August 10, 2020

Volume X, Number 223

August 10, 2020

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FCC Addresses TCPA ATDS Definition in Win for P2P Texting Platforms

The FCC’s proceedings regarding the definition of the term “automatic telephone dialing system” have been pending since May of 2018 when, shortly after the D.C. Circuit’s opinion in ACA International v. FCC, the Commission sought public comment regarding “what constitutes an automatic telephone dialing system.” Although it has been over two years since the commencement of those proceedings, there have been little signs of a ruling from the FCC. All the while, the federal courts have been grappling over the definition, leading to divergent results in jurisdictions across the country. A recent declaratory ruling from the FCC, however, suggests the Commission may be headed in the right direction.

Yesterday, the FCC issued a declaratory ruling in response to a petition by a coalition of providers and users of peer-to-peer (P2P) text message services seeking clarification of whether texts sent from P2P platforms are subject to the TCPA. The fact that the FCC made a ruling on the petition at all is remarkable, considering the FCC has no affirmative obligation to take up any petition, and many petitions are effectively denied as they languish with no action by the Commission.

According to the petition, P2P technology “require[s] a person to manually send each text message one at a time, and enable[s] the sender to exercise discretion regarding the content and other features of the text messages.” Generally, P2P platforms require a human to individually send each message, but leverage technology to make that process efficient, including through the use of stored lists, automated message queuing, templates, message auto-population, etc. But while many aspects of the message queuing and creation process may be aided by automation, a human action—such as a click or screen tap—is required to “send each text message one at a time.” Similar technology exists for telephone dialing as well, such as the LiveVox HCI system, which also leverages technological automation in the process of identifying and queuing numbers to call from a stored list, but with human intervention occurring at the point of dialing in the form of a mouse click to launch every call.

The FCC ruled in favor of the P2P platform, and concluded that “if a calling platform is not capable of originating a call or sending a text without a person actively and affirmatively manually dialing each one, that platform is not an autodialer and calls or texts made using it are not subject to the TCPA’s restrictions[.]” While the FCC declined to decide whether any specific P2P platform is or is not an ATDS, this ruling nevertheless represents a win for P2P, and other similar one-click-per-text/call platforms that will likely help significantly mitigate TCPA risk for both platform providers and their users.

In reaching this decision, the FCC walked back its prior finding that a hallmark of an ATDS is the “capacity to dial thousands of numbers in a short period of time.” This was a conclusion reached by the FCC in prior rulings which, as a majority of courts now agree, are no longer valid. Reflecting an evolution of its position, the Commission has now concluded that whether a platform “can make a large number of calls in a short time,” is neither “dispositive” nor even “probative”. Notably, a platform’s capability of transmitting a large volume of calls or texts is a common allegation used by plaintiffs to plead the use of an ATDS. This is now an allegation that, at least according to the FCC’s latest ruling, can no longer support a claim that a defendant used an ATDS.

The Commission also rejected calls by the National Consumer Law Center to deem P2P platforms an ATDS because, according to the NCLC, “telemarketers and spammers would immediately gravitate to P2P systems as a way to evade the TCPA’s restrictions on unwanted calls.” The FCC acknowledged that the TCPA “does not and was not intended to stop every type of call,” and that so long as a platform requires “active and affirmative manual dialing,” then it is not “evading” the TCPA because it is not an ATDS.

In the course of its ruling, the FCC also touched upon the definition of an ATDS, but without expressly addressing its interpretation. Instead, it tiptoed around the issue by repeatedly quoting the statutory definition, without any comment as to the FCC’s interpretation of that definition. With that said, the Commission’s choice to use language closely hewn to the statutory definition could be viewed as a positive sign, particularly given the Commission’s proclivity to stray from that definition in its prior interpretations. In addition, the Commission gave a hat tip to its 1992 ruling, in which it found that the TCPA does not apply to functions such as speed dialing, “because the numbers are not generated in a random or sequential fashion.” Without reading too much into this reference, it at least hints that the FCC may be thinking in the direction of an interpretation that is more faithful to the statutory text. But the bottom line for the FCC was, regardless of which way the statute is read, human intervention at the point of dialing or texting remains the key to determining on which side of that definition a platform lies.

Lastly, the FCC reiterated in its ruling that calls or texts sent using an autodialer are appropriate as long as the individual has provided their phone number for that purpose. Notably, the FCC did not distinguish between the content of the call (i.e. informational versus telemarketing) in restating its fundamental rule that the act of providing a phone number confers the requisite consent under the TCPA to call with an ATDS.

Ultimately, the FCC’s newest ruling helps bring much needed clarity to manual one-click-to-text/call systems. The Commission’s ruling reflects a better balance between the technological evolutions that have brought greater efficiency to telecommunications platforms, and the requirements of the TCPA. Indeed, the FCC put it best when it said that the TCPA “does not and was not intended to stop every type of call.”

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume X, Number 178

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About this Author

Artin Betpera, Class action litigation lawyer, Womble
Partner

Artin is a partner in the firm’s business litigation practice group.  Precise and analytic, Artin brings over a decade of experience to bear on complex litigation problems.

Artin adeptly manages significant volumes of litigation for some of the country’s largest banks and financial institutions, never losing sight of providing an exceptional level of service to his clients.  He has been a dedicated financial services litigator since starting the practice of law at ground-zero of the financial crisis, affording him with an unparalleled depth of...

657.266.1051
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Companies rely on David Carter to guide them in Telephone Consumer Protection Act (TCPA) compliance matters and to defend them against allegations of TCPA violations. He has represented both closely held and publicly traded companies facing TCPA claims with potential liability in excess of $500 million. David runs the TCPA Defense Force whose mission is to reduce TCPA risk, allowing companies to communicate with consumers responsibly and without fear of legal consequences.

In addition, David counsels technology companies and telecom carriers through a range of business disputes, often against entrenched incumbents and involving new business models and service offerings. As an experienced litigation attorney, David represents carriers in both state and federal courts, as well as before the Federal Communications Commission and state regulatory agencies. His clients include international as well as domestic telecom companies.

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