Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 19330-19337 [05-7346]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 70, Number 70 (Wednesday, April 13, 2005)]
[Rules and Regulations]
[Pages 19330-19337]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-7346]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket No. 02-278; FCC 05-28]


Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for reconsideration; clarification.

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SUMMARY: This document addresses certain issues raised in petitions for 
reconsideration of regarding the national do-not-call registry and the 
Commission's other telemarketing rules implementing the Telephone 
Consumer Protection Act (TCPA).

DATES: Effective May 13, 2005.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Erica McMahon, Consumer & Governmental 
Affairs Bureau, (202) 418-2512.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Order on Reconsideration, CG Docket No. 02-278, FCC 05-28, adopted 
February 10, 2005, and released February 18, 2005 (Order). The Order 
addresses issues arising from Rules and Regulations Implementing the 
Telephone Consumer Protection Act of 1991, Report and Order, (2003 TCPA 
Order), CG Docket No. 02-278, FCC 03-153, released July 3, 2003; 
published at 68 FR 44144, July 25, 2003. This document does not contain 
new or modified information collection requirements subject to the 
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, 
it does not contain 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, Public Law 107-198, see 44 
U.S.C. 3506(c)(4). Copies of any subsequently filed documents in this 
matter will be available for public inspection and copying during 
regular business hours at the FCC Reference Information Center, Portals 
II, Room CY-A257, 445 12th Street, SW., Washington, DC 20054. The 
complete text of this decision may be purchased from the Commission's 
duplicating contractor, Best Copy and Printing, Inc. (BCPI), Portals 
II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. Customers 
may contact BCPI, Inc. at its Web site: https://www.bcpiweb.com or call 
1-800-378-3160. 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 & 
Governmental Affairs Bureau at (202) 418-0530 (voice) or (202) 418-0432 
(TTY). The Order can also be downloaded in Word and Portable Document 
Format (PDF) at https://www.fcc.gov/cgb/policy.

Synopsis

    In the 2003 TCPA Order, the Commission adopted a national do-not-
call registry, in conjunction with the FTC, to provide residential 
consumers with a one-step option to prohibit unwanted telephone 
solicitations. Telemarketers are prohibited from contacting those 
consumers that register their telephone numbers on the national list, 
unless the call falls within a recognized exemption. We explained that 
calls that do not fall within the definition of ``telephone 
solicitation'' as defined in section 227(a)(3) are not restricted by 
the national do-not-call list. These may include surveys, market 
research, political and religious speech calls. The national do-not-
call rules also do not prohibit calls by or on behalf of tax-exempt 
nonprofit organizations, calls to persons with whom the seller or 
telemarketer has an established business relationship, calls to 
businesses, and calls to persons with whom the marketer has a 
``personal relationship.''
    A number of petitioners raise questions related to the 
administration and operation of the national do-not-call registry. The 
DMA requests that the Commission review the national do-not-call 
registry set up by the FTC and reconsider our rules to impose more 
reasonable security procedures for the registry. In addition, the DMA 
asks the FCC to require the DNC list administrator to provide a 
mechanism by which callers can download the national list without 
wireless numbers. Several other petitioners request that the Commission 
reconsider the extent to which states may apply their do-not-call 
requirements to interstate telemarketers. We note that, since the close 
of the filing period for petitions for reconsideration, the Commission 
has received several petitions for declaratory ruling seeking 
preemption of state telemarketing laws. The

[[Page 19331]]

Commission intends to address the issue of preemption separately in the 
future.
    The Commission also received petitions asking whether certain 
entities or certain types of calls are subject to the national do-not-
call rules. The National Association of Realtors (NAR) asks us to 
clarify that the do-not-call rules do not apply to certain practices 
that are ``unique to the real estate industry.'' Specifically, NAR 
argues that calls from real estate agents to individuals who have 
advertised their properties as ``For Sale By Owner'' fall outside the 
scope of the do-not-call rules. In addition, NAR requests that the 
Commission clarify that the rules permit real estate professionals to 
call individuals whose listing with another agent has lapsed. 
Independent Insurance Agents ask the Commission to reconsider our 
determinations that insurance agents are subject to the TCPA and that 
there should be no exemption for calls made based on referrals. The 
State and Regional Newspaper Association asks the Commission to 
reconsider its treatment of newspapers under the do-not-call rules in 
view of the constitutional protection newspapers are accorded.
    As discussed below, we dismiss the foregoing petitions to the 
extent they seek reconsideration of the rules establishing the national 
do-not-call registry. Many of the same issues regarding the do-not-call 
registry were raised during the original proceeding and were addressed 
in the 2003 TCPA Order. In conjunction with the FTC, we will continue 
to monitor closely the operation of the list to ensure its continued 
effectiveness. We are not persuaded by the State & Regional Newspaper 
Association that we need to revisit our rules. The State and Regional 
Newspaper Associations argue that the Commission cannot justify 
application of the new telemarketing rules under the ``limited 
constitutional analysis'' offered in the 2003 TCPA Order. They argue 
instead that, pursuant to a line of judicial decisions involving 
licensing schemes for the distribution of newspapers, the Commission's 
rules must be justified under the standards ``applicable to fully 
protected speech.''
    In February 2004, the United States Court of Appeals for the 10th 
Circuit held that the Commission's ``opt-in telemarketing regulation[s] 
that provide a mechanism for consumers to restrict commercial sales 
calls but do not provide a similar mechanism to limit charitable or 
political calls'' are ``consistent with First Amendment requirements.'' 
Thus, our do-not-call rules are constitutional.
    We recognize, however, that no party to that case specifically 
raised the issue of the standard of First Amendment protection afforded 
the distribution of newspapers before the court. After careful review 
of the State Newspaper Association's argument, however, we conclude 
that it is incorrect. To be sure, the right to distribute newspapers is 
afforded First Amendment protection. But a call from a telemarketer to 
an unwilling listener in their home for the purpose of selling a 
newspaper subscription remains speech which does ``no more than propose 
a commercial transaction.''
    Although the State Newspaper Association cites to a number of 
decisions noting that newspapers have been afforded First Amendment 
protection in the distribution of their newspapers, these cases 
typically deal with licensing cases that vest ``unbridled discretion'' 
in a government official over whether to permit or deny distribution of 
the publication at all. By contrast, our rules simply permit a private 
individual, not a government official, to decide whether or not to 
entertain a subscription request in their home. Indeed, the Supreme 
Court upheld a statute that directed the Postmaster General to send an 
order directing a mail sender to delete the name of an addressee if 
that addressee requests the removal of his name from the sender's 
mailing list: The Court has traditionally respected the right of a 
householder to bar, by order or notice, solicitors, hawkers, and 
peddlers from his property. In this case the mailer's right to 
communicate is circumscribed only by an affirmative act of the 
addressee giving notice that he wishes no further mailings from that 
mailer * * * In effect, Congress has erected a wall--or more accurately 
permits a citizen to erect a wall--that no advertiser may penetrate 
without his acquiescence.
    The do not call rules directly advance the government's substantial 
interests in guarding against fraudulent and abusive solicitations and 
facilitating the protection of consumer privacy in the home even when 
the product sought to be sold is a newspaper. We therefore reject the 
State Newspaper Association's constitutional arguments.
    In addition, we disagree with the DMA that the rules should be 
revised to expressly exempt calls to business numbers. The 2003 TCPA 
Order provided that the national do-not-call registry applies to calls 
to ``residential subscribers'' and does not preclude calls to 
businesses. To the extent that some business numbers have been 
inadvertently registered on the national registry, calls made to such 
numbers will not be considered violations of our rules. We also decline 
to exempt from the do-not-call rules those calls made to ``home-based 
businesses'; rather, we will review such calls as they are brought to 
our attention to determine whether or not the call was made to a 
residential subscriber.
    We also find no basis to further exempt certain entities or calls 
from the national do-not-call rules. The TCPA defines a telephone 
solicitation as ``the initiation of a telephone call or message for the 
purpose of encouraging the purchase or rental of, or investment in, 
property, goods, or services, which is transmitted to any person but 
does not include a call or message to any person with that person's 
prior express invitation or permission; to any person with whom the 
caller has an established business relationship; or by a tax-exempt 
nonprofit organization.'' As with any entity making calls that 
constitute ``telephone solicitations,'' a real estate agent, insurance 
agent, or newspaper is precluded from calling consumers registered on 
the national do-not-call list, unless the calls would fall within one 
of the specific exemptions provided in the statute and rules. 
Therefore, we clarify that a telephone solicitation would include calls 
by real estate agents to property owners for the purpose of offering 
their services to the owner, whether the property listing has lapsed or 
not. In addition, a person who, after seeing an advertisement in a 
newspaper, calls the advertiser to offer advertising space in the same 
or different publication, is making a telephone solicitation to that 
advertiser. We find, however, that calls by real estate agents who 
represent only the potential buyer to someone who has advertised their 
property for sale, do not constitute telephone solicitations, so long 
as the purpose of the call is to discuss a potential sale of the 
property to the represented buyer. The callers, in such circumstances, 
are not encouraging the called party to purchase, rent or invest in 
property, as contemplated by the definition of ``telephone 
solicitation.'' They are instead calling in response to an offer to 
purchase something from the called party. Similarly, a recruiter 
calling to discuss potential employment or service in the military with 
a consumer is not making a ``telephone solicitation'' to the extent the 
called party will not be asked during or after the call to purchase, 
rent or invest in property, goods or services. A caller responding to a 
classified ad would not be making a telephone solicitation, provided 
the purpose of the

[[Page 19332]]

call was to inquire about or offer to purchase the product or service 
advertised, rather than to encourage the advertiser to purchase, rent 
or invest in property, goods or services. In addition, as explained in 
the 2003 TCPA Order, calls constituting telephone solicitations to 
persons based on referrals are nevertheless subject to the do-not-call 
rules, if not otherwise exempted.
    Finally, we deny Insurance Agents' petition to the extent it 
requests that we amend our safe harbor provision to account for ``good 
faith calls'' that violate the rules and to accommodate call back 
technologies that have the potential to run afoul of the rules. We 
believe the existing safe harbor provision sufficiently addresses calls 
made in error by telemarketers that have made a good faith effort to 
comply with the rules. Consistent with the FTC, we concluded that a 
seller or telemarketer will not be liable for violating the national 
do-not-call rules if it can demonstrate that it has met certain 
standards, including using a process to prevent telemarketing to any 
telephone number on the national do-not-call registry using a version 
of the registry obtained from the registry administrator no more than 
31 days prior to the date any call is made.

Common Carrier Notifications

    The Commission's rules require that, beginning January 1, 2004, 
common carriers shall ``when providing local exchange service, provide 
an annual notice, via an insert in the subscriber's bill, of the right 
to give or revoke a notification of an objection to receiving telephone 
solicitations pursuant to the national do-not-call database maintained 
by the Federal government and the methods by which such rights may be 
exercised by the subscriber.'' This notice must be clear and 
conspicuous and include, at a minimum, the Internet address and toll-
free number that residential telephone subscribers may use to register 
on the national database. Verizon asks the Commission to reconsider 
this requirement, arguing that an annual notice is expensive and 
unnecessary. Alternatively, Verizon asks the Commission to clarify that 
other forms of notification, such as messages on telephone bills or in 
telephone directories, satisfy the TCPA requirement and at a much lower 
cost than bill inserts.
    The TCPA provides that if the Commission adopts a national do-not-
call database, such regulations shall ``require each common carrier 
providing telephone exchange service * * * to inform subscribers for 
telephone exchange service of the opportunity to provide notification * 
* * that such subscriber objects to receiving telephone 
solicitations.'' In implementing this provision, the Commission adopted 
a rule requiring such notice to be made on an annual basis. While many 
residential subscribers have already placed their numbers on the 
national do-not-call registry, others may wish to do so in the future 
or may need to place a different number on the registry because of a 
move or change in service. Still others may decide subsequently to 
remove their numbers from the registry. Therefore, we disagree with 
Verizon that such annual notification, which includes the registry's 
toll-free telephone number and Internet address established by the FTC, 
is unnecessary.
    Upon further consideration, we will allow common carriers to 
provide the notice required by 47 U.S.C. 227(c)(3)(B) through either a 
bill insert or a separate message on the bill itself. Such notice may 
also appear on an Internet bill that the subscriber has opted to 
receive. We believe that bill messages may be a less expensive and an 
efficient alternative to a separate page in the bill for some carriers, 
and will nevertheless comply with the TCPA. We emphasize, however, that 
the notice, whether appearing on the actual bill or on a separate page 
in the bill, must be clear and conspicuous and include, at a minimum, 
the Internet address and toll-free number that residential telephone 
subscribers may use to register on or remove their numbers from the 
national database.

Company-Specific Do-Not-Call Lists

    In the 2003 TCPA Order, the Commission determined that company-
specific do-not-call lists should be retained in order to provide 
consumers with an additional option for managing telemarketing calls. 
In addition, we concluded that the retention period for records of 
those consumers requesting not to be called should be reduced from ten 
years to five years. Petitioner Biggerstaff seeks clarification on how 
the five-year retention requirement applies to do-not-call requests 
made prior to the effective date of the amended rule. He argues that in 
fairness to consumers, any do-not-call request made prior to the 
effective date of the new rule must be honored by the telemarketer or 
seller for the original ten-year period. SBC and MCI disagree and urge 
the Commission to clarify that telemarketers are required to honor 
company-specific do-not-call requests for five years from the date any 
request is made, including those requests made prior to the 
Commission's ruling. Petitioner Brown asks the Commission to reduce the 
period of time by which a telemarketer must honor company-specific do-
not-call requests from 30 days to 24 hours. We conclude that any do-
not-call request made of a particular company must be honored for a 
period of five years from the date the request is made, whether the 
request was made prior to the effective date of the amended rule or 
after the rule went into effect. Telemarketers may remove those numbers 
from their company-specific do-not-call lists that have been on their 
lists for a period of five years or longer. As explained in the 2003 
TCPA Order, we believe a five-year retention period reasonably balances 
any administrative burden on consumers in requesting not to be called 
with the interests of telemarketers in contacting consumers. The 
shorter retention period increases the accuracy of companies' do-not-
call databases while the national do-not-call registry option mitigates 
the burden on those consumers who may find company-specific do-not-call 
requests overly burdensome. We also believe that having two different 
retention periods--one for requests made prior to the effective date of 
the amended rule and one for requests made after--will lead to 
confusion among consumers and increase administrative burdens on 
telemarketers.
    In addition, we decline to amend the timeframe by which 
telemarketers must honor do-not-call requests. In concluding that 
telemarketers must honor such requests within 30 days, we considered 
both the large databases of such requests maintained by some entities 
and the limitations on certain small businesses. We also determined 
that telemarketers with the capability to honor company-specific do-
not-call requests in less than thirty days must do so. We continue to 
believe that this requirement adequately balances the privacy interests 
of those consumers that have requested not to be called with the 
interests of the telemarketing industry. We also decline to amend our 
determination regarding the hours a telemarketer must be available to 
record do-not-call requests from consumers making inbound calls to that 
telemarketer. In the 2003 TCPA Order, we concluded that the number 
supplied by the telemarketer must permit an individual to make a do-
not-call request during the hours of 9 a.m. and 5 p.m. Monday through 
Friday. Telemarketers are already required to record do-not-call 
requests at the time the request is made, such as during a live 
solicitation call. Thus, we believe that in those instances where the 
consumer must

[[Page 19333]]

instead contact the telemarketer at the telemarketer's number, it is 
reasonable to do so during ``normal'' business hours when most 
consumers are likely to call.
    Finally, the rules as adopted in July of 2003 contain a minor error 
in wording which is being corrected by this Order. In Sec.  
64.1200(d)(6), the word ``caller's'' should be replaced with the word 
``consumer's.'' We correct the sentence to read: ``A person or entity 
making calls for telemarketing purposes must maintain a record of a 
consumer's request not to receive further telemarketing calls.''

Established Business Relationship Exemption

    The TCPA expressly exempts calls to persons with whom the caller 
has an ``established business relationship'' (EBR) from the 
restrictions on telephone solicitations. Congress determined that such 
an exemption was necessary to allow companies to communicate by 
telephone with their existing customers. Consistent with the FTC, we 
modified the definition of established business relationship so that 
the relationship, once begun, exists for 18 months in the case of 
purchases or transactions and three months in the case of inquiries or 
applications, unless the consumer ``terminates'' it by, for example, 
making a company-specific do-not-call request. ACLI asks the Commission 
to clarify that an ``established business relationship'' exists: (1) 
Between a person and his or her insurer as long as there is an 
insurance policy or annuity in force between the company and the 
person; and (2) between the person and his or her insurance agent, as 
long as there is an insurance policy or annuity in force that was 
placed by that insurance agent. ACLI indicates that the definition of 
``established business relationship'' is vague as applied to the life 
insurance industry and does not take into account the unique aspects of 
the relationship between policyholders, insurers, their agents and 
licensed insurance professionals. ACLI maintains that insurance 
policies and annuities purchased by consumers represent long-term 
obligations of the companies that provide those policies. ACLI 
indicates that an insurance policy or annuity remains in force between 
the parties beyond the initial policy placement or renewal. Thus, ACLI 
contends that an EBR exists during the life of the policy even without 
an additional purchase, transaction or inquiry by the policyholder.
    Petitioner Dowler similarly requests that the Commission clarify 
that an EBR exists between a mortgage broker and a consumer throughout 
the term of any loan that originates with the broker. Without 
clarification from the Commission, Dowler contends that the mortgage 
broker's EBR with the consumer would end 18 months after the original 
transaction with the broker, even though the broker established the 
initial relationship with the consumer. Dowler recommends that the 
Commission expand the rules so that an EBR exists between the broker 
and borrower during the length of the originating loan transaction and 
extends 18 months beyond the conclusion of the loan contract.
    Although petitions from ACLI and Dowler were filed late, we take 
this opportunity to clarify application of the EBR time limitations. We 
agree with petitioners that a unique relationship exists between 
consumers and entities that enter into financial contracts or 
agreements. Financial ``contracts'' often remain in force even if the 
consumer is not required to make regular payments or transactions. In 
passing the recent Fair and Accurate Credit Transactions Act of 2003 
(FACT Act), Congress provided that a ``pre-existing business 
relationship'' includes a ``financial contract between a person and a 
consumer which is in force'' or a ``financial transaction (including 
holding an active account or a policy in force or having another 
continuing relationship).'' We similarly clarify that the existence of 
financial agreements, including bank accounts, credit cards, loans, 
insurance policies and mortgages, constitute ongoing relationships that 
should permit a company to contact the consumer to, for example, notify 
them of changes in terms of a contract or offer new products and 
services that may benefit them. Consumers should not be surprised to 
receive a call from a bank at which they have an account, even if they 
have not transacted any business on that account for over 18 months. 
They also are likely to expect to receive calls from insurance 
companies with whom they hold an insurance policy or from lenders with 
whom they secured a mortgage. Similarly, a publication that a consumer 
agrees to subscribe to for a specified period of time, has an EBR with 
the consumer for the duration of the subscription. Thus, during the 
time a financial contract remains in force between a company and a 
consumer, there exists an established business relationship, which will 
permit that company to call the consumer during the period of the 
``contract.'' Once any account is closed or any ``contract'' has 
terminated, the bank, lender, or other entity will have an additional 
18 months from the last transaction to contact the consumer before the 
EBR is terminated for purposes of telemarketing calls. However, we 
emphasize that a consumer may terminate the EBR for purposes of 
telemarketing calls at any time by making a do-not-call request. Once 
the consumer makes a company-specific do-not-call request, the company 
may not call the consumer again to make a telephone solicitation 
regardless of whether the consumer continues to do business with the 
company.
    In addition, we clarify that intermediaries, such as insurance 
agents and mortgage brokers, may call those consumers with whom they 
have arranged an insurance policy or mortgage for a period of 18 months 
from the time the transaction is completed, i.e., the broker/agent 
arranged the mortgage or insurance deal. We agree that brokers and 
agents often play an important role in these types of financial 
transactions and that, in many circumstances, the consumer would expect 
to receive a call from them within a reasonable period of time of the 
transaction. However, we believe that to allow a broker to make a 
telephone solicitation to a consumer for the duration of the loan or 
term of the policy would conflict with the do-not-call rules' purpose 
in protecting consumer privacy rights. In addition, a broker or agent 
may obtain the consumer's express written permission to call beyond the 
18-month period at the time of the transaction.

Tax-Exempt Nonprofit Organization Exemption

    The term ``telephone solicitation,'' as defined in the TCPA, does 
not include a call or message ``by a tax-exempt nonprofit 
organization.'' The Commission concluded, as part of its 1995 TCPA 
Reconsideration Order, published at 60 FR 42068, August 15, 1995, that 
calls placed by an agent of the telemarketer are treated as if the 
telemarketer itself placed the call. In the 2003 TCPA Order, the 
Commission reaffirmed this conclusion, finding that charitable and 
other nonprofit entities with limited expertise, resources and 
infrastructure, might find it advantageous to contract out its 
fundraising efforts. We determined that a tax-exempt nonprofit 
organization that conducts its own fundraising campaign or hires a 
professional fundraiser to do it, will not be subject to the 
restrictions on telephone solicitations. We also determined, however, 
that when a for-profit organization is delivering its own commercial 
message as part of a telemarketing campaign, even if

[[Page 19334]]

accompanied by a donation to a charitable organization or referral to a 
tax-exempt nonprofit organization, that call is not by or on behalf of 
a tax-exempt nonprofit organization and is therefore subject to the 
``telephone solicitation'' rules.
    Several petitioners ask the Commission to reconsider the rules 
regarding calls by and on behalf of tax-exempt nonprofit organizations. 
DialAmerica requests that we clarify that its ``Sponsor Program'' is 
exempt from the national do-not-call registry because the calls it 
makes are on behalf of a tax-exempt nonprofit entity, and not on behalf 
of a for-profit seller. Petitioner Biggerstaff, on the other hand, asks 
us to reconsider our determination regarding calls made by or on behalf 
of tax-exempt nonprofit organizations, arguing that exempting calls 
from the definition of ``telephone solicitation,'' when they are made 
by a for-profit telemarketer on behalf of the nonprofit, violates 
Congressional intent and the plain language of the statute. We now 
reaffirm our determination regarding for-profit companies that call to 
encourage the purchase of goods or services, yet donate some of the 
proceeds to a nonprofit organization. In circumstances where telephone 
calls are initiated by a for-profit entity to offer its own, or another 
for-profit entity's products for sale--even if a tax-exempt nonprofit 
will receive a portion of the sale's proceeds--such calls are telephone 
solicitations as defined by the TCPA. We distinguish these types of 
calls from those initiated, directed and controlled by a tax-exempt 
nonprofit for its own fundraising purposes. We believe that to exempt 
for-profit organizations merely because a tax-exempt nonprofit 
organization is involved in the telemarketing program would undermine 
the purpose of the do-not-call registry. Thus, we decline to exempt 
DialAmerica's Sponsor Program from the national do-not-call registry.
    We emphasize that a tax-exempt nonprofit organization that simply 
contracts out its fundraising efforts will not be subject to the 
restrictions on telephone solicitations. Although Petitioner 
Biggerstaff describes certain entities that purport to be calling on 
behalf of tax-exempt nonprofits to evade the rules, the record does not 
warrant reversing this determination. Instead, we will address such 
potential violations on a case-by-case basis through the Commission's 
enforcement process.

Predictive Dialers and Abandoned Calls

    Under the Commission's rules, telemarketers must ensure that any 
technology used to dial telephone numbers abandons no more than three 
percent of calls answered by a person, measured over a 30-day period. A 
call will be considered abandoned if it is not transferred to a live 
sales agent within two seconds of the recipient's completed greeting. 
When a call is abandoned within the three percent maximum allowed, a 
telemarketer must deliver a prerecorded identification message 
containing only the telemarketer's name, telephone number, and 
notification that the call is for ``telemarketing purposes.'' Several 
petitioners and commenters raise issues related to the use of 
predictive dialers and the Commission's call abandonment rules. 
InfoCision requests that the Commission reconsider the call abandonment 
rate of three percent and instead adopt a five percent abandonment 
rate. Petitioner Brown asks us to revise the rules to prohibit the 
abandonment of any call which is answered by a person. Beautyrock urges 
the Commission to act to ensure that the FTC's rules on abandoned calls 
are consistent with the FCC's.
    We conclude that petitioners raise no new facts suggesting the call 
abandonment rules should be amended or that the identification message 
requirement should be eliminated. We therefore dismiss such petitions 
to the extent they seek such action. In addition, while we do not have 
the authority to change the FTC's rules, we have forwarded a report to 
Congress which outlines the inconsistencies between the agencies' sets 
of rules.
    The record before us revealed that consumers often face ``dead 
air'' calls and repeated hang-ups resulting from the use of predictive 
dialers. In addition to requiring that telemarketers limit the number 
of such abandoned calls to three percent of calls answered by a person, 
the Commission required that telemarketers deliver a prerecorded 
message when abandoning a call so that consumers will know who is 
calling them. We emphasized that the message must be limited to name 
and telephone number, along with a notice that the call is for 
``telemarketing purposes.'' We cautioned that the message may not be 
used to deliver an unsolicited advertisement, and that additional 
information in the prerecorded message constituting an unsolicited 
advertisement would be a violation of our rules. We agree with the DMA 
that words other than ``telemarketing purposes'' may convey the purpose 
of the call. However, we disagree that language such as ``Hi, this is 
Company A, calling today to sell you our services'' does not constitute 
an unsolicited advertisement and conclude that such statement would run 
afoul of the rules. Therefore, we strongly encourage telemarketers to 
use the words ``telemarketing purposes'' when delivering a prerecorded 
identification message for an abandoned call in order to avoid 
delivering an unsolicited advertisement in the message.

Artificial or Prerecorded Voice Messages

    The TCPA prohibits telephone calls to residences using an 
artificial or prerecorded voice to deliver a message without the prior 
express consent of the called party, unless the call is for emergency 
purposes or is specifically exempted under Commission rules. The TCPA 
permits the Commission to exempt calls that are non-commercial and 
commercial calls which do not adversely affect the privacy rights of 
the called party and which do not transmit an unsolicited 
advertisement. Since 1992, the Commission's rules have exempted from 
the prohibition ``a call or message * * * that is made for a commercial 
purpose but does not include the transmission of any unsolicited 
advertisement.'' The Commission made clear in the 2003 TCPA Order that 
offers for free goods or services that are part of an overall marketing 
campaign to sell property, goods, or services are subject to the 
restrictions on unsolicited advertisements. We also determined that if 
the call is intended to offer property, goods, or services for sale 
either during the call, or in the future (such as in response to a 
message that provides a toll-free number), that call is an 
advertisement.

Debt Collection Calls

    The Commission's rules require that all prerecorded messages 
identify the name of the business, individual or other entity that is 
responsible for initiating the call, along with the telephone number of 
such business, other entity, or individual. The prerecorded message 
must contain, at a minimum, the legal name under which the business, 
individual or entity calling is registered to operate. The rule also 
requires that the telephone number stated in the message be one that a 
consumer can use during normal business hours to ask not to be called 
again. ACA International (ACA) requests clarification that the amended 
identification requirements for prerecorded messages do not apply to 
calls made for debt collection purposes. ACA states that the 
Commission's identification requirement as applied to debt collection 
calls directly conflicts

[[Page 19335]]

with section 805(b) of the Fair Debt Collection Practices Act (FDCPA), 
which prohibits the disclosure of the existence of a debt to persons 
other than the debtor. ACA maintains that the FDCPA expressly prohibits 
debt collectors from communicating any information to third parties, 
even inadvertently, with respect to the existence of a debt. ACA states 
that the requirement that a debt collector transmit its registered name 
at the beginning of the prerecorded message potentially would trigger 
liability under the third party disclosure prohibition of the FDCPA. In 
the alternative, ACA requests that the Commission clarify that debt 
collectors are not required to identify their state-registered name in 
prerecorded messages if such identification conflicts with Federal or 
State laws.
    In the 1995 TCPA Reconsideration Order, the Commission concluded 
that the rules did not require that debt collection employees give the 
names of their employers in a prerecorded message, which disclosure 
might otherwise reveal the purpose of the call to persons other than 
the debtor. Although we believe that it is generally in the best 
interest of residential subscribers that full identification of the 
caller be provided during any prerecorded message call, the FDCPA 
clearly prohibits the disclosure by debt collectors of any information 
regarding the existence of a debt. It requires a collector initiating a 
call answered by a third party to identify himself by name but not to 
disclose the name of his employer unless asked. We therefore clarify 
that as long as the call is made for the purpose of debt collection and 
is not ``for the purpose of encouraging the purchase or rental of, or 
investment in, property, goods or services * * *,'' the debt collector 
is not required to identify its state-registered name in prerecorded 
messages if such identification conflicts with Federal or State laws. 
In such circumstances where a conflict would exist, we find that the 
caller may instead identify himself by individual name. We continue to 
require any debt collector to 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.

``Information-Only'' Calls

    The American Resort Development Association (ARDA) asks the 
Commission to permit entities to make prerecorded, ``information-only'' 
calls to numbers that are not on the national do-not-call list or a 
company-specific do-not-call list. ARDA explains that timeshare 
providers use such messages to describe promotional opportunities, but 
that consumers are not encouraged to purchase anything on the phone. If 
the consumer returns the call to learn more, the operator informs the 
consumer about promotional activities at a nearby resort. ARDA contends 
that prohibiting such prerecorded message calls is not necessary to 
safeguard consumers' privacy or prevent unscrupulous conduct. ARDA 
further argues that the Commission's determination regarding such 
messages violates the First Amendment rights of consumers who wish to 
receive such calls. Shields opposes ARDA's petition, maintaining that a 
prerecorded call, the ultimate purpose of which is to further a 
commercial enterprise, is a telemarketing call.
    We decline to grant ARDA's petition to exempt prerecorded messages 
regarding timeshare opportunities. The messages ARDA describes that 
purport to deliver ``information only'' are clearly part of a marketing 
campaign to encourage consumers to invest in a commercial product. As 
we stated in the 2003 TCPA Order, the fact that a sale is not completed 
during the call or message does not mean the message does not 
constitute a telephone solicitation or unsolicited advertisement. 
Messages that describe a new product, a vacation destination, or a 
company that will be in ``your area'' to perform home repairs 
nevertheless are part of an effort to sell goods and services, even if 
a sale is not made during the call. In addition, as discussed above, 
messages that promote goods or services at no cost are nevertheless 
unsolicited advertisements because they describe the ``quality of any 
property, goods or services.'' ARDA points out that consumers who 
receive prerecorded messages must return the calls if they wish to 
learn more, to complete the sale, or simply to ask to be placed on a 
do-not-call list. As noted in the 2003 TCPA Order, such messages were 
determined by Congress to be more intrusive to consumer privacy than 
live solicitation calls. The record before us shows that consumers are, 
in fact, often more frustrated by prerecorded messages. The DMA 
indicates that they should be used only in limited circumstances, as 
consumers are often offended by such messages. Thus, we reiterate that 
prerecorded messages that contain either a telephone solicitation or 
introduce an unsolicited advertisement are prohibited without the prior 
express consent of the called party.
    We disagree with Petitioner Strang that entities sending lawful 
prerecorded messages must obtain the ``prior express consent'' of the 
called party in writing. Unlike the national do-not-call registry, 
through which consumers have indicated that they do not wish to receive 
telemarketing calls (by registering on the list), we find no evidence 
in the record suggesting that consent should be in writing when sending 
prerecorded messages to consumers not registered on the national do-
not-call list. In the case of the national do-not-call registry, we 
concluded that sellers may contact those consumers on the list if they 
have obtained the prior express permission of the consumers. Such 
express permission must be evidenced only by a signed, written 
agreement between the consumer and the seller. Absent a consumer's 
listing on the do-not-call registry, such prior express consent to 
deliver a lawful prerecorded message may be obtained orally. As with 
the sending of unsolicited facsimile advertisements, telemarketers 
delivering prerecorded messages must be prepared to provide clear and 
convincing evidence that they received prior express consent from the 
called party.
    We also decline to reconsider the requirement for businesses to use 
their legal name to identify themselves when they use prerecorded 
messages. We believe that the use of ``d/b/a'' (``doing business as'') 
alone in many instances may make it difficult to identify the company 
calling. However, as we stated in the 2003 TCPA Order, the rule does 
not prohibit the use of ``d/b/a'' information, provided that the legal 
name of the business is also provided.

Radio Station and Television Broadcaster Messages

    In the 2003 TCPA Order, we addressed prerecorded messages sent by 
radio stations or television broadcasters that encourage telephone 
subscribers to tune in at a particular time for a chance to win a prize 
or similar opportunity. We concluded that if the purpose of the message 
is merely to invite a consumer to listen to or view a broadcast, such 
message is permitted under the rules as a commercial call that ``does 
not include or introduce an unsolicited advertisement or constitute a 
telephone solicitation.'' We also noted, however, that if the message 
encourages consumers to listen to or watch programming that is 
retransmitted broadcast programming for which consumers must pay (e.g., 
cable, digital satellite, etc.), such messages would be considered 
``unsolicited advertisements'' for purposes of our rules. Such messages 
would be part of an overall marketing campaign to encourage the 
purchase of goods or

[[Page 19336]]

services or that describe the commercial availability or quality of any 
goods or services and would be considered ``unsolicited 
advertisements'' as defined by the TCPA.
    Petitioner Biggerstaff requests that the Commission reconsider its 
determination that certain radio and television broadcast messages are 
not considered ``unsolicited advertisements'' under the restrictions on 
prerecorded messages. Biggerstaff contends specifically that radio and 
television broadcasts are entertainment and news ``services,'' as well 
as ``advertisement delivery services.'' Biggerstaff further maintains 
that there is no basis for treating such broadcasters differently from 
others providing similar services, such as cable networks, Web sites, 
newspapers or publishers.
    We decline to reverse our conclusion regarding radio station and 
television broadcaster messages. As explained in the 2003 TCPA Order, 
if the purpose of the message is merely to invite a consumer to listen 
to or view a broadcast, such message is permitted under the current 
rules as ``a commercial call that does not include or introduce an 
unsolicited advertisement or constitute a telephone solicitation.''

Wireless Telephone Numbers

    In the 2003 TCPA Order, we affirmed that it is unlawful to make any 
call using an automatic telephone dialing system or an artificial or 
prerecorded message to any wireless telephone number. We stated that 
both the statute and our rules prohibit these calls, with limited 
exceptions, ``to any telephone number assigned to a paging service, 
cellular telephone service, specialized mobile radio service, or other 
common carrier service, or any service for which the called party is 
charged.'' In addition, we determined not to prohibit all live 
solicitations to wireless numbers, but noted that the TCPA already 
prohibits such calls to wireless numbers using an autodialer.
    As noted above, section 227(b)(1)(A)(iii) of the TCPA refers to 
calls made to any telephone number ``assigned to'' cellular telephone 
service or any service for which the called party is charged for the 
call. Verizon Wireless explains that according to numbering guidelines 
and the Commission's rules, numbers ported to another carrier are 
treated as ``assigned numbers'' that are then reported to the 
Commission for utilization purposes by the donating carrier, not by the 
receiving carrier. According to Verizon Wireless, a number that is 
ported to another carrier is still assigned to the original carrier for 
purposes of numbering and local number portability. Verizon Wireless 
asks us to clarify that, under the TCPA, the number is ``assigned to'' 
a wireless service based on the identity of a customer's new service, 
rather than the identity of the original carrier.
    We agree with those petitioners who point out that permitting 
autodialed and prerecorded voice messages to wireless telephone numbers 
that have been ported from wireline carriers would defeat the 
underlying purpose of the prohibition--to protect wireless subscribers 
from the cost and interference associated with such calls. To apply the 
Commission's definition of ``assigned numbers'' for number utilization 
purposes to the TCPA's rules on calls to wireless numbers would lead to 
an unintended result. Telemarketers would be prohibited from placing 
autodialed and prerecorded message calls to wireless numbers generally, 
but permitted to place such calls to certain subscribers simply because 
they have ported their numbers from wireline service to wireless 
service. In addition, we believe we made clear in the 2003 TCPA Order 
that, even with the advent of local number portability, we expect 
telemarketers to make use of the tools available in the marketplace to 
avoid making autodialed and prerecorded message calls to wireless 
numbers. Thus, we affirm that a telephone number is assigned to a 
cellular telephone service, for purposes of the TCPA, if the number is 
currently being used in connection with that service.
    We also agree with the DMA that a call placed to a wireline number 
that is then forwarded, at the subscriber's sole discretion and 
request, to a wireless number or service, does not violate the ban on 
autodialed and prerecorded message calls to wireless numbers. Action on 
the part of any residential subscriber to forward certain calls from 
their wireline device to their wireless telephones does not subject 
telemarketers to liability under the TCPA.

Caller Identification Rules

    The DMA asks the Commission to further examine and perhaps revise 
our caller identification (caller ID) requirements, indicating that it 
is not clear that Automatic Number Identification (ANI) will pass to 
ordinary residential subscriber lines. Brown petitions the Commission 
to require telemarketers, when transmitting caller ID, to provide a 
telephone number, which the consumer may call at no toll charge.
    We decline to reconsider the caller ID requirements and dismiss 
both the DMA's and Brown's petitions. We continue to believe that the 
caller ID rules allow consumers to screen out unwanted calls and to 
identify companies that they wish to ask not to call again. In 
addition, as discussed in the 2003 TCPA Order, we believe that 
telemarketers can comply with the requirements. Under the rules, 
telemarketers are required to transmit caller ID information, which 
must include either ANI or Calling Party Number (CPN). We explained 
that CPN can include any number associated with the telemarketer or 
party on whose behalf the call is made, that allows the consumer to 
identify the caller. This includes a number assigned to the 
telemarketer by its carrier, the specific number from which a sales 
representative placed a call, the number for the party on whose behalf 
the telemarketer is making the call, or the seller's customer service 
number. Any number supplied must permit an individual to make a do-not-
call request during regular business hours for the duration of the 
telemarketing campaign.

Private Right of Action

    The TCPA provides consumers with a private right of action in State 
court for any violation of the TCPA's prohibitions on the use of 
automatic dialing systems, artificial or prerecorded voice messages, 
and unsolicited facsimile advertisements. Several petitioners request 
that the Commission clarify the parameters of the private right of 
action.
    The Commission declines to make any determination about the 
specific contours of the TCPA's private right of action. Congress 
provided consumers with a private right of action, ``if otherwise 
permitted by the laws or rules of court of a State.'' As we stated in 
the 2003 TCPA Order, this language suggests that Congress contemplated 
that such legal action was a matter for consumers to pursue in 
appropriate State courts, subject to those State courts' rules. We 
continue to believe that it is for Congress, not the Commission, either 
to clarify or limit this right of action.

Regulatory Flexibility Act Analysis

    We note that no FRFA is necessary for the Second Order on 
Reconsideration. In this Order, we are not making any changes to the 
Commission's rules; rather, we are clarifying the existing rules. In 
addition, there were no objections to the FRFA regarding the 
Commission's telemarketing rules.

Congressional Review Act

    The Commission will send a copy of this Second Order on 
Reconsideration in a report to be sent to Congress and

[[Page 19337]]

the General Accounting Office pursuant to the Congressional Review Act, 
see 5 U.S.C. 801(a)(1)(A).

Ordering Clauses

    Pursuant to sections 1-4, 227, and 303(r) of the Communications Act 
of 1934, as amended, 47 U.S.C. 151-154, 227, and 303(r); and Sec.  
1.429 of the Commission's Rules, 47 CFR 1.429, this Second Order on 
Reconsideration in CG Docket No. 02-278 is adopted as set forth herein, 
and part 64 of the Commission's rules, 47 CFR 64.1200 is amended as set 
forth in the Rule Changes.
    This Second Order on Reconsideration shall become effective May 13, 
2005.
    The petitions for reconsideration and/or clarification of the 
telemarketing rules in CG Docket No. 02-278 are denied in part and 
granted in part, as set forth herein. As noted above, the Commission 
intends to address the issue of preemption separately in the future. 
MedStaffing Inc.'s Petition for Declaratory Ruling is granted to the 
extent stated herein. Petitions not filed within 30 days of the Report 
and Order's publication by American Council of Life Insurers, Consumer 
Bankers Association, Clifford Dowler, and RDI Marketing are dismissed.

List of Subjects in 47 CFR Part 64

    Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

0
For reasons discussed in the preamble, the Commission amends part 64 of 
the Code of Federal Regulations as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. The authority citation for part 64 continues to read as follows:

    Authority: 47 U.S.C. 154, 254(k); secs. 403 (b)(2)(B), (C), 
Public Law 104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 
218, 225, 226, 228, and 254(k) unless otherwise noted.

0
2. Section 64.1200 is amended by revising paragraph (d)(6) to read as 
follows:


Sec.  64.1200  Delivery restrictions.

* * * * *
    (d) * * *
    (6) Maintenance of do-not-call lists. A person or entity making 
calls for telemarketing purposes must maintain a record of a consumer's 
request not to receive further telemarketing calls. A do-not-call 
request must be honored for 5 years from the time the request is made.
* * * * *
[FR Doc. 05-7346 Filed 4-12-05; 8:45 am]
BILLING CODE 6712-01-P