Telecommunications and Marketing

1. Privacy telecommunications issues concern specific communications channels and methods

   1. Telemarketing, texts and electronic mail

   2. U.S. law has specific rules that regulate how organizations can communicate with individuals for direct marketing and related purposes.

   3. Marketing issues concerns the rules that apply to personal information (PI) collected by the companies themselves in the course of providing their services

   4. Statutes that govern the commercial use of that type of telephone, cable and Internet activity

10.1 Regulations Governing Telemarketing

1. Telemarketing Federal and state laws

   1. Place legal limits on the manner in which organizations can call individuals for marketing and fund-raising purposes.
      

   2. Background - Response to complaints by families about

      1. Deceptive marketing practices

      2. Unwanted marketing calls

   3. Intrusions

      1. Telemarketing laws in the United States provide considerable detail about what types of “intrusions” are permitted under federal law.

   4. FTC

      1. Implemented the Telemarketing and Consumer Fraud and Abuse Prevention Act (1995)

      2. Telemarketing Sales Rule (TSR) 1995

         1. TSR defines telemarketing as “a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones

      3. Defines telemarketing as “a plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution, by use of one or more telephones and which involves more than one interstate telephone call.

2. Who Can Be Called: The U.S. National Do Not Call Registry

   1. U.S. residents to register residential and wireless phone numbers that they do not wish to be called for telemarketing purposes

   2. require sellers and telemarketers to access the registry prior to making any phone-based solicitations.

   3. Violations of the TSR

      1. Place any call to a consumer (absent an exception) unless the registry is checked

      2. DNC rules apply to for-profit organizations and cover charitable solicitations placed by for-profit telefunders.

3. Existing Business Relationship Exception

   1. Existing business relationship (EBR),

      1. Sellers (and telemarketers calling on their behalf) may call a consumer with whom a seller has EBR

      2. Restriction The consumer has not asked to be on the seller’s entity-specific DNC list

   2. Exception Based on Consent The TSR allows sellers and telemarketers to call consumers who consent to receive such calls.

4. Exception Based on Consent

5. The Do Not Call Safe Harbor

   1. Sellers and telemarketers can use to reduce the risk of liability

      1. The seller or telemarketer has established and implemented written procedures to honor consumers’ requests that they not be called,

      2. The seller or telemarketer has trained its personnel, and any entity assisting in its compliance, in these procedures

      3. The seller, telemarketer, or someone else acting on behalf of the seller . . . has maintained and recorded an entity-specific Do Not Call list

   2. Violations outside of Safe Harbor $40K per call

6. Rules Governing How Calls Can Be Made Under Telemarketing Laws

   1. TSR provides detailed rules about many aspects of how telemarketing calls can be made.

      1. Call only between 8 a.m. and 9 p.m.

      2. Screen and scrub names against the national DNC list

      3. Display caller ID information Identify themselves and what they are selling

      4. Disclose all material information and terms

7. Required Disclosures

   1. before delivering any sales content, telemarketers disclose:

      1. The identity of the seller

      2. That the purpose of the call is to sell goods or services

      3. The nature of those goods or services

      4. In the case of a prize promotion

         1. That no purchase or payment is necessary to participate or win

         2. That a purchase or payment does not increase the chances of winning

   2. Disclosures must be truthful

8. Misrepresentations and Material Omissions

   1. TSR prohibits misrepresentations during the sales call.

      1. Telemarketers must provide accurate and complete information about the products and services being offered.

      2. They may not omit any material facts about the products or services.

      3. There are ten broad categories of information that must always be disclosed:

         1. Cost and quantity

         2. Material restrictions, limitations, or conditions

         3. Performance, efficacy, or central characteristics

         4. Refund, repurchase or cancellation policies

         5. Material aspects of prize promotions

         6. Material aspect of investment opportunities

         7. Affiliations, endorsements, or sponsorships

         8. Credit card loss protection

         9. Negative option features

         10. Debt relief services

9. Transmission of Caller ID Information

   1. The TSR requires entities that make telemarketing calls to transmit accurate call identification information so that it can be presented to consumers with caller ID services.

10. Prohibition on Call Abandonment

    1. The TSR expressly prohibits telemarketers from abandoning an outbound telephone call with either “hang-ups” or “dead air.”

11. Abandonment Safe Harbor

    1. According to the FTC guidance, the abandoned call Safe Harbor provides that a telemarketer will not face enforcement action for violating the call abandonment prohibition if the telemarketer:

       1. Uses technology that ensures abandonment of no more than three percent of all calls answered by a live person, measured per day per calling campaign

       2. Allows the telephone to ring for 15 seconds or four rings before disconnecting an unanswered call

       3. Plays a recorded message stating the name and telephone number of the seller on whose behalf the call was placed whenever a live sales representative is unavailable within two seconds of a live person answering the call

12. Prohibition on Unauthorized Billing

    1. The detailed rules in the TSR have been amended

    2. the TSR strictly prohibits telemarketers from billing consumers for any goods or services without the consumer’s “express, informed consent.”

13. Updates to the TCPA Rules Concerning Robocalls and Autodialers

    1. FCC revised its Telephone Consumer Protection Act (TCPA)

    2. Governed prerecorded calls (robocalls)

    3. Use of automatic telephone dialing systems (autodialers)

14. Updates on the FCC Approach to Robotexts

    1. FCC issued an order explicitly stating that text messages sent to wireless devices are subject to the same consumer protections as voice calls under the TCPA

    2. TCPA prohibits companies from sending text messages via equipment that sends the messages without human intervention, known as “robotexts”—absent express consent.

10.2 Fax Marketing

1. The FCC, prohibits unsolicited commercial fax transmissions.

2. Penalties include a private right of action and statutory damages of up to $500 per fax

3. Failures

   1. Hooters of Augusta (Georgia) was found to have violated the act and ordered to pay out $12 million in a class- action suit.

   2. The FCC approved a $5.4 million fine against Fax.com for violations of the act

4. Junk Fax Prevention Act (JFPA) in part to clarify whether consent was required for commercial faxing (passed in 2005)

   1. The JFPA specifically provides that consent can be inferred from an EBR

   2. Permits sending of commercial faxes to recipients based on an EBR, as long as the sender offers an opt- out in accordance with the act

10.3 Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003

1. CAN-SPAM Act-Applies to anyone who advertises products or services by electronic mail directed to or originating from the United States.

2. CAN-SPAM

   1. Enforced by FTC

   2. Not intended to eliminate all unsolicited commercial email,

   3. Provides a mechanism for legitimate companies to send emails to prospects and respect individual rights to opt out of unwanted communications.

3. Details of Act

   1. Prohibits false or misleading headers

   2. Prohibits deceptive subject lines

   3. Requires commercial emails to contain a functioning, clearly and conspicuously displayed return email address that allows the recipient to contact the sender

   4. Requires all commercial emails to include clear and conspicuous notice of the opportunity to opt out along with a cost-free mechanism for exercising the opt-out.

   5. Prohibits sending commercial email (following a grace period of 10 business days) to an individual who has asked not to receive future email

   6. Requires all commercial email to include

      1. Clear and conspicuous identification that the message is a commercial message (unless the recipient has provided prior affirmative consent to receive the email)

      2. Valid physical postal address of the sender (which can be a post office box)

      3. Prohibits “aggravated violations” relating to commercial emails such as

         1. address-harvesting and dictionary attacks

         2. The automated creation of multiple email accounts

         3. The retransmission of commercial email through unauthorized accounts

         4. Requires all commercial email containing sexually oriented material to include a warning label (unless the recipient has provided prior affirmative consent to receive the email)

   7. Enforcement

      1. The FTC enforces and carries penalties of fines of up to $40,654 per violation.

      2. Authority granted to state attorneys general

      3. Deceptive commercial email is subject to laws banning false or misleading advertising.

      4. The FTC has the authority to issue regulations implementing the CAN-SPAM

   8. Applicabilities

      1. Commercial Email messages

4. Wireless Message Rules Under CAN-SPAM

   1. Mobile service commercial messages (MSCMs)

      1. Includes many commercial text messages.

      2. Commercial electronic mail message that is transmitted directly to a wireless device that is utilized by a subscriber of a commercial mobile service

   2. CAN-SPAM Act prohibits senders from sending any MSCMs without the subscriber’s “express prior authorization

5. Wireless Domain Registry

   1. To help senders of commercial messages determine whether those messages might be MSCMs (rather than regular commercial email), the FCC has created a registry of wireless domain names (available on the FCC website).49 It is updated on a periodic basis, as new domains are added.

   2. Senders are responsible for obtaining this list and ensuring that the appropriate authorizations exist before sending commercial messages to addresses within the registry.

10.4 The Telecommunications Act of 1996

1. These focus on rules affecting the telecommunications companies themselves in connection with personal information.

2. Telecommunications Act of 1996 was a major piece of legislation that reshaped numerous aspects of telecommunications markets.

   1. Scope.

      1. Privacy of customer information provided to and obtained by telecommunications carriers.

      2. Prior to the act, carriers were permitted to sell customer data to third-party marketers without consumer consent.

      3. Customer proprietary network information (CPNI).

         1. CPNI is information collected by telecommunications carriers related to their subscribers.

         2. What are examples

      4. Includes call log data such as time, date, destination and duration of calls

      5. Applied to

         1. Telecommunications carriers

         2. Voice-over-Internet protocol (VoIP) providers that are interconnected with telephone service.

         3. Traditionally did not apply to Broadband Internet service providers (ISPs) but now are subject to Section 222 of general CPNI requirements. In 2016 FCC issued a detailed regulation, which was repealed by the Trump administration.

      6. Requirements

         1. Carriers must notify law enforcement when CPNI is disclosed in a security breach within seven business days of that breach

         2. Customers must provide a password before they can access their CPNI via telephone or online account services.

      7. Enforcement

         1. FCC

      8. Process of Breech - CPNI

         1. Must pass

      9. 
         

10.5 The Cable Communications Policy Act of 1984

1. Actions

   1. Regulates the notice a cable television provider must furnish to customers

   2. The ability of cable providers to collect PI

   3. The ability of cable providers to disseminate PI

   4. The retention and destruction of PI by cable television providers

   5. Provides a private right of action for violations of the aforementioned provisions

2. FYI

   1. Exceptions - update

10.6 The Video Privacy Protection Act of 1988

1. Why?

   1. Passed in response to the disclosure and publication of then-Supreme Court nominee Robert Bork’s video rental records.

2. Applies to

   1. Video tape service providers

      1. Defined as anyone “engaged in the business, in or affecting interstate or foreign commerce, of rental, sale, or delivery of prerecorded video cassette tapes or similar audio visual materials”

   2. Individuals who receive PI in the ordinary course of a videotape service provider’s business or for marketing purposes.

3. Netflix and the 2012 Amendment

   1. Allowed for one-time consumer consent that was valid up to 2 years, replacing contemporaneity requirement.

   2. Enforcement

   3. California Law

10.7 Digital Advertising

1. Self-Regulation for Online Advertising

   1. Two prominent examples are the Digital Advertising Alliance (DAA) and the Network Advertising Initiative (NAI) Code of Conduct.

2. Federal Regulation:

   1. FCC Broadband Privacy Rule

      1. In 2015, FCC reclassified broadband internet service as public utility a part of its “Open Internet” or net neutrality rule.

      2. An important effect of this is that broadband internet providers (Verizon/Comcast etc.) also because subject to other requirements of the Telecommunications Act, including CPNI privacy requirements.

   2. FCC adopted rule:

      1. Requires

         1. opt-in for sensitive PI

         2. allows user opt- out for non sensitive PI

         3. Permitted inferred consent for providing the underlying services.

      2. Provided guidelines for data security and breach notifications.

      3. 2017 – Rescinded by Congress and Trump.

   3. State Regulation: CA Do Not Track Requirements

      1. Requires websites/phone apps to post a privacy policy if the collect PII from those living in CA.

      2. Cal Online Privacy Protection Act (CalOPPA).

10.8 Conclusion