Some welcome the New Year with new goals and new plans while others – the FCC, in particular, welcomes the New Year by wrapping up TCPA rulemakings and issuing other rulings. As expected, a number of TRACED Act items were included in orders issued in late December 2020. As we previewed, the FCC amended nine existing TCPA exemptions, imposing additional restrictions on pre-recorded/artificial voice calls placed to residential lines even for informational calling, and adopted new redress requirements on and safe harbor protections for carriers engaging in network-based call blocking. The FCC also denied two petitions for declaratory rulings, clarifying that “soundboard callers use a prerecorded voice to deliver a message” and that as a result, these calls made using soundboards are subject to TCPA restrictions. In light of these changes, we encourage business callers to carefully assess how they affect any existing calling protocols and compliance practices.
Faegre Drinker
Articles by Faegre Drinker:
FCC Reconsiders Government Contractors’ Classification as TCPA Non-“Persons”
The FCC in 2016 determined that the federal government was not a “person” subject to the TCPA, and that by extension, federal contractors working within the scope of their delegated authority were also not bound by TCPA restrictions. This Broadnet Declaratory Ruling was the subject of at least one prominent dissent. At the time, then-Commissioner Ajit Pai observed: “[I]t is odd to suggest that a contractor’s status as a ‘person’ could switch on or off depending on one’s behavior or relationship with the federal government.” The National Consumer Law Center and Professional Services Council both filed petitions for reconsideration and this issue was again joined on December 14, 2020, when the FCC issued a Reconsideration Order stating that government contractors – but not federal or state governments themselves – “must obtain prior express consent to call consumers” when making calls on behalf of the government.
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Join Us This Week — The TCPA: The Year Behind and Year Ahead
Please join us for a lively roundup of recent developments and hot topics hosted by Faegre Drinker’s TCPA team. Our attorneys will convene government and industry professionals to offer insight and perspective on a variety of issues, including the definition of an autodialer, trends in defending and settling TCPA cases, and the regulatory implications of the election and pandemic, among other much-buzzed-about subjects. In addition to members of Faegre Drinker’s TCPA team, our three panels will feature these guest speakers:
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FCC Proposed Rulemaking Presents an Opportunity to Reshape Some Existing TCPA Exemptions
Over the years, one of the biggest challenges many businesses face when assessing TCPA risks posed by a new calling or texting campaign has been determining whether the proposed use case can defensibly rely on one of the exemptions adopted by the Federal Communications Commission (FCC). That is because the FCC has repeatedly cautioned that any exemptions it adopts apply only to the specific set of facts considered by the agency. Sometimes the jigsaw puzzle pieces align, but other times they do not perfectly fit together, making exemptions less useful than they might otherwise be.
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.
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.
Eleventh Circuit Narrows ATDS Definition
One area of continued confusion and conflict among courts reviewing TCPA cases has been how each approaches the scope of the statutory definition of an autodialer, as this critical matter can spell the difference between calls being deemed violative of the statute or acceptable. Last week, the Eleventh Circuit addressed a pair of appeals disputing the scope of the definition of “automatic telephone dialing system” (“ATDS”) under the TCPA. In Glasser v. Hilton Grand Vacations Co., the Eleventh Circuit determined that ATDS should include only equipment that generates numbers randomly or sequentially and then dials them automatically—effectively excluding equipment that dials numbers from preexisting lists. 2020 WL 415811, at *2 (11th Cir. Jan. 27, 2020). This places the Eleventh Circuit squarely at odds with the Ninth Circuit’s expansive definition of ATDS in Marks v. Crunch San Diego.
Draft Reassigned Numbers Database Technical Requirements Unveiled and Awaiting Comments
The long awaited draft technical requirements for the FCC’s reassigned numbers database was released today. At the time of the adoption of an order establishing this database in December 2018, the FCC tasked its North American Numbering Council (NANC) with studying several technical issues that are prerequisite to ensure the effectiveness of this database within a year. However, stating that the task was unexpectedly complex, the NANC sought two extensions of the deadline in June and in September 2019, using the additional time to formulate baseline technical requirements for the database.
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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