Category: Wireless

1
Second Circuit Holds That Contractual Consent May Not Be Unilaterally Revoked Under The TCPA
2
Rite Aid Wins Summary Judgment in TCPA Class Action for Flu Shot Reminder Calls
3
FCC Hits Companies in Latest Wi-Fi Blocking Inquiries, Proposing $718,000 Penalty, Fueling Further Controversy
4
FCC Denies $3.3 Billion in Bidding Credits to AWS-3 Auction Winners, Requires Full Payment in 30 Days
5
FCC Adopts Broadcast Incentive Auction Items, Clarifies Rules for Unlicensed and Microphone Operations in TV Bands
6
FCC Adopts Innovative Spectrum Sharing Scheme, Making 150 MHz of Spectrum Available for Wireless Broadband  
7
Open Internet Order Published — Triggers Appeal Deadline, June 12, 2015 Effective Date
8
E-LABEL Act Exempts Wireless Devices from Physical Label Requirements
9
Marriott agrees to $600,000 penalty for blocking personal hotspots
10
FCC and Wireless Carriers Reach “Bill Shock” Accord

Second Circuit Holds That Contractual Consent May Not Be Unilaterally Revoked Under The TCPA

By Joseph C. Wylie II and Molly K. McGinley

On June 22, 2017, the Second Circuit affirmed summary judgment for a defendant in a case of first impression, holding that under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), consent to be contacted by telephone cannot be unilaterally revoked by one party when that consent is provided as bargained-for-consideration in a bilateral contract.

In Reyes v. Lincoln Automotive Financial Services, the plaintiff Alberto Reyes, Jr. (“Reyes”) leased a new Lincoln MKZ luxury sedan from a Ford dealership, defendant Lincoln Automotive Financial Services (“Lincoln”).  The lease agreement itself provided “express[] consent” by Reyes for Lincoln to contact him “by manual calling methods, prerecorded or artificial voice messages, text messages, emails and/or automatic telephone dialing systems…. regardless of whether you incur charges as a result.”  After the lease agreement was finalized, Reyes ceased making required payments under the agreement.  After Lincoln placed multiple calls (using both live and pre-recorded voice messages) to Reyes cellular phone, Reyes allegedly sent a letter to Lincoln revoking his consent to be contacted by Lincoln at that telephone number.

Reyes filed a complaint against Lincoln in the Eastern District of New York, alleging violations of the TCPA and seeking $720,000 in damages.  On June 20, 2016, the Eastern District of New York granted summary judgment to Lincoln, holding in part that “the TCPA does not permit a party to a legally binding contract to unilaterally revoke bargained-for consent by telephone.”

In affirming the district court’s ruling regarding revocation of consent, the Second Circuit acknowledged that the Third Circuit and Eleventh Circuit have previously ruled that a party can revoke consent under the TCPA–rulings that were the basis of the FCC’s 2015 Ruling that prior express consent is revocable under the TCPA (discussed here).  However, the Second Circuit held that the question presented by the Reyes appeal was different.  Unlike the plaintiffs in those cases who gave consent “gratuitously,” in the context of an application process, Reyes’s consent was included as an express provision of his lease agreement with Lincoln.

The Second Circuit rejected Reyes’s argument that under common law, the term “consent” is revocable at any time. While the Second Circuit agreed that the common law definition of “consent” applied to consent in the context of the TCPA, it held that “common law is clear that consent to another’s actions can ‘become irrevocable’ when it is provided in an legally binding agreement.”  In such circumstances, any modification to consent must receive the “’mutual assent’ of every contracting party in order to have legal effect.”  The Court reasoned “[i]t is black-letter law that one party may not alter a bilateral contract by revoking a term without consent of a counterparty.”

The Second Circuit further deemed “meritless” Reyes’s contention that his consent could be revoked because it was not an “essential term” of his lease.  Instead, the Court reasoned that terms of a contract are enforceable even if they are not “essential.”  “A party who has agreed to a particular term in a valid contract cannot later renege on that term or unilaterally declare it to no longer apply simply because the contract could have been formed without it.”

The Second Circuit also declined to accept Reyes’s argument that such an interpretation of consent under the TCPA would not further the statute’s remedial purpose of protecting consumers from unwanted telephone calls.  Finding “no lack of clarity in the TCPA’s use of the term ‘consent,’” the Court rejected application of the remedial rule of statutory interpretation.  In doing so, the Second Circuit recognized that businesses may insert consent clauses into standard sales contracts “thereby making revocation impossible in many instances,” but held that this “hypothetical concern” would be for Congress to resolve, not the Courts.

This ruling may provide a strong defense to revoked-consent claims brought against defendants by those in contractual relationships with those defendants.  It remains to be seen whether the reasoning set forth by the Second Circuit will be adopted by other courts.

Rite Aid Wins Summary Judgment in TCPA Class Action for Flu Shot Reminder Calls

By Joseph C. Wylie II, Molly K. McGinley, Lexi D. Bond

A New York U.S. District Court recently granted summary judgment in favor of defendant Rite Aid Headquarters Corporation in a putative Telephone Consumer Protection Act (“TCPA”) class action, holding that calls reminding customers about the flu vaccine were “health related” and therefore Rite Aid was not required to obtain prior express written consent before making the calls. Though the opinion was filed under seal on March 30, 2017, it was made public last week. Read More

FCC Hits Companies in Latest Wi-Fi Blocking Inquiries, Proposing $718,000 Penalty, Fueling Further Controversy

By Stephen J. Matzura and  Marty Stern

On the heels of a consent decree with a services provider imposing a $750,000 penalty for its Wi-Fi management practices at convention center venues, the FCC slammed another services provider earlier this week for allegedly blocking Wi-Fi access at the Baltimore Convention Center.  In a Commission-level Notice of Apparent Liability (“NAL”), the FCC proposed a $718,000 penalty against M.C. Dean, Inc. for allegedly blocking access to third-party Wi-Fi hotspots during at least 26 days in November and December 2014 at the venue, “apparently” in violation of Section 333 of the Communications Act.

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FCC Denies $3.3 Billion in Bidding Credits to AWS-3 Auction Winners, Requires Full Payment in 30 Days

By Stephen J. Matzura and Marty Stern

The FCC unanimously adopted an order released earlier this week denying approximately $3.3 billion in small business bidding credits to SNR Wireless LicenseCo, LLC and Northstar Wireless, LLC, two entities financed by DISH Network Corporation that had won licenses in the AWS-3 auction which concluded in January (Auction 97).  The auction, which had net winning bids of over $41 billion, significantly exceeded expectations and has been termed a “whopping success” from a revenue standpoint. In a statement issued prior to the order’s release, Commission Chairman Tom Wheeler stated that the entities “are not eligible for bidding credits” based on the Commission’s “fact-based analysis,” which “ensures that bidding credits only go to the small businesses our rules aim to serve.”  The Commission’s order, released the following day, details the Commission’s analysis of whether DISH revenues should be attributed to SNR and Northstar based on its degree of control over the entities.

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FCC Adopts Broadcast Incentive Auction Items, Clarifies Rules for Unlicensed and Microphone Operations in TV Bands

By Stephen J. Matzura and Marty Stern

The FCC, at its open meeting last week, adopted a number of key items on the broadcast incentive auction, which it hopes to kick off by March 2016.  If successful, the incentive auction will allow participating broadcasters to receive payment for relinquishing their spectrum and will make spectrum available in the 600 MHz band for auction to wireless providers.

Among a raft of complexities, the process will require that remaining broadcasters be “repacked” in the band from their existing channels.  At the same time, it will provide for unlicensed use (think Wi-Fi and TV “white space” devices) of guard bands between wireless and broadcast frequencies, and what is known as the “duplex gap” — vacant space between the uplink and downlink operations of the new wireless providers in the band.  In one contentious move, the Commission agreed to provide flexibility in the repacking process by authorizing as necessary the relocation of broadcasters to the duplex gap in particular markets, which would render that spectrum unusable for unlicensed operations in those markets.  In a compromise brokered by Commissioner Rosenworcel, the Commission agreed to seek comment on whether it should preserve a vacant channel in such markets for unlicensed and licensed microphone use.

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FCC Adopts Innovative Spectrum Sharing Scheme, Making 150 MHz of Spectrum Available for Wireless Broadband  

By Stephen J. Matzura and Marty Stern

Earlier this week, the FCC released a Report and Order (R&O), adopting new innovative sharing rules for a 150 MHz swath of spectrum in the 3.5 GHz band, including 100 MHz of federal government spectrum.  Under the regime adopted by the FCC, dubbed the Citizens Broadband Radio Service (CBRS), much of the spectrum will be available for the provision of broadband services on an unlicensed “General Authorized Access” basis, though some of the spectrum will be set aside for short-term Priority Access Licenses (PALs) awarded via auction for individual census tracts.

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Open Internet Order Published — Triggers Appeal Deadline, June 12, 2015 Effective Date

By Marty Stern and Stephen J. Matzura

The FCC’s Open Internet order was published today in the Federal Register, kicking off the 60-day deadline to appeal the rules to a federal circuit court of appeals (or seek reconsideration before the FCC).   As we previously discussed, some parties have already filed appeals in various circuits, which have been consolidated in the D.C. Circuit.

Significantly, with publication in the Federal Register, key aspects of the rules go into effect in 60 days, on June 12, 2015, including reclassification of broadband Internet access as a Title II service, as well as the no blocking, no throttling, paid prioritization, and enforcement/complaint provisions of the Open Internet order.

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Marriott agrees to $600,000 penalty for blocking personal hotspots

Marriott International, Inc. recently entered into a Consent Decree with the Federal Communications Commission to end an investigation into whether the company intentionally disabled consumers’ personal Wi-Fi hotspot connections at its Gaylord Opryland Hotel and Convention Center in Nashville, Tennessee. As part of the Consent Decree, Marriott will pay a $600,000 civil penalty and must file compliance reports with the FCC every three months for three years. Read More

FCC and Wireless Carriers Reach “Bill Shock” Accord

FCC Chairman Julius Genachowski recently announced an agreement with the mobile wireless industry by which it has agreed to abide by new voluntary guidelines to prevent “bill shock” through the delivery of advance warning messages to subscribers at risk of incurring high charges on their monthly mobile service bills. Bill shock is a term used by the FCC to describe when a consumer claims a sudden, unexpected increase in their monthly bill, usually as the result of exceeding limits on voice, data, or messaging plans. As a result of the agreement, the FCC suspended its plans to adopt new wireless billing regulations that it proposed last year, but warned that the Commission would not hesitate to adopt regulations in the future if the industry self-regulation proves ineffective.

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