How Will the FCC’s TCPA Declaratory Ruling and Order Affect Your Business?In one of his first official actions, newly elected President Donald Trump tapped Ajit Pai as the new chairman of the Federal Communications Commission (FCC), replacing outgoing chairman Tom Wheeler. Pai is a sharp critic of the Telephone Consumer Protection Act (TCPA) as it is currently being applied, meaning the FCC’s regulatory approach to the TCPA is likely to shift under his leadership.

Pai was initially nominated by President Barack Obama for a Republican Party position on the FCC and was confirmed by the Senate in 2012. Pai previously served as associate general counsel with Verizon Communications Inc. and has also worked as a staffer at the U.S. Senate, the Justice Department, and the FCC.

Currently, Republicans hold a 2-1 majority on the five-member FCC, pending the appointment of two additional members. The President appoints the FCC commissioners with Senate confirmation, though only three commissioners may be members of the same political party. Accordingly, Republicans are likely to maintain a majority on the FCC under the new presidential administration.

Among its other duties, the FCC holds regulatory authority of the TCPA. On July 10, 2015, the FCC issued its TCPA Declaratory Ruling and Order, which we discussed in a previous post. Pai, who was a commissioner on the FCC at that time, voted against the 2015 Declaratory Ruling and Order (the “order”) and strongly criticized the ruling in a dissenting statement.

Pai specifically criticized two of the more controversial aspects of the order in his dissenting statement, both of which—as Pai pointed out—pose regulatory nightmares and increase the potential for abusive litigation.

First, Pai noted that the order “dramatically expands the TCPA’s reach” by expanding the TCPA’s definition of an automatic telephone dialing system (ATDS) to include the equipment’s potential capabilities, rather than its present capabilities. As Pai explained, this expanded definition turns virtually any communication device—save rotary phones—into an ATDS, opening their users to potential liability under the TCPA. Ultimately, Pai suggests in his dissenting statement that the expanded definition of an ATDS is “sure to spark endless litigation, to the detriment of consumers and the legitimate businesses that want to communicate with them.”

Pai also took aim at the order’s application of the TCPA’s strict liability to calls to reassigned phone numbers. Specifically, the FCC found that “the TCPA requires the consent not of the intended recipient of the call, but of the current subscriber,” meaning liability can be imposed under the TCPA for calls to reassigned numbers in certain circumstances. Pai pointed out that this rule “creates a trap for law-abiding companies by giving litigious individuals a reason not to inform callers about a wrong number” and called it a “veritable quagmire of self-contradiction and misplaced incentives.” Instead, Pai supported the “expected-recipient approach,” which would shield good actors from liability so long as they stop calling as soon as they learn that a number is wrong.

“The common thread here is that in practice the TCPA has strayed far from its original purpose,” Pai wrote in his dissenting statement, “[a]nd the FCC has the power to fix that.” With Pai as the new chairman and a Republican majority on the FCC, Pai may just have the opportunity to make those fixes. A decision by the D.C. Circuit Court of Appeals is currently pending in ACA International v. Federal Communications Commission, the consolidated appeal challenging the FCC’s order. Should the D.C. Circuit vacate portions of the order, it would provide Pai a chance to reform the FCC’s interpretation and application of the TCPA.

Additionally, Congress is currently considering reforms to the Federal Communications Act and may consider amending the TCPA in the process. Before joining the FCC, Pai served as chief counsel to the Senate Judiciary Subcommittee on the Constitution, Civil Rights, and Property Rights under Sen. Sam Brownback (R-KS) and as deputy chief counsel to the Senate Judiciary Subcommittee on Administrative Oversight and the Courts under Sen. Jeff Sessions (R-AL). Thus, Pai’s views and voice on the TCPA will be very persuasive in any reform efforts as both the current FCC chairman and a former Capitol Hill staffer.

Ultimately, the future for the TCPA is unclear, but the potential for reform–whether it’s administrative or legislative–is looking much brighter under FCC Chairman Pai.