[Federal Register Volume 75, Number 54 (Monday, March 22, 2010)]
[Proposed Rules]
[Pages 13471-13482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6095]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 64 and 68

[CG Docket No. 02-278; FCC 10-18]


Telephone Consumer Protection

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission invites comment on proposed 
revisions to its rules under the Telephone Consumer Protection Act 
(TCPA) that would harmonize those rules with the Federal Trade 
Commission's (FTC's) recently amended Telemarketing Sales Rule. The 
Commission seeks comment on whether these proposed revisions would 
benefit consumers and industry by creating greater symmetry between the 
two agencies' regulations, and by extending the FTC's standards to 
regulated entities that are not currently subject to the FTC's rules.

DATES: Comments are due on or before May 21, 2010. Reply comments are 
due on or before June 21, 2010. Written comments on the Paperwork 
Reduction Act (PRA) proposed information collection requirements must 
be submitted by the general public, Office of Management and Budget 
(OMB), and other interested parties to Cathy Williams, Federal 
Communications Commission, via e-mail to Cathy [email protected] and to 
Nicholas A. Fraser, Office of Management and Budget, via e-mail to 
[email protected] or via fax at 202-395-5167 on or 
before May 21, 2010.

ADDRESSES: You may submit comments identified by CG Docket No. 02-278 
and/or FCC Number 10-18, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Lisa Boehley, Consumer and 
Governmental Affairs Bureau, Policy Division, at (202) 418-7395 
(voice), or e-mail [email protected].
    For additional information concerning the Paperwork Reduction Act 
information collection requirements contained in this document, contact 
Cathy Williams, Federal Communications Commission, at (202) 418-2918, 
or e-mail [email protected]">Cathy.[email protected].

SUPPLEMENTARY INFORMATION: On July 3, 2003, the Commission released the 
Rules and Regulations Implementing the TCPA of 1991, Report and Order 
(2003 TCPA Order), CG Docket No. 02-278, FCC 03-153, published at 68 FR 
44144, July 25, 2003, revising the TCPA rules, and adopted new rules to 
provide consumers with several options for avoiding unwanted telephone 
solicitations, including the establishment of a national do-not-call 
registry. This is a summary of the Commission's document Rules and 
Regulations Implementing the TCPA of 1991, Notice of Proposed 
Rulemaking, CG Docket No. 02-278, FCC 10-18, adopted January 20, 2010, 
and released January 22, 2010, seeking comment on proposed revisions to 
the Commission's rules under the Telephone Consumer Protection Act 
(TCPA) that would harmonize those rules with the Federal Trade 
Commission's (FTC's) recently amended Telemarketing Sales Rule.
    Document FCC 10-18 contains proposed information collection 
requirements subject to the PRA of 1995, Public Law 104-13. In 
addition, it contains a 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,

[[Page 13472]]

Public Law 107-198, see 44 U.S.C. 3506 (c)(4).
    Pursuant to Sec. Sec.  1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415 and 1.419, interested parties may file comments and reply 
comments on or before the dates indicated on the first page of this 
document. Comments may be filed using: (1) the Commission's Electronic 
Comment Filing System (ECFS), (2) the Federal Government's eRulemaking 
Portal, or (3) by filing paper copies. See Electronic Filing of 
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/or the Federal eRulemaking Portal: http://www.regulations.gov.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street, SW., Washington DC 20554.
    People with Disabilities: 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 and Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).
    Pursuant to Sec.  1.1200 of the Commission's rules, 47 CFR 1.1200, 
this matter shall be treated as a ``permit-but-disclose'' proceeding in 
accordance with the Commission's ex parte rules. Persons making oral ex 
parte presentations are reminded that memoranda summarizing the 
presentations must contain summaries of the substances of the 
presentations and not merely a listing of the subjects discussed. More 
than a one or two sentence description of the views and arguments 
presented is generally required. See 47 CFR 1.1206(b). Other rules 
pertaining to oral and written ex parte presentations in permit-but-
disclose proceedings are set forth in Sec.  1.1206(b) of the 
Commission's rules, 47 CFR 1.1206(b).
    A copy of document FCC 10-18 and any subsequently filed documents 
in this matter will be available during regular business hours at the 
FCC Reference Center, Portals II, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554, (202) 418-0270. Document FCC 10-18 and any 
subsequently filed documents in this matter may also be purchased from 
the Commission's duplicating contractor at their Web site, http://www.bcpiweb.com, or call (800) 378-3160. A copy of document FCC 10-18 
and any subsequently filed documents in this matter may also be found 
by searching the Commission's Electronic Comment Filing System (ECFS) 
at http://www.fcc.gov.cgb/ecfs (insert CG Docket No. 02-278 into the 
Proceeding block).
    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 and Governmental 
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). 
Document FCC 10-18 can also be downloaded in Word or Portable Document 
Format (PDF) at: http://www.fcc.gov/cgb/policy.

Initial Paperwork Reduction Act of 1995 Analysis

    Document FCC 10-18 contains proposed information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burden, invites the general public, OMB and other 
Federal agencies to take this opportunity to comment on the following 
information collection(s), as required by the Paperwork Reduction Act 
of 1995 (PRA), Public Law 104-13. Public and agency comments are due 
May 21, 2010. An agency may not conduct or sponsor a collection of 
information unless it displays a current valid control number. No 
person shall be subject to any penalty for failing to comply with a 
collection of information subject to the PRA that does not display a 
valid control number. Comments are requested concerning: (a) Whether 
the proposed collection of information is necessary for the proper 
performance of the functions of the Commission, including whether the 
information shall have practical utility; (b) the accuracy of the 
Commission's burden estimate; (c) ways to enhance the quality, utility, 
and clarity of the information collected; and (d) ways to minimize the 
burden of the collection of information on the respondents, including 
the use of automated collection techniques or other forms of 
information technology.
    In addition, pursuant to the Small Business Paperwork Relief Act of 
2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission 
seeks specific comment on how the Commission might ``further reduce the 
information collection burden for small business concerns with fewer 
than 25 employees.''
    OMB Control Number: 3060-0519.
    Title: Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991, CG Docket No. 02-278.
    Form Number: N/A.
    Type of Review: Revision of a currently approved collection.
    Respondents: Business or other for-profit entities; Not-for-profit 
institutions; and Individuals or households.
    Number of Respondents and Responses: 49,397 respondents, 
135,632,883 responses.
    Estimated Time per Response: .004 hours (15 seconds) to 1 hour.
    Frequency of Responses: Recordkeeping requirement; Monthly, annual, 
and on occasion reporting requirements; Third party disclosure 
requirement.
    Obligation to Respond: Required to obtain or retain benefits. The 
authorizing statute for this information collection is found in the 
Telephone Consumer Protection Act of 1991 (TCPA), Public Law 102-243, 
105 Statute 2394 (1991), which added Section 227 of the Communications 
Act of 1934, [47 U.S.C. 227] Restrictions on the Use of Telephone 
Equipment.
    Total Annual Burden: 650,906 hours.
    Total Annual Cost: $4,590,000.
    Privacy Impact Assessment: Yes. The Privacy Impact Assessment was 
completed on June 28, 2007. It may be reviewed at http://www.fcc.gov/omd/privacyact/privacy_impact_assessment.html. The Commission is in 
the process of updating the PIA to incorporate various revisions to it 
as a result of revisions to the system of records notice (SORN).
    Nature and Extent of Confidentiality: Confidentiality is an issue 
to the extent

[[Page 13473]]

that individuals and households provide personally identifiable 
information, which is covered by the FCC's SORN, FCC/CGB-1, ``Informal 
Complaints and Inquiries.'' As required by the Privacy Act, 5 U.S.C. 
552a, the Commission also published SORN, FCC/CGB1, ``Informal 
Complaints and Inquiries,'' in the Federal Register on December 15, 
2009 (74 FR 66356), which became effective on January 25, 2010. A 
system of records for the do-not-call registry was created by the 
Federal Trade Commission (FTC) under the Privacy Act. The FTC published 
a notice in the Federal Register describing the system. See 68 FR 
37494, June 24, 2003.
    Needs and Uses: On July 3, 2003, the Commission released the Rules 
and Regulations Implementing the TCPA of 1991, Report and Order (2003 
TCPA Order), CG Docket No. 02-278, FCC 03-153, published at 68 FR 
44144, July 25, 2003, revising the TCPA rules, and adopted new rules to 
provide consumers with several options for avoiding unwanted telephone 
solicitations. These new rules established a national do-not-call 
registry, set a maximum rate on the number of abandoned calls, required 
telemarketers to transmit caller ID information, and modified the 
Commission's unsolicited facsimile advertising requirements. On January 
22, 2010, the Commission released the Rules and Regulations 
Implementing the TCPA of 1991, Notice of Proposed Rulemaking (NPRM), CG 
Docket No. 02-278, FCC 10-18 seeking comment on proposed revisions to 
its rules under the Telephone Consumer Protection Act (TCPA) that would 
harmonize those rules with the Federal Trade Commission's (FTC's) 
recently amended Telemarketing Sales Rule. The Commission anticipates 
that proposed revisions to Sec. Sec.  64.1200(a)(1) and 64.1200(a)(2) 
of the Commission's TCPA rules would contain new information collection 
requirements under the Paperwork Reduction Act of 1995. The proposed 
revisions would require sellers and telemarketers, when obtaining 
telephone subscribers' prior express consent to receive prerecorded 
telemarketing calls, to obtain such prior express consent in writing 
(including electronic methods of consent).
    To view a copy of this information collection request (ICR) 
submitted to OMB: (1) Go to the Web page http://www.reginfo.gov/public/do/PRAMain, (2) look for the section of the Web page called ``Currently 
Under Review,'' (3) click on the downward-pointing arrow in the 
``Select Agency'' box below the ``Currently Under Review'' heading, (4) 
select ``Federal Communications Commission'' from the list of agencies 
presented in the ``Select Agency'' box, (5) click the ``Submit'' button 
to the right of the ``Select Agency'' box, (6) when the list of FCC 
ICRs currently under review appears, look for the title of this ICR (or 
its OMB control number, if there is one) and then click on the ICR 
Reference Number to view detailed information about this ICR.''

Synopsis

Discussion

A. Prerecorded Message Calls

Written Consent Requirement
    1. The FCC's TCPA Rules. The TCPA prohibits the delivery of 
artificial or prerecorded voice messages to residential telephone 
lines, absent an emergency, without the ``prior express consent'' of 
the called party. Under the Commission's TCPA rules and orders, prior 
express consent of a residential telephone subscriber to receive a 
prerecorded telemarketing call (or live telephone solicitation) must be 
in writing if the subscriber's number is listed on the national do-not-
call registry, but may be obtained orally or in writing if the 
subscriber's number is not listed on the registry. In explaining the 
basis for this distinction, the Commission has noted that a residential 
subscriber who places his or her number on the registry has indicated a 
desire, through the act of registering, not to receive unsolicited 
telemarketing calls and, as such, written consent evidences the 
subscriber's wish to be contacted by only particular sellers at a 
particular number. When written consent is required under the 
Commission's rules and orders (because the subscriber is listed on the 
national do-not-call registry), the seller or telemarketer must obtain 
a signed, written agreement between the subscriber and seller stating 
that the subscriber agrees to be contacted by that seller and including 
the telephone number to which the calls may be placed. The Commission 
has indicated that the term ``signed'' may include an electronic or 
digital form of signature, to the extent such form of signature is 
recognized as a valid signature under applicable Federal or State 
contract law.
    2. With respect to a residential subscriber who has not listed his 
number on the national do-not-call registry, the Commission has 
declined to require written consent to deliver prerecorded messages to 
such a subscriber and noted that allowing oral consent in that context 
is consistent with statements in the legislative history suggesting 
that Congress did not believe written consent was needed with respect 
to calls placed to unregistered subscribers. Whether consent has been 
obtained orally or in writing, a seller or telemarketer placing a 
prerecorded telemarketing call must be prepared to provide ``clear and 
convincing evidence'' that it received prior express consent from the 
called party.
    3. The FTC's Telemarketing Sales Rule. Under the Telemarketing 
Sales Rule, as amended, prior express consent to receive prerecorded 
telemarketing calls must be in writing. The written agreement must be 
signed by the consumer and must be sufficient to show that he or she: 
(1) Received ``clear and conspicuous disclosure'' of the consequences 
of providing the requested consent--i.e., that the consumer will 
receive future calls that deliver prerecorded messages by or on behalf 
of a specific seller--and (2) having received this information, agrees 
unambiguously to receive such calls at a telephone number the consumer 
designates. In addition, the written agreement must be obtained 
``without requiring, directly or indirectly, that the agreement be 
executed as a condition of purchasing any good or service.'' The FTC 
has determined that written agreements obtained in compliance with the 
E-SIGN Act will satisfy the requirements of its rule, such as, for 
example, agreements obtained via an e-mail or Web site form, telephone 
keypress, or voice recording. Finally, under the Telemarketing Sales 
Rule, the seller bears the burden of proving that a clear and 
conspicuous disclosure was provided, and that an unambiguous consent 
was obtained.
    4. Consistent with Congress's directive in the Do Not Call 
Improvement Act of 2007 (DNCIA) to ``maximize consistency'' of the 
Commission's TCPA rules with the FTC's Telemarketing Sales Rule, the 
Commission seeks comment on whether it should revise Sec. Sec.  
64.1200(a)(1) and 64.1200(a)(2) of its rules to provide that, for all 
calls, prior express consent to receive prerecorded telemarketing 
messages must be obtained in writing. The Commission seeks comment on 
these proposed revisions and specific related issues in the discussion 
that follows.
    5. As an initial matter, the Commission seeks comment on its 
authority to adopt a prior written consent requirement similar to the 
FTC's. Specifically, while the term ``prior express consent'' appears 
in both subsections 227(b)(1)(A) and (b)(1)(B) of the Communications 
Act, the statute is silent regarding the precise form of such

[[Page 13474]]

consent (i.e., oral or written). Certain statements in the legislative 
history, however, suggest that Congress may have contemplated that 
consent may be obtained orally or in writing.
    6. Given that such a rule change would permit a telemarketer 
wishing to deliver prerecorded telemarketing messages to residential 
subscribers to obtain agreements from the subscribers by any electronic 
means authorized by the E-SIGN Act (including, for example, e-mail, Web 
form, telephone key press, or voice recording), the Commission seeks 
comment on whether Congressional concerns expressed nearly two decades 
ago regarding the potential burdens of a written consent requirement 
remain relevant today in light of the multitude of quick and cost 
effective options now available for obtaining written consent, other 
than via traditional pen and paper. The Commission also notes that 
section 227(b)(2)(B) of the Communications Act, in authorizing the 
Commission to adopt exemptions from the prerecorded message 
prohibition, states that it may do so ``subject to such conditions as 
the Commission may prescribe.'' This statement suggests that Congress 
intended the Commission to exercise discretion in establishing the 
parameters of any exemption from the prohibition on prerecorded 
messages. The Commission seeks comment on whether the discretion 
afforded it in this subsection extends to establishing a written 
consent requirement. The Commission also seeks comment on how best to 
reconcile the congressional objective to maximize consistency between 
the FTC's rule and the Commission's rule with the statements referenced 
above in the TCPA's legislative history reflecting the concern that 
written consent may prove unduly burdensome to telemarketers and to 
subscribers who wish to receive telephone solicitations. The Commission 
seeks comment on whether the convenience afforded by the E-SIGN Act 
addresses these concerns.
    7. As noted above, when written consent is required under the 
Commission's current rules (because the called party's number is listed 
on the national do-not-call registry), the seller or telemarketer must 
obtain a signed, written agreement between the subscriber and seller 
stating that the subscriber agrees to be contacted by that seller and 
including the telephone number to which the calls may be placed. If the 
Commission were to adopt a written consent requirement for placing 
prerecorded telemarketing calls to unregistered subscribers, it seeks 
comment on whether it also should adapt existing Sec.  
64.1200(c)(2)(ii) of its rules (governing the content of written 
consent agreements) to apply specifically to prerecorded telemarketing 
calls, as the FTC has done in its Telemarketing Sales Rule. The 
Commission tentatively concludes that requiring a written agreement 
evidencing consent to receive prerecorded messages in particular, such 
as that required by the FTC, may help to ensure that consumers are 
adequately apprised of the specific nature of the consent that is being 
requested and, in particular, of the fact that they will receive 
prerecorded message calls as a consequence of their agreement.
    8. Assuming the Commission has legal authority to adopt a written 
consent requirement, it seeks comment on whether it should adopt the 
same requirement both for calls governed by section 227(b)(1)(A) of the 
Communications Act (generally prohibiting automated or artificial or 
prerecorded message calls without prior express consent to emergency 
lines, health care facilities, and cellular services), and for calls 
governed by section 227(b)(1)(B) of the Communications Act (generally 
prohibiting prerecorded message calls without prior express consent to 
residential telephone lines). Because the two provisions include an 
identically worded exception for calls made with the ``prior express 
consent of the called party,'' the Commission tentatively concludes 
that any written consent requirement adopted should apply to both 
provisions. The Commission seeks comment on this tentative conclusion.
    9. The Commission also seeks information concerning the extent to 
which, in the absence of written consent, residential subscribers have 
been targeted by unscrupulous senders of prerecorded messages who 
erroneously claim to have obtained the subscriber's oral consent. If, 
after reviewing the record, the Commission determines that it does not 
have legal authority to adopt a written consent requirement, it seeks 
comment on what, if any, additional steps should be required by senders 
who choose to obtain consent orally in order to verify that consent 
was, in fact, given.
    10. As a policy matter, the Commission tentatively concludes that 
harmonizing its prior consent requirement with the FTC's may reduce the 
potential for industry and consumer confusion surrounding a 
telemarketer's obligations to the extent that similarly situated 
entities would no longer be subject to different requirements depending 
upon whether an entity is subject to the FTC's rule or to the 
Commission's rule. It tentatively concludes that written consent also 
may enhance the Commission's enforcement efforts and serve to protect 
both consumers and industry from erroneous claims that consent was or 
was not given, to the extent that, unlike oral consent, the existence 
of a paper or electronic record may provide unambiguous proof of 
consent. The Commission seeks comment on these tentative conclusions.
    11. The Commission notes that in light of the numerous options 
available today under the E-SIGN Act to obtain a written agreement, a 
telemarketer may be afforded flexibility to determine the form of 
``written'' consent that is most appropriate, least burdensome, and 
most cost effective for that particular business (e.g., e-mail, Web 
site form, telephone keypress, or voice recording). It seeks 
information and data on the specific compliance costs and burdens 
associated with various written consent options under the E-SIGN Act 
and on the extent to which sellers and telemarketers are already 
utilizing these methods for obtaining consumer consent, either pursuant 
to the FTC's amended Telemarketing Sales Rule or pursuant to Commission 
rules when a called party's number is listed on the national do-not-
call registry. Finally, to the extent that the Commission currently 
requires sellers and telemarketers placing prerecorded telemarketing 
calls to be prepared to provide ``clear and convincing evidence'' of 
the receipt of prior express consent from the called party, even when 
consent has been obtained orally, it seeks comment on the extent to 
which Commission adoption of a written consent requirement would add to 
the compliance burden associated with this existing requirement.
Exemption for Prerecorded Telemarketing Calls to Established Business 
Relationship Customers
    12. The FCC's TCPA Rules. The TCPA prohibits the use of artificial 
or prerecorded messages in telephone calls to residential (wireline) 
numbers without the prior express consent of the called party, but 
permits the Commission to exempt from this provision calls that are 
non-commercial and commercial calls that ``do not adversely affect the 
privacy rights of the called party'' and that do not transmit an 
``unsolicited advertisement.'' The TCPA does not explicitly exempt from 
the prohibition on artificial and prerecorded message calls those from 
a party with whom the subscriber has an established business 
relationship. Nevertheless, in

[[Page 13475]]

1992, the Commission determined to create such an exemption, based on 
its authority under the TCPA to exempt commercial calls that ``do not 
adversely affect residential subscriber privacy interests.'' The 
Commission concluded, based upon ``the comments received and the 
legislative history,'' that a solicitation to someone with whom a prior 
business relationship exists does not adversely affect subscriber 
privacy interests. It further concluded that such a solicitation can be 
``deemed to be invited or permitted'' by a subscriber in light of the 
business relationship. Finally, noting that the legislative history 
indicates that the TCPA ``does not intend to unduly interfere with 
ongoing business relationships,'' the Commission stated that 
``requiring actual consent to prerecorded message calls where 
[established business] relationships exist could significantly impede 
communications between businesses and their customers.''
    13. The FTC's Telemarketing Sales Rule. In 2004, the FTC published 
a notice of proposed rulemaking in which it proposed, at the request of 
a telemarketer, the creation of a safe harbor under the Telemarketing 
Sales Rule for prerecorded telemarketing calls to established business 
customers. Under the proposed safe harbor, prerecorded messages to 
consumers with whom a seller has an ``established business 
relationship'' (as defined by the FTC's rules) would not violate the 
FTC's Telemarketing Sales Rule if, among other things, a keypress opt-
out mechanism or other means were provided at the outset of the call 
for consumers to add their telephone number to the seller's company-
specific do-not-call list.
    14. In 2006, the FTC denied the proposed safe harbor request that 
would have permitted prerecorded telemarketing calls to established 
business customers based, in large measure, on the more than 13,000 
consumer comments it had received opposing the proposal. According to 
the FTC, many consumers expressed the view that, in light of the 
``intrusive and impersonal nature'' of prerecorded messages, neither a 
prior inquiry nor a purchase should be deemed to imply consumer consent 
to receive future prerecorded solicitations from a seller. The FTC 
noted that this reaction was contrary to prior consumer support among 
commenters for an exemption to allow live telemarketing calls to 
established business customers. In addition, the FTC denied the 
proposed safe harbor based on record evidence indicating, among other 
things, that: (1) the self interest of sellers in retaining established 
customers could not be relied on to prevent abuse through excessive 
prerecorded message telemarketing, especially as new digital 
technologies, including Voice over Internet Protocol (VoIP), reduce the 
cost of transmitting prerecorded telemarketing messages by telephone; 
(2) prerecorded telemarketing messages impose potential costs, 
including risks to health and safety when an extended message ties up a 
line and prevents consumers from placing emergency calls, as well as 
burdens on consumers, including costs to store and retrieve prerecorded 
messages on home answering machines or voicemail services; and (3) 
various methods by which consumers may elect to opt out of future 
prerecorded message calls are often cumbersome to use or simply do not 
work. Based on this record, the FTC changed course and published a new 
proposed amendment to the Telemarketing Sales Rule to expressly 
prohibit all unsolicited prerecorded telemarketing calls without the 
consumer's prior written agreement, even with respect to prerecorded 
calls to established business relationship customers.
    15. In 2008, the FTC amended the Telemarketing Sales Rule to make 
explicit that the existence of an established business relationship 
will not serve as authorization for placing prerecorded telemarketing 
calls. Thus, although an established business relationship will 
continue to serve as authorization for placing live telemarketing calls 
to consumers under the FTC's Telemarketing Sales Rule, it no longer 
serves as authorization for placing prerecorded telemarketing calls. As 
amended, the FTC's Telemarketing Sales Rule prohibits prerecorded 
message calls unless the called party has given prior express written 
consent and the call complies with certain additional requirements in 
16 CFR 310.4(b)(1)(v).
    In light of the substantial record of public comments developed 
over the course of the FTC's four-year rulemaking opposing the creation 
of a safe harbor for prerecorded telemarketing calls to established 
business customers, and in view of Congress's mandate to maximize 
consistency between the Commission's rules and the FTC's Telemarketing 
Sales Rule, the Commission seeks comment on whether it should 
reconsider its 1992 determination that an established business 
relationship may be deemed to constitute express invitation or 
permission to receive unsolicited prerecorded telemarketing calls. The 
FTC's 2008 rule amendments make explicit that, absent a consumer's 
express prior written agreement, sellers and telemarketers are 
prohibited from delivering a prerecorded telemarketing message, 
regardless of whether the call is made to a consumer who has an 
established business relationship with the seller. As a result, an 
``established business relationship'' currently provides the necessary 
permission to deliver prerecorded telemarketing messages only for 
entities subject to the Commission's, but not the FTC's, jurisdiction 
(e.g., banks, airlines, common carriers). Based on the foregoing, the 
Commission seeks comment on whether it should conform its rule to the 
FTC's Telemarketing Sales Rule by eliminating the established business 
relationship exemption from the general prohibition on prerecorded 
telemarketing calls to residential telephone lines.
    16. As noted above, the Commission created the ``established 
business relationship'' exemption from the TCPA's ban on artificial or 
prerecorded messages based on its authority under the TCPA to exempt 
calls that ``do not adversely affect residential subscriber privacy 
interests.'' It reasoned that a subscriber's privacy interests are not 
adversely affected by the receipt of such prerecorded message calls 
because, in that instance, the solicitation can be ``deemed to be 
invited or permitted'' by the subscriber in light of the business 
relationship. In light of the strenuous opposition expressed by the 
thousands of consumers who filed comments in the FTC's rulemaking, the 
Commission seeks comment on the continued validity of this 
determination and whether prerecorded telemarketing calls (i.e., sales 
calls) may reasonably be ``deemed invited or permitted'' by established 
business customers. In particular, the Commission seeks comment on 
whether its established business relationship exception remains 
supportable on the basis that artificial or prerecorded message calls 
to established customers do not adversely affect residential subscriber 
privacy interests and do not transmit an unsolicited advertisement.
    17. In the 1992 rulemaking, the Commission also expressed the 
concern that ``requiring actual consent to prerecorded message calls 
where [established business] relationships exist could significantly 
impede communications between businesses and their customers'' and, as 
such, might be at odds with statements in the legislative history 
indicating Congress's desire not to ``unduly interfere with ongoing 
business relationships.'' The Commission seeks comment on the extent to 
which authorization to receive

[[Page 13476]]

prerecorded message calls based on prior written or oral consent 
(rather than on the basis of an established business relationship) 
would in fact ``unduly interfere with ongoing business relationships'' 
or ``impede communications'' between businesses and their customers. In 
particular, the Commission seeks comment on whether technological 
advances, such as the use of one or more methods available under the E-
SIGN Act for establishing a consumer's prior express written consent to 
receive prerecorded telemarketing calls, have minimized the burden 
associated with obtaining the express consent of established business 
customers (e.g., instructing an established customer during a live 
telephone solicitation to use a keypress feature to request future 
prerecorded message calls).
    18. The Commission also seeks specific comment on the experiences 
of telemarketers that have conducted marketing campaigns on behalf of 
sellers that are subject to the FTC's recently amended Telemarketing 
Sales Rule in obtaining the requisite prior written consent from those 
businesses' established customers. Has the FTC's revised rule had the 
effect of impeding communications between businesses and their 
customers and, if so, in what ways? If the Commission were to retain 
the current exemption for established business customers, it seeks 
comment, particularly from individual consumers and consumer groups, 
regarding whether consumers would support the use of prerecorded 
telemarketing messages by sellers and telemarketers with established 
business customers if such messages provided an interactive opt-out 
mechanism that would provide a means to avoid future prerecorded 
messages from that seller.
    19. Finally, the Commission tentatively concludes that conforming 
its rule governing prerecorded message calls to established business 
customers to the FTC's may reduce the potential for industry and 
consumer confusion surrounding a telemarketer's authority to place 
unsolicited prerecorded message calls to established customers to the 
extent that similarly situated entities would no longer be subject to 
different requirements depending upon whether an entity is subject to 
the FTC's rule or to the Commission's. The Commission seeks comment on 
this tentative conclusion.
Exemption for Health Care Related Calls Subject to HIPAA
    20. The FCC's TCPA Rules. As previously noted, section 227 of the 
Communications Act allows the Commission to create exemptions from the 
TCPA's ban on artificial or prerecorded messages to residential lines 
for calls that are non-commercial and for commercial calls that do not 
adversely affect the privacy rights of the called party and that do not 
transmit an unsolicited advertisement. The Commission's prerecorded 
message rules currently contain no specific exemption for healthcare-
related prerecorded message calls that are subject to the Health 
Insurance Portability and Accountability Act of 1996 (HIPAA).
    21. The FTC's Telemarketing Sales Rule. In its 2008 amendments to 
the Telemarketing Sales Rule, the FTC exempted from its prior written 
consent requirement healthcare-related prerecorded message calls that 
are subject to HIPAA. These prerecorded calls include, among others, 
flu shot and other immunization reminders, prescription refill 
reminders, health screening reminders; calls to obtain permission to 
contact doctors for renewal of medication or medical supply orders; 
calls to obtain documentation needed for billing health plans; calls by 
home health agencies to follow-up on patients for six months after 
discharge; calls monitoring patient compliance with prescribed medical 
therapies; and calls encouraging enrollment in disease management or 
treatment programs, and in migration from branded to generic drugs, and 
from retail to mail order pharmacies. The FTC noted commenters' fear 
that such calls may be subject to the Telemarketing Sales Rule to the 
extent that they can result in a payment or co-pay for medication, 
durable medical equipment, or medical services. An exemption is 
necessary, the FTC determined, because (among other things) the 
individuals most in need of these healthcare-related prerecorded 
messages (elderly or ill patients) might be unable or simply unlikely 
to take the steps necessary to provide their express written consent to 
receive them. To the extent that the communications between healthcare-
related entities subject to HIPAA regulations and their customers 
already are subject to extensive Federal regulations, some of which 
directly address the making of telephone solicitations to patients, the 
FTC was persuaded that there would be little risk that the creation of 
an exemption for these calls would lead to abusive practices by these 
entities. Finally, citing evidence that prerecorded healthcare messages 
of the type described above are generally deemed more welcome and less 
intrusive by consumers, the FTC determined that the creation of an 
exemption for this category of calls would not adversely affect 
consumer privacy rights.
    22. On the basis of information presented in the record of the 
FTC's rulemaking proceeding on healthcare-related prerecorded message 
calls made by, or on behalf of, a covered entity or its business 
associate, as those terms are defined in the HIPAA Privacy Rule, the 
Commission seeks comment on whether it likewise should exempt such 
calls from the general prohibition on prerecorded message calls to 
residential lines under the TCPA. If so, it seeks comment on the 
Commission's authority to exempt these calls either under section 
227(b)(2)(B)(i) of the Communications Act (calls that are not made for 
a commercial purpose), or under section 227(b)(2)(B)(ii) of the 
Communications Act (commercial calls that do not adversely affect the 
privacy rights of the called party and that do not transmit an 
unsolicited advertisement). In addition, it notes that, with limited 
exception, HIPAA requires that a ``covered entity'' obtain an 
individual's written authorization before using protected health 
information (including the individual's name and telephone number) for 
marketing purposes. As a practical matter, this HIPAA restriction (in 
conjunction with other HIPAA provisions) would appear to preclude or 
limit the delivery of prerecorded telemarketing calls placed by a 
``covered entity'' or its ``business associate'' to individuals with 
whom the covered entity or business associate has no pre-existing 
relationship (i.e., ``cold calling'' of consumers). The Commission 
seeks comment on this aspect of the HIPAA requirements, on the relative 
frequency and volume of healthcare-related prerecorded telemarketing 
calls placed to individuals by entities that do not have a pre-existing 
relationship with the consumer, and on the extent to which consumers 
consider such calls intrusive or an invasion of privacy.
    23. The Commission notes that when one of its TCPA rules differs 
substantively from the FTC's Telemarketing Sales Rule, it has been 
generally understood that the more restrictive requirement prevails and 
sets the standard applicable to all entities that are subject to the 
jurisdiction of both agencies. In this instance, although the FTC has 
adopted a more specific provision, the Commission's rule, by providing 
no exemption for healthcare-related prerecorded message calls subject 
to HIPAA, is arguably more restrictive. Accordingly, the Commission 
seeks comment on the practical impact of this disparity on

[[Page 13477]]

regulated entities currently and if the Commission does not adopt a 
similar exemption in the future.
Opt-Out Mechanism
    24. The FCC's TCPA Rules. The TCPA directs the Commission to 
prescribe technical and procedural standards for systems that are used 
to transmit ``any'' artificial or prerecorded voice message via 
telephone. Under any Commission-adopted standards, the entity 
initiating a call must be identified at ``the beginning'' of a 
prerecorded message, and, ``during or after the message,'' the 
telephone number or address of such entity must be provided. Such 
Commission-adopted standards also must require that a prerecorded 
message call ``automatically release the called party's line within 5 
seconds of the time notification is transmitted to the system that the 
called party has hung up, to allow the called party's line to be used 
to make or receive other calls.'' Consistent with the TCPA's technical 
and procedural standards provision, the Commission's rules require 
that, at the beginning of all artificial or prerecorded message calls, 
the message identify the entity responsible for initiating the call 
(including the legal name under which the entity is registered to 
operate), and during or after the prerecorded message, provide a 
telephone number that consumers can call during regular business hours 
to make a company-specific do-not-call request.
    25. The FTC's Telemarketing Sales Rule. The FTC's Telemarketing 
Sales Rule, as amended in 2008, requires, with limited exception, that 
any prerecorded message call that could be answered by the consumer in 
person provide an automated interactive opt-out mechanism that is 
announced at the outset of the message and is available throughout the 
duration of the call. The opt-out mechanism, when invoked, must 
automatically add the consumer's number to the seller's do-not-call 
list and immediately disconnect the call. Where a call could be 
answered by an answering machine or voicemail service, the message must 
also include a toll-free number that enables the consumer to call back 
and connect directly to an automated opt-out mechanism.
    26. There are several key differences between the Commission's and 
the FTC's rules with respect to their respective ``opt-out'' and 
related disclosure requirements. First, the FTC opt-out requirement 
specifies that, if there is any possibility that a call could be 
answered in person by a consumer, an automated interactive opt-out 
mechanism must be available throughout the call. The provision permits 
either a voice or keypress-activated opt-out mechanism to be used, or 
both in combination. If there is any possibility that a prerecorded 
call could be answered by an answering machine or voicemail service, a 
toll-free number must be provided and disclosed promptly at the outset 
of the call. The toll-free number must connect directly to an automated 
interactive opt-out mechanism that is accessible at any time throughout 
the duration of the telemarketing campaign. The provision further 
requires that, once invoked, the interactive mechanism must 
automatically add the number called to the seller's entity-specific do-
not-call list. In contrast, the Commission's analogous provision does 
not require an automated opt-out mechanism and, instead, simply 
requires a telephone number that consumers can call ``during regular 
business hours'' to make an entity-specific do-not-call request. 
Inasmuch as automated, interactive opt-out mechanisms are now widely 
available and, as discussed above, are now required of most sellers and 
telemarketers by virtue of the FTC's rule, the Commission seeks comment 
on whether it should conform its rule to the FTC's rule by requiring 
their use. Comments supporting this revision should address the 
Commission's authority to adopt this change, consistent with the 
``technical and procedural standards'' provision of the TCPA, as 
codified in section 227(d)(3) of the Communications Act. In addition, 
given that section 227(d)(3) of the Communications Act prescribes 
technical standards for ``any'' artificial or prerecorded voice message 
via telephone, the Commission seeks comment on whether it may adopt 
additional disclosure and opt-out requirements mirroring the FTC's 
solely for artificial or prerecorded voice message calls that are for 
telemarketing purposes.
    27. Second, whereas the FTC's Telemarketing Sales Rule requires 
that prerecorded message calls provide a disclosure at the outset of 
the message explaining how to opt out of future calls, the TCPA itself 
provides that, for opt-out purposes, the telephone number of the entity 
initiating a call can be disclosed ``during or after the message.'' 
Therefore, commenters supporting a requirement that the telephone 
number of the entity initiating the prerecorded message be disclosed at 
the outset of the message should address the Commission's legal 
authority to do so.
    28. Third, although each agency's rule provides for prompt 
termination of the call after a consumer hangs up, the Commission's 
standard is more specific (call must be released within 5 seconds of 
time notification is transmitted to system) than the FTC's (call must 
be released immediately). Again, in light of the specific statutory 
language pertaining to call termination, commenters supporting a change 
to the Commission's existing rules to require immediate release of a 
call once the consumer has hung up are asked to address the 
Commission's authority to adopt such a requirement.
    29. Finally, the Commission notes that, in addition to exempting 
certain healthcare-related prerecorded message calls from its express 
written consent requirement, the FTC likewise exempted such calls from 
its automated opt-out requirement. Inasmuch as the TCPA technical 
standards codified in section 227(d)(3) of the Communications Act apply 
to ``any'' artificial or prerecorded messages, the Commission seeks 
comment on its authority to exempt any category of prerecorded message 
calls from the specific requirements of that section. If it adopts 
separate disclosure and opt-out requirements (mirroring the FTC's) 
specifically for prerecorded telemarketing calls, the Commission seeks 
comment on whether it may exempt the category of healthcare-related 
prerecorded message calls identified in the FTC's rule from those 
separate requirements and, if so, whether it should provide such an 
exemption.
    30. As a policy matter, the FTC's automated opt-out requirement 
appears to be more consumer friendly than the Commission's to the 
extent that it allows consumers to easily and immediately assert their 
opt-out rights, regardless of the time of day, and without having to 
wait to opt out until the next business day during regular business 
hours when an operator is available to record the opt-out request. The 
Commission therefore seeks comment on whether it should revise its opt-
out requirements to make them more consistent with the FTC's, and, if 
so, how to do so in a manner that is consistent with the ``technical 
and procedural standards'' provision of the TCPA.

B. Abandoned Calls/Predictive Dialers

    31. The FCC's TCPA Rules. Under the Commission's rules, an outbound 
telephone call is deemed ``abandoned'' if a person answers the 
telephone and the caller does not connect the call to a sales 
representative within two seconds of the person's completed greeting. 
The Commission imposes restrictions on the percentage of live 
telemarketing calls

[[Page 13478]]

that a telemarketer may drop or ``abandon'' as a result of the use of 
predictive dialers. Under the Commission's rules, a seller or 
telemarketer would not be liable for violating the restrictions on call 
abandonment if, among other things, it employs technology that ensures 
abandonment of no more than three percent of all calls answered by a 
person (rather than by an answering machine). The Commission's call 
abandonment rule measures the abandonment rate over a 30-day period, 
but contains no ``per campaign'' limitation.
    32. The FTC's Telemarketing Sales Rule. Like the Commission's rule, 
an outbound telephone call is deemed ``abandoned'' under the FTC's 
Telemarketing Sales Rule if a person answers the telephone and the 
caller does not connect the call to a sales representative within two 
seconds of the person's completed greeting. A seller or telemarketer 
similarly is not liable for violating the prohibition on call 
abandonment if, among other things, the seller or telemarketer employs 
technology that ensures abandonment of no more than three percent of 
all calls answered by a person (rather than by an answering machine).
    In its 2008 final rule amendments, the FTC revised the standard it 
uses for measuring the three percent (permissible) call abandonment 
rate. Whereas the FTC previously required that a telemarketer employ 
technology that ensures abandonment of no more than three percent of 
all calls answered by a person, measured per day per calling campaign, 
it revised the standard in 2008 to permit telemarketers to measure the 
abandonment rate over a 30-day period for the duration of a single 
calling campaign, if less than 30 days, or separately over each 
successive 30-day period or portion thereof that the campaign 
continues. According to the FTC, the effect of this change, which had 
been requested by the telemarketers, was to allow telemarketers to 
conduct smaller telemarketing campaigns, such as in test markets, in a 
more cost effective manner. At the same time, the FTC considered, but 
rejected, a separate request to eliminate the ``per campaign'' 
limitation contained in its rule, which would have allowed call 
abandonment rates to be averaged across multiple telemarketing 
campaigns. The FTC reasoned that the absence of a ``per campaign'' 
limitation in its rule might encourage telemarketers ``to target less-
valued customers with a disproportionate share of abandoned calls.''
    33. The Commission's current rule measures the three percent 
(permissible) call abandonment rate over a 30-day period but, because 
it imposes no ``per campaign'' limitation, it effectively allows the 
averaging of call abandonment rates across multiple telemarketing 
campaigns during any single 30-day period. As noted above, the FTC's 
rulemaking proceeding highlighted concerns that this approach might 
allow a telemarketer to compute a single call abandonment rate for all 
campaigns that it conducts during a 30-day period and, in so doing, to 
allocate a greater percentage of abandoned calls to a less desirable 
marketing campaign (e.g., a campaign directed at lower income 
individuals) while allocating a smaller percentage to a more desirable 
campaign (e.g., a campaign directed at upper income individuals). The 
Commission seeks comment on the prevalence of such practices among 
those sellers or telemarketers that are subject to its (but not the 
FTC's) telemarketing rules and on the practical impact of the two 
agencies' currently differing standards. In addition, the Commission 
seeks comment on whether it should revise the standard by which it 
measures the three percent call abandonment rate to include a ``per 
campaign limitation'' in order to eliminate any potential incentive for 
telemarketers to engage in such practices and to make the Commission's 
standard more consistent with the FTC's. Finally, it notes that the FTC 
has clarified that the term ``campaign'' refers to ``the offer of the 
same good or service for the same seller.'' If the Commission adopts a 
``per campaign limitation,'' as proposed, it seeks comment on whether 
it also should adopt the FTC's definition of the term ``campaign.''

C. Implementation Issues

    34. In order to reduce initial compliance costs and burdens, the 
FTC deferred the effective date of the requirement that prerecorded 
message calls provide an automated interactive opt-out mechanism for 
three months, and the express written agreement requirement for twelve 
months. If the Commission adopts an express written consent requirement 
and/or an automated interactive opt-out mechanism such as those adopted 
by the FTC, it seeks comment on whether it also should adopt similar 
implementation periods to ensure that companies have adequate time to 
prepare to comply. If the Commission adopts these or similar 
requirements, it seeks comment on whether to allow sellers and 
telemarketers, as did the FTC, to continue placing prerecorded 
telemarketing calls to consumers with whom the seller has an 
established business relationship for the duration of the 
implementation period for the express written consent requirement. 
Finally, it seeks comment on an appropriate implementation period for 
the proposed change to the Commission's call abandonment rules.

Initial Regulatory Flexibility Analysis

    35. As required by the Regulatory Flexibility Act of 1980, as 
amended, (RFA), the Commission has prepared this Initial Regulatory 
Flexibility Analysis (IRFA) of the possible significant economic impact 
on a substantial number of small entities by the policies and rules 
proposed in document FCC 10-18. Written public comments are requested 
on this IRFA. Comments must be identified as responses to the IRFA and 
must be filed by the deadlines for comments on document FCC 10-18 
provided on the first page of this document. The Commission will send a 
copy of document FCC 10-18, including this IRFA, to the Chief Counsel 
for Advocacy of the Small Business Administration.

Need for, and Objectives of, the Proposed Rules

    36. In document FCC 10-18, the Commission seeks comment on proposed 
revisions to its rules under the TCPA pertaining to prerecorded 
telemarketing calls and certain other telemarketing practices. Document 
FCC 10-18 proposes to amend the Commission's TCPA rules in four areas. 
The first proposed amendment would conform the Commission's rules to 
the FTC's Telemarketing Sales Rule by prohibiting the use of 
prerecorded messages in telemarketing sales calls unless the seller or 
telemarketer has obtained the consumer's prior express consent, in 
writing, to receive such messages and irrespective of any established 
business relationship between the caller and the called party. The 
Commission also proposes to allow sellers or telemarketers to obtain 
such consent using any medium or format permitted by the E-SIGN Act. 
The Commission's objective in proposing to harmonize its prior consent 
requirement with the FTC's by adopting a written consent requirement is 
to reduce the potential for industry and consumer confusion surrounding 
telemarketers' obligations to the extent that similarly situated 
entities would no longer be subject to different requirements depending 
upon whether an entity is subject to the FTC's rule or to the 
Commission's rule. The Commission also believes that written consent 
may

[[Page 13479]]

enhance its enforcement efforts and serve to protect both consumers and 
industry from erroneous claims that consent was or was not given, to 
the extent that, unlike oral consent, the existence of a paper or 
electronic record may provide unambiguous proof of consent.
    37. The second proposed amendment would conform the Commission's 
rules to the FTC's Telemarketing Sales Rule by exempting certain 
healthcare-related calls from the general prohibition on prerecorded 
telemarketing calls to residential telephone lines. The Commission 
proposes to exempt such calls based on the FTC's findings that: (1) The 
individuals most in need of these healthcare-related prerecorded 
messages (elderly or ill patients) might be unable or unlikely to take 
the steps necessary to provide their express written consent to receive 
them; (2) communications between healthcare-related entities subject to 
HIPAA regulations and their customers already are subject to extensive 
regulations at the Federal level, including regulations directly 
addressing the making of telephone solicitations to patients, such that 
it would be unlikely that the creation of an exemption for these calls 
would lead to abusive practices; and (3) prerecorded healthcare 
messages of the type described in document FCC 10-18 are generally 
deemed more welcome and less intrusive by consumers and, as such, the 
creation of an exemption for this category of calls would not adversely 
affect consumer privacy rights. Thus, the Commission's objective in 
proposing the creation of this exemption is to avoid imposing 
duplicative regulations in an area that is already extensively 
regulated at the Federal level and that, as a result, does not appear 
to give rise to the same privacy and other concerns as other types of 
calls.
    38. The third proposed amendment would conform the Commission's 
rules to the FTC's Telemarketing Sales Rule by requiring that 
prerecorded telemarketing calls delivered to residential subscribers 
include an automated, interactive mechanism by which a consumer may 
``opt out'' of receiving future prerecorded messages from the seller or 
telemarketer. The Commission's objective in proposing this requirement 
is to make the opt-out process more consumer friendly by allowing 
consumers to easily and immediately assert their opt-out rights, 
regardless of the time of day, and without having to wait to opt out 
until the next business day during regular business hours when an 
operator is available to record the opt-out request.
    39. The Commission also believes that the use of an automated 
mechanism, as described above, may enhance the efficiency of companies' 
outbound telemarketing campaigns. To the extent that the FTC's 
Telemarketing Sales Rule, as recently amended, imposes different 
requirements on sellers and telemarketers in these three areas than 
analogous rules adopted by the Commission, the Commission seeks comment 
on whether it should attempt to harmonize its TCPA requirements with 
those of the FTC. In proposing to conform its prerecorded message rules 
to the Telemarketing Sales Rule in the identified areas, the Commission 
also identified two overarching objectives: (1) To further empower 
residential telephone subscribers to avoid unwanted telemarketing 
messages; and (2) to advance Congress's directive to maximize 
consistency between the Commission's TCPA rules and the FTC's 
Telemarketing Sales Rule. The Commission therefore seeks comment on 
whether these proposed revisions would benefit consumers and industry 
by creating greater symmetry between the two agencies' regulations and 
on the extent to which they would enhance the ability of residential 
telephone subscribers to avoid unwanted telemarketing messages.
    40. The final proposed amendment would conform the Commission's 
rules to the FTC's Telemarketing Sales Rule by adopting a ``per 
campaign'' standard for measuring the ``call abandonment rate.'' As 
noted above, the ``call abandonment rate'' refers to the percentage of 
live telemarketing calls that a telemarketer drops or ``abandons'' as a 
result of the use of predictive dialers. The Commission proposes to 
adopt a ``per campaign'' limitation based on the concern raised in the 
FTC's rulemaking proceeding that telemarketers would be more likely to 
target less-valued customers with a disproportionate share of abandoned 
calls in the absence of such a limitation. Because the absence of a 
``per campaign'' limitation may leave consumers to rely on the 
industry's good faith that it will not engage in such practices, 
despite obvious economic incentives to do otherwise, the Commission 
seeks comment on whether it should revise its current standard for 
measuring the three percent call abandonment rate by adopting this 
proposed limitation.

Legal Basis

    41. The legal basis for any action that may be taken pursuant to 
document FCC 10-18 is contained in sections 1-4, 227, and 303(r) of the 
Communications Act of 1934, as amended; the Telephone Consumer 
Protection Act of 1991, Public Law 102-243, 105 Statute 2394; and the 
Do-Not-Call Implementation Act, Public Law 108-10, 117 Statute 557.

Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules Will Apply

    42. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that will be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. Under the Small Business Act, a ``small business concern'' is one 
that: (1) Is independently owned and operated; (2) is not dominant in 
its field of operation; and (3) meets any additional criteria 
established by the Small Business Administration (SBA).
    43. In general, the Commission's rules on telephone solicitation 
and on the use of autodialers, or artificial or prerecorded messages 
apply to a wide range of entities. The proposed rules, in particular, 
would apply (with certain exceptions) to all persons using prerecorded 
or artificial voice messages for telemarketing purposes. Therefore, the 
Commission expects that the proposals in this proceeding potentially 
could have a significant economic impact on a substantial number of 
small entities. Determining the precise number of small entities that 
would be subject to the requirements proposed in document FCC 10-18, 
however, is not readily feasible. Therefore, the Commission invites 
comment on such number and, after evaluating the comments, will examine 
further the effect of any rule changes on small entities in the Final 
Regulatory Flexibility Analysis. Below, the Commission has described 
some current data that are helpful in describing the number of small 
entities that might be affected by the proposed action, if adopted.
    Nationwide, there are a total of approximately 29.6 million small 
businesses, according to the SBA. A ``small organization'' is generally 
``any not-for-profit enterprise which is independently owned and 
operated and is not dominant in its field.'' Nationwide, as of 2002, 
there were approximately 1.6 million small organizations.
    44. Telemarketing Bureaus and Other Contact Centers. According to 
the

[[Page 13480]]

Census Bureau, this economic census category ``comprises establishments 
primarily engaged in operating call centers that initiate or receive 
communications for others--via telephone, facsimile, e-mail, or other 
communication modes--for purposes such as (1) promoting clients' 
products or services, (2) taking orders for clients, (3) soliciting 
contributions for a client; and (4) providing information or assistance 
regarding a client's products or services.'' The SBA has developed a 
small business size standard for this category, which is: all such 
entities having $7 million or less in annual receipts. According to 
Census Bureau data for 2002, there were 1,876 firms in this category 
that operated for the entire year. Of this total, 1,610 firms had 
annual sales of under $5 million, and an additional 129 had sales of $5 
million to $9,999,999. Thus, the majority of firms in this category can 
be considered small.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    45. The express written consent requirement proposed in document 
FCC 10-18 may entail additional recordkeeping requirements for covered 
entities to the extent that they would be required to obtain and keep 
records of consumers' written consent to receive prerecorded message 
calls. As a practical matter, however, it appears that there would not 
be a significant change in this recordkeeping burden for at least two 
reasons.
    46. First, because a seller or telemarketer placing a prerecorded 
telemarketing call must be prepared to provide, under the Commission's 
current requirements, ``clear and convincing evidence'' that it 
received prior express consent from the called party, whether consent 
has been obtained orally or in writing, covered entities already are 
required to maintain records to demonstrate compliance with the 
existing express consent requirement. In addition, covered entities 
already maintain electronic or other records of the existence of an 
established business relationship in order to demonstrate compliance 
with current Commission requirements governing prerecorded message 
calls to established business relationship customers. In place of 
keeping records of ``oral consent'' or of ``established business 
relationships'' as a precondition for placing prerecorded telemarketing 
calls, the proposed rule change would require covered entities to 
maintain records of consumers' express written agreement to receive 
such calls. And because the Commission has proposed that these 
agreements may be obtained pursuant to the E-SIGN Act, minimal 
additional recordkeeping should be necessary. For these reasons, the 
proposed written consent requirement, as a practical matter, is 
unlikely to result in significant new reporting, recordkeeping or other 
compliance requirements for sellers and telemarketers, including small 
entities.

Steps Taken To Minimize Significant Economic Impact on Small Entities, 
and Significant Alternatives Considered

    47. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    By proposing to conform the Commission's TCPA rules to those of the 
FTC in the areas described in paragraphs two through six above, the 
actions proposed are consistent with the mandate of the DNCIA to 
``maximize consistency'' of the Commission's TCPA rules with the FTC's 
Telemarketing Sales Rule.
    48. One alternative to the proposed amendments would be to adopt no 
changes to the Commission's rules on prerecorded messages and call 
abandonment. Although the Commission considered the option of doing 
nothing for each of the proposed rules, this option was outweighed by 
the anticipated benefits of the proposed changes, including: (1) 
Reducing the potential for industry and consumer confusion surrounding 
a telemarketer's obligations to the extent that similarly situated 
entities would no longer be subject to different Federal requirements; 
(2) enhancing the Commission's enforcement efforts and protecting both 
consumers and industry from erroneous claims that consent was or was 
not given, to the extent that the written consent requirement may 
provide more verifiable proof of consent; (3) empowering consumers to 
determine which prerecorded commercial solicitations they will receive 
via their telephones and providing a convenient and consumer-friendly 
method to ``opt-out'' of receiving those to which they object; and (4) 
ensuring that telemarketers do not calculate the three percent 
(permissible) call abandonment rate in a way that certain communities 
or populations are subject to a disproportionately greater number of 
dropped or abandoned calls.
    49. In order to reduce initial compliance costs and burdens, the 
Commission proposes to defer the effective date of the proposed 
requirement that prerecorded calls provide an automated interactive 
opt-out mechanism for three months, and the proposed written agreement 
requirement for twelve months, to ensure that the industry will have 
adequate time to prepare to comply. Document FCC 10-18 proposes to 
allow sellers and telemarketers to continue placing prerecorded calls 
to consumers with whom the seller has an established business 
relationship during the pendency of the implementation period for the 
written agreement requirement. In addition, by proposing that written 
consent agreements be obtained pursuant to any method allowed under the 
E-SIGN Act, the Commission's proposed written consent requirement would 
afford small entities flexibility in determining the method of 
``written'' consent that is best suited to those entities' marketing 
plans and business operations. Although the Commission has determined 
that there may be an economic impact on small entities as a result of 
the proposed rules, such impact, which has been minimized to the extent 
possible, would appear to be minor and not unjustifiably adverse or 
burdensome.
    50. The Commission has determined that, on balance, any such burden 
is outweighed by the potentially significant benefits of the proposed 
rules to industry and consumers, as identified in the preceding 
paragraph. Because these anticipated significant benefits outweigh, 
based on the Commission's analysis, any minor burden the proposed rules 
may impose on small entities, the Commission has determined that no 
further discussion of alternatives to the proposed rules is warranted 
beyond what it has set forth.

Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    51. As discussed above, the Telemarketing Consumer Fraud and Abuse 
Prevention Act (``Telemarketing Act''), 15 U.S.C. 6101-6108, and the 
Telemarketing Sales Rule (TSR) adopted by the FTC also address certain 
telemarketing acts or practices.

[[Page 13481]]

Document FCC 10-18 identifies several aspects of the FTC's 
Telemarketing Sales Rule, as recently amended, that differ from the 
Commission's TCPA rules. Therefore, the Commission seeks comment in 
document FCC 10-18 on whether it should revise its rules to harmonize 
them with the FTC's rule. Amending the Commission's rules, as proposed 
above, would reduce the inconsistencies that currently exist between 
the two sets of rules.

Ordering Clause

    Pursuant to the authority contained in sections 1-2, 4, 201, 227, 
and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151-
152, 154, 201, 227, and 403, document FCC 10-18 is adopted.

List of Subjects

47 CFR Part 64

    Telecommunications, Telephone.

47 CFR Part 68

    Communications equipment, Telecommunications, Telephone.

Marlene H. Dortch,
Secretary, Federal Communications Commission.

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR parts 64 and 68 as 
follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

    1. The authority citation for part 64 is revised to read as 
follows:

    Authority: 47 U.S.C. 154, 227, and 254(k); secs. 403(b)(2)(B), 
(c), Pub. L. 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 
201, 218, 222, 225, 226, 227, 228, and 254 (k) unless otherwise 
noted.

Subpart L--Restrictions on Telemarketing, Telephone Solicitation, 
and Facsimile Advertising

    2. Section 64.1200 is amended by revising paragraph (a)(1) 
introductory text and (a)(2) introductory text and adding new paragraph 
(a)(1)(v), removing paragraph (a)(2)(iv), redesignating and revising 
paragraph (a)(2)(v) as newly designated paragraph (a)(2)(iv), and 
adding new paragraphs (a)(2)(v) and (a)(2)(vi), revising paragraphs 
(a)(6) introductory text, (a)(6)(i), and (b) to read as follows:
    Sec.  64.1200 Delivery restrictions. (a) No person or entity may: 
(1) Initiate any telephone call (other than a call made for emergency 
purposes or made with the prior express written consent of the called 
party) using an automatic telephone dialing system or an artificial or 
prerecorded voice;
* * * * *
    (v) For purposes of paragraph (a)(1) of this section, a person or 
entity shall be deemed to have obtained prior express written consent 
upon obtaining from the recipient of the call an express agreement, in 
writing, that:
    (A) The person or entity obtained only after a clear and 
conspicuous disclosure that the purpose of the agreement is to 
authorize the delivery of calls to the recipient using an automatic 
telephone dialing system or an artificial or prerecorded voice;
    (B) The person or entity obtained without requiring, directly or 
indirectly, that the agreement be executed as a condition of purchasing 
any good or service;
    (C) Evidences the willingness of the recipient of the call to 
receive calls using an automatic telephone dialing system or an 
artificial or prerecorded voice; and
    (D) Includes the telephone number to which such calls may be placed 
in addition to the recipient's signature. For purposes of this 
provision, the term ``signature'' shall include an electronic or 
digital form of signature, to the extent that such form of signature is 
recognized as a valid signature under applicable Federal law or State 
contract law; and
    (2) Initiate any telephone call to any residential line using an 
artificial or prerecorded voice to deliver a message without the prior 
express written consent of the called party, unless the call;
* * * * *
    (iv) Is made by or on behalf of a tax-exempt nonprofit 
organization; or
    (v) Delivers a prerecorded healthcare message made by, or on behalf 
of, a covered entity or its business associate, as those terms are 
defined in the HIPAA Privacy Rule, 45 CFR 160.103;
    (vi) For purposes of paragraph (a)(2) of this section, a person or 
entity shall be deemed to have obtained prior express written consent 
upon obtaining from the recipient of the call an express agreement, in 
writing, that:
    (A) The person or entity obtained only after a clear and 
conspicuous disclosure that the purpose of the agreement is to 
authorize the delivery of calls to the recipient using an artificial or 
prerecorded voice;
    (B) The person or entity obtained without requiring, directly or 
indirectly, that the agreement be executed as a condition of purchasing 
any good or service;
    (C) Evidences the willingness of the recipient of the call to 
receive calls using an artificial or prerecorded voice; and
    (D) Includes the telephone number to which such calls may be placed 
in addition to the recipient's signature, For purposes of this 
provision, the term ``signature'' shall include an electronic or 
digital form of signature, to the extent that such form of signature is 
recognized as a valid signature under applicable Federal law or State 
contract law; and
* * * * *
    (6) Abandon more than three percent of all telemarketing calls that 
are answered live by a person, or measured over a 30-day period, per 
marketing campaign. A call is ``abandoned'' if it is not connected to a 
live sales representative within two (2) seconds of the called person's 
completed greeting. Whenever a sales representative is not available to 
speak with the person answering the call, that person must receive, 
within two (2) seconds after the called person's completed greeting, a 
prerecorded identification message that states only the name and 
telephone number of the business, entity, or individual on whose behalf 
the call was placed, and that the call was for ``telemarketing 
purposes.'' The telephone number so provided must permit any individual 
to make a do-not-call request during regular business hours for the 
duration of the telemarketing campaign. The telephone number may not be 
a 900 number or any other number for which charges exceed local or long 
distance transmission charges. The seller or telemarketer must maintain 
records establishing compliance with paragraph (a)(6) of this section.
    (i) A call for telemarketing purposes that delivers an artificial 
or prerecorded voice message to a residential telephone line that is 
assigned to a person who has granted prior express written consent for 
the call to be made shall not be considered an abandoned call if the 
message begins within two (2) seconds of the called person's completed 
greeting.
* * * * *
    (b) All artificial or prerecorded telephone messages shall conform 
to the requirements of paragraph (b)(1) or (b)(2) of this section.
    (1) All artificial or prerecorded telephone messages, other than 
those delivered to residential telephone subscribers for telemarketing 
purposes, shall
    (i) At the beginning of the message, state clearly the identity of 
the business, individual, or other entity that is responsible for 
initiating the call. If a business is responsible for initiating the

[[Page 13482]]

call, the name under which the entity is registered to conduct business 
with the State Corporation Commission (or comparable regulatory 
authority) must be stated, and
    (ii) During or after the message, 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. 
The telephone number provided may not be a 900 number or any other 
number for which charges exceed local or long distance transmission 
charges.
    (2) All artificial or prerecorded telephone messages delivered to 
residential telephone subscribers for telemarketing purposes shall
    (i) At the beginning of the message, state clearly the identity of 
the business, individual, or other entity that is responsible for 
initiating the call; that the purpose of the call is to sell goods or 
services; and the nature of the goods or services, and
    (ii) Followed immediately by a disclosure of one or both of the 
following:
    (A) In the case of a call that could be answered in person by a 
consumer, that the person called can use an automated interactive voice 
and/or keypress-activated opt-out mechanism to assert a do-not-call 
request at any time during the message. The mechanism must 
automatically add the number called to the caller's company-specific 
do-not-call list; once invoked, immediately disconnect the call; and be 
available for use at any time during the message; and
    (B) In the case of a call that could be answered in person by an 
answering machine or voicemail service, that the person called can use 
a toll-free telephone number to assert a do-not-call request. The 
number provided must connect directly to an automated interactive voice 
or keypress-activated opt-out mechanism that automatically adds the 
number called to the caller's company-specific do-not-call list; 
immediately thereafter disconnects the call; and is accessible at any 
time throughout the duration of the telemarketing campaign.
    (3) Paragraph (b)(2) of this section shall not apply to a 
prerecorded healthcare message made by, or on behalf of, a covered 
entity or its business associate, as those terms are defined in the 
HIPAA Privacy Rule, 45 CFR 160.103.
* * * * *

PART 68--CONNECTION OF TERMINAL EQUIPMENT TO THE TELEPHONE NETWORK

    3. The authority citation for subpart D of part 68 is revised to 
read as follows:

    Authority: Secs. 4, 5, 227, 303, 48 Stat., as amended, 1066, 
1068, 1082 (47 U.S.C. 154, 155, 227, 303).

Subpart D--Conditions for Terminal Equipment Approval

    4. Section 68.318 is amended by revising paragraph (c) to read as 
follows:


68.318  Additional limitations.

* * * * *
    (c) Line seizure by automatic telephone dialing systems. Automatic 
telephone dialing systems which deliver a recorded message to the 
called party must release the called party's telephone line within 5 
seconds of the time notification is transmitted to the system that the 
called party has hung up, to allow the called party's line to be used 
to make or receive other calls. When a residential telephone subscriber 
asserts a do-not-call request pursuant to Sec.  64.1200(b)(2) of this 
chapter, an automatic dialing system that delivers an artificial or 
prerecorded message to such subscriber for telemarketing purposes must 
release the called party's telephone line in the manner prescribed in 
Sec.  64.1200(b)(2) of this chapter.
* * * * *
[FR Doc. 2010-6095 Filed 3-19-10; 8:45 am]
BILLING CODE 6712-01-P