On the heels of a February 2019 Public Notice regarding the same issue, the Federal Communications Commission’s (“FCC” or Commission”) Consumer and Governmental Affairs Bureau is once again seeking comment on the TCPA’s classification of calls placed using soundboard technology and whether such calls fall within the TCPA’s definition of “prerecorded voice messages.”  This request comes in response to a September 13, 2019 Petition for Declaratory Ruling or Retroactive Waiver (“Petition”) filed by Yodel Technologies, LLC (“Yodel”), a lead generation and telemarketing vendor that is currently facing a multi-million-dollar TCPA class action for allegedly placing thousands of prerecorded driver recruiting calls on behalf of Lyft.

What is Soundboard Technology?

A consumer- and business-friendly service that has risen in popularity due to the TCPA risks associated with the traditional call center model, soundboard or “avatar” technology employs live agents who, once a call is initiated, respond to the recipients’ statements and questions by selecting one or more short recorded responses.  Unlike traditional prerecorded calls, though, the live agent remains on the line during the call’s entire length and, where necessary, can intervene in the call in real time to speak directly with the recipient.  Moreover, the call is never automated, as the soundboard playing the recorded responses is manually controlled by the live agent, who must react to the recipient’s statements and questions to select the correct recorded response.

While the FTC for several years deemed soundboard technology to fall outside its Telemarketing Sales Rule on the use of prerecorded telemarketing calls, the FCC has never explicitly raised the issue.  Yodel’s Petition, however, now asks the Commission to make a final determination regarding the relationship between soundboard technology and the TCPA.

Yodel’s Petition:

In its Petition, Yodel requests an expedited declaratory ruling that the use of soundboard technology is not a prerecorded call of the type prohibited by the TCPA.  In the alternative, and to protect itself from the multi-million-dollar class action currently pending against it, Yodel asks that the Commission grant a retroactive waiver of the TCPA’s application to those soundboard-placed calls made using Yodel’s technology for the period prior to May 2017.

According to Yodel, the TCPA’s prerecorded voice message proscriptions should not apply to calls placed using soundboard technology because the Commission, courts, and FTC have each implicitly or explicitly indicated that calls must be completely prerecorded to be subject to TCPA regulation.  As Yodel argues, “[e]very example [of prerecorded messages] given by the FCC, whether proscribed or not, assumes a fully automated call.”  Moreover, courts have turned this assumption into holdings, finding the TCPA was meant to protect against only the “nuisance and greater invasion of privacy” that comes with calls that “cannot interact with the customer except in preprogrammed ways.”

Yodel’s Petition also relies on FTC guidance in supporting its Petition, noting that “for seven years, the Staff of the Federal Trade Commission, which cooperates with the FCC in combatting illegal robocalls, held that its Telemarketing Sales Rule on use of prerecorded telemarketing calls did not apply to the use of soundboard technology where ‘a single agent stays with a call from beginning to end.’”  Granted, that FTC guidance was recently rescinded in May of 2017, however, Yodel asserts any FCC determination of this issue should be made independent of the FTC’s decision, and that it should rule here in a manner that agrees with the agency’s prior implicit statements.

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In response to the ever increasing number of TCPA lawsuits filed against businesses operating in good faith, innovative telemarketing companies and platform providers have tried to create new technologies that are both business- and consumer-friendly and that comply with FCC regulations.  Unfortunately, however, businesses’ implementation of these technologies still result in costly and unnecessary TCPA class actions, where plaintiffs take advantage of ambiguous, conflicting precedent and the Commission’s lack of action. 

As we’ve mentioned before, one of the best ways for businesses to combat this scourge of litigation and encourage FCC action is to advise the Commission of the TCPA hardships good-faith businesses face.  Yodel’s Petition offers a chance for companies to make themselves heard.

Comments on Yodel’s Petition are due to be filed by October 21, 2019, with reply comments due on or before November 4, 2019.