it in their comments.

Comments are due May 7, 2014, while replies are due May 22, 2014.

Although the ruling is an important victory, the FCC's rationale for permitting the messages is relatively narrow and not all confirmatory messages will be permitted. Moreover, the FCC's ruling in effect imposes a requirement that confirmatory texts be sent within five minutes of the consumer's opt-out request. Companies engaging in mobile marketing should review their practices carefully before sending additional confirmatory text messages in reliance on the FCC's ruling.

Background

The TCPA and the Commission's implementing rules prohibit the use of autodialers to make non-emergency calls to mobile phones without the "prior express consent" of the recipient. These restrictions have been applied to new "call" technologies, including SMS and MMS text messages. The SoundBite petition concerned a practice by marketers to send a confirmation by text messages to consumers that request to opt-out of receiving future text messages. The confirmatory text messages at issue were one-time notifications, sent within minutes of the consumer's opt-out request, that did not contain any marketing information. The sending of such confirmatory text messages is recommended by the guidelines of the Mobile Marketing Association ("MMA"), an influential set of guidelines for mobile marketing companies. (CTIA member wireless carriers, for example, require marketers to follow the MMA guidelines in their mobile marketing campaigns).

Consent-Based Approval

In the SoundBite ruling, the FCC reasoned that opt-out confirmation messages fall with a consumer's initial consent to receive marketing text messages. That is, the FCC found that "a consumer's prior express consent to receive text messages from an entity can be reasonably construed to include consent to receive a final, one-time text message confirming that such consent is being revoked at the request of the consumer."

The Order emphasized, however, that consumer consent to receive such messages is not unlimited. Specifically, the FCC concluded that a consumer's consent is limited to one additional message sent after receipt of the opt-out request, and that the consent does not extend to the receipt of a confirmatory text that contains marketing or promotional information. The confirmatory message also may not attempt to convince the consumer to reconsider his or her opt-out decision.

In addition, in a requirement that was unexpected, the FCC found that while confirmation messages sent within five minutes of receiving an opt-out request are presumptively within the recipient's original consent, there is a "strong likelihood" that messages sent outside of the five-minute window are not within the consumer's consent. As such, messages sent after the five-minute mark will require a sender to make a showing that the delay was reasonable.

Other Confirmatory Texts May Still Violate the TCPA

Because the FCC based its decision on the consent rationale, it did not address SoundBite's arguments that (a) SoundBite does not use an autodialer to send such messages because the software used to send text messages does not have the capacity to store or produce telephone numbers using a random or sequential number generator, and (b) confirmatory texts fall within the 30 day grace period to effectuate opt-out requests received from consumers. Moreover, because the FCC's rationale is based on the consumer's initial consent to receive text messages, the permissibility of the confirmatory text message will depend upon whether the consumer in fact provided consent in the first place. Text messages to consumers who did not provide consent -- or did not properly provide consent -- are not covered by this ruling. As a result, the FCC ruling is narrower than some headlines may suggest.

Finally, it is important to note that the FCC still has not addressed several petitions that seek to classify text messaging under the FCC's rules. Those pending classification decisions have important implications for both the rights and obligations of entities that provide text messages or send text messages in mobile marketing campaigns.

Peter Swire, a professor at The Ohio State University Michael E. Moritz College of Law and a Senior Fellow with the Center for American Progress, opened the seminar with a keynote address that gave historical context to the most recent regulatory efforts addressing consumer privacy. Professor Swire’s remarks were followed by two panel sessions that included six experts representing key industry representatives and the federal agencies integral to recent privacy initiatives. The first panel discussed children's online privacy and the Federal Trade Commission’s proposed revisions to the Children's Online Privacy Protection Rule. The second panel discussed various consumer privacy enforcement and regulatory initiatives relating to mobile apps.

For more on the seminar, including a synopsis of key takeaways, see the Kelley Drye client advisory. An audio recording of the full program is also available.