The FCC announced on March 31, 2020, new rules requiring implementation of caller ID authentication, known as STIR/SHAKEN.¹ The FCC is requiring voice service providers to implement caller ID authentication using the STIR/SHAKEN technical standards in the Internet Protocol (IP) portions of their networks by June 30, 2021 to protect consumers from “spoofing,” a method used by scammers and some telemarketers to trick consumers into answering their phones. The long overdue and much needed definition of “autodialer” (also known as ATDS), however, remains elusive.

According to the FCC, STIR/SHAKEN enables phone companies to verify that the caller ID information that is transmitted with a call matches the caller’s phone number. In the FCC’s view, “[w]idespread deployment of STIR/SHAKEN will reduce the effectiveness of illegal spoofing, allow law enforcement to identify bad actors more easily, and help phone companies identify calls with illegally spoofed caller ID information before those calls reach their subscribers.” According to FCC Chairman Ajit Pai, “spoofed” calls are among the hundreds of millions of daily unwanted calls that Americans receive. Chairman Pai explained that “[t]he caller spoofs or manipulates the caller ID information that appears on the recipient’s phone to trick him into thinking that the call is from someone he knows or can trust.”

Cast against the backdrop of the global coronavirus pandemic, Chairman Pai noted that spoofed calls prevent health care officials from making important phone calls, and in the past two weeks (since about mid-March), “utility companies from Maryland to California have warned about fraudsters spoofing their phone numbers and exploiting concerns about financial uncertainty during the pandemic, threatening to shut off service if customers don’t pay up.”

The June 2021 implementation deadline is consistent with the deadlines articulated in the recently enacted TRACED Act. See our earlier alert on the TRACED Act here. The FCC also adopted a Further Notice of Proposed Rulemaking to accept public comments with respect to expanding the STIR/SHAKEN implementation mandate to apply to intermediate voice service providers; extending the implementation deadline by one year for small voice service providers; adopting requirements to promote caller ID authentication on voice networks that do not rely on IP technology; and further implementation of the TRACED Act.

According to the FCC’s news release on the rules:

[T]he benefits of eliminating the wasted time and nuisance caused by illegal scam robocalls will exceed $3 billion annually, and STIR/SHAKEN is an important part of realizing those cost savings. Additionally, when paired with call analytics, STIR/SHAKEN will help protect American consumers from fraudulent robocall schemes that cost Americans approximately $10 billion annually. Improved caller ID authentication will also benefit public safety by reducing spoofed robocalls that disrupt healthcare and emergency communications systems.

The FCC further opined that implementation of STIR/SHAKEN “will restore consumer trust in caller ID information and encourage consumers to answer the phone, to the benefit of consumers, businesses, healthcare providers, and non-profit organizations.”

In a separately issued statement, FCC Commissioner Michael O’Rielly expressed concern over the cost of implementing STIR/SHAKEN. He also addressed head-on the FCC’s failure to-date to tackle one of the most vexing issues pending before the FCC, namely, the definition of “autodialer” under the TCPA, which continues to fuel large-dollar, bet-the-company TCPA class actions. Issuing a clarion call to his fellow FCC Commissioners, Commissioner O’Rielly stated:

I hope we will finally have the will to respond to the D.C. Circuit’s set-asides in ACA International v. FCC and clarify the TCPA’s ‘automatic telephone dialing system’ provision. As long as the harmful and backwards Marks v. Crunch San Diego decision still stands, any efforts to enact blocking and labeling redress mechanisms for legitimate callers will be for naught if unscrupulous class action plaintiffs are able to flock to the 9th Circuit to serve legitimate businesses with abusive and frivolous TCPA lawsuits. Especially now that the 7th and 11th Circuits have explicitly rejected the approach in Marks, allowing the confusion and uncertainty to linger any longer is tremendously unfair to those legitimate companies trying to do the right thing. And, to the extent that the Commission isn’t prepared to do this just yet, we must act on the over fifty petitions pending before the Commission for TCPA clarification and relief. Either way, the Commission must stop allowing legitimate callers to be unfairly punished by statutory misinterpretation and frivolous litigation.

Laudable as implementing STIR/SHAKEN is, Commissioner O’Rielly’s comments hit the nail on the head and focus on the urgent and long overdue need for the FCC to issue guidance on the definition of autodialer and ATDS. Doing so will inform courts and guide the course of pending and future TCPA class actions, which have cost companies hundreds of millions of dollars.

Given the large number of TCPA class actions that continue to be filed, the FCC’s ongoing delay in clarifying the TCPA autodialer rules has left the regulated community both shaken AND stirred.

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¹STIR/SHAKEN stands for Secure Telephone Identity Revisited (STIR)/Secure (or Signature-based) Handling of Asserted Information Using ToKENs (SHAKEN).

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