[Federal Register Volume 77, Number 112 (Monday, June 11, 2012)]
[Rules and Regulations]
[Pages 34233-34249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-13862]



[[Page 34233]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket No. 02-278; FCC 12-21]


Telephone Consumer Protection Act of 1991

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(``FCC'' or ``Commission'') revises its rules to: require prior express 
written consent for all autodialed or prerecorded telemarketing calls 
to wireless numbers and for prerecorded calls to residential lines and, 
accordingly, eliminate the established business relationship exemption 
for such calls to residential lines while maintaining flexibility in 
the form of consent needed for purely informational calls; require all 
prerecorded telemarketing calls to allow consumers to opt out of future 
prerecorded telemarketing calls using an interactive, automated opt-out 
mechanism; and limit permissible abandoned calls on a per-calling 
campaign basis, in order to discourage intrusive calling campaigns. The 
Commision also exempts from its telemarketing requirements prerecorded 
calls to residential lines made by health care-related entities 
governed by the Health Insurance Portability and Accountability Act of 
1996. Taken together, today's actions offer consumers greater 
protection from intrusive telemarketing calls and protect consumers 
from unwanted autodialed or prerecorded telemarketing calls to wireless 
numbers and from unwanted prerecorded telemarketing calls to 
residential lines, also known as ``telemarketing robocalls,'' and 
maximize consistency with the analogous Telemarketing Sales Rule 
(``TSR'') of the Federal Trade Commission (``FTC''), as contemplated by 
the Do-Not-Call Implementation Act (``DNCIA'') in a way that reduces 
industry confusion about telemarketers' obligations and does not 
increase compliance burdens for most telemarketers.

DATES: Effective July 11, 2012, except revised 47 CFR 64.1200(a)(2), 
64.1200(a)(3), and 64.1200(a)(7), and 47 CFR 64.1200(b)(3), which 
contain modified information collection requirements that have not been 
approved by the Office of Management and Budget (OMB). The Commission 
will publish a separate document in the Federal Register announcing the 
effective dates of those amendments.

FOR FURTHER INFORMATION CONTACT: Karen Johnson Consumer and 
Governmental Affairs Bureau, at 202-418-7706 or [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 via email at [email protected] and [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order, FCC 12-21, adopted on February 15, 2012 and released on 
February 15, 2012. The full text of document FCC 12-21 is available for 
inspection and copying during normal business hours in the FCC 
Reference Information Center, Room CY-A257, 445 12th Street SW., 
Washington, DC 20554. The complete text 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, (202) 488-5300, facsimile (202) 488-5563, or via email at 
[email protected]. The complete text is also available on the 
Commission's Web site at http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0215/FCC-12-21A1.pdf. To request materials in 
accessible formats for people with disabilities (Braille, large print, 
electronic files, audio format), send an email to [email protected] or 
call the Consumer and Governmental Affairs Bureau 202-418-0530 (voice), 
202-418-0432 (TTY).

Congression Review Act

    The Commission will send a copy of document FCC 12-21 to Congress 
and the Government Accountability Office pursuant to the Congressional 
Review Act, see 5 U.S.C. 801(a)(1)(A).

Final Paperwork Reduction of 1995 Analysis

    Document FCC 12-21 contains modified information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, will invite the general public to comment on 
the information collection requirements contained in document FCC 12-21 
as required by the PRA of 1995, Public Law 104-13 in a separate notice 
that will be published in the Federal Register. In addition, the 
Commission notes that pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the 
Commission previously sought specific comment on how it might further 
reduce the information collection burden for small business concerns.
    The rules adopted herein establish recordkeeping requirements for a 
large variety of businesses, including small business entities. First, 
the seller must secure a written agreement between itself and the 
consumer showing that the consumer agrees to receive, from the seller, 
autodialed or prerecorded telemarketing calls to a wireless number and/
or prerecorded calls to a residential line. The prior express written 
consent requirement applies to autodialed or prerecorded telemarketing 
calls to wireless numbers and prerecorded calls to residential lines 
only. Limiting the written consent requirement to telemarketing calls 
significantly reduces the compliance burden for all entities, including 
small entities. The Commission allows the seller the flexibility to 
determine the type of written agreement that it will secure from the 
consumer. The Commission does not require a particular form or format 
for this written agreement or its retention. In adopting the written 
consent requirement for autodialed or prerecorded telemarketing calls 
to wireless numbers and prerecorded telemarketing calls to residential 
lines, the Commission also concluded that consent obtained pursuant to 
the E-SIGN Act, Electronic Signatures in Global and National Commerce 
Act 15 U.S.C. 7001 (2000), will satisfy the requirement of its revised 
rule, including permission obtained via an email, Web site form, text 
message, telephone keypress, or voice recording. Accepting consent 
pursuant to the E-SIGN Act relieves all businesses, including small 
entities, from the economic impact of generating and retaining a paper 
document to evidence their compliance. The E-SIGN Act also provides 
additional flexibility in obtaining electronic consent producing 
minimal additional recordkeeping efforts. To the extent that the 
calling parties previously relied on an established business 
relationship in lieu of express consent, the Commission notes that it 
stated that such telemarketers had to be prepared to provide clear and 
convincing evidence of the existence of such a relationship. Hence, a 
record of written consent will replace the previously required record 
of an established business relationship. Because of these factors, any 
additional recording keeping costs should be minimal. Second, 
telemarketers and sellers, including small business

[[Page 34234]]

entities, that initiate telemarketing calls using prerecorded messages, 
must provide an automated, interactive opt-out feature at the outset of 
such a call. This rule obligates telemarketers and sellers to retain 
records of providing this feature and to retain records of consumers 
opting out of receiving these autodialed or prerecorded telemarketing 
messages. Such records should demonstrate the telemarketer's and 
seller's compliance with the provision and utilization of the 
automated, interactive opt-out feature. The Commission allows the 
telemarketers and sellers the flexibility to determine how to implement 
the mechanism. The Commission does not require a particular form or 
format evidencing this mechanism or its implementation. Third, the FCC 
revises its abandoned call requirement to require the permissible three 
percent abandoned call rate to be calculated for every telemarketing 
calling campaign. There is no additional recordkeeping burden for this 
revision because the FCC's rule already requires that the seller or 
telemarketer maintain records establishing compliance with the 
abandoned call rules. Moreover, all of these revised rules are 
consistent with analogous requirements under the FTC's TSR, with which 
many telemarketers must already comply; therefore, the additional 
burden of complying with the FCC's new requirements is substantially 
mitigated. The Commission identified alternatives to the rules adopted 
in document FCC 12-21, but it rejects these alternatives because they 
are more costly to small businesses. Finally, to the extent that there 
are compliance costs resulting from the Commission's action, it finds 
that the implementation periods it adopts here--30 days from 
publication of OMB approval for the abandoned call rule, 90 days from 
publication of OMB approval for the automated, interactive opt-out 
requirement, and one year from publication of OMB approval for the 
written consent requirement and phase-out of the EBR exemption--should 
allow covered entities time to find cost-efficient ways to comply with 
these changes, to the extent they have not already made such changes to 
comply with the FTC's rules.

Synopsis

Discussion

    1. Based on substantial record support and evidence of continued 
consumer frustration with unwanted telemarketing robocalls, and in 
furtherance of the statutory goal of maximizing consistency with the 
FTC's telemarketing rules, the Commission adopts the consumer 
protection measures proposed in the 2010 TCPA NPRM, published at 75 FR 
13471, March 22, 2010. First, the Commission requires prior express 
written consent for autodialed or prerecorded telemarketing calls to 
wireless numbers and for prerecorded telemarketing calls to residential 
lines. Second, the Commission eliminates the ``established business 
relationship'' exemption as it previously applied to prerecorded 
telemarketing calls to residential lines. Third, the Commission 
requires telemarketers to implement an automated, interactive opt-out 
mechanism for autodialed or prerecorded telemarketing calls to wireless 
numbers and for prerecorded telemarketing calls to residential lines, 
which would allow a consumer to opt out of receiving additional calls 
immediately during a telemarketing robocall. Fourth, the Commission 
requires that the permissible three percent call abandonment rate be 
calculated for each calling campaign, so that telemarketers cannot 
shift more abandoned calls to certain campaigns, as is possible if 
calculation is made across multiple calling campaigns. Finally, the 
Commission adopts an exemption to its implementing rules under the 
Telephone Consumer Protection Act (``TCPA'') for prerecorded health 
care-related calls to residential lines, which are already regulated by 
the federal Health Insurance Portability and Accountability Act.
    2. At the outset, the Commission notes that the benefits to 
consumers of increased protection from unwanted telemarketing robocalls 
are significant. By enacting the TCPA and its prohibitions on unwanted 
calls, Congress has already made an assessment that the benefits of 
protecting consumer privacy are substantial. Congress, through 
enactment of a second law--the DNCIA--has further determined that there 
are substantial benefits to consistency in telemarketing regulations by 
the FCC and the FTC. The FCC further finds that the significant ongoing 
consumer frustration reflected in its complaint data and the positive 
consumer response to the FTC's proceeding confirm the need to 
strengthen its current rules in some respects, and narrow them in 
others where other legal protections are in place. Moreover, with the 
exception of the limited group of entities that are outside the FTC's 
jurisdiction, the FCC expects that many telemarketers affected by the 
changes in this Report and Order have already incurred the cost of 
implementing a written consent requirement, have already given up 
reliance on the EBR as a basis for making prerecorded telemarketing 
calls to residential lines without prior express consent, have 
implemented an automated, interactive opt-out mechanism, and are 
calculating the call abandonment rate on a per-campaign basis. As a 
result, the Commission finds that increased consumer protection from 
unwanted telemarketing robocalls will provide substantial benefits to 
consumers without substantial implementation costs. While these 
benefits may not be easily quantifiable, nothing in the record 
persuades the Commission that the costs of complying with its revised 
rules outweigh the benefits.

A. Autodialed and Prerecorded Message Calls

1. Prior Express Written Consent Requirement
    3. Based on substantial record support, the volume of consumer 
complaints the Commission continues to receive concerning unwanted, 
telemarketing robocalls, and the statutory goal of harmonizing the FCC 
rules with those of the FTC, the FCC requires prior express written 
consent for all telephone calls using an automatic telephone dialing 
system or a prerecorded voice to deliver a telemarketing message to 
wireless numbers and for prerecorded telemarketing calls to residential 
lines.
    4. As an initial matter, the Commission notes that the TCPA is 
silent on the issue of what form of express consent--oral, written, or 
some other kind--is required for calls that use an automatic telephone 
dialing system or prerecorded voice to deliver a telemarketing message. 
Thus, the Commission has discretion to determine, consistent with 
Congressional intent, the form of express consent required. The vast 
majority of commenters support harmonizing the FCC's rules with those 
of the FTC by adopting a written consent requirement for autodialed or 
prerecorded telemarketing calls to wireless numbers and prerecorded 
telemarketing calls to residential lines. For example, Bank of America 
asserts that the Commission should harmonize its regulations with those 
of the FTC. Similarly, the National Cable & Telecommunications 
Association urges that a written consent requirement should apply to 
telemarketing calls. The National Council of Higher Education

[[Page 34235]]

Loan Programs and the Educational Finance Council also supports a 
written consent requirement for telemarketing calls. While a few 
commenters argue that the Commission should require written consent for 
all autodialed or prerecorded calls (i.e., not simply those delivering 
marketing messages), it concludes that requiring prior express written 
consent for all such calls would unnecessarily restrict consumer access 
to information communicated through purely informational calls. For 
instance, bank account balance, credit card fraud alert, package 
delivery, and school closing information are types of information calls 
that the Commission do not want to unnecessarily impede. The FCC takes 
this action to maximize consistency with the FTC's TSR, as contemplated 
in the DNCIA, and avoid unnecessarily impeding consumer access to 
desired information.
    5. Since the TCPA's enactment and the adoption of implementing 
rules, the Commission has continued to receive thousands of complaints 
regarding unwanted telemarketing robocalls. Furthermore, in its TSR 
proceeding, the FTC noted that it received over 13,000 comments 
opposing its proposal to, among other things, adopt an established 
business relationship (EBR) exemption for prerecorded telemarketing 
calls. In deciding to amend its rules to require prior written consent 
for prerecorded telemarketing calls, the FTC also considered its 
enforcement experience that resulted in multi-million dollar 
settlements where telemarketers, among other things, failed to secure 
the appropriate consent for telemarketing calls. In light of the FCC's 
record and the record amassed by the FTC in its TSR proceeding, the 
Commission finds that, notwithstanding current consent requirements and 
other TCPA safeguards, consumers continue to experience frustration in 
receiving unwanted telemarketing robocalls.
    6. The Commission also finds that a written consent requirement 
would advance Congress' objective under the DNCIA to harmonize the 
Commission's rules with those of the FTC. As stated previously, the 
DNCIA provides that ``the Federal Communications Commission shall 
consult and coordinate with the Federal Trade Commission to maximize 
consistency with the telemarketing rule promulgated by the Federal 
Trade Commission.'' Eliminating the differences between the FCC's rules 
and those of the FTC where warranted will ``maximize consistency'' with 
the FTC's consent requirements.
    7. Among the findings Congress made when adopting the TCPA were 
that: (1) The use of the telephone to market goods and services to the 
home and to other businesses has become pervasive due to the increased 
use of cost-effective telemarketing techniques; (2) telephone 
subscribers considered automated or prerecorded telephone calls, 
regardless of the content or the initiator of the message, to be a 
nuisance and an invasion of privacy; and (3) individuals' privacy 
rights, public safety interests, and commercial freedoms of speech and 
trade must be balanced in a way that protects the privacy of 
individuals yet permits legitimate telemarketing practices. While 
current regulations provide a measure of consumer protection from 
unwanted and unexpected calls, the complaint data, as noted above, show 
that the proliferation of intrusive, annoying telemarketing calls 
continues to trouble consumers. The Commission concludes that requiring 
prior express written consent for telemarketing calls utilizing 
autodialed or prerecorded technologies will further reduce the 
opportunities for telemarketers to place unwanted or unexpected calls 
to consumers. The Commission believes that requiring prior written 
consent will better protect consumer privacy because such consent 
requires conspicuous action by the consumer--providing permission in 
writing--to authorize autodialed or prerecorded telemarketing calls, 
and will reduce the chance of consumer confusion in responding orally 
to a telemarketer's consent request.
    8. The Commission further finds that the unique protections for 
wireless consumers contained in the TCPA supports requiring prior 
written consent for telemarketing robocalls. Because section 
227(b)(1)(A) of the Act specifically protects wireless users, among 
others, from autodialed or prerecorded calls to which they have not 
consented, the Commission must ensure that its rules address privacy 
issues for wireless consumers. In addition, the Commission notes that 
the substantial increase in the number of consumers who use wireless 
phone service, sometimes as their only phone service, means that 
autodialed and prerecorded calls are increasingly intrusive in the 
wireless context, especially where the consumer pays for the incoming 
call. Further, the costs of receiving autodialed or prerecorded 
telemarketing calls to wireless numbers often rest with the wireless 
subscriber, even in cases where the amount of time consumed by the 
calls is deducted from a bucket of minutes. Given these factors, the 
Commission believes that it is essential to require prior express 
written consent for autodialed or prerecorded telemarketing calls to 
wireless numbers. One commenter, USAA, appears to suggest that oral 
consent is sufficient to permit any autodialed or prerecorded calls to 
wireless numbers.
    It argues that its customers may orally provide their wireless 
phone number as a point of contact and therefore those customers expect 
marketing and service calls. The Commission disagrees. Consumers who 
provide a wireless phone number for a limited purpose--for service 
calls only--do not necessarily expect to receive telemarketing calls 
that go beyond the limited purpose for which oral consent regarding 
service calls may have been granted. Moreover, as use of wireless 
numbers continues to increase, the Commission believes that increased 
protection from unwanted telemarketing robocalls is warranted.
    9. The Commission further concludes that harmonizing its prior 
consent requirement with that of the FTC will reduce the potential for 
industry and consumer confusion surrounding a telemarketer's 
obligations because similarly situated entities will no longer be 
subject to different requirements depending upon whether the entity is 
subject to the FTC's or the FCC's jurisdiction. The Commission also 
finds that requiring prior written consent will enhance the FCC's 
enforcement efforts and better protect both consumers and industry from 
erroneous claims that consent was or was not provided, given that, 
unlike oral consent, the existence of a paper or electronic record can 
be more readily verified and may provide unambiguous proof of consent.
    10. Calls Not Subject to Written Consent Requirement. While the 
Commission adopts rules to protect consumers from unwanted 
telemarketing robocalls, it leaves undisturbed the regulatory framework 
for certain categories of calls. Specifically, consistent with section 
227(b)(2)(C) of the Act and its implementing rules and orders, the 
Commission does not require prior written consent for calls made to a 
wireless customer by his or her wireless carrier if the customer is not 
charged. One commenter requests that the Commission clarify that 
wireless carriers may send free autodialed or prerecorded calls, 
including text messages, without prior written consent, if the calls 
are intended to inform wireless customers about new products that may 
suit their needs more effectively, so long as the customer has not 
expressly opted out of receiving such communications. As noted above, 
the Commission addressed this issue in the 1992 TCPA Order, published 
at 57

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FR 48333, October 23, 1992, by concluding that Congress did not intend 
to prohibit autodialed or prerecorded message calls by a wireless 
carrier to its customer when the customer is not charged. The 
Commission based its conclusion on the fact that neither the TCPA nor 
its legislative history indicates that Congress intended to impede 
communications between common carriers and their customers regarding 
the delivery of customer services by barring calls to wireless 
consumers for which the consumer is not charged. Nothing in the record 
or the Commission's analysis of consumer complaints provides it a 
reason to alter its finding.
    11. Moreover, while the Commission revises its consent rules to 
require prior written consent for autodialed or prerecorded 
telemarketing calls to wireless numbers and prerecorded telemarketing 
calls to residential lines, it maintains the existing consent rules for 
non-telemarketing, informational calls, such as those by or on behalf 
of tax-exempt non-profit organizations, calls for political purposes, 
and calls for other noncommercial purposes, including those that 
deliver purely informational messages such as school closings. The 
FCC's rules for these calls will continue to permit oral consent if 
made to wireless consumers and other specified recipients, and will 
continue to require no prior consent if made to residential wireline 
consumers. Commenters support distinguishing telemarketing calls from 
non-telemarketing, informational calls. For instance, the National 
Cable & Telecommunications Association has urged that a written consent 
requirement should apply only to telemarketing calls and notes that its 
members make informational, non-telemarketing calls to wireless phones 
that should not be subject to a written consent requirement. The 
National Council of Higher Education Loan Programs and the Educational 
Finance Council also seek clarification that the written consent 
requirement will be limited to telemarketing calls. Additionally, the 
Commission notes that many commenters expressed concern about obtaining 
written consent for certain types of autodialed or prerecorded calls, 
including debt collection calls, airline notification calls, bank 
account fraud alerts, school and university notifications, research or 
survey calls, and wireless usage notifications. Again, such calls, to 
the extent that they do not contain telemarketing messages, would not 
require any consent when made to residential wireline consumers, but 
require either written or oral consent if made to wireless consumers 
and other specified recipients.
    12. While the Commission observes the increasing pervasiveness of 
telemarketing, it also acknowledges that wireless services offer access 
to information that consumers find highly desirable and thus do not 
want to discourage purely informational messages. As was roundly noted 
in the comments, wireless use has expanded tremendously since passage 
of the TCPA in 1991. The Commission believes that requiring prior 
express written consent for all robocalls to wireless numbers would 
serve as a disincentive to the provision of services on which consumers 
have come to rely. Moreover, in adopting these rules today, the FCC 
employs the flexibility Congress afforded to address new and existing 
technologies and thereby limit the prior express written consent 
requirement to autodialed or prerecorded telemarketing calls to 
wireless numbers and prerecorded telemarketing calls to residential 
lines. In addition, the Commission notes that section 227(b)(1)(A) of 
the Act and its implementing rules continue to require some form of 
prior express consent for autodialed or prerecorded non-telemarketing 
calls to wireless numbers. The Commission also maintains the 
requirement of prior express consent for autodialed or prerecorded non-
telemarketing calls to wireless numbers that are not subject to any 
exemptions under section 227(b)(2) of the Act. The FCC leaves it to the 
caller to determine, when making an autodialed or prerecorded non-
telemarketing call to a wireless number, whether to rely on oral or 
written consent in complying with the statutory consent requirement.
    13. Some commenters also express concern that written consent for 
autodialed or prerecorded calls to wireless numbers and for prerecorded 
calls to residential lines that offer certain home loan modifications 
and refinancing would frustrate their compliance with the American 
Recovery and Reinvestment Act, also known as the Recovery Act, which 
established certain outreach requirements designed to prevent 
foreclosure. These commenters assert that the calls may be interpreted 
as telephone solicitations because certain fees or charges to the 
consumer may be involved. These commenters note that calls and messages 
made pursuant to the Recovery Act also include non-telemarketing 
information regarding the status of the consumer's loan and repayment 
options, among other things. In the 2003 TCPA Order, published at 68 FR 
44144, July 25, 2003, the Commission articulated a standard in 
evaluating ``dual-purpose'' robocalls. The Commission asserted that in 
evaluating dual-purpose calls, it would determine whether the call 
includes an advertisement. The Commission provided that if the call, 
notwithstanding its free offer or other information, is intended to 
offer property, goods, or services for sale either during the call, or 
in the future, that call is an advertisement.
    14. The Commission believes that the intent of calls made pursuant 
to the Recovery Act, when the call is made by the consumer's loan 
servicer, is to fulfill a statutory requirement rather than offer a 
service for sale. Similarly, the Commission, in analyzing telephone 
solicitation, states that the application of the prerecorded message 
rule should turn, not on the caller's characterization of the call, but 
on the purpose of the message. Again, the Commission believes that the 
predominant purpose of a ``Recovery Act'' call, when it is made by the 
consumer's loan servicer, is compliance with the Recovery Act. In this 
instance, the FCC finds that the home loan modification and refinance 
calls placed pursuant to the Recovery Act generally are not 
solicitation calls and do not include or introduce an unsolicited 
advertisement, when those calls are made by the consumer's loan 
servicer, because the primary motivation of the calling party is to 
comply with that statute's outreach requirements. The FCC notes, 
however, that should such calls be challenged as TCPA violations 
because the primary motivation appears to be sending a telephone 
solicitation or unsolicited advertisement rather than complying with 
the Recovery Act, the Commission will consider the facts on a case-by-
case basis. Further, if a ``Recovery Act'' robocall is made to a 
wireless number, prior express consent, which may be either oral or 
written, is specifically required pursuant to the Act.
    15. Content and Form of Consent. With respect to written consent, 
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. Under the FTC's rules, prior express consent to 
receive prerecorded telemarketing calls must be in writing. The FTC's 
rules require that the written agreement must be signed by the consumer 
and be sufficient to show that he or she: (1) Received ``clear and 
conspicuous disclosure'' of the consequences of

[[Page 34237]]

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 email, Web site form, text message, 
telephone keypress, or voice recording. Finally, under the TSR, the 
seller bears the burden of proving that a clear and conspicuous 
disclosure was provided, and that an unambiguous consent was obtained.
    16. Consistent with the FTC's TSR, the Commission concludes that a 
consumer's written consent to receive telemarketing robocalls must be 
signed and be sufficient to show that the consumer: (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.'' Finally, should any question about 
the consent arise, the seller will bear the burden of demonstrating 
that a clear and conspicuous disclosure was provided and that 
unambiguous consent was obtained.
    17. Electronic Consent. In the 2010 TCPA NPRM, the Commission 
proposed to allow sellers or telemarketers to obtain prior express 
written consent using any medium or format permitted by the E-SIGN Act, 
as the FTC permits in the TSR. The FTC specifically found that consent 
obtained via an email, Web site form, text message, telephone keypress, 
or voice recording are in compliance with the E-SIGN Act and would 
satisfy the written consent requirement in the amended TSR. Consistent 
with the FTC, the Commission now similarly concludes that consent 
obtained in compliance with the E-SIGN Act will satisfy the 
requirements of its revised rule, including permission obtained via an 
email, Web site form, text message, telephone keypress, or voice 
recording. Allowing documentation of consent under the E-SIGN Act will 
minimize the costs and burdens of acquiring prior express written 
consent for autodialed or prerecorded telemarketing calls while 
protecting the privacy interests of consumers. Because it greatly 
minimizes the burdens of acquiring written consent, commenters 
generally support using electronic signatures consistent with the E-
SIGN Act. The Commission concludes that the E-SIGN Act significantly 
facilitates its written consent requirement, while minimizing any 
additional costs associated with implementing the requirement.
2. Established Business Relationship Exemption
    18. The Commission next considers whether to retain the exemption 
to the prior consent requirement for prerecorded telemarketing calls 
made to consumers with whom the caller has an established business 
relationship (EBR). In making the determination here, the Commission is 
again mindful of the statutory goal of maximizing consistency with the 
FTC's regulations in this area. As described below, the Commission 
eliminates the established business relationship exemption for 
prerecorded telemarketing calls to residential lines.
    19. The FCC's Rules. In the 1992 TCPA Order, the Commission 
allowed, without the need for additional consent, prerecorded 
telemarketing calls to residential lines when the caller has an 
established business relationship with the consumer. The Commission 
concluded, based on the record and legislative history, that a 
solicitation to someone with whom a prior business relationship exists 
does not adversely affect consumer privacy interests because a consumer 
with an established business relationship implicitly consents to the 
call. Such a solicitation, the Commission reasoned, can be deemed to be 
invited or permitted by the consumer. In addition, the Commission 
relied on the legislative history, which suggests that Congress did not 
intend that the TCPA unduly interfere with ongoing business 
relationships. The Commission later codified in its rules the EBR 
exemption for telemarketing calls to residential lines.
    20. The FTC's Approach. The FTC has recently taken a different view 
of whether an established business relationship alone should allow 
prerecorded telemarketing calls when there is no prior express consent. 
In its 2008 amendment to the TSR, the FTC terminated its previously 
announced policy of forbearing from bringing enforcement actions 
against sellers and telemarketers who, in accordance with a safe harbor 
that was proposed in November 2004, made calls that deliver prerecorded 
messages to consumers with whom the seller has an EBR. In reaching this 
conclusion, the FTC was persuaded by the number of comments opposing 
its safe harbor rule, lack of consumer confidence in industry 
assurances to self-regulate and not abuse consumers, consumer privacy 
concerns, and the difficulty in stopping unwanted calls.
    21. At the outset, the Commission notes that there is no statutory 
barrier to eliminating the established business relationship exemption 
for prerecorded telemarketing calls. Section 227 of the Act grants the 
Commission authority to create exemptions to the restrictions on 
prerecorded calls to residential lines but does not require that the 
Commission recognize an EBR exemption in this context. Hence, the 
statute gives the Commission authority to establish--or not establish--
an EBR exemption for prerecorded telemarketing calls. While, as noted 
above, the Commission previously interpreted the statute to permit an 
EBR exemption and did adopt one, additional experience, the record 
before it, and evidence of ongoing consumer frustration lead us to 
conclude that the exemption has adversely affected consumer privacy 
rights.
    22. Based on the record in this proceeding and the volume of 
complaints filed by consumers that have an established business 
relationship with the caller, and consistent with the FTC's findings, 
the Commission concludes that the public interest would be served by 
eliminating the established business relationship exemption for 
telemarketing calls. As such, telemarketing calls to residential lines 
will require prior written consent, even where the caller and called 
party have an EBR.
    23. In general, consumer groups and individual commenters in this 
proceeding support eliminating the established business relationship 
exemption. For example, some commenters assert that a reasonable 
consumer would consider prerecorded telemarketing messages even where 
an EBR exists to be coercive or abusive of the consumer's right to 
privacy. Another commenter contends that businesses falsely claim to 
have an EBR when none exists, or improperly expand the scope of their 
business relationships with customers to permit calls. One

[[Page 34238]]

commenter objects to the notion that consumers welcome or expect 
prerecorded messages from companies with which they conduct business. 
Two other commenters argue that telemarketing calls should not be 
``deemed invited'' by virtue of an EBR and assert that prerecorded 
telemarketing calls are intrusive whether or not the caller has a 
preexisting relationship with the recipient. Business groups and 
industries, however, support retention of the exemption because, they 
assert, communication between businesses and their customers would be 
significantly impeded without it. Another commenter reiterates the 
Commission's 1992 determination that the exemption does not adversely 
affect the consumer's privacy interests. The Commission disagrees with 
commenters advocating retention of the EBR for the reasons described 
below.
    24. The FCC's complaint data shows that thousands of consumers 
remain unhappy with prerecorded telemarketing messages even when they 
have an established business relationship with the caller. The 
Commission finds these complaints to be a clear indication that many 
consumers do not consider prerecorded calls made pursuant to an 
established business relationship either invited or expected. 
Consistent with its data, the FTC has found ``compelling evidence that 
consumer aversion to artificial or prerecorded message telemarketing--
regardless of whether an established business relationship exists--has 
not diminished since enactment of the TCPA, which, in no small measure, 
was prompted by consumer outrage about the use of artificial or 
prerecorded messages.'' More than 13,000 comments opposing an EBR 
exemption were received on the issues presented in the FTC's 
proceeding, and, the FTC concluded, such opposition to artificial or 
prerecorded telemarketing messages could not be ignored. The FTC 
subsequently decided to discontinue its recognition of an EBR exemption 
for prerecorded telemarketing calls.
    25. Complaints about EBR-based calls demonstrate that, in many 
cases, a prior business relationship does not necessarily result in a 
consumer's willingness to receive prerecorded telemarketing calls and 
often adversely affects consumer privacy rights. The Commission 
emphasizes that its decision to eliminate the established business 
relationship exemption is consistent with the FTC's findings rejecting 
an EBR exemption and the DNCIA's requirement that the FCC ``maximize 
consistency'' with the FTC's approach in this area. In doing so, the 
FCC ensures that all telemarketers subject to federal law are given 
clear and consistent guidance regarding the circumstances under which 
prior express consent must be obtained from consumers before making 
prerecorded telemarketing calls. The Commission believes that its 
decision here strikes an appropriate balance between preserving ongoing 
business relationships and protecting consumer privacy, as intended by 
Congress. Since the enactment of the TCPA and the FCC's creation of an 
established business relationship exemption, methods for efficiently 
obtaining electronic consent have been developed and have been legally 
recognized by the E-SIGN Act. These newer consent options have 
significantly facilitated business relationships while, at the same 
time, allowing consumers to affirmatively choose whether they wish to 
receive prerecorded telemarketing calls before such calls invade their 
privacy.
    26. While commenters' assertions that eliminating the EBR exemption 
will impede business communications suggest that there are compliance 
costs associated with this new rule, commenters do not, however, 
quantify any such costs. In light of the fact that the FTC's rules have 
been in place for more than two years, the Commission believes that 
compliance costs, if substantial, should be known. Commenters have 
failed to put forward evidence of such costs, however. Nevertheless, 
elimination of the EBR will require telemarketers to secure consent 
from consumers in some cases where they would not have obtained consent 
under the current rules. As with the other changes the Commission 
adopts in document FCC 12-21, many telemarketers are already required 
to market without benefit of the EBR for entities under FTC 
jurisdiction, and given the absence of record evidence on the 
incremental cost of complying with these changes, the Commission lacks 
a basis for finding that the costs outweigh the substantial consumer 
benefits. For those entities that currently rely on the EBR exemption, 
the Commission notes that its rules require ``clear and convincing 
evidence'' that an EBR exists. Although commenters opposing elimination 
of the EBR exemption have not provided information on compliance costs, 
the Commission notes that the incremental cost resulting from its 
action is offset to some degree by the costs that these entities 
already incur to retain ``clear and convincing evidence.'' The 
Commission believes that any additional cost incurred by having to 
obtain written consent is further lowered by the option of using 
electronic measures consistent with E-SIGN.
3. Opt-Out Mechanism
    27. The FCC next considers whether to require an automated opt-out 
mechanism that would allow consumers to bar unwanted prerecorded 
telemarketing calls. The FTC has recently required such an automated 
opt-out mechanism, and the FCC now considers how it can maximize 
consistency with the FTC's approach. The FCC adopts an automated, 
interactive opt-out requirement for autodialed or prerecorded 
telemarketing calls to wireless numbers and prerecorded telemarketing 
calls to residential lines.
    28. The FCC's Rules. Under the FCC's existing rules, a consumer who 
does not wish to receive further prerecorded telemarketing calls can 
``opt out'' of receiving such calls by dialing a telephone number 
(required to be provided in the prerecorded message) to register his or 
her do-not-call request. Specifically, the FCC'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 message, provide a telephone number 
that consumers can call during regular business hours to make a 
company-specific do-not-call request.
    29. The FTC's Rule. The FTC's TSR, as amended in 2008, requires, 
with limited exception, that any artificial or prerecorded message call 
that could be answered by the consumer in person provide an 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 the consumer's answering machine or voicemail 
service, the message must also include a toll-free number that enables 
the consumer to subsequently call back and connect directly to an 
automated opt-out mechanism.
    30. Based on the record, the FCC revises its rules to require any 
artificial or prerecorded message call that could be answered by the 
consumer in person provide an interactive opt-out mechanism that is 
announced at the outset of the message and is available throughout the 
duration of the call. In addition, the opt-out mechanism, when

[[Page 34239]]

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 the consumer's answering machine or voicemail 
service, the message must also include a toll-free number that enables 
the consumer to subsequently call back and connect directly to an 
automated opt-out mechanism. The Commission adopts these rules to 
enable consumers to control their exposure to, and continued 
participation in, prerecorded telemarketing calls and to harmonize its 
opt-out rules with the FTC's TSR, consistent with the Congressional 
intent expressed by the DNCIA. The Commission notes that the TCPA does 
not require implementation of a particular opt-out mechanism. Rather, 
the TCPA provides that the Commission shall prescribe technical and 
procedural standards for systems that are used to transmit any 
prerecorded voice message via telephone and provides two elements that 
the Commission must include in its standards.
    31. The Commission believes that the automated, interactive opt-out 
mechanism adopted will empower consumers to revoke consent if they 
previously agreed to receive autodialed or prerecorded telemarketing 
calls and stop receipt of unwanted autodialed or prerecorded 
telemarketing calls to which they never consented. The record developed 
in the FTC proceeding includes an industry analysis showing, among 
other things, that consumers are four times more likely to opt out of a 
prerecorded call that has an automated, interactive opt-out mechanism 
as opposed to opting out of a prerecorded call that provides a toll-
free number for the consumer to call during business hours. This 
analysis suggests that consumers are reluctant to use toll-free numbers 
to end unwanted telemarketing calls. The majority of commenters in this 
proceeding who address this issue support an automated, interactive 
opt-out mechanism for telemarketing calls. For instance, the National 
Consumer Law Center states that the Commission's current opt-out 
mechanism, which requires a separate call to the telemarketer, is far 
less useful or protective of a consumer's privacy, and thus advocates 
adopting the more consumer-friendly automated, interactive opt-out 
mechanism. While a few commenters assert that the Commission should 
apply the automated, interactive opt-out requirement to non-
telemarketing and telemarketing calls alike, the Commission declines to 
do so at this time because the record does not reveal a level of 
consumer frustration with non-telemarketing calls that is equal to that 
for telemarketing calls. The Commission therefore limits the automated, 
interactive opt-out requirement that it adopts in this Report and Order 
to autodialed or prerecorded telemarketing calls.
    32. The Commission emphasizes that an entity placing an otherwise 
unlawful autodialed or prerecorded call cannot shield itself from 
liability simply by complying with the FCC's opt-out and identification 
rules. Furthermore, the revised rules the Commission adopts in this 
Order do not alter the current technical and procedural standards as 
applied to non-telemarketing, informational calls. The Commission 
maintains its identification and contact information requirements in 
Sec.  64.1200(b) of the Commission's rules. The Commission also takes 
this opportunity to stress that the identification and contact 
information must be valid, verifiable, and actionable.

B. Abandoned Calls/Predictive Dialers

    33. The Commission next decides whether to adopt rules that are 
consistent with the FTC's method for determining whether a 
telemarketer's ``abandoned'' call rate is within the lawful numerical 
limits for such calls. Based on the record, the Commission modifies its 
abandoned call rule to require that the three percent call abandonment 
rate be calculated for each calling campaign.
    34. The FCC's Rules. Predictive dialers initiate phone calls while 
telemarketers are talking to other consumers and frequently disconnect 
those connected calls when a telemarketer is otherwise occupied and 
unavailable to take the next call, resulting in a hang-up or dead-air 
call. 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 called person's completed greeting. The Commission's existing 
rules restrict the percentage of live telemarketing calls that a 
telemarketer may drop (or abandon) as a result of predictive dialers. 
Specifically, a seller or telemarketer would not be liable for 
violating the two-second restriction if, among other things, it employs 
technology that ensures abandonment of no more than three percent of 
all calls answered by the called person (rather than by an answering 
machine). The Commission's existing call abandonment rule measures the 
abandonment rate over a 30-day period, but contains no ``per-calling-
campaign'' limitation.
    35. The FTC's Rule. As does the FCC's rule, the FTC's TSR deems an 
outbound telephone call to be ``abandoned'' if the called person 
answers the telephone and the caller does not connect the call to a 
sales representative within two seconds of the called person's 
completed greeting. Under the TSR, a seller or telemarketer 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) for the duration of a 
single calling campaign, if the campaign is less than 30 days, or 
separately over each successive 30-day period or portion thereof during 
which the calling campaign continues.
    36. The Commission revises its rules to match the FTC's and require 
assessment of the call abandonment rate to occur during a single 
calling campaign over a 30-day period, and if the single calling 
campaign exceeds a 30-day period, the Commission requires that the 
abandonment rate be calculated each successive 30-day period or portion 
thereof during which the calling campaign continues. The revised 
requirement will deprive telemarketers of the opportunity to average 
abandoned calls across multiple calling campaigns, which can result in 
targeting abandoned calls to less desirable consumers, a form of 
robocall ``redlining.''
    37. Several commenters support the proposed rules, and several 
oppose them. Michigan PSC, NASUCA, and SmartReply generally support the 
proposed rule and favor harmonization of the Commission's rule with the 
FTC's rule. Bank of America (BofA) opposes the per-calling campaign 
measurement because, BofA asserts, it does not engage in the kind of 
rate manipulation the proposed rule attempts to address. The Newspaper 
Association of American opposes the per-campaign modification to the 
Commission's existing rule because it claims that the rule would 
adversely impact smaller organizations that utilize shorter calling 
lists. Roylance opposes the proposed rule and instead argues that a 
per-day measurement should be used to ensure a reduction in the 
abandoned call rate and that a per-telephone number limitation, without 
regard to the number of telemarketers or campaigns, should be imposed 
to ensure that the consumer does not receive more than a certain number 
of abandoned calls to a certain telephone number. Although BofA

[[Page 34240]]

claims that it has not calculated the abandoned call rate based upon 
multiple calling campaigns, no commenter in this proceeding provided 
industry data regarding the occurrence of averaging over multiple 
calling campaigns. The Commission notes, however, that the Connecticut 
Attorney General supported the FTC's per-calling campaign limitation, 
as did several consumer commenters.
    38. The Commission declines to adopt a ``per-day'' assessment of 
the abandonment rate instead of the 30-day assessment, as urged by some 
commenters. In changing its per-day, per-calling campaign assessment to 
a 30-day, per-calling campaign assessment, the FTC noted that the 
biggest problem with the per-day calculation is adjusting for the 
unexpected spikes in answered and abandoned calls. As the FCC has 
previously noted, a rate measured over a longer period of time will 
allow for reasonable variations in telemarketing calling campaigns such 
as calling times, number of operators available, number of telephone 
lines used by the call centers, and similar factors. This allowance 
alleviates some of the difficulties experienced by small businesses 
that use a smaller calling list. Thus, the Commission finds it 
necessary to maintain the 30-day time period for measurement of 
abandoned calls. The Commission also declines to adopt a ``per-
telephone number'' assessment of the abandoned call rate instead of the 
30-day assessment as noted above by one commenter. The cost of 
implementing a per-telephone number limitation would outweigh the 
benefit of the extra measure of protection against abandoned calls.
    39. In addition, the FCC will apply the term ``campaign'' as 
defined by the FTC. In the 2008 TSR, published at 73 FR 51164, August 
29, 2008, the FTC defines ``campaign'' as ``the offer of the same good 
or service for the same seller.'' So long as a telemarketer is offering 
the same good or service for the same seller, the FCC will regard the 
offer as part of a single campaign, irrespective of whether 
telemarketing scripts used to convey the offer use or contain different 
wording.

C. Exemption for Health Care-Related Calls Subject to HIPAA

    40. The Commission next considers whether prerecorded calls subject 
to the Health Insurance Portability and Accountability Act of 1996 
(HIPAA) should be exempt from its TCPA consent, identification, time-
of-day, opt-out, and abandoned call rules. Once again, as contemplated 
by the DNCIA, the FCC considers the FTC's approach to this issue so 
that the FCC can ``maximize consistency'' with the FTC's TSR. The HIPAA 
statute strives to improve portability and continuity of health 
insurance coverage in the group and individual markets, to combat 
waste, fraud, and abuse in health insurance and health care delivery, 
to promote the use of medical savings accounts, to improve access to 
long-term care services and coverage, and to simplify the 
administration of health insurance, among other purposes. HIPAA also 
gives individuals important controls over whether and how their 
protected information is used and disclosed for marketing purposes. 
With limited exceptions, HIPAA requires an individual's written 
authorization before his or her protected health information can be 
used or disclosed for marketing purposes. In view of the privacy 
protections afforded under HIPAA, the FCC exempts from its consent, 
identification, time-of-day, opt-out, and abandoned call requirements 
all prerecorded health care-related calls to residential lines that are 
subject to HIPAA.
    41. The FCC's Statutory Authority. The Act provides that the 
Commission may establish exemptions from the prohibitions on 
prerecorded voice calls to residential lines. Specifically, section 
227(b)(2)(B) of the TCPA provides, in relevant part, that two types of 
calls may be exempted: ``(i) calls that are not made for a commercial 
purpose, and (ii) such classes or categories of calls made for 
commercial purposes as the Commission determines (I) will not adversely 
affect the privacy rights that this section is intended to protect; and 
(II) do not include the transmission of any unsolicited 
advertisement.''
    42. The FTC's Approach. In its 2008 amendment to the TSR, the FTC 
exempted health care-related prerecorded message calls subject to HIPAA 
from its restrictions on such calls, basing its determination on six 
primary considerations. First, the FTC found that delivery of health 
care-related prerecorded calls subject to HIPAA is already regulated 
extensively at the federal level. Second, it found that coverage of 
such calls by the TSR could frustrate the Congressional intent embodied 
in HIPAA, as well as other federal statutes governing health care-
related programs. Third, the FTC found that the number of health care 
providers who might call a patient is inherently quite limited--as is 
the scope of the resulting potential privacy infringement--in sharp 
contrast to the virtually limitless number of businesses potentially 
conducting commercial telemarketing campaigns. Fourth, the FTC found 
that there is no incentive, and no likely medical basis, for providers 
who place health care-related prerecorded calls to attempt to boost 
sales through an ever-increasing frequency or volume of calls. Fifth, 
the FTC concluded that the existing record did not show that ``the 
reasonable consumer'' would consider prerecorded health care calls 
coercive or abusive. Finally, FTC enforcement experience did not 
suggest that health care-related calls have been the focus of the type 
of privacy abuses the exemption was intended to remedy. For these 
reasons, the FTC determined, pursuant to both its authority under the 
Telemarketing Act and its authority under the FTC Act, that health 
care-related prerecorded message calls subject to HIPAA should be 
exempt from the TSR because application of the TSR to such calls ``is 
not necessary to prevent the unfair or deceptive act or practice [that 
harms consumer privacy] to which the [TSR] relates.''
    43. For the reasons discussed herein and consistent with the FTC's 
action, the FCC exempts from its consent, identification, time-of-day, 
opt-out, and abandoned call requirements applicable to prerecorded 
calls all health care-related calls to residential lines subject to 
HIPAA. Establishing this exemption advances the statutory goal of 
maximizing consistency with the FTC's rules, and the FCC's record 
affirmatively supports adopting the FTC's approach. Therefore, pursuant 
to section 227(b)(2)(B) of the Act, which allows the Commission to 
establish an exemption for specified prerecorded calls that are 
commercial in nature if such calls will not adversely affect consumer 
privacy rights and do not include an unsolicited advertisement, the 
Commission finds that prerecorded calls to residential lines that are 
subject to HIPAA should be exempted from the consent, identification, 
time-of-day, opt-out, and abandoned call requirements under its TCPA 
rules. Furthermore, the Commission agrees with commenters that assert 
these calls serve a public interest purpose: to ensure continued 
consumer access to health care-related information.
    44. As has the FTC, the FCC finds that HIPAA's existing 
protections, which it describes below, already safeguard consumer 
privacy, and the FCC therefore does not need to subject these calls to 
its consent, identification, opt-out, and abandoned call rules. The FCC 
notes at the outset that HIPAA regulations cover all communications 
regarding protected health information and all means of communication

[[Page 34241]]

regarding such information. The Department of Health and Human Services 
(HHS) explains that HIPAA protects individually identifiable health 
information held or transmitted by a covered entity or its business 
associate, in any form or media, whether electronic, paper, or oral. In 
addition to limiting the use or disclosure of health information for 
treatment, payment, or health care operations or otherwise permitted or 
required disclosures, HIPAA restricts the use of this information for 
marketing. Unless the covered entity secures the individual's written 
authorization, HIPAA allows marketing only if the communication imparts 
information about a product or service that is included in a health 
care benefits plan offered by the covered entity, gives information 
concerning treatment, or describes goods or services for case 
management or care coordination. It is also noteworthy that HIPAA 
applies its regulations not only to certain uses or disclosures by the 
covered entity, but also extends HIPAA obligations, without exception, 
to third parties to which covered entities disclose protected health 
information. Violations of HIPAA are subject to civil penalties and 
criminal penalties, including possible imprisonment.
    45. All health care industry commenters support a consent exemption 
for health care-related prerecorded calls subject to HIPAA. Among those 
opposing the exemption, one commenter states without elaboration that 
an exemption should not be established for health care-related 
prerecorded marketing calls. Although it is unclear from the comment, 
this commenter may not understand that restrictions imposed by HIPAA 
would restrain any such marketing calls. A second commenter opposes a 
HIPAA exemption but misjudges the effect of an exemption, not 
acknowledging that without an exemption, calls permitted by HIPAA would 
be prohibited by the FCC's existing rules and not acknowledging that 
HIPAA provides rigorous privacy protections and penalties.
    46. In the FTC's TSR proceeding, concern was raised, in relevant 
part, whether immunization reminders, health screening reminders, 
medical supply renewal requests, and generic drug migration 
recommendations would constitute inducements to purchase goods or 
services. In the FCC's proceeding, one commenter argues that a call 
``pushing'' flu vaccines would be illegal under the TCPA. Without 
reaching the merits of this argument, the Commission does believe that 
an exemption for prerecorded health care-related calls to residential 
lines is warranted when such calls are subject to HIPAA. With respect 
to the privacy concerns that the TCPA was intended to protect, the 
Commission believes that prerecorded health care-related calls to 
residential lines, when subject to HIPAA, do not tread heavily upon the 
consumer privacy interests because these calls are placed by the 
consumer's health care provider to the consumer and concern the 
consumers' health. Moreover, the exemption the Commission adopts in 
document FCC 12-21 does not leave the consumer without protection. The 
protections provided by HIPAA safeguard privacy concerns. Under the 
second prong of the TCPA exemption provision, which requires that such 
calls not include an unsolicited advertisement, the Commission finds 
the calls at issue here are intended to communicate health care-related 
information rather than to offer property, goods, or services and 
conclude that such calls are not unsolicited advertisements. Therefore, 
such calls would satisfy the TCPA standard for an exemption as provided 
in the Act and the FCC's implementing rules.
    47. Third, a commenter anticipates abuse of the HIPAA marketing 
definition and suggests that robocalling a neighborhood to alert 
persons that the calling entity will provide immunizations would be 
allowed under HIPAA. HHS enforcement measures of HIPAA discourage abuse 
because these measures include civil and criminal penalties. Lastly, 
one commenter that opposes the HIPAA exemption questions the 
Commission's authority to adopt such an exemption. Because the 
Commission concludes that prerecorded, health care-related calls, 
subject to HIPAA, to residential lines do not constitute an unsolicited 
advertisement and will not adversely affect the privacy rights that the 
Act was intended to protect, the Act allows the Commission to establish 
an exemption for such calls, and it does so in this Report and Order.
    48. In sum, based on the record and the HIPAA requirements, the FCC 
agrees with the FTC approach under the TSR and is persuaded that the 
HIPAA privacy regulations are rigorous and reflect a statutory mission 
to protect privacy rights. HHS enforcement measures of HIPAA discourage 
abuse because these measures include civil and criminal penalties. The 
FCC therefore adopts an exemption from its TCPA rules for prerecorded 
health care-related calls to residential lines that are subject to 
HIPAA. In those instances where the prerecorded health care-related 
call is not covered by HIPAA, as determined by HHS, restrictions 
imposed by the TCPA and the FCC's implementing rules will apply as the 
facts warrant.

D. Implementation

    49. Finally, the Commission addresses the timing and cost of 
implementing the rules it adopts in document FCC 12-21. The Commission 
seeks to ensure that the consumer protection measures it adopts are 
timely implemented so that consumers can realize the benefits, while 
allowing a reasonable time for affected parties to implement necessary 
changes in a way that makes sense for their business models. Each of 
the FCC's implementation periods is consistent with the implementation 
periods adopted by the FTC. Specifically, the FCC establishes a twelve-
month period for implementation of the requirement that prior express 
consent be in writing for telemarketers employing autodialed or 
prerecorded calls or messages to wireless numbers and prerecorded calls 
or messages to residential lines. This twelve-month period will 
commence upon publication of OMB approval of the FCC's written consent 
rules in the Federal Register. In connection with the implementation of 
the written consent requirement for telemarketing robocalls, the FCC 
will phase out the established business relationship exemption over the 
same twelve-month period that follows publication of OMB approval of 
its written consent rule in the Federal Register. To reiterate, the FCC 
allows telemarketers twelve months from publication of OMB approval of 
its written consent rules to cease utilization of the established 
business relationship as evidence of consumer consent to receive 
prerecorded telemarketing calls. Second, the FCC establishes a 90-day 
implementation period for the automated, interactive opt-out mechanism 
for telemarketing calls, again commencing upon publication of OMB 
approval of its opt-out rules in the Federal Register. Finally, the FCC 
establishes a 30-day implementation period for the revised abandoned 
call rule, also commencing upon publication of OMB approval of its 
abandoned calls rule in the Federal Register.
    50. Based on its review of the record and the considerations noted 
above, the Commission adopts implementation timetable as described 
herein. Although industry commenters focused their remarks on the time 
that would be needed for implementing a prior express written consent 
requirement for non-telemarketing calls, they did not address 
implementation where the proposed consent requirement was limited to

[[Page 34242]]

telemarketing calls. The Commission finds that establishing a twelve-
month implementation period for the written consent requirement is 
appropriate because, as noted in the FTC proceeding, it will take time 
for businesses to redesign Web sites, revise telemarketing scripts, and 
prepare and print new credit card and loyalty program applications and 
response cards to obtain consent from new customers, as well as to use 
up existing supplies of these materials and create new record-keeping 
systems and procedures to store and access the new consents they 
obtain.
    51. One commenter in this proceeding supports the use of consent 
obtained under the Commission's existing rules to authorize continued 
autodialed or prerecorded calls for a limited period of time. Because 
allowing telemarketers to rely on such consent pending the effective 
date of its new written consent requirement would ease the operational 
and technical transition for autodialed or prerecorded voice 
telemarketing calls, the Commission finds that it would serve the 
public interest to permit continued use of existing consents for an 
interim period. For example, in cases where a telemarketer has not 
obtained prior written consent under the FCC's existing rules, the 
Commission will allow such telemarketer to make prerecorded voice 
telemarketing calls until the effective date of its written consent 
requirement, so long as the telemarketer has obtained another form of 
prior express consent. Once the Commission's written consent rules 
become effective, however, an entity will no longer be able to rely on 
non-written forms of express consent to make autodialed or prerecorded 
voice telemarketing calls, and thus could be liable for making such 
calls absent prior written consent.
    52. With respect to the 90-day implementation period for the 
automated, interactive opt-out mechanism for telemarketing calls, there 
is no indication in the FCC's record that implementing the proposed 
opt-out mechanism would be especially burdensome or pose extraordinary 
technical issues. Moreover, the FTC observed in its proceeding, that 
industry comments uniformly represent that interactive technology is 
affordable and widely available. In addition, the FCC believes that the 
implementation circumstances associated with its revised abandonment 
rate measurement rules merit a 30-day allotment of time for compliance. 
None of the commenters on the proposed abandoned call rule requested 
any delay to give affected entities sufficient time to comply. Having 
received no input regarding the implementation period needed to 
implement the abandoned call rule, the Commission believes the 
appropriate time for implementation of this revised rule is also 30 
days after publication of OMB approval of this rule in the Federal 
Register.
    53. In the 2010 TCPA NPRM, the Commission asked for comment on the 
incremental costs of implementing its proposals to require written 
consent. With one exception (elimination of the EBR, which the 
Commission address above), industry commenters do not substantially 
oppose the proposals the Commission adopt today. As described above, 
neither telemarketers nor sellers oppose the written consent 
requirement for telemarketing robocalls--the Commission would have 
expected such opposition if compliance costs were material. Many, 
perhaps the vast majority, of telemarketers already have processes in 
place to comply with this requirement. Hence, with the exception of the 
limited group of entities that are outside the FTC's jurisdiction, the 
FCC expects that many telemarketers affected by the changes in this 
Report and Order have already incurred the cost of implementing a 
written consent requirement, have already given up reliance on the EBR 
as a basis for making robocalls without prior express consent, have 
implemented an automated opt-out mechanism, and are calculating the 
call abandonment rate on a per-campaign basis. Because there is little 
record opposition to these changes, other than elimination of the EBR, 
and because many affected entities should already have processes in 
place to comply with the changes and of the availability of electronic 
means to obtain written consent, the Commission finds no reason to 
conclude that the consumer benefits that will result from these changes 
are outweighed by the associated costs.

Final Regulatory Flexibility Analysis

    54. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Notice of Proposed Rulemaking (2010 TCPA NPRM) 
released by the Federal Communications Commission (Commission) on 
January 22, 2010. The Commission sought written public comments on the 
proposals contained in the 2010 TCPA NPRM, including comments on the 
IRFA. None of the comments filed in this proceeding were specifically 
identified as comments addressing the IRFA; however, comments that 
address the impact of the proposed rules and policies on small entities 
are discussed below. This present Final Regulatory Flexibility Analysis 
(FRFA) conforms to the RFA.

E. Need for, and Objectives of, the Order

    55. The DNCIA provides that ``the Federal Communications Commission 
shall consult and coordinate with the Federal Trade Commission to 
maximize consistency with the rule promulgated by the Federal Trade 
Commission.'' The FCC notes that the Federal Trade Commission amended 
its Telemarketing Sales Rule (TSR) in 2008 to require, among other 
things, that telemarketers secure the consumer's express written 
agreement to receive prerecorded telemarketing messages, provide an 
automated, interactive opt-out mechanism, terminate its safe harbor 
provision allowing prerecorded telemarketing calls to consumers with 
whom the telemarketer enjoyed an established business relationship, and 
limit abandoned calls on a 30-day, per campaign period. This Commission 
has determined to harmonize its rules with the FTC's TSR to protect 
consumers from unwanted autodialed or prerecorded telemarketing calls, 
also known as ``robocalls.'' Despite establishing a National Do-Not-
Call Registry and adopting other consumer protection rules, the 
Commission observes that consumers continue to receive unwanted 
robocalls. The continued receipt of unwanted robocalls demonstrates a 
need for the actions taken in this Order. Abuses in telemarketing have 
motivated the Commission to the objective of bringing an end to 
consumers receiving unwanted robocalls, encountering difficult or 
ineffective opt-out procedures, and receiving dead-air calls. In 
adopting these rules, the Commission fulfills another objective in 
document FCC 12-21 by acting upon Congress's directive in the DNCIA.
    56. In document FCC 12-21, the Commission adopts measures under the 
Telephone Consumer Protection Act (TCPA) to help consumers protect 
their privacy from unwanted telemarketing calls. Specifically, to 
summarize the rules adopted, the Commission revises its rules to 
require prior express written consent for all autodialed or prerecorded 
telemarketing calls to wireless numbers and prerecorded telemarketing 
calls residential lines and to eliminate the established business 
relationship exemption for prerecorded calls to residential lines while 
providing more flexibility for purely informational calls. The 
Commission revises its rules to require an automated, interactive opt-
out feature at the outset of any autodialed or prerecorded 
telemarketing

[[Page 34243]]

call that could be answered by the consumer in person and is available 
throughout the duration of the autodialed or prerecorded telemarketing 
call. In addition, if the called party elects to opt out, the calling 
party's mechanism must automatically add the consumer's number to the 
seller's do-not-call list and immediately disconnect the call. The 
revised rules will also require provision of a toll-free number that 
enables the consumer to call back and connect directly to an automated 
opt-out mechanism if the telemarketing call could be answered by an 
answering machine or voicemail service. Next, document FCC 12-21 
revises the Commission's abandoned call rule whereby measurement of 
abandoned calls will occur over a 30-day period for the duration of a 
single calling campaign to discourage certain targeted calling 
campaigns. A campaign consists of the offer of the same good or service 
for the same seller.
    57. Finally, for health care-related entities governed by the 
Health Insurance Portability and Accountability Act of 1996 (HIPAA), 
the Commission establishes an exemption from its TCPA rules. The 
Commission adopts these new rules to further protect consumers from 
unwanted autodialed or prerecorded telemarketing calls, also known as 
``robocalls,'' and establish consistency with the Federal Trade 
Commission's Telemarketing Sales Rule (TSR), as required by statute.
    58. The Commission believes the rules it adopts in document FCC 12-
21 strike an appropriate balance between maximizing consumer privacy 
protections and avoiding imposing undue burdens on telemarketers. 
Document FCC 12-21 avoids imposing undue burdens of (1) requiring 
written consent for informational calls, (2) requiring handwritten 
consent agreements and handwritten signatures to fulfill the written 
consent requirement for telemarketing calls, and (3) requiring 
immediate implementation of the rules adopted herein on large and small 
telemarketers. For example, a community bank will not have to secure 
prior express written consent to provide a fraud alert notification to 
its customer's wireless number. In this instance, prior express oral 
consent to receive notifications satisfies the Commission's rules. 
Similarly, while the Commission adopts a prior express written consent 
requirement for prerecorded or autodialed telemarketing calls to 
wireless numbers and for prerecorded calls to residential lines, it 
also allows documentation and signature requirements recognized by the 
Electronic Signatures in Global and National Commerce Act (E-SIGN Act) 
satisfies the FCC's rules and avoids the undue burden associated with 
generating hardcopy documentation to evidence written consent. In 2000, 
Congress enacted the E-SIGN Act to ``facilitate the use of electronic 
records and signatures in interstate or foreign commerce'' by granting 
legal effect, validity, and enforceability to electronic signatures, 
contracts, or other records relating to transactions in or affecting 
interstate or foreign commerce. Finally, the Commission eases the 
burden on telemarketers by deferring the effective date of the rules 
adopted. By adopting the rules in document FCC 12-21, the Commission 
maximizes the consistency between its rules and the FTC's TSR, as 
contemplated in the DNCIA.

F. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    59. There were no comments filed in direct response to the IRFA. 
Some commenters, however, raised issues and questions about the impact 
the proposed rules and policies would have on small entities.
    60. Prior Express Written Consent Requirement. Commenters expressed 
a variety of concerns regarding adoption of a prior express written 
consent requirement for autodialed or prerecorded non-telemarketing 
calls. American Financial Services Association (AFSA), Bank of American 
(BofA) and Cross-Industry Group are concerned that requiring written 
consent to authorize autodialed or prerecorded calls delivering account 
or loan application or modification information and other informational 
calls would be too costly for small financial institutions. AFSA argues 
that the Commission should limit the prior express written consent 
requirement to telemarketing calls only, or alternatively that account 
and loan modification calls be exempt from the prior express written 
consent requirement. Bank of America appears to object to a prior 
express written consent requirement for account-servicing and loan 
application calls made to wireless numbers. It cautions that such a 
requirement would be disadvantageous to individual and small business 
customers seeking credit approval if Bank of America is unable to 
communicate with them on their wireless numbers to secure needed 
information. Cross-Industry Group opposes written consent for 
autodialed or prerecorded, non-telemarketing calls to wireless services 
because requiring written consent unnecessarily impedes efficient 
communication between businesses and consumers. The Commission limits 
its prior express written consent requirement to telemarketing calls; 
therefore, the actions it takes impose no new burdens on entities 
placing autodialed or prerecorded non-telemarketing calls, including 
home loan modification calls placed pursuant to the American Recovery 
and Reinvestment Act.
    61. The Commission reiterates that it requires prior express 
written consent for autodialed or prerecorded telemarketing calls to 
wireless numbers and for prerecorded telemarketing calls to residential 
lines only. Prior express consent is not required for purely 
informational calls, i.e. non-telemarketing. As stated earlier, several 
commenters expressed concerns about the consent requirement for 
autodialed or prerecorded non-telemarketing calls. Below you will find 
a summary of those concerns.
    62. Research organizations expressed a concern opposing written 
consent for autodialed or prerecorded calls that deliver research or 
survey messages. For instance, Marketing Research Association (MRA) 
states that small businesses conducting research studies that include 
cell phone users in their samples would face increased costs if a 
written consent standard is adopted. The Commission does not require 
prior express written consent for autodialed or prerecorded 
informational, non-telemarketing calls to wireless numbers or for 
informational, non-telemarketing prerecorded calls to residential 
lines.
    63. Similarly, charitable organizations contend that they would be 
negatively impacted if they had to secure prior express written consent 
for fundraising calls using autodialed or prerecorded messages. MDS 
Communications, Inc. asserts that a prior express written consent 
requirement for calls to cell phones using autodialed or prerecorded 
messages will have a material, detrimental effect on non-profit 
organizations that utilize telephone fundraising. Again, the Commission 
does not require prior express written consent for autodialed or 
prerecorded informational, non-telemarketing calls to wireless numbers 
or for prerecorded informational, non-telemarketing calls to 
residential lines.
    64. Likewise, Portfolio Recovery Associates (PRA) predicts that 
numerous entities, including school boards, non-profit organizations, 
political candidates, debt collectors, small businesses, and large 
established companies would be unnecessarily and adversely affected if 
the written consent requirement is applied to all autodialed and 
prerecorded calls to mobile telephones, including purely

[[Page 34244]]

informational calls. The Commission's actions do not require prior 
express written consent for informational, non-telemarketing calls to 
wireless numbers.
    65. The last comment to address potential burdens on small 
businesses arising from the consent rules concerns electronic 
documentation obtained pursuant to the E-SIGN Act. Mark Schwartz states 
that it is incorrect for the Commission to reason that the burden of 
requiring a small business to obtain an existing customer's written or 
electronic consent to send intrastate prerecorded sales calls to that 
customer is lessened by the E-SIGN Act. He argues that the E-SIGN Act 
(1) was written for interstate and foreign commerce only and (2) 
burdens small businesses with determining which technological methods 
are compliant with the E-SIGN Act. Congress enacted the E-SIGN Act to 
``facilitate the use of electronic records and signatures in interstate 
or foreign commerce'' by granting legal effect, validity, and 
enforceability to electronic signatures, contracts, or other records 
relating to transactions in or affecting interstate or foreign 
commerce. The Commission believes that by allowing E-SIGN measures to 
secure written consent, it relieves all businesses, including small 
businesses, from the burden of securing paper documents from consumers 
to evidence prior express written consent. Although the E-SIGN Act may 
be directed to interstate and foreign commerce, the Commission 
concludes that the measures to affect an electronic signature described 
in the E-SIGN Act should be allowed here because these measures would 
significantly facilitate its written consent requirement. With regard 
to any uncertainty concerning what satisfies the prior express consent 
requirement, the Commission concludes that consent obtained in 
compliance with the E-SIGN Act will satisfy the requirements of its 
revised rule, including permission obtained via an email, Web site 
form, text message, telephone keypress, or voice recording.
    66. Abandoned Calls. Predictive dialers initiate phone calls while 
telemarketers are talking to other consumers and these dialers 
frequently disconnect those calls when a telemarketer is unavailable to 
take the next call. In attempting to ``predict'' the average time it 
takes for a consumer to answer the phone and when a telemarketer will 
be free to take the next call, predictive dialers may either ``hang-
up'' on consumers or keep the consumer on hold until connecting the 
call to a sales representative, resulting in what has been referred to 
as ``dead air.'' Dead-air calls are abandoned calls. The Commission's 
existing rules limit the percentage of abandoned calls that a 
telemarketer may incur to three percent (3%) over a thirty day period.
    67. Newspaper Association of America (NAA) states that the ``per 
campaign'' limitation adopted in this Order has a negative impact on 
smaller businesses, including newspapers. A campaign consists of the 
offer of the same good or service for the same seller. NAA believes 
that small community newspapers would be hampered the most because 
their telemarketing calling list is less than 5,000. It contends that 
when calling a small list the algorithm used by predictive dialers is 
not as precise and results in more abandoned calls. NAA favors the 
existing abandoned call rule. NAA's concern is not significant because 
the FTC has already implemented this same abandoned call requirement 
and the burden, if any, is significantly mitigated by the FTC's action.

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

    68. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the rules adopted herein. 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) satisfies any additional criteria 
established by the Small Business Administration (SBA).
    69. The Commission's rules on telephone solicitation and the use of 
autodialers and artificial or prerecorded messages apply to a wide 
range of entities, including all entities that call residential 
telephone lines and/or telephone numbers assigned to wireless numbers 
to advertise. In the IRFA, the Commission concluded that determining 
the precise number of small entities that will be subject to the rules 
is not readily feasible and invited comment on such number. None of the 
commenting parties provided the requested information. Based on the 
absence of available date in this proceeding, the Commission, like the 
FTC, believes that determining the precise number of small entities to 
which the rules adopted herein will apply is not currently feasible.
    70. Because its action affects the myriad of businesses throughout 
the nation that use telemarketing to advertise, the Commission offers 
these following categories of businesses which it believes will be 
impacted by rules it adopts in document FCC 12-21. For example the 
types of business impacted by its rules include, but are not limited 
to, commercial banks, mortgage brokers, pharmacies, freight airlines, 
and utility companies that elect to use automated or prerecorded 
telemarketing calls or health care-related calls.
    71. Commercial Banks. SBA defines a commercial bank as a small 
business if its total assets do not exceed $175 million. This industry 
comprises establishments primarily engaged in accepting demand and 
other deposits and making commercial, industrial, and consumer loans. 
Commercial banks and branches of foreign banks are included in this 
industry. U.S. Census data for 2007 indicate that, in this industry, 
there were 6,490 commercial banks that operated for the entire year. Of 
these, 6,490, 6135 operated with annual receipts of $100,000,000 or 
less; 189 operated with annual receipts of $100,000,000 to 
$249,999,999; and 166 operated with annual receipts of more than 
$250,000,000. Based on this data, it is impossible to state precisely 
how many commercial banks operated with annual receipts of $175 million 
or less, but since the data do specifically indicate that 6,135 of 
6,490 banks operated with less than $100,000,000 in annual receipts, 
the Commission concludes that a substantial majority of commercial 
banks are small under the SBA standard.
    72. Mortgage Brokers. SBA defines a mortgage broker as a small 
business if its annual receipts do not exceed $7 million. Census data 
for 2007 indicate that in 2007, 17,702 mortgage broker firms operated 
for the entire year. Of these, 17,363 operated with annual receipts of 
$5 million or less; 177 operated with annual receipts of between $5 
million and $9,999,999; and 132 operated with annual receipts of $10 
million or more. While the exact number that operated with annual 
receipts of $7 million or less cannot be stated precisely, the 
available data clearly show that a substantial majority of brokerage 
firms were small by the SBA standard.
    73. Pharmacies and Drug Stores. Likewise, pharmacies and drug 
stores which do not exceed $25.5 million in annual receipts are 
considered small businesses. U.S. Census data show that

[[Page 34245]]

17,217 firms operated in this category during that entire year. Of 
these 7,217 firms, 14,136 received annual receipts of $5 million or 
less; 2,311 received annual receipts of between $5 million and 
$9,999,999; and 770 received annual receipts of $10 million or more. 
Based on this data, the Commission cannot state precisely how many 
businesses earned $7.0 million or less in annual receipts. The 
Commission concludes, however, that a substantial majority of 
businesses in this category are small under the SBA standard.
    74. Freight Airlines. This U.S. industry comprises establishments 
primarily engaged in providing air transportation of cargo without 
transporting passengers over regular routes and on regular schedules. 
Establishments in this industry operate flights even if partially 
loaded. Establishments primarily engaged in providing scheduled air 
transportation of mail on a contract basis are included in this 
industry. For freight airlines, the SBA developed a small business size 
standard for such companies stating that those companies having 1500 or 
fewer employees are small. U.S. Census data for 2007 indicate that 
there were 221 businesses in this category that operated for the entire 
year. Of these 221, 220 operated with 999 employees or less, and one 
(1) operated with more than 1000 employees. Based on this data, the 
Commission concludes that a substantial majority of the freight 
airlines in this category are small under the SBA standard.
    75. Utility Companies. The SBA also developed a small business size 
standard for utility companies. For electric utility companies, the 
small business size standard is any electric utility that it is 
primarily engaged in the generation, transmission, and/or distribution 
of electric energy for sale and its total electric output for the 
preceding fiscal year did not exceed 4 million megawatt hours. U.S. 
Census does not provide megawatt hours information and does not provide 
a specific number of small utility companies.
    76. Telemarketing Bureaus and Other Contact Centers. This U.S. 
industry comprises establishments primarily engaged in operating call 
centers that initiate or receive communications for others--via 
telephone, facsimile, email, 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. These establishments do not own the product or provide the 
services they are representing on behalf of clients. The SBA has 
determined that ``Telemarketing Bureaus and other Contact Centers'' 
with $7 million or less in annual receipts qualify as small businesses. 
U.S. Census data for 2007 indicate that 2,100 businesses in this 
category operated throughout that year. Of those 2,100 businesses, 
1,764 operated with annual receipts of less than $5 million; 145 
operated with annual receipts between $5 million and $9,999,999; and 
191 operated with annual receipts of $10 million or more. Based on this 
data, it is not possible to state precisely how many businesses in this 
category operated with annual receipts of $7 million or less. The 
Commission concludes, however, that a substantial majority of 
businesses in this category are small under the SBA standard.

H. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    77. The rules adopted herein establish recordkeeping requirements 
for a large variety of businesses, including small business entities. 
First, the seller must secure a written agreement between itself and 
the consumer showing that the consumer agrees to receive autodialed or 
prerecorded telemarketing calls from the seller. The Commission allows 
the seller the flexibility to determine the type of written agreement 
that it will secure from the consumer. The Commission does not require 
a particular form or format for this written agreement or its 
retention. The E-SIGN Act also provides additional flexibility in 
obtaining electronic consent producing minimal additional recordkeeping 
efforts. To the extent that the calling parties rely on an established 
business relationship, the Commission notes that it previously stated 
that telemarketers that claim their prerecorded messages are delivered 
pursuant to an established business relationship must be prepared to 
provide clear and convincing evidence of the existence of such a 
relationship. Because of these factors, any additional recordkeeping 
costs should be minimal.
    78. Second, telemarketers and sellers, including small business 
entities, that initiate telemarketing calls using autodialed or 
prerecorded messages, must provide an automated, interactive opt-out 
feature at the outset of such a call. This rule obligates telemarketers 
and sellers to retain records of providing this feature and to retain 
records of consumers opting out of receiving these autodialed or 
prerecorded telemarketing messages. Such records should demonstrate the 
telemarketer's and seller's compliance with the provision and 
utilization of the automated, interactive opt-out feature. The 
Commission allows the telemarketers and sellers the flexibility to 
determine how to implement the mechanism. The Commission does not 
require a particular form or format evidencing this mechanism or its 
implementation.
    79. Thirdly, the Commission revises its abandoned call requirement. 
There is no additional recordkeeping burden for this revision because 
the Commission's rule already requires that the seller or telemarketer 
maintain records establishing compliance with the abandoned call rules.

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

    80. The RFA requires an agency to describe any significant 
alternatives that it has considered in developing its 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 such 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 
such small entities.'' As indicated above, various groups will be 
subject to the Commission's new rules, and some of these entities are 
classified as small entities.
    81. Prior Express Written Consent Requirement. At the outset, the 
Commission notes that the adopted rules differ from the proposed rules. 
In the proposed rules, the Commission considered adopting prior express 
written consent for all autodialed or prerecorded calls to wireless 
numbers and for all prerecorded calls to residential lines. Here, the 
Commission adopts prior express written consent for autodialed or 
prerecorded telemarketing calls to wireless numbers and for prerecorded 
telemarketing calls to residential lines only. Limiting the written 
consent requirement to telemarketing calls significantly reduces the 
compliance burden for all entities, including small entities. In 
adopting the written consent requirement for autodialed or prerecorded 
telemarketing calls to wireless numbers and for prerecorded 
telemarketing calls to residential lines, the Commission also concluded 
that consent obtained

[[Page 34246]]

pursuant to the E-SIGN Act will satisfy the requirement of its revised 
rule, including permission obtained via an email, Web site form, text 
message, telephone keypress, or voice recording. Accepting consent 
pursuant to the E-SIGN Act relieves all businesses, including small 
entities, from the economic impact of generating and retaining a paper 
document to evidence their compliance.
    82. Elimination of Established Business Relationship Exemption. In 
document FCC 12-21, the Commission amends its rules to eliminate the 
established business relationship (EBR) exemption for prerecorded 
telemarketing calls. Eliminating the established business relationship 
exemption will be a burden to the calling telemarketer because the 
calling party will not be able to rely on the EBR as its form of prior 
express consent. That burden is mitigated because the prior express 
written consent requirement can be fulfilled using electronic measures 
including those described in the E-SIGN Act. Securing written consent 
using electronic measures relieves the calling parties from the task of 
securing handwritten documentation and handwritten signatures. This 
reasoning applies equally to small entities. Moreover, with the 
increasing use of cell phones, the burden of eliminating the 
established business relationship exemption on telemarketers is further 
diminished because the EBR never applied to robocalls to cell phones. 
In addition, because the FTC's TSR already imposes a prior express 
written consent requirement for telemarketing calls and does not 
recognize an EBR, many entities have already implemented steps to 
fulfill this requirement, thereby reducing the burden associated with 
the rule the Commission adopts in document FCC 12-21.
    83. Opt-Out Mechanism. The opt-out provisions in document FCC 12-21 
do not impose significant economic impact on small businesses. The 
Commission did not receive any comments stating that this rule would 
cause a significant economic impact on small businesses.
    84. Abandoned Call. One business concern, the Newspaper Association 
of America, suggests that the abandoned call rule adopted will present 
an adverse economic impact on small businesses. The Commission 
disagrees. Neither NAA nor its membership will be burdened by the 
abandoned call rule adopted in document FCC 12-21 because these 
entities are already subject to the FTC's abandoned call provision in 
the TSR. The abandoned call provision adopted in this Order is 
identical to the FTC's TSR abandoned call provision. Document FCC 12-21 
also rejects an alternate proposal to measure the abandoned calls on a 
per-campaign, per day basis. Measuring the abandoned call rate on a 
per-campaign, per-day basis, instead of a per-campaign, 30-day basis, 
would pose a significant economic burden on all businesses, including 
small businesses.
    The Commission identified alternatives to the rules adopted in 
document FCC 12-21, but it rejects these alternatives because they are 
more costly to small businesses.

Ordering Clauses

    Pursuant to the authority contained in sections 1-4, 222, 227, and 
303(r) of the Communications Act of 1934, as amended; 47 U.S.C. 151-
154, 222, 227, and the Do-Not-Call Implementation Act, Public Law 108-
10, 117 Stat. 557, that document FCC 12-21 in CG Docket No. 02-278 IS 
ADOPTED, and that part 64 of the Commission's rules, 47 CFR 64.1200, is 
amended. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, SHALL SEND a copy of document FCC 12-21, 
including the Final Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 64

    Communications common carriers, Radio, Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 64 as follows:

PART 64--[AMENDED]

0
1. The authority citation for part 64 is amended to read as follows:

    Authority: 47 U.S.C. 154, 254(k); 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, 254(k), 616, and 620 unless otherwise noted.

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

0
2. In Sec.  64.1200, revise paragraphs (a), (b), (c), and (f) to read 
as follows:


Sec.  64.1200  Delivery restrictions.

    (a) No person or entity may:
    (1) Except as provided in paragraph (a)(2) of this section, 
initiate any telephone call (other than a call made for emergency 
purposes or is made with the prior express consent of the called party) 
using an automatic telephone dialing system or an artificial or 
prerecorded voice;
    (i) To any emergency telephone line, including any 911 line and any 
emergency line of a hospital, medical physician or service office, 
health care facility, poison control center, or fire protection or law 
enforcement agency;
    (ii) To the telephone line of any guest room or patient room of a 
hospital, health care facility, elderly home, or similar establishment; 
or
    (iii) To any telephone number assigned to a paging service, 
cellular telephone service, specialized mobile radio service, or other 
radio common carrier service, or any service for which the called party 
is charged for the call.
    (iv) A person will not be liable for violating the prohibition in 
paragraph (a)(1)(iii) of this section when the call is placed to a 
wireless number that has been ported from wireline service and such 
call is a voice call; not knowingly made to a wireless number; and made 
within 15 days of the porting of the number from wireline to wireless 
service, provided the number is not already on the national do-not-call 
registry or caller's company-specific do-not-call list.
    (2) Initiate, or cause to be initiated, any telephone call that 
includes or introduces an advertisement or constitutes telemarketing, 
using an automatic telephone dialing system or an artificial or 
prerecorded voice, to any of the lines or telephone numbers described 
in paragraphs (a)(1)(i) through (iii) of this section, other than a 
call made with the prior express written consent of the called party or 
the prior express consent of the called party when the call is made by 
or on behalf of a tax-exempt nonprofit organization, or a call that 
delivers a ``health care'' 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.
    (3) 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;
    (i) Is made for emergency purposes;
    (ii) Is not made for a commercial purpose;
    (iii) Is made for a commercial purpose but does not include or 
introduce an advertisement or constitute telemarketing;
    (iv) Is made by or on behalf of a tax-exempt nonprofit 
organization; or

[[Page 34247]]

    (v) Delivers a ``health care'' 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.
    (4) Use a telephone facsimile machine, computer, or other device to 
send an unsolicited advertisement to a telephone facsimile machine, 
unless--
    (i) The unsolicited advertisement is from a sender with an 
established business relationship, as defined in paragraph (f)(6) of 
this section, with the recipient; and
    (ii) The sender obtained the number of the telephone facsimile 
machine through--
    (A) The voluntary communication of such number by the recipient 
directly to the sender, within the context of such established business 
relationship; or
    (B) A directory, advertisement, or site on the Internet to which 
the recipient voluntarily agreed to make available its facsimile number 
for public distribution. If a sender obtains the facsimile number from 
the recipient's own directory, advertisement, or Internet site, it will 
be presumed that the number was voluntarily made available for public 
distribution, unless such materials explicitly note that unsolicited 
advertisements are not accepted at the specified facsimile number. If a 
sender obtains the facsimile number from other sources, the sender must 
take reasonable steps to verify that the recipient agreed to make the 
number available for public distribution.
    (C) This clause shall not apply in the case of an unsolicited 
advertisement that is sent based on an established business 
relationship with the recipient that was in existence before July 9, 
2005 if the sender also possessed the facsimile machine number of the 
recipient before July 9, 2005. There shall be a rebuttable presumption 
that if a valid established business relationship was formed prior to 
July 9, 2005, the sender possessed the facsimile number prior to such 
date as well; and
    (iii) The advertisement contains a notice that informs the 
recipient of the ability and means to avoid future unsolicited 
advertisements. A notice contained in an advertisement complies with 
the requirements under this paragraph only if--
    (A) The notice is clear and conspicuous and on the first page of 
the advertisement;
    (B) The notice states that the recipient may make a request to the 
sender of the advertisement not to send any future advertisements to a 
telephone facsimile machine or machines and that failure to comply, 
within 30 days, with such a request meeting the requirements under 
paragraph (a)(4)(v) of this section is unlawful;
    (C) The notice sets forth the requirements for an opt-out request 
under paragraph (a)(4)(v) of this section;
    (D) The notice includes--
    (1) A domestic contact telephone number and facsimile machine 
number for the recipient to transmit such a request to the sender; and
    (2) If neither the required telephone number nor facsimile machine 
number is a toll-free number, a separate cost-free mechanism including 
a Web site address or email address, for a recipient to transmit a 
request pursuant to such notice to the sender of the advertisement. A 
local telephone number also shall constitute a cost-free mechanism so 
long as recipients are local and will not incur any long distance or 
other separate charges for calls made to such number; and
    (E) The telephone and facsimile numbers and cost-free mechanism 
identified in the notice must permit an individual or business to make 
an opt-out request 24 hours a day, 7 days a week.
    (iv) A facsimile advertisement that is sent to a recipient that has 
provided prior express invitation or permission to the sender must 
include an opt-out notice that complies with the requirements in 
paragraph (a)(4)(iii) of this section.
    (v) A request not to send future unsolicited advertisements to a 
telephone facsimile machine complies with the requirements under this 
subparagraph only if--
    (A) The request identifies the telephone number or numbers of the 
telephone facsimile machine or machines to which the request relates;
    (B) The request is made to the telephone number, facsimile number, 
Web site address or email address identified in the sender's facsimile 
advertisement; and
    (C) The person making the request has not, subsequent to such 
request, provided express invitation or permission to the sender, in 
writing or otherwise, to send such advertisements to such person at 
such telephone facsimile machine.
    (vi) A sender that receives a request not to send future 
unsolicited advertisements that complies with paragraph (a)(4)(v) of 
this section must honor that request within the shortest reasonable 
time from the date of such request, not to exceed 30 days, and is 
prohibited from sending unsolicited advertisements to the recipient 
unless the recipient subsequently provides prior express invitation or 
permission to the sender. The recipient's opt-out request terminates 
the established business relationship exemption for purposes of sending 
future unsolicited advertisements. If such requests are recorded or 
maintained by a party other than the sender on whose behalf the 
unsolicited advertisement is sent, the sender will be liable for any 
failures to honor the opt-out request.
    (vii) A facsimile broadcaster will be liable for violations of 
paragraph (a)(4) of this section, including the inclusion of opt-out 
notices on unsolicited advertisements, if it demonstrates a high degree 
of involvement in, or actual notice of, the unlawful activity and fails 
to take steps to prevent such facsimile transmissions.
    (5) Use an automatic telephone dialing system in such a way that 
two or more telephone lines of a multi-line business are engaged 
simultaneously.
    (6) Disconnect an unanswered telemarketing call prior to at least 
15 seconds or four (4) rings.
    (7) Abandon more than three percent of all telemarketing calls that 
are answered live by a person, as measured over a 30-day period for a 
single calling campaign. If a single calling campaign exceeds a 30-day 
period, the abandonment rate shall be calculated separately for each 
successive 30-day period or portion thereof that such calling campaign 
continues. 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.
    (i) Whenever a live sales representative is not available to speak 
with the person answering the call, within two (2) seconds after the 
called person's completed greeting, the telemarketer or the seller must 
provide:
    (A) A prerecorded identification and opt-out message that is 
limited to disclosing that the call was for ``telemarketing purposes'' 
and states the name of the business, entity, or individual on whose 
behalf the call was placed, and a telephone number for such business, 
entity, or individual that permits the called person to make a do-not-
call request during regular business hours for the duration of the 
telemarketing campaign; provided, that, such telephone number may not 
be a 900 number or any other number for which charges exceed local or 
long distance transmission charges, and
    (B) An automated, interactive voice- and/or key press-activated 
opt-out mechanism that enables the called person to make a do-not-call 
request prior to terminating the call, including brief explanatory 
instructions on how to use such mechanism. When the called person 
elects to opt-out using such

[[Page 34248]]

mechanism, the mechanism must automatically record the called person's 
number to the seller's do-not-call list and immediately terminate the 
call.
    (ii) A call for telemarketing purposes that delivers an artificial 
or prerecorded voice message to a residential telephone line or to any 
of the lines or telephone numbers described in paragraphs (a)(1)(i) 
through (iii) of this section after the subscriber to such line 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.
    (iii) The seller or telemarketer must maintain records establishing 
compliance with paragraph (a)(7) of this section.
    (iv) Calls made by or on behalf of tax-exempt nonprofit 
organizations are not covered by this paragraph (a)(7).
    (8) Use any technology to dial any telephone number for the purpose 
of determining whether the line is a facsimile or voice line.
    (b) All artificial or prerecorded voice telephone messages shall:
    (1) 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 
call, the name under which the entity is registered to conduct business 
with the State Corporation Commission (or comparable regulatory 
authority) must be stated;
    (2) 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. 
For telemarketing messages to residential telephone subscribers, such 
telephone number must permit any individual to make a do-not-call 
request during regular business hours for the duration of the 
telemarketing campaign; and
    (3) In every case where the artificial or prerecorded voice 
telephone message includes or introduces an advertisement or 
constitutes telemarketing and is delivered to a residential telephone 
line or any of the lines or telephone numbers described in paragraphs 
(a)(1)(i) through (iii), provide an automated, interactive voice- and/
or key press-activated opt-out mechanism for the called person to make 
a do-not-call request, including brief explanatory instructions on how 
to use such mechanism, within two (2) seconds of providing the 
identification information required in paragraph (b)(1) of this 
section. When the called person elects to opt out using such mechanism, 
the mechanism, must automatically record the called person's number to 
the seller's do-not-call list and immediately terminate the call. When 
the artificial or prerecorded voice telephone message is left on an 
answering machine or a voice mail service, such message must also 
provide a toll free number that enables the called person to call back 
at a later time and connect directly to the automated, interactive 
voice- and/or key press-activated opt-out mechanism and automatically 
record the called person's number to the seller's do-not-call list.
    (c) No person or entity shall initiate any telephone solicitation 
to:
    (1) Any residential telephone subscriber before the hour of 8 a.m. 
or after 9 p.m. (local time at the called party's location), or
    (2) A residential telephone subscriber who has registered his or 
her telephone number on the national do-not-call registry of persons 
who do not wish to receive telephone solicitations that is maintained 
by the Federal Government. Such do-not-call registrations must be 
honored indefinitely, or until the registration is cancelled by the 
consumer or the telephone number is removed by the database 
administrator. Any person or entity making telephone solicitations (or 
on whose behalf telephone solicitations are made) will not be liable 
for violating this requirement if:
    (i) It can demonstrate that the violation is the result of error 
and that as part of its routine business practice, it meets the 
following standards:
    (A) Written procedures. It has established and implemented written 
procedures to comply with the national do-not-call rules;
    (B) Training of personnel. It has trained its personnel, and any 
entity assisting in its compliance, in procedures established pursuant 
to the national do-not-call rules;
    (C) Recording. It has maintained and recorded a list of telephone 
numbers that the seller may not contact;
    (D) Accessing the national do-not-call database. It uses a process 
to prevent telephone solicitations to any telephone number on any list 
established pursuant to the do-not-call rules, employing a version of 
the national do-not-call registry obtained from the administrator of 
the registry no more than 31 days prior to the date any call is made, 
and maintains records documenting this process.

    Note to paragraph (c)(2)(i)(D): The requirement in paragraph 
64.1200(c)(2)(i)(D) for persons or entities to employ a version of 
the national do-not-call registry obtained from the administrator no 
more than 31 days prior to the date any call is made is effective 
January 1, 2005. Until January 1, 2005, persons or entities must 
continue to employ a version of the registry obtained from the 
administrator of the registry no more than three months prior to the 
date any call is made.

    (E) Purchasing the national do-not-call database. It uses a process 
to ensure that it does not sell, rent, lease, purchase or use the 
national do-not-call database, or any part thereof, for any purpose 
except compliance with this section and any such state or federal law 
to prevent telephone solicitations to telephone numbers registered on 
the national database. It purchases access to the relevant do-not-call 
data from the administrator of the national database and does not 
participate in any arrangement to share the cost of accessing the 
national database, including any arrangement with telemarketers who may 
not divide the costs to access the national database among various 
client sellers; or
    (ii) It has obtained the subscriber's prior express invitation or 
permission. Such permission must be evidenced by a signed, written 
agreement between the consumer and seller which states that the 
consumer agrees to be contacted by this seller and includes the 
telephone number to which the calls may be placed; or
    (iii) The telemarketer making the call has a personal relationship 
with the recipient of the call.
* * * * *
    (f) As used in this section:
    (1) The term advertisement means any material advertising the 
commercial availability or quality of any property, goods, or services.
    (2) The terms automatic telephone dialing system and autodialer 
mean equipment which has the capacity to store or produce telephone 
numbers to be called using a random or sequential number generator and 
to dial such numbers.
    (3) The term clear and conspicuous means a notice that would be 
apparent to the reasonable consumer, separate and distinguishable from 
the advertising copy or other disclosures. With respect to facsimiles 
and for purposes of paragraph (a)(4)(iii)(A) of this section, the 
notice must be placed at either the top or bottom of the facsimile.
    (4) The term emergency purposes means calls made necessary in any 
situation affecting the health and safety of consumers.
    (5) The term established business relationship for purposes of 
telephone

[[Page 34249]]

solicitations means a prior or existing relationship formed by a 
voluntary two-way communication between a person or entity and a 
residential subscriber with or without an exchange of consideration, on 
the basis of the subscriber's purchase or transaction with the entity 
within the eighteen (18) months immediately preceding the date of the 
telephone call or on the basis of the subscriber's inquiry or 
application regarding products or services offered by the entity within 
the three months immediately preceding the date of the call, which 
relationship has not been previously terminated by either party.
    (i) The subscriber's seller-specific do-not-call request, as set 
forth in paragraph (d)(3) of this section, terminates an established 
business relationship for purposes of telemarketing and telephone 
solicitation even if the subscriber continues to do business with the 
seller.
    (ii) The subscriber's established business relationship with a 
particular business entity does not extend to affiliated entities 
unless the subscriber would reasonably expect them to be included given 
the nature and type of goods or services offered by the affiliate and 
the identity of the affiliate.
    (6) The term established business relationship for purposes of 
paragraph (a)(4) of this section on the sending of facsimile 
advertisements means a prior or existing relationship formed by a 
voluntary two-way communication between a person or entity and a 
business or residential subscriber with or without an exchange of 
consideration, on the basis of an inquiry, application, purchase or 
transaction by the business or residential subscriber regarding 
products or services offered by such person or entity, which 
relationship has not been previously terminated by either party.
    (7) The term facsimile broadcaster means a person or entity that 
transmits messages to telephone facsimile machines on behalf of another 
person or entity for a fee.
    (8) The term prior express written consent means an agreement, in 
writing, bearing the signature of the person called that clearly 
authorizes the seller to deliver or cause to be delivered to the person 
called advertisements or telemarketing messages using an automatic 
telephone dialing system or an artificial or prerecorded voice, and the 
telephone number to which the signatory authorizes such advertisements 
or telemarketing messages to be delivered.
    (i) The written agreement shall include a clear and conspicuous 
disclosure informing the person signing that:
    (A) By executing the agreement, such person authorizes the seller 
to deliver or cause to be delivered to the signatory telemarketing 
calls using an automatic telephone dialing system or an artificial or 
prerecorded voice; and
    (B) The person is not required to sign the agreement (directly or 
indirectly), or agree to enter into such an agreement as a condition of 
purchasing any property, goods, or services.
    (ii) 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.
    (9) The term seller means the person or entity on whose behalf a 
telephone call or message is initiated for the purpose of encouraging 
the purchase or rental of, or investment in, property, goods, or 
services, which is transmitted to any person.
    (10) The term sender for purposes of paragraph (a)(4) of this 
section means the person or entity on whose behalf a facsimile 
unsolicited advertisement is sent or whose goods or services are 
advertised or promoted in the unsolicited advertisement.
    (11) The term telemarketer means the person or entity that 
initiates 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.
    (12) The term telemarketing means 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.
    (13) The term telephone facsimile machine means equipment which has 
the capacity to transcribe text or images, or both, from paper into an 
electronic signal and to transmit that signal over a regular telephone 
line, or to transcribe text or images (or both) from an electronic 
signal received over a regular telephone line onto paper.
    (14) The term telephone solicitation means 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 such term does not include a call or 
message:
    (i) To any person with that person's prior express invitation or 
permission;
    (ii) To any person with whom the caller has an established business 
relationship; or
    (iii) By or on behalf of a tax-exempt nonprofit organization.
    (15) The term unsolicited advertisement means any material 
advertising the commercial availability or quality of any property, 
goods, or services which is transmitted to any person without that 
person's prior express invitation or permission, in writing or 
otherwise.
    (16) The term personal relationship means any family member, 
friend, or acquaintance of the telemarketer making the call.
* * * * *
[FR Doc. 2012-13862 Filed 6-8-12; 8:45 am]
BILLING CODE 6712-01-P