Commentary

FCC Tightens Text-Spam Rules

Companies that send text messages to consumers got some bad news today: The Federal Communications Commission voted 3-2 to move forward with a proposal to tighten text-spam rules.

Specifically, the agency issued a set of declaratory rulings implementing the Telephone Consumer Protection Act, which prohibits companies from using automated dialers to send text messages without recipients' consent.

Numerous Web companies -- including Yahoo, Twitter, Facebook, and Lyft -- have been sued for allegedly violating that law. The rulings issued today could make it harder for those companies to defend themselves.

For instance, in one of today's decisions, the FCC said that companies can only send one autodialed text (or make one robocall) to a reassigned number. If companies continue to send SMS messages to reassigned numbers, they could face damages of up to $1,500 per message.

The FCC hasn't yet published the exact wording of that rule, so it's not clear yet how the agency expects companies to know when they've sent a text to a reassigned number. In the past, however, some companies allegedly continued to send SMS messages (or place robocalls) to wrong numbers even after consumers complained. Yahoo, for example, allegedly sent 27,000 unwanted text alerts to Philadelphian Bill Dominguez, who had a reassigned number.

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Dominguez -- who doesn't have a Yahoo email address -- alleged in a federal lawsuit that he asked Yahoo to stop sending him the text messages, but was told by a company supervisor that only the phone's former owner could arrange to stop the texts. Dominguez says he tried to explain to Yahoo that he doesn't know the former owner and has no way to contact him.

He says that at one point he threatened to resort to litigation. The Yahoo supervisor Dominguez was speaking with allegedly replied: “So sue me.”

Yahoo later argued in court papers that Dominguez could have solved the problem by asking his carrier to assign him a new phone number.

A panel of appellate judges who heard arguments in the matter late last year indicated they didn't think that suggestion was satisfactory. “Is that a simple solution?” asked Third Circuit Judge Jane Richards Roth at a hearing in November. “A lot of people have my phone number, and if I ask to have it reassigned, that's a big pain in the neck for me.”

The FCC today also issued a ruling on a key issue in many of the pending cases: the definition of “autodialer.”

Many companies facing litigation for sending unwanted SMS messages have argued that the texts didn't come from an “autodialer” -- which the companies define as equipment that can automatically generate phone numbers (by an algorithm, for instance), as opposed to automatically dialing numbers from a list.

The FCC appeared to reject that position today. The precise language of the ruling isn't yet available, but the FCC said in a statement that it was defining autodialers in a way that ensures “that robocallers cannot skirt consumer consent requirements through changes in calling technology design or by calling from a list of numbers.”

Today's series of rulings drew praise from consumer advocates like Public Knowledge, who said the FCC closed “several loopholes exploited by unscrupulous telemarketers and bill collectors to harass consumers.”

But companies that reach consumers via SMS and robocalls almost certainly aren't happy.

Henry Pietrkowski, a partner at the law firm Reed Smith, tells MediaPost that the rulings are likely to face a court challenge from companies. He adds that the challengers likely will argue that the FCC exceeded its authority with its expansive definition of autodialer.

“This isn't the end of the road on autodialers,” he says.

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