On July 10, 2015, the Federal Communications Commission released the Omnibus Declaratory Ruling and Order (the Order) it adopted on June 18. The Order addresses requests for clarification regarding requirements under the Telephone Consumer Protection Act (TCPA) and previous rules and orders issued by the Commission.

The Order, which took effect immediately upon release, is certain to create compliance challenges for a wide variety of businesses that use telemarketing calls and text messages for commercial communications with consumers. Although it was hoped that the Order might help stem the tide of TCPA class action lawsuits, many of which have been based on perceived ambiguities in the FCC’s previously issued rules, commenters—including dissenting Commissioner Ajit Pai—have expressed concerns that the Order may well have the opposite effect, offering new avenues of attack for plaintiffs’ attorneys.

Highlighting the controversy surrounding the Order, on July 13, 2015, ACA International, which represents credit and collections professionals, filed a lawsuit in federal court challenging certain provisions. The suit seeks judicial review of the FCC’s determinations on a number of issues, including how the Order defines “capacity” with respect to autodialers, and the Commission’s treatment of the “prior express consent” requirement as it applies to reassigned telephone numbers. Similar suits are likely to follow.

Businesses currently engaged in telemarketing, or those that may be planning to launch telephone or text message marketing campaigns, should carefully review the Order to determine how it may impact their activities. Some of the key takeaways from the Order include the following:

  • In the Order, the FCC explicitly reiterates that SMS text messages are “subject to the same consumer protections under the TCPA as voice calls.” This has been the general assumption since the Commission’s 2003 TCPA order, and was not the subject of debate. Less clear, however, was the extent to which TCPA requirements apply to Internet-to-phone messages. The Order clarifies that (1) these messages are the functional equivalent of SMS text messages; (2) the equipment used to send them is considered an “automatic telephone dialing system” for TCPA purposes; and (3) “Internet-to-phone text messages, including those sent using an interconnected text provider, require consumer consent.” The FCC rejected the argument that such Internet-to-phone messages are covered solely by the CAN-SPAM Act.
  • The Order discusses automatic telephone dialing systems at length, addressing questions concerning the statutory definition of the term and how it may apply to the equipment used to place telemarketing calls. The Commission opted for a broad reading that may encompass any equipment that could be modified to “dial randomly or sequentially,” and advocated an ad hoc approach to determining what level of human intervention would be required to remove a piece of equipment from the “automatic” category. Accordingly, companies that have thus far assumed they are not using an autodialer because an operator is involved in the dialing process may need to revisit how their systems function to assess whether they are subject to the TCPA requirements associated with automated dialing systems.
  • The Order states that consumers must be able to revoke their consent to receive telemarketing calls and messages at any time “using any reasonable method including orally or in writing.” Marketers are effectively prohibited from specifying a mechanism for revoking consent, potentially creating a host of practical difficulties when it comes to honoring revocation requests.
  • The Order indicates that sending a single text message in response to a specific call to action does not constitute a “telemarketing message” subject to the TCPA requirements.
  • With respect to liability for telemarketing calls made to reassigned telephone numbers, the Order states 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).” Callers that are unaware of a reassignment are permitted one call to a reassigned number “to gain actual or constructive knowledge of the reassignment and cease future calls to the new subscriber.” Because a combination of tools and methods may be necessary to ascertain whether a number has been reassigned, the Order recommends that companies establish and follow their own set of best practices in this regard.
  • The Order clarifies that consent to receive a certain type of call remains valid when a landline telephone number is ported to a wireless service, putting the onus on the consumer to revoke his or her consent for calls to the ported number. That said, in some cases, prior express consent may be required for a type of call to a wireless number whereas such consent was not required to make the same type of call to a residential number. Accordingly, if the caller did not obtain prior express consent because the number being called was a landline, when the number is ported to a cell phone, such consent must be obtained before making telemarketing calls to the newly-wireless number.
  • The Order grants requests by the banking industry and healthcare providers to create exemptions to TCPA consent requirements for certain types of autodialed calls that the FCC characterizes as “pro-consumer.” The exemptions will apply only to calls made for certain specifically enumerated purposes, and the communications will be subject to numerous restrictions. For example, a financial institution may avail itself of the exemption for calls placed to prevent fraud, provide security breach notification, or notify customers about money transfers; and healthcare providers may make appointment reminder calls, send pre- and post-operative care instructions, or notify a patient regarding prescriptions.
  • As for the restrictions on the exempt calls made by financial institutions or healthcare providers, among other requirements, such calls (or texts) must be concise and free to the consumer; state the name and contact information of the calling party; and include an opt-out mechanism that ensures opt-out requests are honored immediately. The calls may not include any telemarketing, advertising, or debt collection content.