Facebook Wins Battle of the Canons in Supreme Court Autodialer Case

In a hotly anticipated decision that should have significant impact on litigation under the Telephone Consumer Protection Act of 1991 (TCPA), the Supreme Court held, 9-0, that the TCPA’s definition of an “autodialer” does not include equipment that merely stores telephone numbers to be dialed automatically, unless the equipment does so using a random or sequential number generator.  Facebook, Inc. v. Duguid, No. 19-511 (U.S., April 1, 2021).

Stopping unwanted or harmful telemarketing calls has long been a consumer-protection priority.  Toward that end, the TCPA prohibits certain communications made with an “automatic telephone dialing system,” or “autodialer.”  47 U.S.C. § 227(b)(1).  The TCPA defines “autodialers” as equipment with the capacity “to store and produce telephone numbers to be called, using a random or sequential number generator,” and to dial those numbers.  47 U.S.C. § 227(a)(1).  There was no dispute that the last clause (“using a random or sequential number generator”) qualifies the last verb in the preceding clause (“produce”).  The exam-worthy question before the Court, however, was whether that last clause also qualifies the first verb in the preceding clause, “store.”  Put another way, does the TCPA’s definition of autodialer apply to all equipment that “store[s] … telephone numbers to be called,” even if the equipment does not do so “using a random or sequential number generator?”  (The facts of the case play no real role here, but, for context, Facebook used equipment that stored numbers to be dialed automatically, but did not use a random or sequential number generator, so the question was whether Facebook’s equipment fell with the TCPA definition of autodialer).

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CLECs Challenge FCC’s 2019 Access Stimulation Rules

Briefing is now complete at the D.C. Circuit in the latest appeal involving the FCC’s rules on access stimulation schemes.  Access stimulation (or traffic pumping) refers to a practice in which a local telephone company partners with entities that generate large amounts of terminating long-distance traffic, such as “free” conference calling providers and chat lines.  This allows the local telephone company to generate large revenues from the access charges that long-distance carriers must pay to terminate the calls through the local telephone company.  The revenues are then shared with the conferencing or chat line entities, which allows the services to be “free” to the end users.

In 2011, the FCC declared access stimulation a “wasteful arbitrage scheme” and adopted rules to curb the practice, primarily through requiring companies engaged in traffic pumping to reduce their rates to those of the large, urban carriers.  Connect America Fund, 26 FCC Rcd 17663, ¶¶ 656-201 (2011), aff’d, In re FCC 11-161, 753 F.3d 1015 (10th Cir. 2014).  However, those rules did not reduce the practice as much as hoped.  For instance, some traffic pumpers  adjusted their schemes by including intermediate carriers (tandem and transport providers) in the call flow, which increased the overall charges.

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