Update July 09: The FCC has issued a Public Notice announcing that beginning July 27, 2020, voice service providers must begin maintaining records of the most recent date each phone number was permanently disconnected and must age numbers for at least 45 days after disconnection before reassignment. Small business voice service providers have an additional six months (i.e., until January 27, 2021) to comply with the record maintenance rule.
The FCC said it will separately announce the compliance date for the requirement for voice service providers to start sending information to the Reassigned Numbers Database, once the database is established.
The Federal Communications Commission (FCC) has issued a Second Report and Order in its Advanced Methods to Target and Eliminate Robocalls proceeding to create a comprehensive database of phone numbers subject to reassignment because they have been disconnected from their prior subscribers. This initiative will come as welcome news to companies transmitting calls and texts based on consent previously received for these numbers, in that they will now have the ability to avoid directing them to recipients who have not requested them, just because they inherited a phone number reassigned from a prior user who had consented. This database should thus bring relief to legitimate and well-meaning companies facing significant financial exposure under the Telephone Consumer Protection Act (TCPA) for innocently contacting unintended recipients.
The TCPA authorizes the FCC to adopt rules to help consumers avoid unwanted telemarketing and other calls, and prohibits using an automatic telephone dialing system (ATDS or autodialer) and/or a prerecorded voice without the prior express consent of the recipient. In addition to enforcement by the FCC through its forfeiture authority, the TCPA allows consumers to file private suits and collect statutory damages for violations of the statute or FCC implementing rules. Damages may be assessed on a per-call basis, and can quickly mount given the volume of large-scale marketing campaigns and/or customer-service initiatives, especially for claims brought as class actions. The TCPA has become one of the most frequently invoked federal laws for civil claims, and settlements in the millions—and even tens of millions—are not uncommon.
The issue of unintended calls to reassigned numbers has been particularly thorny under the TCPA’s regime that requires the consent of subscribers to call or text their phone number. Other FCC rules require telephone service providers to reassign numbers to a new subscriber once disconnected from a previous user, with the agency reporting that upwards of 35 million numbers are disconnected and made available for reassignment each year. When a company attempts to use an autodialer or prerecorded voice to contact a consumer from whom it obtained consent at some time in the past, it may instead reach someone who has not consented, because the number has been reassigned, thus creating potential TCPA liability. Concerns about inadvertently but unavoidably calling reassigned numbers have caused some companies to cease calling or texting altogether given the threat of liability for such calls. While various commercial reassigned-number databases have sought to alleviate some of these risks, they are not comprehensive, and thus cannot be a fail-safe against exposure.
The Advanced Methods Second Report and Order creates a new tool that should assist TCPA compliance and help consumers avoid receiving calls and texts meant for others. A new single, comprehensive database of phone numbers that have been disconnected will allow callers/texters to verify if a number is no longer associated with a person who previously granted consent to be contacted. The new regulations will require all reporting carriers to report disconnections the 15th of every month, and will also require at least 45 days to pass before a disconnected number is reassigned.
The database’s costs will be covered by fees imposed on those accessing it, in the same vein as the National Do-Not-Call Registry. In exchange, along with avoiding transmitting unwanted calls or texts and the risks associated with reaching a non-consenting user of a reassigned number, the rules provide a safe harbor from TCPA liability for calls or texts that are misdirected due to errors in data reported to or otherwise found in the database. However, the safe harbor will apply only to calls/texts made by those who actually queried the database and reasonably relied on it. That means callers or texters must demonstrate they obtained and used the most recent update of the FCC-overseen database (not other commercial databases), and that it reported “No” (as to disconnection/reassignment) based on the date the caller or texter entered as having gained consent or could otherwise be confident that the consumer could be reached at that number. Companies relying on the database for safe harbor protection bear the burden of proof on all elements of the safe harbor, which is also limited in that it covers only the period between checking the database and transmitting a call or text if that period does not extend beyond the next update to the database. Nevertheless, once operational, the reassigned numbers database should provide some measure of relief for what has been a challenging TCPA-compliance issue.
The safe harbor will not be available until the FCC first selects an independent third-party administrator for operating the database through a competitive bidding process, which will then be subject to FCC oversight. The costs of setting up and operating the database, and reimbursing reporting carriers for reporting their reassigned numbers also must initially be determined in order to set the database’s usage fees. The FCC expects to issue a solicitation of bids within 12 months, with selection of the administrator and, ultimately, placing-in-operation of the database to follow (though small service providers, i.e., those with 100,000 or fewer domestic retail subscriber lines, will have an extra 6 months before starting to report disconnections).
Other points of TCPA import also arose in connection with adoption of the Second Report and Order. Among them were comments from Commissioner O’Rielly, who stressed the interests of “legitimate callers,” indicating that he was promised by Chairman Pai a “comprehensive TCPA redo in the near future.” If carried out, this would be significant, especially given that, in doing so, Commissioner O’Rielly called the National Do-Not-Call Database “costly and ineffective” as only legitimate callers use it, while also alluding to the FCC’s rethinking of the definition of autodialers on remand from the D.C. Circuit. Thus, there is a real likelihood that the reassigned numbers database could be just the beginning of several significant steps in the revamping of FCC implementation of the TCPA.