The FCC, The FTC, and The New Presidential Administration

The telemarketing industry is full of acronyms and regulations. Understanding all of it, as well as knowing what the future of the industry holds, can be a tall task. This article was written with hopes of clearing up some of the confusion.

What is the FCC?

The Federal Communications Commission (FCC) is a federal regulatory agency that oversees interstate and international communications by radio, telephone, television, wire, satellite, and cable in all of the US states and territories. It was formed as part of the Communications Act of 1934.

Perhaps the biggest influence that the FCC has on the telemarketing industry is the enforcement of the Telephone Consumer Protection Act (TCPA), which was signed into law by President George H. W. Bush in 1991. The TCPA limits the use of certain dialing technology, prerecorded voice messages, fax machines, and text messages.

The FCC also maintains the national Do-Not-Call list. Marketing companies must obtain a subscription account number ("SAN") and purchase Do-Not-Call data for all area codes into which they will call, unless they have an exemption such as well-documented written consent or an established business relationship.  Effective October 1, 2016, its fees for accessing the national Do-Not-Call database increased to $61 per area code, or $16,714 for the entire nation. The fee for accessing an additional area code for a half year remains at just $30. 

What is the FTC?

The Federal Trade Commission (FTC) is a federal regulatory agency with the role of promoting consumer protection and the elimination and prevention of anticompetitive business practices.

In an effort to help protect consumers from being scammed or deceived by marketing phone calls, the FTC enforces the Telemarketing Sales Rule (TSR). The TSR requires telemarketers to “make specific disclosures of material information; prohibits misrepresentations; sets limits on the times telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services.”

Effective August 1, 2016, the FTC raised its civil penalty from $16,000 to a staggering $40,000.  This is a per violation penalty, and adds up quickly.  Among other violations, the new fine applies to any violation of its Telemarketing Sales Rule, or any other act which it defines as an "unfair or deceptive act or practice."  Therefore, the new fine may be applied to online, email and other marketers - not just telemarketers.  Prior to February of 2009, the penalty was $11,000.  Since February of 2009, the fine had been $16,000. Violations that can trigger the new $40,000 fine include, for example: calling numbers on the national Do Not Call list without consent or an established business relationship, robocalling consumers without consent, failing to honor an opt-out, making a material sales misrepresentation, and making product claims that lack substantiation.  

Who is in charge of the organizations?

Both the FTC and the FCC are administrated by a group of five commissioners, although if a commissioner steps down during an election year it is unlikely that the position will be filled until after the election. The president chooses which of the commissioners will act as the chair of the commission. When a commissioner’s term expires or when they step down on their own, the president chooses the replacement with the consent of congress. Commissioners may continue serving in their position until a replacement is appointed. No more than three out of the five commissioners can be members of the same political party.

The Supreme Court Case Humphrey’s Execuor v. United States ruled that The President may not remove any appointee to an independent regulatory agency, such as FTC and FCC, except for reasons Congress has provided by law: "inefficiency, neglect of duty, or malfeasance in office."

Current Leadership

FCC

Name	Position	Party	Term Expires
Jessica Rosenworcel	Commissioner	D	6/30/2015
Ajit Pai	Commissioner	R	6/30/2016
Mignon Clyburn	Commissioner	D	6/30/2017
*Thomas Wheeler	Chairman	D	6/30/2018
Michael O'Rielly	Commissioner	R	6/30/2019

*Recently announced that he will be stepping down.  

FTC

Name	Position	Party	Term Expires
Edith Ramirez	Chairwoman	D	9/25/2015
Maureen K. Ohlhausen	Commissioner	R	9/25/2018
Terrell McSweeny	Commissioner	D	9/25/2017

What is Donald Trump Likely to do?

When President-elect Trump takes office, he will most likely appoint replacements for FCC Commissioner Jessica Rosenworcel and FTC Commissioner Edith Ramirez, both of which are only still serving because President Obama has yet to nominate their replacements. It is assumed that President Trump will choose Republicans to replace those two commissioners. Two more commissioner vacancies on the FTC can also be filled by President Trump, with the consent of congress. Finally, the president will also decide which commissioners, most likely republican, will serve as chairmen of their respective agencies.

Included in his plans for his first 100 days in office is a requirement that for every new federal regulation, two existing regulations must be eliminated. While it is yet to be determined if Trump can succeed with this effort, it would seem that he is committed to limiting and reducing the number of regulations that federal agencies like the FCC and FTC can make.

In addition, Trump has been surrounding himself with conservative, small government advocates. Many of Trumps economic advisors, including David Malpass and Steven Moore, are very conservative. Paul Atkins, who has been named to the landing team for the CFPB, has been known as an advocate for small government.  Mark Jamison, a member of Trump’s transition team, published a blog post just days before the election arguing that there was no need for the government to be involved in the telecommunications industry.

The upcoming years should be very interesting for the telemarketing industry. Changes in the leadership of federal regulatory agencies and a new president will certainly have an effect on the regulations that govern the industry.