PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Comments Filed with the FCC: Modernization and Interpretation of the TCPA of 1991

By at 13 October, 2020, 9:48 am

October 9, 2020

Marlene H. Dortch, Secretary

Federal Communications Commission

Office of the Secretary

445 12th Street, SW

Washington, DC   20554

 

Via Electronic Submission 

RE: CG Docket No. 02-278 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991

CG Docket No. 18-152 Consumer and Government Affairs Bureau Seeks Comments on Interpretation of the Telephone Consumer Protection Act in Light of the D.C. Circuit’s ACA International Decision

 

Dear Secretary Dortch:

On behalf of the Small Business & Entrepreneurship Council (SBE Council), I am pleased to submit comments on two items under consideration and/or review by the Federal Communications Commission (FCC) relating to the Telephone Consumer Protection Act (TCPA) of 1991. SBE Council supports the modernization of TCPA to reflect the normalized use of communications technologies and preference of consumers, as they engage and transact with small businesses and small firms across every industry where rapid and touchless communication has become necessary, if not critical, especially in the COVID-19 economy.  

It is vital for the FCC – and now the U.S. Supreme Court in consideration of the autodialer question in Facebook Inc. v. Duguid – to seriously reflect on how consumers are harmed by the existing TCPA regime. Moreover, as noted below, consumers favor the modernization of the regime to enable seamless and important communications on key matters.

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. With nearly 100,000 members nationwide, SBE Council works to advance initiatives and policy proposals to enhance competitiveness and improve the environment for business start-up and growth. SBE Council has closely followed telecommunications and technology policy since our founding in 1994 and has weighed in on relevant issues since the passage of the 1996 Telecommunications Act. We have consistently supported policies that allow for innovation and technology in the marketplace, and the modernization of policy and rules that reflect how technology is being utilized to drive efficiencies and transparency. Technological innovation in the telecommunications sector has especially helped small businesses navigate and weather various economic periods that have been challenging, and of course the economic effects and impacts of COVID-19 they face today.

The accelerated use and deployment of technology has become essential for consumers and businesses, and is allowing commerce and our economy to keep chugging along during this challenging COVID period. However, under existing law – specifically the outdated TCPA of 1991 – the use of texting and similar electronic messaging are being utilized under a cloud of uncertainty that hangs over most businesses.

As SBE Council has previously noted in our various communications and advocacy efforts during the past couple of years, the TCPA requires a modern makeover that will align its framework with how businesses and consumers communicate in the digital economy. As I noted in an August 2018 Morning Consult Op-ed:

TCPA is strict and “unforgiving.” Even if a business misdials a number, or dials a reassigned number that was previously used by someone else, each violation entitles the person on the receiving end to file a lawsuit and seek damages of $500 to $1,500 per unsolicited call, text or fax per person.

These non-marketing calls can be notifications about potential fraud, or reminders about appointments, due dates and other customer-service courtesies. Yet the threat of TPCA litigation is chilling this activity, which is troublesome for customers who count on prompt outreach from a business about their accounts or information pertaining to important matters, such as medical appointments and even life-saving information.

An insidious cottage industry of plaintiffs’ lawyers and professional TCPA plaintiffs are making a very nice living off this ambiguous and outdated law. According to litigation analyst WebRecon LLC, TCPA lawsuits have increased by 1,272 percent since 2010. In 2008, there were 16 plaintiffs nationwide that filed TCPA claims in federal court. That number grew to 1,136 plaintiffs in 2012. By 2016, there were 4,860 claims in federal court.

About 100,000 telephone numbers are reassigned by mobile carriers every day, and this large amount means that companies risk triggering a TCPA lawsuit if they happen to call or text the wrong party about important or time-sensitive information.

Obviously, with the growth of texting and similar communications being used via smart phone and other devices, which supports efficient and safe communications in the COVID-19 economy, the need to update TCPA has become more acute. But even prior to the onset of the pandemic, consumers conveyed their support for allowing businesses and medical providers to communicate with customers and patients about critical matters that are non-telemarketing in nature.  A mid-November 2019 Morning Consult Survey sponsored by SBE Council, for example, found that while there is strong support for cracking down on robocallers, 66% of voters thought it should be “less onerous for companies to contact their customers with important account information and updates.” In addition:

● Voters say they support calls and texts for non-telemarketing purposes from medical providers (87%), utility companies (84%), schools (84%) and financial institutions (82%).

● Over 4 in 5 voters say they support calls and texts for non-telemarketing purposes from financial institutions (82%) and say they want to be contacted with suspected fraud alerts (87%).

● Voters say they are concerned that these calls and texts from financial institutions may be blocked under the current legal regime. Two thirds of voters say they are concerned that financial institutions may be blocked from contacting consumers with time-sensitive information (67%), may be sued for alerting consumers of suspicious account activity (66%) and may not contact consumers with fraud alerts or other notifications (65%).

● Two thirds of voters also say they are concerned that medical providers may not contact them with important information (64%).

● By nearly a 20% margin, voters say the FCC should reform the TCPA to allow companies to use automated technology to reach customers with non-telemarketing communications (48% to 29%).

● 62% of voters say it is important for the FCC to reform the TCPA to allow companies to use automated technology to reach customers with non-telemarketing communications such as data breach notifications or low account balance alerts.

● Both Democrats (63%) and Republicans (64%) think it is important for the FCC to reform the TCPA to allow companies to use automated technology to reach customers with non-telemarketing communications

Interestingly, 83% of voters said they haven’t seen, read, or heard anything about the TCPA. Yet, when the law was described to survey participants 77% said they support the TCPA. This high level of support for consumer protection makes sense given the problems with robocalls and aggressive telemarketing over the years. No one thinks the TCPA should be thrown out, but it does need to be appropriately modernized.

While the FCC has not yet taken on TCPA modernization, under Chairman Ajit Pai’s leadership, the FCC has done a laudable job of advancing measures – including issuing significant fines – to help curb abusive robocalling. As noted by YouMail, the number of robocalls during the spring dropped significantly: “April robocalls were almost 50% lower than last October’s monthly peak of 5.7 billion calls.” (Yes, that billions.)

At the same time, a U.S. Supreme Court decision in Facebook Inc. v. Duguid “may lead to clarity for businesses that have wondered whether automated calls and texts they send consumers are legal,” according to an article in Bloomberg Law. As further explained in the piece:

The 1991 Telephone Consumer Protection Act bans companies from using an autodialer to call or text consumers without advance permission. Circuit courts are split, however, over which technologies qualify as autodialers.

Resolving the split is important for businesses, who need to know whether the technology they choose puts them in violation of the law. Companies face fines of up to $1,500 per call or text if they violate the TCPA.

“The Supreme Court now has a clear path to determine whether the TCPA applies only to random-fired calls or to all calls dialed automatically,” Eric Troutman, a partner at Squire Patton Boggs who specializes on the TCPA, said in an email. “This will be the biggest ruling ever for the TCPA.”

Facebook’s petition challenges the U.S. Court of Appeals for the Ninth Circuit’s broad interpretation of the “autodialer” term. The Ninth Circuit ruled that Facebook used an autodialer to notify a consumer of a suspicious attempt to access his account.

Several other courts, including the U.S. Court of Appeals for the D.C. Circuit, have favored a narrower definition of autodialer. Businesses back the narrow definition, which gives them more technological options for sending messages.

Again, it is critical that both the Supreme Court and FCC consider how consumers are harmed by the outdated TCPA. I will add that small businesses that compete with larger companies in the digital economy, along with the formidable challenges they currently face during the COVID-19 crisis, are harmed by this uncertainty as well. There is an opportunity to appropriately fix the broad definition of autodialer, which will help to modernize TCPA and make it work for the massive digital shift in business-to-consumer communications (and vice versa) that is critically important in the digital – and COVID-19 economy.

Thank you for the opportunity to provide our views on this important subject matter for small businesses.

Sincerely,

Karen Kerrigan, President & CEO

 

200 Lawyers Road NW Vienna, VA 22183

(703)-242-5840 www.sbecouncil.org @SBECouncil

                                                                      

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