Safe Harbors and Erroneous Blocking Redress Measures Adopted by the FCC; Additional Rulemaking Proposed

As we previewed recently, the FCC adopted a set of rule amendments through a Third Report and Order for its “call blocking by default” framework on July 16, 2020. These rules focus on two safe harbors potentially shielding voice service providers from liability when they block calls that fail the SHAKEN/STIR authentication framework or that originate from “bad-actor upstream voice service providers.” These rules also generally provide for protection of “critical calls,” and condition safe harbors on having a no-cost, streamlined solution designed to remedy blocking errors, without defining what constitutes an “error.”

The rules as adopted had few substantive changes from the draft version that was released prior to the FCC’s July 2020 Open Meeting. First, the FCC added a clarification that the safe harbor that allows voice service providers to block calls based on “bad-actor upstream voice service providers” is not intended to “affect[] the private contractual rights a downstream provider has to block or refuse to accept calls pursuant to its agreements with wholesale customers.” This clarification suggests that the FCC does not intend this safe harbor to be the only permissible provider-based blocking under the FCC’s rules. For example, the FCC has long recognized that consumer consent or opt-in could be a valid basis for call blocking.

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Regulatory Updates: FCC to Vote on “Robocall” Measures to Mitigate Erroneous Blocking and to Advance Reassigned Numbers Database Rules to the Next Step

The FCC recently reported a decrease of approximately 60% of consumer robocall complaints and a drop of approximately 30% in volume of “unwanted robocalls” that were placed in the first half of 2020 as compared to the first half of 2019. Considering that the FCC adopted the first-of-its-kind “call blocking by default” framework in June 2019, some might wonder: Does this mean the FCC’s “call blocking by default” framework has been successful?

While the FCC cited to voice service providers reporting that they have so far only discovered less than 1% of – or as few as 0.2% of – blocked calls to be false positives, the seemingly low percentage still means that millions of lawful and wanted calls have been erroneously blocked. For example, Hiya reported that it has blocked nearly 800 million calls in 2019, which could mean that 0.2% of which – 1.6 million calls – had been blocked in error in that year. Likewise, Nomorobo blocked over 512 million robocalls in 2019; its blocking platform may have affected the delivery of 1.024 million lawful calls in that year.

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Second Circuit Joins Ninth Circuit in Adopting Expansive Interpretation of ATDS, But Carves Out Smartphones

In a decision released on April 7, the Second Circuit joined the Ninth Circuit in adopting an expansive interpretation of what qualifies as an Automatic Telephone Dialing System (ATDS), finding that online texting platforms that use human-generated lists and require a human to click “send” on a screen to initiate the texts falls within the statutory definition. Duran v. La Boom Disco, Inc., No. 19-600, 2020 WL 1682773, at *8–9 (2d Cir. Apr. 7, 2020). In an effort to respond to expected critics of their approach, the court explained its view of why “so-called smartphones” and other modern devices do not qualify as an ATDS despite having similar functionality to the online texting platforms at issue (the ability to store a list of numbers and to dial them by simply clicking “send”). Id. at *8 n.39. The decision deepens the divide between circuit courts on what qualifies as an ATDS.

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FCC Issues Ruling Applying TCPA’s “Emergency Purposes Exception” To Calls Addressing Health and Safety Risks Arising Out Of COVID-19 Pandemic

Acknowledging that “effective communications with the American public” is “a critical component” to efforts to slow the spread of the coronavirus, the Federal Communications Commission (FCC) released on its own motion, a declaratory ruling on March 20, 2020, addressing the applicability of the “emergency purposes” exception to the TCPA’s prohibition against making automated and prerecorded calls without prior express consent. This declaratory ruling is meant to provide “hospitals, health care providers, state and local health officials, and other government officials” peace of mind when sending important COVID-19 information through automated calls or texts.

As readers of the blog are well aware, the TCPA contains an exception to its consent requirements for calls made for “emergency purposes.” 47 U.S.C. §§ 227(b)(1)(A)-(B). The FCC’s rules define “emergency purposes” to mean “calls made necessary in any situation affecting the health and safety of consumers.” 47 C.F.R. § 64.1200(f)(4). The FCC’s declaratory ruling officially acknowledges the undeniable point that the COVID-19 pandemic constitutes an “emergency” under the TCPA. Earlier this month, on March 13, 2020, the White House declared a national emergency in light of the COVID-19 outbreak in the United States. As of March 20, 2020, all fifty states and the District of Columbia had declared states of emergency, which have led to many cities closing schools, workplaces, parks, restaurants, and houses of worship. Public safety organizations and institutions providing healthcare services, in particular, are changing modes of operation and means of handling some public-facing tasks. For example, many health care clinics have broadened their telemedicine programs or have begun conducting new patient intake “virtually” to triage patients with flu-like symptoms. These changes need to be communicated to existing and prospective patients in a timely manner on a large scale.

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TRACED Act Creates New FCC Implementation Timelines

As predicted, amendments to the TCPA – in the form of the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (the “TRACED Act”) – were signed into law by the President of the United States on December 30, 2019. The Chairman of the Federal Communications Commission (FCC) applauded this milestone on Twitter, commenting: “[T]he TRACED Act was signed into law, giving the FCC and law enforcement greater authority to go after scammers.” As the saying goes, with great power comes great responsibility: the enactment started the countdown for a long list of actions that the FCC is required to take during 2020 and beyond. This will add to the already active TCPA dockets at the FCC.

We share below the timeline for these actions to help our readers anticipate and prepare for the regulatory activities that will ensue. We summarized the content of these required FCC actions previously at this post.
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Legislation Looking Likely on a Number of TCPA “Hot-Button” Issues

Senate Bill 151, now called “the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act” (the “TRACED Act”), has been reconciled with the House of Representatives’ bipartisan bill House Bill 3375 and was passed in the House on December 4, 2019. This revised amendment has been returned to the Senate for a final vote and is expected to become final legislation “if not this week, then next week,” according to the bill’s sponsor, Representative John Thune. Thus, the prospects for passage of TCPA legislation currently look quite positive.

As drafted, the legislation will kick off a number of activities by the FCC, and may, as a practical matter, require the agency to take prompt actions on long-awaited rulings on critical statutory definitions. We highlight below some of the most notable revisions in the TRACED Act made since July 2019.

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Ninth Circuit Rules Montana’s Ban on Political Robocalls is Unconstitutional

In a unanimous decision earlier this month, the Ninth Circuit ruled that a provision in Montana’s Robocall Statute restricting political messages was unconstitutional. In doing so, the court overturned a district court ruling that found for the state on summary judgment.

In Victory Processing v. Fox, a political consulting firm filed suit against the Attorney General for the State of Montana, alleging that Montana’s prohibition against political robocalls violated its First Amendment rights. The statute at issue, Montana Code section 45-8-216, specifically prohibited five categories of robocalls, including those: “(a) offering goods or services for sale; (b) conveying information on goods or services in soliciting sales or purchases; (c) soliciting information; (d) gathering data or statistics; or (e) promoting a political campaign or any use related to a political campaign.” It was that final provision that Victory Processing alleged was violative of the First Amendment as an invalid content-based restriction on speech.

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TCPA Class Allegations Stricken Due to “Unique Defenses Peculiar to Plaintiff’s Case”

The Northern District of Illinois recently clarified that a “revocation class” that defines a putative class as those having made “a request to stop calling [their] number” does not satisfy Rule 23(b)(3)’s predominance requirement. This memorandum opinion again highlights the significance of individualized issues of consent in a TCPA class certification process. Continue reading   »

Comment Cycle Begins for the FCC’s Third Further Notice of Proposed Rulemaking on “Call Blocking by Default” Regime And SHAKEN/STIR Implementation Deadline

On June 24, 2019, the FCC’s adopted Declaratory Ruling and Third Further Notice of Proposed Rulemaking (“Third FNPRM”) was published in the Federal Register, triggering the commenting period deadlines. We previously discussed in detail the various components of the Third FNPRM here and here. Comments on this Third FNPRM are due by Wednesday, July 24, 2019, and reply comments are due by Friday, August 23, 2019. Drinker Biddle’s TCPA team will continue to monitor this docket and related developments as they become available.

TCPA Legislation on the Horizon?

While the FCC has a record open to adopt guidance and a new definition for what it considers as an “automatic telephone dialing system” (ATDS) and related TCPA matters, there appears to be growing consensus on “Robocall” legislation in the two houses of Congress that may be moving TCPA legislation closer to reality. On the heels of the Senate passing Senate Bill 151 (entitled “Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act”)Senate Bill 151 (entitled “Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act”), the House of Representatives yesterday introduced a new bipartisan bill – House Bill 3375 – that would bolster the prospects that Congress may be able to pass legislation this year.

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