The Federal Communications Commission, in a divided vote, approved an order clarifying several long-simmering Telephone Consumer Protection Act (TCPA) issues. While the order has not been officially released, the Commissioners discussed many of the order’s details and the new TCPA risks and obligations for businesses.

Based on the Commissioners' statements and the FCC news release, the order addresses, among other issues: the definition of an automatic telephone dialing system (broad interpretation of “capacity” to include devices that could at some future point dial randomly or sequentially); the revocation of consent (consumers may revoke their prior express consent at any time); and the liability of companies for autodialed calls made to reassigned phone numbers (strict liability).

The FCC also approved, with conditions, limited exemptions for fraud alert messages from financial institutions and patient notifications from health care providers. The text of the order is expected to be released shortly, and a full summary will be provided once the FCC staff has completed editorial revisions.

The order addresses 21 TCPA petitions that were pending before the FCC. Based on the FCC staff's description, Commissioners' statements, and observations from attending the FCC's June 18, 2015 meeting, the order covers the following:

• Revoking Consent. Consumers have the right to revoke their prior express consent to receive autodialed calls at any time through any reasonable means. It is unclear at this point what is considered a “reasonable” revocation, although one Commissioner’s dissent suggested that such revocation could be done in person.
• Calls to Reassigned Phone Numbers. The actual called party’s consent is required to make an autodialed call. The staff’s description of the order stated that the phone’s customary user or the current subscriber’s prior express consent is required. If a phone number is reassigned to a new consumer, a company cannot rely on the prior owner’s consent to avoid liability.
  
  The order provides a single-call safe harbor for the caller to determine if the phone number has been reassigned to a different consumer. Any calls after this single call would be a TCPA violation. Commissioner Ajit Pai stated that there are 37 million reassigned phone numbers each year, but there is no database to track these reassignments. Commissioner Pai further opined that the FCC’s new strict liability standard will only lead to more TCPA class actions, while Commissioner Michael O’Rielly questioned whether the single-call safe harbor was a workable process.
• Defining Autodialers. The definition of an automatic telephone dialing system (autodialer) is to be broadly interpreted to ensure new technologies “cannot skirt consumer consent requirements.” The TCPA defines an autodialer as “equipment which has the capacity to store or produce telephone numbers to be called, using a random or sequential number generator and to dial such numbers.” The order will clarify that devices that make calls to phone numbers from preprogramed lists would be considered an autodialer.
  
  Based on statements made at the meeting, “capacity” will be broadly interpreted to include devices that do not presently have the ability to dial randomly or sequentially, but could at some future point. To highlight the breadth of this interpretation, Commissioner O’Rielly stated that a rotary phone was as an example of one of the few communications devices that is not an autodialer under this interpretation. Commissioner O’Rielly strongly dissented, noting that this is akin to the FAA extending laws governing aircraft to cars because one day they might fly and using skateboards in regulations governing flying objects as an example of something that is not a plane.
• Exceptions for Fraud and Patient Alerts. Over the skepticism of Commissioners Mignon Clyburn and Jessica Rosenworcel, the order will provide financial institutions and health care providers with a limited exemption for free-to-end-user calls regarding account fraud or health care alerts. The meeting’s discussion did not detail all of the exceptions’ conditions, but there will be limitations on the number of excepted calls and these alerts will be required to offer consumers the ability to opt-out of future calls. We expect these requirements to be similar to previous FCC exceptions.
• Call Blocking. The order will clarify that phone carriers may offer consumers the option to block the receipt of autodialed and prerecorded calls to their residential and wireless phones

The order will address a number of other additional TCPA issues as well. For example, the order affirms that text messages are considered telephone calls for TCPA purposes, and that Internet-to-phone text messaging services are covered by the TCPA.

Companies should work with counsel to review the architecture of their dialing hardware and software systems and to take stock of their policies and procedures for contacting consumers by telephone. In light of the vote, companies will almost certainly need to revise their systems architecture and develop new policies and procedures to avoid exposure to class actions for violating the TCPA. The TCPA is a gold mine for plaintiffs’ counsel, as it provides for a private right of action, statutory damages of $500 per violation, and treble damages for willful violations. As pointed out by the dissenting Commissioners, there were almost 2,000 TCPA class action cases filed in 2014. Regrettably, the actions taken by the Commission today will only result in further abuse of the TCPA by plaintiffs’ counsel.