FCC Chairman Tom Wheeler’s proposal to revise the Telephone Consumer Protection Act rules passed by a 3-2 vote during yesterday’s Open Commission Meeting. While the final order is not yet public, the press release issued following the meeting notes that it “addresses almost two dozen petitions and other requests that sought clarity on how the Commission interprets the [TCPA], closing loopholes and strengthening consumer protections already on the books.” Specifically, the ruling covers the following major issues: consumers’ right to opt out of receiving robocalls, revocation of consent, reassigned numbers, exemption for certain types of urgent calls/texts, and the definition of autodialer. While all indications point to the ruling being generally unfavorable to industry, a couple of areas appear to provide some relief for particular industry sectors and for service providers and texting platforms. We provide below a summary of the ruling based on the press release and commissioner statements during the meeting.

The voting generally fell along party lines, with Democrats Jessica Rosenworcel and Mignon Clyburn supporting fellow Democrat Tom Wheeler, and Republicans Ajit Pai and Michael O’Rielly dissenting. Several times during the meeting, the Republicans made known their displeasure with the Chairman’s proposal. Commissioner Pai noted that by adopting the ruling, the FCC has “strayed from the law’s original purpose,” and “made it much easier for abuses of the law,” which will primarily benefit trial lawyers and open the floodgates of liability for good faith actors. Commissioner O’Rielly offered a more impassioned observation, noting that the forthcoming ruling “is one of the most slanted documents I’ve ever seen and I will not be so naïve to trust again certain people in leadership positions at the Commission.”

With that as background, here are some of the major issues that were discussed at yesterday’s meeting and what they might mean for industry (subject, of course, to the ruling’s official release).

Green Light for ‘Do Not Disturb’ Technology

The Commission will grant permission to service providers and carriers to offer call blocking technology to their subscribers without fear of liability. These companies have, for years, been asked by subscribers for a solution to block robocalls but were hindered from doing so out of fear of being sued by companies trying to reach their consumers and prospects. Now the door has been opened. However, questions remain about how this will work and what choices consumers will actually have. For example, how will carriers and service providers know what numbers to block? How will companies react when trying to reach these consumers with legitimate information but are unable to do so due to consumer choice?

Right to Revoke Consent

The Commission will codify consumers’ rights to revoke previously given consent to receive calls and messages to their mobile phone and prerecorded calls to landlines. Prior to this ruling, only the courts recognized these rights, as the TCPA and FCC rules were silent on this issue. Now the FCC has made clear that consumers will have the right to revoke their consent “in any reasonable way at any time.” One commissioner expressed serious concern with this language, noting that the new ruling would allow a consumer to walk into any fast food restaurant and inform the server that she does not want to receive any future calls or texts from the restaurant. A company’s failure to develop effective policies and procedures for honoring these requests would subject it to liability under the law, an outcome that “would send shivers through any boardroom.”

Reassigned Numbers

Closing what the Chairman and the majority refer to as “loopholes,” the FCC’s ruling would place strict liability on companies that call a mobile phone number that was reassigned to a new subscriber, despite having received consent for such calls from the prior subscriber. The caller would get one free pass and not have liability for the first call made after reassignment. However, liability would attach for all subsequent calls, even if the recipient of the call never informs the caller that the number had been reassigned. It is still not clear how the FCC expects companies to comply when they believe in good faith that they have the requisite consent under the TCPA. Justifying their vote on this issue, the commissioners in the majority offered that callers could have access to and could rely on databases of reassigned numbers, but parties on all sides universally agree that no authoritative database in real-time exists. This ruling comes despite industry pleas for a good faith safe harbor, or clarifying that the statute’s use of “called party” means “intended recipient.”

Limited Exemptions for Certain Calls/Texts

The FCC appears to have been swayed by certain industry groups to allow urgent calls and messages to be sent to consumers under certain circumstances without consent, but closed the door to broader allowances. The commissioners’ statements suggest that the exemption would apply to certain healthcare and banking communications, such as important medical treatment, health notices, fraud alerts, or identity theft warnings. But the exemption would not be absolute—other calls by these firms involving marketing or debt collection would not be subject to an exemption. Interestingly, commissioners on both sides of the aisle expressed concern with the FCC assuming the role of arbiter in deciding what messages are—and are not—urgent, leading at least one to suggest that the FCC has improperly entered the business of governing speech and content.

Possible Relief for Service Providers/ Platform and App Providers

The one bright light for industry appears to be shining on service companies, texting platforms and app developers that provide the ability for others to send messages, make calls, or transmit messages, but that play no part in initiating such communications. This exemption appears to provide relief to companies that merely provide the means for others to make calls or to send text messages.

Autodialer

The most contested of all issues at the Commission and in the courts has been the definition of an “automatic telephone dialing system” (i.e., autodialer). According to all sources, the Commission will keep the TCPA’s broad and far-from-clear definition intact, leaving undisturbed the word “capacity,” without adding industry’s much sought after qualifier, “present.” This means that even systems that do not have the present capacity to autodial will likely still be deemed autodialers. The press release states that “[t]his definition ensures that robocallers cannot skirt consumer consent requirements through changes in calling technology design or by calling from a list of numbers.” The latter part of the sentence is likely intended to foreclose the argument that a device that only dials manually entered numbers should fall outside the statute’s purview. Noting his disappointment, Commissioner Pai stated that the ruling “dramatically expands” the definition of autodialer and that “today’s action makes every iPhone an autodialer, subjecting its user to liability under the law.” The Commissioner suggested that most all devices, except perhaps a “rotary phone,” will be considered an autodialer under the new ruling.

Reaffirmations

In its order, the FCC claims to “reaffirm” certain of its previously announced rulings. For example, the ruling declares that a text message is a call, and that a consumer has the right to revoke consent at any time. While the commissioners generally concurred on these points, Commissioner O’Rielly noted that neither of these points are set forth in the law or the FCC’s regulations and “if Congress wants to make those changes, it is up to them, not the FCC.”

The particulars regarding these and other issues covered in the FCC’s press release will soon become public and will be subject to a more detailed report on what they mean for consumers and industry. Last, we leave you with a quote from Chairman Wheeler, who, when responding to critics who claimed that the FCC was not being sensitive to industries’ unlimited financial exposure under the law and abuses by class action attorneys, said, “if industry is so concerned with class actions, the proper place to address this is with Congress, not the FCC.”