Telephone Marketing

HOW FAR CAN BROADCASTERS GO?

Come ratings season, or any time for that matter, broadcasters are always seeking new ways to interest the public in their station and programming. Some broadcasters have hit upon the time-tested marketing technique of COLD CALLING.

However, cold calling can take a lot of staff time. Why not use one of those autodialing services that uses prerecorded voice messages -- play some of the station as an intro, fade the music and put on a compelling, prerecorded message ... maybe from one of the popular station personalities?

But what about TCPA - the Telephone Communications Privacy Act? Doesn't it protect telephone consumers from uninvited, autodialed, prerecorded marketing messages? Well, YES!

Generally, under TCPA, prerecorded message calls are permitted by or on behalf of a "seller" only when a consumer has signed an express written or electronically recorded agreement authorizing the seller to make such calls to his or her designated telephone number. Under the FCC portion of the TCPA, and the Commission's rules at §64.1200(a)(2), any telephone call using an automatic telephone dialing system or an artificial or prerecorded voice placed to a residential line is prohibited unless it meets one of five exceptions.

But, wait! Radio and TV are special, right? Maybe the TCPA doesn't apply to broadcasters. Well ... Yes! (At least sometimes....)

The Case

Several years ago, a Clear Channel station had this very idea. It recorded a message that encouraged the called party to listen to the station and to call in at a certain time to win a prize. Here's the message that was used:

"Hi, this is Al "Bernie" Bernstein from 106.7 Lite FM. In case your favorite station went away, I want to take just a minute to remind you about the best variety of yesterday and today at 106.7. Motown, classic '70s from James Taylor, Elton and Carole King ... it's all here. Each weekday, we kick off the workday with an hour of continuous, commercial-free music. This week, when the music stops at 9:20, be the tenth caller at 1-800-222-1067. Tell us the name of the Motown song we played during that hour, and you'll win one thousand dollars. Easy money. And the best variety from 106.7 Lite FM."

One person who was called didn't feel so lucky. He received the call and responded with a class action lawsuit asserting that Clear Channel had violated the TCPA for himself and all those who had received a similar call.

However, the TCPA has several exceptions to the categories of calls that are included in its scope. After the lawsuit had been dismissed in New York and re-filed in Ohio, the District Court tackled the issue, holding that the call fell within one of the specific exceptions of the TCPA.

In making her determination, Judge Sandra Beckwith recognized that §227 of the TCPA gives the FCC discretion to exempt "such classes or categories of calls made for commercial purposes as the [FCC] determines (I) will not adversely affect the privacy rights that this section is intended to protect; and (II) do not include the transmission of any unsolicited advertisement." Using this congressionally-chartered discretion, in 2003 the FCC specifically permitted messages that invite a consumer to listen to or view a broadcast, and reaffirmed its position in the 2005 final rules implementing the TCPA.

The FCC Opinion

But did this case go beyond the FCC's 2005 rule because it combined a call to listen with a contest promotion? Bowing to the FCC's expertise and the intent of Congress, Judge Beckwith sent a letter of inquiry to the FCC seeking further clarification. In response, then-FCC General Counsel Sam Feder stated "... the Commission's Orders make clear that a hybrid call that both announces a contest and contains a general promotion for the station is permitted [and] therefore not actionable under the TCPA."

Under well-established legal precedent, the court believed it was duty-bound to defer to the FCC's determination. The court relied upon the broad legal principle that where Congress does not legislate directly, but leaves specific determinations to the Commission's discretion, the court must uphold the FCC's interpretation, provided that it is reasonable and that the FCC had arrived at its conclusion following proper notice-and-comment rulemaking procedures.

In fact, said General Counsel Feder, the Commission had agreed with comments of the National Association of Broadcasters, which had specifically recognized the special nature of over-the-air broadcasting. Citing the NAB's comments, Feder opined that free over-the-air radio and television broadcasts are not consumer products or services that are bought and sold in commercial transactions. Instead, over-the-air radio and television broadcasts are sources of news, information and entertainment programming that are by federal mandate available for free to every person within a station's listening or viewing area. Further, he held that broadcast programming is not "commercially" available to listeners and viewers, and therefore concepts of "commercial" availability or quality have no applicability to the programming that broadcasters transmit over the public airwaves. As such, he concluded that broadcast audience invitation calls, which do not seek to sell a product or service, are not advertisements.

Interestingly, the Commission distinguished calls placed by over-the-air broadcasters -- whose service is free of charge to the listener -- from similar calls placed by a paid-for service, such as satellite or cable television. Thus, prerecorded messages to encourage consumers to listen to or watch programming for which they must pay would be considered advertisements for purposes of the FCC rules. The Commission also distinguished radio and television station calls from calls about purported "free offers" or calls that appear only to give information, but are motivated in part by the desire to ultimately sell additional goods or services.

The Bottom Line

So the bottom line is this: Broadcasters may make direct telephone solicitations to the listening and viewing public to tune to their station, even where the calls comprise hybrid messages containing a motivational component such as a contest. Satellite radio and TV and cable TV cannot. However, the messages must be constructed to avoid making any direct solicitation for the sale of additional goods or services.

This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.