[Federal Register Volume 70, Number 70 (Wednesday, April 13, 2005)]
[Rules and Regulations]
[Pages 19330-19337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7346]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CG Docket No. 02-278; FCC 05-28]
Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991
AGENCY: Federal Communications Commission.
ACTION: Final rule; petition for reconsideration; clarification.
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SUMMARY: This document addresses certain issues raised in petitions for
reconsideration of regarding the national do-not-call registry and the
Commission's other telemarketing rules implementing the Telephone
Consumer Protection Act (TCPA).
DATES: Effective May 13, 2005.
ADDRESSES: Federal Communications Commission, 445 12th Street, SW.,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Erica McMahon, Consumer & Governmental
Affairs Bureau, (202) 418-2512.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second
Order on Reconsideration, CG Docket No. 02-278, FCC 05-28, adopted
February 10, 2005, and released February 18, 2005 (Order). The Order
addresses issues arising from Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991, Report and Order, (2003 TCPA
Order), CG Docket No. 02-278, FCC 03-153, released July 3, 2003;
published at 68 FR 44144, July 25, 2003. This document does not contain
new or modified information collection requirements subject to the
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition,
it does not contain new or modified ``information collection burden for
small business concerns with fewer than 25 employees,'' pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4). Copies of any subsequently filed documents in this
matter will be available for public inspection and copying during
regular business hours at the FCC Reference Information Center, Portals
II, Room CY-A257, 445 12th Street, SW., Washington, DC 20054. The
complete text of this decision may be purchased from the Commission's
duplicating contractor, Best Copy and Printing, Inc. (BCPI), Portals
II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. Customers
may contact BCPI, Inc. at its Web site: http://www.bcpiweb.com or call
1-800-378-3160. To request materials in accessible formats for people
with disabilities (Braille, large print, electronic files, audio
format), send an e-mail to [email protected] or call the Consumer &
Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432
(TTY). The Order can also be downloaded in Word and Portable Document
Format (PDF) at http://www.fcc.gov/cgb/policy.
Synopsis
In the 2003 TCPA Order, the Commission adopted a national do-not-
call registry, in conjunction with the FTC, to provide residential
consumers with a one-step option to prohibit unwanted telephone
solicitations. Telemarketers are prohibited from contacting those
consumers that register their telephone numbers on the national list,
unless the call falls within a recognized exemption. We explained that
calls that do not fall within the definition of ``telephone
solicitation'' as defined in section 227(a)(3) are not restricted by
the national do-not-call list. These may include surveys, market
research, political and religious speech calls. The national do-not-
call rules also do not prohibit calls by or on behalf of tax-exempt
nonprofit organizations, calls to persons with whom the seller or
telemarketer has an established business relationship, calls to
businesses, and calls to persons with whom the marketer has a
``personal relationship.''
A number of petitioners raise questions related to the
administration and operation of the national do-not-call registry. The
DMA requests that the Commission review the national do-not-call
registry set up by the FTC and reconsider our rules to impose more
reasonable security procedures for the registry. In addition, the DMA
asks the FCC to require the DNC list administrator to provide a
mechanism by which callers can download the national list without
wireless numbers. Several other petitioners request that the Commission
reconsider the extent to which states may apply their do-not-call
requirements to interstate telemarketers. We note that, since the close
of the filing period for petitions for reconsideration, the Commission
has received several petitions for declaratory ruling seeking
preemption of state telemarketing laws. The
[[Page 19331]]
Commission intends to address the issue of preemption separately in the
future.
The Commission also received petitions asking whether certain
entities or certain types of calls are subject to the national do-not-
call rules. The National Association of Realtors (NAR) asks us to
clarify that the do-not-call rules do not apply to certain practices
that are ``unique to the real estate industry.'' Specifically, NAR
argues that calls from real estate agents to individuals who have
advertised their properties as ``For Sale By Owner'' fall outside the
scope of the do-not-call rules. In addition, NAR requests that the
Commission clarify that the rules permit real estate professionals to
call individuals whose listing with another agent has lapsed.
Independent Insurance Agents ask the Commission to reconsider our
determinations that insurance agents are subject to the TCPA and that
there should be no exemption for calls made based on referrals. The
State and Regional Newspaper Association asks the Commission to
reconsider its treatment of newspapers under the do-not-call rules in
view of the constitutional protection newspapers are accorded.
As discussed below, we dismiss the foregoing petitions to the
extent they seek reconsideration of the rules establishing the national
do-not-call registry. Many of the same issues regarding the do-not-call
registry were raised during the original proceeding and were addressed
in the 2003 TCPA Order. In conjunction with the FTC, we will continue
to monitor closely the operation of the list to ensure its continued
effectiveness. We are not persuaded by the State & Regional Newspaper
Association that we need to revisit our rules. The State and Regional
Newspaper Associations argue that the Commission cannot justify
application of the new telemarketing rules under the ``limited
constitutional analysis'' offered in the 2003 TCPA Order. They argue
instead that, pursuant to a line of judicial decisions involving
licensing schemes for the distribution of newspapers, the Commission's
rules must be justified under the standards ``applicable to fully
protected speech.''
In February 2004, the United States Court of Appeals for the 10th
Circuit held that the Commission's ``opt-in telemarketing regulation[s]
that provide a mechanism for consumers to restrict commercial sales
calls but do not provide a similar mechanism to limit charitable or
political calls'' are ``consistent with First Amendment requirements.''
Thus, our do-not-call rules are constitutional.
We recognize, however, that no party to that case specifically
raised the issue of the standard of First Amendment protection afforded
the distribution of newspapers before the court. After careful review
of the State Newspaper Association's argument, however, we conclude
that it is incorrect. To be sure, the right to distribute newspapers is
afforded First Amendment protection. But a call from a telemarketer to
an unwilling listener in their home for the purpose of selling a
newspaper subscription remains speech which does ``no more than propose
a commercial transaction.''
Although the State Newspaper Association cites to a number of
decisions noting that newspapers have been afforded First Amendment
protection in the distribution of their newspapers, these cases
typically deal with licensing cases that vest ``unbridled discretion''
in a government official over whether to permit or deny distribution of
the publication at all. By contrast, our rules simply permit a private
individual, not a government official, to decide whether or not to
entertain a subscription request in their home. Indeed, the Supreme
Court upheld a statute that directed the Postmaster General to send an
order directing a mail sender to delete the name of an addressee if
that addressee requests the removal of his name from the sender's
mailing list: The Court has traditionally respected the right of a
householder to bar, by order or notice, solicitors, hawkers, and
peddlers from his property. In this case the mailer's right to
communicate is circumscribed only by an affirmative act of the
addressee giving notice that he wishes no further mailings from that
mailer * * * In effect, Congress has erected a wall--or more accurately
permits a citizen to erect a wall--that no advertiser may penetrate
without his acquiescence.
The do not call rules directly advance the government's substantial
interests in guarding against fraudulent and abusive solicitations and
facilitating the protection of consumer privacy in the home even when
the product sought to be sold is a newspaper. We therefore reject the
State Newspaper Association's constitutional arguments.
In addition, we disagree with the DMA that the rules should be
revised to expressly exempt calls to business numbers. The 2003 TCPA
Order provided that the national do-not-call registry applies to calls
to ``residential subscribers'' and does not preclude calls to
businesses. To the extent that some business numbers have been
inadvertently registered on the national registry, calls made to such
numbers will not be considered violations of our rules. We also decline
to exempt from the do-not-call rules those calls made to ``home-based
businesses'; rather, we will review such calls as they are brought to
our attention to determine whether or not the call was made to a
residential subscriber.
We also find no basis to further exempt certain entities or calls
from the national do-not-call rules. The TCPA defines a telephone
solicitation as ``the initiation of a telephone call or message for the
purpose of encouraging the purchase or rental of, or investment in,
property, goods, or services, which is transmitted to any person but
does not include a call or message to any person with that person's
prior express invitation or permission; to any person with whom the
caller has an established business relationship; or by a tax-exempt
nonprofit organization.'' As with any entity making calls that
constitute ``telephone solicitations,'' a real estate agent, insurance
agent, or newspaper is precluded from calling consumers registered on
the national do-not-call list, unless the calls would fall within one
of the specific exemptions provided in the statute and rules.
Therefore, we clarify that a telephone solicitation would include calls
by real estate agents to property owners for the purpose of offering
their services to the owner, whether the property listing has lapsed or
not. In addition, a person who, after seeing an advertisement in a
newspaper, calls the advertiser to offer advertising space in the same
or different publication, is making a telephone solicitation to that
advertiser. We find, however, that calls by real estate agents who
represent only the potential buyer to someone who has advertised their
property for sale, do not constitute telephone solicitations, so long
as the purpose of the call is to discuss a potential sale of the
property to the represented buyer. The callers, in such circumstances,
are not encouraging the called party to purchase, rent or invest in
property, as contemplated by the definition of ``telephone
solicitation.'' They are instead calling in response to an offer to
purchase something from the called party. Similarly, a recruiter
calling to discuss potential employment or service in the military with
a consumer is not making a ``telephone solicitation'' to the extent the
called party will not be asked during or after the call to purchase,
rent or invest in property, goods or services. A caller responding to a
classified ad would not be making a telephone solicitation, provided
the purpose of the
[[Page 19332]]
call was to inquire about or offer to purchase the product or service
advertised, rather than to encourage the advertiser to purchase, rent
or invest in property, goods or services. In addition, as explained in
the 2003 TCPA Order, calls constituting telephone solicitations to
persons based on referrals are nevertheless subject to the do-not-call
rules, if not otherwise exempted.
Finally, we deny Insurance Agents' petition to the extent it
requests that we amend our safe harbor provision to account for ``good
faith calls'' that violate the rules and to accommodate call back
technologies that have the potential to run afoul of the rules. We
believe the existing safe harbor provision sufficiently addresses calls
made in error by telemarketers that have made a good faith effort to
comply with the rules. Consistent with the FTC, we concluded that a
seller or telemarketer will not be liable for violating the national
do-not-call rules if it can demonstrate that it has met certain
standards, including using a process to prevent telemarketing to any
telephone number on the national do-not-call registry using a version
of the registry obtained from the registry administrator no more than
31 days prior to the date any call is made.
Common Carrier Notifications
The Commission's rules require that, beginning January 1, 2004,
common carriers shall ``when providing local exchange service, provide
an annual notice, via an insert in the subscriber's bill, of the right
to give or revoke a notification of an objection to receiving telephone
solicitations pursuant to the national do-not-call database maintained
by the Federal government and the methods by which such rights may be
exercised by the subscriber.'' This notice must be clear and
conspicuous and include, at a minimum, the Internet address and toll-
free number that residential telephone subscribers may use to register
on the national database. Verizon asks the Commission to reconsider
this requirement, arguing that an annual notice is expensive and
unnecessary. Alternatively, Verizon asks the Commission to clarify that
other forms of notification, such as messages on telephone bills or in
telephone directories, satisfy the TCPA requirement and at a much lower
cost than bill inserts.
The TCPA provides that if the Commission adopts a national do-not-
call database, such regulations shall ``require each common carrier
providing telephone exchange service * * * to inform subscribers for
telephone exchange service of the opportunity to provide notification *
* * that such subscriber objects to receiving telephone
solicitations.'' In implementing this provision, the Commission adopted
a rule requiring such notice to be made on an annual basis. While many
residential subscribers have already placed their numbers on the
national do-not-call registry, others may wish to do so in the future
or may need to place a different number on the registry because of a
move or change in service. Still others may decide subsequently to
remove their numbers from the registry. Therefore, we disagree with
Verizon that such annual notification, which includes the registry's
toll-free telephone number and Internet address established by the FTC,
is unnecessary.
Upon further consideration, we will allow common carriers to
provide the notice required by 47 U.S.C. 227(c)(3)(B) through either a
bill insert or a separate message on the bill itself. Such notice may
also appear on an Internet bill that the subscriber has opted to
receive. We believe that bill messages may be a less expensive and an
efficient alternative to a separate page in the bill for some carriers,
and will nevertheless comply with the TCPA. We emphasize, however, that
the notice, whether appearing on the actual bill or on a separate page
in the bill, must be clear and conspicuous and include, at a minimum,
the Internet address and toll-free number that residential telephone
subscribers may use to register on or remove their numbers from the
national database.
Company-Specific Do-Not-Call Lists
In the 2003 TCPA Order, the Commission determined that company-
specific do-not-call lists should be retained in order to provide
consumers with an additional option for managing telemarketing calls.
In addition, we concluded that the retention period for records of
those consumers requesting not to be called should be reduced from ten
years to five years. Petitioner Biggerstaff seeks clarification on how
the five-year retention requirement applies to do-not-call requests
made prior to the effective date of the amended rule. He argues that in
fairness to consumers, any do-not-call request made prior to the
effective date of the new rule must be honored by the telemarketer or
seller for the original ten-year period. SBC and MCI disagree and urge
the Commission to clarify that telemarketers are required to honor
company-specific do-not-call requests for five years from the date any
request is made, including those requests made prior to the
Commission's ruling. Petitioner Brown asks the Commission to reduce the
period of time by which a telemarketer must honor company-specific do-
not-call requests from 30 days to 24 hours. We conclude that any do-
not-call request made of a particular company must be honored for a
period of five years from the date the request is made, whether the
request was made prior to the effective date of the amended rule or
after the rule went into effect. Telemarketers may remove those numbers
from their company-specific do-not-call lists that have been on their
lists for a period of five years or longer. As explained in the 2003
TCPA Order, we believe a five-year retention period reasonably balances
any administrative burden on consumers in requesting not to be called
with the interests of telemarketers in contacting consumers. The
shorter retention period increases the accuracy of companies' do-not-
call databases while the national do-not-call registry option mitigates
the burden on those consumers who may find company-specific do-not-call
requests overly burdensome. We also believe that having two different
retention periods--one for requests made prior to the effective date of
the amended rule and one for requests made after--will lead to
confusion among consumers and increase administrative burdens on
telemarketers.
In addition, we decline to amend the timeframe by which
telemarketers must honor do-not-call requests. In concluding that
telemarketers must honor such requests within 30 days, we considered
both the large databases of such requests maintained by some entities
and the limitations on certain small businesses. We also determined
that telemarketers with the capability to honor company-specific do-
not-call requests in less than thirty days must do so. We continue to
believe that this requirement adequately balances the privacy interests
of those consumers that have requested not to be called with the
interests of the telemarketing industry. We also decline to amend our
determination regarding the hours a telemarketer must be available to
record do-not-call requests from consumers making inbound calls to that
telemarketer. In the 2003 TCPA Order, we concluded that the number
supplied by the telemarketer must permit an individual to make a do-
not-call request during the hours of 9 a.m. and 5 p.m. Monday through
Friday. Telemarketers are already required to record do-not-call
requests at the time the request is made, such as during a live
solicitation call. Thus, we believe that in those instances where the
consumer must
[[Page 19333]]
instead contact the telemarketer at the telemarketer's number, it is
reasonable to do so during ``normal'' business hours when most
consumers are likely to call.
Finally, the rules as adopted in July of 2003 contain a minor error
in wording which is being corrected by this Order. In Sec.
64.1200(d)(6), the word ``caller's'' should be replaced with the word
``consumer's.'' We correct the sentence to read: ``A person or entity
making calls for telemarketing purposes must maintain a record of a
consumer's request not to receive further telemarketing calls.''
Established Business Relationship Exemption
The TCPA expressly exempts calls to persons with whom the caller
has an ``established business relationship'' (EBR) from the
restrictions on telephone solicitations. Congress determined that such
an exemption was necessary to allow companies to communicate by
telephone with their existing customers. Consistent with the FTC, we
modified the definition of established business relationship so that
the relationship, once begun, exists for 18 months in the case of
purchases or transactions and three months in the case of inquiries or
applications, unless the consumer ``terminates'' it by, for example,
making a company-specific do-not-call request. ACLI asks the Commission
to clarify that an ``established business relationship'' exists: (1)
Between a person and his or her insurer as long as there is an
insurance policy or annuity in force between the company and the
person; and (2) between the person and his or her insurance agent, as
long as there is an insurance policy or annuity in force that was
placed by that insurance agent. ACLI indicates that the definition of
``established business relationship'' is vague as applied to the life
insurance industry and does not take into account the unique aspects of
the relationship between policyholders, insurers, their agents and
licensed insurance professionals. ACLI maintains that insurance
policies and annuities purchased by consumers represent long-term
obligations of the companies that provide those policies. ACLI
indicates that an insurance policy or annuity remains in force between
the parties beyond the initial policy placement or renewal. Thus, ACLI
contends that an EBR exists during the life of the policy even without
an additional purchase, transaction or inquiry by the policyholder.
Petitioner Dowler similarly requests that the Commission clarify
that an EBR exists between a mortgage broker and a consumer throughout
the term of any loan that originates with the broker. Without
clarification from the Commission, Dowler contends that the mortgage
broker's EBR with the consumer would end 18 months after the original
transaction with the broker, even though the broker established the
initial relationship with the consumer. Dowler recommends that the
Commission expand the rules so that an EBR exists between the broker
and borrower during the length of the originating loan transaction and
extends 18 months beyond the conclusion of the loan contract.
Although petitions from ACLI and Dowler were filed late, we take
this opportunity to clarify application of the EBR time limitations. We
agree with petitioners that a unique relationship exists between
consumers and entities that enter into financial contracts or
agreements. Financial ``contracts'' often remain in force even if the
consumer is not required to make regular payments or transactions. In
passing the recent Fair and Accurate Credit Transactions Act of 2003
(FACT Act), Congress provided that a ``pre-existing business
relationship'' includes a ``financial contract between a person and a
consumer which is in force'' or a ``financial transaction (including
holding an active account or a policy in force or having another
continuing relationship).'' We similarly clarify that the existence of
financial agreements, including bank accounts, credit cards, loans,
insurance policies and mortgages, constitute ongoing relationships that
should permit a company to contact the consumer to, for example, notify
them of changes in terms of a contract or offer new products and
services that may benefit them. Consumers should not be surprised to
receive a call from a bank at which they have an account, even if they
have not transacted any business on that account for over 18 months.
They also are likely to expect to receive calls from insurance
companies with whom they hold an insurance policy or from lenders with
whom they secured a mortgage. Similarly, a publication that a consumer
agrees to subscribe to for a specified period of time, has an EBR with
the consumer for the duration of the subscription. Thus, during the
time a financial contract remains in force between a company and a
consumer, there exists an established business relationship, which will
permit that company to call the consumer during the period of the
``contract.'' Once any account is closed or any ``contract'' has
terminated, the bank, lender, or other entity will have an additional
18 months from the last transaction to contact the consumer before the
EBR is terminated for purposes of telemarketing calls. However, we
emphasize that a consumer may terminate the EBR for purposes of
telemarketing calls at any time by making a do-not-call request. Once
the consumer makes a company-specific do-not-call request, the company
may not call the consumer again to make a telephone solicitation
regardless of whether the consumer continues to do business with the
company.
In addition, we clarify that intermediaries, such as insurance
agents and mortgage brokers, may call those consumers with whom they
have arranged an insurance policy or mortgage for a period of 18 months
from the time the transaction is completed, i.e., the broker/agent
arranged the mortgage or insurance deal. We agree that brokers and
agents often play an important role in these types of financial
transactions and that, in many circumstances, the consumer would expect
to receive a call from them within a reasonable period of time of the
transaction. However, we believe that to allow a broker to make a
telephone solicitation to a consumer for the duration of the loan or
term of the policy would conflict with the do-not-call rules' purpose
in protecting consumer privacy rights. In addition, a broker or agent
may obtain the consumer's express written permission to call beyond the
18-month period at the time of the transaction.
Tax-Exempt Nonprofit Organization Exemption
The term ``telephone solicitation,'' as defined in the TCPA, does
not include a call or message ``by a tax-exempt nonprofit
organization.'' The Commission concluded, as part of its 1995 TCPA
Reconsideration Order, published at 60 FR 42068, August 15, 1995, that
calls placed by an agent of the telemarketer are treated as if the
telemarketer itself placed the call. In the 2003 TCPA Order, the
Commission reaffirmed this conclusion, finding that charitable and
other nonprofit entities with limited expertise, resources and
infrastructure, might find it advantageous to contract out its
fundraising efforts. We determined that a tax-exempt nonprofit
organization that conducts its own fundraising campaign or hires a
professional fundraiser to do it, will not be subject to the
restrictions on telephone solicitations. We also determined, however,
that when a for-profit organization is delivering its own commercial
message as part of a telemarketing campaign, even if
[[Page 19334]]
accompanied by a donation to a charitable organization or referral to a
tax-exempt nonprofit organization, that call is not by or on behalf of
a tax-exempt nonprofit organization and is therefore subject to the
``telephone solicitation'' rules.
Several petitioners ask the Commission to reconsider the rules
regarding calls by and on behalf of tax-exempt nonprofit organizations.
DialAmerica requests that we clarify that its ``Sponsor Program'' is
exempt from the national do-not-call registry because the calls it
makes are on behalf of a tax-exempt nonprofit entity, and not on behalf
of a for-profit seller. Petitioner Biggerstaff, on the other hand, asks
us to reconsider our determination regarding calls made by or on behalf
of tax-exempt nonprofit organizations, arguing that exempting calls
from the definition of ``telephone solicitation,'' when they are made
by a for-profit telemarketer on behalf of the nonprofit, violates
Congressional intent and the plain language of the statute. We now
reaffirm our determination regarding for-profit companies that call to
encourage the purchase of goods or services, yet donate some of the
proceeds to a nonprofit organization. In circumstances where telephone
calls are initiated by a for-profit entity to offer its own, or another
for-profit entity's products for sale--even if a tax-exempt nonprofit
will receive a portion of the sale's proceeds--such calls are telephone
solicitations as defined by the TCPA. We distinguish these types of
calls from those initiated, directed and controlled by a tax-exempt
nonprofit for its own fundraising purposes. We believe that to exempt
for-profit organizations merely because a tax-exempt nonprofit
organization is involved in the telemarketing program would undermine
the purpose of the do-not-call registry. Thus, we decline to exempt
DialAmerica's Sponsor Program from the national do-not-call registry.
We emphasize that a tax-exempt nonprofit organization that simply
contracts out its fundraising efforts will not be subject to the
restrictions on telephone solicitations. Although Petitioner
Biggerstaff describes certain entities that purport to be calling on
behalf of tax-exempt nonprofits to evade the rules, the record does not
warrant reversing this determination. Instead, we will address such
potential violations on a case-by-case basis through the Commission's
enforcement process.
Predictive Dialers and Abandoned Calls
Under the Commission's rules, telemarketers must ensure that any
technology used to dial telephone numbers abandons no more than three
percent of calls answered by a person, measured over a 30-day period. A
call will be considered abandoned if it is not transferred to a live
sales agent within two seconds of the recipient's completed greeting.
When a call is abandoned within the three percent maximum allowed, a
telemarketer must deliver a prerecorded identification message
containing only the telemarketer's name, telephone number, and
notification that the call is for ``telemarketing purposes.'' Several
petitioners and commenters raise issues related to the use of
predictive dialers and the Commission's call abandonment rules.
InfoCision requests that the Commission reconsider the call abandonment
rate of three percent and instead adopt a five percent abandonment
rate. Petitioner Brown asks us to revise the rules to prohibit the
abandonment of any call which is answered by a person. Beautyrock urges
the Commission to act to ensure that the FTC's rules on abandoned calls
are consistent with the FCC's.
We conclude that petitioners raise no new facts suggesting the call
abandonment rules should be amended or that the identification message
requirement should be eliminated. We therefore dismiss such petitions
to the extent they seek such action. In addition, while we do not have
the authority to change the FTC's rules, we have forwarded a report to
Congress which outlines the inconsistencies between the agencies' sets
of rules.
The record before us revealed that consumers often face ``dead
air'' calls and repeated hang-ups resulting from the use of predictive
dialers. In addition to requiring that telemarketers limit the number
of such abandoned calls to three percent of calls answered by a person,
the Commission required that telemarketers deliver a prerecorded
message when abandoning a call so that consumers will know who is
calling them. We emphasized that the message must be limited to name
and telephone number, along with a notice that the call is for
``telemarketing purposes.'' We cautioned that the message may not be
used to deliver an unsolicited advertisement, and that additional
information in the prerecorded message constituting an unsolicited
advertisement would be a violation of our rules. We agree with the DMA
that words other than ``telemarketing purposes'' may convey the purpose
of the call. However, we disagree that language such as ``Hi, this is
Company A, calling today to sell you our services'' does not constitute
an unsolicited advertisement and conclude that such statement would run
afoul of the rules. Therefore, we strongly encourage telemarketers to
use the words ``telemarketing purposes'' when delivering a prerecorded
identification message for an abandoned call in order to avoid
delivering an unsolicited advertisement in the message.
Artificial or Prerecorded Voice Messages
The TCPA prohibits telephone calls to residences using an
artificial or prerecorded voice to deliver a message without the prior
express consent of the called party, unless the call is for emergency
purposes or is specifically exempted under Commission rules. The TCPA
permits the Commission to exempt calls that are non-commercial and
commercial calls which do not adversely affect the privacy rights of
the called party and which do not transmit an unsolicited
advertisement. Since 1992, the Commission's rules have exempted from
the prohibition ``a call or message * * * that is made for a commercial
purpose but does not include the transmission of any unsolicited
advertisement.'' The Commission made clear in the 2003 TCPA Order that
offers for free goods or services that are part of an overall marketing
campaign to sell property, goods, or services are subject to the
restrictions on unsolicited advertisements. We also determined that if
the call is intended to offer property, goods, or services for sale
either during the call, or in the future (such as in response to a
message that provides a toll-free number), that call is an
advertisement.
Debt Collection Calls
The Commission's rules require that all prerecorded messages
identify the name of the business, individual or other entity that is
responsible for initiating the call, along with the telephone number of
such business, other entity, or individual. The prerecorded message
must contain, at a minimum, the legal name under which the business,
individual or entity calling is registered to operate. The rule also
requires that the telephone number stated in the message be one that a
consumer can use during normal business hours to ask not to be called
again. ACA International (ACA) requests clarification that the amended
identification requirements for prerecorded messages do not apply to
calls made for debt collection purposes. ACA states that the
Commission's identification requirement as applied to debt collection
calls directly conflicts
[[Page 19335]]
with section 805(b) of the Fair Debt Collection Practices Act (FDCPA),
which prohibits the disclosure of the existence of a debt to persons
other than the debtor. ACA maintains that the FDCPA expressly prohibits
debt collectors from communicating any information to third parties,
even inadvertently, with respect to the existence of a debt. ACA states
that the requirement that a debt collector transmit its registered name
at the beginning of the prerecorded message potentially would trigger
liability under the third party disclosure prohibition of the FDCPA. In
the alternative, ACA requests that the Commission clarify that debt
collectors are not required to identify their state-registered name in
prerecorded messages if such identification conflicts with Federal or
State laws.
In the 1995 TCPA Reconsideration Order, the Commission concluded
that the rules did not require that debt collection employees give the
names of their employers in a prerecorded message, which disclosure
might otherwise reveal the purpose of the call to persons other than
the debtor. Although we believe that it is generally in the best
interest of residential subscribers that full identification of the
caller be provided during any prerecorded message call, the FDCPA
clearly prohibits the disclosure by debt collectors of any information
regarding the existence of a debt. It requires a collector initiating a
call answered by a third party to identify himself by name but not to
disclose the name of his employer unless asked. We therefore clarify
that as long as the call is made for the purpose of debt collection and
is not ``for the purpose of encouraging the purchase or rental of, or
investment in, property, goods or services * * *,'' the debt collector
is not required to identify its state-registered name in prerecorded
messages if such identification conflicts with Federal or State laws.
In such circumstances where a conflict would exist, we find that the
caller may instead identify himself by individual name. We continue to
require any debt collector to state clearly the telephone number (other
than that of the autodialer or prerecorded message player that placed
the call) of such business, other entity, or individual.
``Information-Only'' Calls
The American Resort Development Association (ARDA) asks the
Commission to permit entities to make prerecorded, ``information-only''
calls to numbers that are not on the national do-not-call list or a
company-specific do-not-call list. ARDA explains that timeshare
providers use such messages to describe promotional opportunities, but
that consumers are not encouraged to purchase anything on the phone. If
the consumer returns the call to learn more, the operator informs the
consumer about promotional activities at a nearby resort. ARDA contends
that prohibiting such prerecorded message calls is not necessary to
safeguard consumers' privacy or prevent unscrupulous conduct. ARDA
further argues that the Commission's determination regarding such
messages violates the First Amendment rights of consumers who wish to
receive such calls. Shields opposes ARDA's petition, maintaining that a
prerecorded call, the ultimate purpose of which is to further a
commercial enterprise, is a telemarketing call.
We decline to grant ARDA's petition to exempt prerecorded messages
regarding timeshare opportunities. The messages ARDA describes that
purport to deliver ``information only'' are clearly part of a marketing
campaign to encourage consumers to invest in a commercial product. As
we stated in the 2003 TCPA Order, the fact that a sale is not completed
during the call or message does not mean the message does not
constitute a telephone solicitation or unsolicited advertisement.
Messages that describe a new product, a vacation destination, or a
company that will be in ``your area'' to perform home repairs
nevertheless are part of an effort to sell goods and services, even if
a sale is not made during the call. In addition, as discussed above,
messages that promote goods or services at no cost are nevertheless
unsolicited advertisements because they describe the ``quality of any
property, goods or services.'' ARDA points out that consumers who
receive prerecorded messages must return the calls if they wish to
learn more, to complete the sale, or simply to ask to be placed on a
do-not-call list. As noted in the 2003 TCPA Order, such messages were
determined by Congress to be more intrusive to consumer privacy than
live solicitation calls. The record before us shows that consumers are,
in fact, often more frustrated by prerecorded messages. The DMA
indicates that they should be used only in limited circumstances, as
consumers are often offended by such messages. Thus, we reiterate that
prerecorded messages that contain either a telephone solicitation or
introduce an unsolicited advertisement are prohibited without the prior
express consent of the called party.
We disagree with Petitioner Strang that entities sending lawful
prerecorded messages must obtain the ``prior express consent'' of the
called party in writing. Unlike the national do-not-call registry,
through which consumers have indicated that they do not wish to receive
telemarketing calls (by registering on the list), we find no evidence
in the record suggesting that consent should be in writing when sending
prerecorded messages to consumers not registered on the national do-
not-call list. In the case of the national do-not-call registry, we
concluded that sellers may contact those consumers on the list if they
have obtained the prior express permission of the consumers. Such
express permission must be evidenced only by a signed, written
agreement between the consumer and the seller. Absent a consumer's
listing on the do-not-call registry, such prior express consent to
deliver a lawful prerecorded message may be obtained orally. As with
the sending of unsolicited facsimile advertisements, telemarketers
delivering prerecorded messages must be prepared to provide clear and
convincing evidence that they received prior express consent from the
called party.
We also decline to reconsider the requirement for businesses to use
their legal name to identify themselves when they use prerecorded
messages. We believe that the use of ``d/b/a'' (``doing business as'')
alone in many instances may make it difficult to identify the company
calling. However, as we stated in the 2003 TCPA Order, the rule does
not prohibit the use of ``d/b/a'' information, provided that the legal
name of the business is also provided.
Radio Station and Television Broadcaster Messages
In the 2003 TCPA Order, we addressed prerecorded messages sent by
radio stations or television broadcasters that encourage telephone
subscribers to tune in at a particular time for a chance to win a prize
or similar opportunity. We concluded that if the purpose of the message
is merely to invite a consumer to listen to or view a broadcast, such
message is permitted under the rules as a commercial call that ``does
not include or introduce an unsolicited advertisement or constitute a
telephone solicitation.'' We also noted, however, that if the message
encourages consumers to listen to or watch programming that is
retransmitted broadcast programming for which consumers must pay (e.g.,
cable, digital satellite, etc.), such messages would be considered
``unsolicited advertisements'' for purposes of our rules. Such messages
would be part of an overall marketing campaign to encourage the
purchase of goods or
[[Page 19336]]
services or that describe the commercial availability or quality of any
goods or services and would be considered ``unsolicited
advertisements'' as defined by the TCPA.
Petitioner Biggerstaff requests that the Commission reconsider its
determination that certain radio and television broadcast messages are
not considered ``unsolicited advertisements'' under the restrictions on
prerecorded messages. Biggerstaff contends specifically that radio and
television broadcasts are entertainment and news ``services,'' as well
as ``advertisement delivery services.'' Biggerstaff further maintains
that there is no basis for treating such broadcasters differently from
others providing similar services, such as cable networks, Web sites,
newspapers or publishers.
We decline to reverse our conclusion regarding radio station and
television broadcaster messages. As explained in the 2003 TCPA Order,
if the purpose of the message is merely to invite a consumer to listen
to or view a broadcast, such message is permitted under the current
rules as ``a commercial call that does not include or introduce an
unsolicited advertisement or constitute a telephone solicitation.''
Wireless Telephone Numbers
In the 2003 TCPA Order, we affirmed that it is unlawful to make any
call using an automatic telephone dialing system or an artificial or
prerecorded message to any wireless telephone number. We stated that
both the statute and our rules prohibit these calls, with limited
exceptions, ``to any telephone number assigned to a paging service,
cellular telephone service, specialized mobile radio service, or other
common carrier service, or any service for which the called party is
charged.'' In addition, we determined not to prohibit all live
solicitations to wireless numbers, but noted that the TCPA already
prohibits such calls to wireless numbers using an autodialer.
As noted above, section 227(b)(1)(A)(iii) of the TCPA refers to
calls made to any telephone number ``assigned to'' cellular telephone
service or any service for which the called party is charged for the
call. Verizon Wireless explains that according to numbering guidelines
and the Commission's rules, numbers ported to another carrier are
treated as ``assigned numbers'' that are then reported to the
Commission for utilization purposes by the donating carrier, not by the
receiving carrier. According to Verizon Wireless, a number that is
ported to another carrier is still assigned to the original carrier for
purposes of numbering and local number portability. Verizon Wireless
asks us to clarify that, under the TCPA, the number is ``assigned to''
a wireless service based on the identity of a customer's new service,
rather than the identity of the original carrier.
We agree with those petitioners who point out that permitting
autodialed and prerecorded voice messages to wireless telephone numbers
that have been ported from wireline carriers would defeat the
underlying purpose of the prohibition--to protect wireless subscribers
from the cost and interference associated with such calls. To apply the
Commission's definition of ``assigned numbers'' for number utilization
purposes to the TCPA's rules on calls to wireless numbers would lead to
an unintended result. Telemarketers would be prohibited from placing
autodialed and prerecorded message calls to wireless numbers generally,
but permitted to place such calls to certain subscribers simply because
they have ported their numbers from wireline service to wireless
service. In addition, we believe we made clear in the 2003 TCPA Order
that, even with the advent of local number portability, we expect
telemarketers to make use of the tools available in the marketplace to
avoid making autodialed and prerecorded message calls to wireless
numbers. Thus, we affirm that a telephone number is assigned to a
cellular telephone service, for purposes of the TCPA, if the number is
currently being used in connection with that service.
We also agree with the DMA that a call placed to a wireline number
that is then forwarded, at the subscriber's sole discretion and
request, to a wireless number or service, does not violate the ban on
autodialed and prerecorded message calls to wireless numbers. Action on
the part of any residential subscriber to forward certain calls from
their wireline device to their wireless telephones does not subject
telemarketers to liability under the TCPA.
Caller Identification Rules
The DMA asks the Commission to further examine and perhaps revise
our caller identification (caller ID) requirements, indicating that it
is not clear that Automatic Number Identification (ANI) will pass to
ordinary residential subscriber lines. Brown petitions the Commission
to require telemarketers, when transmitting caller ID, to provide a
telephone number, which the consumer may call at no toll charge.
We decline to reconsider the caller ID requirements and dismiss
both the DMA's and Brown's petitions. We continue to believe that the
caller ID rules allow consumers to screen out unwanted calls and to
identify companies that they wish to ask not to call again. In
addition, as discussed in the 2003 TCPA Order, we believe that
telemarketers can comply with the requirements. Under the rules,
telemarketers are required to transmit caller ID information, which
must include either ANI or Calling Party Number (CPN). We explained
that CPN can include any number associated with the telemarketer or
party on whose behalf the call is made, that allows the consumer to
identify the caller. This includes a number assigned to the
telemarketer by its carrier, the specific number from which a sales
representative placed a call, the number for the party on whose behalf
the telemarketer is making the call, or the seller's customer service
number. Any number supplied must permit an individual to make a do-not-
call request during regular business hours for the duration of the
telemarketing campaign.
Private Right of Action
The TCPA provides consumers with a private right of action in State
court for any violation of the TCPA's prohibitions on the use of
automatic dialing systems, artificial or prerecorded voice messages,
and unsolicited facsimile advertisements. Several petitioners request
that the Commission clarify the parameters of the private right of
action.
The Commission declines to make any determination about the
specific contours of the TCPA's private right of action. Congress
provided consumers with a private right of action, ``if otherwise
permitted by the laws or rules of court of a State.'' As we stated in
the 2003 TCPA Order, this language suggests that Congress contemplated
that such legal action was a matter for consumers to pursue in
appropriate State courts, subject to those State courts' rules. We
continue to believe that it is for Congress, not the Commission, either
to clarify or limit this right of action.
Regulatory Flexibility Act Analysis
We note that no FRFA is necessary for the Second Order on
Reconsideration. In this Order, we are not making any changes to the
Commission's rules; rather, we are clarifying the existing rules. In
addition, there were no objections to the FRFA regarding the
Commission's telemarketing rules.
Congressional Review Act
The Commission will send a copy of this Second Order on
Reconsideration in a report to be sent to Congress and
[[Page 19337]]
the General Accounting Office pursuant to the Congressional Review Act,
see 5 U.S.C. 801(a)(1)(A).
Ordering Clauses
Pursuant to sections 1-4, 227, and 303(r) of the Communications Act
of 1934, as amended, 47 U.S.C. 151-154, 227, and 303(r); and Sec.
1.429 of the Commission's Rules, 47 CFR 1.429, this Second Order on
Reconsideration in CG Docket No. 02-278 is adopted as set forth herein,
and part 64 of the Commission's rules, 47 CFR 64.1200 is amended as set
forth in the Rule Changes.
This Second Order on Reconsideration shall become effective May 13,
2005.
The petitions for reconsideration and/or clarification of the
telemarketing rules in CG Docket No. 02-278 are denied in part and
granted in part, as set forth herein. As noted above, the Commission
intends to address the issue of preemption separately in the future.
MedStaffing Inc.'s Petition for Declaratory Ruling is granted to the
extent stated herein. Petitions not filed within 30 days of the Report
and Order's publication by American Council of Life Insurers, Consumer
Bankers Association, Clifford Dowler, and RDI Marketing are dismissed.
List of Subjects in 47 CFR Part 64
Telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Rule Changes
0
For reasons discussed in the preamble, the Commission amends part 64 of
the Code of Federal Regulations as follows:
PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS
0
1. The authority citation for part 64 continues to read as follows:
Authority: 47 U.S.C. 154, 254(k); secs. 403 (b)(2)(B), (C),
Public Law 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201,
218, 225, 226, 228, and 254(k) unless otherwise noted.
0
2. Section 64.1200 is amended by revising paragraph (d)(6) to read as
follows:
Sec. 64.1200 Delivery restrictions.
* * * * *
(d) * * *
(6) Maintenance of do-not-call lists. A person or entity making
calls for telemarketing purposes must maintain a record of a consumer's
request not to receive further telemarketing calls. A do-not-call
request must be honored for 5 years from the time the request is made.
* * * * *
[FR Doc. 05-7346 Filed 4-12-05; 8:45 am]
BILLING CODE 6712-01-P