Do They Unfairly Expose Utilities to Fines for Keeping Their Customers Informed About Service Interruptions?

The Telephone Consumer Protection Act (TCPA) limits the use of automated dialing equipment to make calls or send text messages to wireless phone numbers without the called party's express prior consent. Because utility companies use automated dialing equipment to inform customers of service outages or restoration schedules, the TCPA, including its substantial penalty provisions, applies to those calls and messages. Concerned that the FCC's regulations issued in June 2015 interpreting the TCPA are overbroad and have encouraged an exponential rise in multimillion dollar TCPA lawsuits against them, several companies and trade associations have challenged the FCC's regulations in a case now pending before the DC Circuit Court of Appeals. In early December, a number of briefs were filed by amicus curiae in support of those challenges. These included a brief representing the interests of electric, natural gas, and water utilities concerned that the rules, if not modified, would expose them to millions of dollars in fines for providing critical information about service outages and restoration that their customers and state regulators have demanded.

The challenges to the FCC action, briefly, involve three issues that affect utilities.

First, is the problem facing utilities when, having received prior approval from their customers to send text messages, the customers' cellphone numbers are assigned to another person without the utility's knowledge. Under the FCC's rules, utilities would face fines for every call made or text sent after the first call or text to the reassigned number. The utilities have argued that the FCC's regulations violate its own policy against adopting rules with which callers cannot feasibly comply. And they have pointed out that this is a special problem for utilities since utilities often send out multiple automated messages about service restoration in a single day. The second such message (and all subsequent messages) to a reassigned number under the rule would subject the utilities to minimum fines of $500 and maximum fines of $1,500 for willful violations.

Second, the FCC says customers have an absolute right to revoke consent, orally or in writing, at any time, as long as the revocation method is "reasonable." The utilities have argued that it was arbitrary for the FCC to leave "reasonable" undefined, thereby exposing callers to litigation risk over disputes about whether consent has been revoked.

Last, the FCC had defined autodialing equipment as any equipment that, if modified by software, could be used to make automated and prerecorded calls to random or sequential numbers. The dissenting commissioners maintained that the rule arbitrarily subjects utilities to TCPA penalties even for manual calls where the caller is making the call from equipment capable of autodialing. On appeal, the utilities have invoked the dissenting commissioners' objections to make the same point.

Briefs by the FCC will be filed in mid-January, 2016 and reply briefs will be filed the following month. The case is likely to be heard by the court this spring, with a decision by this summer.