The FCC today approved a Declaratory Ruling and Order resolving approximately 20 pending petitions seeking clarification of a variety of items relating to the federal Telephone Consumer Protection Act (TCPA). The Commission’s Order expands consumer rights and protections at the expense of legitimate businesses that use modern technologies responsibly to reach consumers.

At today’s Open Commission Meeting, the FCC confirmed adoption of proposals that Chairman Tom Wheeler outlined at the end of March. In particular, the FCC ruled that:

  • Carriers and service providers may implement call blocking technology to preclude unwanted calls;
  • The TCPA requires the consent of the actual called party, the subscriber to a phone number, or the customary user of the number, not the intended recipient of the call. This, according to the FCC, provides an incentive for businesses to adopt “best practices such as database checks” to ensure the called number has not been reassigned, though callers are allowed “one call post reassignment in order to affirm any number reassigned;”
  • If dialing equipment has the capacity, even with some modification, to dial random or sequential numbers, then it is an automatic telephone dialing system (ATDS) for purposes of the statute;
  • Consumers who previously consented to receiving calls may revoke that consent “at any time and through any reasonable means;” and
  • There is an exemption to the consumer consent requirement for “time sensitive financial alerts and healthcare related calls that are free to the consumer.”

Chairman Wheeler’s proposal was approved 3-2, with a blistering dissent by two of the commissioners. As FCC Commissioner Michael O’Rielly stated, “We are deceived to produce 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.” The dissenting voices noted that the ruling dramatically expands the reach of the ATDS definition to include equipment like smartphones that could not have been the intended target of the original statute. They also argued that the new rules open the floodgates to liability for good faith actors and were disappointed that an overarching exception for reassigned numbers was not included. And they noted a key potential problem with the expanded right of consent revocation, offering the example that a company may be held liable when consent is revoked at a licensed retail store to an employee who has no way of communicating revocation to the party in charge of placing the calls.

The key concern for most legitimate businesses is how this will affect them with respect to future liability. The dissenting commissioners complained that the FCC and trial lawyers have not gone after parties who commit the most egregious violations of the TCPA, but have instead targeted viable business interests with deep pockets. According to them, the TCPA has strayed beyond its intended purpose. At least one request was made to increase FCC enforcement of illegal telemarketing calls while decrying the ruling for allowing trial lawyers to expand loopholes to the litigation process.

But as one commissioner emphasized, the FCC’s goal and directive is to stop certain calls from being made: “Consumers have the right to present any prior consent and have an unequivocal right to say stop.” In response to concerns from the dissenting commissioners about the potential for runaway litigation, Chairman Wheeler pointed to the private right of action that Congress included in the TCPA as evidence that Congress intended the litigation as an enforcement mechanism.

The ruling adds fuel to the already expanding fire of TCPA litigation. In light of the ruling, businesses should reevaluate telemarketing, debt collection, and text messaging practices to ensure compliance with both new and existing TCPA rules. There remain areas for clarification, such as what constitute “reasonable means” for revoking consent and the scope of the “one call” rule for reassigned numbers. The FCC has indicated that a full text order should be out later today or tomorrow. As always, we will continue to track and provide updates on these areas.