Last week we published an overview of key issues raised by the Federal Communications Commission’s July 10, 2015, Declaratory Ruling and Order regarding the Telephone Consumer Protection Act (the “July 2015 Order”). The July 2015 Order responded to 21 requests for clarification concerning previous rules and orders the FCC has issued pursuant to the TCPA, which regulates telemarketing calls and text messages sent to wireless devices. We noted that the July 2015 Order was largely disappointing from an industry perspective, and that companies that engage in telemarketing should re-examine their protocols in light of the FCC’s new guidance. In the coming weeks we will be providing additional insights about specific takeaways from the July 2015 Order.
The July 2015 Order was effective upon release, but the FCC did provide a grace period for the Petitioners (and their members, for trade associations) to cure certain deficiencies with respect to consents to receive telemarketing calls and texts that they had previously obtained from consumers. Full compliance is required by 90 days following the release of the July 2015 Order (October 7, 2015).
Although the FCC did not explicitly extend this grace period to all companies, the FCC’s rationale for the grace period indicates that it likely would apply across the board. The rationale refers to language in the FCC’s February 2012 Report and Order (the “February 2012 Order”) concerning the then-new requirements for obtaining express written consent to receive telemarketing calls and texts:
- The February 2012 Order altered the definition of “prior express written consent” to include new content requirements for obtaining such consent. Such consent would need to include a “clear and conspicuous disclosure” that (1) the telemarketing calls (or texts) may be made using an autodialer or an artificial or prerecorded voice, and (2) providing consent is not required to make a purchase.
- In the February 2012 Order, the Commission stated that once their new written consent rules became effective, companies could be liable for making autodialed or prerecorded voice telemarketing calls “absent prior written consent.”
- Based on that language, many companies considered the written consents they had obtained previously to be sufficient, even though those previously obtained consents did not contain the new disclosures as required by the February 2012 Order.
- In the July 2015 Order, the FCC acknowledged that its “absent prior written consent” language “could have reasonably been interpreted to mean that written consent obtained prior to the current rule’s effective date would remain valid even if it does not satisfy the current rule.” However, the FCC has now made clear that prior written consents that did not include the new disclosures are not valid, and companies that had been relying on those old consents must obtain new consents that include the required disclosures.
- The Petitioners requested a grace period to obtain these new consents, and the FCC assented, granting a waiver dating back to the effective date of the new consent requirements and for 89 days following the release of the July 2015 Order.
The grace period technically applies only to the Petitioners who requested it, so relying on it is an issue of risk tolerance for other companies. Accordingly, the most prudent approach would be to promptly remedy any inadequacies in previously obtained written consents.
What Constitutes an “Automatic Telephone Dialing System”
Among other clarifications in the July 2015 Order that might come as a surprise is the FCC’s exceptionally expansive interpretation of what may be considered an automatic telephone dialing system (“ATDS” or “autodialer”). The FCC stopped short of including rotary phones in the mix, finding the possibility of modifying a rotary-dial phone to such an extent that it would qualify as an autodialer “too attenuated,” but otherwise left the door open for virtually any type of equipment to fall under the ATDS rubric. With regard to the term “capacity” as it is used in the definition of an ATDS, the FCC stated that capacity includes the “potential functionalities” of equipment, without limiting the amount of human intervention that might be required to turn such equipment into an ATDS.
Companies that have to this point assumed that their equipment is not an autodialer because it is not currently configured or operated as such, and have therefore not complied with the regulatory requirements associated with autodialers, should consider whether to update their practices in light of the FCC’s broader interpretation of the term. Other program revisions in light of the July 2015 Order also may be prudent.