March 2010: FCC Aligns Rules with FTC?

by Joseph Sanscrainte, an attorney specializing in telemarketing law.

On January 22, 2010, the Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking (NPRM) regarding its rules governing the delivery of prerecorded calls (these rules appear at Title 47, Section 64.1200 in the Code of Federal Regulations).

As the FCC correctly points out, its prerecorded rules are different than the rules promulgated by the Federal Trade Commission (FTC), which has long caused confusion and frustration for entities in the telemarketing space. The FCC proposes, in the NPRM, to help alleviate this confusion by streamlining its rules with the FTC's.

In 2008, the FTC changed its rules regarding the delivery of prerecorded messages. These new rules mandate that all prerecorded telemarketing messages delivered by entities subject to the jurisdiction of the FTC are prohibited unless the sender has a signed, written agreement from the recipient (or the call meets one of three very limited carve-outs.) In addition, the FTC required all prerecorded calls to allow the called consumer to, via an automated keypress or voice-activated mechanism, assert a Do Not Call request to the company making the call. Finally, the FTC determined that it would adopt a "successive 30-day, per campaign" standard for determining a company's abandoned call rate.

The FCC is specifically seeking comment with regard to the following:

• Whether its existing "express consent" provision should be changed to required "express written consent"
• Whether the FCC should reconsider its determination that an established business relationship may be deemed to constitute express invitation or permission to receive unsolicited prerecorded telemarketing calls
• Whether the FCC should exempt calls that are subject to HIPAA from the general prohibition on prerecorded message calls to residential lines
• Whether the FCC should conform its rule to the FTC's rule by requiring interactive opt-out mechanisms at the beginning of any prerecorded call
• Whether the FCC should adopt a "per campaign" limitation to its abandoned call measurement standard

Although the FCC appears to believe it is addressing all of the differences with the FTC's rules, there is a danger that in fact the new rules may create yet further complexities. Fundamentally, the FTC approaches its prerecorded rules from a "technology-agnostic" standpoint - the rules apply if you make a prerecorded call, and it doesn't matter how the call is generated, and it doesn't matter whether it is made to a landline or a wireless device. The FCC, on the other hand, appears to be proposing to keep much of its existing language - and this language divides calls up depending upon whether they are made by "an automatic telephone dialing system" (aka, a predictive dialer) or to (amongst other things) a "cellular telephone service."

This language poses many complexities, especially for entities (e.g., debt collectors), seeking to contact individuals via their wireless devices for purposes other than offering the sale of goods or services. Finally, the FCC's proposal with regard to its abandonment rate measurement standard still does not conform entirely with the FTC's - the FCC does not appear interested in addressing its "rolling" 30 day period versus the FTC's "successive" 30 day period language.

Here's a modest proposal (with apologies to Jonathan Swift): if the FCC seeks to "harmonize" its prerecorded rules with the FTC's rules, it could just copy the FTC's rules verbatim - attempting to keep the skeleton of its rules intact may create more confusion than it resolves.

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