The First Amendment status of commercial speech: why the FCC regulations implementing the Telephone Consumer Protection Act of 1991 are unconstitutional.

• Author: Hamilton, Deborah L.

INTRODUCTION

Six weeks ago, feeling generous, you decided to make a donation to your local hospital. Since then, you have been besieged by calls from other charitable organizations seeking donations. Subsequently, you also decided to take advantage of a special TV offer to purchase a "unique collection" of your favorite songwriter's greatest hits. This, too, resulted in a flood of calls from other vendors with "once-in-a-lifetime special offers." Tonight, during a relaxing meal at home with your family, you are interrupted for the umpteenth time by a ringing phone. Reluctantly, you get up from your chair to answer the call.(1) When you pick up the phone, you hear the hum of a recorded voice on the other end of the line. Even before listening to the recording, you are annoyed by the unwanted intrusion into the privacy of your home. But, does the content of the message -- be it seeking a charitable donation or a commercial sale -- affect the type of harm the call causes? It is important to think about the answer to this question because the FCC regulations implementing the Telephone Consumer Protection Act of 1991 (TCPA)(2) prohibit commercial recorded messages while permitting other types of recorded messages. In order for these regulations to survive constitutional scrutiny, therefore, the FCC must demonstrate that the type of harm a phone call causes indeed does depend on the content of the phone call.(3)

Congress passed the TCPA in response to consumer complaints(4) with the hope that it would balance residential telephone subscribers' desire for privacy with telephone solicitors' right to free speech and consumers' right to information.(5) One provision of the Act specifically addresses the technological revolution in telemarketing brought about by the development of autodialers and recorded-message players.(6)

The no-recorded-message provision makes it unlawful for callers "to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party."(7) An exemption provision, however, permits the Federal Communications Commission (FCC) to exempt from the ban those messages that do not include "unsolicited advertisements."(8) FCC regulations implemented this exception and now outlaw only those recorded messages that include an unsolicited advertisement.(9)

Although some residential-telephone subscribers may applaud the congressional effort to protect their privacy, the regulations implementing the no-recorded-message provision raise constitutional questions by singling out commercial speech for particularly strict regulation. One federal district court found the statutory no-recorded-message provision unconstitutional and granted a preliminary injunction staying enforcement.(10) The Ninth Circuit reversed, holding that the statutory provision satisfies constitutional requirements because the statutory exemption to the broad ban on recorded messages is "permissive, not mandatory. It in no way requires the FCC to adopt such exemptions by regulations, order or otherwise."(11)

In its opinion upholding the statute, the Ninth Circuit specifically indicated that it was not passing on the FCC's implementing regulations,(12) suggesting that the regulations, which clearly mandate a distinction between commercial and noncommercial messages, would present a different problem. The Ninth Circuit dismissed a later challenge to the regulations for lack of subject matter jurisdiction because the challenge failed to meet the sixty-day time limitation for review of final agency orders.(13) Although the regulations can no longer be challenged directly, a defendant can raise the constitutionality of the regulations as a defense in any FCC enforcement proceeding.

This Note considers the constitutionality of the FCC's regulations implementing the no-recorded-message provision of the 1991 TCPA and concludes that they violate the First Amendment because they impermissibly distinguish between commercial and noncommercial speech. Part I explains the structure of the FCC's recorded-message regulations and demonstrates that the regulations explicitly distinguish commercial recorded messages from other recorded messages. Part II examines First Amendment protection for commercial speech in light of three 1993 Supreme Court decisions(14) that restructured commercial speech doctrine by holding that the government can single out commercial speech for regulation only in response to a distinct harm arising from the speech. Part III applies the modern commercial speech test to the FCC regulations implementing the no-recorded-message provision of the TCPA and concludes that the FCC regulations violate the First Amendment protections accorded commercial speech because they are not reasonably related to any distinct harm caused by commercial speech, nor are they narrowly tailored.

1. THE FCC's RESTRICTIONS ON COMMERCIAL RECORDED MESSAGES

   Because commercial speech receives different treatment under the First Amendment than fully protected speech,(15) a First Amendment analysis of the regulations implementing the no-recorded-message provision of the TCPA requires a determination of what type of speech the regulations affect. This Part examines the structure of the regulations implementing the TCPA and determines that the FCC explicitly distinguishes commercial speech from noncommercial speech. Section I.A introduces the regulations. Section I.B discusses the Court's definition of commercial speech and concludes that the regulations implementing the no-recorded-message provision impose unique burdens on commercial speech.

   1. The Regulations Implementing the No-Recorded-Message Provision

      The TCPA outlaws the use of recorded messages by all telephone solicitors calling residences, but this restriction permits specific exemptions.(16) The provision provides:

      It shall be unlawful for any person within the United States to initiate

      any telephone call to any residential telephone line using an artificial

      or prerecorded voice to deliver a message without the prior express consent

      of the called party, unless the call is initiated for emergency purposes or

      is exempted by rule or order by the Commission under paragraph (2)(B).(17)

      In paragraph (2)(B) Congress delegated rulemaking authority to the FCC to exempt only certain calls from the prohibition on recorded solicitations.(18)

      Following Congress's lead, the FCC adopted regulations that codify the congressional exceptions to the no-recorded-message provision. The exemptions section of the regulations defines the prohibited telephone calls to exclude calls

      [t]hat [are] not made for a commercial purpose; [t]hat [are] made for a

      commercial purpose but [do] not include the transmission of any

      unsolicited advertisement; [t]o any person with whom the caller has an

      established business relationship at the time the call[s] [are] made; or

      [w]hich is a tax-exempt nonprofit organization.(19)

      The regulations, when coupled with their exemptions, definitively prohibit only recorded messages containing an unsolicited advertisement.

      The statutory regime underlying the regulations categorizes recorded calls on the basis of the information included in the message and subjects certain types of solicitations to more restrictive regulation.(20) Congress denied the FCC the option to exempt any calls containing an unsolicited advertisement from the ban on recorded messages. The FCC regulations quoted above perpetuate the congressional distinction between messages that contain an advertisement and those that do not. Differentiating a recorded unsolicited advertisement from other recorded messages raises First Amendment questions about the level of protection accorded to advertisements.

   2. The FCC Regulations as a Commercial Speech Restriction

      The regulations implementing the no-recorded-message provision, which prohibit calls containing an unsolicited advertisement, constitute a restriction on commercial speech because of their broad definition of "advertisement." In the First Amendment context, commercial speech remains a somewhat ambiguous concept.(21) The Court has oscillated between different definitions of commercial speech depending on the facts of the case, and even the limited definitions on which the Court relies are rather vague. Regardless of the definition used, however, the FCC's restriction on unsolicited advertisements is a commercial speech regulation.

      In the first case to extend constitutional protection to commercial speech, the Court characterized commercial speech as that "which does 'no more than propose a commercial transaction.'"(22) In later cases, the Court developed a more expansive notion of commercial speech, describing it as "expression related solely to the economic interests of the SpeaKer and its audience."(23) The Court continues to use both definitions, as well as combinations of the two,(24) preferring to rely on the "common sense" difference between commercial and noncommercial speech.(25) The Court recently admitted that the distinction between commercial and noncommercial speech was "only a matter of degree."(26)

      The regulations implementing the TCPA, however, differentiate commercial speech from noncommercial speech under either definition because the regulations' focus on "unsolicited advertisements" meets even the Court's narrowest definition of commercial speech. The regulations provide that any telephone call that does not include an "unsolicited advertisement" is exempt from the ban on recorded-message players.(27) Under the regulations, an unsolicited advertisement means "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission."(28) Thus, the FCC prohibits recorded messages that propose commercial transactions -- the narrow...