Last week, the U.S. Court of Appeals for the Third Circuit concluded that the TCPA’s definition of “automatic telephone dialing system” (or “ATDS”) includes all dialing equipment with the present ability to generate random or sequential phone numbers and dial those numbers, regardless of whether the equipment’s owner actually uses those “ATDS functionalities.” But, importantly, a caller must actually use such functionalities in order to violate the statute’s prohibition on making autodialed phone calls, the Court further held.
In other words, a dialing system’s status as an ATDS turns on the system’s present capabilities, not how it is used. But whether a defendant is liable for using an ATDS turns on how the system is used, not just what it can do. Thus, the Court read the ATDS definition broadly but the liability provision narrowly, in a ruling that will give some comfort to companies that use their dialing equipment to contact customers or prospects from set lists, rather than to randomly generate phone numbers to be called indiscriminately.
Recently, on May 20, 2022, the Federal Communications Commission (“FCC”) issued a Report and Order (“Order”), as well as a Further Notice of Proposed Rulemaking (all available here), with a plain objective: to “take further steps to stem the tide of foreign-originated illegal robocalls and seek comment on additional ways to address all such calls.” Order ¶ 1. As stated by the FCC, “reducing illegal robocalls that originate abroad is one of the most vexing challenges we face in tackling the problem of illegal robocalls.” Id. The Order was adopted by a unanimous, 4-0 vote by the FCC after it had received comments over the last nine months on various topics, including whether so-called “gateway providers” should be required to authenticate caller identification information and implement other efforts to reduce the number of illegal prerecorded and/or artificial voice “robocalls” originating overseas.
A “gateway provider” is a U.S.-based provider that acts as an intermediary for an international call by receiving a call directly from a foreign provider before transmitting that call downstream to other U.S.-based providers for termination. Order ¶ 25. This definition is not static but rather one that applies on a call-by-call basis, i.e., a provider is a gateway provider—and subject to the FCC’s new Order—only for those calls in which it acts as a gateway provider. Id. ¶ 28. Per the FCC, commenters “overwhelmingly” supported the imposition of additional requirements on gateway providers in order to “stop the flood of foreign-originated illegal calls.” Id. ¶ 21.