On Friday, January 22, 2010, the Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking proposing to place tougher restrictions on “robocalls” (prerecorded telemarketing calls). The FCC’s intent is to harmonize its existing telemarketing regulations with the more restrictive regulations of the Federal Trade Commission (FTC).

Why the Proposed Rule Change?

As of September 1, 2009, new FTC rules went into effect governing the delivery of interstate prerecorded telemarketing calls. Under the FTC’s rules, sellers and telemarketers must obtain a signed, written agreement from call recipients in order to deliver interstate prerecorded calls.

The FTC’s jurisdiction does not extend to intrastate calls, or to certain entities such as telephone companies, airlines, banks and certain insurance companies—these entities are governed by the FCC’s telemarketing rules. The FCC’s proposed new rules are intended to “bridge the gap” so that similarly situated entities are governed consistently under the FTC’s and FCC’s rules.

The FTC’s Rules Governing Robocalls

Under the FTC rules that went into effect on September 1, 2009, in order to place a robocall, a telemarketer must have a signed, written agreement with the call recipient, which must evidence the call recipient’s agreement to receive prerecorded calls on behalf of the specific seller; such agreement must be obtained without requiring the purchase of any goods or services, and must include the call recipient’s telephone number and signature. See 16 C.F.R. § 310.4(b)(1)(v). The signed, written agreement is permitted to be electronic, provided that the signature is obtained in conformance with the federal E-SIGN Act (which includes signatures provided on web site forms, emails and telephone keypress). See 16 C.F.R. § 310.4(b)(1)(v)(A)(iv).

The FCC’s Proposed Rule Changes

Until now, the FCC’s rules have been more permissive. Under the FCC’s existing rules, telemarketers governed by the FCC’s regulations may place robocalls if they have an established business relationship with the call recipient. Under the Commission’s rules, the term “established business relationship” is defined as a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber, with or without an exchange of consideration, on the basis of the subscriber’s purchase or transaction with the entity within the 18 months immediately preceding the date of the telephone call or on the basis of the subscriber’s inquiry or application regarding products or services offered by the entity within the three months immediately preceding the date of the call, which relationship has not been previously terminated by either party. 47 C.F.R. § 64.1200(f)(4).

In the FCC’s Notice of Proposed Rulemaking, it seeks comment on whether it should conform its rule to the FTC’s Telemarketing Sales Rule by eliminating the established business relationship exemption from the general prohibition on prerecorded telemarketing calls to residential telephone lines.

The FCC also tentatively concludes that conforming its rules to the FTC’s prerecorded call rules will reduce the potential for industry and consumer confusion, to the extent that similarly situated entities would no longer be subject to different requirements, depending upon whether an entity is subject to the FTC’s rule or to the FCC’s rule. The FCC seeks comment on this tentative conclusion.

The Notice of Proposed Rulemaking was issued on January 22, 2010. Comments will be due to the FCC 60 days after the NPRM is published in the Federal Register. Reply comments will be due 30 days after the comment date.