“Change in TCPA Compliance Is on the Horizon,” Law360, September 23, 2019.

Extracted from Law360 

Legislation making its way through Congress could lead to some much-needed clarity to the issue of what it takes to be in compliance with the Telephone Consumer Protection Act. After a highly anticipated U.S. Court of Appeals for the District of Columbia Circuit decision in 2018 failed to completely resolve definitional issues under the TCPA, the House has stepped in to address some of these points through legislation and pushing the Federal Communications Commission to act.

The Stopping Bad Robocalls Act passed the House with overwhelming support in a 429-3 vote on July 24.[1] H.R. 3375 was sponsored by Rep. Frank Pallone Jr., D-N.J., the chairman of the House Energy and Commerce Committee. If enacted, the bill would amend the Communications Act of 1934 and bring several major changes to the TCPA legal landscape.

Redefining the Robocall

The TCPA generally makes it illegal to call someone using an automatic telephone dialing system (or prerecorded voice) without the prior express consent of the called party. But what constitutes an ATDS is the subject of much debate and litigation. The TCPA defines ATDS as equipment that has the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.”[2]

Courts have interpreted the term ATDS in vastly different manners in the wake of the D.C. Circuit’s decision in ACA International v. FCC.[3] Some courts include in that definition only equipment with the present capacity to generate numbers randomly or sequentially, while others, including the Court of Appeals for the Ninth Circuit, have held that equipment need only have the capacity to store numbers and dial them to qualify as an ATDS.

Previous versions of the House bill scrapped the definition of ATDS in its entirety, replacing it with the term “robocall.”[4] Those bills defined “robocall” as a call made or text sent:

(A) using equipment that makes a series of calls to stored telephone numbers, including numbers stored on a list, or to telephone numbers produced using a random or sequential number generator, except for a call made using only equipment that the caller demonstrates requires substantial additional human intervention to dial or place a call after a human initiates the series of calls; or

(B) using an artificial or prerecorded voice.

While many viewed this definition as more business-friendly than some court interpretations, it did not address the level of human intervention required or what constitutes a stored list.

The version of the bill that got the House’s stamp of approval abandons Congress’ attempt to redefine ATDS and instead seeks to force action by the FCC. It gives the FCC six months from the date of enactment to “clarify descriptions of automatic telephone dialing systems” in accordance with the legislation. The clarified regulations must ensure, in part, that:

The consumer protection and privacy purposes of 47 U.S.C. § 227 are upheld.

• Calls and texts sent via ATDS or made with artificial or prerecorded voices are sent with consent, provided an exemption does not apply.
• Consumers can withdraw consent.
• Circumvention of the regulation is prevented.
• Callers maintain records demonstrating consent for a set amount of time, provided an exemption does not apply.
• Compliance with 47 U.S.C. § 227 is facilitated.

The impact the new ATDS definition will have on businesses remains to be seen, and while the bill itself does not clarify the definition of ATDS, it gives the FCC a tight timeline to do so. Granted, the FCC has already sought comment on the definition of ATDS and is expected to publish new guidance on the issue soon. The House bill’s language on revocation of consent is also vague, and it will be up to the FCC to supply the details.

Businesses will need to pay close attention to developments on this front. While we do not yet have clarity on several key issues including the definition of ATDS and the level of human intervention required, this legislation and the pending FCC guidance suggest clarity may be on the way. It is unclear whether we will see a broad definition that includes equipment that merely has the capacity to store numbers and dial them, or whether the FCC will define an ATDS with narrow strokes.

Businesses can also expect to see guidance on the means by which consumers can withdraw consent. With new guidance comes new responsibilities for businesses to ensure compliance with the TCPA. Businesses should make sure they are prepared to respond and adapt to changes the bill may bring.

Reassigned Numbers

Additionally, the act also provides for the creation of a reassigned numbers database. The creation of this database would affect the processes businesses must follow before placing calls.

The goal of the database is to prevent callers from calling a number that previously belonged to a consenting person but was then reassigned to a person who has not consented to be called. This idea is already in the works, but there have been industry concerns about the feasibility of such a database. In March, the FCC published its final rule, paving the way for the creation of a database of reassigned numbers. Callers are responsible for checking numbers against the database, and they have a safe harbor if they relied on the database when unknowingly making a call to a number that was reassigned. Compliance dates have not yet been announced.

H.R. 3375 calls for the creation of the same reassigned numbers database and requires the FCC to submit to Congress within one year of the bill’s enactment a report on the status of efforts to get the database up and running.

The new bill also redefines “called party” as “the current subscriber or customary user of the telephone number to which the call is made, determined at the time when the call is made.” The D.C. Circuit set aside the FCC’s definition of “called party” through ACA International, and the term is not defined in the text of the TCPA.

To comply with a reassigned numbers database, businesses will need to update their workflow to make sure all numbers are run against this database before any calls are made and that their use of the database is clearly documented.

New Technology

Under the new legislation, telephone carriers also have to adopt new technology that helps prove the true identify of callers, without passing the charges on to consumers. The legislation does not provide much detail on what that technology looks like, other than to describe it as “effective call authentication technology.” The bill also requires the FCC to provide regulations that “help protect subscribers from receiving unwanted calls from a caller using an unauthenticated number, through effective means of enabling the subscriber or provider to block such calls, with no additional line item charge to the subscriber.”

The FCC also must, within 18 months of enactment, prescribe regulations that streamline the ways private entities can share information about calls or texts sent in violation of the act, and within a year, the FCC must take a final agency action to make sure that the recently announced robocall blocking services are available for consumers and callers at no charge.

Reporting Obligations

The legislation also puts the onus on the FCC to provide an annual report to Congress that includes, among other things, the number of complaints it received in recent years for various violations of the act, the number of citations it issued, the number of final orders imposing forfeiture penalties, and the total amount of forfeiture penalties or criminal fines collected.

The FCC must also provide within 90 days of enactment rules to create a registration process for the creation of a consortium to conduct “private-led efforts to trace back the origin of suspected unlawful robocalls.” The FCC must provide a report on those efforts within a year.

Exemptions

The TCPA allows the FCC to exempt certain types of calls, such as those not made for commercial purposes. The new legislation requires the FCC to put some parameters around the types of calls that can be exempted and mandates that the FCC ensure that exemptions contain:

requirements for calls made in reliance on the exemption with respect to:

(i) the classes of parties that may make such calls;
(ii) the classes of parties that may be called; and
(iii) the number of such calls that a calling party may make to a particular called party.

Additional Changes

The new legislation increases the statute of limitations from two to four years for certain intentional violations and caller identification violations. It also increases forfeiture penalties for willful violations to $10,000 (in addition to penalties allowed under Section 503(b)(2)) and empowers the FCC to pursue forfeiture penalties without issuing citations.

The bill also requires the FCC to provide the attorney general with evidence it obtains that suggests “a willful, knowing, and repeated robocall violation with an intent to defraud, cause harm, or wrongfully obtain anything of value.”

Additionally, the bill directs the FCC to consider ways to combat “one-ring scams,” which are scams in which a caller hangs up after one ring, inducing the called party to return the call at his or her expense.

It also calls for the creation of certain task forces. The Interagency Working Group is to be convened to study the enforcement of 47 U.S.C. § 227(b), which outlines the restrictions on using autodialers. The group will be made up of members of federal departments and agencies such as the U.S. Department of Commerce, U.S. Department of State, U.S. Department of Homeland Security, FCC, Federal Trade Commission and Consumer Financial Protection Bureau. The legislation also calls for the creation of the Hospital Robocall Protection Group to develop ways to fight illegal calls made to hospitals.

Unanswered Questions

The bill leaves open several questions: What exactly is an ATDS? What constitutes consent? What constitutes revocation of consent? While the bill does not supply the answers, it at least provides a deadline for the FCC to do so. The extent to which businesses need to respond and revise their policies depends on what happens with the bill in the coming months.

Next Steps

This bill was introduced in the House on June 20. The Committee on Energy and Commerce sent an amended bill to the House on July 23, and the bill went to the floor for a vote the following day. The Senate received the bill on July 25. The Senate previously passed its own robocall legislation in May with a 97-1 vote. Sen. Ed Markey, D-Mass. stated in a tweet that senators and representatives would meet to reconcile the two bills and send legislation to the president.

Perhaps the biggest takeaway for businesses is “Stay tuned.” Whether it comes via this legislation or other FCC guidance, change in the TCPA landscape is on the horizon.