22 March 2010
[Federal Register: March 22, 2010 (Volume 75, Number 54)]
[Proposed Rules]
[Page 13471-13482]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22mr10-12]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 64 and 68
[CG Docket No. 02-278; FCC 10-18]
Telephone Consumer Protection
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Commission invites comment on proposed
revisions to its rules under the Telephone Consumer Protection Act
(TCPA) that would harmonize those rules with the Federal Trade
Commission's (FTC's) recently amended Telemarketing Sales Rule. The
Commission seeks comment on whether these proposed revisions would
benefit consumers and industry by creating greater symmetry between the
two agencies' regulations, and by extending the FTC's standards to
regulated entities that are not currently subject to the FTC's rules.
DATES: Comments are due on or before May 21, 2010. Reply comments are
due on or before June 21, 2010. Written comments on the Paperwork
Reduction Act (PRA) proposed information collection requirements must
be submitted by the general public, Office of Management and Budget
(OMB), and other interested parties to Cathy Williams, Federal
Communications Commission, via e-mail to Cathy Williams@fcc.gov and to
Nicholas A. Fraser, Office of Management and Budget, via e-mail to
Nicholas_A._Fraser@omb.eop.gov or via fax at 202-395-5167 on or
before May 21, 2010.
ADDRESSES: You may submit comments identified by CG Docket No. 02-278
and/or FCC Number 10-18, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web Site: http://
fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting
comments.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Lisa Boehley, Consumer and
Governmental Affairs Bureau, Policy Division, at (202) 418-7395
(voice), or e-mail Lisa.Boehley@fcc.gov.
For additional information concerning the Paperwork Reduction Act
information collection requirements contained in this document, contact
Cathy Williams, Federal Communications Commission, at (202) 418-2918,
or e-mail Cathy.Williams@fcc.gov.
SUPPLEMENTARY INFORMATION: On July 3, 2003, the Commission released the
Rules and Regulations Implementing the TCPA of 1991, Report and Order
(2003 TCPA Order), CG Docket No. 02-278, FCC 03-153, published at 68 FR
44144, July 25, 2003, revising the TCPA rules, and adopted new rules to
provide consumers with several options for avoiding unwanted telephone
solicitations, including the establishment of a national do-not-call
registry. This is a summary of the Commission's document Rules and
Regulations Implementing the TCPA of 1991, Notice of Proposed
Rulemaking, CG Docket No. 02-278, FCC 10-18, adopted January 20, 2010,
and released January 22, 2010, seeking comment on proposed revisions to
the Commission's rules under the Telephone Consumer Protection Act
(TCPA) that would harmonize those rules with the Federal Trade
Commission's (FTC's) recently amended Telemarketing Sales Rule.
Document FCC 10-18 contains proposed information collection
requirements subject to the PRA of 1995, Public Law 104-13. In
addition, it contains a new or modified ``information collection burden
for small business concerns with fewer than 25 employees,'' pursuant to
the Small Business Paperwork Relief Act of 2002,
[[Page 13472]]
Public Law 107-198, see 44 U.S.C. 3506 (c)(4).
Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's rules,
47 CFR 1.415 and 1.419, interested parties may file comments and reply
comments on or before the dates indicated on the first page of this
document. Comments may be filed using: (1) the Commission's Electronic
Comment Filing System (ECFS), (2) the Federal Government's eRulemaking
Portal, or (3) by filing paper copies. See Electronic Filing of
Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/
ecfs2/or the Federal eRulemaking Portal: http://www.regulations.gov.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail. All filings must be addressed to the Commission's Secretary,
Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand
deliveries must be held together with rubber bands or fasteners. Any
envelopes must be disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street, SW., Washington DC 20554.
People with Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an e-mail to fcc504@fcc.gov or call the
Consumer and Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).
Pursuant to Sec. 1.1200 of the Commission's rules, 47 CFR 1.1200,
this matter shall be treated as a ``permit-but-disclose'' proceeding in
accordance with the Commission's ex parte rules. Persons making oral ex
parte presentations are reminded that memoranda summarizing the
presentations must contain summaries of the substances of the
presentations and not merely a listing of the subjects discussed. More
than a one or two sentence description of the views and arguments
presented is generally required. See 47 CFR 1.1206(b). Other rules
pertaining to oral and written ex parte presentations in permit-but-
disclose proceedings are set forth in Sec. 1.1206(b) of the
Commission's rules, 47 CFR 1.1206(b).
A copy of document FCC 10-18 and any subsequently filed documents
in this matter will be available during regular business hours at the
FCC Reference Center, Portals II, 445 12th Street, SW., Room CY-A257,
Washington, DC 20554, (202) 418-0270. Document FCC 10-18 and any
subsequently filed documents in this matter may also be purchased from
the Commission's duplicating contractor at their Web site, http://
www.bcpiweb.com, or call (800) 378-3160. A copy of document FCC 10-18
and any subsequently filed documents in this matter may also be found
by searching the Commission's Electronic Comment Filing System (ECFS)
at http://www.fcc.gov.cgb/ecfs (insert CG Docket No. 02-278 into the
Proceeding block).
To request materials in accessible formats for people with
disabilities (braille, large print, electronic files, audio format),
send an e-mail to fcc504@fcc.gov or call the Consumer and Governmental
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).
Document FCC 10-18 can also be downloaded in Word or Portable Document
Format (PDF) at: http://www.fcc.gov/cgb/policy.
Initial Paperwork Reduction Act of 1995 Analysis
Document FCC 10-18 contains proposed information collection
requirements. The Commission, as part of its continuing effort to
reduce paperwork burden, invites the general public, OMB and other
Federal agencies to take this opportunity to comment on the following
information collection(s), as required by the Paperwork Reduction Act
of 1995 (PRA), Public Law 104-13. Public and agency comments are due
May 21, 2010. An agency may not conduct or sponsor a collection of
information unless it displays a current valid control number. No
person shall be subject to any penalty for failing to comply with a
collection of information subject to the PRA that does not display a
valid control number. Comments are requested concerning: (a) Whether
the proposed collection of information is necessary for the proper
performance of the functions of the Commission, including whether the
information shall have practical utility; (b) the accuracy of the
Commission's burden estimate; (c) ways to enhance the quality, utility,
and clarity of the information collected; and (d) ways to minimize the
burden of the collection of information on the respondents, including
the use of automated collection techniques or other forms of
information technology.
In addition, pursuant to the Small Business Paperwork Relief Act of
2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission
seeks specific comment on how the Commission might ``further reduce the
information collection burden for small business concerns with fewer
than 25 employees.''
OMB Control Number: 3060-0519.
Title: Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, CG Docket No. 02-278.
Form Number: N/A.
Type of Review: Revision of a currently approved collection.
Respondents: Business or other for-profit entities; Not-for-profit
institutions; and Individuals or households.
Number of Respondents and Responses: 49,397 respondents,
135,632,883 responses.
Estimated Time per Response: .004 hours (15 seconds) to 1 hour.
Frequency of Responses: Recordkeeping requirement; Monthly, annual,
and on occasion reporting requirements; Third party disclosure
requirement.
Obligation to Respond: Required to obtain or retain benefits. The
authorizing statute for this information collection is found in the
Telephone Consumer Protection Act of 1991 (TCPA), Public Law 102-243,
105 Statute 2394 (1991), which added Section 227 of the Communications
Act of 1934, [47 U.S.C. 227] Restrictions on the Use of Telephone
Equipment.
Total Annual Burden: 650,906 hours.
Total Annual Cost: $4,590,000.
Privacy Impact Assessment: Yes. The Privacy Impact Assessment was
completed on June 28, 2007. It may be reviewed at http://www.fcc.gov/
omd/privacyact/privacy_impact_assessment.html. The Commission is in
the process of updating the PIA to incorporate various revisions to it
as a result of revisions to the system of records notice (SORN).
Nature and Extent of Confidentiality: Confidentiality is an issue
to the extent
[[Page 13473]]
that individuals and households provide personally identifiable
information, which is covered by the FCC's SORN, FCC/CGB-1, ``Informal
Complaints and Inquiries.'' As required by the Privacy Act, 5 U.S.C.
552a, the Commission also published SORN, FCC/CGB1, ``Informal
Complaints and Inquiries,'' in the Federal Register on December 15,
2009 (74 FR 66356), which became effective on January 25, 2010. A
system of records for the do-not-call registry was created by the
Federal Trade Commission (FTC) under the Privacy Act. The FTC published
a notice in the Federal Register describing the system. See 68 FR
37494, June 24, 2003.
Needs and Uses: On July 3, 2003, the Commission released the Rules
and Regulations Implementing the TCPA of 1991, Report and Order (2003
TCPA Order), CG Docket No. 02-278, FCC 03-153, published at 68 FR
44144, July 25, 2003, revising the TCPA rules, and adopted new rules to
provide consumers with several options for avoiding unwanted telephone
solicitations. These new rules established a national do-not-call
registry, set a maximum rate on the number of abandoned calls, required
telemarketers to transmit caller ID information, and modified the
Commission's unsolicited facsimile advertising requirements. On January
22, 2010, the Commission released the Rules and Regulations
Implementing the TCPA of 1991, Notice of Proposed Rulemaking (NPRM), CG
Docket No. 02-278, FCC 10-18 seeking comment on proposed revisions to
its rules under the Telephone Consumer Protection Act (TCPA) that would
harmonize those rules with the Federal Trade Commission's (FTC's)
recently amended Telemarketing Sales Rule. The Commission anticipates
that proposed revisions to Sec. Sec. 64.1200(a)(1) and 64.1200(a)(2)
of the Commission's TCPA rules would contain new information collection
requirements under the Paperwork Reduction Act of 1995. The proposed
revisions would require sellers and telemarketers, when obtaining
telephone subscribers' prior express consent to receive prerecorded
telemarketing calls, to obtain such prior express consent in writing
(including electronic methods of consent).
To view a copy of this information collection request (ICR)
submitted to OMB: (1) Go to the Web page http://www.reginfo.gov/public/
do/PRAMain, (2) look for the section of the Web page called ``Currently
Under Review,'' (3) click on the downward-pointing arrow in the
``Select Agency'' box below the ``Currently Under Review'' heading, (4)
select ``Federal Communications Commission'' from the list of agencies
presented in the ``Select Agency'' box, (5) click the ``Submit'' button
to the right of the ``Select Agency'' box, (6) when the list of FCC
ICRs currently under review appears, look for the title of this ICR (or
its OMB control number, if there is one) and then click on the ICR
Reference Number to view detailed information about this ICR.''
Synopsis
Discussion
A. Prerecorded Message Calls
Written Consent Requirement
1. The FCC's TCPA Rules. The TCPA prohibits the delivery of
artificial or prerecorded voice messages to residential telephone
lines, absent an emergency, without the ``prior express consent'' of
the called party. Under the Commission's TCPA rules and orders, prior
express consent of a residential telephone subscriber to receive a
prerecorded telemarketing call (or live telephone solicitation) must be
in writing if the subscriber's number is listed on the national do-not-
call registry, but may be obtained orally or in writing if the
subscriber's number is not listed on the registry. In explaining the
basis for this distinction, the Commission has noted that a residential
subscriber who places his or her number on the registry has indicated a
desire, through the act of registering, not to receive unsolicited
telemarketing calls and, as such, written consent evidences the
subscriber's wish to be contacted by only particular sellers at a
particular number. When written consent is required under the
Commission's rules and orders (because the subscriber is listed on the
national do-not-call registry), the seller or telemarketer must obtain
a signed, written agreement between the subscriber and seller stating
that the subscriber agrees to be contacted by that seller and including
the telephone number to which the calls may be placed. The Commission
has indicated that the term ``signed'' may include an electronic or
digital form of signature, to the extent such form of signature is
recognized as a valid signature under applicable Federal or State
contract law.
2. With respect to a residential subscriber who has not listed his
number on the national do-not-call registry, the Commission has
declined to require written consent to deliver prerecorded messages to
such a subscriber and noted that allowing oral consent in that context
is consistent with statements in the legislative history suggesting
that Congress did not believe written consent was needed with respect
to calls placed to unregistered subscribers. Whether consent has been
obtained orally or in writing, a seller or telemarketer placing a
prerecorded telemarketing call must be prepared to provide ``clear and
convincing evidence'' that it received prior express consent from the
called party.
3. The FTC's Telemarketing Sales Rule. Under the Telemarketing
Sales Rule, as amended, prior express consent to receive prerecorded
telemarketing calls must be in writing. The written agreement must be
signed by the consumer and must be sufficient to show that he or she:
(1) Received ``clear and conspicuous disclosure'' of the consequences
of providing the requested consent--i.e., that the consumer will
receive future calls that deliver prerecorded messages by or on behalf
of a specific seller--and (2) having received this information, agrees
unambiguously to receive such calls at a telephone number the consumer
designates. In addition, the written agreement must be obtained
``without requiring, directly or indirectly, that the agreement be
executed as a condition of purchasing any good or service.'' The FTC
has determined that written agreements obtained in compliance with the
E-SIGN Act will satisfy the requirements of its rule, such as, for
example, agreements obtained via an e-mail or Web site form, telephone
keypress, or voice recording. Finally, under the Telemarketing Sales
Rule, the seller bears the burden of proving that a clear and
conspicuous disclosure was provided, and that an unambiguous consent
was obtained.
4. Consistent with Congress's directive in the Do Not Call
Improvement Act of 2007 (DNCIA) to ``maximize consistency'' of the
Commission's TCPA rules with the FTC's Telemarketing Sales Rule, the
Commission seeks comment on whether it should revise Sec. Sec.
64.1200(a)(1) and 64.1200(a)(2) of its rules to provide that, for all
calls, prior express consent to receive prerecorded telemarketing
messages must be obtained in writing. The Commission seeks comment on
these proposed revisions and specific related issues in the discussion
that follows.
5. As an initial matter, the Commission seeks comment on its
authority to adopt a prior written consent requirement similar to the
FTC's. Specifically, while the term ``prior express consent'' appears
in both subsections 227(b)(1)(A) and (b)(1)(B) of the Communications
Act, the statute is silent regarding the precise form of such
[[Page 13474]]
consent (i.e., oral or written). Certain statements in the legislative
history, however, suggest that Congress may have contemplated that
consent may be obtained orally or in writing.
6. Given that such a rule change would permit a telemarketer
wishing to deliver prerecorded telemarketing messages to residential
subscribers to obtain agreements from the subscribers by any electronic
means authorized by the E-SIGN Act (including, for example, e-mail, Web
form, telephone key press, or voice recording), the Commission seeks
comment on whether Congressional concerns expressed nearly two decades
ago regarding the potential burdens of a written consent requirement
remain relevant today in light of the multitude of quick and cost
effective options now available for obtaining written consent, other
than via traditional pen and paper. The Commission also notes that
section 227(b)(2)(B) of the Communications Act, in authorizing the
Commission to adopt exemptions from the prerecorded message
prohibition, states that it may do so ``subject to such conditions as
the Commission may prescribe.'' This statement suggests that Congress
intended the Commission to exercise discretion in establishing the
parameters of any exemption from the prohibition on prerecorded
messages. The Commission seeks comment on whether the discretion
afforded it in this subsection extends to establishing a written
consent requirement. The Commission also seeks comment on how best to
reconcile the congressional objective to maximize consistency between
the FTC's rule and the Commission's rule with the statements referenced
above in the TCPA's legislative history reflecting the concern that
written consent may prove unduly burdensome to telemarketers and to
subscribers who wish to receive telephone solicitations. The Commission
seeks comment on whether the convenience afforded by the E-SIGN Act
addresses these concerns.
7. As noted above, when written consent is required under the
Commission's current rules (because the called party's number is listed
on the national do-not-call registry), the seller or telemarketer must
obtain a signed, written agreement between the subscriber and seller
stating that the subscriber agrees to be contacted by that seller and
including the telephone number to which the calls may be placed. If the
Commission were to adopt a written consent requirement for placing
prerecorded telemarketing calls to unregistered subscribers, it seeks
comment on whether it also should adapt existing Sec.
64.1200(c)(2)(ii) of its rules (governing the content of written
consent agreements) to apply specifically to prerecorded telemarketing
calls, as the FTC has done in its Telemarketing Sales Rule. The
Commission tentatively concludes that requiring a written agreement
evidencing consent to receive prerecorded messages in particular, such
as that required by the FTC, may help to ensure that consumers are
adequately apprised of the specific nature of the consent that is being
requested and, in particular, of the fact that they will receive
prerecorded message calls as a consequence of their agreement.
8. Assuming the Commission has legal authority to adopt a written
consent requirement, it seeks comment on whether it should adopt the
same requirement both for calls governed by section 227(b)(1)(A) of the
Communications Act (generally prohibiting automated or artificial or
prerecorded message calls without prior express consent to emergency
lines, health care facilities, and cellular services), and for calls
governed by section 227(b)(1)(B) of the Communications Act (generally
prohibiting prerecorded message calls without prior express consent to
residential telephone lines). Because the two provisions include an
identically worded exception for calls made with the ``prior express
consent of the called party,'' the Commission tentatively concludes
that any written consent requirement adopted should apply to both
provisions. The Commission seeks comment on this tentative conclusion.
9. The Commission also seeks information concerning the extent to
which, in the absence of written consent, residential subscribers have
been targeted by unscrupulous senders of prerecorded messages who
erroneously claim to have obtained the subscriber's oral consent. If,
after reviewing the record, the Commission determines that it does not
have legal authority to adopt a written consent requirement, it seeks
comment on what, if any, additional steps should be required by senders
who choose to obtain consent orally in order to verify that consent
was, in fact, given.
10. As a policy matter, the Commission tentatively concludes that
harmonizing its prior consent requirement with the FTC's may reduce the
potential for industry and consumer confusion surrounding a
telemarketer's obligations to the extent that similarly situated
entities would no longer be subject to different requirements depending
upon whether an entity is subject to the FTC's rule or to the
Commission's rule. It tentatively concludes that written consent also
may enhance the Commission's enforcement efforts and serve to protect
both consumers and industry from erroneous claims that consent was or
was not given, to the extent that, unlike oral consent, the existence
of a paper or electronic record may provide unambiguous proof of
consent. The Commission seeks comment on these tentative conclusions.
11. The Commission notes that in light of the numerous options
available today under the E-SIGN Act to obtain a written agreement, a
telemarketer may be afforded flexibility to determine the form of
``written'' consent that is most appropriate, least burdensome, and
most cost effective for that particular business (e.g., e-mail, Web
site form, telephone keypress, or voice recording). It seeks
information and data on the specific compliance costs and burdens
associated with various written consent options under the E-SIGN Act
and on the extent to which sellers and telemarketers are already
utilizing these methods for obtaining consumer consent, either pursuant
to the FTC's amended Telemarketing Sales Rule or pursuant to Commission
rules when a called party's number is listed on the national do-not-
call registry. Finally, to the extent that the Commission currently
requires sellers and telemarketers placing prerecorded telemarketing
calls to be prepared to provide ``clear and convincing evidence'' of
the receipt of prior express consent from the called party, even when
consent has been obtained orally, it seeks comment on the extent to
which Commission adoption of a written consent requirement would add to
the compliance burden associated with this existing requirement.
Exemption for Prerecorded Telemarketing Calls to Established Business
Relationship Customers
12. The FCC's TCPA Rules. The TCPA prohibits the use of artificial
or prerecorded messages in telephone calls to residential (wireline)
numbers without the prior express consent of the called party, but
permits the Commission to exempt from this provision calls that are
non-commercial and commercial calls that ``do not adversely affect the
privacy rights of the called party'' and that do not transmit an
``unsolicited advertisement.'' The TCPA does not explicitly exempt from
the prohibition on artificial and prerecorded message calls those from
a party with whom the subscriber has an established business
relationship. Nevertheless, in
[[Page 13475]]
1992, the Commission determined to create such an exemption, based on
its authority under the TCPA to exempt commercial calls that ``do not
adversely affect residential subscriber privacy interests.'' The
Commission concluded, based upon ``the comments received and the
legislative history,'' that a solicitation to someone with whom a prior
business relationship exists does not adversely affect subscriber
privacy interests. It further concluded that such a solicitation can be
``deemed to be invited or permitted'' by a subscriber in light of the
business relationship. Finally, noting that the legislative history
indicates that the TCPA ``does not intend to unduly interfere with
ongoing business relationships,'' the Commission stated that
``requiring actual consent to prerecorded message calls where
[established business] relationships exist could significantly impede
communications between businesses and their customers.''
13. The FTC's Telemarketing Sales Rule. In 2004, the FTC published
a notice of proposed rulemaking in which it proposed, at the request of
a telemarketer, the creation of a safe harbor under the Telemarketing
Sales Rule for prerecorded telemarketing calls to established business
customers. Under the proposed safe harbor, prerecorded messages to
consumers with whom a seller has an ``established business
relationship'' (as defined by the FTC's rules) would not violate the
FTC's Telemarketing Sales Rule if, among other things, a keypress opt-
out mechanism or other means were provided at the outset of the call
for consumers to add their telephone number to the seller's company-
specific do-not-call list.
14. In 2006, the FTC denied the proposed safe harbor request that
would have permitted prerecorded telemarketing calls to established
business customers based, in large measure, on the more than 13,000
consumer comments it had received opposing the proposal. According to
the FTC, many consumers expressed the view that, in light of the
``intrusive and impersonal nature'' of prerecorded messages, neither a
prior inquiry nor a purchase should be deemed to imply consumer consent
to receive future prerecorded solicitations from a seller. The FTC
noted that this reaction was contrary to prior consumer support among
commenters for an exemption to allow live telemarketing calls to
established business customers. In addition, the FTC denied the
proposed safe harbor based on record evidence indicating, among other
things, that: (1) the self interest of sellers in retaining established
customers could not be relied on to prevent abuse through excessive
prerecorded message telemarketing, especially as new digital
technologies, including Voice over Internet Protocol (VoIP), reduce the
cost of transmitting prerecorded telemarketing messages by telephone;
(2) prerecorded telemarketing messages impose potential costs,
including risks to health and safety when an extended message ties up a
line and prevents consumers from placing emergency calls, as well as
burdens on consumers, including costs to store and retrieve prerecorded
messages on home answering machines or voicemail services; and (3)
various methods by which consumers may elect to opt out of future
prerecorded message calls are often cumbersome to use or simply do not
work. Based on this record, the FTC changed course and published a new
proposed amendment to the Telemarketing Sales Rule to expressly
prohibit all unsolicited prerecorded telemarketing calls without the
consumer's prior written agreement, even with respect to prerecorded
calls to established business relationship customers.
15. In 2008, the FTC amended the Telemarketing Sales Rule to make
explicit that the existence of an established business relationship
will not serve as authorization for placing prerecorded telemarketing
calls. Thus, although an established business relationship will
continue to serve as authorization for placing live telemarketing calls
to consumers under the FTC's Telemarketing Sales Rule, it no longer
serves as authorization for placing prerecorded telemarketing calls. As
amended, the FTC's Telemarketing Sales Rule prohibits prerecorded
message calls unless the called party has given prior express written
consent and the call complies with certain additional requirements in
16 CFR 310.4(b)(1)(v).
In light of the substantial record of public comments developed
over the course of the FTC's four-year rulemaking opposing the creation
of a safe harbor for prerecorded telemarketing calls to established
business customers, and in view of Congress's mandate to maximize
consistency between the Commission's rules and the FTC's Telemarketing
Sales Rule, the Commission seeks comment on whether it should
reconsider its 1992 determination that an established business
relationship may be deemed to constitute express invitation or
permission to receive unsolicited prerecorded telemarketing calls. The
FTC's 2008 rule amendments make explicit that, absent a consumer's
express prior written agreement, sellers and telemarketers are
prohibited from delivering a prerecorded telemarketing message,
regardless of whether the call is made to a consumer who has an
established business relationship with the seller. As a result, an
``established business relationship'' currently provides the necessary
permission to deliver prerecorded telemarketing messages only for
entities subject to the Commission's, but not the FTC's, jurisdiction
(e.g., banks, airlines, common carriers). Based on the foregoing, the
Commission seeks comment on whether it should conform its rule to the
FTC's Telemarketing Sales Rule by eliminating the established business
relationship exemption from the general prohibition on prerecorded
telemarketing calls to residential telephone lines.
16. As noted above, the Commission created the ``established
business relationship'' exemption from the TCPA's ban on artificial or
prerecorded messages based on its authority under the TCPA to exempt
calls that ``do not adversely affect residential subscriber privacy
interests.'' It reasoned that a subscriber's privacy interests are not
adversely affected by the receipt of such prerecorded message calls
because, in that instance, the solicitation can be ``deemed to be
invited or permitted'' by the subscriber in light of the business
relationship. In light of the strenuous opposition expressed by the
thousands of consumers who filed comments in the FTC's rulemaking, the
Commission seeks comment on the continued validity of this
determination and whether prerecorded telemarketing calls (i.e., sales
calls) may reasonably be ``deemed invited or permitted'' by established
business customers. In particular, the Commission seeks comment on
whether its established business relationship exception remains
supportable on the basis that artificial or prerecorded message calls
to established customers do not adversely affect residential subscriber
privacy interests and do not transmit an unsolicited advertisement.
17. In the 1992 rulemaking, the Commission also expressed the
concern that ``requiring actual consent to prerecorded message calls
where [established business] relationships exist could significantly
impede communications between businesses and their customers'' and, as
such, might be at odds with statements in the legislative history
indicating Congress's desire not to ``unduly interfere with ongoing
business relationships.'' The Commission seeks comment on the extent to
which authorization to receive
[[Page 13476]]
prerecorded message calls based on prior written or oral consent
(rather than on the basis of an established business relationship)
would in fact ``unduly interfere with ongoing business relationships''
or ``impede communications'' between businesses and their customers. In
particular, the Commission seeks comment on whether technological
advances, such as the use of one or more methods available under the E-
SIGN Act for establishing a consumer's prior express written consent to
receive prerecorded telemarketing calls, have minimized the burden
associated with obtaining the express consent of established business
customers (e.g., instructing an established customer during a live
telephone solicitation to use a keypress feature to request future
prerecorded message calls).
18. The Commission also seeks specific comment on the experiences
of telemarketers that have conducted marketing campaigns on behalf of
sellers that are subject to the FTC's recently amended Telemarketing
Sales Rule in obtaining the requisite prior written consent from those
businesses' established customers. Has the FTC's revised rule had the
effect of impeding communications between businesses and their
customers and, if so, in what ways? If the Commission were to retain
the current exemption for established business customers, it seeks
comment, particularly from individual consumers and consumer groups,
regarding whether consumers would support the use of prerecorded
telemarketing messages by sellers and telemarketers with established
business customers if such messages provided an interactive opt-out
mechanism that would provide a means to avoid future prerecorded
messages from that seller.
19. Finally, the Commission tentatively concludes that conforming
its rule governing prerecorded message calls to established business
customers to the FTC's may reduce the potential for industry and
consumer confusion surrounding a telemarketer's authority to place
unsolicited prerecorded message calls to established customers to the
extent that similarly situated entities would no longer be subject to
different requirements depending upon whether an entity is subject to
the FTC's rule or to the Commission's. The Commission seeks comment on
this tentative conclusion.
Exemption for Health Care Related Calls Subject to HIPAA
20. The FCC's TCPA Rules. As previously noted, section 227 of the
Communications Act allows the Commission to create exemptions from the
TCPA's ban on artificial or prerecorded messages to residential lines
for calls that are non-commercial and for commercial calls that do not
adversely affect the privacy rights of the called party and that do not
transmit an unsolicited advertisement. The Commission's prerecorded
message rules currently contain no specific exemption for healthcare-
related prerecorded message calls that are subject to the Health
Insurance Portability and Accountability Act of 1996 (HIPAA).
21. The FTC's Telemarketing Sales Rule. In its 2008 amendments to
the Telemarketing Sales Rule, the FTC exempted from its prior written
consent requirement healthcare-related prerecorded message calls that
are subject to HIPAA. These prerecorded calls include, among others,
flu shot and other immunization reminders, prescription refill
reminders, health screening reminders; calls to obtain permission to
contact doctors for renewal of medication or medical supply orders;
calls to obtain documentation needed for billing health plans; calls by
home health agencies to follow-up on patients for six months after
discharge; calls monitoring patient compliance with prescribed medical
therapies; and calls encouraging enrollment in disease management or
treatment programs, and in migration from branded to generic drugs, and
from retail to mail order pharmacies. The FTC noted commenters' fear
that such calls may be subject to the Telemarketing Sales Rule to the
extent that they can result in a payment or co-pay for medication,
durable medical equipment, or medical services. An exemption is
necessary, the FTC determined, because (among other things) the
individuals most in need of these healthcare-related prerecorded
messages (elderly or ill patients) might be unable or simply unlikely
to take the steps necessary to provide their express written consent to
receive them. To the extent that the communications between healthcare-
related entities subject to HIPAA regulations and their customers
already are subject to extensive Federal regulations, some of which
directly address the making of telephone solicitations to patients, the
FTC was persuaded that there would be little risk that the creation of
an exemption for these calls would lead to abusive practices by these
entities. Finally, citing evidence that prerecorded healthcare messages
of the type described above are generally deemed more welcome and less
intrusive by consumers, the FTC determined that the creation of an
exemption for this category of calls would not adversely affect
consumer privacy rights.
22. On the basis of information presented in the record of the
FTC's rulemaking proceeding on healthcare-related prerecorded message
calls made by, or on behalf of, a covered entity or its business
associate, as those terms are defined in the HIPAA Privacy Rule, the
Commission seeks comment on whether it likewise should exempt such
calls from the general prohibition on prerecorded message calls to
residential lines under the TCPA. If so, it seeks comment on the
Commission's authority to exempt these calls either under section
227(b)(2)(B)(i) of the Communications Act (calls that are not made for
a commercial purpose), or under section 227(b)(2)(B)(ii) of the
Communications Act (commercial calls that do not adversely affect the
privacy rights of the called party and that do not transmit an
unsolicited advertisement). In addition, it notes that, with limited
exception, HIPAA requires that a ``covered entity'' obtain an
individual's written authorization before using protected health
information (including the individual's name and telephone number) for
marketing purposes. As a practical matter, this HIPAA restriction (in
conjunction with other HIPAA provisions) would appear to preclude or
limit the delivery of prerecorded telemarketing calls placed by a
``covered entity'' or its ``business associate'' to individuals with
whom the covered entity or business associate has no pre-existing
relationship (i.e., ``cold calling'' of consumers). The Commission
seeks comment on this aspect of the HIPAA requirements, on the relative
frequency and volume of healthcare-related prerecorded telemarketing
calls placed to individuals by entities that do not have a pre-existing
relationship with the consumer, and on the extent to which consumers
consider such calls intrusive or an invasion of privacy.
23. The Commission notes that when one of its TCPA rules differs
substantively from the FTC's Telemarketing Sales Rule, it has been
generally understood that the more restrictive requirement prevails and
sets the standard applicable to all entities that are subject to the
jurisdiction of both agencies. In this instance, although the FTC has
adopted a more specific provision, the Commission's rule, by providing
no exemption for healthcare-related prerecorded message calls subject
to HIPAA, is arguably more restrictive. Accordingly, the Commission
seeks comment on the practical impact of this disparity on
[[Page 13477]]
regulated entities currently and if the Commission does not adopt a
similar exemption in the future.
Opt-Out Mechanism
24. The FCC's TCPA Rules. The TCPA directs the Commission to
prescribe technical and procedural standards for systems that are used
to transmit ``any'' artificial or prerecorded voice message via
telephone. Under any Commission-adopted standards, the entity
initiating a call must be identified at ``the beginning'' of a
prerecorded message, and, ``during or after the message,'' the
telephone number or address of such entity must be provided. Such
Commission-adopted standards also must require that a prerecorded
message call ``automatically release the called party's line within 5
seconds of the time notification is transmitted to the system that the
called party has hung up, to allow the called party's line to be used
to make or receive other calls.'' Consistent with the TCPA's technical
and procedural standards provision, the Commission's rules require
that, at the beginning of all artificial or prerecorded message calls,
the message identify the entity responsible for initiating the call
(including the legal name under which the entity is registered to
operate), and during or after the prerecorded message, provide a
telephone number that consumers can call during regular business hours
to make a company-specific do-not-call request.
25. The FTC's Telemarketing Sales Rule. The FTC's Telemarketing
Sales Rule, as amended in 2008, requires, with limited exception, that
any prerecorded message call that could be answered by the consumer in
person provide an automated interactive opt-out mechanism that is
announced at the outset of the message and is available throughout the
duration of the call. The opt-out mechanism, when invoked, must
automatically add the consumer's number to the seller's do-not-call
list and immediately disconnect the call. Where a call could be
answered by an answering machine or voicemail service, the message must
also include a toll-free number that enables the consumer to call back
and connect directly to an automated opt-out mechanism.
26. There are several key differences between the Commission's and
the FTC's rules with respect to their respective ``opt-out'' and
related disclosure requirements. First, the FTC opt-out requirement
specifies that, if there is any possibility that a call could be
answered in person by a consumer, an automated interactive opt-out
mechanism must be available throughout the call. The provision permits
either a voice or keypress-activated opt-out mechanism to be used, or
both in combination. If there is any possibility that a prerecorded
call could be answered by an answering machine or voicemail service, a
toll-free number must be provided and disclosed promptly at the outset
of the call. The toll-free number must connect directly to an automated
interactive opt-out mechanism that is accessible at any time throughout
the duration of the telemarketing campaign. The provision further
requires that, once invoked, the interactive mechanism must
automatically add the number called to the seller's entity-specific do-
not-call list. In contrast, the Commission's analogous provision does
not require an automated opt-out mechanism and, instead, simply
requires a telephone number that consumers can call ``during regular
business hours'' to make an entity-specific do-not-call request.
Inasmuch as automated, interactive opt-out mechanisms are now widely
available and, as discussed above, are now required of most sellers and
telemarketers by virtue of the FTC's rule, the Commission seeks comment
on whether it should conform its rule to the FTC's rule by requiring
their use. Comments supporting this revision should address the
Commission's authority to adopt this change, consistent with the
``technical and procedural standards'' provision of the TCPA, as
codified in section 227(d)(3) of the Communications Act. In addition,
given that section 227(d)(3) of the Communications Act prescribes
technical standards for ``any'' artificial or prerecorded voice message
via telephone, the Commission seeks comment on whether it may adopt
additional disclosure and opt-out requirements mirroring the FTC's
solely for artificial or prerecorded voice message calls that are for
telemarketing purposes.
27. Second, whereas the FTC's Telemarketing Sales Rule requires
that prerecorded message calls provide a disclosure at the outset of
the message explaining how to opt out of future calls, the TCPA itself
provides that, for opt-out purposes, the telephone number of the entity
initiating a call can be disclosed ``during or after the message.''
Therefore, commenters supporting a requirement that the telephone
number of the entity initiating the prerecorded message be disclosed at
the outset of the message should address the Commission's legal
authority to do so.
28. Third, although each agency's rule provides for prompt
termination of the call after a consumer hangs up, the Commission's
standard is more specific (call must be released within 5 seconds of
time notification is transmitted to system) than the FTC's (call must
be released immediately). Again, in light of the specific statutory
language pertaining to call termination, commenters supporting a change
to the Commission's existing rules to require immediate release of a
call once the consumer has hung up are asked to address the
Commission's authority to adopt such a requirement.
29. Finally, the Commission notes that, in addition to exempting
certain healthcare-related prerecorded message calls from its express
written consent requirement, the FTC likewise exempted such calls from
its automated opt-out requirement. Inasmuch as the TCPA technical
standards codified in section 227(d)(3) of the Communications Act apply
to ``any'' artificial or prerecorded messages, the Commission seeks
comment on its authority to exempt any category of prerecorded message
calls from the specific requirements of that section. If it adopts
separate disclosure and opt-out requirements (mirroring the FTC's)
specifically for prerecorded telemarketing calls, the Commission seeks
comment on whether it may exempt the category of healthcare-related
prerecorded message calls identified in the FTC's rule from those
separate requirements and, if so, whether it should provide such an
exemption.
30. As a policy matter, the FTC's automated opt-out requirement
appears to be more consumer friendly than the Commission's to the
extent that it allows consumers to easily and immediately assert their
opt-out rights, regardless of the time of day, and without having to
wait to opt out until the next business day during regular business
hours when an operator is available to record the opt-out request. The
Commission therefore seeks comment on whether it should revise its opt-
out requirements to make them more consistent with the FTC's, and, if
so, how to do so in a manner that is consistent with the ``technical
and procedural standards'' provision of the TCPA.
B. Abandoned Calls/Predictive Dialers
31. The FCC's TCPA Rules. Under the Commission's rules, an outbound
telephone call is deemed ``abandoned'' if a person answers the
telephone and the caller does not connect the call to a sales
representative within two seconds of the person's completed greeting.
The Commission imposes restrictions on the percentage of live
telemarketing calls
[[Page 13478]]
that a telemarketer may drop or ``abandon'' as a result of the use of
predictive dialers. Under the Commission's rules, a seller or
telemarketer would not be liable for violating the restrictions on call
abandonment if, among other things, it employs technology that ensures
abandonment of no more than three percent of all calls answered by a
person (rather than by an answering machine). The Commission's call
abandonment rule measures the abandonment rate over a 30-day period,
but contains no ``per campaign'' limitation.
32. The FTC's Telemarketing Sales Rule. Like the Commission's rule,
an outbound telephone call is deemed ``abandoned'' under the FTC's
Telemarketing Sales Rule if a person answers the telephone and the
caller does not connect the call to a sales representative within two
seconds of the person's completed greeting. A seller or telemarketer
similarly is not liable for violating the prohibition on call
abandonment if, among other things, the seller or telemarketer employs
technology that ensures abandonment of no more than three percent of
all calls answered by a person (rather than by an answering machine).
In its 2008 final rule amendments, the FTC revised the standard it
uses for measuring the three percent (permissible) call abandonment
rate. Whereas the FTC previously required that a telemarketer employ
technology that ensures abandonment of no more than three percent of
all calls answered by a person, measured per day per calling campaign,
it revised the standard in 2008 to permit telemarketers to measure the
abandonment rate over a 30-day period for the duration of a single
calling campaign, if less than 30 days, or separately over each
successive 30-day period or portion thereof that the campaign
continues. According to the FTC, the effect of this change, which had
been requested by the telemarketers, was to allow telemarketers to
conduct smaller telemarketing campaigns, such as in test markets, in a
more cost effective manner. At the same time, the FTC considered, but
rejected, a separate request to eliminate the ``per campaign''
limitation contained in its rule, which would have allowed call
abandonment rates to be averaged across multiple telemarketing
campaigns. The FTC reasoned that the absence of a ``per campaign''
limitation in its rule might encourage telemarketers ``to target less-
valued customers with a disproportionate share of abandoned calls.''
33. The Commission's current rule measures the three percent
(permissible) call abandonment rate over a 30-day period but, because
it imposes no ``per campaign'' limitation, it effectively allows the
averaging of call abandonment rates across multiple telemarketing
campaigns during any single 30-day period. As noted above, the FTC's
rulemaking proceeding highlighted concerns that this approach might
allow a telemarketer to compute a single call abandonment rate for all
campaigns that it conducts during a 30-day period and, in so doing, to
allocate a greater percentage of abandoned calls to a less desirable
marketing campaign (e.g., a campaign directed at lower income
individuals) while allocating a smaller percentage to a more desirable
campaign (e.g., a campaign directed at upper income individuals). The
Commission seeks comment on the prevalence of such practices among
those sellers or telemarketers that are subject to its (but not the
FTC's) telemarketing rules and on the practical impact of the two
agencies' currently differing standards. In addition, the Commission
seeks comment on whether it should revise the standard by which it
measures the three percent call abandonment rate to include a ``per
campaign limitation'' in order to eliminate any potential incentive for
telemarketers to engage in such practices and to make the Commission's
standard more consistent with the FTC's. Finally, it notes that the FTC
has clarified that the term ``campaign'' refers to ``the offer of the
same good or service for the same seller.'' If the Commission adopts a
``per campaign limitation,'' as proposed, it seeks comment on whether
it also should adopt the FTC's definition of the term ``campaign.''
C. Implementation Issues
34. In order to reduce initial compliance costs and burdens, the
FTC deferred the effective date of the requirement that prerecorded
message calls provide an automated interactive opt-out mechanism for
three months, and the express written agreement requirement for twelve
months. If the Commission adopts an express written consent requirement
and/or an automated interactive opt-out mechanism such as those adopted
by the FTC, it seeks comment on whether it also should adopt similar
implementation periods to ensure that companies have adequate time to
prepare to comply. If the Commission adopts these or similar
requirements, it seeks comment on whether to allow sellers and
telemarketers, as did the FTC, to continue placing prerecorded
telemarketing calls to consumers with whom the seller has an
established business relationship for the duration of the
implementation period for the express written consent requirement.
Finally, it seeks comment on an appropriate implementation period for
the proposed change to the Commission's call abandonment rules.
Initial Regulatory Flexibility Analysis
35. As required by the Regulatory Flexibility Act of 1980, as
amended, (RFA), the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on a substantial number of small entities by the policies and rules
proposed in document FCC 10-18. Written public comments are requested
on this IRFA. Comments must be identified as responses to the IRFA and
must be filed by the deadlines for comments on document FCC 10-18
provided on the first page of this document. The Commission will send a
copy of document FCC 10-18, including this IRFA, to the Chief Counsel
for Advocacy of the Small Business Administration.
Need for, and Objectives of, the Proposed Rules
36. In document FCC 10-18, the Commission seeks comment on proposed
revisions to its rules under the TCPA pertaining to prerecorded
telemarketing calls and certain other telemarketing practices. Document
FCC 10-18 proposes to amend the Commission's TCPA rules in four areas.
The first proposed amendment would conform the Commission's rules to
the FTC's Telemarketing Sales Rule by prohibiting the use of
prerecorded messages in telemarketing sales calls unless the seller or
telemarketer has obtained the consumer's prior express consent, in
writing, to receive such messages and irrespective of any established
business relationship between the caller and the called party. The
Commission also proposes to allow sellers or telemarketers to obtain
such consent using any medium or format permitted by the E-SIGN Act.
The Commission's objective in proposing to harmonize its prior consent
requirement with the FTC's by adopting a written consent requirement is
to reduce the potential for industry and consumer confusion surrounding
telemarketers' obligations to the extent that similarly situated
entities would no longer be subject to different requirements depending
upon whether an entity is subject to the FTC's rule or to the
Commission's rule. The Commission also believes that written consent
may
[[Page 13479]]
enhance its enforcement efforts and serve to protect both consumers and
industry from erroneous claims that consent was or was not given, to
the extent that, unlike oral consent, the existence of a paper or
electronic record may provide unambiguous proof of consent.
37. The second proposed amendment would conform the Commission's
rules to the FTC's Telemarketing Sales Rule by exempting certain
healthcare-related calls from the general prohibition on prerecorded
telemarketing calls to residential telephone lines. The Commission
proposes to exempt such calls based on the FTC's findings that: (1) The
individuals most in need of these healthcare-related prerecorded
messages (elderly or ill patients) might be unable or unlikely to take
the steps necessary to provide their express written consent to receive
them; (2) communications between healthcare-related entities subject to
HIPAA regulations and their customers already are subject to extensive
regulations at the Federal level, including regulations directly
addressing the making of telephone solicitations to patients, such that
it would be unlikely that the creation of an exemption for these calls
would lead to abusive practices; and (3) prerecorded healthcare
messages of the type described in document FCC 10-18 are generally
deemed more welcome and less intrusive by consumers and, as such, the
creation of an exemption for this category of calls would not adversely
affect consumer privacy rights. Thus, the Commission's objective in
proposing the creation of this exemption is to avoid imposing
duplicative regulations in an area that is already extensively
regulated at the Federal level and that, as a result, does not appear
to give rise to the same privacy and other concerns as other types of
calls.
38. The third proposed amendment would conform the Commission's
rules to the FTC's Telemarketing Sales Rule by requiring that
prerecorded telemarketing calls delivered to residential subscribers
include an automated, interactive mechanism by which a consumer may
``opt out'' of receiving future prerecorded messages from the seller or
telemarketer. The Commission's objective in proposing this requirement
is to make the opt-out process more consumer friendly by allowing
consumers to easily and immediately assert their opt-out rights,
regardless of the time of day, and without having to wait to opt out
until the next business day during regular business hours when an
operator is available to record the opt-out request.
39. The Commission also believes that the use of an automated
mechanism, as described above, may enhance the efficiency of companies'
outbound telemarketing campaigns. To the extent that the FTC's
Telemarketing Sales Rule, as recently amended, imposes different
requirements on sellers and telemarketers in these three areas than
analogous rules adopted by the Commission, the Commission seeks comment
on whether it should attempt to harmonize its TCPA requirements with
those of the FTC. In proposing to conform its prerecorded message rules
to the Telemarketing Sales Rule in the identified areas, the Commission
also identified two overarching objectives: (1) To further empower
residential telephone subscribers to avoid unwanted telemarketing
messages; and (2) to advance Congress's directive to maximize
consistency between the Commission's TCPA rules and the FTC's
Telemarketing Sales Rule. The Commission therefore seeks comment on
whether these proposed revisions would benefit consumers and industry
by creating greater symmetry between the two agencies' regulations and
on the extent to which they would enhance the ability of residential
telephone subscribers to avoid unwanted telemarketing messages.
40. The final proposed amendment would conform the Commission's
rules to the FTC's Telemarketing Sales Rule by adopting a ``per
campaign'' standard for measuring the ``call abandonment rate.'' As
noted above, the ``call abandonment rate'' refers to the percentage of
live telemarketing calls that a telemarketer drops or ``abandons'' as a
result of the use of predictive dialers. The Commission proposes to
adopt a ``per campaign'' limitation based on the concern raised in the
FTC's rulemaking proceeding that telemarketers would be more likely to
target less-valued customers with a disproportionate share of abandoned
calls in the absence of such a limitation. Because the absence of a
``per campaign'' limitation may leave consumers to rely on the
industry's good faith that it will not engage in such practices,
despite obvious economic incentives to do otherwise, the Commission
seeks comment on whether it should revise its current standard for
measuring the three percent call abandonment rate by adopting this
proposed limitation.
Legal Basis
41. The legal basis for any action that may be taken pursuant to
document FCC 10-18 is contained in sections 1-4, 227, and 303(r) of the
Communications Act of 1934, as amended; the Telephone Consumer
Protection Act of 1991, Public Law 102-243, 105 Statute 2394; and the
Do-Not-Call Implementation Act, Public Law 108-10, 117 Statute 557.
Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply
42. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that will be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. Under the Small Business Act, a ``small business concern'' is one
that: (1) Is independently owned and operated; (2) is not dominant in
its field of operation; and (3) meets any additional criteria
established by the Small Business Administration (SBA).
43. In general, the Commission's rules on telephone solicitation
and on the use of autodialers, or artificial or prerecorded messages
apply to a wide range of entities. The proposed rules, in particular,
would apply (with certain exceptions) to all persons using prerecorded
or artificial voice messages for telemarketing purposes. Therefore, the
Commission expects that the proposals in this proceeding potentially
could have a significant economic impact on a substantial number of
small entities. Determining the precise number of small entities that
would be subject to the requirements proposed in document FCC 10-18,
however, is not readily feasible. Therefore, the Commission invites
comment on such number and, after evaluating the comments, will examine
further the effect of any rule changes on small entities in the Final
Regulatory Flexibility Analysis. Below, the Commission has described
some current data that are helpful in describing the number of small
entities that might be affected by the proposed action, if adopted.
Nationwide, there are a total of approximately 29.6 million small
businesses, according to the SBA. A ``small organization'' is generally
``any not-for-profit enterprise which is independently owned and
operated and is not dominant in its field.'' Nationwide, as of 2002,
there were approximately 1.6 million small organizations.
44. Telemarketing Bureaus and Other Contact Centers. According to
the
[[Page 13480]]
Census Bureau, this economic census category ``comprises establishments
primarily engaged in operating call centers that initiate or receive
communications for others--via telephone, facsimile, e-mail, or other
communication modes--for purposes such as (1) promoting clients'
products or services, (2) taking orders for clients, (3) soliciting
contributions for a client; and (4) providing information or assistance
regarding a client's products or services.'' The SBA has developed a
small business size standard for this category, which is: all such
entities having $7 million or less in annual receipts. According to
Census Bureau data for 2002, there were 1,876 firms in this category
that operated for the entire year. Of this total, 1,610 firms had
annual sales of under $5 million, and an additional 129 had sales of $5
million to $9,999,999. Thus, the majority of firms in this category can
be considered small.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
45. The express written consent requirement proposed in document
FCC 10-18 may entail additional recordkeeping requirements for covered
entities to the extent that they would be required to obtain and keep
records of consumers' written consent to receive prerecorded message
calls. As a practical matter, however, it appears that there would not
be a significant change in this recordkeeping burden for at least two
reasons.
46. First, because a seller or telemarketer placing a prerecorded
telemarketing call must be prepared to provide, under the Commission's
current requirements, ``clear and convincing evidence'' that it
received prior express consent from the called party, whether consent
has been obtained orally or in writing, covered entities already are
required to maintain records to demonstrate compliance with the
existing express consent requirement. In addition, covered entities
already maintain electronic or other records of the existence of an
established business relationship in order to demonstrate compliance
with current Commission requirements governing prerecorded message
calls to established business relationship customers. In place of
keeping records of ``oral consent'' or of ``established business
relationships'' as a precondition for placing prerecorded telemarketing
calls, the proposed rule change would require covered entities to
maintain records of consumers' express written agreement to receive
such calls. And because the Commission has proposed that these
agreements may be obtained pursuant to the E-SIGN Act, minimal
additional recordkeeping should be necessary. For these reasons, the
proposed written consent requirement, as a practical matter, is
unlikely to result in significant new reporting, recordkeeping or other
compliance requirements for sellers and telemarketers, including small
entities.
Steps Taken To Minimize Significant Economic Impact on Small Entities,
and Significant Alternatives Considered
47. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.
By proposing to conform the Commission's TCPA rules to those of the
FTC in the areas described in paragraphs two through six above, the
actions proposed are consistent with the mandate of the DNCIA to
``maximize consistency'' of the Commission's TCPA rules with the FTC's
Telemarketing Sales Rule.
48. One alternative to the proposed amendments would be to adopt no
changes to the Commission's rules on prerecorded messages and call
abandonment. Although the Commission considered the option of doing
nothing for each of the proposed rules, this option was outweighed by
the anticipated benefits of the proposed changes, including: (1)
Reducing the potential for industry and consumer confusion surrounding
a telemarketer's obligations to the extent that similarly situated
entities would no longer be subject to different Federal requirements;
(2) enhancing the Commission's enforcement efforts and protecting both
consumers and industry from erroneous claims that consent was or was
not given, to the extent that the written consent requirement may
provide more verifiable proof of consent; (3) empowering consumers to
determine which prerecorded commercial solicitations they will receive
via their telephones and providing a convenient and consumer-friendly
method to ``opt-out'' of receiving those to which they object; and (4)
ensuring that telemarketers do not calculate the three percent
(permissible) call abandonment rate in a way that certain communities
or populations are subject to a disproportionately greater number of
dropped or abandoned calls.
49. In order to reduce initial compliance costs and burdens, the
Commission proposes to defer the effective date of the proposed
requirement that prerecorded calls provide an automated interactive
opt-out mechanism for three months, and the proposed written agreement
requirement for twelve months, to ensure that the industry will have
adequate time to prepare to comply. Document FCC 10-18 proposes to
allow sellers and telemarketers to continue placing prerecorded calls
to consumers with whom the seller has an established business
relationship during the pendency of the implementation period for the
written agreement requirement. In addition, by proposing that written
consent agreements be obtained pursuant to any method allowed under the
E-SIGN Act, the Commission's proposed written consent requirement would
afford small entities flexibility in determining the method of
``written'' consent that is best suited to those entities' marketing
plans and business operations. Although the Commission has determined
that there may be an economic impact on small entities as a result of
the proposed rules, such impact, which has been minimized to the extent
possible, would appear to be minor and not unjustifiably adverse or
burdensome.
50. The Commission has determined that, on balance, any such burden
is outweighed by the potentially significant benefits of the proposed
rules to industry and consumers, as identified in the preceding
paragraph. Because these anticipated significant benefits outweigh,
based on the Commission's analysis, any minor burden the proposed rules
may impose on small entities, the Commission has determined that no
further discussion of alternatives to the proposed rules is warranted
beyond what it has set forth.
Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
51. As discussed above, the Telemarketing Consumer Fraud and Abuse
Prevention Act (``Telemarketing Act''), 15 U.S.C. 6101-6108, and the
Telemarketing Sales Rule (TSR) adopted by the FTC also address certain
telemarketing acts or practices.
[[Page 13481]]
Document FCC 10-18 identifies several aspects of the FTC's
Telemarketing Sales Rule, as recently amended, that differ from the
Commission's TCPA rules. Therefore, the Commission seeks comment in
document FCC 10-18 on whether it should revise its rules to harmonize
them with the FTC's rule. Amending the Commission's rules, as proposed
above, would reduce the inconsistencies that currently exist between
the two sets of rules.
Ordering Clause
Pursuant to the authority contained in sections 1-2, 4, 201, 227,
and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151-
152, 154, 201, 227, and 403, document FCC 10-18 is adopted.
List of Subjects
47 CFR Part 64
Telecommunications, Telephone.
47 CFR Part 68
Communications equipment, Telecommunications, Telephone.
Marlene H. Dortch,
Secretary, Federal Communications Commission.
Proposed Rules
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR parts 64 and 68 as
follows:
PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS
1. The authority citation for part 64 is revised to read as
follows:
Authority: 47 U.S.C. 154, 227, and 254(k); secs. 403(b)(2)(B),
(c), Pub. L. 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C.
201, 218, 222, 225, 226, 227, 228, and 254 (k) unless otherwise
noted.
Subpart L--Restrictions on Telemarketing, Telephone Solicitation,
and Facsimile Advertising
2. Section 64.1200 is amended by revising paragraph (a)(1)
introductory text and (a)(2) introductory text and adding new paragraph
(a)(1)(v), removing paragraph (a)(2)(iv), redesignating and revising
paragraph (a)(2)(v) as newly designated paragraph (a)(2)(iv), and
adding new paragraphs (a)(2)(v) and (a)(2)(vi), revising paragraphs
(a)(6) introductory text, (a)(6)(i), and (b) to read as follows:
Sec. 64.1200 Delivery restrictions. (a) No person or entity may:
(1) Initiate any telephone call (other than a call made for emergency
purposes or made with the prior express written consent of the called
party) using an automatic telephone dialing system or an artificial or
prerecorded voice;
* * * * *
(v) For purposes of paragraph (a)(1) of this section, a person or
entity shall be deemed to have obtained prior express written consent
upon obtaining from the recipient of the call an express agreement, in
writing, that:
(A) The person or entity obtained only after a clear and
conspicuous disclosure that the purpose of the agreement is to
authorize the delivery of calls to the recipient using an automatic
telephone dialing system or an artificial or prerecorded voice;
(B) The person or entity obtained without requiring, directly or
indirectly, that the agreement be executed as a condition of purchasing
any good or service;
(C) Evidences the willingness of the recipient of the call to
receive calls using an automatic telephone dialing system or an
artificial or prerecorded voice; and
(D) Includes the telephone number to which such calls may be placed
in addition to the recipient's signature. For purposes of this
provision, the term ``signature'' shall include an electronic or
digital form of signature, to the extent that such form of signature is
recognized as a valid signature under applicable Federal law or State
contract law; and
(2) Initiate any telephone call to any residential line using an
artificial or prerecorded voice to deliver a message without the prior
express written consent of the called party, unless the call;
* * * * *
(iv) Is made by or on behalf of a tax-exempt nonprofit
organization; or
(v) Delivers a prerecorded healthcare message made by, or on behalf
of, a covered entity or its business associate, as those terms are
defined in the HIPAA Privacy Rule, 45 CFR 160.103;
(vi) For purposes of paragraph (a)(2) of this section, a person or
entity shall be deemed to have obtained prior express written consent
upon obtaining from the recipient of the call an express agreement, in
writing, that:
(A) The person or entity obtained only after a clear and
conspicuous disclosure that the purpose of the agreement is to
authorize the delivery of calls to the recipient using an artificial or
prerecorded voice;
(B) The person or entity obtained without requiring, directly or
indirectly, that the agreement be executed as a condition of purchasing
any good or service;
(C) Evidences the willingness of the recipient of the call to
receive calls using an artificial or prerecorded voice; and
(D) Includes the telephone number to which such calls may be placed
in addition to the recipient's signature, For purposes of this
provision, the term ``signature'' shall include an electronic or
digital form of signature, to the extent that such form of signature is
recognized as a valid signature under applicable Federal law or State
contract law; and
* * * * *
(6) Abandon more than three percent of all telemarketing calls that
are answered live by a person, or measured over a 30-day period, per
marketing campaign. A call is ``abandoned'' if it is not connected to a
live sales representative within two (2) seconds of the called person's
completed greeting. Whenever a sales representative is not available to
speak with the person answering the call, that person must receive,
within two (2) seconds after the called person's completed greeting, a
prerecorded identification message that states only the name and
telephone number of the business, entity, or individual on whose behalf
the call was placed, and that the call was for ``telemarketing
purposes.'' The telephone number so provided must permit any individual
to make a do-not-call request during regular business hours for the
duration of the telemarketing campaign. The telephone number may not be
a 900 number or any other number for which charges exceed local or long
distance transmission charges. The seller or telemarketer must maintain
records establishing compliance with paragraph (a)(6) of this section.
(i) A call for telemarketing purposes that delivers an artificial
or prerecorded voice message to a residential telephone line that is
assigned to a person who has granted prior express written consent for
the call to be made shall not be considered an abandoned call if the
message begins within two (2) seconds of the called person's completed
greeting.
* * * * *
(b) All artificial or prerecorded telephone messages shall conform
to the requirements of paragraph (b)(1) or (b)(2) of this section.
(1) All artificial or prerecorded telephone messages, other than
those delivered to residential telephone subscribers for telemarketing
purposes, shall
(i) At the beginning of the message, state clearly the identity of
the business, individual, or other entity that is responsible for
initiating the call. If a business is responsible for initiating the
[[Page 13482]]
call, the name under which the entity is registered to conduct business
with the State Corporation Commission (or comparable regulatory
authority) must be stated, and
(ii) During or after the message, state clearly the telephone
number (other than that of the autodialer or prerecorded message player
that placed the call) of such business, other entity, or individual.
The telephone number provided may not be a 900 number or any other
number for which charges exceed local or long distance transmission
charges.
(2) All artificial or prerecorded telephone messages delivered to
residential telephone subscribers for telemarketing purposes shall
(i) At the beginning of the message, state clearly the identity of
the business, individual, or other entity that is responsible for
initiating the call; that the purpose of the call is to sell goods or
services; and the nature of the goods or services, and
(ii) Followed immediately by a disclosure of one or both of the
following:
(A) In the case of a call that could be answered in person by a
consumer, that the person called can use an automated interactive voice
and/or keypress-activated opt-out mechanism to assert a do-not-call
request at any time during the message. The mechanism must
automatically add the number called to the caller's company-specific
do-not-call list; once invoked, immediately disconnect the call; and be
available for use at any time during the message; and
(B) In the case of a call that could be answered in person by an
answering machine or voicemail service, that the person called can use
a toll-free telephone number to assert a do-not-call request. The
number provided must connect directly to an automated interactive voice
or keypress-activated opt-out mechanism that automatically adds the
number called to the caller's company-specific do-not-call list;
immediately thereafter disconnects the call; and is accessible at any
time throughout the duration of the telemarketing campaign.
(3) Paragraph (b)(2) of this section shall not apply to a
prerecorded healthcare message made by, or on behalf of, a covered
entity or its business associate, as those terms are defined in the
HIPAA Privacy Rule, 45 CFR 160.103.
* * * * *
PART 68--CONNECTION OF TERMINAL EQUIPMENT TO THE TELEPHONE NETWORK
3. The authority citation for subpart D of part 68 is revised to
read as follows:
Authority: Secs. 4, 5, 227, 303, 48 Stat., as amended, 1066,
1068, 1082 (47 U.S.C. 154, 155, 227, 303).
Subpart D--Conditions for Terminal Equipment Approval
4. Section 68.318 is amended by revising paragraph (c) to read as
follows:
68.318 Additional limitations.
* * * * *
(c) Line seizure by automatic telephone dialing systems. Automatic
telephone dialing systems which deliver a recorded message to the
called party must release the called party's telephone line within 5
seconds of the time notification is transmitted to the system that the
called party has hung up, to allow the called party's line to be used
to make or receive other calls. When a residential telephone subscriber
asserts a do-not-call request pursuant to Sec. 64.1200(b)(2) of this
chapter, an automatic dialing system that delivers an artificial or
prerecorded message to such subscriber for telemarketing purposes must
release the called party's telephone line in the manner prescribed in
Sec. 64.1200(b)(2) of this chapter.
* * * * *
[FR Doc. 2010-6095 Filed 3-19-10; 8:45 am]
BILLING CODE 6712-01-P
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