Federal Communications Commission
Revisions to Telephone Consumer Protection Act Rules
On July 3, 2003, the Federal Communications Commission released its Report and Order
revising its Telephone Consumer Protection Act (TCPA) rules to provide consumers with several
options for avoiding unwanted telephone solicitations. The FCC’s jurisdiction over
telemarketing practices is significantly broader than the FTC’s. Unlike the FTC Telemarketing
Sales Rule, the FCC’s telemarketing rules apply to any entity engaged in telemarketing activities
targeted by the TCPA. The FCC plans to enforce activities and entities that fall outside the
FTC’s reach, including airlines, financial institutions, insurance companies, and common
carriers.1 In addition, the FCC has authority over purely intrastate, as well as interstate activities.
The FCC rules constitute a floor, and thus would supersede all less restrictive state do-not-call
rules. This means that the laws of those states containing newspaper exemptions to the DNC
requirement are now preempted. However, more restrictive state laws may or may not be
preempted, depending upon whether the state laws are inconsistent with the FCC’s rules. The
FCC will consider any alleged conflicts between state and federal requirements and the need for
preemption on a case-by-case basis.
The FCC staff plans to work closely with the FTC to avoid duplicative enforcement actions and
will negotiate a Memorandum of Understanding between the two agencies. The recently enacted
Do-Not-Call Act requires the Commission to transmit reports to Congress within 45 days after
the final rules are published in the Federal Register, and annually thereafter. The report will
note, among other things, any remaining inconsistencies between the FCC and FTC rules.
With the exception of the DNC, call abandonment, and caller ID requirements, the FCC rules
will become effective 30 days after they are published in the Federal Register.
Summary of FCC Rule Changes
The FCC’s national registry will be maintained by the FTC and will become effective on
October 1, 2003. Unless a newspaper has an established business relationship with, express
written permission from, or a personal relationship with the consumer (e.g., the caller is a family
member, friend or acquaintance of the called party), the newspaper or its telemarketing vendor is
prohibited from calling consumers that register their telephone numbers—both residential and
wireless—on the national list. The prohibition does not apply to business-to-business calls nor
does the prohibition apply to calls for the purpose of conducting surveys, market research, since
such calls do not fall within the definition of “telephone solicitation”. However, calls to
Congress has excluded tax-exempt non-profit organizations from the definition of telemarketing in the
Telephone Consumer Protection Act. Thus, calls made by or on behalf of charitable or other non-profit entities are
exempt from the national do-not-call and company-specific do-not-call rules.
encourage consumers to subscribe to the newspaper or place private party advertisements in the
paper would be prohibited.
Newspapers or their telemarketing vendors, who acting in good faith, place prohibited calls may
fall within a safe harbor under which they would not be liable for failure to comply with DNC
requirements, if they: (1) have established and implemented written procedures to comply with
the DNC rules; (2) trained their personnel, and any entity assisting in their compliance, in the
procedures established pursuant to the DNC rules; (3) have maintained and recorded a list of
telephone numbers the newspaper may not contact; (4) have used and documented a process to
prevent telemarketing to any telephone number on any list established pursuant to the DNC
rules, employing a version of the DNC registry obtained from the administrator of the registry no
more than three months before the date the call was made; and (5) made the call in error.
Newspapers and their telemarketers may access up to five area codes in the national DNC list at
no cost. Others will be assessed an annual fee based upon the number of area codes requested.
Although the DNC list will be updated continuously, newspapers and their telemarketers will be
required to update their lists at least quarterly. However, they will have unlimited access to the
DNC list for up to a year, once the annual fee is paid and may download newly added phone
numbers on a constant basis.
ESTABLISHED BUSINESS RELATIONSHIP
An established business relationship is a prior or existing relationship formed by a voluntary
two-way communication between the newspaper and a consumer on the basis of the consumer’s
purchase or transaction with the newspaper within eighteen months immediately preceding the
date of the telephone call or on the basis of the consumer’s inquiry or application regarding
products or services offered by the newspaper within three months immediately preceding the
date of the call. The EBR remains as long as the consumer does not ask to be placed on the
newspaper’s specific DNC list. At that point, the EBR is terminated for purposes of telephone
solicitations, even if the consumer still remains a newspaper subscriber or advertising customer.
The newspaper or its telemarketer must honor a company-specific DNC request within a
reasonable time of the request, not to exceed 30 days. In addition, the DNC must be honored for
five years from the time the request is made.
The EBR is not limited by product or service. Thus, a newspaper’s circulation department may
rely upon the EBR exception to call a consumer who has placed classified ad in the newspaper,
but is not a current subscriber. The FCC recognizes that many companies offer a wide variety of
services and products and that a consumer should not be surprised to receive a telemarketing call
from that company, regardless of the product being offered. A newspaper’s telemarketing
vendor may rely on the newspaper’s EBR to call an individual consumer to market the
newspaper’s services and products. However, the newspaper may not rely upon a consumer’s
EBR with the third party telemarketer, merely because the newspaper has a contractual
relationship with that telemarketer.
AUTOMATED TELEPHONE DIALING EQUIPMENT
Predictive dialers fall within the statutory definition of “automated telephone dialing equipment”,
since they have the capacity to store or produce numbers and dial those numbers at random. In
addition to the statutory prohibition on using autodialers to dial emergency numbers, health care
facilities, telephone numbers assigned to wireless services and any other numbers for which the
consumer is charged for the call, the FCC’s amended rules prohibit so-called “war dialing” (i.e.,
ringing a telephone for the purpose of determining whether the number is associated with a fax
or voice line).
ARTIFICIAL OR PRERECORDED VOICE MESSAGES
The amended rule prohibits telephone calls to residences using artificial or prerecorded voice
messages that include or introduce an “unsolicited advertisement”, unless the recipient has given
prior express consent or has an EBR with the seller or telemarketer. Examples of messages that
include or introduce an unsolicited advertisement would be dual purpose calls, such as those to
inquire about a customer’s satisfaction with an already purchased subscription but motivated in
part by the desire to ultimately sell additional goods or services or prerecorded messages that
contain free offers and information about goods and services that are commercially available to
consumers. Thus, newspapers without an EBR or the prior express consent of the recipient
should not deliver such prerecorded messages. This amended rule differs from the FTC’s
amended rule which prohibits prerecorded messages even to customers having an established
All prerecorded messages, whether delivered by automated dialing equipment or not, must
identify the name of the business or entity that is responsible for initiating the call, along with the
telephone number of the business or entity. The legal name of the business should be given,
even if the newspaper gives its “doing business as” name, and the telephone number stated in the
message should be one that a consumer can use during normal business hours to ask not to be
Newspapers and their telemarketers must ensure that any technology used to dial telephone
numbers, whether or not predictive dialers, 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.
Newspapers or telemarketers must allow the phone to ring for fifteen seconds (four rings) before
disconnecting an unanswered call. Newspapers or their telemarketers using predictive dialers
must maintain records that provide clear and convincing evidence that the dialers used comply
with the three percent call abandonment rate, “ring time” and two-second transfer rule. Calls
disconnected because they were never answered (within the required 15 seconds or four rings) or
because they received busy signals will not be considered abandoned.
When a telemarketer abandons a call under the three percent rate allowed, the telemarketer must
deliver a prerecorded message containing the legal name of the business or entity initiating the
call, as well as the telephone number of the business or entity and must state that the call is for
“telemarketing purposes.” The call abandonment rules will become effective on October 1,
The FCC, like the FTC, requires all sellers and telemarketers to transmit caller ID information,
regardless of their calling systems. Entities engaged in telemarketing are prohibited from
blocking the transmission of caller ID information. Caller ID information must include the
telephone number, and when available by the telemarketer’s carrier, the name of the
telemarketer. This provision goes into effect on January 29, 2004.
UNSOLICITED FACSIMILE ADVERTISEMENTS
The amended rule will require any entity transmitting an unsolicited fax advertisement to obtain
the prior express invitation or permission of the recipient in writing and with the recipient’s
signature. The recipient must clearly state that he or she consents to receiving the faxed
advertisements from the company to which permission is given, and provide the individual or
business’s fax number to which faxes may be sent. The existence of a prior business relationship
will no longer be sufficient to show that an individual or business has given their express
permission to receive unsolicited facsimile advertisements. One way to obtain the requisite
permission would be to request a fax number on a non-promotional facsimile, for example an
application form or a proof of an order, and include a statement indicating that, by providing the
fax number, the individual or business agrees to receive facsimile advertisements from that
company. If the recipient returned the form with a signature, that statement would constitute the
necessary prior express permission to send facsimile advertisements to that individual or
Permission cannot be in the form of a “negative option”. For example, a company does not have
the requisite permission if it sends a facsimile advertisement containing a telephone number and
an instruction to call if the recipient no longer wishes to receive such faxes. Similarly, facsimile
requests for permission to transmit faxed ads, including toll-free opt-out numbers would violate
The prohibition applies to faxes sent to personal computers equipped with or attached to
modems, to computerized fax servers, and to telephone facsimile machines. However, the
prohibition does not extend to facsimile messages sent as email over the Internet.
Fax broadcasters, who transmit other entities’ advertisements to a large number of telephone
facsimile machines, will be liable for an unsolicited fax if they are involved to a high degree or
have actual notice of an illegal use of the transmission. For example, fax broadcasters who
create or maintain the lists of facsimile numbers or who review or assess the content of a
facsimile message would be held responsible. Fax broadcasters that demonstrate a high degree
of involvement in the transmission of the facsimile advertisement must be identified in the
header of the facsimile, along with the identification of the sender. Adequate identification in
the header must include the name under which the sender and/or fax broadcaster is officially
registered to conduct business, even though use of a “doing business as” name or other widely
recognized name is permissible.
(NAA is preparing a more comprehensive compliance guide that will cover both the FCC and
FTC amended telemarketing rules. We plan to have the guide available for distribution within
a few weeks.)