On Thursday, Aug. 4, the FCC granted organizations representing schools and utilities significant relief from liability under the Telephone Consumer Protection Act—a law that subjects callers to substantial penalties if they send automated text or voice messages to mobile phones without the prior express consent of the recipient. These organizations had urged the Commission to find that when consumers give schools and utilities their cell phone numbers, they are thereby giving their express prior consent to receive automated calls offering information these consumers themselves desired—knowledge of school closings, power outages, the status of storm damage restoration efforts and the like. The FCC agreed, but emphasized that this prior express consent was limited—it didn’t protect all communications with the consumers, only those communications involving issues related to the school’s or utility’s core functions.

The TCPA

Although the TCPA was originally enacted by Congress to stem telemarketing calls to consumers, the law is not limited to marketing communications. In fact, except for emergency communications, the TCPA prohibits all robocalls (calls made with an automatic dialer or using an automated voice or pre-recorded message) and text messages to mobile phones unless the recipient has given express prior consent.

The TCPA has become a favorite of the plaintiffs’ bar, with over 3,700 cases filed in 2015 alone. Cases alleging violations of the TCPA are generally brought as class actions seeking to recover statutory penalties of $500 to $1,500 per call or text, which often equates to millions or billions of dollars of potential liability for a single case.
Last year, the FCC issued a controversial declaratory ruling in which it answered several open questions about the TCPA. The Commission effectively determined that any communication technology that uses software is an automatic dialer, and thus cannot be used to make calls or texts to mobile phones without express prior consent. The Commission also determined that callers are permitted only one call to a wrong or reassigned mobile phone number before TCPA liability may apply. Finally, the Commission determined that prior consent may be revoked through any reasonable means, including orally.

A number of organizations have challenged these interpretations as placing heavy and arbitrary burdens on entities that wish to communicate useful and desired messages with consumers. Their challenges are currently before the D.C. Circuit Court of Appeals, which will hear oral arguments in October. While that litigation is proceeding, the Commission has continued to issue declaratory rulings addressing industry-specific issues under the TCPA, including the ruling addressing schools and utilities.

The FCC’s Ruling

With regard to both schools and utilities, the FCC determined that, absent instructions to the contrary, persons who provide their mobile number to a school or utility have thereby provided their express prior consent to receive communications related to the school’s or utility’s core functions. For schools, the Commission specified that communications regarding parent-teacher conferences or surveys seeking input on school issues qualify as related to the school’s core function, but communications regarding non-school activities, such as local community events or ballot issues, likely do not.

For utilities, the Commission explained that communications regarding planned or unplanned service outages (including restoration of service), field work that directly affects the customer’s utility (including meter work and tree trimming), eligibility for subsidized or low-cost services, and potential cancelation of service due to non-payment are related to the entity’s core function. The Commission noted, however, that communications about voluntary participation in energy saving programs, communications soliciting donations to subsidize other energy consumers, and communications after utility service has been terminated (even for non-payment) are not within the prior-consent exception.

Takeaways from the Ruling

The Commission’s declaratory ruling provides much-needed guidance to schools and utilities, and lessens the risk that those entities will face millions of dollars in potential penalties simply for sending parents and utility customers noncommercial information the recipients themselves have said that they desire.1 The ruling, however, does not provide a blanket exemption for schools and utilities to send robocalls and texts to mobile phones. They still remain subject to the Commission’s general rules—rules that, among other things, permit callers a single call to a wrong or reassigned number before they are subject to steep penalties for making automated calls without the recipient’s consent. Although this and other limitations on callers are being challenged in court, schools and utilities should be vigilant about keeping their contact information updated and have a well-planned process for determining if prior consent has been revoked.

The Commission’s ruling also leaves schools and utilities liable for communications that fall outside of the scope of specific exemptions addressed. Therefore, any school or utility that uses modern technology to communicate with students, parents, or customers via their mobile phones should seek legal advice to ensure that its communications are compliant with the TCPA.

Finally, the FCC’s ruling demonstrates that the Commission is, in some instances, willing to provide industry-specific guidance about its interpretation of the TCPA. Any entity that uses modern technology to communicate with consumers via their mobile phones should consider whether a petition to the FCC requesting industry-specific guidance could help protect against potentially costly litigation.

1. A different petition submitted to the FCC asked it to rule that governmental agencies were not “persons” covered by the TCPA’s prior consent requirements. Last month, the FCC issued a partial ruling on the petition. It agreed that federal agencies weren’t “persons” under the Act. But it reserved for determination at some unspecified future date whether state and local governmental entities were likewise not “persons.” If that petition were granted, it would entirely exempt public schools and municipally owned utilities from the TCPA.

Nicci Warr