June 18, 2015 RE: FCC Ruling on TCPA In a 3-2 vote today, the Federal Communications Commission (FCC) approved a declaratory ruling (Ruling) that, while intended to protect consumers from unwanted robocalls and texts, will in actuality limit legitimate business’ ability to contact their customers and further expose them to abusive class action lawsuits. Commissioner Michael O'Rielly, who voted against the Ruling, even went so far as to call it "one of the most slanted documents [he's] ever seen" and "a farce." While the full text of the Ruling has not yet been released, the definition of "automatic telephone dialing system" (ATDS), liability for calls made to reassigned numbers and other issues were discussed during the meeting. Definition of ATDS According to John Adams, FCC Deputy Chief of Consumer and Governmental Affairs, equipment is an ATDS if it "has the capacity, even with some modification, to dial random or sequential numbers...even if the caller is not currently or presently dialing random or sequential phone numbers but is instead calling a set list of numbers." Mr. Adams said that the Ruling clarifies that "the term capacity in the definition of [ATDS] is not unbounded or so broad as to make any equipment that can dial a number an [ATDS]." Comments issued by the dissenting commissioners, however, indicate that the Ruling significantly expands the definition of ATDS. Commissioner Ajit Pai commented that "after this Order, each and every Smartphone, tablet, VoIP phone, calling app, texting app...pretty much any phone that's not a rotary dial phone will be an [ATDS]." According to Commissioner Pai, the order "will make abuse of the TCPA much, much easier. The primary beneficiaries will be trial lawyers, not American consumers." Commissioner O'Rielly similarly commented that "according to the Order, equipment that could conceivably function as an autodialer [constitutes an ATDS today]. Indeed, the new definition is so expansive that the FCC has to use a rotary phone as an example of technology that would not be covered." Liability for Calls to Reassigned Phone Numbers

The other substantive topic that attracted the most discussion at today's meeting was liability for calls made to reassigned phone numbers. Mr. Adams stated that the Ruling "clarifies that the TCPA requires the consent of the actual called party— the subscriber to a phone number or the customary user of that number, not the intended recipient of the call." According to the FCC, businesses will have only one opportunity to call a reassigned number before facing liability. Commissioner Pai commented that "the Order makes the situation for good faith actors worse by imposing a strict liability standard" even though there is "no authoritative database" to determine whether a number has been reassigned.

Other Provisions Other key components of the Ruling include:

Text Messages. The Ruling reiterates that text messages are considered calls under the TCPA, making autodialed text messages subject to the same consent requirements as phone calls. According to the FCC, this includes Internet-to-phone text messages.

Green light for “Do Not Disturb” technology. Phone service providers can now offer "robocall" blocking services and technology to their customers.

Revoking Consumer Consent. Consumers who previously consented to receive calls from a business may revoke that consent at any time and through any reasonable means. The FCC, however, failed to clarify the scope and definition of the term "reasonable," which the dissenting commissioners took issue with.

Third-Party Consent. A consumer whose name is in the contact list of an acquaintance’s phone must provide their own consent to be called. According to Mr. Adams, “being on an acquaintance’s wireless phone contact list is not consent to receive robocalls from providers of third-party applications downloaded by the acquaintance.”

Limited and Specific Exemptions. Time sensitive financial alerts (such as fraud alerts) and healthcare related calls (such as medication refills) that are free to the consumer will be exempt from the TCPA's consent requirements. It is unclear, however, what limitations will be placed on such exemptions. Other healthcare or financial related calls, such as marketing or debt collection communications, will not be exempt.

The Ruling takes effect immediately upon release of the full text. PACE members should be prepared to immediately take all necessary steps to ensure compliance with the Ruling. PACE is closely monitoring the issuance of the final Ruling. We will conduct a thorough analysis of the Ruling once it is released and continue to provide updates to membership as the situation evolves.