Earlier this week the Senate Commerce Committee subcommittee with responsibility for consumer protection issues held a hearing to discuss the impact of unwanted robocalls on consumers. Topics discussed included the consumer harm associated with fraudulent robocalls; the effectiveness of regulations and law enforcement in stopping them; and the feasibility of technological solutions to the challenges posed by unauthorized robocalls. The hearing was held not long after the 10th anniversary of the Do Not Call Registry – in the words of humorist Dave Barry “the most popular federal concept since the Elvis stamp.” The hearing heard testimony from two panels: witnesses on the first panel represented the FTC and FCC, and witnesses on the second panel represented the telecom and ancillary industries.
Two overall themes emerged from the testimony. First, the challenges faced both by regulators and legitimate industry in keeping with up fast-paced technological changes in the robocall industry, and second the increasingly global nature of unauthorized robocalls.
The FTC testimony spoke to the agency’s law enforcement efforts, initiatives to spur technological solutions, and its broad consumer and business outreach in the robocall arena. In the decade since the Telemarketing Sales Rule (TSR) was amended to create the Do Not Call Registry, the agency has brought over 105 enforcement actions, resulting in $126 million in civil penalties and $741 million in redress or disgorgement. Despite these actions, the number of unauthorized robocalls continues to balloon, from 63,000 consumer complaints per month in 2009, to 200,000 complaints per month in 2012. These numbers were consistent with those presented by the FCC witness who testified that the number of consumer complaints to that agency had doubled in the past two years.
Much of the growth in robocalling is enabled by new technologies such as Voice Over Internet Protocol (VoIP) technology which enables blasting of prerecorded messages over the Internet. VoIP technology not only makes it cheaper to place robocalls when compared to the time and money needed to place a call on the traditional cooper wire, but it also makes identifying the robocall perpetrator more challenging. In the highly regulated copper wire world, the regulated entities are well-known and cannot easily conceal their identities. In contrast, VoIP technology allows businesses to place cheap calls wherever they find an Internet connection, both at home and abroad. For example, one 2012 FTC enforcement action involved billions of calls placed by phone numbers registered to companies with overseas offices in the Northern Mariana Islands, Hong Kong, and the Netherlands.
In October 2012, the Commission hosted a workshop – the Robocall Summit – to explore technological solutions to keep up with the Internet enabled growth in robocalls, (or as then-Chairman Leibowitz described it, “voice blasting technology  at bargain basement prices.”) The FTC announced a public contest or “Robocall Challenge” with a $50,000 prize for the individual or small team that could propose a technological solution to help consumers block robocalls on their landlines and mobile phones. In April this year, the agency announced three winning solutions which, if successfully developed could result in “positive results for American consumers.”
Urging caution, a representative from the USTelecom trade association counseled that technological solutions that “seek to make phone service providers the arbiter of whether a call should – or should not – be permitted to proceed skirt dangerously close to violating the privacy obligations imposed on us by law.” The witness cited the Wiretap Act provisions protecting the transmission of calls and limiting the rights of universal service providers to intercept them. The witness was not optimistic that a “silver bullet” technological solution to the robocall challenge could be found, and counseled further that “today’s solution could very well turn into tomorrow’s Maginot Line, and could have unintended adverse consequences.”