AI-Generated Calls: Telecom’s Next TCPA Frontier?

By Jared M. Tully and Blake N. Humphrey

The world is abuzz about “artificial intelligence” and its potential to revolutionize how people live, work, and play. The telecommunications industry is no exception. To that end, in August 2024, the Federal Communications Commission (“FCC”) released a notice of proposed rulemaking that would impose new requirements for autodialed marketing calls and texts that use artificial intelligence (AI) to generate content. Before this proposal, the FCC weighed in on the discussion and declared that AI-generated content qualifies as an “artificial voice” under the Telephone Consumer Protection Act (TCPA).

For some background, the TCPA is a federal law designed to protect consumers from unwanted telemarketing calls, faxes, and text messages. Enacted by the United States Congress and signed into law by President George H. W. Bush in 1991, the TCPA restricts the use of automated telephone equipment, including automatic dialing systems, prerecorded voice messages, and unsolicited advertisements. It also establishes guidelines for telemarketers such as: prohibiting calls before 8 a.m. or after 9 p.m., and requiring the maintenance of a “do-not-call” list. Violations of the TCPA can result in significant fines, with consumers able to sue for damages up to $1,500 per violation. Often, these claims are filed by a consumer on a class-wide basis. 

Against this backdrop, the FCC’s August 2024 Notice of Rulemaking focuses primarily on AI-generated calls and areas such as the necessary disclosures, and affirmative consent to receive AI-generated calls. It’s also considering whether future AI technology does—or, for that matter, should—fall within the scope of the TCPA. The Notice says the FCC’s proposals’ intent is to “protect consumers from the abuse of AI in robocalls alongside actions that clear the path for positive uses of AI, including its use to improve access to the telephone network for people with disabilities.” To that end, the FCC proposes defining “AI-generated calls,” as well as adopting new rules that would “require callers disclose to consumers when they receive an AI-generated call.” Per the FCC, “[t]his would provide consumers with an opportunity to identify and avoid those calls that contain an enhanced risk of fraud and other scams.”

Ultimately, the FCC’s proposed changes have the potential to create a new frontier surrounding the TCPA. These changes could lead to increased litigation and heightened compliance costs for call centers, contact centers, teleservice agencies, phone answering services, and tele-messaging companies. As far as litigation is concerned, we anticipate industry challenges to the FCC’s proposed rules, especially in light of the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, which overruled the Chevron Doctrine and its deference to “reasonable” agency interpretations of a statute.

If the FCC’s proposed rules are enacted, the telemarketing industry can expect a deluge of litigation filed by plaintiffs bringing TCPA claims, both individually and on behalf of putative classes of those similarly situated. Although FCC’s Notice is still in the early stages, if ultimately adopted, these proposed changes will likely lead to minor deviations by businesses attempting to comply with the rules. Put differently, non-compliance with the new rules by telemarketing businesses could result in significant fines and legal challenges. Businesses will need to track the regulatory changes and ensure they are fully compliant to minimize litigation risk.

In the short term, telemarketing companies, or those who rely on telephone or electronic outreach to customers, will need to determine whether their current compliance programs are sufficient and react quickly to update them to comply with any new rules seeking to implement AI.  Businesses in this space will need to invest in systems and processes to ensure compliance with the new regulations. This includes updating call scripts to disclose the use of AI, training staff on new requirements eventually promulgated by the FCC, upgrading technology to handle these disclosures automatically, and updating forms and policies to receive the appropriate consent and make the necessary disclosures. Furthermore, businesses must understand what their communications software does—it could rely upon AI in a non-obvious way leading to unknown violations depending on the final state of updated rules.

Of course, there could be potential benefits for telemarketing businesses as this landscape develops and the FCC implements the new rules. For instance, the new rules could drive innovation as businesses look for ways to comply while leveraging AI’s benefits. This could include the development of more sophisticated AI systems that can better mimic human interaction or the creation of new tools to help consumers easily identify and manage AI-generated calls. What’s more, the requirement to disclose AI use in calls might enhance transparency and build trust with consumers.

Anticipating and preparing for the FCC’s proposed regulations is difficult. However, having a plan in place to act quickly when new regulations come into effect is vital.

Jared M. Tully and Blake N. Humphrey are attorneys at Frost Brown Todd LLP, a full-service law firm with attorneys in 18 offices across the United States.

For more information, visit www.frostbrowntodd.com.