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Kelley Drye introduces a new Full Spectrum series, “Inside the TCPA,” which will offer a deeper focus on TCPA issues and petitions pending before the FCC. Each episode will tackle a single TCPA topic or petition that is in the news or affecting cases around the country. In this inaugural episode, partner Steve Augustino and associate Jenny Wainwright discuss the definition of an autodialer or ATDS. This episode addresses the 2018 D.C. Circuit decision in ACA International and the FCC’s new proceeding to examine the definition. With initial comments filed on June 13th, Steve and Jenny analyze the principal arguments made by commenters and discuss whether Congress will weigh in on the matter. To listen to this episode, please click here.*

Future episodes of “Inside the TCPA” will tackle reassigned numbers, consent, and other topics raised before the FCC. This is a companion to Kelley Drye’s comprehensive list of petitions before the Commission available in our monthly TCPA Tracker newsletter. Please contact us if we can assist you with any of the FCC proceedings.

Kelley Drye’s Full Spectrum is available on iTunes. To subscribe, and keep up to date on the latest trends and topics in communications, simply find the built-in and undeletable podcast app, search “Kelley Drye Full Spectrum,” look for our logo, and hit “subscribe.”

You can also access the podcast through our website, Soundcloud, and Stitcher.

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On December 11, 2017, the Federal Communications Commission (FCC) and Federal Trade Commission (FTC) released a draft Memorandum of Understanding (MOU) which will allocate oversight and enforcement authority related to broadband Internet access service (BIAS) between the two agencies.  The new MOU was announced three days before the FCC’s scheduled vote to reclassify BIAS as an “information service,” and is expected to be finalized simultaneously with that vote.  The MOU is part of an ongoing effort to address concerns that reversing the current “net neutrality” rules will adversely affect consumers, and provides a guide for Internet service providers (ISPs) and other stakeholders to understand which agency will be taking the lead on oversight and enforcement going forward.  However, the extent to which the MOU takes effect will depend upon, among other things, the pending case interpreting section 5 of the FTC Act that is before the Ninth Circuit Court of Appeals.

Continue Reading On the Eve of the FCC’s Reclassification of Broadband Services, the FCC and FTC Release Memorandum of Understanding for Oversight of Broadband

On Wednesday, November 2, 2016, the Federal Communications Commission (FCC) released the text of its long-awaited Broadband Privacy Order, which it adopted on October 27, 2016. For an overview of the Order, you may read our client advisory here.

The practical impact and reach of the rules will not be known for some time, but at this point we can offer a few of our key takeaways from the Order:

  • All carriers must prepare and maintain public-facing privacy notices. The Commission’s new notice rules will require all telecommunications carriers to draft and post public-facing privacy policies that describe their collection, use, and sharing of customer PI. Formerly, this obligation only applied to BIAS providers (through the Commission’s transparency rule). We expect that disclosures in these privacy policies will be a significant area of enforcement, similar to the Commission’s enforcement of annual CPNI certifications.
  • The sensitivity-based consent framework upends the existing CPNI approval framework. The Commission’s adopted rules fundamentally reshape the consent framework for telecommunications carriers, focusing on the sensitivity of the information, rather than on the particular uses and recipients of the information (as the voice CPNI rules did). As a result, all carriers should carefully review and revise their policies, procedures, and systems for obtaining and tracking customer approval.
  • The Order leaves a significant interpretive role for FCC’s Enforcement Bureau with respect to data security. Unlike the existing voice CPNI rules and the Commission’s proposed data security rules, which mandated specific data security compliance practices, the new rules simply require carriers to adopt “reasonable” data security practices. By focusing on the “reasonableness” of carriers’ privacy and data security practices, the Commission leaves significant room for its Enforcement Bureau to interpret whether particular practices are reasonable, in a manner similar to the FTC’s approach to privacy and data security enforcement. For this reason, providers should carefully review the Commission’s “exemplary” data security practices and Enforcement Bureau consent decrees in order to gauge which practices the Commission expects of providers.
  • Now is the time to begin reviewing contracts with vendors. In the Order, the Commission makes clear that carriers will be held responsible for the acts of their agents, vendors, and other third parties with whom they share customer PI. As a result, carriers should take the opportunity now to review contracts with those third parties to determine whether they include specific terms addressing privacy and security. This is particularly important for non-BIAS telecommunications carriers serving enterprise customers, who will be able to take advantage of the Commission’s expanded business customer exemption.

Kelley Drye’s Communications and Privacy & Information Security practice groups are well-versed in privacy law at the federal and state level, and stand ready to help interested parties understand the scope of these rules and how to operationalize them. Should you have any questions, please contact any of the attorneys listed in the margin.

iStock_000019536561Large-300x225At the Federal Communications Commission’s (“FCC”) Open Meeting on October 27, the Commission voted along party lines (3-2) to impose more stringent rules on broadband Internet service providers (“ISPs”). Chairman Tom Wheeler, along with Commissioners Rosenworcel and Clyburn voted in favor of the item, while Commissioners Pai and O’Rielly voted against it.

The new rules clarify the privacy requirements applicable to broadband ISPs pursuant to Section 222 of the Communications Act. The new rules also apply to voice services and treat call-detail records as “sensitive” in the context of voice services.

According to an FCC press release issued immediately after the meeting, these rules “establish a framework of customer consent required for ISPs to use and share their customers’ personal information that is calibrated to the sensitivity of the information.” The Commission further asserts that this approach is consistent with the existing privacy framework of the Federal Trade Commission (“FTC”). Continue Reading FCC Votes to Impose Aggressive New Privacy Rules on Broadband Providers

On October 13, 2016, the Federal Trade Commission (FTC) filed a petition in the U.S. Court of Appeals for the Ninth Circuit requesting a rehearing en banc of the court’s decision in the FTC’s case against AT&T alleging that the company dramatically reduced – or “throttled” – data speeds for certain customers on unlimited data plans once those customers had used a certain level of data.  A three-judge panel for the Ninth Circuit determined in August 2016 that the case should be dismissed because AT&T was not subject to an FTC enforcement action due to the company’s status as a common carrier.  As we noted in a previous blog post, this case could reset the jurisdictional boundaries between the FTC and the Federal Communications Commission (FCC) with respect to phone companies, broadband providers and other common carriers.

As expected, the FTC asked the Ninth Circuit to rehear the case en banc.  The request, if granted by the court, would result in the full contingent of judges hearing the case, likely early next year.  The FTC advances three primary arguments in support of rehearing, but the most interesting by far is its claim of a gap in consumer protection jurisdiction as a result of the ruling.

The FTC’s lead argument is that the decision allegedly “creates an enforcement gap” because “no other federal agency has the FTC’s breadth of authority to protect consumers from many unfair or deceptive practices across the economy and to obtain redress for consumer harm.”  In support, the FTC argues that the FCC’s jurisdiction “is limited to matters ‘for and in connection with’ common-carrier service” and, unlike the FTC, the FCC cannot collect consumer redress and is subject to a one year statute of limitations.  The FTC further argues that the Ninth Circuit panel’s status-based approach to determining FTC jurisdiction has wide-reaching implications for any company who can claim to be a “common carrier” in some aspect of its business to avoid enforcement actions for non-common-carriage activities.  (We noted this open question in our previous post as well.)  Such entities – which the FTC identified to include large cable companies, satellite service providers, internet companies and energy utilities – may manipulate their common carrier status to avoid FTC jurisdiction.  Finally, the FTC claims that the ruling “threatens the FTC’s ability to enforce other important consumer protection statutes including the Children’s Online Privacy Protection Act, the Telemarketing and Consumer Fraud and Abuse Act, and the Restore Online Shoppers’ Confidence Act, and several others.”

Notably, the FTC’s position was previewed by FTC Chairwoman Edith Ramirez in her written testimony for an FTC oversight hearing before the Senate Committee on Commerce, Science and Transportation on September 27, 2016.  As we predicted, Chairwoman Ramirez argued that the case supported the FTC’s long-time effort to repeal the common carrier exception, stating in part that following the Ninth Circuit’s ruling, coupled with the FCC’s 2015 decision to reclassify broadband Internet access as a common carriage service, “[a]ny company that has or acquires the status of a common carrier will be able to argue that it is immune from FTC enforcement against any of its lines of business by virtue of its common carrier status.”

Whether the FCC agrees with the FTC’s characterization of its jurisdiction is yet to be determined.  Nevertheless, the fault line is clearly identified in the FTC’s filing.  We will continue to monitor this case and will post any new developments here.

On May 4, 2016, the FCC issued a Notice of Proposed Rulemaking to exempt robocalls made to collect “a debt owed to or guaranteed by the United States” from the TCPA’s prior express consent requirement. The new rules will implement a provision of the Bipartisan Budget Act of 2015. In its Notice, the Commission seeks comment on a number of issues, including as follows:

What types of calls should be covered by the exemption? The Budget Act created the TCPA exemption for calls made “solely to collect a debt” owed to the United States.  The Commission seeks comment on the proper interpretation of that language.  It also proposes to allow debt servicing calls under the exemption because such calls “may provide a valuable service by offering information about options and programs designed to keep at-risk debtors from defaulting or becoming delinquent on their loans.”  Finally, the Commission seeks comment on the proper interpretation and scope of the phrase “owed to or guaranteed by the United States.”
Who can be called? The Commission proposes that the exemption will cover “only calls to the person or persons obligated to pay the debt.”  It would exclude calls to persons who the caller does not intend to reach, and would apply the “one-call window” rule for reassigned numbers.  The Commission seeks comments on these proposals and asks commenters to provide alternative approaches they feel would be appropriate.
Who may place the calls? The Commission proposes that the exemption would cover calls made by creditors and those calling on their behalf, including agents.  It seeks comment on whether it should adopt this approach, or consider a narrower or broader interpretation under the Budget Act exemption.
How should the Commission limit the number and duration of the calls? The Budget Act provides the Commission with discretion to restrict covered calls, including by limiting the frequency and duration of the calls.  Thus, the Commission has proposed a three-call-per-month maximum for autodialed, prerecorded, or artificial voice calls to wireless numbers.  The limit would apply regardless of whether a call went unanswered.  The Commission posits whether a different limitation would be appropriate for live agent calls.  Without setting forth specific proposals, the Commission also seeks comment on the appropriate duration for the calls, as well as other restrictions (i.e., limiting calls hours to 8:00 AM to 9:00 PM).
Should consumers be permitted to stop covered calls? The Commission proposes “that consumers should have a right to stop [covered] calls at any point the consumer wishes.”  It proposes that stop-calling requests would continue to apply even after the debt is transferred to other collectors.  It further proposes to require callers to inform consumers of their right to make a stop-calling request.

Comments on the Commission’s proposals are due on June 6, 2016 and replies are due on June 21, 2016. Following the comment period, we expect the proceeding to move quickly because the Commission is statutorily mandated to adopt rules to implement the exemption no later than August 2, 2016.

iStock_000036215158Large-335x251On January 11, 2016, the FCC’s Consumer and Governmental Affairs Bureau released an order denying a petition by a text message platform provider for a declaratory ruling that the Commission should evaluate TCPA liability for these types of entities under the same standard established for fax broadcasters.  In the Order, the Bureau explained that a separate liability standard for text message apps and platforms was laid out in the Commission’s July 2015 Omnibus TCPA Order and that “text broadcasters can be liable for TCPA violations based on the factors discussed in that decision.”

The petitioner, Club Texting, Inc., filed its request for a declaratory ruling in 2009.  In the petition, Club Texting asked the Commission to apply the fax broadcaster TCPA liability standard to text message platforms, such that “liability will attached only if a text broadcaster ‘demonstrates a high degree of involvement in, or actual notice of, the unlawful activity and fails to take steps to prevent such transmissions.’”  In support of this request, Club Texting claimed that if the Commission made an affirmative finding that text broadcasters are not “senders” for TCPA purposes, it would “promote compliance” by the broadcasters’ third party clients that “are in the best position to ensure that recipients have consented to receive the text messages.”

FCC TCPA Declaratory Ruling

Nearly six years after the petition was filed, the FCC released its July 2015 Omnibus TCPA Order, in which it responded to approximately two dozen petitions for clarification of a variety of TCPA-related issues, including the Commission’s definition of a “caller” for purposes of determining TCPA liability.  In the Order – which is currently being challenged in the U.S. Court of Appeals for the D.C. Circuit – the Commission determined that a calling or texting platform or application may face primary liability under the TCPA as the “caller” based on a case-by-case analysis of whether the entity takes the steps necessary to physically place the telephone call (or text), or is so involved in the placing of a call to have been deemed to initiate it (as opposed to merely having some role, however minor, in the causal chain that results in the making of the telephone call).  The Commission further explained that other relevant factors when making its determination could include “the extent to which a person willfully enables fraudulent spoofing of telephone numbers or assists telemarketers in blocking Caller ID, by offering either functionality to clients,” or whether the text broadcaster “has knowingly allowed its client(s) to use that platform for unlawful purposes.”

The FCC’s standard is similar to the “high degree of involvement” standard applicable to fax broadcasters, but the Commission made clear that it was not applying the fax broadcaster standardper se.  This raises the possibility that outcomes involving calls or texts will differ than they would if faxes were involved.  Until we see cases adjudicating liability, however, we will not know how much of a difference the standard makes in practice.

Club Texting Petition

Against this backdrop, the FCC’s order in Club Texting is primarily procedural.  In denying the Club Texting petition, the Bureau reaffirmed the position in the Order and noted that “the Commission has clarified the standard to be applied to text broadcasters and that standard is not the same standard as applies to fax broadcasters.”  It did not revise the standard, nor did it offer any meaningful clarifications of how the standard will be applied.  Indeed, the order explicitly states that it is not adjudicating the liability of any particular text broadcasting service at this time.

We note that the FCC has proposed to fine a “robocall broadcaster” previously.  The case involved Dialing Services, Inc., a developer of a software platform that allows customers to record their own messages and send them to a designated list of recipients.  The Commission issued a Notice of Apparent Liability against the company in May 2014, and proposed a $2.9 million penalty on the basis that Dialing Services had allowed its customers, through its platform, to make 184 unlawful prerecorded message calls to cell phones.  According to the Commission, because of the company’s involvement in the call process, Dialing Services made or initiated the calls.  The Commission has yet to convert the NAL to a Forfeiture Order, however.  Arguably, the Commission should apply the standard announced in the 2015 TCPA Declaratory Ruling to determine Dialing Services’ liability in the case.

For now, service providers should expect the Commission to continue in its efforts to cast a wide consumer protection net, and companies involved in activities regulated by the TCPA should take whatever steps are necessary to avoid unwanted attention from regulators or the plaintiffs’ bar.