The Federal Communications Commission (FCC) is a federal agency that regulates interstate and international communications across various forms of transmission.
It has jurisdiction over radio communication, telephone, TV, wire, cable, and satellite across the U.S. and its territories. The agency operates independently of the U.S government, although its operations are overseen by Congress.
The FCC oversees the creation and implementation of communication laws, regulates the communications industries, and promotes technological innovation.
The Federal Communications Commission doesn't control the industries it regulates so much as it regulates the information that's delivered through these means of communication.
Businesses may be surprised to learn that the Federal Communications Commission has jurisdiction over what can be sent through SMS, or text messages from business to consumer. FCC rules state that a business cannot send unsolicited texts to a customer unless that customer has opted to receive texts from the business.
The reason why the FCC requires businesses to ask customers to opt-in for text messages dates back to the days before cell phones. Telemarketing was becoming a nuisance as marketers were relentless in their pursuit of finding customers.
The federal government felt this was unfair to consumers and passed an amendment to the Communications Act of 1934 known as the Telephone Consumer Protection Act in 1991.
The Federal Communications Commission has extended this act to cover text message marketing campaigns by requiring businesses to ask for permission to text a customer.
It's important for businesses to understand and respect this rule as it helps them stay on the right side of the Federal Communications Commission and avoids the risk of fines.
Read on to learn more about the Federal Communications Commission and how federal regulations and rules affect how you run a text message marketing campaign.
What is the FCC?
The FCC is a federal regulatory agency that oversees the communications industry. Its main responsibility is the creation, implementation, and enforcement of communication laws across all forms of broadcast transmission.
The overall function of the Federal Communications Commission is to protect consumers from unwanted imagery, global communications, and other intrusions while making sure that the industries it regulates practice due diligence and cooperate with Federal Communications Commission rules.
What is the FCC Communications Act of 19?
The FCC Communications Act, also known as the Communications Act of 1934, brought together and organized FCC regulation of telegraph, telephone, and radio communications.
The Act created the Federal Communications Commission to keep watch on and regulate the industries. Over time, the act was updated to give the FCC more power to govern new technologies as they arose.
Currently, the FCC regulates everything from personal radios to major broadcast stations. Essentially, the Federal Communications Commission has the ability to police any signal that's broadcast over the air or by wire. For more information please go to the FCC website.
What are the FCC's responsibilities?
The FCC has seven subchapters that regulate all facets of the broadcasting industry and has the power to set rates and fees, assign frequencies, enforce competition, commercials, and more.
Its overarching purpose is to ensure consumers are connected to the world at large through various types of communication while ensuring the communications market stays competitive. The agency also protects consumer privacy and interests and assists with homeland security.
In the event a business or individual breaks a Federal Communications Commission rule or law, the agency can take punitive action against the offending business or person.
Once the FCC is aware of a violation, it engages in an investigation and issues a fine that's in keeping with the severity of the infraction. The agency does not have police powers, but it can punish through fines and license revocations.
FCC Regulations for Business Owners
Federal regulations for business owners are designed to keep the playing field level and make sure that all parties act in an ethical and fair manner.
It makes sure that businesses operating a broadcast business don't interfere with other broadcast operators, broadcasters roll material that's appropriate for viewers, and all businesses using all methods of communication don't take advantage of their audience and customers.
The FCC enforces standards of decency in broadcasting to ensure that nothing overly offensive is broadcast to the public at large.
The FCC has a duty to protect the public from offensive material, predatory practices, and any other unwanted or adverse materials that can be broadcast over the air.
The category of communications services is a broad one, especially since the FCC is in the business of regulating all forms of communication.
The FCC has jurisdiction over any item that has the capacity to deliver voice or video signals through a wire or over the air. In some instances, it can also hold operators to a standard of decency and put in place rules that outline the proper distribution of marketing materials.
Advertising and marketing
The Federal Communications Commission has some oversight when it comes to advertising and marketing materials that are broadcast or delivered through other means of communication.
By and large, the agency can't tell a broadcaster what it can and cannot air, although it can prohibit certain topics that are banned by other regulatory federal agencies.
The FCC relies on broadcasters to maintain internal standards of decency to prevent the transmission of obscene or otherwise prohibited materials. In the event something offensive is broadcast, the Federal Communications Commission usually relies on consumer complaints to bring the matter to its attention.
The agency takes a similar hands-off approach to marketing materials that are delivered through various forms of communication.
It does actively engage in creating rules and media regulations for how marketers and consumers connect with each other and leans towards consumer protection versus allowing businesses to market to consumers in any fashion they deem necessary.
In most cases, the Federal Communications Commission leaves the responsibility for regulating advertising and marketing to the Federal Trade Commission (FTC) and the Food and Drug Commission (FDA). One aspect that the FCC does actively govern is the prohibition of advertising materials that are false or misleading and can result in fraud.
Consumer protection is a necessary function of the FCC. The agency is sometimes proactive in its efforts to protect consumers, but most of the time, it acts upon consumer complaints and alters or adds new rules in response.
When a company is overly aggressive or ignores FCC rules as part of its operation, the FCC acts by suing offending communications companies and seeking punitive fines. The FCC frequently puts companies out of business through heavy fines and penalties.
Sometimes, communications companies take advantage of loopholes in the laws and rules and use various methods of communication to find vulnerable people. Once the Federal Communications Commission learns about these tactics, it takes action by closing the loopholes. Any company that's caught engaging in the now-banned activity opens itself up to a lawsuit brought by the FCC.
One recent issue that partly led to the opt-in requirement for text marketing campaigns was debt collection activity. Prior to the wide availability of unlimited cellphone text and voice packages, consumers had to pay by the minute and per each text.
An unsolicited phone call or text caused the consumer to lose their minutes and have to pay for texts that they didn't ask for. This was found to be an unfair practice and unsolicited texts and calls were barred. Now, businesses have to ask a consumer if it's OK for the business to send a text or call the consumer.
In September 2022, the FCC issued a proposal that adds another layer of difficulty to engaging in an SMS/MMS marketing campaign.
As it currently stands, smartphone operating systems and wireless carriers actively engage in the blocking of spam texts and robocalls, but they are doing this voluntarily.
The Federal Communications Commission's proposed rules make it a mandatory action that carriers have to take to protect their consumers. If the unnamed communications act goes into effect, businesses will have to be more careful with their opt-in efforts and accept that some texts will be lost to blocking efforts by the carrier if the rule becomes effective.
Licensing and certification requirements
The FCC handles licensing and certifications for business owners who wish to engage in broadcasting services.
In the event a business wants to start a radio station or a television station on an unused frequency, it has to apply for a license from the Federal Communications Commission.
Licensing ensures that the operator is fully informed of the rules, regulations, and laws that apply to the act of broadcasting as well as making sure the business operates within the stated parameters of broadcasting.
A license for various types of broadcasting is surprisingly affordable and is not a major burden on a business that's looking to operate a broadcast outlet.
As long as the business that holds the license keeps it renewed on a regular basis, it can stay on the air as long as it maintains accepted operating standards and complies with FCC guidelines and regulations.
How do federal regulations impact businesses?
Businesses tend to find regulations a burden as opposed to a benefit, but they're necessary in order to maintain a competitive environment that's mostly fair.
Without an agency like the FCC, the communications business would be the Wild West and businesses would have a much harder time reaching their intended audiences.
Consumers also benefit by being able to control how they view and otherwise receive advertising materials, allowing them to engage more directly with a business they feel favorably towards.
Benefits of FCC regulations
The FCC makes sure that all forms of communication operate in a reliable and predictable fashion. It ensures consistency for each type of communication and media it oversees, enabling consumers to have confidence in their communications products. Businesses also benefit from having clear rules and regulations to follow in their daily pursuit of delivering various forms of communication.
The FCC is in charge of the various communications spectrums that all broadcasters and communications companies use to connect themselves and their customers to each other.
The spectrum auctions not only generate income for their use, they also make sure the winning bidder uses the spectrum for its benefit and that of its customers, if applicable, in a fair manner. This also prevents one entity from gaining a monopoly over a given spectrum and prevents others from using it.
When a company oversteps or abuses the rules and regulations in the pursuit of profits, the FCC has the authority to conduct an investigation into the matter, levy a fine, and issue administrative judgments against the violator. The fines can reach amounts that seriously impact the ability of the company to perform going forward or affect its overall value.
A business has to weigh the cost of using a particular method of communication versus the return on investment, just as it would with any other type of business decision.
As previously mentioned, the cost of licenses from the FCC is reasonable across all categories of licensure. That means the costs that a business has to consider are ones that involve pursuing the intended activity of starting a new broadcast station, getting a HAM radio communications license, or engaging in the production of broadcast equipment such as radios.
There are always challenges that come from doing something that falls under the watchful eye of a federal agency.
In the case of the FCC, a business has to be careful that it doesn't violate the restrictions that apply to its operations, regardless of the main focus of the business.
A business that's looking to create a text marketing campaign, but isn't in an industry that has anything to do with communications, needs to be fully aware of the FCC opt-in rules for text marketing.
The FCC tends to take consumer complaints seriously as this is the agency's main source of awareness that an entity is violating its rules or federal laws. A business that's running a text marketing campaign is operating within the rules and keeping track of permissions for each phone number can still be subject to FCC scrutiny. This can result in lost time and money, and can make a business question the benefits of running such a campaign.
There are an untold amount of compliance requirements for the industries governed by the FCC. Businesses need to study the requirements that directly affect their operations, or work with a consultant who can provide guidance.
The best way to maintain compliance with the FCC is to understand what's expected of the business and operate in a fashion that is in line with the expectations of the FCC.
Compliance guides are written in plain English and are easily understood by individuals who are new to interacting with the FCC. The guides cover topics that range from emergency alert system testing to hearing aids.
There's also a guide that lays out how the FCC protects consumers from predatory behavior, a guide for sports blackout rules, and even rats for interstate inmate calling services.
All communications activities, no matter how large or small, are governed by the FCC. The FCC outlines how the operation of a service or device needs to be handled, what it expects from the manufacturer and the standards of operation.
These guides serve to inform the relevant business how it should operate, manufacture, and otherwise design its communications device.
Privacy and the FCC
Respecting the privacy of an individual or entity is something that cuts across all areas of the FCC the Privacy Act of 1974, also known as the federal data protection law.
The FCC, along with all other federal agencies, is required to retain a minimal amount of information about people who come into contact with the agency. The information that is retained has to be protected from a data breach in a secure fashion as well.
A business that's had to comply with the EU's GDPR laws will find that the Privacy Act is similar in nature, even though it predates the GDPR by decades.
The policy states that "an individual's privacy is a right that must be respected and protected." It further goes on to state that all contractors and employees of the FCC will be made aware of and comply with the Privacy Act and all related communications law.
Businesses that come into contact with the FCC can be assured that the information they provide is kept private at all times and is unlikely to be uncovered through a data breach.
Understanding the importance of the FCC for business owners
The FCC plays an important role when it comes to making sure businesses and consumers get what each one expects from the other. Businesses can solicit customers for their permission to text them promotional materials such as sale announcements, coupons, and the latest news. In turn, consumers have control over their choice to receive texts from businesses.
At Mailchimp, we're here to help you run an SMS marketing campaign that keeps you compliant with the FCC's rules whenever you reach out to your customers via text.
We've put together a free guide to text message marketing that helps you stay on the right side of the FCC regulations for MMS and SMS marketing. You'll learn why text message marketing works, the legality of a text marketing campaign, and best practices. It's a great way to grow your business while adding another tool to your marketing campaign toolbox.