FCC's extensive declaratory ruling on TCPA heightens risks and obligations for businesses (Part 2)

July 23, 2015

Privacy Alert

Author(s): Troy K. Lieberman, Dan Deane

On July 10, 2015, the Federal Communications Commission (“FCC”) released its much anticipated Declaratory Ruling and Order (the “Ruling”) providing clarification on numerous issues regarding the Telephone Consumer Protection Act (“TCPA”). As discussed in our July 20, 2015, alert, while the Ruling provides some clarification, it raises as many questions as it answers. Overall, the main thrust of the Ruling is a further strengthening of consumer protections. As a result, we anticipate the Ruling will embolden class action lawyers seeking to cash in on the generous statutory damage provisions provided in the statute.

Because of the vast scope of the Ruling, we focused our first alert on three of the most important issues addressed in the Ruling: the definition of an “autodialer,” the definition of the “maker” of a call and the extent to which consumer consent can be revoked. This alert covers the other major issues addressed by the Ruling.

IV.      Prior express written consent

The FCC addressed whether express written consent obtained before October 16, 2013 (when the current prior-express-written-consent rule became effective) is still valid. Because the current rule is more stringent than the previous rule, it was unclear whether written consent obtained prior to the effective date was still valid. In the 2012 order instituting the current rules, the FCC held “[o]nce our written consent rules become effective . . . an entity will no longer be able to rely on non-written forms of express consent to make autodialed or prerecorded voice telemarketing calls, and this could be liable for making such calls absent prior written consent.” In this Ruling, the FCC agreed with petitioners that the italicized language could have reasonably been interpreted to mean written consent obtained prior to the current rule’s effective date would be valid even if it did not satisfy the more stringent current rule. The FCC therefore clarified that the prior-express-written-consent requirements apply to each and every call, meaning that each call made to a wireless phone number requires prior express written consent. As such, telemarketers should not rely on written consent obtained before the new rule’s effective date if it does not meet the requirements of the current rule. Nonetheless, the FCC granted a retroactive waiver from the current rule’s requirements. The waiver is applicable from October 16, 2013, through the release of the Ruling, and for 89 days following the date of the Ruling.  Accordingly, written consent obtained before the October 16, 2013, date is valid for 89 days from July 10, 2015.

Additionally, the FCC ruled that “a one-time text message sent immediately after a consumer’s request for the text does not violate the TCPA.” Such texts could include a consumer seeing an advertisement and respond by texting “discount” to the retailer who responds by texting a coupon to the consumer. Such one-time text, however, must: (1) be requested by the consumer, (2) be a one-time only message sent immediately in response to a specific consumer request, and (3) contain only the information requested by the consumer with no other marketing or advertising information. The FCC noted that its ruling permits businesses to provide a simple disclosure (stating that the text is sent from an autodialer and consent is not required for purchase); however, prior express written consent is required if more than a single responsive text message is sent.

The FCC granted businesses a slight reprieve regarding consent with the 89-day window; however, companies should be sure to keep track of consumer consent and confirm that all consent meets the current prior-express-written-consent rules before contacting consumers.

V.        Text messages as calls

Next, the FCC reaffirmed that SMS text messages are subject to the same TCPA restrictions as voice calls. The FCC further clarified that “equipment used to originate Internet-to-phone text messages to wireless numbers via e-mail or via a wireless carrier’s web portal” qualifies as an autodialer and “therefore calls made using this equipment require consent.” The FCC reasoned that such equipment has the capacity to store or produce telephone numbers using a random or sequential number generator, and the capacity to dial those numbers. While the TCPA contains no definition of “dial,” the FCC interpreted dial to include “the act of addressing and sending an Internet-to-phone text message to a consumer’s wireless number.” The FCC stated that the text and legislative history of the TCPA demonstrate that “Congress intended the word ‘dial’ to mean initiating a communication with consumers through use of their telephone number by an automated means that does not require direct human intervention.”  Thus, Internet-to-phone equipment dials a wireless telephone number when it addresses and sends that number a message.

Similarly, the FCC clarified that text messages sent from applications that enable messages to be sent to a substantial number of U.S. telephone numbers are subject to TCPA restrictions. The FCC rejected the argument that the CAN-SPAM Act, which offers consumers protection from unsolicited commercial e-mail sent to wireless devices, exclusively covers text messages sent to wireless numbers through Internet-to-phone equipment.  Finally, the FCC noted that the TCPA does not prohibit all messages sent using Internet-to-phone equipment, “[r]ather, [it] prohibits only those Internet-to-text messages that are sent without prior express consent using an autodialer, other than calls made for an emergency purpose.”

Therefore, companies should treat text messages, including Internet-to-phone messages, the same as voice calls for purposes of the TCPA.

VI.      Distinction between telemarketing and informational calls

The FCC also reaffirmed that non-telemarketing calls made to wireless numbers are subject to the same TCPA restrictions as telemarketing calls. “The TCPA’s restrictions on autodialed, artificial-voice[] and prerecorded-voice calls to wireless numbers apply equally to telemarketing and informational calls.”  The FCC recognized that the same level of protection does not apply to residential landline consumers. The FCC noted that the TCPA contains unique protections for wireless consumers because “the intrusion on the consumer’s privacy from unwanted calls may actually be greater with wireless than wireline calls, where the calls are received on a phone that the consumer may carry at all times.”

Thus, companies engaging in any type of autodialed or pre-recorded call to wireless numbers must be sure to abide by the consent requirements of the TCPA.

VII.     Exceptions to consent for free calls delivering important health care and financial information

Next, the FCC narrowly exempted from the consumer consent requirement certain time-sensitive and free, pro-consumer financial- and health care-related messages, subject to strict conditions and limitations. The FCC decided two separate petitions on these issues, which may help financial and health care institutions in the future:


First, regarding calls made to prevent fraudulent transactions, identity theft, security breaches and other financial transactions, the FCC recognized that getting prior express consent was nearly impossible. Such calls address exigent circumstances and seek to prevent substantial consumer harm. In light of this, the FCC exempts such calls and text messages subject to several conditions, including that the financial institution making the call or text: (1) identifies itself in the call or text, (2) delivers the call or text only to phone numbers previously provided by the consumer, (3) ensures that the call or text is limited to the exigent circumstance and does not include any telemarketing or debt collection message, (4) ensures that the message is less than one minute or 160 characters long and that no more than three messages per event over a three-day period are sent, and (5) ensures that the message contains appropriate options to allow the consumer to “opt-out” of future calls.

Second, the FCC ruled that providing a phone number to a health care provider constitutes prior express consent for health care-related calls subject to HIPAA. Additionally, the FCC ruled that a third party could provide prior express consent on behalf of a medically incapacitated person, but that consent would only extend for as long as that person remains incapacitated.

The FCC also considered a request to exempt certain calls made to patients that provided a patient’s health care information. The FCC found that unlike financial calls, timely delivery was not critical and therefore a person’s privacy interests under the TCPA were not outweighed. Accordingly, the FCC granted the exemption to calls made under the provisions of HIPAA, while rejecting health care calls that include solicitation, advertisements, and financial content.

To protect consumers’ privacy interests for the newly exempt calls and/or messages made by financial institutions and healthcare providers, the FCC laid down strict guidelines. Accordingly, (1) no more than three calls and/or texts messages over three days can be placed to a consumer, (2) messages and calls must include an easy opt-out mechanism, (3) no marketing information or solicitation can be included, (4) messages and/or calls must include the name and contact information of the entity, (5) they must be concise—calls cannot be over one minute and messages cannot exceed 160 characters, (6) institutions must comply with a customer’s opt-out request and messages by financial institutions must be limited to financial transactions affecting fraud, identity theft and security breaches, and (7) messages by health care providers must be made within the contours of HIPAA and not convey advertisements or financial information.

VIII.   Waiver and additional exemption requests

The FCC rejected a petition to grant a retroactive waiver under section 227(b)(2)(C) of the TCPA, for an “apps” invitation mechanism. The Commission ruled that in order to grant a waiver, the petitioner must plead with particularity. This must include a showing that special circumstances warrant a waiver or a waiver will better serve the public’s interest. The petitioner failed to demonstrate a special circumstance or a public interest and failed to establish that the recipient of its invitational message was never charged for the texts.

IX.      Call-blocking technology encouraged

The FCC ruled that nothing in the Communications Act restricts common carriers or VoIP providers from using call-blocking systems. Furthermore, the commission clarified in its ruling that there are no legal or policy considerations that prevent companies from offering call-blocking services to customers. The ruling also held that call-blocking services complement the Commissions TCPA rulings by providing an additional means for consumers to stop unwanted calls.

The FCC clarified that companies are not required to offer call-blocking services. However, if such service is provided, the company must inform customers that such technology can inadvertently block some wanted calls. As a result, the Commission urged companies to offer ways to mitigate the risk of calls being inadvertently blocked. Finally the FCC sought to dissuade call-blocking companies and common carriers from blocking public safety entities, such as emergency operation centers or law enforcement agencies.


The FCC Ruling likely increases the risk for businesses that operate under the TCPA. Despite purporting to offer clarification on a number of issues, including those discussed above, the Ruling leaves businesses with substantial uncertainty. Accordingly, Nixon Peabody will continue to review the Ruling and subsequent regulatory and court orders and will provide guidance to businesses and industries affected.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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