But One Vote is Not Enough for Action, Nor Does Action Assure a Favorable Outcome
FCC Commissioner Michael O’Rielly recently blogged that “It is Time to Provide Clarity” on issues swirling around application of the Telephone Consumer Protection Act (TCPA). To this we say, “Hear, Hear!”
Commissioner O’Rielly observes that “as the FCC and the courts have interpreted the TCPA, business models and ways of communicating with consumers have also changed.” Consequently, rules on autodialing, prerecorded-messaging, texting, telemarketing, and fax advertising “have become complex and unclear.” While the TCPA “aimed to strike a balance between protecting consumers … and enabling legitimate businesses,” rules targeting “robocalls” and “junk faxes” have created “situations where consumers might not receive notifications and offers that they want and expect, and where new and innovative services and applications … could be restricted.”
Currently, there are dozens of petitions pending at the FCC seeking declaratory rulings and even new rulemaking proceedings that would clarify application of the TCPA and its implementing rules. One central issue is how to determine if equipment used to reach consumers constitutes an “automatic telephone dialing system,” or “ATDS,” which under the TCPA may not be used to contact cell phones unless there is prior consent from the called party (or an emergency). These rules govern not only prerecorded telemarketing, but also informational calls, live-agent calls, and texting. The FCC has long embraced a broad definition of autodialers, such that any equipment that has the “capacity” to dial numbers one after another (or simultaneously), without human intervention, will qualify. Many courts generally follow the FCC’s expansive approach, though a few courts have started taking a more nuanced view.
As such, companies around the country have thus tried to innovate around the ATDS definition, but have faced uncertainty and massive potential liabilities in the courts, where we have seen an explosion in TCPA civil litigation, including the meteoric rise of TCPA class actions. Because of the availability of statutory damages and the often large number of calls placed, alleged statutory damages create potential liability in the millions, or even billions of dollars, thus resulting in multi-million dollar settlements.
Commissioner O’Rielly is on the right track in suggesting the FCC should “make sure that good actors and innovators are not needlessly subjected to enforcement actions or lawsuits, which could discourage them from offering new consumer-friendly communications services.” But it takes three votes for the FCC to act, and a willing Chairman to set an agenda allowing for action. And there is no statutory (or other) deadline or obligation for the FCC to act on the pending petitions. Indeed, a decade ago, the FCC promised it would decide whether its rules preempt state laws on a case-by-case basis, then sat idle as a similar raft of preemption petitions were filed. It is also possible Commissioner O’Rielly stands alone, and that votes exist, but only to reaffirm the broad reach of the FCC’s interpretation of what constitutes an ATDS, and to grant only limited relief – or none – on other, narrower issues.
But if nothing else, the number and variety of petitions before the FCC confirms the need for clarity and, perhaps, a holistic review of the TCPA rules, which has not happened for more than a decade now. As Commissioner O’Rielly aptly notes: “Tackling this backlog in a comprehensive manner will help restore certainty and reduce the need to file additional petitions.”