5 minute read |

Is the VoIP Legal Landscape in Trouble with the TCPA?

VoIP phone service background

The road to replacing the PSTN has not been easy for VoIP technology. When it first launched, the service could not compare to the quality and reliability of landlines. Even though it enabled free calls, lack of high-speed Internet in many areas restricted its growth.

Apart from technical issues, there have also been legal challenges and regulatory roadblocks. VoIP was a revolutionary technology, bridging the gap between analog phone systems and the digital world. But it also meant that legislators were behind the curve when it came to rules, laws, and taxation.

Many governments debated the issue of faxing VoIP service providers, classifying VoIP phone service in the appropriate category and other regulatory issues. It is made somewhat difficult by the fact that innovation in the VoIP industry happens at a much faster pace than the legislative process. By the time the authorities come to a decision regarding one aspect of VoIP, new situations arise that require resolution.

Telephone Consumer Protection Act (1991)

The latest series of legal challenges to VoIP comes in the form of TCPA violations. What exactly is the TCPA and how does it apply to VoIP? The Telephone Consumer Protection Act was enacted in 1991 to address the issue of telephone marketing phone calls. The TCPA established restrictions on companies that make marketing calls to customers, whether the call is made by human operators or automated dialing systems. As part of the requirements, companies were to maintain do-not-call lists of customers that had opted out of receiving such calls.

In 2012, several amendments were made to the original piece of legislation to close loopholes. The original Act allowed enterprises with a ‘prior business relationship’ to avoid getting consent. Specifically, companies were now required to obtain prior written consent from customers before robocalling them. Another provision was added mandating businesses to include an opt out option in each call, to make it easier for customers to stop those calls.

VoIP and the TCPA

VoIP technology is very different from cellular networks and the PSTN. For a long time, there has been debate over classifying VoIP service providers as common carriers. Of late, additional questions are cropping up with regards to how VoIP fits into the TCPA framework. When the TCPA was enacted in 1991, VoIP was nowhere on the horizon. So what happens when companies make calls to VoIP numbers for the purpose of telemarketing using robocalling systems?

A couple of recent court decisions highlight the intricacies of the issue. Both decisions shine a spotlight on the importance of VoIP calls largely being free of cost for the called party. While this is a great benefit for users, it might turn out to be a blessing in disguise for telemarketing companies as well.

In one case, the consumer alleged that a company kept calling her phone even after she was no longer a customer of their service in violation the TCPA provisions. The key distinction, in this case, was that the user’s new number used VoIP for placing calls and she was not charged for the company’s marketing calls. The relevant section of the TCPA prohibits telemarketing without prior consent but only when the recipient is charged for the call. At the time the law was made and even today, called parties are charged for it even on cellular networks. But this is clearly not the case with VoIP.

In a similar case, the court decided that the TCPA liabilities were not triggered because the calls were made to the user’s VoIP number. The important issue was that not that the number used a VoIP service. But rather that the customer was using a free Google Voice service and didn’t have to pay for the telemarketer’s call. In the end, these judgments fall firmly on the side that free VoIP services do not fall under the TCPA provisions.

What Lies in the Future for VoIP Telemarketing Calls?

The fact of the matter is that there are not many judgments of this nature. No one has yet analyzed the complete implications of TCPA on VoIP technology. What exactly is the correct decision when free calls comprise a large percentage of all phone calls made? How long before TCPA provisions are extended to all consumers regardless of whether they pay for the service? After all, the TCPA is intended to protect consumers and not organizations.

In the meantime, VoIP service providers should be careful to maintain compliance. There is the potential to attract fines and other liabilities if they violate the TCPA. Even inadvertent violations may galvanize authorities to enact penalties. As a general rule of thumb, it is better to obtain consent from the user and respect their decision to opt out of telemarketing lists.  That way, businesses won’t run afoul of the law and don’t have to worry about noncompliance.

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