Telecom Law Monitor : Washington D.C. Telecom Lawyer & Attorney : Kelley Drye & Warren Law Firm : New York, Chicago, Connecticut, New Jersey, Brussels

While the FCC has taken an interest in mobile marketing by carriers -- most notably with investigations of carrier early termination fees and proceedings examining wireless consumer "bill shock" -- it also is helpful to remember that the mobile content providers are subject to enforcement for deceptive marketing practices.  Our colleagues at the Ad Law Access blog covered a recent settlement of a class action lawsuit by several mobile marketers.  They remind marketers to clearly and conspicuously disclose costs so that consumers know what they are obligated to pay.  Mobile service providers should ensure that their billing and collection agreements impose such an obligation on the content provider and that the carrier properly polices compliance.

Read the Ad Law Access story here. 

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It has been quiet on the FCC front as all hands seem to be focused on the upcoming National Broadband Plan.  In the meantime, I didn't want this development at the FTC to go unnoticed.  Our firm's sister blog, Adlawaccess, provided this report on the confirmation of two new Commissioners.  A statement by the FTC Chairman is available here.

With the FTC active in enforcement on prepaid card and mobile marketing matters, and with the FTC seeking an end to the "common carrier exception" to its jurisdiction, it is worth monitoring activities at the FTC. 

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Initial comments were filed last week on Club Texting's request for a declaratory ruling regarding the use of text broadcasting for marketing purposes.  Club Texting, a provider of mass texting services to marketers and other customers, asked the FCC to rule that text broadcasters enjoy the same protection from liability under the TCPA that applies to fax broadcasters.  Under this standard, a text broadcaster would not be considered a "sender' of the message unless it has a "high degree of involvement" in an illegal message or had actual notice that the transmission is illegal and failed to take steps to prevent the transmission. 

The FCC sought public comment on Club Texting's petition, but the only comment was filed by another text broadcaster.  Not surprisingly, the commenter also supported a ruling that the FCC will apply the same standard to text broadcasters that it applies to fax broadcasting.  No consumers, class action plaintiffs or public interest groups filed in response to the petition.

With such little comment, it is unlikely the FCC will rule on the petition any time soon, if at all.  This issue most likely will be addressed initially in litigation challenging a mobile marketing campaign.

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On Friday, June 19, 2009, the Ninth Circuit Court of Appeals reversed a district court decision involving a mobile marketing campaign. A key issue in the case is whether text messages are subject to the Telephone Consumer Protection Act (the "TCPA"), a law that was drafted before the advent of text messaging. Although the Ninth Circuit remanded the case so that the district court could develop more facts, the decision underscores the importance of ensuring that marketers get express consent before sending text messages to consumers. 

Background on the Case

Laci Satterfield became a registered user of Nextones in order to receive a free ring tone. During the registration process, Ms. Satterfield checked a box which read, in part: "I would like to receive promotions from Nextones affiliates and brands." On January 18, 2006, Ms. Satterfield received a text message from Simon & Schuster advertising a novel by Stephen King. Shortly thereafter, Ms. Satterfield filed a class action lawsuit alleging that Simon & Schuster's text message campaign violated the TCPA.

In June 2007, the Federal Court for the Northern District of California granted summary judgment to Simon & Schuster holding that the company did not violate the TCPA. Specifically, the court determined that the text message campaign did not violate the TCPA's prohibition against using an automatic telephone dialing system (an "ATDS") because the device used to send the messages did not fall within the statutory definition of an ATDS. Moreover, the court found that Ms. Satterfield had agreed to receive text messages when she registered for Nextones.

Ninth Circuit Opinion

On Friday, June 19, 2009, the Ninth Circuit Court of Appeals reversed the district court decision and remanded the case for further proceedings. The Ninth Circuit held that the district court had erred because (1) the text message was a "call" within the meaning of the TCPA, (2) there was a disputed issue of material fact as to whether the system Simon & Schuster used was an ATDS, and that (3) Ms. Satterfield did not consent to receive messages from Simon & Schuster because Simon & Schuster is not an affiliate or brand of Nextones.

The TCPA applies to certain types of "calls." Simon & Schuster had argued that the sending of text messages did not constitute a "call" under the TCPA. Although the district court did not rule on that point, the Ninth Circuit disagreed with Simon & Schuster's argument. The term "call" is not defined by the TCPA. However, the Federal Communications Commission has noted that the statute

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