FCC: Federal Government and Its Contractors Not Covered by TCPA Restrictions

Despite initiating a rulemaking to implement the narrow federal government debt collection amendment to the TCPA included in the Bipartisan Budget Act of 2015, the FCC resolved three pending petitions by clarifying “that the TCPA does not apply to calls made by or on behalf of the federal government in the conduct of official government business, except when a call made by a contractor does not comply with the government’s instructions.”

The Federal Communications Commission recently issued a Declaratory Ruling that clarifies how the Telephone Consumer Protection Act applies to automated or prerecorded calls, including text messages, made by the federal government and its contractors. According to the FCC’s ruling, the term “person” as used in section 227(b)(1), the provision which lays out the TCPA’s restrictions on the use of automated telephone equipment and its related rules, does not include the federal government or agents acting within the scope of their agency under common-law principles of agency. The FCC declined to address calls made by or on behalf state and local governments in the ruling, noting that the issue remains pending.

Quoting the U.S. Supreme Court’s Campbell-Ewald Co. v. Gomez decision, which was issued earlier this year, the FCC stated that there is a “longstanding interpretive presumption” that “the word ’person’ does not include the sovereign . . . [except] upon some affirmative showing of statutory intent to the contrary.”  Because the FCC found that Congress provided no such intent to include the federal government under the TCPA, neither in the statutory language nor the legislative history, it clarified that the federal government is not included as a “person” under section 227(b)(1) of the TCPA.

The FCC also clarified that based on the federal common law of agency, federal government contractors will be able to invoke the federal government’s exception from the TCPA when they have valid authorization to act as the government’s agent, act within the scope of their contractual relationship with the government, and the government delegates the prerogative to make autodialed or prerecorded- or artificial-voice calls. Relying again on Campbell-Ewald, the FCC stated that “While the Court indicated that a government contractor may be eligible for ’derivative immunity’ when it acts under authority validly conferred on it by the federal government, the Court emphasized that derivative immunity cannot shield a contractor when it ’violates both federal law and the Government’s explicit instructions.’”

From a policy standpoint, the FCC stated that subjecting the federal government to the TCPA’s prohibitions would limit its ability to communicate with citizens. “If the federal government were prohibited from making autodialed or prerecorded- or artificial- voice calls to communicate with its citizens, it would impair – in some cases severely – the government’s ability to communicate with the public and to collect data necessary to make informed public policy decisions.”

The ruling also clarified that the goal of the FCC’s 2015 Declaratory Ruling and Order was “intended to apply only to calls that are covered by the TCPA and not to exempt calls, such as emergency calls or calls made by the federal government or its agents.” Although acknowledging that the ruling may result in consumers receiving more unwanted calls, the FCC noted that it believes its clarifications align with congressional intent and will not lead to “extreme results.”

The ruling is in response to the three separate, but related petitions that requested the FCC to clarify how the TCPA applies to autodialed or prerecorded calls made by the government and government contractors. The underlying petitions were filed by Broadnet Teleservices LLC (the provider of TeleForum, a technology platform that enables members of government to communicate with citizens, including through tele-townhalls), the National Employment Network Association (who represents individual providers of employment services to beneficiaries receiving Social Security Disability Insurance and Supplemental Security Income payments due to a qualifying disability), and RTI International (a nonprofit organization that conducts research and whose largest client is the federal government).

FCC Commissioner Jessica Rosenworcel concurred with the ruling and issued a statement; Commissioner Ajit Pai approved in part and dissented in part, and issued a statement; and Commissioner Michael O’Rielly issued a statement.

Impact of the Broadnet Declaratory Ruling on the Federal Government Debt Collection Rulemaking

As Commissioner Rosenworcel noted in her statement, the Declaratory Ruling produces an “odd result” given the FCC’s ongoing rulemaking to implement the federal government debt collection amendment included in the Bipartisan Budget Act of 2015. According to Rosenworcel, “In effect, we prejudge the outcome of our narrower proceeding under the Bipartisan Budget Act by here providing a blanket exemption from the Telephone Consumer Protection Act to the federal government and its agents.”

In addition, Commissioner Rosenworcel expressed concern that the FCC’s ruling is inconsistent with congressional intent given its decision to amend the TCPA in the Bipartisan Budget Act to exempt calls made by or on behalf of the federal government from the TCPA’s prior express consent requirements. “I am concerned that our decision risks trampling on the will of Congress. After all, if the federal government is truly outside the scope of the Telephone Consumer Protection Act, it is unclear why Congress would need to have specifically provided a debt-related exception to the law in the first place,” said Rosenworcel.

Commissioner Pai, who disagreed with the majority that federal contractors are not persons under the TCPA, echoed Commissioner Rosenworcel’s concern about congressional intent not supporting the FCC’s clarification related to federal contractors. According to Pai, “the express language of the TCPA confirms that Congress intended federal contractors to be persons under the law … if federal contractors were not persons under the law, this exemption [for federal debt collectors under the Bipartisan Budget Act] would be pointless (and the statutory language mere surplusage).”

Despite these concerns and the clear overlap between the Declaratory Ruling and the ongoing federal government debt collection rulemaking, the FCC only superficially addressed this issue in a footnote in the Broadnet ruling. In footnote 96, the FCC claims that the clarifications in the ruling do not mean that Congress’s recent Bipartisan Budget Act amendment was unnecessary because “at the time Congress enacted that amendment the Commission had not yet determined whether federal government contractors are subject to the TCPA, so the amendment was not redundant or pointless, but instead served to guarantee that callers covered by the amendment would be excepted from the consent requirement no matter how the Commission eventually resolved the question in this proceeding.” 

As for the impact of the ruling on the rulemaking, in the same footnote, the FCC states only that it “has not yet completed its congressionally mandated rulemaking to determine the scope and contours of the Budget Act amendment” and therefore it “lack[s] a record about the interplay between today’s ruling and the Budget Act amendments until the Budget Act rulemaking proceeding has been completed.”

Based on this footnote in the ruling, the accompanying Commissioner statements, and Chairman Wheeler’s responses to a related question in an FCC oversight hearing earlier this week, it appears that there is no clear answer for how the Broadnet Declaratory Ruling will ultimately impact how the FCC handles the federal government debt collection rulemaking. ACA, who submitted comprehensive comments to the rulemaking, will continue to closely follow this issue.