According to the Federal Communications Commission (FCC), approximately 100,000 cell phone numbers are reassigned in this country every day, resulting in millions of wireless numbers being reassigned each year. Reassigned cell phone numbers have created an intractable problem and have exposed companies to the risks of Telephone Consumer Protection Act (TCPA) liability because no systematic and reliable way exists for business callers to track these numbers. Oftentimes businesses may call wireless numbers believing they have consent from the cell phone subscriber only to discover, usually through the filing of a complaint, that the number has been reassigned, and the calls were made in violation of the TCPA.

In an effort to address this problem, the FCC has adopted new rules that will hopefully reduce potential TCPA liability for calls made to reassigned cell phone numbers. Specifically, on December 12, 2018, and as incorporated in a December 13, 2018, Second Report and Order, the FCC unanimously adopted the creation of a comprehensive reassigned number database to enable companies to verify the status of phone numbers and to prevent calls to reassigned numbers. This long-awaited development will now allow business callers to screen out reassigned numbers and hopefully avoid litigation.

The FCC also approved, in a 3-1 vote, to classify short message service (SMS) text messages as “information services” under the Communications Act, which gives wireless providers the ability to block unwanted text messages, reminiscent of the power given to broadband providers in last year’s net-neutrality decision.

Reassigned Number Database

The FCC’s December 13, 2018, Second Report and Order on reassigned cell phone numbers provides much needed relief to businesses that in the past had no workable means to achieve compliance with the old rules. Businesses faced a potential liability trap based solely on routine, good faith communications directed to their own customer lists in situations where a cell phone number had been reassigned to a new user. Without a method to track those reassignments or know that the numbers had been reassigned, callers faced potential TCPA exposure for calls made to reassigned numbers.

Under the FCC’s July 2015 Omnibus TCPA Declaratory Ruling and Order (2015 TCPA Order), a caller could be held strictly liable for a call to a reassigned cell phone number even where the caller had consent from the prior subscriber, and the call to that number was made on the good faith belief that the caller was trying to reach the original subscriber. What’s more, the “safe harbor” implemented by the 2015 Order was anything but—it was limited to one call, regardless of whether the call was answered, or whether the caller obtained any information from that call that indicated that the number was reassigned. To compound the issue, the recipients of the calls had no obligation to alert the caller of the mistake, and instead could let the calls—and accompanying statutory damages—accumulate.

On appeal of the 2015 TCPA Order, the US Court of Appeals for the DC Circuit, in ACA International v. Federal Communications Commission (FCC), found that the FCC’s one-call safe harbor rule was arbitrary and capricious. As the court observed, the FCC itself acknowledged “that even the most careful caller, after employing all reasonably available tools to learn about reassignments, may nevertheless not learn of reassignment before placing a call to a new subscriber.” And the FCC failed to “give some reasoned (and reasonable) explanation of why its safe harbor stopped at the seemingly arbitrary point of a single call or message.”

On December 12, 2018, the FCC unanimously adopted the creation of a reassigned number database that will be a resource for callers to determine whether telephone numbers have been reassigned. Companies using the database will be able to determine if telephone numbers on their calling lists have been disconnected and made eligible for reassignment. Any such numbers can then be purged from their call lists, thereby decreasing the number of calls to consumers who did not provide consent to the caller. Participation in the database will be voluntary. However, to further encourage use of the database, the FCC is providing callers with a safe harbor from liability for any calls made to reassigned numbers due to a database error. Callers will have the burden to prove that they checked the most recent and up-to-date database.

The approved order includes the following steps to implement the reassigned number database: (1) establish a single, comprehensive reassigned number database that will enable callers to verify whether a telephone number has been permanently disconnected, and is therefore eligible for reassignment, before calling that number; (2) a minimum aging period of 45 days before permanently disconnected telephone numbers are eligible to be reassigned by a service provider; (3) service providers would report on a monthly basis information regarding permanently disconnected numbers to the database; and (4) select an independent third-party database administrator, using a competitive bidding process, to manage the reassigned number database. It is unclear when the new database will be launched.

In its press release, the FCC stated, “The rules respond to consumer groups, trade associations, and state and federal authorities that asked the Commission to establish a single, comprehensive database as the best solution to reducing calls to reassigned numbers while minimizing burdens on both callers and providers.” The FCC estimates that it will cost approximately $2 million to set up the database and less than $2 million annually to maintain the database.

FCC Commissioner, Michael O’ Rielly stated, “While I am hopeful that the database will accomplish its intended purpose it would be naive to think that it will comprehensively fix the reassigned numbers problem … Informing our expectations, we should be wise to keep in mind the costly and ineffective do not call registry, which never stops bad actors from calling those on the list. Ultimately only the honest and legitimate callers will consult the reassigned numbers database, not the criminals or the scammers.” While the FCC has provided an additional tool to facilitate compliance and minimize potential TCPA litigation risk, Commissioner O’Rielly notes that the effectiveness of the database will be determined in the months and years to come.

Wireless Carriers Have an Option to Block Text Messages

The FCC also approved the FCC’s November 21, 2018, Wireless Messaging Service Declaratory Ruling that permits wireless companies to block unwanted texts sent to consumers via robotext-blocking, anti-spoofing measures and other anti-spam features. In a 3-1 vote, the FCC ruled to classify SMS and multimedia messaging service (MMS) as a “Title I - Information Services” under the Communications Act of 1934, rather than a “Title II - Telecommunication Services,” which gives wireless providers more authority to combat spam and robotexts. The FCC also concluded that SMS and MMS are not commercial mobile services or their functional equivalent.

The FCC said that “[w]ith this decision, the FCC empowers wireless providers to continue taking action to protect American consumers from unwanted text messages.” FCC Chairman Ajit Pai noted: “The FCC shouldn’t make it easier for spammers and scammers to bombard consumers with unwanted texts … and we shouldn’t allow unwanted messages to plague wireless messaging services in the same way that unwanted robocalls flood voice services.” However, this decision was not unanimous, and the new measure has been criticized by some lawmakers and consumer groups that contend the rules may allow providers to censor text messages.

CONCLUSION

The FCC’s creation of the reassigned number database, and the safe harbor from TCPA liability for database error, is a welcomed development for businesses because it will provide callers with a workable mechanism to comply with the rules and minimize TCPA exposure. The full impact of the new text message classification on TCPA risk remains unclear and whether wireless providers will be effective in limiting the volume of unwanted texting.