[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
MODERNIZING THE TELEPHONE CONSUMER PROTECTION ACT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 22, 2016
__________
Serial No. 114-172
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
_________
U.S. GOVERNMENT PUBLISHING OFFICE
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas FRANK PALLONE, Jr., New Jersey
Chairman Emeritus Ranking Member
JOHN SHIMKUS, Illinois BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania ANNA G. ESHOO, California
GREG WALDEN, Oregon ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania GENE GREEN, Texas
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee LOIS CAPPS, California
Vice Chairman MICHAEL F. DOYLE, Pennsylvania
STEVE SCALISE, Louisiana JANICE D. SCHAKOWSKY, Illinois
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi KATHY CASTOR, Florida
LEONARD LANCE, New Jersey JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky JERRY McNERNEY, California
PETE OLSON, Texas PETER WELCH, Vermont
DAVID B. McKINLEY, West Virginia BEN RAY LUJAN, New Mexico
MIKE POMPEO, Kansas PAUL TONKO, New York
ADAM KINZINGER, Illinois JOHN A. YARMUTH, Kentucky
H. MORGAN GRIFFITH, Virginia YVETTE D. CLARKE, New York
GUS M. BILIRAKIS, Florida DAVID LOEBSACK, Iowa
BILL JOHNSON, Missouri KURT SCHRADER, Oregon
BILLY LONG, Missouri JOSEPH P. KENNEDY, III,
RENEE L. ELLMERS, North Carolina Massachusetts
LARRY BUCSHON, Indiana TONY CARDENAS, California
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota
Subcommittee on Communications and Technology
GREG WALDEN, Oregon
Chairman
ROBERT E. LATTA, Ohio ANNA G. ESHOO, California
Vice Chairman Ranking Member
JOHN SHIMKUS, Illinois MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee PETER WELCH, Vermont
STEVE SCALISE, Louisiana JOHN A. YARMUTH, Kentucky
LEONARD LANCE, New Jersey YVETTE D. CLARKE, New York
BRETT GUTHRIE, Kentucky DAVID LOEBSACK, Iowa
PETE OLSON, Texas BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas DIANA DeGETTE, Colorado
ADAM KINZINGER, Illinois G.K. BUTTERFIELD, North Carolina
GUS M. BILIRAKIS, Florida DORIS O. MATSUI, California
BILL JOHNSON, Missouri JERRY McNERNEY, California
BILLY LONG, Missouri BEN RAY LUJAN, New Mexico
RENEE L. ELLMERS, North Carolina FRANK PALLONE, Jr., New Jersey (ex
CHRIS COLLINS, New York officio)
KEVIN CRAMER, North Dakota
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 1
Prepared statement........................................... 3
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, opening statement............................... 4
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 6
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 60
Witnesses
Michelle Turano, Vice President, Public Policy and Government
Affairs, Wellcare Health Plans................................. 8
Prepared statement........................................... 11
Answers to submitted questions............................... 112
Shaun Mock, Chief Financial Officer, Snapping Shoals Electric
Membership Corporation......................................... 19
Prepared statement........................................... 21
Answers to submitted questions............................... 116
Spencer Weber Waller, Professor and Director, Institute for
Consumer Antitrust Studies, Loyola University Chicago.......... 29
Prepared statement........................................... 31
Answers to submitted questions............................... 122
Richard Shockey, Principal, Shockey Consulting................... 35
Prepared statement........................................... 36
Answers to submitted questions............................... 127
Submitted Material
Statement of Indiana Attorney General Greg Zoeller, submitted by
Mr. Walden..................................................... 62
Statement of the National Association of Federal Credit Unions,
submitted by Mr. Walden........................................ 64
Statement of several non-profit consumer groups, submitted by Ms.
Eshoo.......................................................... 74
Statement of several banking associations, submitted by Mr.
Walden.........................................................
Article entitled, ``The Telephone Consumer Protection Act of
1991: Adapting Consumer Protection to Changing Technology,''
Loyola Consumer Law Review, 2014, submitted by Mr. Walden \1\.. 62
Statement of the Electronic Privacy Information Center, submitted
by Ms. Eshoo................................................... 89
Statement of America's Health Insurance Plans, submitted by Mr.
Latta.......................................................... 93
Statement of the Credit Union National Association, submitted by
Mr. Latta...................................................... 107
----------
\1\ Available at: http://docs.house.gov/meetings/IF/IF16/
20160922/105351/HHRG-114-IF16-20160922-SD008.pdf.
MODERNIZING THE TELEPHONE CONSUMER PROTECTION ACT
----------
SEPTEMBER 22, 2016
House of Representatives,
Subcommittee on Communications and Technology,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 11:00 a.m., room
2322, Rayburn House Office Building, Hon. Greg Walden (chairman
of the subcommittee) presiding.
Present: Representatives Walden, Latta, Shimkus, Blackburn,
Lance, Guthrie, Pompeo, Bilirakis, Long, Collins, Eshoo, Doyle,
Welch, Clarke, McNerney, and Pallone (ex officio).
Also Present: Representative Schakowsky.
Staff Present: Rebecca Card, Assistant Press Secretary;
Gene Fullano, Detailee, Telecom; Kelsey Guyselman, Counsel,
Telecom; Grace Koh, Counsel, Telecom; David Redl, Chief
Counsel, Telecom; Charlotte Savercool, Professional Staff,
Communications and Technology; Dan Schneider, Press Secretary;
Gregory Watson, Legislative Clerk, Communications and
Technology; Jeff Carroll, Minority Staff Director; David
Goldman, Minority Chief Counsel, Communications and Technology;
Elizabeth Letter, Minority Professional Staff Member; Jerry
Leverich, Minority Counsel; Lori Maarjberg, Minority FCC
Detailee; Dan Miller, Minority Staff Assistant; Matt
Schumacher, Minority Press Assistant; and Andrew Souvall,
Minority Director of Communications, Outreach and Member
Services.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. We will call to order the subcommittee on
Communications and Technology and welcome our witnesses here
today. We look forward to your participation in this hearing.
We are here today to talk about modernizing the Telephone
Consumer Protection laws. As you all know, it has been 25
years, 25 years, quarter of a century since Congress passed the
Telephone Consumer Protection Act. And I don't have to tell you
the world has changed pretty dramatically in that time period.
Back in '91, virtually everybody had a landline, and that is
what they used to call each other on. Today, half of U.S.
households or thereabouts have become wireless-only,
eliminating their landline phones entirely. And there are more
cell phones than people in the United States.
Current law is not reflective of these incredible
technological changes in our culture. Despite an extraordinary
number of lawsuits over the years, calls and texts from bad
actors continue to happen. Clearly, this approach isn't a
deterrent to those who place harassing, malicious calls. We all
share the goal of preventing harmful phone calls, but it is
increasingly clear that the law is outdated and, in many cases,
counterproductive. We will hear about that today from our
witnesses.
The attempts to strengthen the TCPA rules have actually
resulted in a decline in legitimate informational calls that
consumers want and need. The FCC has granted narrow exceptions
to specific industries in attempts to clear up ongoing
uncertainty, but the number of petitions still pending before
the Commission demonstrate that it is time to examine how
effective this approach has been.
Industries across the board have real needs to communicate
with their customers in a positive and beneficial way, and
today we will hear from those whose daily operations have been
impacted by this 25-year-old law. We have a public utility co-
op from Georgia that needs to inform their customers of
neighborhood tree maintenance, for example, and ways to reduce
their energy footprint during peak energy consumption periods.
We will also hear from a managed health care provider that
is seeking clarification to be able to provide critical
information to patients to help lower the cost of their health
care. And these folks, like many others, struggle with how to
serve the needs of the consumers and the economy with the lack
of clarity in the current law.
I heard from a staffing company that operates in Oregon and
in my district that connects blue-collar workers to temporary,
short-term job opportunities. It used to be these workers would
have to sit around the waiting room all day waiting to hear if
a job that met their skill set was available. The company
figured a way to use technology to improve the lives of these
people, the company instead used text messages to communicate
with workers when a job that matched their skill set is
available. That gave the people looking for the jobs the
opportunity to continue with the rest of their lives rather
than sitting around a waiting room, while still finding the
chance to work, which sounds great and efficient and kind of
the modernization of the workplace we all expect today.
Unfortunately, the 25-year-old law, TCPA, they were smacked
with a lawsuit for their efforts. For a business like this, a
massive class-action lawsuit could actually mean bankruptcy.
So I think we can all agree there is a big difference
between the call fraudulently purporting to be the IRS and a
legitimate reminder from the doctor's office of an upcoming
appointment or a job agency of a temporary job now available.
This is the critical distinction we need to recognize in order
to strike the correct balance.
How can we protect consumers from the harassing, spoofed
calls they do not want to receive--none of us do--while at the
same time ensuring they do receive the legitimate calls that
improve quality of life? What are the solutions out there that
can be used to determine the differences, and are there changes
to the law that would actually help consumers?
I want to thank my Democratic colleagues for requesting
this hearing and all of our members for the commitment to a
productive conversation about taking a look at a 25-year-old
law.
Just yesterday, the full committee passed the Anti-Spoofing
Act in a bipartisan manner, legislation prohibits bad actors
from deliberately manipulating a text message number for
illegal purposes. Spoofing is a major component of the robocall
problem, but just one piece of this complicated puzzle. There
is no silver bullet here to solve the problem of unwanted
calls, but if there are legislative changes that will protect
our constituents, we owe it to them to make every effort to
mitigate the problem. So I hope the momentum from our
accomplishments yesterday can carry on to our efforts today to
work toward the shared goal of protecting consumers from
illegal phone calls.
We have a unique set of perspectives here today that I hope
will guide us through a productive discussion. From a professor
who has studied the law extensively, to a couple of businesses
concerned about violating the law while trying to providing
their services, and those who have been developing technical
solutions to these issues at stake; this hearing should set the
stage for a constructive consideration about protecting
consumers in this new technological era.
So I thank our witnesses for being here and our members and
look forward to the discussion we are going to have today.
[The prepared statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
We are here today to talk about modernizing the telephone
consumer protection laws. It has been 25 years since Congress
passed the Telephone Consumer Protection Act, and the world has
changed dramatically since then. When the law was signed back
in 1991, consumers relied primarily on landline phones to
communicate, but today almost half of U.S. households have
become ``wireless-only,'' eliminating their landline phones
entirely, and there are more cell phones than people in the US.
The current law is not reflective of these technological
advances. Despite an extraordinary number of lawsuits over the
years, calls and texts from bad actors continue to happen-
clearly this approach isn't a deterrent to those who place
harassing, malicious calls. We all share the goal of preventing
harmful phone calls, but it is increasingly clear that the law
is outdated and in many cases, counter-productive. The attempts
to strengthen the TCPA rules have actually resulted in a
decline in legitimate, informational calls that consumers want.
The FCC has granted narrow exceptions to specific industries in
attempts to clear up ongoing uncertainty, but the number of
petitions still pending before the Commission demonstrate that
it's time to examine how effective this approach has been.
Industries across the board have real needs to communicate
with their customers in a positive and beneficial way, and
today we'll hear from those whose daily operations have been
impacted by the TCPA. We have a public utility co-op from
Georgia that needs to inform their customers of neighborhood
tree maintenance and ways to reduce their energy footprint
during peak energy consumption periods. We'll also hear from a
managed healthcare provider that is seeking clarification to be
able to provide critical information to patients to help lower
the cost of health care. These folks, like many others,
struggle with how to serve the needs of their customers and the
economy with the lack of clarity in the law.
I heard from a staffing company that operates in my
district that connects blue-collar workers to temporary, short-
term job opportunites. It used to be that those workers would
have to sit around the waiting room of a staffing agency all
day, waiting for a job to come up, or not. Thanks to
technological advances, this company instead uses text messages
to communicate with workers when a job that matches their skill
set is available, giving the workers the opportunity to
continue with their lives while still having the chance to find
work. Sounds great, right? Unfortunately, thanks to the TCPA,
they were smacked with a lawsuit for their efforts. For a
business like this, a massive class-action lawsuit could mean
bankruptcy.
I think we can all agree that there is a big difference
between the call fraudulently purporting to be the IRS and the
legitimate reminder from the doctor's office of an upcoming
appointment. This is the critical distinction we need to
recognize in order to strike the right balance. How can we
protect consumers from the harassing, spoofed calls they do not
want to receive, while at the same time ensuring that they do
receive the legitimate calls that improve their quality of
life? What are the solutions out there that can be used to
determine the difference and are there changes to the law
needed to bring them to consumers?
I want to thank my colleagues on the Democratic side for
requesting this hearing and for all of our members for the
commitment to a productive conversation about modernizing an
outdated law. Just yesterday, the full committee passed the
Anti-Spoofing Act in a bipartisan manner, legislation that
prohibits bad actors from deliberately manipulating a text
message number for illegal purposes. Spoofing is a major
component of the robo-call problem, but just one piece of this
complicated puzzle. There is no silver bullet to solve the
problem of unwanted calls, but if there are legislative changes
that will protect our constituents, we owe it to them to make
every effort to mitigate the problem. I hope the momentum from
our accomplishment yesterday can carry on through our efforts
today to work towards the shared goal of protecting consumers
from illegal phone calls.
We have a unique set of perspectives here today that I hope
will guide us through a productive discussion. From a professor
who has studied the law extensively, to businesses concerned
about violating the law while providing their services, and
those who have been developing technical solutions to these
issues at stake; this hearing should set the stage for a
constructive consideration of protecting consumers in a new
technological era. I thank all of our witnesses for being here
and I look forward to hearing your testimony.
Mr. Walden. And I will yield back the remaining 3 seconds
of my time and recognize my friend from California, Ms. Eshoo,
for her opening comments.
Ms. Eshoo. Thank you, Mr. Chairman----
Mr. Walden. But before I do, could I ask unanimous consent
to insert into the record a letter from the Indiana Attorney
General Greg Zoeller, a letter from the National Association of
Federal Credit Unions, a letter signed by several consumer
groups, a statement from several banking associations, along
with the very, very distinguished paper from our professor
today and from 2014, the Telephone Consumer Protection Act of
1991: Adapting Consumer Protection to Changing Technology. \1\
Without objection, we will enter those into the record.
[The information appears at the conclusion of the hearing.]
---------------------------------------------------------------------------
\1\ The information has been retained in committee files and is
also available at: http://docs.house.gov/meetings/IF/IF16/20160922/
105351/HHRG-114-IF16-20160922-SD008.pdf.
---------------------------------------------------------------------------
Mr. Walden. Now, I recognize my friend from California.
OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Eshoo. Thank you, Mr. Chairman. Good morning, everyone.
Welcome to the witnesses.
There is one issue that I hear consistently about from my
constituents, and that is the need to put an end to unwanted
phone calls. Whether I am in the grocery store--now, I am going
grocery shopping late at night so that I can just get it done
quickly because, people see me, recognize me, and this is what
they come up to me to talk about. And they are 40,000 feet and
climbing over it. Their sleep is interrupted. The day doesn't
belong to them. It is a consistent form of harassment the way
they view it. For many seniors, there are many scams, and they
are susceptible to them.
So this barrage of unwanted calls using auto-dialers and
prerecorded messages, they are disruptive to say the least and
they really are intrusive. And I can speak for myself when I
get them because I consider my home my oasis, and I can't stand
hearing from these people.
Now, how bad is the problem? Obviously, from what I have
said, it is pretty bad. And estimates have found that robocalls
make up nearly 35 percent of calls that consumers receive
today. And it keeps climbing. The robocall blocking service
YouMail tracked the number of robocalls made last month, August
of this year alone, and found that there were 2.64 billion with
a B. We usually talk about dollars with a B, these calls. That
is a 9 percent increase over the previous month of July of this
year. And that is just one month's worth of robocalls, so it is
no wonder that these kinds of calls are the number-one source
of consumer complaints at the FCC.
Now, Congress sought to address this 25 years ago, a
quarter of a century ago, by passing the Telephone Consumer
Protection Act, the TCPA. At that time the law put important
protections in place to restrict the use of technology used to
place robocalls. We took other steps to crack down on unwanted
calls, including the passing of the Do Not Call list. That
worked for a long time. People were really thrilled with it.
And I was proud to be a cosponsor of that effort. So the TCPA
was, for a long time, an effective way to limit the number of
unwanted calls.
Now, the FCC, I think, has done its best to implement the
law in a way that keeps pace with today's practices. But the
law, along with the technologies that were embedded in it or
referred to, have aged in plenty of ways. And it is up to us
and I think it is very clear to us that it is time to start
thinking about how we can update the TCPA to better protect
consumers. And it is exactly why Ranking Member Pallone,
Congresswoman Jan Schakowsky, and I called for a hearing on
this. And thank you, Mr. Chairman, all our thanks on behalf of
our constituents that we are doing this today.
Now, there are a number of issues for us to consider as we
examine the TCPA. For instance, does the FCC and the FTC have
the tools they need to effectively enforce the law? Well, we
are going to examine that. Are intentional violations
sufficiently punished under the current structure of the law?
We have come to a time and a place in our country where people
break the law and then they settle with the regulators, and no
one is punished really for anything. And that is a great source
of frustration to people, and I don't think it is fair. How do
we target calls from overseas? This is a big thing because so
much is coming from overseas that can result in fraud.
So I look forward to hearing from the witnesses.
And I think one thing Congress should not be doing is
passing more exemptions to the TCPA. The 2015 Budget Act
contains an exemption allowing robocalls for Federal debt
collection, including calls to cell phones. So I am glad that
the FCC put some limits on that exemption, but the fact remains
that we still--and our constituents most importantly, people
across the country--are asking us for more protection, not more
loopholes. And I think we have to keep our eye on that ball,
too, Mr. Chairman.
So, again, thank you for holding this hearing today, and I
look forward to hearing from today's witnesses and some solid
suggestions about how we can actually update the TCPA to
eliminate these issues that are plaguing all of our
constituents.
Thank you, and I yield--I have no time to yield back. Thank
you.
Mr. Walden. The gentlelady yields back.
The chair recognizes the vice chair of the subcommittee,
Mr. Latta.
Mr. Latta. Well, thank you, Mr. Chairman, and thanks for
holding today's hearing. The Telephone Consumer Protection Act
is clearly outdated and needs to be reformed to accommodate
current technological challenges. It is not reasonable to
govern communications based off technology available in 1991.
While it is essential we continue to protect consumer privacy,
we must find the right balance between consumer rights and
expectations and allowing institutions to provide information
to their customers.
Additionally, we must recognize the importance of
distinguishing the content of communications on modernizing
this act. Our goals should be to deter the bad actors and not
punish businesses and organizations with the best of
intentions.
The FTC has attempted to modernize the TCPA. However, these
reforms have not necessarily made the law better and it still
remains far from perfect. In fact, the broad interpretation of
the FTC's definition of auto-dialer is concerning as it creates
greater uncertainty for consumers and companies.
Today's hearing will provide robust conversation and ideas
on how to best update the TCPA, and consumers' privacy needs to
be protected and businesses need an avenue to inform and
communicate with their customers.
And with that, Mr. Chairman, I yield back.
Mr. Walden. The gentleman yields back.
Any others seeking time?
Then we will go to Mr. Pallone, the ranking member of the
full committee, for opening comments.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you.
If you think you are getting more robocalls than ever, you
are probably right. Just this past month, a record 2.6 billion
robocalls flooded our cell phones, work phones, and home
phones. And these calls are more than just a nuisance; they can
add up to harassment or even outright fraud.
When Congress first passed the Telephone Consumer
Protection Act 25 years ago, we stated that consumers were
already ``outraged over the proliferation of intrusive nuisance
calls their homes.'' Back then, we sought to balance individual
privacy rights, public safety interests, and commercial
freedoms of speech and trade. And for a time, the law worked.
Unfortunately, a little over a decade later, these nuisance
calls were on the rise again, but this time the calls did not
only cause a nuisance, many of them sought to defraud
consumers. According to the FTC, consumer complaints of
unwanted telemarketing calls increased over 1,000 percent
between '98 and 2002. Congress stepped in once more to stop
this dramatic surge in calls, and we required the FTC to create
a Do Not Call Registry, among other things, again turning back
the tide of unwanted calls.
But almost like clockwork, however, nuisance calls were
rebounding again nearly a decade later. Robocalls were finding
new ways to circumvent the system, and the law simply wasn't
keeping up.
The FCC tried to reduce these robocalls, but they keep
coming. By 2012, the FCC was receiving an average of over
10,000 complaints per month from mobile phones alone, and that
number has only continued to grow to a point where last year,
the FCC received more than 170,000 robocall and telemarketing
complaints.
So last month, the FCC convened a new Robocall Strike Force
hoping to leverage the industry in the FCC's ongoing effort,
and I commend the Commission for working so diligently to
address this issue. But the fact that the FCC's actions are not
reducing the number of robocalls demonstrates that it is time
for Congress to once again step in.
So I urge the strike force to continue to look for
technical and regulatory solutions to this problem, but
Congress has a role as well. So that is why I joined Ranking
Member Eshoo and Schakowsky last month in asking that the
committee hold a hearing on updating the TCPA. Our constituents
are rightfully growing impatient with these calls, and they
expect us to fix the problem.
And I appreciate that Chairman Walden agreed to our request
for this hearing, and I also want to thank the phone carriers
for offering to work with us to address this problem. It is not
a moment too soon, and we all need to work together to solve
it.
Now, we acted to protect consumers in '91 and 2003. Now, 13
years later, we should again put the FTC and the FCC back on
firm footing so they can step up to protect consumers from
these annoying and so often dangerous called.
And again, I want to thank our witnesses, and I yield the
balance of my time to Ms. Schakowsky.
Ms. Schakowsky. I am so grateful for the opportunity to
join you today. I thank Ranking Member Pallone for yielding
time to me.
As has been mentioned, last month, I joined Ranking Members
Eshoo and Pallone to request a hearing on updating the
Telephone Consumer Protection Act for the 21st century. This
year marks the 25th anniversary of TCPA. Congress has made some
updates over that time such as the Do Not Call Registry, but
the law is beginning to show its age.
Consumer complaints about unwanted calls are on the rise. I
think Ranking Member Eshoo really described what all of us are
hearing. I have heard from many constituents in recent months
trying to stop robocalls. I have received many on my cell
phone. We need to close loopholes and improve enforcement
tools.
My Democratic colleagues and I have introduced many bills
to protect consumers as they use their phones. For instance, I
introduced the Protect Consumers from Phony Pay Charges Act in
June to stop telephone companies from including unauthorized
charges on phone bills. Until we act on such improvements, we
are going to continue to see family meals disrupted, fraudsters
exploiting seniors, consumers subjected to unwanted charges.
And it is time to reform TCPA.
I am going to apologize that I have to leave in a moment
because the Consumer, Manufacturing, and Trade Subcommittee, on
which I am the ranking Democrat, is also having its hearing
right now. But that said, I hope this is just the beginning of
this discussion and that we will have the opportunity for joint
hearings with this subcommittee and the CMT in the future.
The Federal Trade Commission and Federal Communications
Commission frequently work together on these issues and the
subcommittees with jurisdiction over those agencies should as
well.
So I thank the opportunity to be here this morning, and I
yield back.
Mr. Walden. All time has been consumed. I will now go to
our witness panel. And again, thank you all for being here this
morning.
And our first witness is Michelle Turano--we appreciate you
being here--Vice President, Government Affairs and Public
Policy for WellCare. Good morning.
Ms. Turano. Good morning.
Mr. Walden. Pull that microphone fairly close. Make sure
the light is on on the base there, and you are good to go.
STATEMENTS OF MICHELLE TURANO, VICE PRESIDENT, PUBLIC POLICY
AND GOVERNMENT AFFAIRS, WELLCARE HEALTH PLANS; SHAUN MOCK,
CHIEF FINANCIAL OFFICER, SNAPPING SHOALS ELECTRIC MEMBERSHIP
CORPORATION; SPENCER WEBER WALLER, PROFESSOR AND DIRECTOR,
INSTITUTE FOR CONSUMER ANTITRUST STUDIES, LOYOLA UNIVERSITY
CHICAGO; AND RICHARD SHOCKEY, PRINCIPAL, SHOCKEY CONSULTING
STATEMENT OF MICHELLE TURANO
Ms. Turano. Thank you. Mr. Chairman, Representative Eshoo,
Ranking Member Pallone, members of the committee, I am Michelle
Turano, vice president of Public Policy and Government Affairs
for WellCare Health Plans. Thank you for your invitation to
appear today.
We fundamentally agree with the premise of this hearing
that we need to minimize nuisance and unsolicited phone calls
while ensuring laws and regulations keep pace with the
evolution of telecommunications technology. We also share the
goal of maintaining privacy, consistent with strict Federal
standards such as under the Health Insurance Portability and
Accountability Act, or HIPAA.
Let me begin by telling you a little bit about WellCare.
Headquartered in Tampa, Florida, WellCare focuses exclusively
on providing government-sponsored managed health care through
Medicare Advantage, Medicaid, and Medicare prescription drug
plans to families, children, seniors, and individuals with
complex medical needs.
Our members tend to be vulnerable older or disabled
Americans with limited access to resources who are often
transitory and rely heavily on cell phones versus a dedicated
landline, which underscores the need for laws and regulations
to be updated to reflect cell phone use.
I would like to be clear. Our communications with these
members is for the purpose of sharing health care information,
not for sales and not for marketing. WellCare has statutory and
contractual mandates from Federal and State governments to
serve our members. Communication with our members to coordinate
and assist with care often requires the use of a cell phone. In
many cases, we receive an enrollee's contact information via
the State or Federal Government.
Beneficiaries can be randomly assigned to WellCare and
might not apply to us directly. Sometimes we have no way of
verifying if the number provided to us is a cell phone or a
landline, yet we are still required to contact them.
State Medicaid contracts require WellCare to make telephone
contact with members for health-related purposes. For example,
Florida requires outreach to enrollees within 30 days to
complete a health risk assessment. Georgia requires outreach to
parents with newborns within 7 days to inform them of certain
health services. These are not marketing calls but are directly
tied to providing critical care to our members and making the
best and most efficient use of taxpayer dollars.
The uncertainty surrounding the FCC's interpretation of the
TCPA has had a chilling effect on the ability of WellCare and
other managed health care plans to conduct this kind of
outreach to members. This adds cost while reducing efficiency
and negatively affects the health of our members.
While the TCPA serves an important privacy-enhancing
purpose, the FCC's interpretation does not acknowledge that
there is comprehensive regulation of the use of protected
health information by HIPAA that governs not only treatment,
payment, and health care operations messages but severely
restricts marketing communications.
Recent interpretations of the TCPA could be read to provide
that companies like WellCare cannot conduct automated outreach
to a cell phone to deliver a health care message unless the
calling party can also prove prior express consent, a
requirement that the HIPAA privacy rule expressly does not
require. These are the exact same phone calls that health care
providers like doctors and pharmacies can make today. But the
FCC has excluded managed health care firms from making these
same sorts of calls.
WellCare and others recently petitioned the FCC seeking
clarification around the use of member telephone numbers under
the TCPA compared to the use of the same information under
HIPAA. In doing so, we are hoping the Commission will protect
non-telemarketing calls allowed under TCPA in light of their
unique value to and acceptance by consumers and do so in an
expedited manner.
Legislatively, it would be helpful if Congress could
clarify that the provision of a phone number to a HIPAA-covered
entity or business associate constitutes prior express consent
for health care communications to that number. The TCPA's
protection of a consumer's right to control unwanted calls
would still be respected by allowing the consumer to revoke
that consent at any time.
In closing, I want to reiterate that the health and well-
being of our enrollees is WellCare's top priority. We need to
work together and we look forward to working together with this
committee and Congress on modernizing the TCPA.
Thank you for your invitation to testify, and I look
forward to answering your questions.
[The prepared statement of Michelle Turano follows:]
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Mr. Walden. Thank you, Ms. Turano. That was very helpful
testimony as we look at this law and the consequences out in
the real world.
We will go now to Mr. Shaun Mock, who is chief financial
officer of the Snapping Shoals Electric Membership Corporation.
Mr. Mock, welcome. Thanks for being here. We look forward
to your counsel.
STATEMENT OF SHAUN MOCK
Mr. Mock. Thank you for the opportunity to address this
committee regarding the impacts of the Telephone Consumer
Protection Act on my electric cooperative, Snapping Shoals EMC.
We are a nonprofit, consumer-owned co-op headquartered in
Covington, Georgia, where we provide electric service to about
97,000 mostly residential members southeast of Atlanta.
Snapping Shoals has a proud tradition of member service and
innovation. We constantly strive to improve our services not
because of earnings targets but rather to improve the lives of
our members.
Our members of the 21st century expect and demand
uninterrupted electric service, along with a host of modern
communication tools. In recent years, our ability to
communicate with our members has been stymied by the
uncertainty surrounding existing TCPA regulations. Like most
complicated matters, the existing regulations are neither all
good nor all bad.
We are absolutely in favor of protecting our members from
unwanted communication. However, we are also in favor of
removing undue liability found within the confines of the
existing regulation. Our industry welcomed recent FCC rulings
when the Commission recognized the importance of timely utility
notifications. However, these orders did not go far enough in
patching up the increasingly archaic regulations associated
with existing law.
Beginning in 2010, Snapping Shoals offered a prepaid
electric program that now serves over 11,000 residential
members. This program allows members to take control of their
electricity usage much the same pay-as-you-go manner as fueling
up the family car. In addition, there are no up-front deposits
and no disconnect or reconnect fees.
Upon consent, members are provided with low-balance and
disconnect notifications. Most members establish a default low
balance, which becomes the notification threshold once active.
Timely information is vital to providing these members with a
member-friendly program.
Since launching the program, we have learned that our
prepaid membership needs are very different than traditional
members. We have found that not only does the typical prepaid
member use less electricity but will also paid towards their
electric balance at least five times each month.
In short, prepaid members are more engaged with our co-op
on a daily basis and require more up-to-date information than
traditional members. We have found that our low-income
populations are more likely to choose our prepaid billing
option. This fact is especially relevant when we consider that
liability concerns over current TCPA regulations prompted
Snapping Shoals to discontinue all automated telephone
notifications in June 2014.
In late 2013, Snapping Shoals faced legal action alleging
improper unsolicited phone calls under the strict liability
portion of the TCPA statute. Although the case has since been
resolved, Snapping Shoals made substantial negative changes to
our member notification offerings as a result of this
complaint.
The mobile number at issue was provided by a prepaid member
upon establishing service. The member provided consent and
verified the phone number at least seven times through a series
of member-initiated phone calls. Without our knowledge,
sometime in late 2011, our member changed phone numbers but
continued to receive electric service at the original address
while also receiving almost daily email and phone low-balance
notifications until disconnecting service in April of 2013.
Daily notifications sound excessive but reflects the member's
practice of paying small amounts, often daily, to maintain the
lowest balance possible.
Unfortunately, our original automated phone system did not
allow for the member to simply opt out from within the phone
call. Our automated systems were in their infancy, and we
acknowledged that these systems should be improved and have
continued to work with our service providers to develop a more
robust member solution.
The prepaid billion program at Snapping Shoals was
certainly not the first within our industry, but the rapid
growth of our program meant that we would be one of the first
to experience the growing pains associated with reassigned
phone numbers. At best, the FCC has offered a patchwork of best
practices intended to protect members and reduce liability
concerns. However, the strict liability provisions within the
statute leave no room for reasonable application of the law
that would reflect the modernization of communication.
By June of 2014, our co-op reluctantly made the unpopular
decision to discontinue all automated phone notices. Every
attempt was made to notify our members of the change in hopes
of avoiding any unnecessary service interruptions. Despite our
best efforts, we still receive numerous complaints from angry
members that had grown to depend on these phone notifications.
The only remaining channel to safely and effectively
communicate with our members is through email. Unfortunately,
e-mail-only notifications can exclude a large portion of our
membership who do not have Internet-connected devices or
reliable Internet service. We need help from Congress and the
FCC to mitigate concerns over costly and burdensome TCPA
litigation for businesses like Snapping Shoals EMC.
This hearing is a great first step, and I look forward to
taking your questions today and working with you to improve the
TCPA moving forward.
[The prepared statement of Shaun Mock follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. Thank you, Mr. Mock. We appreciate the
testimony, and sorry for what you all have gone through as a
result of current status of this law.
We will go now to Mr. Spencer Waller, interim associate
dean for Academic Affairs and professor at Loyola University
Chicago and director of the Institute for Consumer Antitrust
Studies.
Mr. Waller, thank you for being here. We look forward to
your testimony.
STATEMENT OF SPENCER WEBER WALLER
Mr. Waller. Thank you very much. Chairman Walden, Ranking
Member Eshoo, and other members of the subcommittee, I
appreciate the chance to be here today and discuss with you the
important issues raised regarding the continued effectiveness
of the TCPA and appropriate proposals for its reform. I thank
you for also including our 2014 study of the TCPA in the record
of these hearings.
The only thing I would emphasize is that I am here in my
individual academic capacity and that our institute is
nonpartisan. We don't take positions in individual cases.
As I said, my comments are drawn from that 2014 study, and
as the committee is aware, in the late 1980s, spurred by
advances in technology, the telemarketing industry began to
aggressively seek out consumers by the hundreds of thousands.
They were able to do so as a result of then-technological
advances involving robocalls, prerecorded messages, automatic
dialing, and the development of what was then the fax machine.
Consumers and businesses became overwhelmed with
unsolicited telemarketing calls and fax advertisements. Calls
for action grew louder. States enacted laws but could not reach
the interstate aspects and international aspects of
telemarketing. And after reviewing and debating 10 different
pieces of legislation, Congress ultimately enacted the TCPA
that we are here to talk about.
And the TCPA was borne out of abusive telemarketing
practices, made more invasive by the technology of that time.
And since 1991, Congress has enacted other statutes relevant to
the discussion of the TCPA, some of which have already been
mentioned today.
The original purpose of the TCPA was to regulate certain
uses of technology that were abusive, invasive, and potentially
dangerous and also to some extent cost-shifting to the
consumers. And the TCPA effectively regulates those abuses by
prohibiting certain technologies altogether, rather than
focusing specifically on the content of the messages being
delivered.
And the expansion of the TCPA into areas outside of
marketing and new technologies such as text messaging and cell
phones over the years is consistent with its original purpose.
On the enforcement side under the current scheme, private
parties are largely responsible for the TCPA and have done so
primarily through the class-action mechanism. This is in part
due to the small statutory damages for any single plaintiff
under the TCPA and the lack of statutory attorneys fees except
through the class-action mechanism.
And while this aspect of private enforcement has drawn some
criticism because of the potential for large total damages
faced by certain defendants, the threat of class actions has
also provided significant direct and indirect deterrence to
violators and is the only meaningful source of potential
compensation to victims of TCPA violations.
Historically, the Federal Government, through the FCC, has
only enforced the TCPA directly against violators to a limited
extent, and yet the statute has been relatively successful in
reducing the conduct it was enacted to regulate.
Obviously, technology continues to evolve rapidly, and
there are a number of trends that are emerging. The number of
entities that are operating in intentional disregard of the
TCPA are growing, and they are using more sophisticated
technology to evade detection and enforcement.
According to the Federal Trade Commission, about 59 percent
of phone spam cannot be traced or blocked because the calls are
routed through ``a web of automatic dialers, caller ID
spoofing, and voiceover-Internet protocols.''
Although the traditional scheme of TCPA enforcement, with
its strong reliance on private rights of action, has been
successful in the past, two main issues are becoming clear. The
private right of action is limited in terms of its ability to
deter actions of intentional violators, and FCC direct
enforcement through forfeiture proceedings is limited by its
slow processes, limited resources, and limited remedies.
So in order for the TCPA to continue to remain relevant and
effective going forward, our report from 2014 makes the
following recommendations: We recommended increasing government
enforcement of the TCPA by providing State attorneys general
with a larger incentive to bring TCPA cases and also
authorizing the FTC to bring enforcement actions under the
TCPA. It is involved in the enforcement of obviously portions
of the laws relating to abusive telemarketing and is also the
prime enforcer of most of our country's consumer laws, and we
think they are better able to tackle this problem in concert
with the FCC.
We also recommended increased uniformity of the application
of the TCPA by encouraging more frequent and quicker FCC
rulemakings, focus more on the definition of terms and
ambiguities in the law, less so with respect to carve-outs and
exemptions for individual industries and actors.
We hope to continue to protect cell phones by requiring
express prior consent for any communication by call or text
made to a cell phone. And we have other recommendations
relating to the junk fax portion of the TCPA, which may also be
of interest to the committee.
We oppose efforts to remove or otherwise modify the private
right of action in view of its importance in the enforcement of
the statute, and we support placing increased restrictions both
through law and through technology on entities that seek to
manipulate caller ID.
These recommendations and other issues are discussed more
fully in our report. And I thank you for your time, and I am
happy to answer any questions.
[The prepared statement of Spencer Weber Waller follows:]
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Mr. Walden. Thank you very much for your testimony.
I will now go to our final witness, Mr. Richard Shockey,
principal at Shockey Consulting. We are delighted to have you
here, sir. Please go ahead.
STATEMENT OF RICHARD SHOCKEY
Mr. Shockey. Chairman Walden----
Mr. Walden. Be sure to push the button on your microphone
there. There we go.
Mr. Shockey. There we go. Chairman Walden, Ranking Member
Eshoo, and members of this committee, thank you for the
opportunity to speak with you today.
My name is Richard Shockey, and I am a consulting
telecommunications engineer by profession advising
telecommunications companies, their supplier community, the
investment community, and actually other national governments
on any number of issues related to our communications networks.
I am also the chairman of the board of the SIP Forum. SIP,
or the Session Initiation Protocol, is the fundamental Internet
building block by which all modern voice communications
networks in the United States are designed around, including
those deployed by cable, enterprises, including the Congress I
might add, and advanced residential networks.
I am only speaking for myself here and none of the other
members of the SIP Forum, et cetera, et cetera.
I have been a working member of the Internet Engineering
Task Force for over 15 years, and I currently serve on the
FCC's North American Numbering Council, and I have previously
served on the FCC's Communications Security, Reliability, and
Interoperability Council.
I am here to discuss many of the technical issues involving
TCPA, robocalls, caller-ID spoofing, which are interrelated
with each other and inter-tangled with each other. This
committee is clearly aware of the new Robocall Strike Force.
Though I am not a member of the strike force, I am intimately
aware of the work the engineering community is contributing to
that effort and happy to share it with you.
I look forward to answering your questions.
[The prepared statement of Richard Shockey follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Walden. All right. Thank you very much. And you win the
prize for the shortest testimony. We appreciate all our
panelists here and for what you have shared.
I have got a couple of questions that came my way.
Obviously, we all don't want the unwanted robocalls, the
spoofing, all of those things, but I keep getting asked what is
a robocall? What is an auto-dial call? And, Mr. Waller, maybe
you can help because I haven't been able to get a definitive
answer that if I pick up this device called a mobile phone and
in the address book push a number, it auto-dials. Some would
argue that constitutes an auto-dial, a robocall. If I manually
dial the number, some would argue, well, that gets around it,
but others say not necessarily because the device is capable of
doing that. Do you believe there is clarity in the law on this
matter, and if so, which is it?
Mr. Waller. Mr. Chairman, it is a good question. I would
have to go back and look carefully, particularly at the 2015
FCC omnibus rulings to see what their current position is and I
don't have that at the tip of my tongue.
Mr. Walden. All right.
Mr. Waller. I would certainly take the position, I think,
that manual-dial call on a device is a manual-dial call and
would not be captured by the auto-dial----
Mr. Walden. Because one of the other issues that comes up
is if you have a list of customers in a system and you need to
communicate with them, does it really in today's technology
make sense that you have to hire people to manually punch in a
number that otherwise could come down and mechanically be
dialed. That is treated as a robocall because it is auto-
dialed, right?
Ms. Turano, you seem to be agreeing with me on this point.
Is this something you all have run into? Mr. Mock?
Ms. Turano. You are right. I am nodding over here.
Mr. Walden. Why?
Ms. Turano.I appreciate the question and I think there is
an important distinction is because frankly of the cost related
to those types of calls. For us to hire an employee to make
manual phone calls, depending on the length of the call, it
could be anywhere between $6 to $10. If it were an auto-dialed
call, it could be anywhere between 35 to 65 cents. And so those
are funds that could otherwise----
Mr. Walden. And you are allowed to make that call one way
or the other, right? If you have permission into the cell phone
and to use a cell phone number, then you can do the auto-dial?
You could use technology like we all do with our--anybody have
an address book with phone numbers? Anybody really know phone
numbers anymore? Do you still go around in the wheel? I don't
think so, right?
Ms. Turano. Right, the----
Mr. Walden. But this antiquated law makes you do that,
doesn't it?
Ms. Turano. It distinguishes between a landline and a cell
phone, yes.
Mr. Walden. All right. Mr. Mock, what have you run into in
that respect?
Mr. Mock. Well, certainly, from Snapping Shoals'
standpoint, we operate at cost for our members, and any
additional manual processes that are added ultimately would
have to be passed along through our electric rates onto our
members.
Just to give the committee an idea of volume and our issue
with prepaid----
Mr. Walden. Right.
Mr. Mock [continuing]. Particularly highlights the volume
of phone calls. But Snapping Shoals' 11,000 prepaid consumers
in August of 2011 received in excess of 220,000 low-balance
notifications. That is 23 notifications per member per month.
Mr. Walden. Now, some people might say that is too much; I
don't want that.
Mr. Mock. I would absolutely agree, but we are dealing with
a population that will quite literally pay $5 and $10 towards
their electric account every single day. And so as we maintain,
say, a $20 minimum balance and as that balance goes below $20,
the member pays $10, that may only buy them a few days. In some
cases with the lower payments, these members are receiving
phone calls day after day after day and to have a small
business such as ours place that volume of phone calls just
simply is not feasible cost-wise or----
Mr. Walden. Are these calls your consumers actually want?
Mr. Mock. Absolutely. Since----
Mr. Walden. What happens if they fall behind? Does their
power get cut off? And what does that cost them if that
happens?
Mr. Mock. Because they are a prepaid member, there are no
additional fees. At this point, once the balance falls below
zero, the meter automatically disconnects. Once they make a
payment, automatically comes on.
Mr. Walden. All right.
Mr. Mock. Outside of the prepaid program, we have also
experienced some difficulty with our regular consumers. Just a
simple phone call for a member of 20 years goes out of town for
5 or 6 weeks, forgot to pay the bill before he left----
Mr. Walden. Right.
Mr. Mock [continuing]. Paid a little extra as a matter of
fact but not quite enough, he comes home to a house with thawed
freezers, ruined floors, and in conversations, he simply wanted
a phone call. Prior to June of 2014, he would have received a
phone call.
Mr. Walden. But because of the class-action lawsuits or
whatever else----
Mr. Mock. Absolutely, and----
Mr. Walden [continuing]. You have backed off doing that?
Mr. Mock. We have a strong practice of verifying phone
numbers at every opportunity.
Mr. Walden. Right.
Mr. Mock. And for us, the issue of reassigned phone numbers
and the volume particularly that can stack up with a reassigned
phone number is really where our----
Mr. Walden. All right.
Mr. Mock [continuing]. Material concern is.
Mr. Walden. I wish I had more time. I would pursue that
course because that is the next----
Mr. Mock. Thank you.
Mr. Walden [continuing]. Big issue on my list. But we will
go now to the gentlelady from California, Ms. Eshoo.
Ms. Eshoo. Thank you, Mr. Chairman, and thank you to the
witnesses.
I think what I would like to do is just ask a
straightforward question of three out of the four of you. Mr.
Waller, you made recommendations of what you thought we should
do, and that is most helpful. So one or two sentenced, Ms.
Turano. What do you recommend that we do to address what we are
here for?
Ms. Turano. Sure. Thank you.
Ms. Eshoo. What is your top recommendation, quickly?
Ms. Turano. Thank you. My top recommendation has to with a
reconciliation comparing the language within TCPA and certain
language within HIPAA. They are both statutes that govern this
practice and the Medicare Advantage and Medicaid programs.
However, there is a disconnect----
Ms. Eshoo. I have it. I got it. OK.
Ms. Turano. Thanks.
Ms. Eshoo. Thank you. Mr. Mock?
Mr. Mock. Thank you. I think our top recommendation simply
would be to introduce some measure of reasonability in
application into the law. Additional exemptions----
Ms. Eshoo. But something specific. I understand everybody
will say here, even if they disagree with each other, that they
are all reasonable, so be specific.
Mr. Mock. Thank you. The definition of called party at this
particular point in time leaves absolutely no liability on the
called party, and in our case, whenever the called party is not
the intended, the reasonable application that might ask a----
Ms. Eshoo. Well, I understand----
Mr. Mock [continuing]. Called party----
Ms. Eshoo [continuing]. What you are talking about, but in
your written testimony, if I read it correctly, you all made
500 calls over, I think, 13 months to a reassigned number. I
mean, 500 calls and you want to put the burden on the person
that receives the call? Is that what you are saying?
Mr. Mock. Five hundred phone calls absolutely sounds
excessive. Again, these----
Ms. Eshoo. Well, it is excessive.
Mr. Mock. These are members that have requested these daily
notifications. If a member does not receive a notification,
their power is out. In this particular case a reasonable
application of the law might have looked at this case and just
asked the question would it be reasonable----
Ms. Eshoo. Well, I understand reasonable, and I don't know
how we do this, but we can't reshape TCPA based on your co-
operative. We are going to have to look for something that is
going to help you, but it is a very unusual, in my view,
business model.
Mr. Shockey?
Mr. Shockey. These are policy questions, and I defer to the
other witnesses----
Ms. Eshoo. So ask the engineer and consultant? You don't
have even one----
Mr. Shockey. Well, I think you can't look----
Ms. Eshoo [continuing]. Recommendation for us?
Mr. Shockey. There are a number of things I would bring up.
The number one thing I would is you can't look at TCPA in
isolation. We are going to have to look at the Truth in Caller
ID Act specifically. The act is creating a great deal of the
problems with robocalls because the way it is constructed.
Ms. Eshoo. But tell us the fix. Everybody is telling us the
problems. We know what the end result of the problems. What do
you recommend we fix? How would you do it? You are the expert.
That is why you all came here to testify.
Mr. Shockey. There are issues involving what I would
consider adding safe harbor, as well as----
Ms. Eshoo. Safe harbor for whom?
Mr. Shockey. Safe harbor for the entity making the calls.
And the telecommunications companies really do need to safe
harbor. It is also in good-faith provisions that in good faith
here for these entities such as a co-operative and health care
providers and financial institutions that if they are trying to
do this is in good faith, they should have some reasonable
protection from unwarranted lawsuits.
Ms. Eshoo. And what is----
Mr. Shockey. What is in good faith?
Ms. Eshoo. Are there limits to what they do or are there--I
mean, is it you just enter a safe harbor and then do whatever
you want?
Mr. Shockey. No, that I think can be worked out----
Ms. Eshoo. There are financial institutions but then there
are some that abuse. They never stop calling to market their
goods. Is that considered safe harbor in your view?
Mr. Shockey. No, but safe harbor I would say there is a
difference between marketing and also financial protection,
which is I get occasionally both telephone calls as well as
text messages when I make a purchase, say, for instance, over
$500. I need that. I want that. And within reason I am willing
to accept a certain amount of marketing materials one way or
the other. It is a fine line. It is discretionary.
However, I think that the problem we have seen in the act,
in TCPA, is it has been unreasonable. And especially for
smaller firms. It is one thing for AT&T or Bank of America or
Dominion Resources to be able to protect themselves. It is
another for a relatively small firm or manufacturing firm or a
small electric co-operative to defend themselves against these
kinds of class-action suits.
My belief is we have to look at this as a larger machine.
There is TCPA, there was the Truth in Caller ID Act. I believe
the telecommunications firms are committed to injecting
cryptographically secure material into the networks itself that
begins to reduce the problem of spoofing and robocalls at its
source.
Mr. Walden. We need to----
Ms. Eshoo. Yes. I am waiting for him to finish. Mr.
Chairman, can I just ask unanimous consent to place Electronic
Privacy Information Center's letter----
Mr. Walden. Sure. Oh, absolutely.
Ms. Eshoo [continuing]. In the record? Thank you.
Mr. Walden. Yes, without objection.
[The information appears at the conclusion of the hearing.]
Mr. Walden. And I thank you for your answer.
I will now go to the gentleman from New York, Mr. Collins,
for questions.
Mr. Collins. Thank you, Mr. Chairman.
I think we are here today really talking about unintended
consequences. And there is no perfect solution. There can never
be a perfect solution. And certainly I appreciated Mr.
Shockey's comments about safe harbor, common sense, and really
small businesses--I am a small business guy--who really live in
fear of some of these class-action lawsuits and in some cases
might be withholding the information that somebody--like Mr.
Waller saying, if somebody is going to--for every purchase over
$500 I would like to know it just in case, things of that sort.
But my question, Ms. Turano, is in your business--in fact,
health care today, patients come in, they are treated, they may
have a high deductible plan. They may not even realize that.
After they have come, they have gone, they are treated, I would
have to expect sometimes left with people owing substantial
money. And you are in business and have to stay in business
based on cash flow and collecting money. And you are not a
telemarketer, but I have to expect you worry about and are
frustrated by making a follow-up call to someone who, you know,
through ObamaCare or some other reason is stuck in a high
deductible plan. They could owe you thousands of dollars.
You need that money to stay in business and provide your
service, and yet, under the TCPA what are you? Are you a
collection firm, which you are not, or are you just trying to
protect the financial interests for all your other patients,
and unfortunately, having to call folks to say you owe us some
money, based on your insurance plan and high deductible,
others, could you just maybe comment on some of those
unintended consequences relative to you providing health care,
something we all know we need?
Ms. Turano. Sure. Thank you. And actually, the law provides
that we do not make these types of phone calls to cell phones
about payment. We make automated phone calls with consent for
health-related purposes. So we are not behaving like a
collections agency. In fact, we are only making calls, sharing
health care information with the members.
Mr. Collins. So what can you or can't you do relative to
try to collect money that is owed to you by a patient that has
come in, been treated, and now they owe you money?
Ms. Turano. Well, I would assume use traditional other
methods, whether that be sending them a bill in the U.S. mail
or we certainly have the ability to, if there were a landline
available, we could use that. But using an auto-dialer to a
cell phone or using an auto-dialer to text a cell phone is not
something that we would do to attempt to collect----
Mr. Collins. Which, again, as the chairman noted in his
opening comments, as many as half of Americans now don't even
have a landline.
Ms. Turano. Correct.
Mr. Collins. Well, thank you very much. Again, it is the
unintended consequences--I think really we all want the same
thing. No one wants the annoying calls, trying to sell
something but, where does the fine line come? And with the fear
of litigation, at what point do good phone calls stop or
reasonable phone calls?
Mr. Shockey. Congressman, I think what a lot of people are
struggling with here are what are genuinely legitimate calls
from people who have a prior business relationship. And what
some of us are worried about, which is the really fraudulent
calls that are attacking vulnerable populations, the aged one
way or the other, those of us such as myself and the
engineering community, we would like to crush the fraudulent
calls immediately. Hang them, please.
But these issues that you are bringing up, Congressman,
there are fine lines here, and I certainly understand the
frustration of small business owners that they are getting
entrapped with a lot of ambulance-chasers--let's put it
bluntly--who are using TCPA to extract--it is fraudulent in its
own sense to a certain extent.
I am just a poor, dumb engineer here. It is very hard for
me to distinguish issues involving policy versus issues
involving engineering, but I certainly understand your concern.
Mr. Collins. And I think this hearing is really an
informational hearing to bring some of these issues forward. We
are not going to solve the issues today, but your testimony is
certainly much appreciated. And, Mr. Chairman, I think it is a
very timely committee, and my time has run out so I yield back.
Mr. Walden. The gentleman yields back.
Ms. Turano, just before I go to Mr. Pallone, when you talk
about sharing health care information, is that the results of a
blood test? Is that what you are talking about?
Ms. Turano. Those are the types of calls I am talking
about, yes. It could be a reminder to fill a prescription, to
pick up your prescription. It could be a reminder to receive or
to seek out preventative tests or screenings. It is those types
of calls that I am----
Mr. Walden. OK.
Ms. Turano [continuing]. Talking about.
Mr. Walden. All right. Thank you.
Mr. Pallone.
Mr. Pallone. Thank you. I wanted to ask Mr. Shockey, in
your written testimony you note that Congress can be helpful in
ensuring that consumers benefit from the various technological
solutions that can help reduce robocalls. Can you just tell me
more specifically what technological steps you think Congress
could take to better protect consumers and stop the robocalls?
Mr. Shockey. Thank you, Congressman, for your excellent
question there. The technological solutions that we are
proposing, the engineering community, basically looks upon the
fraudulent robocall problem as essentially a form of
cybersecurity attack. Therefore, we need to go into the core of
the voice communications network and use modern cryptographic
methodology such as public infrastructure to basically sign the
caller ID, sign the CNAME data, potentially make more
information about the call party available to the consumer.
One of the things that we are working very diligently on on
a technology side is in those cases where there is a clear
prior business relationship allowing for more information to be
displayed to the consumer. We are looking at some things like a
green check box which is this call has been validated, a big
red check box, no, this is not really the IRS involved, some
kinds of other form of visual indicators that the call, at
least from the network's perspective, has been authenticated
from the called party, and we can do better things like track
and trace one way or the other.
Those are the technological solutions that we have. As for
whether or not Congress needs to further enhance the existing
portions of title 47, I am not sure at this particular point.
The relevant sections of the act that I know of, which are
251(e)(1), which is plenary authority over the numbering plan.
The Commission already has that. They use that for numbering
plan administration, local number portability.
I believe, at least in my own--I am not a lawyer and I
don't play one on TV so I can't answer that question, but I
think they actually have sufficient authority to act if other
aspects of the statutes are clear as to what the true intent of
Congress is.
Mr. Pallone. OK. Rather than fraudulent calls, I wanted to
talk about telemarketers that we never want or we never asked
for. And, Professor Waller, you note in your written testimony
that Congress should require that telemarketers receive express
consent from consumers before they call their cell phones. Can
you explain why you think strong consent is so important for
consumers?
Mr. Waller. Yes. Thank you. I think that the requirement of
consent has been a core provision of the TCPA from the very
beginning, and I would urge that it be strengthened if
anything.
The situation that Chairman Walden referred to with respect
to text messaging, making temporary job opportunities available
is a perfect illustration of how valuable it is when the
consumer has consented and how it is simply unwelcome--perhaps
not harassing but simply unwelcome and invasive in their lives
if they have not consented.
And some of the examples and many of the horror stories
that are presented are really about consent, and services are
valuable if the consumer has consented and services are
unwelcome and telemarketing is unwelcome when they haven't, and
that is a critical component of the act.
Now, some of the other horror stories that have been
presented are not about consent but about reassigned numbers
and reaching out to people who perhaps they intended to get
someone who had given consent but they didn't reach someone,
and in that case, the person they reached has not consented.
There are still cost consequences to the 75 million consumers
who have some form of prepaid cell phones. These calls are
unwelcome. And it is the caller or the people they use who are
the best cost-avoiders in that circumstance using currently
available databases and some of the things that are in
development that Mr. Shockey has talked about.
Mr. Pallone. Let me just ask quickly. The FCC has been
issuing more rulings on the TCPA recently. Do you think this
recent uptick in FCC action has been beneficial for consumers?
Mr. Waller. I think it has. I think the 2015 omnibus ruling
has been helpful by focusing on certain definitions, in
particular, this reassigned number issue, the question of
vicarious liability and the definition of auto-dialers that
Chairman Walden was asking about. I think rulemaking by its
very nature is a lengthy process and I commend the FCC for
doing the best job it can, but it is really hit with a flood of
petitions over and over again by the firms or industry seeking
special treatment.
Mr. Pallone. Thank you. Thank you, Mr. Chairman.
Mr. Walden. OK. The gentleman's time is expired.
I now go to the vice chair of the subcommittee, Mr. Latta.
Mr. Latta. Well, thank you, Mr. Chairman, and thanks to our
panel for being here this morning, appreciate it.
Ms. Turano, if I could start with you, in your testimony
you stated that health care-related texts and calls lead to
more engaged patients, better patient outcomes, and lower
health care costs for consumers. It seems obviously that public
health and safety notifications, along with individual health
reminders, are helpful and important. Under current law, am I
right to believe that these types of notifications are
underutilized due to liability risks?
Ms. Turano. Yes, sir, I believe that is accurate.
Mr. Latta. Let me follow up then. How can we better update
then the TCPA to ensure that actors with good intentions are
able to reach the consumers and patients to better serve them?
Ms. Turano. Sir, currently, there is an exemption within
the TCPA that is extended to health care providers to make
these types of phone calls that I have been referring to.
Unfortunately, that is a vague term. Within the HIPAA statute,
however, there is language that could be imported that is far
more clear and has a much more specific definition, and that is
a term called HIPAA-covered entity. If that language were to be
imported within the TCPA, that would make things much more
clear for companies like WellCare, and that would allow us to
make these types of phone calls.
Mr. Latta. Well, I was going to follow up on that. And let
me ask you this because under HIPAA is it more clear for
landlines than it is for cell phones?
Ms. Turano. Is it more clear within HIPAA for landlines----
Mr. Latta. Right, is that----
Ms. Turano [continuing]. Or cell phones? HIPAA covers all
health care communications. It does not make a distinction
between cell phones and landlines from my understanding.
Mr. Latta. OK. But is there any type of confusion out there
today for folks out there then----
Ms. Turano. Operate----
Mr. Latta [continuing]. If you are looking on the cell
phone side?
Ms. Turano. No.
Mr. Latta. There isn't? So there is not a problem then for
people that--especially for you all to go to contact folks on
that and then----
Ms. Turano. Well, if we were operating under HIPAA
guidelines, those are very clear, and it is very prescriptive
about what we can say, whom we can contact, how, and why. If
those types of guidelines were transferred over to be
consistent with the TCPA, it would be much more straightforward
with us. There would be no gray area in terms of who we can
contact, whether it is a landline or a cell phone.
Mr. Latta. OK. Thank you.
Ms. Turano. Thanks.
Mr. Latta. Mr. Waller, I am wondering, how many of the
complaints--and maybe if you might know this, how many of the
complaints that the FCC and FTC receive are from the same
numbers, any idea? Do we have any kind of knowledge out there
as to who the bad actors are out there that are making a lot of
these calls that people receive? Is there a way to find that
out?
Mr. Waller. It is my understanding that the way the FCC
tracks complaints on this issue that they accumulate complaints
with respect to specific numbers and senders when they can
identify them. So I believe the FCC can provide that
information. I am not clear on how the FTC tracks robocall
complaints, but I am aware that they receive between 200,000
and 300,000 per month.
Mr. Latta. All right. Thank you.
Mr. Shockey. Congressman, can I address some of that
because----
Mr. Latta. Yes. Yes.
Mr. Shockey [continuing]. It is slightly tactical?
Mr. Latta. Yes.
Mr. Shockey. It is correct that the way that the FCC and
the FTC track this is via the number, but the number is
inaccurate because it has been spoofed----
Mr. Latta. Right.
Mr. Shockey [continuing]. In most of the cases.
Mr. Latta. And as the chairman mentioned in his opening
statement that we just passed out of full committee----
Mr. Shockey. Correct.
Mr. Latta [continuing]. The bill especially on the spoofing
end, correct, yes.
Mr. Shockey. And they are coming in through intermediary
providers and the current legislation, which was passed
yesterday, that requires intermediary transit providers to
identify themselves with the FCC makes a great deal of sense.
What we do know anecdotally, by the way, is that the number
of actors creating particularly the fraudulent robocalls is in
fact relatively small. They are quite sophisticated and I might
add I have done consulting work for the CRTC in Ottawa and
Ofcom in the United Kingdom, and on a per capita basis the
problem in Canada and in the United Kingdome is in fact worse.
And the technical solutions that we are looking at deploying
may actually have international implications as well and offer
United States leadership to our friends, allies, and partners,
on this area as well.
One of the things that I know law enforcement is concerned
about is this track-and-trace issue and the call validation
technology that we want to interject into the network should be
able to provide law enforcement with considerably better tools
than what they have now.
Mr. Latta. Yes. Thank you very much, Mr. Chairman. My time
is expired and I yield back.
Mr. Walden. I thank the gentleman. And we have a list for
the committee at some point here of the conflicts in statute
that require people to make calls that then put them in
conflict with TCPA. We do have that, too, as part of our
discussion.
Mr. Doyle.
Mr. Doyle. Thank you, Mr. Chairman.
Mr. Waller, I want to follow up on Mr. Pallone's questions
about expressed consent. I want to ask you if you think we need
to reexamine the rules about prior express consent through an
intermediary because it seems to me recent court cases seem to
affirm the notion that debt collectors can harass consumers
even when they have not explicitly been given consent to do so.
So I am concerned that this practice of consent through a
third party sometimes leads to loopholes where consumers are
harassed by debt collectors or advertisers in situations that
they haven't expressly consented to. What problems do you see
in this practice and how would we deal with that?
Mr. Waller. I share your concern. Consent should mean
express consent expressed in a reasonable fashion that is part
of the TCPA. There is growing amount of case law, plus the
notion of reasonableness as an accepted standard throughout
consumer protection law, most of American law. Third-party
consent I think should be extremely limited or simply abolished
whenever humanly possible.
The area that you talked about particularly with debt
collection is one of the top areas of consumer complaints. I
think it is unfortunate that there was a carve-out for debt
collection from the Federal Government or its contractor
recently in the Budget Reconciliation Act.
So I think the number of people who are now exposed to
those calls are certainly greater. It is 60-some million people
depending on which debt programs you are talking about. So I
would like to see a return to the definitions that were used
when consumers directly consented, whether it is in writing or
some other fashion that can be legitimately recorded by the
sender so they get the information they want and simply not be
deemed to consent by the actions of a third party.
Mr. Doyle. Thank you. Let me ask you, historically, phone
carriers have had an obligation to connect all phone calls, but
recently, when the FCC loosens this restriction in order to
promote the development and deployment of robocall-blocking
technologies, I want to ask you, do you think the common
carrier exemption should be reexamined as there will be an onus
on carriers to connect the right calls? What safeguards are
necessary to ensure that carriers aren't overzealous in their
call-blocking?
Mr. Waller. I think in some ways Mr. Shockey may be better
able to answer that than I do, but I do think it is a
combination of legal and technological solutions, so the gold
standard would be a single rule that applies across all
technology platforms, whether it is landlines, whatever is left
of fax machines, cell phones, and whatever is yet to come--and
e-mail obviously--where a consumer can opt out and be done with
it where we would be, in my view, aiming for a universal do-
not-contact register, not just do not call, and that obviously
involves a sensible drafting of interaction of legal and
technological requirements.
Mr. Doyle. Mr. Shockey, do you want to answer?
Mr. Shockey. I agree with Mr. Waller completely,
Congressman. I have serious problems with blacklists. We have
problems with blacklists in the past in this country in one way
or the other. The problem in getting on a blacklist is how do
you get off of it, and I have personally run into this problem
myself trying to send email to this committee because my
domain, Shockey.us, was thrown into your junk mail pile and how
do I get off.
Ms. Eshoo. And look it, you got here.
Mr. Shockey. I got here, yes. I had to use my Gmail
account. But these are the kinds of things that concern me
about blacklisting, which is why those of us in the engineering
community have tried to look at this from a much more holistic
point in the core of the network, namely, that the originating
call is cryptographically signed by the call originating
network, it is authenticated and verified by the terminating
network, and that the call detail records and the call routing
records reflect that so that we have got appropriate track-and-
trace mechanism here.
And recourse in the event that you are thrown into a black
hole has to be somehow constructed either possibly through
regulation, hopefully by best current practices among the
service providers one way or the other. If we march down this
road, we are very, very concerned about that and we know where
the problem is.
Mr. Doyle. Thank you. Mr. Chairman, thank you.
Mr. Walden. Thank you, Mr. Doyle.
We will now turn to Mr. Long from Missouri.
Mr. Long. Thank you, Mr. Chairman.
And, Mr. Shockey, I hear from constituents about robocalls,
as everyone else does, and we all find them extremely annoying,
I believe. Finding a solution, of course, is very important so
my question is this: This issue seems to involve all segments
of telecom, including the carriers, equipment-makers, standard-
setting bodies, cable, voiceover-Internet protocol providers,
basically everyone.
Mr. Shockey. Yes.
Mr. Long. You are nodding your head. So is it important to
have these groups involved in finding a solution to stopping
these unwanted calls? Is it important to have all these
different folks at the table and involved?
Mr. Shockey. Well, thank you, Congressman. The answer to
your question is absolutely. And in fact I personally have been
involved in this for the last 4 years with our nation's service
providers. I have been involved in the tactical standards work
directly involving all of this. Of course it is difficult to
get all of these people to consensus. We are much like any
other group of professionals in one way or the other. It is
hard to get agreement, which is why it has taken so long.
But I believe we have a general outline of a plan, and that
is where we hope--and I believe the Robocall Strike Force, when
it reports on October the 17th, can at least outline a plan.
And this committee and the FCC can move forward with all
deliberate speed in implementing those recommendations.
Mr. Long. OK. Thank you. But my point is that everyone
needs to be involved in this process.
Mr. Shockey. And everyone is, sir.
Mr. Long. Yes, OK.
Mr. Shockey. I guarantee you that.
Mr. Long. Ms. Turano, the types of calls that WellCare is
making to its clients, you have mentioned it a few times but
can you kind of just give an encapsulated what your company
does, what these calls are?
Ms. Turano. Certainly. Thank you.
Mr. Long. Can you pull that a little closer to you? It has
got a long cord on here. Pull her up. There you go.
Ms. Turano. Is that better?
Mr. Long. You bet.
Ms. Turano. OK. Thank you. The types of phone calls that we
are referring to really are about health care reminders----
Mr. Long. And that is something somebody would want to hear
about?
Ms. Turano. One would think so, yes.
Mr. Long. OK.
Ms. Turano. Our members tend to be vulnerable older
Americans, disabled Americans, or folks that have less access
to resources, less access to an infrastructure, a support core
if you will. And so we feel it is important to be able to make
these calls to them. They increasingly rely on cell phones. We
want to be able to help them with their health care, and this
is an efficient and effective way of doing that.
Mr. Long. OK. Well, I think I agree and most reasonable
people would agree that those are the type of calls that folks
are anxious to have, glad to have prescription reminders,
whatever they may be. But has the FCC's order impacted
WellCare's calling practices, and if so, how?
Ms. Turano. Yes, absolutely. Currently, we do not make
auto-dialer calls or texts to cell phones. That is a practice
that there----
Mr. Long. You mean you can still talk on a cell phone? You
can still call?
Ms. Turano. We could call you on your cell phone----
Mr. Long. Really? I didn't even know you could talk on
these anymore. I tell everyone to text me, and you are not
allowed to text.
Ms. Turano. I would be happy to text you a reminder to go
pick up----
Mr. Long. You could even call me.
Ms. Turano [continuing]. Your prescriptions but----
Mr. Long.. I haven't talked on a phone in so long----
Ms. Turano [continuing]. I am currently not allowed to do
that.
Mr. Long. All right. Especially being from Mizzou, you
know.
Ms. Turano. Yes, sir.
Mr. Long. Get that in there. So these patients will
potentially not be able to get the information that they need
for their health care, correct?
Ms. Turano. If they are relying on a cell phone, I am----
Mr. Long. Which everyone does.
Ms. Turano [continuing]. Extremely hampered from being able
to contact them.
Mr. Long. OK. I have another question here for you. In your
testimony you highlight the importance of using cell phones to
reach all these--and you just now mentioned how important it
is. Why not just communicate with mail or landlines?
Ms. Turano. Well, sir----
Mr. Long. Do you know what a landline is?
Ms. Turano. I do, thank you. In fact, I think I might still
have one. Because when you are talking about the members that
we typically have, I think I mentioned that in many cases they
have unstable housing, and therefore, they might not have a
consistent home address so U.S. mail is not going to be an
effective way to reach them.
Relatedly, they might not have a consistent landline if
they are not in stable housing, so therefore, those two methods
can't be guaranteed to be an effective way of reaching them.
Mr. Long. OK. Thank you. As they say, the commonsense
problem is it is not common, and I think that some of these
things we are looking at, a little common sense would help with
the FCC.
Ms. Turano. Thank you.
Mr. Long. So, Mr. Chairman, I yield back.
Mr. Walden. The gentleman yields back.
The chair recognizes the gentleman from California, Mr.
McNerney.
Mr. McNerney. Wow, what a great hearing, Mr. Chairman.
Thank you. And I thank----
Mr. Walden. You got it.
Mr. McNerney [continuing]. The panelists.
Mr. Shockey, I was really thrilled to hear that public-key
cryptography is used to authenticate caller ID.
Mr. Shockey. It will be.
Mr. McNerney. Oh, it will be? OK. That was my next
question. How widely adopted is that technology? Or when is it
going to be adopted in a wide fashion?
Mr. Shockey. As Congressman Long pointed out, there are a
lot of people here involved, obviously: Our nation's carriers,
the equipment suppliers, the Congress potentially, but
certainly the Federal Communications Commission. We have what
we believe is the outline of a plan and how long that plan will
take to implement I would choose not to speculate about.
Mr. McNerney. OK.
Mr. Shockey. However, it is reasonable--public-key
cryptography is used all over our economy. The electric meter
on the side of your house uses PKI, your credit card uses PKI,
obviously the Web browsers when you buy something from Amazon
use PKI. This is proven, well-understood technology.
We have the standards now pretty much ready to go. All they
need is testing. They need to be put into the actual kit that
our nation's carriers have. We are very concerned that we don't
break what we already have. We need to maintain the security,
the reliability, and the interoperability of at least what we
have today when we inject this new technology in there, but we
can do this.
Mr. McNerney. Well, thank you. I understand that another
potential solution to unwanted and fraudulent calls is
malicious call tracing. Can you describe that a little bit?
Mr. Shockey. Well, malicious call tracing is in fact
partially solved by this call validation technology using PKI
because the basic concept--and I will just try and walk you
through it. Basically, when you place a phone call from any
access network--that would be cable or mobile or traditional
landline or enterprise from within this building, the service
provider would actually sign the underlying call signaling that
says, yes, I am, well, AT&T and I want this other carrier to
terminate the call.
So it signs what is known as the SIP invite. It sends it
along its merry way, and somewhere along the line level 3 gets
the call. It uses PKI to verify that AT&T was sending this call
and then terminates the call in the normal manner. So we
actually now have an origination and a termination,
cryptographically sound methodology for track and trace.
Now, beyond that, we could actually display to the consumer
validated, good to go. We could also display to the consumer
such as on your mobile device, on your enterprise phone here in
the Congress or on your television set if you are using
advanced network, you know, more information about whether or
not this call has been trusted or if it is valid or not. So
empowering the consumer is one of the key advantages of trying
to deploy this technology and give enforcement in law
enforcement that are track-and-trace.
Mr. McNerney. So the trace back is another form of this
technology is that----
Mr. Shockey. Yes.
Mr. McNerney [continuing]. Right?
Mr. Shockey. Yes.
Mr. McNerney. And then I guess the last thing is the do-
not-originate. And again, they sound like they are all sort of
based on the same technology, those three methods.
Mr. Shockey. Do-not-originate is a little bit different.
Mr. McNerney. Is it?
Mr. Shockey. That is going to require, I think, a little
bit of study. I know the public safety folks are extremely
concerned about do-not-originate because of the various
phishing attacks on public safety institutions one way or the
other. It is certainly worth investigation, and people are
actively talking about it. And I certainly want to wait and see
what the final report of the strike force is before making a
determination, but it is technologically feasible. Let's put it
that way.
Mr. McNerney. What is the most effective thing we can do
here then is to----
Mr. Shockey. Clarity. Again, as has been discussed by
better policy experts than I am, having clarity in the
legislation. I think you also have to look at the Truth in
Caller ID Act. You also have to look at some other aspects of
current legislation. Truth in Caller ID Act is bound to the
problem with TCPA. If we can't secure the identity of the calls
themselves, we can't fix the problem.
Mr. McNerney. Mr. Chairman, I need another 5 minute but I
will yield back anyway.
Mr. Walden. Thank you. We will have more time later on
probably to talk about this issue.
But we will now, let's see, go to the gentleman from
Florida, Mr. Bilirakis.
Mr. Bilirakis. Thank you, Mr. Chairman. I thank the Ranking
Member Eshoo as well for holding this very important hearing.
Modernizing the 1991 TCPA statute has long been a goal of
mine, and I am glad the subcommittee is holding this
informational hearing today. I appreciate it so much.
Ms. Turano--and I apologize if these questions were already
asked. I understand that WellCare filed a petition with the FCC
seeking clarity on the TCPA provisions. Can you briefly outline
the basis for WellCare's petition, please?
Ms. Turano. Certainly. Thank you. WellCare and others filed
a petition asking for clarity around some of the language
within the 2015 declaratory order. That order uses the term
health care provider, which is basically undefined. And there
is quite a bit of vagueness around what entities fall within
that definition.
What we have asked for instead is a reconciliation between
the language in the TCPA and the language in HIPAA, which is
our governing statute for health care communications from
Health and Human Services. If FCC were to import the language
and use the term ``HIPAA-covered entity,'' that would clear up
a lot of confusion around who falls within that definition,
what rules govern that communication, and that would go a long
way towards clarifying the guidance.
Mr. Bilirakis. OK. In your opinion, how long are petitions
pending with the FCC before receiving a response?
Ms. Turano. Well, we filed our petition--WellCare and
others filed our petition July 28 of this year. My
understanding of FCC's process is that there is a comment
period for 30 days. Then, there are additional comment periods
that stack up on top of that. However, my understanding is that
there is no deadline or time frame within which the FCC has to
respond. Therefore, we wait.
Mr. Bilirakis. Wow. How would the failure----
Ms. Eshoo. We can help you with that.
Mr. Bilirakis. Excuse me.
Mr. Walden. We have a bill to fix that.
Ms. Turano. Thanks.
Mr. Bilirakis. Let's fix it. How would the failure to
receive a timely answer hurt your patients? That is the bottom
line.
Ms. Turano. Certainly. As we wait, the way our consumers
are being impacted is that we are hindered from being able to
use an efficient and effective means of communication with
them. So that means for those of our members who rely on cell
phones, we are not making calls or we are not using the auto-
dialer technology to make calls to remind parents about getting
their children vaccinated. We are not using the most efficient
technology to remind members to get preventative health
screenings.
And in what I think is a very significant example, if we
were to have a member--and we frequently do have a member--
being discharged from the hospital, as I have said a couple of
times already, if we have a member who doesn't have a strong
support system around them, which is frequently the case, we
feel like we take on some responsibility for assisting them in
the care provided after their discharge. So we would want to be
able to contact them using this technology via cell phone to
remind them to get their medications, to remind them to take
them as the doctor prescribed them, to remind them about proper
wound care and follow-up care.
If we are able to do all that, it is only going to help
their outcome versus if they are without those types of
reminders. You are looking at a potential for infection, you
are looking for a potential for a hospital readmission, which
is a problem for the whole system, which is something we are
hoping to avoid.
So as we wait, we are severely hampered in our ability to
be able to do that in the most efficient and effective way
possible.
Mr. Bilirakis. Thank you. To the panel--and you know I
submitted questions to FCC Commissioner O'Rielly asking if he
supports expediting petitions to provide clarity on obligations
under the TCPA pending any congressional action. The
commissioner expresses support for such efforts. Is this
something that members of the panel can support since we don't
know how long it will take for Congress to act? But we will
act. And I wanted to ask the panel. We will start with Ms.
Turano, please.
Ms. Turano. Yes, sir. That is certainly something we would
support.
Mr. Bilirakis. Please, sir.
Mr. Mock. I think I can say absolutely we would support
more timely response from the FCC. In our particular case there
were facts within the lawsuit we were faced with that, had
definitions been more clearly defined, the situation might have
turned out very different, so absolutely.
Mr. Waller. Congressman, we are on record in supporting
expedited review, but sometimes you don't always get the answer
you want.
Mr. Bilirakis. Thank you.
Mr. Shockey. The answer is yes, that would be perfect.
Mr. Bilirakis. Very good. Thank you very much. I yield
back, Mr. Chairman.
Mr. Walden. The gentleman yields back.
The chair recognizes the gentlelady from Tennessee, the
vice chair of the full committee, for 5 minutes.
Mrs. Blackburn. Well, thank you, sir. And I am so pleased
that we have the hearing today, that it is on the agenda. And
sorry that I was late. We have had other hearings that we are
dealing with this morning, and since our main room is under
construction, we have to go to the Capitol and use a room
there.
Mr. Mock, I want to come to you. When we were preparing for
this hearing and talking with some folks that are in the health
care space and all, I was struck by how trial lawyers have
seemed to use this as a piggy bank with the lawsuits. And
looking at from 2010 to 2015 there was a 940 percent increase
in the lawsuits under the TCPA. And the average payout for an
attorney filing one of those suits was $2.4 million. I mean,
this is just unbelievable. That tells us something is terribly
wrong with this process.
So the Snapping Shoals experience, and you had said in your
testimony although the case has since been resolved, Snapping
Shoals made substantial negative changes to our member
notification offerings as a result of the complaint. So I want
you to elaborate just a little bit if you will for the record
on your experience of being sued and how that movement, you
know, how you followed through to that movement. I know you
articulated the changes that you made, but talk a little bit
about that experience. Just one minute will suffice.
Mr. Mock. Well, thank you very much for the question.
In our example, we really felt like these were
communications that were requested by our member. At any time
those notifications could be discontinued, numbers could be
changed, and certainly as we have looked to the future, our
goal is to provide more flexible notifications.
I should say that over the last few years it has been a
more-common-than-I-would-like practice to maybe see a 1-800 ad
late at night for any unwanted communications. In our
experience I really felt like it would have been a very
reasonable thing for someone to have received 500 phone calls
to complain at least once. And so I think that is where the
good-faith provisions and safe harbor provisions----
Mrs. Blackburn. Got it.
Mr. Mock [continuing]. For small businesses----
Mrs. Blackburn. Yes.
Mr. Mock [continuing]. Like Snapping Shoals would be very
important.
Mrs. Blackburn. OK. Got that.
Mr. Shockey, just a little bit on reassignment and the
difficulty of these reassigned numbers and tracking that.
Listening to all of this today makes you wonder why there isn't
a way to track reassignment more carefully or more easily so
that companies can determine when there has been reassignment
of a number. Do you have anything to add to that?
Mr. Shockey. Well, actually, there is one thing I would
like to add. The problem of reassigned numbers is real. We do
have numbering databases that are currently deployed.
Obviously, the number portability database is one of them.
These have been altered from time to time. They could be
repurposed to be able to add some sort of a field in the
databases on when they would have been modified in some way,
shape, or form. I don't think we necessarily need a new
database.
The other thing is one of the issues that is actually
personal to me and I think is also relevant is I also am a big
believer in national number portability, which is why can't we
just have one telephone number and keep it, basically whenever
you move? Twelve percent of the entire United States population
moves very single solitary year, and that is actually creating
the churn in the system because even if you go from the west
side of New York to the east side of New York, you actually
have to change your phone number because you have actually
moved out of a boundary. And that is actually pretty ridiculous
for the consumer if you sort of ask me.
So we in the North American Numbering Council have actually
recommended to the Commission that they consider a notice of
proposed rulemaking on national number portability, which could
reduce the church that we see in the numbering plan quite a bit
and increase the size of the North American Numbering Plan by
20 percent virtually overnight so that we don't have the kinds
of problems in 408 area code for constantly splitting and
splitting and splitting one way or the other.
So it needs a little bit of study. I don't necessarily want
to recommend that in advance of where the strike force could be
reporting on that in the middle of October, but it certainly
needs active consideration.
Mrs. Blackburn. OK. I appreciate that. And as we wrap up, I
would like for each of you to send me the three things you
think we need to make certain we change as we look at the
updates on the TCPA. I would just love to see that in writing.
And with that, I yield back. Thank you.
Mr. Latta [presiding]. Thank you very much. The gentlelady
yields back.
And seeing no other members to ask questions, I have a
letter from the American Health Insurance Plans, their comments
that they submitted before the FCC and also the Credit Union
National Association. And I ask unanimous consent that these
letters be inserted in the record.
[The information appears at the conclusion of the hearing.]
Mr. Latta. And on behalf of the gentleman from Oregon, the
subcommittee chair; the gentlelady from California, the ranking
member; and myself, we thank you all for participating in this
panel today. It has been very informative and we appreciate it.
And if there is nothing else to come before the
subcommittee, we stand adjourned.
[Whereupon, at 12:38 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Fred Upton
Today's hearing will focus on a topic that unfortunately
most of us have dealt with on a personal level: pesky
robocalls. Many constituents have contacted my office in search
of a solution to stop the unwanted calls, and I am sure the
same is true for my colleagues. Unfortunately, there just
doesn't seem to be a current solution that is entirely up to
the task. Registering your number on the Do-Not-Call List
simply isn't enough these days, and it is time we begin a
thoughtful dialogue on providing our consumers with relief.
I'd like to thank Ranking Members Pallone, Eshoo, and
Schakowsky for their letter requesting a hearing on this issue
of modernizing the Telephone Consumer Protection Act and for
adding their voices to the growing chorus for this outdated law
to be updated to meet the challenges of the 21st century. The
FCC, experts in industry and the business community, and folks
back home are all in agreement that it is time to bring this
outdated law into the 21st century. Our consumers no longer
feel protected under the law; and with seemingly relentless
attempts at fraud occurring over the phone, who can blame them?
The TCPA is failing on two fronts. First, the number of bad
actors who are intentionally disregarding the TCPA is growing,
and until the act is modernized, consumers will be under siege
by unwanted pre-recorded messages and solicitations. Second,
recent reform attempts have instead captured unintended good
actors in the crosshairs, who as a result, face litigation for
non-compliance with the TCPA despite their good faith.
While we are all probably familiar with the frustration
that robocalls are causing us on the receiving end of the call,
what some of us might be less familiar with are the challenges
faced by legitimate businesses who have been inadvertently
caught in the crosshairs of the TCPA. As bad actors
increasingly flaunt the TCPA to gain access to millions of
consumers' phone lines, it is important that we recognize that
there is a legitimate use of auto-dialing technology that
doesn't fall under the same malicious category.
Unlike the well-known ``Rachel from Card Services'' scam,
you can put a face on the folks operating in good faith-they
look like your kid's school, or maybe your doctor's office, or
even your local credit union. Businesses using auto-dialers
often have good intent when contacting their customers, and
moreover, their subscribers have come to expect and rely on
these types of calls.
An update to the TCPA will do more to prevent unwanted
calls and provide clear rules of the road for our legitimate
businesses who are operating in good faith. We ought to have a
holistic approach towards finding a solution that our
constituents can rely on to protect them from unwanted calls,
and that legitimate businesses can navigate without hiring an
army of attorneys to ensure they are within the letter of the
law just to be in touch with their customers. As you will hear,
this is no easy task, but today's discussion will be an
important first step towards crafting a modern law that
protects consumers.
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