TCPA Regulatory Update — FCC Reverses Course on Broadnet Declaratory Ruling; Begins Implementing Another Section of the TRACED Act
As in past months, the FCC has taken several small but important steps to curtail illegal robocalls through targeted actions implementing the TRACED Act. Stakeholders have also been meeting virtually with Commission staff on a regular basis to discuss these and other proposals reforming the TCPA. In particular, over the past month, stakeholders urged the FCC to provide clarity surrounding the scope of consumer opt-out requests, as originally requested by the Capital One Petition over a year ago; not to curtail time-tested TCPA exemptions for certain non-marketing calls and for calls and texts from wireless service providers to their customers, as proposed in the Notice of Proposed Rulemaking implementing Section 8 of the TRACED Act; and asked the FCC to extend safe harbor protections to cover network-based blocking.
FCC Reverses Course on Broadnet Order on Reconsideration, but Practical Impacts May Be Limited
This month, the FCC adopted two robocall-related items. On December 9, the FCC adopted an Order on Reconsideration of its 2016 Broadnet Declaratory Ruling. As background, the 2016 Broadnet Declaratory Ruling addressed petitions by contractors placing calls on behalf of the government, seeking guidance or clarification on the extent of the TCPA’s governmental exception. These petitions argued that, among other things, the federal government was not a “person” under the TCPA, meaning that no TCPA requirements, such as prior express consent for robocalls and texts, are required. The 2016 Declaratory Ruling stated that “the TCPA does not apply to calls made by or on behalf of the federal government in the conduct of official government business, except when a call made by a contractor does not comply with the government’s instructions.”
On May 18, 2018, the Consumer and Governmental Affairs Bureau released a Public Notice seeking comment on interpretations of the TCPA, including on the Broadnet decision and two pending petitions for reconsideration of the decision. In the first petition, the National Consumer Law Center asked the FCC to reconsider its interpretation of “person” and clarify that federal government contractors, regardless of their status as common-law agents, are “persons” under the TCPA. In the second, the Professional Services Council asked the FCC to reconsider its reliance on common-law agency principles and clarify that contractors acting on behalf of the federal government are not “persons” under the TCPA.
On December 14, 2020, the FCC released an Order on Reconsideration finding that federal and state contractors are “persons” under section 227(b)(1) of the TCPA, and thus, must obtain prior express consent to call consumers. But the TCPA does not require that step for the federal or state governments themselves. The FCC also concluded that local governments, unlike federal and state governments, are not sovereign entities entitled to the same presumption and that they were intended to be included within the TCPA’s consent framework.
The FCC noted, however, that federal and state contractors may qualify for forms of derivative immunity when making calls on behalf of the federal government. It also explained that a federal contractor may be able to avoid liability under the TCPA if it is not the “maker of the call” based on a “totality of the facts and circumstances” analysis. This analysis would include evaluating (1) who took the steps necessary to physically place the call; and (2) whether another person or entity was so involved in placing the call as to be deemed to have initiated it, considering the goals and purposes of the TCPA. Applying this analysis to Broadnet’s petition, the FCC found that Broadnet was not the maker of the call, but rather that Broadnet’s government client was the maker of the call because that government client was so involved in placing the call as to be deemed to have initiated it.
Implementing Section 10(a) of the TRACED Act
On December 8, the FCC adopted a Notice of Proposed Rulemaking on Implementing Section 10(a) of the TRACED Act. Section 10(a) of the TRACED Act requires the FCC to establish regulations, no later than June 30, 2021, to create a process that “streamlines the ways in which a private entity may voluntarily share with the Commission information relating to” a call or text message that violates the law regarding robocalls or spoofing. In response, the FCC proposes to establish a web portal that would be monitored by the Enforcement Bureau. The FCC seeks comment on how it should define a private entity in the context of this section. It concludes that an online portal would meet the requirements for a streamlined process, and that such a portal would be different than and in addition to, the current informal complaint process, which the FCC expects consumers to continue to use. The FCC anticipates that the portal will be valuable to employees of companies that may be making illegal robocalls and spoofed calls. It also asks whether other incentives, such as safe harbors or confidential treatment, should be available.
Interested parties may submit comments and reply comments 30 and 45 days, respectively, after the NPRM is published in the Federal Register, which has not yet occurred.
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