Taking its next step to implement the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act), the Federal Communications Commission (FCC) has issued a Notice of Proposed Rulemaking (NPRM) by seeking input on potential adjustments to exceptions and allowances the FCC has adopted over the years to restrictions on autodialed and prerecorded calls and texts under the Telephone Consumer Protection Act (TCPA).

In addition to codifying exceptions for certain healthcare, financial-institution, and package-delivery calls/texts that until now existed only in declaratory rulings, the NPRM proposes to revise longstanding exceptions for prerecorded calls to residential lines for informational, transactional, and non-profit purposes, to require that they allow recipients to opt out of such calls in the future, including via automated means, to make them subject to other company-specific do-not-call rules, and to potentially limit the number of such calls. The NPRM also proposes on the allowance for wireless carriers to autodial/prerecorded-call their own customers if no cost is imposed to require honoring opt-out there as well.

There is a very short comment window, and the TRACED Act requires the FCC to adopt final rules by the end of the year.


The TCPA and the FCC's implementing rules are the principal source of federal restrictions and requirements for autodialed and prerecorded calls to cell phones and residential lines, do-not-call rights relating to telemarketing and telephone solicitations (under shared power with the Federal Trade Commission and its Telemarketing Sales Rule), and unsolicited fax ads. In relevant part here, the TCPA makes it unlawful to initiate autodialed and/or prerecorded calls (and texts) to cell phones and prerecorded calls to residential lines, other than for emergency purposes or with the prior express consent of the called (or texted) party.

The statute allows the FCC to exempt certain calls from the residential line restriction, and it has exempted calls for other than commercial purposes, including calls by or for nonprofits and calls for commercial purposes that do not adversely affect privacy rights. The statute also allows exemption from the cell phone restriction of calls not charged to the called party, subject to conditions necessary to protect privacy rights. In this latter case, the FCC has through declaratory rulings adopted allowances for non-marketing healthcare and financial-services calls, certain inmate-related calls, and package-delivery notifications.

The TRACED Act, in addition to directing various FCC actions relating to call authentication and call blocking and expanding enforcement authority over illegal "robocalls," requires it to revisit the exemptions granted under the authority outlined above. The Act instructs the FCC to ensure the exemptions include terms specifying the classes of parties that may make such calls and be called, and the number of such calls that are permissible, and to complete any necessary rule adoption or amendment by December 30, 2020. The NPRM proposes various codifications and amendments to the TCPA rules to that end and seeks comments on the proposed changes.

A Short NPRM Packing a Potentially Big Punch

Though in significant part the NPRM simply codifies relatively recently created exemptions while tweaking what might be viewed as one of the oldest exceptions, as discussed below, the FCC perhaps most notably proposes changes that would substantially alter the longstanding exceptions for informational, transactional and nonprofit prerecorded calls to residential lines.

From the earliest years of the FCC's implementation of the TCPA well over two decades ago, the rules have exempted from the prohibition on prerecorded calls to residential lines (unlike cells, autodialed calls to residential lines are not restricted) any such calls that are not made for a commercial purposes, that are made for a commercial purpose but do not involve marketing, or that are made by or on behalf of a tax-exempt non-profit organization. These calls have never been subject to any opt-out or do-not-call obligations.

While maybe prudent from the perspective of customer relations and/or complaint-avoidance, there has never been an obligation per se to refrain from making suchprerecorded calls to residential lines upon request or objection. Nor has there been any limit on the number or frequency of these calls.

The FCC proposes to change that in the NPRM. Under the draft rule changes, prerecorded calls to residential lines for noncommercial purposes, non-marketing commercial purposes, and by or for nonprofits would become subject to the TCPA company-specific do-not-call rules. First, the prerecorded calls would have to cease upon an opt-out—i.e., a do-not-call— request. To enable this, the prerecorded call would be required to have an automated, interactive voice- and/or keypress-activated mechanism to enable opt-outs.

Further, while these calls have always had disclosure requirements identifying the calling party and its phone number, they would now be required—like prerecorded telemarketing—to make the phone number one that can field do-not-call requests during normal business hours. They would also be required to adhere to other do-not-call rules pertaining to having a written policy for maintaining a do-not-call list, training personnel in that policy, and keeping opt-out residential numbers on that list for five years, among other rules.

These are all significant operational changes that until now have applied only to telemarketers and telephone solicitation. The NPRM seeks comment on these proposals.

The NPRM also asks whether there should be any numerical limit on prerecorded calls falling within these exemptions. The FCC asks, if such a limit is imposed, whether it should be an overall numerical limit or one based on a number of calls per week or month. This, too, would be a sharp break from historical practice.

Elsewhere, the NPRM largely proposes to codify existing policy. With respect to exceptions the FCC has created by declaratory ruling for cellphone-directed autodialed and/or prerecorded healthcare and financial institution calls and texts of certain types, for inmate-related messaging, and for package delivery notifications, the NPRM proposes to codify them into the FCC rules without material substantive change.

The healthcare, financial-institution, and package-delivery exceptions are all essentially for free-to-called/texted-party messages that are autodialed and/or prerecorded and must, among other things, include automated opt-out mechanisms, keep to prescribed length and frequency restrictions, and be limited to a handful of certain specified, non-marketing topics. In short, the proposed rules track the declaratory rulings in which the exemptions were adopted.

The FCC created the allowance for wireless carriers to autodial/prerecorded-call their subscribers without cost back in the 1990s, when it first implemented the TCPA (and as technology evolved, later extended it to autodialed texts). As this allowance was not created pursuant to the statutory authority underlying the above exemptions, the FCC was not required by the TRACED Act to revise the allowance or embody it in a rule, and the NPRM proposes no codification. However, the FCC nonetheless proposes to newly subject it to the same opt-out requirements as the other exemptions (i.e., enabling out-outs, including through automated means), and seeks comment on whether calls/texts under this allowance should be limited in number and/or frequency.

The FCC has set a tight comment period for this inquiry, with comments on the proposal and questions in the NPRM due October 26 and replies due November 3, 2020. As noted at the outset, the TRACED Act requires the FCC to adopt new rules based on the NPRM by December 30, 2020.

This article was originally featured as a privacy and security advisory on DWT.com on October 05, 2020. Our editors have chosen to feature this article here for its coinciding subject matter.