Do not call lists: a cause for telemarketing extinction or evolution?

Bateman, Connie R. ; Schmidt, JoAnn

ABSTRACT

Are you one of the more than 122 million consumers registered on the National Do Not Call registry as of April 2006? (www.ftc.gov, Apr 21, 2006) If you have registered, are you one of the 92% claiming fewer calls are being received? (www.harrisinteractive.com, Feb 23, 2006) Are you aware the telemarketing industry is larger and more profitable today than before the Do Not Call List went into effect?

This paper will review secondary data from various governmental, corporate, media and trade journal sources and reveal a critical issue in the telemarketing industry where consumers were concerned about their right to privacy and disgruntled with the growing number of invasive telemarketing sales calls received in their homes. The information will reveal how quickly consumers have taken advantage of the tool provided by the Do Not Call List to stop these unwanted calls and how the various State and Federal Governments as well as the Courts have handled the Do Not Call laws along with the telemarketing industry's reactions. Implications for government, businesses and consumers are made after reviewing the information found as well as providing an attempt to allow the reader to make a prediction about future legislation regarding other privacy issues, such as do not email lists, based on the information.

Consumers seem to have won the day with the restrictions imposed on telemarketing practices regarding live telephone calls. Is this just the beginning of such consumer popularity choices or will the governments and courts decide not push their fate in keeping a balance between a company's right to do business and the consumer's right to privacy?

INTRODUCTION

The Do Not Call strategy basically allows consumers to register their telephone numbers on a list whereby, non-charity telemarketing organizations must perform regular list checks and cease to make unsolicited calls to list members or risk paying fines and penalties levied by government agencies. The Do Not Call registry was created to offer consumers a choice regarding telemarketing calls. The Federal Trade Commission (FTC), the nation's consumer protection agency, made a decision to create the National Do Not Call Registry. This was the result of a comprehensive, three-year review of the Telemarketing Sales Rule, in addition to extensive experience in Rule enforcement over a seven year period. The FTC held numerous meetings and briefings to gain feedback from interested parties, and considered over 64,000 public comments. The majority of consumers were in favor of creating the registry and businesses were emphatic and consistent in expressing their need for an established business relationship exemption (www.ftc.gov, Feb 23, 2006).

[section] 310.4(b)(1)(iii)(B) of the Telemarketing Sales Rule specifically identifies the pattern of calls that are considered abusive telemarketing acts or practices and clearly states its intent for a federally maintained Do Not Call List allowing consumers the choice to add their telephone numbers to the list to try and limit the number of outbound telephone sales calls they were receiving. Even though the FTC was offering consumers a choice regarding telephone calls, the Commission was also aware of the profitable telemarketing benefits to businesses and was careful to add a clause for established business relationships to ensure businesses were not harmed by not being able to call their customers.

"It is an abusive telemarketing act or practice and a violation of this Rule for a telemarketer to engage in, or for a seller to cause a telemarketer to engage in, the following conduct ... Initiating any outbound telephone call to a person when ... that person's telephone number is on the "do-not-call" registry, maintained by the Commission, of persons who do not wish to receive outbound telephone calls to induce the purchase of goods or services unless the seller has obtained the express agreement, in writing ... or has an established business relationship with such person, and that person has not stated that he or she does not wish to receive outbound telephone calls ..."

Telemarketing is an effective tool for businesses. In September 2003, when the Do Not Call List went into effect, efforts by telemarketers were generating about $211 billion in goods and services made up of about 180 million successful sales attempts, so it would seem as if not all consumers felt sales calls were a nuisance (www.siliconvalley.com, Oct 23, 2003). However, telemarketers were making nearly 24 billion calls annually in order to achieve this. Sales calls were frequently placed during the evening hours and conducted with the aid of computers, which often left the consumer hearing "dead air" when the call was answered. The FTC recognized that consumers were unhappy with telemarketer practices and talked about the issue in the Rule.

" ... one of the most invasive practices of the telemarketing industry. "Hang up" calls and "dead air" frighten consumers, invade their privacy, cause some of them to struggle to answer the phone only to be hung up on, and waste the time and resources of consumers working from home. The Commission noted that "abandoned calls" include two distinguishable scenarios: "hang up" calls, in which telemarketers hang up on consumers whom they have called without speaking to them; and "dead air" calls, in which there is a prolonged period of silence between the consumer's answering a call and the connection of that call to a sales representative."

Consumers were ready for a change and welcomed the thought of being in control of their own privacy when the FTC promulgated the revised Telemarketing Sales Rule in January 2003, providing for a National Do Not Call List putting telephone numbers off-limits to outbound telemarketers. The people-pleasing concept of the Do Not Call List aroused the ire of telemarketing firms and caused a flurry of activity at both state and federal political levels. In the last decade various legislative directives for the implementation and maintenance of Do Not Call Lists as well as other consumer privacy issues have been passed at both the State and Federal levels and put to the test in various court battles.

The consumer popularity of tighter restrictions on telemarketer practices imposed by the Do Not Call Lists has certainly not escaped the notice of Congressmen at both the Federal and State levels. This popularity is demonstrated with the endorsement of 100 percent of the states, rule promulgation at both the State and Federal levels, Congressional backing proven by the passage of the Omnibus Appropriations Act of 2003 authorizing the FTC to implement and enforce the Do Not Call provisions of the Telemarketing Sales Rule and a strong voter approval. This voter approval was confirmed when more than 50 million people had signed up for the National Do Not Call List from the time consumers could start to sign up on June 27, 2003 (www.pqasb.pqarchiver.com, Mar 1, 2005) when it went into effect on October 1, 2003. In just two and half years the Do Not Call list entries have more than doubled to over 122 million (www.ftc.gov, Apr 21, 2006).

Telemarketers have also recognized the fact that consumers have clearly spoken their wishes and for the most part have been abiding by the Do Not Call legislation as shown by more 33,000 telemarketing organizations accessing the registry each month and downloading an average of 45 area codes out of a possible 317 (Miller, 2005). Telemarketers as well as other businesses were quick to realize they either had to change their way of doing business or risk becoming extinct in the shrinking market access or face the penalties imposed by both State and Federal government agencies if they failed to follow the directive of the Do Not Call laws. In the two and half years since the Federal Do Not Call List has been in effect, telemarketers have been going through an evolution of business strategy changes. Although there are telemarketing agencies that have been forced out of business and diminished direct call solicitations for businesses due to the Do Not Call legislation, telemarketers who have changed their business focus, such as offering in-bound customer services, are appearing to reap the rewards of creating companies that are becoming more efficient and profitable.

Consumers seem to have won the day with the restrictions imposed on telemarketing practices regarding live telephone calls. Is this just the beginning of such consumer popularity choices or will the governments and courts decide not push their fate in keeping a balance between a company's right to do business and the consumer's right to privacy?

LEGISLATION

Early Legislative Attempts

How did mass telemarketing get started? It is believed that Ford Motor Company may have conducted the first mass-dialing sales initiative in 1964 when the company made 20 million calls to consumers in an effort to generate leads for their local car dealerships. And as early as the mass telephone marketing got started, so did the legislative actions. Also, in 1964, the Tampa, Florida city council passed an ordinance banning "telephone calls for the purpose of offering for sale or selling products or services--without the present existence of a current business relationship" (www.search.epnet.com, May 26, 2003).

Various attempts at legislation were started over 30 years ago, even before telemarketing grew to be such a large industry. Walter Baer is a scholar whose major field of study is the convergence of technology and marketing. He is also credited with the paperless sending of messages from computer to computer, more commonly known as email today. Baer was concerned about privacy issues and felt there had to be something that could be done about the growing invasion of privacy. In 1978, he prepared a petition to the FCC demanding a National Do Not Call list, restrictions on computerized dialers and the penalties that should go with callers not honoring the restrictions, all parts included the current laws today. However, at that time the FCC failed to grasp the technological impacts and deemed such a law would not be necessary. The commission felt most calls were not made under the state-to-state jurisdiction of the FCC and that computers just weren't that widespread.

The Expanding Industry

The FCC's predictions may have held true, as it was very expensive to make interstate long distance calls at that time. However, both legislative and technological changes in the early 1980's helped the telemarketing industry to blossom. One of the factors was the deregulation of the long-distance telephone market and the break up of AT&T telephone. Many new telephone companies were created and competition arrived to help drive down the price of long distance calls, many times to merely pennies, making it very cost-effective for telemarketing pitches.

Technology played its part in the phenomenon with rapid advances in the computer industry coupled with the computerized auto dialers. For a mere $4000, a company could employ an auto dialer that was capable of dialing hundreds of homes at a time and then rerouting successful connections to live telemarketers. This provided companies with inexpensive and efficient technology that was capable of dialing many numbers in the hopes someone at the other line would be willing to hear the sales pitch (www.search.epnet.com, May 26, 2003).

When looking at the amount of calls telemarketers are able to generate, it is no wonder that so many consumers are unhappy with the untimely telephone calls and were eager to embrace the Do Not Call legislation. One estimate has shown that the 10 largest telemarketing agencies in the United States can make over 550 random telephone calls per second (www.pianet.com, Mar 15, 2006). This means approximately 16 billion phones calls containing some type of sales pitch were happening per year in the United States where there were about 166 million residential and another 150 million cell telephone numbers. In 2003, telemarketing was a huge industry that had swelled from just $10 billion annually to a whopping $274 billion annually (www.search.epnet.com, May 26, 2003).

Consumers especially seemed to have an adversity to "dead air" or cold calls generated from the use of preemptive or auto dialers with computers. As early as 1988, 20 states had already enacted legislature restricting the use of auto dialers, usually requiring the caller to provide identification. Telemarketers were also aware of consumers' growing unhappiness with the practice and had already made a move to get rid of the annoying cold calls by utilizing pre-recorded messages. Telemarketers have traditionally been using technology to maneuver around legislation that has been passed to restrict telemarketing practices (www.search.epnet.com, May 26, 2003).

Do Not Call List--Federal Legislation

The authority for the Do Not Call legislation has its roots in the Constitution where Congress was established to pass laws, including the ability to establish various commissions, which are given the power to aide in the compliance of Legislative actions. One such commission is the Federal Trade Commission (FTC) which was established in 1914 as an independent agent of the U.S. Government to help make sure markets were able to be competitive by investigating companies and eliminating unfair methods of competition within the market structure (www.ftc.gov, Feb 23, 2006). The FTC has jurisdiction over communication that occurs across state lines. The agency was founded by Woodrow Wilson to help break up the huge trusts and monopolies that were in place in the United States at that time. Then in 1938, Congress passed the Wheeler-Lea Amendment, which included a broad prohibition against "unfair and deceptive acts or practices" which helped to establish the basis which has lead to the prominent role the FTC has played in protecting consumers in various activities, including the Telephone Consumer Protection Act of 1991.

The FTC generally works in conjunction with the Federal Communications Commission (FCC) regarding communications issues. The FCC is another independent Federal agency that was established by Congress with the implementation of the Communications Act of 1934 and was given the responsibility to regulate interstate and international communications. The FCC's jurisdiction includes all 50 states, the District of Columbia and any U.S. possessions and includes communications by radio, television, wire, satellite and cable (www.ftc.gov, Feb 23, 2006).

The initial federal legislative protection mandated in the Telephone Consumer Protection Act (TCPA) of 1991 required the Federal Communications Commission (FCC) to promulgate procedures to protect the privacy rights of consumers without a cost to the consumers. The wording in the TCPA hinted that a "single national database to compile a list of phone numbers ... " may be required. However, the FCC determined at that time that the most "efficient, effective and economic manner" would be for each telemarketing firm to maintain their own do not calls lists and opted not to maintain a national list (www.junkbusers.com, Dec 15, 2003). Consumers could then directly sue for damages if telemarketers were not honoring their request for removal from the company's calling list.

Other federal legislation includes the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994, granting the Federal Trade Commission to "prescribe rules prohibiting deceptive ... and other abusive telemarketing acts" and on February 23, 2003 President Bush signed the $4 billion spending Omnibus Appropriations Act of 2003 authorizing the FTC to "implement and enforce the Do Not Call provisions of the Telemarketing Sales Rule" and included about $16 million for launching the National Do Not Call registry (www.siliconvalley.com, Oct 23, 2003).

The FTC found that consumers were not protected enough from the company-specific Do Not Call rules set forth in the original Telemarketing Sales Rule. Consumers were still receiving at least one unwanted sales call per company calling and even if the consumer requested to have their name added to the company's individual Do Not Call list, there was no way to verify the company actually placed the consumers name on their list. The commission discusses their concerns in the Rule.

"The company-specific approach is extremely burdensome to consumers, who must repeat their "do-not-call" request with every telemarketer that calls; consumers' repeated requests to be placed on a "do-not-call" list are ignored; consumers have no way to verify that their names have been taken off of a company's calling list; consumers find that using the TCPA's private right of action is very complex and time-consuming, and places an evidentiary burden on the consumer who must keep detailed lists of who called and when; and finally, even if the consumer wins a lawsuit against a company, it is difficult for the consumer to enforce the judgment. In addition to the fact that it has proven ineffective, there is another problem that is not even addressed by the company-specific provision. In particular, because a great many telemarketers are now placing huge patterns of unsolicited telemarketing calls, many consumers find even an initial call from a telemarketer or seller to be abusive and invasive of privacy."

Do Not Call Provisions of the Revised Telemarketing Sales Rule

The FTC was able to help remedy this by using a very important piece of legislation from the Telemarketing Sales Rule of 1995 for the implementation of the current National Do Not Call list. This Sales Rule allows the FTC to enforce the provisions of the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 and set forth fines for violations (www.thedma.org, Dec 16, 2003). It is under this Telemarketing Sales Rule, the FTC, according to APA guidelines, posted a revised Telemarketing Sales Rule in the Federal Register with an effective date of March 31, 2003. This important revision allowed consumers to place their telephone numbers on a nationally maintained Do Not Call list affecting interstate telemarketing calls and newspapers circulating in more than one state starting on June 27, 2003. Once placed on the list, a telephone number remains on the list for a period of 5 years and provisions added so the List is periodically purged of all disconnected or reassigned numbers. The Commission discusses their intent in the Rule.

"The Commission has determined that consumer registrations will remain valid for five years, with the registry periodically being purged of all numbers that have been disconnected or reassigned. The Commission wishes to minimize the inconvenience to consumers entailed in periodically reregistering their preference not to receive telemarketing calls. However, the Commission is also aware that the length of time registrations remain valid directly affects the overall accuracy of the national registry. A number of commenters stated that 16 percent of all telephone numbers change each year, and that 20 percent of all Americans move each year. Unless the system includes a process to counteract this effect, numbers in the national registry that have been disconnected and then reassigned to other line subscribers would remain in the registry even though those line subscribers to whom the numbers are reassigned may not object to receiving telemarketing calls."

This amendment to the Telemarketing Sales Rule also required telemarketers to pay an annual access fee to the list of $29 per area code, or a maximum of $7,250 and to check the list every 3 months. Companies caught violating the request can be assessed a fine of up to $11,000 for each violation. Specific exclusions included calls from charities and of not surprisingly, polls on behalf of politicians, or if a person has purchased, leased or rented an item in the previous 18 months. However, if a consumer has asked to be placed on a company's specific Do Not Call list, the seller may not call the consumer again even if the seller continues to do business with the consumer (www.ftc.gov, Feb 23, 2006). This revised ruling also provided a clause in which individuals could directly sue violators up to $500 if they receive a call more than twice in 12 months (www.usatoday.com, Jun 27, 2005). In addition, telemarketers were required to have their name and telephone number show up on caller Id instead of "out of area" by January 1, 2004 and call times were restricted to only place calls between 8 a.m. and 9 p.m. (www.usatoday.com, Sep 25, 2003). Even though many consumers had expressed concerns regarding the hours chosen for the restrictive time, the Commission talks about consumer accessibility in the Rule as stated, "The Commission recognizes that while some consumers may find it objectionable to receive telemarketing calls between 8:00 a.m. and 9:00 p.m., the majority of consumers would not find calls within these hours to be particularly abusive of their privacy."

The Commission realized the most intrusive and frightful aspect of outbound telemarketing calls, were the annoying "dead air" or "hang up" calls, commonly referred to as abandoned calls. The FTC made sure the revised ruling contained safe harbor provisions for consumers to help remedy these types of calls brought about by technology and the use of computer and preemptive dialers. The Commission wanted to ensure consumers had ample time to answer telephone calls and when the calls were answered to ensure interaction with the caller occurred in a timely manner. The safe harbor provisions encompass four parts in the Rule.

" ... certain specified standards designed to minimize call abandonment. These standards are: (1) the seller or telemarketer must employ technology that ensures abandonment of no more than three percent of all calls answered by a consumer, measured per day per calling campaign; (2) the seller or telemarketer must allow each telemarketing call placed to ring for at least fifteen seconds or four complete rings before disconnecting an unanswered call; (3) whenever a sales representative is not available to speak with the person answering the call within two seconds of that person's completed greeting, the seller or telemarketer must promptly play a recorded message; and (4) the seller or telemarketer must retain records ..."

Another important aspect to the revised Telemarketing Sales Rule was to ensure non-profitable and charitable organizations would not be severely hampered. The Commission was also aware of Constitutional protections of the First Amendment as it pertains to charitable organizations. The Commission still allowed recourse to call recipients by retaining the company-specific exclusion as stated in the Rule.

"Calls on behalf of charitable organizations will be subject to the company-specific "do-not-call" provision ... Because of the central role of the telephone and of professional fundraisers in the non-profit arena ... [C]haritable solicitations involve a variety of speech interests ... that are within the protection of the First Amendment and therefore have not been dealt with as purely commercial speech."

The most significant industry opposition to the do not call list came from not exempting existing business relationships from the Rule. One business, Gottschalks, a regional department store chain headquartered in Fresno, California, conducted a poll of its patrons and submitted their findings to the FTC. In their poll, 13,000 out of 15,000 customers indicated they would support allowing Gottschalks to call them even if they had signed up on a Do Not Call registry to block other sales calls (www.ftc.gov, Oct 23, 2006). Comments received by the Commission from industry representatives along with the Commission's findings were noted in the Rule.

"In failing to include an exemption for existing business relationships, the proposed Rule is at odds with the approach taken by the states with regard to "do-not-call" registries. All state "do-not-call" laws, except Indiana's, include such an exemption. State regulators noted that there have been few complaints from consumers about calls from companies with whom they have an existing business relationship. In addition, FCC regulations under the TCPA exempt "established business relationships" from the company-specific "do-not-call" regulations. Based on the record as a whole, the Commission is persuaded that the benefits of including an exemption for established business relationships outweigh the costs of such an exemption. Therefore, the Commission has decided to provide an exemption for "established business relationships" from the national "do-not-call" registry, as long as the consumer has not asked to be placed on the seller's company-specific "do-not-call" list ... The amended Rule limits the "established business relationship" exemption to relationships formed by the consumer's purchase, rental or lease of goods or services from, or financial transaction with, the seller within 18 months of the telephone call or, in the case of inquiries or applications, to three months from the inquiry or application."

The FTC was careful to make sure the list itself and the information contained on the list would not be used in a harmful manner. In order to protect consumer's privacy, Rule states, "For both telephone and Internet registrations, the only personal identifying information that will be maintained by the national "do-not-call" registry will be the consumer's telephone number." The Rule also specifically prohibits sellers from abusing the list as indicated, "of the proposed Rule prohibited any seller or telemarketer from selling, purchasing, or using a seller's "do-not-call" list for any purpose other than complying with the Rule's "do-not-call" provision" (www.ftc.org, Feb 23, 2006).

Of course honest mistakes do happen and Commission also included safe harbor provisions for businesses. Section 310.4(b)(3) of the revised Rule contains provisions to ensure businesses are not charged penalties in the case of mistakes.

"During the original rulemaking, the Commission determined that sellers and telemarketers should not be held liable for calling a person who previously asked not to be called if they had made a good faith effort to comply with the Rule's "do-not-call" provision and the call was the result of error. The Rule established four requirements that a seller or telemarketer must meet in order to avail itself of the safe harbor:

(1) it must establish and implement written procedures to comply with the "do-not-call" provision;

(2) it must train its personnel in those procedures;

(3) it must maintain and record lists of persons who may not be contacted; and

(4) any subsequent call must be the result of error.

The above criteria tracked the FCC's regulations, which set forth the minimum standards that companies must follow to comply with the TCPA's "do-not-call" provision. By comparison, in the NPRM, the Commission proposed three additional requirements which have to be met by sellers or telemarketers or others acting on behalf of a seller or charitable organization before they may avail themselves of the "safe harbor:"

(1) they must use a process to prevent telemarketing calls from being placed to any telephone number included on the Commission's national registry using a version of the registry obtained not more than 30 days before the calls are made;

(2) they must maintain and record consumers' express verifiable authorizations to call; and

(3) they must monitor and enforce compliance with their ''do-not-call'' procedures."

The Federal Communications Commission (FCC) threw in its endorsement of FTC's Do Not Call registry in an amendment to the Telephone Consumer Protection Act of 1991 (TCPA). This amendment provides for coordination with the FTC list. This endorsement was important as broadened jurisdiction was realized since the FCC has the authority to impose the restrictions on intrastate calls as well as calls from commercial telephone carriers, banks and the airline industry, industries that were among those generating the largest volume of telemarketing calls (www.adlawbyrequest.com, July 7, 2003).

In more recent adaptations by both the FCC and FTC, effective January 1, 2005, telemarketers are required to "scrub" or compare their contact lists against the National Do Not Call List every 31 days instead of every 3 months, providing a faster response time for consumers (www.ftc.gov, Feb 23, 2006). The actual information provided to companies from the National Do Not Call List is simply the 10 digit telephone numbers sorted by area code. Currently, a company can access the first 5 area codes for free and subsequent area codes can be accessed for $56 per area code with a maximum cost of $15,400 to obtain the entire national database each year (www.ftc.gov, Feb 23, 2006).

Howard Beales of the Federal Trade Commission's Bureau of Consumer Protection, observed, "The principle behind the National Do Not Call Registry is consumer choice. The idea is that it's your home, it's your phone, and now it's your choice whether to get telemarketing calls at home" (www.state.ny.us, Jul 7, 2003). This opinion appears to be shared by many and seems to be the one common premise behind the concept of all of the Do Not Call legislative actions.

Do Not Call--State Legislation

State politicians had also realized the voter popularity of Do Not Call legislation. As early as 1993, Florida congressmen had passed the first Do Not Call list legislation to protect their elderly from unwanted solicitation calls at a state level (www.tampabaylive.com, Sep 24, 2003). In April 1998 only 2 states had passed Do Not Call legislation, and by December 2000, twelve states had already enacted legislation for state-maintained Do Not Call registries (www.adlawbyrequest.com, Dec 4, 2000). As of August of 2003, 43 states had Do Not Call legislation in place and the remaining 7 states had pending legislation (www.gryphonnetworks.com, Feb 15, 2006). North Dakota's Do Not Call list law was effective August 1, 2003 and by the end of September 2003, almost 132,000 North Dakotans, or about 57% of telephone subscribers had added their names to the list (www.grandforksherald.com, Sep 25, 2003). In April 2002, all 50 states banded together to submit combined comments to the FTC regarding its proposed amendment to the Telemarketing Sales Rule regarding the Do Not Call registry. States overwhelming agreed with a National Do Not Call list but were concerned the federal registry would undercut the states' consumer protection laws and discourage states from passing their own legislative actions (www.adlawbyrequest.com, Apr 30, 2002). Most state-level Do Not Call lists work in conjunction with the original federal legislation and more recently, the National Do Not Call List.

Traditionally the FTC has maintained that the federal laws do not supersede the effectiveness of the states' laws that are frequently more restrictive. However, the FCC is less forgiving in this area and does not allow the state laws to conflict with the federal laws, especially concerning the entities for which the FCC has jurisdiction (www.the-dma.org, May 5, 2004). Five states currently have laws more restrictive than the federal law. New Jersey, Indiana and Wisconsin all have laws that do not recognize the "established business relationship" exception and North Dakota and Florida have laws that do not allow "pre-recorded voice messages" to individuals (www.epic.org, Jan 2006). The FTC is guarded in ruling for any state preemption until more time has passed to see how successful the current approach is working but remains hopeful that eventually a single list could be enforced. The FTC talks about this in the Rule.

"At this time, the Commission does not intend the Rule provisions establishing a national "do-not-call" registry to preempt state "do-not-call" laws. Rather, the Commission's intent is to work with those states that have enacted "do-not-call" registry laws, as well as with the FCC, to articulate requirements and procedures during what it anticipates will be a relatively short transition period leading to one harmonized "do-not-call" registry system and a single set of compliance obligations. The Commission is actively consulting with the individual states to coordinate implementation of the national registry to minimize duplication and maximize efficiency for consumers and business."

Currently, 35 states work directly in conjunction with the Federal Do Not Call registry. When consumers sign up for the list directly through the Federal list, no additional cost to the consumer occurs and the registration has an effective range of 5 years. Other states such as Colorado, Indiana, Kentucky, Massachusetts, Missouri, Oklahoma, Louisiana, Mississippi, Pennsylvania, Tennessee and Wisconsin all maintain separate lists where consumer registration is free and the duration lasts anywhere from 2 years to unlimited. Finally, Alaska, Florida, Texas and Wyoming all have separate state maintained lists that require user registration fees and some renewal fees anywhere from $2.25 per telephone number in Texas to $50 per telephone number in Alaska (www.aarp.org, June 2005). Many of the states that do maintain their own lists strongly recommend that consumers sign up at both the state and federal levels to ensure the maximum protection. In some cases, the state laws are more restrictive and in others the federal law is more restrictive.

COURT CASES OPPOSING DO NOT CALL LEGISLATION

The National Do Not Call registry does appear to be courting two conflicting, constitutional issues, the right of privacy and the freedom of speech (www.search.epnet.com, Oct 2003). These conflicts allowed for a flurry of activity at both the legislative and appellate levels at both the State and Federal levels. Just a few days short of the much anticipated launch date of the FTC's National Do Not Call registry enforcement, two U.S. District Courts ruled to prevent its operation (www.privacyrights.org, Nov 2003). For many companies, telemarketing delivers. When compared one-on-one with other direct response media including direct mail, telemarketing has a lower cost per contact, lower cost per lead, lower cost per conversion and a lower cost per sale and/or renewal (King, Dec 17, 2003). So it stands to reason, that successful businesses with large amounts of money available did not embrace the Do Not Call List without a fight.

Companies that feel their rights have been infringed upon pour millions of dollars into lobbying efforts at both the Federal and State congressional levels as well as bringing about lawsuits. This was demonstrated in one such lawsuit, U.S. Security v. FTC, brought about by Direct Marking Association (DMA). This trade association comprises business and nonprofit organizations using and supporting direct marking tools and techniques. DMA is an advocate for industry standards and responsible marketing and has over 4,800 corporate, affiliate and chapter members from the U.S. and 46 other countries.

On September 23 2003, U.S. District Court Judge Lee R. West of the Oklahoma District Court ruled in favor of Direct Marketing Association on a technicality, stating the FTC overstepped its boundaries of authority and did not have jurisdiction to promulgate the Do Not Call service and that it was the FCC in which congress has given authority. He indicated the recently adopted rules allowing the FTC to create the list were not valid and that the amended Telemarketing Sales Rule did not specifically speak to the Do Not Call List authority in the TCP Act of 1991, however, he did not issue an order for the FTC to stop the list and also hinted that if Congress should pass legislation granting the FTC the necessary authority to create the least, the FTC would have the authority to do so. The FTC immediately filed for a motion to stay Judge West's order pending an appeal to the Oklahoma Federal Court (www.msnbc.com, Sep 24, 2003). In a lightening-speed response to this court ruling, Congress the very next day, on September 25, 2003, passed bill HR 3161 in both houses to grant the FTC explicit authority to create a National Do Not Call List for telemarketers, rendering Judge West ruling moot (www.cnnmoney.com, Sep 26, 2003). The House passed the bill by 412-8 and the Senate passed the bill by 95-0, almost a unanimous vote. Billy Tauzin, the Louisiana representative who had introduced the bill, stated, "When it comes to legislation, Congress is usually a slow-moving beast. But when 50 million American's are mad, we can be a real speedy rabbit" (www.usatoday.com, Sep25, 2003)

However, this victory proved to be short-lived. U. S. District Judge Edward Nottingham of the Denver Circuit Court heard the case of Mainstream Marketing v. FTC where he decided the Do Not Call list was unconstitutional on the grounds of violating free speech and discrimination because it applies to calls from businesses but not charities (www.tmcnet.com, Sep 29, 2003). Then in yet another turn of events, on October 7, 2003, the Tenth Circuit Court granted the FTC a stay on Denver Court's decision and operations of the Do Not Call List are going forward while the appeal is pending its review (www.msnbc.com, Oct 8, 2003). The Tenth Circuit Court found that the FTC passed the difficult four-pronged test in order to succeed under the Federal Rules of Appellate Procedure 8 and 18: 1) likelihood of success on appeal; 2) threat of irreparable harm if the stay or injunction is not granted; 3) absence of harm to opposing parties if the stay or injunction is granted; and 4) any risk of harm to the public interest. By passing the 4-part standards test, the District Court was able remove the order barring the enforcement of the new do-not-call list legislation set forth in the lower court (FTC v. Mainstream Marketing Services Order, Oct 7, 2003). However, the 10th Circuit Court did uphold the Do Not Call legislation. One of the statements found in the 10th Circuit Court ruling staying the order to bar of the implementation of the Do Not Call List, seems to give some insight into the court's position. The Court indicated that it felt that the FTC would be able to demonstrate a reasonable fit between substantial government interests set forth in the legislation and the implementation of the Do Not Call List (FTC v. Mainstream Marketing Services Order, Oct 7, 2003).

The FTC had attempted justification of First Amendment cases in the Rule and how the Do Not Call provisions outlined by the Commission should be consistent with other cases such as Central Hudson Gas & Elec. V. Pub Serv. Comm.of N.Y and Rowan v. Post Office Dept.

"The Commission believes that, with respect to telemarketing that solicits sales of goods or services, the "do-not-call" registry provisions are consistent with the relevant First Amendment cases. In Central Hudson Gas & Elec. v. Pub Serv. Comm. of N.Y., the Supreme Court established the applicable analytical framework for determining the constitutionality of a regulation of commercial speech that is not misleading and does not otherwise involve illegal activity. Under that framework, the regulation (1) must serve a substantial governmental interest; (2) must directly advance this interest; and (3) may extend only as far as the interest it serves--that is, there must be "a 'fit' between the legislative ends and the means chosen to accomplish those ends ... a fit that is not necessarily perfect, but reasonable ... that employs not necessarily the least restrictive means but ... a means narrowly tailored to achieve the desired objective. With regard to the first of these criteria, protecting the privacy of consumers from unwanted commercial telemarketing calls is a substantial governmental interest ... is designed to advance the privacy rights of consumers by providing them with an effective, enforceable means to make known to sellers their wishes not to receive solicitation calls. The registry is also designed to cure the inadequacies as a privacy protection measure that became apparent in the company-specific "do-not-call" provisions included in the original Rule. Thus, the second of Central Hudson's criteria is satisfied. Finally, the national "do-not-call" registry is a mechanism closely and exclusively fitted to the purpose of protecting consumers from unwanted telemarketing calls ... In Rowan v. Post Office Dept., the Supreme Court upheld a federal statute empowering a homeowner to bar mailings from specific senders by notifying the Postmaster General that she wished to receive no further mailings from that sender ... The Commission believes that the First Amendment similarly raises no impediment to Rule provisions that will enable a person by signing up on a national "do-not-call" registry to block commercial communications via telephone, which are far more intrusive than the communications, at issue in Rowan, via printed words and images."

Traditionally, courts have overwhelming deferred to agencies rulings unless proof of some gross constitutional violation such as arbitrariness or capriciousness can be proven (Cann, 2002). In other topic covered by Cann, courts also primarily defer to Congressional intent in their decisions. In the event the 10th Circuit Court had ruled in favor of telemarketers, Congress itself could have always passed another law even further clarifying their intent for an FTC implemented Do Not Call List and could directly state no judicial review is allowed to counteract further court litigation. The courts would not be able to review due to statutory preclusions to judicial review as in Traynor v. Turnage 1988 (Cann, 2002).

Neil M. Richards, associate professor of law at Washington University in St. Louis, set forth some interesting observations. The appellate Courts' decisions will stand and Congress cannot overrule a court's decision about a court's interpretation of the meaning of the first amendment. Richard's points out the telemarketer's first amendment free speech rights are derived from the right of consumers to hear messages. However, in his opinion, this was not because of the rights of advertisers to send the messages. The Do Not Call List seems to imply that people have spoken and if their name is on the list, they do not want to hear the messages, thereby, the first amendment rights of telemarketers would not be violated. However, Richards also noted that in the past, the 10th Circuit Court had not been very receptive to consumer privacy claims against telemarketers (www.washinguniveristy.com, Oct 2003).

Richard's prediction of the Court's reception out to be unfounded and on February 17, 2004, a panel of three judges on the 10th Circuit Court of appeals ruled unanimously dismissing the claims of violation of free speech and unfairness because it does not apply to charitable or political calls. A statement from the Court said, "We hold that the Do Not Call registry is a valid commercial speech regulation because it directly advances the government's important interests in safeguarding personal privacy and reducing the danger of telemarketing abuse without burdening an excessive amount of speech" (www.firstamendmentcenter.org, Feb 17, 2004).

After the 10th Circuit Court's ruling Ken Paulson, the First Amendment Center executive director, was pleased with how the Court addressed the issue regarding future government intrusion into the constitutional issue of freedom of speech. Paulson says, "The court says that there would be no justification for more direct government regulation of telemarketing because this system of allowing customers an opt-in is an effective alternative. That means other areas in which there are calls for greater government intervention--including the Internet and cable television--are best addressed in both practical and constitutional terms through a system where consumers make the choices" (www.firstamendmentcenter.org, Feb 17, 2004). This statement seems to hint the courts will continue to uphold legislative actions as long as consumers are able to continue to make their own choices.

The American Teleservices Association (ATA), formerly called the American Telemarketer's Association, filed an appeal to the U.S. Supreme Court to rule on the constitutionality of the National Do Not Call registry in May of 2004, which was rejected by the Supreme Court in October 2004 (www.epic.org, Oct 2004). This rejection by the Nation's highest court sent the message to consumers and telemarketers that the National Do Not Call List was here to stay.

On a more local front, in December 2005, the 8th U.S. Circuit of Court Appeals overturned a previous decision in the lawsuit, Fraternal Order of Police v. Stenehiem, made by U.S. District Judge Ralph Erickson of Fargo where Erickson had stated North Dakota's telemarketing law which made the distinction between volunteers and professional callers for charity or non-profit calls was not legal. Circuit Court judges Roger Wollman and J. Leon Holmes stated, "The (state law) does not substantially limit charitable solicitations, and is not unconstitutionally overbroad." Charities may make fundraising calls to people who have joined the no-call list, but only if they use employees or volunteers. Professional telemarketers are not allowed to call people on the list. (www.firstamendmentcenter.org, Apr 21, 2006) A petition was filed in April 2005 by 33 different organizations trying to invalidate the more restrictive state regulations and allow the FCC alone, jurisdiction over telemarketing across state lines. Also, the Direct Marketing Association has asked the FTC to consider reducing its policy on the abandoned or dead air calls, to be more in line with the more lenient policies set forth in the FCC regulations on abandoned calls. (www.online.wsj.com, Sep 28, 2005).

If any of the petitions are successful in getting implemented or more restrictive state laws are no longer acknowledged to have precedence, larger loopholes could potentially be available to telemarketers in their practices and consumers could potentially start receiving more calls. Electronic Privacy Information Center (EPIC) officials are planning to present their case to the FCC citing their fear of returning consumers to the era of the unwanted telephone calls. Chris Hoofnagle of EPIC, states, "The five states with stricter laws are an important beachhead for consumers. They currently prevent telemarketers from using computerized callers or making calls based on existing business relationships because they need to avoid breaking any state laws when they do national marketing campaigns" (www.msnbc.msn.com, Jul 20, 2005). However, proponents of lifting the restrictive state regulations argue that telemarketers need to have one standard to follow that is uniform. Bill Raney, a telecommunications lawyer who defends companies against Do Not Call lawsuits stated, "There is no evidence that (a favorable FCC ruling) will lead to large increases in telemarketing calls." Another factor that should be considered, if the petition to have the state regulations invalidated succeeds, this would have a potentially profound impact on any and all State regulations and laws that are more restrictive than Federal laws, not just the Do Not Call directives.

Lawsuits Filed Against Telemarketers

The first actual federal suit was filed by the FCC against American Home Craft, Inc. in the U.S. District Court for Northern California also under the federal TCPA as all of the calls were made intrastate, or within the state of California. In the suit, California Attorney General, Bill Lockyer, was seeking at least $100,000 in fines along with a permanent injunction for the company to abide by the law. The suit alleged that American Home Craft did not attempt to purchase the registry available since September 1, 2003. Lockyer made the following statement, "This lawsuit should put all telemarketers on notice to get a copy of the Do Not Call registry and take the law seriously" (www.ag.ca.gov, Dec 8, 2003).

As of September 2005, nearly two years after the Federal Do Not Call List was effective, over a million violations were reported but only a few fines have been levied or lawsuits filed against violators (www.online.wsj.com, Sep 28, 2005). The FTC had filed 14 lawsuits and levied 4 fines. The FCC had issued warnings and only 2 fines. One such company fined was AT&T Corporation for $780,000 for Do Not Call violations. That particular suit has an ironic twist, as AT&T is the contactor that actually maintains the National Do Not Call Registry (www.privacyrights.org, Nov 2003). In July 2004, AT&T agreed to pay $490,000 and the second company, Primus Communications agreed to pay $400,000.

Then on December 15, 2005, the FTC announced the issuance of its largest penalty for-Do Not Call violations when it imposed a $5.3 million fine against the satellite provider, DirecTV Group Inc. The penalty targeted the common business practice of companies that hire telemarketers to utilize cold calls and other sales tactics to generate new business (www.proquest.umi.com, Dec 14, 2005). This suit is important as it demonstrates a company is accountable for the calls being made on their behalf.

As a result of the lawsuit, DirecTV terminated its contracts with 4 of the 5 telemarketers named in the suit claiming the 4 companies had made unwanted and unlawful calls to existing and potential customers and claims to fully support the National Not Call Registry. When asked why the Federal lawsuit quantity is so small, both registry officials of the FTC and the FCC basically felt telemarketers were for the most part following the rules and only a few of the complaints investigated were actual violations (www.online.wsj.com, Sep 28, 2005). Another reason for the limited number of fines appears to correlate with the number of resources available for investigations. Generally, the federal agencies have only had resources available to investigate a single company after multiple complaints have been reported. (www.abcnews.go.com, Aug 2005) Although various fines levied through both Federal and State governments is over $10 million. A partial listing is shown in Table 1.

In its latest report to the chairman, the FTC sums up the latest statistics regarding its rule enforcement. (www.ftc.org, Apr 21, 2006)

"The agency has filed 19 enforcement actions against 102 individual and corporate defendants, alleging that they had called consumers whose numbers were on the DNC Registry. In 12 of those cases, the FTC obtained settlements with orders requiring payment in the aggregate of more than $6 million in civil penalties and more than $5 million in consumer redress."

Information from the Direct Marketing Association (DMA) seems to back the claims as well. In September 2003, DMA had requested the entire telemarketing industry to voluntarily abide by the rulings. The Association felt their call for compliance had been adhered to by about 90 percent of the industry (www.the-dma.org, Feb 17, 2004). Surprisingly, even telemarketers themselves are counting on increased federal enforcements to help cull out the telemarketing firms performing willful violations. Tim Searcy, chief executive of the American Teleservices Association remarked, "We are asking the Federal Government to do a better job of enforcing. I want to remove from the marketplace anyone who is not abiding by the Do Not Call List. Let's make sure that we have a level playing field for legitimate practitioners" (www.abcnews.go.com, Aug 2005).

Various states have also brought suits against Do Not Call List violators. Since 1991, Florida has collected over $1 million in penalties and fines and has over 171,000 people on its list. Florida consumers must also pay an annual fee to be included in the list (www.tampabaylive.com, Sep 24, 2003). Another suit filed July 10, 2003, provides an example of trends where federal and state governments and legislative acts work in conjunction for Do Not Call actions. The state of Missouri sued MCI, AT&T and SBC Missouri for violating the federal Telephone Consumer Protection Act (TCPA) as Missouri's own Do Not Call legislation exempts telephone companies (www.adlawbyrequest.com, Jul 21, 2003).

MARKETPLACE ACTIVITY AND IMPACT

Popularity of Do Not Call Lists

"Unwanted telemarketing calls are intrusive, annoying and all too common. When Americans are sitting down to dinner or parents are reading to their children, the last thing they want is a call from a stranger with a sales pitch, " stated by George W. Bush in his Statement on the National Do Not Call Registry prior to signing the Do Not Call Registry law passed by Congress (Weekly Compilation of Presidential Documents, September 2003).

This sentiment certainly seemed to be true for many Americans. From the first registrations in May 2003 to October 1, 2003, when the FTC's Federal Do Not Call list went into effect, over 50 million Americans had already signed up for the list. Consumers were unhappy with interrupted meal and family times and for many, the call is not what is the most bothersome to consumers. The call for something not wanted seems to cause the largest objection to telemarketing calls (www.msnbc.com, Sep 24, 2003).

By April 2006, over 122 million American's had added their telephone numbers, both residential and wireless, to the List (www.ftc.gov, Apr 21, 2006). "The level of public involvement's really quite extraordinary. More people have expressed a preference in telemarketing than voted for the last president of the United States," observes Mark Rotenberg, director of the Electronic Privacy Information Center (www.news.com, Oct 1, 2004).

Telemarketing Industry Impact--Evolution Versus Extinction

When the Do Not Call legislation went into affect in 2003, telemarketers were anticipating the legislation to cost the industry about $50 billion in sales each year, about half of its business (www.siliconvalley.com, Oct 23, 2003). Efforts by telemarketers were generating about $211 billion in goods and services made up of about 180 million successful sales attempts out of the nearly 24 billion calls being made annually, so it would seem as if not all consumers felt sales calls were a nuisance. In September 2005, The Direct Marketing Association, which had commissioned an independent study, announced that in 2005 companies in the United States had spent more than $161 billion on direct marketing and generated $1.85 trillion in sales, or approximately 10.3% of the total United States FPD for 2005 (www.the-dma.org, Sep 29, 2005).

Scott Hovanyetz, a reporter who covers the telemarketing industry in the trade publication DM News, has chronicled some of the layoffs that occurred in the telemarketing industry after the Federal Do Not Call List went into effect. He said, "that certainly the jobs lost are in the thousands or tens of thousands but it's hard to arrive at a more exact figure because call centers tend to be transient, with high turnover." The largest fallout of lost jobs and closed call centers was in the small to midlevel firms that only have a few clients. A loss of one major client for the smaller out-bound telemarketing firms means closing the doors, especially when the resources to transition to another type of market are not available (www.news.com, Oct 1, 2004). So far, the actual call center closings have been minor in comparison with the telemarketing industry as a whole.

Not all telemarketing jobs lost can be blamed on the Do Not Call legislation. Some of the larger telemarketing firms were already in the process of using off-shore locations like India or near-shore locations like Canada where cheaper labor is found (www.the-dma.org, Aug 27, 2004). Traditionally, the largest factor of lost positions in the telemarketing industry is due to new technologies. Many call centers are using the Internet and on-line services to collect payments and change addresses without the need for a live agent to conduct the transaction.

In October 2003, Andrew Tilton and economist for Goldman Sachs estimated between 100,000 and 150,000 jobs would be lost over the next year due to the new legislations, a fairly small number in the 130 million people direct marketing work force. In an interesting reflection, Tilton noted the Do Not Call List could actually boost the telemarketing industry's profitability as the list effectively eliminates those consumers who probably would not have made a purchase anyway (www.msnbc.com, Oct 8, 2003).

It would appear as if Tilton's predictions of improved profitability have come true for much of the telemarketing industry. The telemarketing industry seems to have escaped extinction by evolving into more efficient consumer communication industry.

Improved Telemarketing Practices

Many telemarketing firms are actually seizing the new opportunities being presented through the Do Not Call legislation. Many of the larger, more progressive telemarketing companies are shifting their efforts to inbound customer service, proactive customer care services and technical support venues as well a shift into the business to business or charity markets, not hampered by the Federal legislation (www.webapp2.concderto.com, Jul 2005).

Interesting comments were received from industry representatives when the FTC asked for comments prior to ruling on the Do Not Call List where some felt a Do Not Registry may actual benefit the industry as stated in the Rule (www.ftc.gov, Feb 23, 2006).

"Although industry fears the economic impact a national registry might have, ironically, an FTC "do-not-call" registry may actually benefit rather than harm industry. For example, the federal framework, with its exemptions, would provide greater consistency of coverage, at least with regard to interstate calls. In addition, industry would benefit because telemarketers would reduce time spent calling consumers who do not want to receive telemarketing calls and would be able to focus their calls only on those who do not object to such calls."

A few of the more creative niches found by direct telemarketers include interactive chat and toll-free numbers manned by operators. These types of calls are used in conjunction with other types of advertising such as Internet Web sites, newspaper ads and billboards (www.news.com, Oct 1, 2004). Online advertising, e-mail, search, CRM and database marketing are giving companies more precision in marketing, advertising and customer relations. Many companies have felt the answer to greater profit lies in the inbound market, which embraces opt in approach to telemarketing. Opt in is the concept where an individual initiates the contact to a company and asks to be explicitly included in communication. The overall implication is the individual is automatically excluded until contact has been initiated. The opposite is true for opt out. Unless an individual explicitly asks to be excluded from communication, a company can deliberately include that individual in communication efforts.

Many forward-thinking companies are shifting their marketing focus to customers who call or contact them. Whether the customer approaches through a call center, Web site or interactive voice-response system, the inbound channel represents a golden opportunity to build and capitalize on an existing relationship. Companies are finding that customers who have initiated a call are more likely to give of their time and attention. Rather than being interrupted with an outbound call, a customer controls when the interaction occurs. The result experienced is open communication with customers, leading to more effective marketing.

Another tactic used by telemarketers is the use of recorded messages instead of live messages in the states that allow them. The restrictive Do Not Call rules were geared more towards live calls. Telemarketers have used more of the recorded calls leaving identification and a return number. This practice has become another popular way to utilize an opt in approach to telemarketing, using methods to entice customers to call them back.

The real-time nature of the inbound interaction also creates opportunities. It's a chance to address customers on a personal level, to extend the relationship and learn more about what drives them and what their pain points are. Companies that can make the most of this intelligence are in a strong position to survive in a post-DNC marketing landscape. Inbound marketing is about building existing relationships (Miller, May 15, 2005).

Not only have telemarketing companies enjoyed better business practices, but the businesses they are providing service for are also seeing larger bottom lines in the marketing efforts being utilized. Some of the rewards seen by businesses include a targeted pool of buyers, enhanced customer service, greater customer loyalty and a more streamlined and productive workforce (www.webapp2.concderto.com, Jul 2005).

Consumer Impact--Consumer Satisfaction

Are Do Not Call practices working? When the FTC passed the revised legislation in 2003, it anticipated about 80% of unwanted calls should be stopped with its Do Not Call List (www.usatoday.com, Sep 25, 2003). In statistics published by the United States Telecom Association, there were approximately 107.5 million households with telephone services as of July 2005 and approximately 184.7 million wireless subscribers as of December 2004 (www.usta.org, Mar 7, 2006). The FTC feels the Do Not Call List is a success and has stated that more than 122 million residential and wireless telephone numbers have been registered with the National Do Not Call Registry. In the latest Chairman report issued in April of 2006, the Commission praises the Do Not Call List and talks about its success (www.ftc.gov, Apr 21, 2006).

"Compliance with this law has been high and the Registry has been a significant success. Yahoo! ranked the launch of the FTC's Do Not Call website as one of the top 100 moments on the web over the last 10 years. The success of the DNC Registry has also caught the attention of the international community. Encouraged by the success of the Registry, Canadian and Mexican agencies have consulted with the FTC in developing their own do not call registry frameworks."

In general consumers seem to be enjoying fewer intrusive sales calls. In a Harris Interactive poll conducted as of September 30, 2004, 57% of adults in the United States indicated they had signed up for the Federal Do Not Call registry. Of these participating consumers, 92% said they were getting fewer calls and 25% had said they had received no calls. In another survey conducted by Customer Care Alliance, it was determined consumers were enjoying an 80% drop in the number of calls received (www.proquest.umi.com.ezproxy.library.und.edu, Oct 1, 2005). In the same Harris Interactive poll conducted as of December 14, 2005, 76% of adults had indicated they had signed up on the registry and 92% of those consumers indicated they had received fewer calls but only 18% said they had received none (www.harrisinteractive.com, Jan 12, 2006).

Based on the results of various surveys conducted, it would appear as if the telemarketing industry is abiding by legislative actions and honoring consumer's wishes so consumers appear to be enjoying fewer invasive calls.

Consumer Impact--Consumer Expectations

Is the Do Not Call legislation working as consumers had expected? When the National Do Not Call List went into affect, many consumers were disappointed and felt they were still getting calls they felt they should not be getting. This happened in part because of some of the exemptions built into the Do Not Call rules and the lack of communication to consumers what these exemptions included. Many consumers did not realize that charitable sales calls could still occur, or that telephone surveys and political solicitations could still be conducted and more importantly, that any business with an established relationship with the consumer could still be making telephone pitches legally.

The established business relationship appears to be quite broad and provides the largest hoop hole in the laws telemarketers can still utilize. For instance, if a consumer subscribes to a magazine subscription, the publisher can call during the life of the subscription plus the next 18 months after the subscription runs out. Any company in which a person has an ongoing relationship, like a bank, credit card, insurance, etc. can make calls. Probably the largest ambiguity experienced in the Sales Rule seems to be when a person makes an inquiry or submits an application to a company. The company is allowed to make a call for up to 18 months after the last inquiry; however, no clear-cut definition of what constitutes an inquiry exists. At any time, though, a consumer can still ask the caller, even if it is charitable organization, to not call again, and the company must adhere to those wishes or face the stiff fines promised in the Sales Rule (www.ftc.gov, Feb 23, 2006).

Public awareness and consumer education on what the Do Not Call legislation does cover seems to be growing but is still slow. In the latest Harris Interactive poll conducted in 2005, 63% of the individuals signed up for the registry indicated they did not realize survey research and political polls were allowed under the Do Not Call legislation (www.harrisinteractive.com, Jan 12, 2006).

It would appear as if many consumers are not terribly concerned with the number of calls that still come through so there seems to be an acceptance of the number of calls that have been stopped by the legislation and consumers are generally happy as a whole with the concept of reduced calls provided with Do Not Call lists regulations.

FUTURE

When the Supreme Court denied hearing the appeal to the 10th Circuit Court case that validated the constitutionality of the Do Not Call legislation, the message became clear that the law is here to stay. There have been other requests of such items as Do Not Email and Do Not Span types of lists. Is it possible the National telephone list was only the beginning?

The FCC has already set up a list of Internet domains that is used by the mobile telephone carriers in an effort to help keep unwanted spam messages off mobile telephones, a violation of the Can-Spam Act of 2003. The Can-Spam Act of 2003, which took effect January 1, 2004 requires unsolicited commercial e-mail message to be labeled, to provide opt-out instructions and to include the sender's actual physical address. The Act also prohibits deceptive use of subject lines and false headers. The FTC was also granted authority to establish a National Do Not E-mail registry.

In June of 2004, the FTC submitted a feasibility report regarding the establishment of a Do Not E-mail list required in the Can-Spam Act. The FTC felt by providing such a list, an increase in Internet spamming could occur with so many valid e-mail addresses available to companies. Therefore, the findings of the FTC were that a national list would not be feasible without some mechanism in place to be able to authenticate the actual origin of e-mail messages (www.realtors.org, Jun 17, 2004).

Government officials are extremely aware of the growing e-mail and Internet spamming practices and are hoping to find some relief against unwanted spamming. One such effort includes a memo of understanding among Australia, the United Kingdom and the United States requiring cooperation between agencies and countries that have conflicting laws regarding spamming and to be able to conduct joint investigations into spam violations. Both Australia and the United Kingdom have more restrictive, opt in laws regarding e-mail spamming. The United State's spamming law utilizes the opt-out approach so spamming is deliberately allowed. Therefore, the Unites States would only be allowed to prosecute offenders from the various countries if recipients have explicitly requested to opt out and the other countries can prosecute according to their more restrictive opt in laws (www.computerworld.com, May 7, 2004).

Faxes have become another area seeing attempts at imposed restrictions. The FCC had tried to impose tighter restrictions on faxing and when the agency promulgated the restrictions, it did not provide for the exemption of the existing business relationship when sending faxes. Congress at that time recognized the impact of this restriction on commerce and passed legislative action to establish their position. On July 9, 2005, President Bush signed the Junk Fax Prevention Act into law. This Act provided the restoration of existing business relationships in commercial faxes. The Act also included another important piece of legislation where commercial faxes needed to provide an opt-out provision on the first page of the fax that provides a free method at any time for the recipient to request removal from the distribution (www.pianet.com, Mar 15, 2006).

This rule promulgation seems to demonstrate that Congress will enact laws when they deem it necessary to get their wishes known and that law makers also realize the importance of allowing businesses to communicate with consumers in order to satisfy the free enterprise system and to keep the economy thriving while still allowing business and consumers a way to opt out as their choice. The question that is looming in the nearest future is regarding what the FCC finds with its ruling on the petition to allow the FCC alone, jurisdiction over telemarketing across state lines. As indicated earlier, the FCC does not allow state's individual jurisdictions to supersede its rulings. At the present time, the FCC is endorsing the FTC's Do Not Call directives. The FTC has hinted at endorsing a single Do Not Call List and set of rules but has indicated it will reserve judgment on a ruling of this type depending upon the success of the current Rule provisions. If the FTC or the FCC decides in favor of single Do Not Call provisions, it could have a far-reaching impact on what the future will hold regarding the passing of further privacy Laws at both Federal and State levels and the ability of these laws to pass the highest Courts in the land.

CONCLUSION

Any type of legislation that provides a feeling of privacy protection, such as the Do Not Call legislation is extremely popular to voters. States have proven their backing by passing their own legislation and then subsequently in bringing about lawsuits against Do Not Call violators on behalf of their citizens. Congress has demonstrated its approval of Do Not Call legislation by expediently passing the bill to clarify its intent for the FTC to implement the National Do Not Call list only one day after the Denver Court ruled the FTC was not granted the appropriate authority by Congress. It appears that the Denver Court has made it clear that it will uphold any rulings that provide for consumer choice.

The FTC itself has been very careful when promulgating its rules that it continues to keep rules within constitutional boundaries and is cognizant of business and consumers and the needs of each as demonstrated in the dialog throughout the Revised Ruling.

Voter popularity of the Do Not Call List strategy on so many fronts has made it successful. It will remain to be seen if any of the other types of anti-privacy types of the legislation also uphold as well. Even though at this time, the United State's spamming laws are less restrictive than those of other countries, a legislative action at any time could change this to be more like other countries' opt-in choices and level the playing field regarding international communication as well as internal communication. American's could see another roller-coaster ride and perhaps some new creative twists to implementing people-pleasing laws.

Telemarketing is one area where consumers' especially feel their privacy is at jeopardy. People want the choice as to the types of information they are willing to accept. Smart telemarketers are realizing that the traditional opt-out method of telemarketing may become a practice of the past. It may be time to figure out innovative ways to entice consumers with an opt-in approach of doing business where businesses are more cognizant of finding products for customers rather than finding customers for products.

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Edwards, J. (2003, May 26). Dinner, interrupted. Brandweek, 44 (21), 28. Retrieved March 1, 2005, from http://search.epnet.com/login.aspx?direct-true&db-alp&an=9936789

8th Circuit upholds N.D. do-not-call law--8 Dec 2005. Associated Press. Retrieved April 21, 2006, from http://www.firstamendmentcenter.org/news.aspx?id=16164

FCC joins FTC in endorsing national do-not-call registry--7 July 2003. Hall Dickler ADLaw By Request. Retrieved December 2, 2003, from http://www.adlawbyrequest.com/regulation/DoNotCall070703.shtmal

FTC v. Mainstream Marketing Services order. United States Court of Appeals, Tenth Circuit court documents Filed October 7, 2003. Retrieved October 10, 2005, from http://www.ftc.gov/os/2003/09/mmsiftcnoa.pdf

Federal court rules against do-not-call registry--Sep 2003. The Mercury News. Retrieved October 23, 2003, from http://www.siliconvalley.com/mld/siliconvalley/6849984.htm

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Florida do-not-call list continues despite ruling--24 Sep 2003. Associated Press. Retrieved December 11, 2003, from http://www.tampabaylive.com/stories/2003/09/030925flllist.html

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Governor Strengthens Do Not Call Telemarketing Program--7 July, 2003. Office of the Governor, State of New York. Retrieved October 23, 2003, from http://www.state.ny.us/governor/press/year03/july7_2_03.htm

Growth trends continue for direct marketing--29 Sep 2005. Direct Marketing Association. Retrieved March 26, 2006, from http://www.the-dma.org/cgi/disppressrelease?article=704.html

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What now for the national do not call registry? Do not call registry is 'fully up and running'--Nov 2003. Privacy Rights Clearinghouse. Retrieved December 12, 2003, from http://www.privacyrights.org

Connie R. Bateman, University of North Dakota JoAnn Schmidt, University of North Dakota

Table 1: Recent Do Not Call List Fines

Date Company Name Fine Amount

04-12-06 Sports Authority Florida (FL) $112,500.00
02-24-06 Book of the Month Club (FTC) $680,000.00
01-12-06 Total Remodeling Inc. (New Jersey) $151,500.00
12-14-05 DirecTV (FTC) $5,340,000.00
07-31-05 Chesapeake Window and Building (Maryland) $25,000.00
07-15-05 Columbia House (FTC) $300,000.00
06-07-05 Real Time International (Virginia) $196,000.00
05-05-05 EchoStar Communications (Missouri) $50,000.00
03-18-05 ABI Marketing (Pennsylvania) $90,000.00
03-15-05 AT&T (Pennsylvania) $35,000.00
03-03-05 Dynasty Mortgage (FCC) $770,000.00
02-17-05 Braglia Marketing Group, L.L.C. (FTC) $3,500.00
02-17-05 Flagship Resort Dev. & Atlantic Palace (FTC) $500,000.00
02-10-05 SBC Communications (Missouri) $150,000.00
02-01-05 Florida 2004 Settlements & Fines $319,750.00
11-28-04 Solartherm Remodelers, Inc. (Pennsylvania) $1,900.00
09-08-04 Primus Telecommunications (FCC) $400,000.00
08-06-04 Comcast Cable (Pennsylvania) $7,500.00
07-09-04 Shelterguard, Inc. (Ohio) $65,000.00
06-24-04 American Home Craft, Inc. (California) $45,000.00
05-09-04 Sunset Mortgage Co., L.P. (Pennsylvania) $19,000.00
04-12-04 AT&T (North Carolina) $30,000.00
04-12-04 American Communications (North Carolina) $15,000.00
03-30-04 67 Settlements in New York $1,050,960.00
05-01-01 Tennesse Regulatory Authority Settlements $7,000.00

 DNC Fine Total: $10,364,610.00

(http://dontphoneme.com/dncfines.htm. Retrieved April 21, 2006).