Proposed Rule: Telemarketing Sales Rules: Prerecorded Telemarketing Calls, Etc. Seller and Telemarketer Compliance

Wednesday,
October 4, 2006
Part III
Federal Trade
Commission
16 CFR Part 310
Denial of Petition for Proposed
Rulemaking; Revised Proposed Rule With
Request for Public Comments; Revocation
of Non-enforcement Policy; Proposed
Rule
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58716 Federal Register / Vol. 71, No. 192 / Wednesday, October 4, 2006 / Proposed Rules
FEDERAL TRADE COMMISSION U.S. postal mail in the Washington area by telemarketers and business trade
and at the Commission is subject to associations representing numerous
16 CFR Part 310 delay due to heightened security members, and the balance from
precautions. Comments filed in consumers and consumer advocates.
RIN: 3084–0098
electronic form should be submitted by Section 310.4(b)(1)(iv) of the TSR
Telemarketing Sales Rule (‘‘TSR’’) visiting the Web site at https:// prohibits telemarketers from
secure.commentworks.com/ftc-tsr and abandoning calls. An outbound
AGENCY: Federal Trade Commission. following the instructions on the Web- telemarketing call is ‘‘abandoned’’ if the
ACTION: Denial of petition for proposed based form. telemarketer does not connect the call to
rulemaking; revised proposed rule with To ensure that the Commission a sales representative within two
request for public comments; revocation considers an electronic comment, you seconds of the completed greeting of the
of non-enforcement policy. must file it on the Web-based form at person who answers. Call abandonment
the https://secure.commentworks.com/ is an unavoidable consequence of the
SUMMARY: In this document, the Federal ftc-tsr Web site. You may also visit use of ‘‘predictive dialers’’—
Trade Commission (‘‘FTC’’ or http://www.regulations.gov to read this telemarketing equipment that increases
‘‘Commission’’) announces decisions on Proposed Rule, and may file an the productivity of telemarketers by
four issues involving the Telemarketing electronic comment through that Web placing multiple calls for each available
Sales Rule (‘‘TSR’’): the denial of a site. The Commission will consider all sales representative. Predictive dialers
petition submitted by Voice Mail comments that regulations.gov forwards maximize the amount of time
Broadcasting Corporation (‘‘VMBC’’) to it. representatives spend speaking with
requesting creation of a new safe harbor The FTC Act and other laws the consumers and minimize the time they
for the TSR that would permit the use Commission administers permit the spend waiting to speak to a prospective
of prerecorded messages in calls to collection of public comments to customer. An inevitable side effect of
established customers; a new proposal consider and use in this proceeding as this functionality, however, is that the
to amend the TSR by expressly appropriate. The Commission will dialer will reach more consumers than
prohibiting unsolicited prerecorded consider all timely and responsive can be connected to available sales
telemarketing calls without the public comments that it receives, representatives. In these situations, the
consumer’s prior written agreement; whether filed in paper or electronic dialer either disconnects the call
revocation of the Commission’s form. Comments received will be (resulting in a ‘‘hang-up’’ call) or keeps
previously announced policy of available to the public on the FTC Web the consumer connected with no one on
forbearance from bringing enforcement site, to the extent practicable, at http:// the other end of the line in case a sales
actions against sellers and telemarketers www.ftc.gov. As a matter of discretion, representative becomes available
who make prerecorded telemarketing the FTC makes every effort to remove
(resulting in ‘‘dead air’’). The call
calls to established customers effective home contact information for
abandonment prohibition, added to the
January 2, 2007; and a new proposal to individuals from public comments it
TSR pursuant to the Telemarketing and
amend the prescribed method for receives before placing those comments
Consumer Fraud and Abuse Prevention
measuring the maximum allowable call on the FTC Web site. More information,
Act (‘‘Telemarketing Act’’),2 is designed
abandonment rate in the TSR’s existing including routine uses permitted by the
to remedy these abusive practices.3
safe harbor provision, in response to a Privacy Act, may be found in the FTC’s
Notwithstanding the prohibition on
petition from the Direct Marketing privacy policy, at http://www.ftc.gov/
call abandonment, § 310.4(b)(4) of the
Association, Inc. (‘‘DMA’’). The ftc/Privacy.htm.
TSR contains a safe harbor designed to
Commission is requesting public FOR FURTHER INFORMATION CONTACT:
preserve telemarketers’ ability to use
comment on the proposed amendments Craig Tregillus, Staff Attorney, (202) predictive dialers, subject to four
during a comment period ending 326–2970; Division of Marketing conditions. The safe harbor is available
November 6, 2006. Practices, Bureau of Consumer if the telemarketer or seller: (1)
Protection, Federal Trade Commission,
DATES: Written comments must be Abandons no more than three percent of
600 Pennsylvania Avenue, NW.,
received on or before November 6, 2006. all calls answered by a person (as
Washington, DC 20580.
ADDRESSES: Interested parties are opposed to an answering machine); (2)
SUPPLEMENTARY INFORMATION: allows the telephone to ring for fifteen
invited to submit written comments.
Comments should refer to ‘‘TSR I. Background seconds or four rings; (3) plays a
Prerecorded Call Prohibition and Call This document sets out the reasons prerecorded message stating the name
Abandonment Standard Modification, for the Commission’s decision to deny and telephone number of the seller on
Project No. R411001’’ to facilitate the VMBC’s petition for amendment of the whose behalf the call was placed
organization of comments. A comment TSR’s call abandonment provisions to whenever a sales representative is
filed in paper form should include this add a new safe harbor, and to seek unavailable within two seconds of the
reference both in the text and on the public comment on amendments the 2 15 U.S.C. 6101 et seq. This and other
envelope, and should be mailed or Commission is now proposing in amendments to the original TSR resulting from a
delivered to the following address: response to the record created by the rule review mandated by the Telemarketing Act, 15
Federal Trade Commission/Office of the VMBC and DMA petitions. These U.S.C. 6108, took effect on March 31, 2003. TSR
Secretary, Room H–159 (Annex K), 600 actions are based on a careful analysis Statement of Basis and Purpose (‘‘TSR SBP’’), 68 FR
Pennsylvania Avenue, NW., 4580 (Jan. 29, 2003).
of the public comments received in 3 TSR SBP, 68 FR at 4641–45. The Telemarketing
Washington, DC 20580. Comments
response to a Notice of Proposed Act directed the Commission to prescribe rules

containing confidential material must be Rulemaking (‘‘NPRM’’) published in the prohibiting deceptive and abusive telemarketing
filed in paper form, as explained in the Federal Register on November 17, acts or practices, including ‘‘a requirement that
SUPPLEMENTARY INFORMATION section. 2004.1 The NPRM generated nearly telemarketers may not undertake a pattern of
unsolicited telephone calls which the reasonable
The FTC is requesting that any comment 13,600 unique comments—23 submitted consumer would consider coercive or abusive of
filed in paper form be sent by courier or such consumer’s right to privacy.’’ 15 U.S.C.
overnight service, if possible, because 1 69 FR 67287 (Nov. 17, 2004). 6102(a)(3)(A).
Federal Register / Vol. 71, No. 192 / Wednesday, October 4, 2006 / Proposed Rules 58717
completed greeting of the person number that would connect to a sales Finally, VMBC argued that a new safe
answering the call; and (4) maintains representative. Finally, as indicated harbor for prerecorded messages is
records documenting compliance.4 above, the prerecorded messages would necessary to conform the FTC’s TSR to
Thus, to comply with this provision of be delivered exclusively to consumers the rules and regulations issued by the
the TSR, at least 97 percent of a who have an ‘‘established business Federal Communications Commission
telemarketer’s calls that are answered by relationship’’ 6 with the seller on whose (‘‘FCC’’) 9 pursuant to the Telephone
a person (rather than an answering behalf the calls are made. Consumer Protection Act of 1991
machine) must be connected to a sales (‘‘TCPA’’).10 VMBC pointed out that the
A. VMBC’s Rationale for a Safe Harbor
representative. A telemarketing FCC’s rules—which largely parallel the
campaign that consists solely of VMBC advanced three primary Do Not Call and certain other of the
prerecorded messages, therefore, would reasons for adding a new safe harbor to TSR’s provisions—since the early 1990s
violate § 310.4(b)(1)(iv) and would not the TSR’s call abandonment prohibition have permitted prerecorded message
meet the safe harbor requirements. to permit calls delivering such telemarketing to consumers with whom
VMBC submitted a request for an prerecorded messages to consumers a seller has an established business
advisory opinion requesting an with whom the seller has an established relationship. In most other
additional safe harbor for prerecorded business relationship. First, VMBC circumstances, however, the FCC’s rules
message telemarketing to consumers asserted that the harms that prompted under the TCPA prohibit prerecorded
with whom the seller has an established inclusion of the call abandonment message telemarketing, absent a
business relationship, which the prohibition in the TSR would not be consumer’s prior express consent.11
Commission treated as a petition to present in campaigns conducted
amend the TSR under § 1.25 of the according to its proposed business B. The Safe Harbor Proposal and
FTC’s Rules of Practice.5 VMBC’s model. Specifically, VMBC argued that Specific Issues Raised for Public
submission sought permission to deliver the use of prerecorded messages would Comment
prerecorded messages to consumers make it unnecessary to subject a To assist interested parties in
who have an established business consumer to ‘‘dead air’’ while waiting commenting on the VMBC petition, the
relationship with the seller on whose for a sales representative, and would not NPRM included a proposed new
behalf the telemarketing calls are made, result in a ‘‘hang-up’’ when no § 310.4(b)(5) that would have amended
asserting that such calls would not representative is available. Moreover, the TSR to permit prerecorded
result in the twin harms of ‘‘hang ups’’ because the prerecorded messages telemarketing messages to established
and ‘‘dead air’’ that the prohibition on would immediately identify the seller, customers.12 As drafted, the proposed
abandoned calls in § 310.4(b)(1)(iv) was the seller would not be engaging in safe harbor provision would have
designed to remedy. telemarketing under the cloak of required sellers and telemarketers to: (1)
The amendment requested by DMA, anonymity that often prompts consumer Allow the telephone to ring for at least
in contrast, sought modification of the concern about ‘‘dead air’’ and ‘‘hang 15 seconds or four rings before
method for calculating the maximum ups.’’ disconnecting an unanswered call; (2)
three percent call abandonment rate Second, VMBC contended that play a prerecorded message within two
prescribed in the existing safe harbor because the prerecorded messages seconds of the called party’s completed
provision. DMA asked that the would be delivered only to existing
requirement in § 310.4(b)(4)(i) that customers, sellers would have a strong messages rather than using live telemarketers, so
sellers and telemarketers use incentive to preserve their customers’ the volume of commercial calls that consumers
receive may increase. ‘‘
‘‘technology that ensures abandonment goodwill.7 This incentive would serve, 9 47 CFR 64.1200. See also FCC Rules and
of no more than three (3) percent of all VMBC posited, as a sufficient check on Regulations Implementing the Telephone Consumer
calls answered by a person, measured the potential for abuse such that Protection Act of 1991, CC Docket No. 92–90,
per day per calling campaign’’ be prerecorded calls to established Report and Order, 7 FCC Rcd 8752 (1992), available
customers would be unlikely to prompt at http://gullfoss2.fcc.gov/prod/ecfs/
revised so that the three percent retrieve.cgi?native_or_pdf =
standard instead could be ‘‘measured substantial consumer objection.8 pdf&id_document=1071340001, summarized in 57
over a 30-day period’’ for all of a FR 48333 (Oct. 23, 1992) (‘‘1992 FCC Order’’);
telemarketer’s calling campaigns.
6 16 CFR 310.2(n) (‘‘ ‘Established business amended by FCC Rules and Regulations
relationship’ means a relationship between a seller Implementing the Telephone Consumer Protection
II. The VMBC Petition and a consumer based on: (1) The consumer’s Act of 1991, CG Docket No. 02–278, Report and
purchase, rental, or lease of the seller’s goods or Order, 18 FCC Rcd 14014, available at http://
The VMBC petition for an additional services or a financial transaction between the hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-
safe harbor was premised on a business consumer and seller, within the eighteen (18) 03-153A1.pdf, summarized in 68 FR 44143 (July 25,
months immediately preceding the date of a 2003) (‘‘2003 FCC Order’’).
model that, VMBC contended, would telemarketing call; or (2) the consumer’s inquiry or 10 47 U.S.C. 227 (1991).
not result in the harms the call application regarding a product or service offered 11 47 CFR 64.1200(a)(2). The FCC’s TCPA
abandonment prohibition in by the seller, within the three (3) months regulations make an exception for calls placed by
§ 310.4(b)(1)(iv) was designed to immediately preceding the date of a telemarketing a seller or telemarketer that has obtained the called
call.’’). party’s prior express consent to receive
prevent. Under VMBC’s proposed 7 VMBC noted that the FTC suggested that ‘‘the telemarketing calls, or has an established business
model, prerecorded messages would incentive to nurture established business relationship with the called party. 47 CFR
give the called party an opportunity to relationships may provide an adequate restraint on 64.1200(a)(2). The regulations also exclude calls for
assert a company-specific Do Not Call the growth of recorded message telemarketing’’ in emergency purposes, calls not made for a
request. The messages would allow the its Report to Congress Pursuant to the Do Not Call commercial purpose that do not include a
Implementation Act (‘‘DNCIA Report’’), p. 35. solicitation, and calls made by or on behalf of a tax-
called party to do so either by pressing 8 In support of this argument, VMBC cited one exempt nonprofit organization. 47 CFR
a button on the telephone keypad to prerecorded campaign for a major retailer in which 64.1200(a)(2)(i)–(v). In addition, the FCC’s
speak to a sales representative at any only .02 of 1 percent of 5.8 million customers regulations absolutely prohibit all live and
time during the message, or asserted their Do Not Call rights. 69 FR at 67288 n. prerecorded telemarketing calls to a cellular
8. See also n. 30, infra. The Commission noted in telephone, regardless of any established business
alternatively by dialing a toll-free the NPRM, however, that any incentive to preserve relationship or prior express consent a seller or
consumer goodwill could be outweighed in practice telemarketer may have obtained. 47 CFR
4 16 CFR §§ 310.4(b)(4)(i)–(iv). 64.1200(a)(1)(iii).
by the fact that ‘‘it may be more economical for
5 16 CFR 1.25. companies to contact consumers via prerecorded 12 69 FR at 67289.
greeting; (3) give the called party an consumers to assert a company-specific into the proposed amendment to the call
opportunity to assert an entity-specific Do Not Call request, was to ensure the abandonment safe harbor,’’ 19 stating
Do Not Call request at the outset of the same Do Not Call rights for consumers that it would ‘‘satisfy the proposed safe
message, with only the disclosures who receive prerecorded message calls harbor.’’ 20 This endorsement gave
required by §§ 310.4(d) or (e) preceding as are available to consumers receiving advance assurance to sellers and
that opportunity; 13 and (4) ensure that live telemarketing calls from a sales telemarketers that they could adopt this
the message complies with all other representative. Absent such parity, the means of compliance during the
requirements of the TSR and other Commission was concerned that, in pendency of this proceeding when the
applicable State and Federal laws.14 view of the likely increase in the Commission announced it would
1. The ‘‘Ring-Time’’ Standard frequency of lower-cost prerecorded forebear from enforcing the call
message calls (compared to the cost of abandonment provision if they
The NPRM explained that the first live calls by sales representatives), the complied with the proposed safe
prerequisite for meeting the safe harbor privacy protection provided by the harbor.21
requirements, the ‘‘ring time’’ standard National Do Not Call Registry might Although the NPRM did not similarly
requiring 15 seconds or four rings to become illusory. The NPRM endorse prerecorded messages
elapse while awaiting an answer, is emphasized: providing a toll-free number for
identical to the analogous element of the consumers to call to be placed on a
existing safe harbor in § 310.4(b)(4)(ii). Accordingly, the Commission believes that,
if allowed, telemarketing calls that deliver company-specific Do Not Call list, the
That standard, modeled on what were prerecorded messages to consumers with Commission sought ‘‘information and
then DMA’s ethical guidelines for its whom a seller has an established business data about the costs and benefits of
members, was designed to give relationship must preserve the ability of requiring that the disclosure of how to
consumers, including the elderly or those consumers to assert their Do Not Call make a Do Not Call request be made at
infirm who may struggle to get to a rights quickly, effectively, and efficiently, so the outset of the call,’’ as well as about
telephone, a reasonable opportunity to that consumers retain an effective right to
‘‘alternative methods of preserving the
answer telemarketing calls before the decide whether to receive commercial calls,
including prerecorded messages.15 consumer’s ability to assert a Do Not
connection is terminated. Call request when receiving a
2. The ‘‘Dead Air’’ Standard The proposed safe harbor therefore prerecorded message telemarketing
required that the prerecorded message call.’’ 22 In addition, the NPRM sought
The second prerequisite of the provide, ‘‘at the outset of the call’’ (i.e.,
proposed safe harbor, requiring that the information and data about the
preceded only by the prompt oral technical feasibility and costs of
prerecorded message be played within disclosures required by the TSR), an
two seconds of the called party’s implementing the interactive technology
opportunity for the called party to assert that allows consumers to make a
completed greeting, was intended to a seller-specific Do Not Call request by
minimize ‘‘dead air.’’ It was based on company-specific Do Not Call request
pressing a button on his or her with the press of a keypad button, and
the analogous element of the existing telephone keypad to connect to a sales
safe harbor in § 310.4(b)(4)(iii), allowing the costs to industry of requiring this
representative or an automated system. mechanism.
no more than two seconds of dead air By stressing that ‘‘the Commission
before the called party is connected to believes that the Do Not Call option 4. Effect on Other Laws
a sales representative. The Commission should allow consumers to assert their The fourth and final element of the
specifically requested public comment Do Not Call rights during the draft proposal simply made it clear that
on whether the maximum amount of prerecorded message,’’ 16 the NPRM the new safe harbor would not obviate
dead air should be less than two distinguished this element of the or negate any other provision of the TSR
seconds in the new safe harbor for Commission’s safe harbor proposal from or other Federal or State laws, in order
prerecorded messages in which there FCC rules allowing prerecorded to preserve consistency with the
would be no need to connect a sales messages to provide a toll-free number existing TSR call abandonment safe
representative. The Commission also consumers may call to make a Do Not harbor. It placed sellers and
requested information on the relative Call request during or after the telemarketers on notice that other
costs and benefits of a standard that message.17 The NPRM expressly applicable regulations may be stricter
would set the maximum amount of dead declined to adopt the FCC approach, than the proposed safe harbor. The
air at a level lower than two seconds. which requires ‘‘consumers to be NPRM sought comment on whether or
3. Prompt Opportunity for Company- prepared with pen and paper at the not this requirement was appropriate.
Specific Do Not Call Requests ready when they answer the phone, to
take down the number and to place a C. Public Comment
The purpose of the third prerequisite,
separate call’’ to make a Do Not Call In general, the industry comments on
mandating a prompt opportunity for
request, because that approach the VMBC petition supported
13 Section 310.4(d) requires the following prompt
‘‘encumbers consumers’’ assertions of liberalizing the TSR to allow the use of
oral disclosures in outbound commercial company-specific Do Not Call rights.’’ 18 prerecorded telemarketing messages,
telemarketing calls: (1) The identity of the seller; (2) Noting that the VMBC petition and consumers and consumer advocates
that the purpose of the call is to sell goods or ‘‘contemplates some prerecorded opposed it.23 Although both industry
services; (3) the nature of the goods or services; and messages that would enable consumers
(4) that no purchase or payment is necessary to be
able to win a prize or participate in a prize to speak with a sales representative 19 Id.
promotion if a prize promotion is offered, and that during the call by pressing a button on 20 Id.at 67290.
21 See the discussion in Section II.F, infra.

any purchase or payment will not increase the their telephone keypads,’’ the NPRM
chances of winning. Section 310.4(e) requires the specifically ‘‘incorporated this feature 22 69 FR at 67289.
following oral disclosures in outbound charitable 23 All of the public comments, excluding 442
solicitation calls: (1) The identity of the charitable judged obscene or not germane, appear at http://
15 69 FR at 67288–89 (emphasis added).
organization on behalf of which the request is being www.ftc.gov/os/comments/tsrcallabandon/
16 69 FR at 67289 (emphasis added).
made; and (2) that the purpose of the call is to index.htm, where they are listed alphabetically
solicit a charitable contribution. 17 47 CFR 64.1200(b)(2).
under the name of the person who submitted the
14 69 FR at 67294. 18 69 FR at 67289. comment. The first citation of each comment
and consumer comments addressed the not only that prerecorded messages not ‘‘telemarketing’’ as defined by the
major issues raised by the NPRM, not all avoid the harms associated with Telemarketing Act 31 or the Rule.32
responded to each of the questions on abandoned calls (i.e., ‘‘dead air’’ and Adopting VMBC’s view that sellers
which the Commission requested public ‘‘hang ups’’), but also ensure better would self-regulate and not abuse the
comment. quality service to customers than goodwill of their customers, most of the
Many of the comments, both from the telemarketers because there is no risk industry comments that addressed the
telemarketing industry and consumers, that the intended message will vary issue doubted that the volume of
exhibited a fundamental misconception from call to call.26 prerecorded telemarketing messages that
of the TSR’s scope. They presumed that, Several industry comments posited consumers receive would increase if the
absent the proposed safe harbor, the that consumers are interested in safe harbor proposal were adopted.33
TSR’s call abandonment prohibition receiving prerecorded messages.27 VMBC’s comment further predicted that
would prevent sellers from using Although some of the examples cited to the likely result would not be an
prerecorded messages to provide support this contention were increase in calls, but that many ‘‘non-
important information to customers prerecorded messages governed by the sale’’ calls would convert from live calls
with whom they have an established TSR (such as letting customers know of from sales representatives to cost-
business relationship, such as special promotional events or upcoming effective recorded messages.34 Two
notifications of flight cancellations, sales),28 many of the examples, if not industry comments disagreed. One
reminders of medical appointments and most, were informational messages that acknowledged that, if allowed,
overdue payments, and notices of dates are not covered by the TSR at all.29 For prerecorded telemarketing messages
and times for delivery of goods or example, SBC cited a survey of 1217 of would increase in number given their
service appointments. Such strictly its DSL Internet access customers on the low cost.35 Another observed that the
informational calls, however, whether use of prerecorded informational proposed safe harbor would free it and
live or prerecorded, have never been messages to remind them of their its telemarketers from using recorded
covered by the TSR. The TSR applies service installation dates, in which 55.1 messages solely for informational
only to ‘‘telemarketing,’’ which is percent said they would like to receive purposes, ‘‘and put prerecorded
defined, in pertinent part, as ‘‘a plan, such messages in the future.30 As messages to additional valuable
program or campaign which is previously noted, such informational uses.’’ 36
conducted to induce the purchase of messages are neither governed nor Only two industry comments
goods or services.’’ 24 It does not apply prohibited by the TSR, because they are addressed the question posed in the
to informational calls, unless the calls NPRM of whether the proposed safe
combine the informational message with OL–113915 at 8; Joint Comment of the United States harbor would complicate Commission
a sales invitation or promotional pitch. Chamber of Commerce, The Coalition for
Healthcare Communication, The Consumer Bankers enforcement actions against sellers or
1. Industry Comments Association, The Magazine Publishers of America, telemarketers who falsely claim to have
The Mortgage Bankers Association, The National an established business relationship
Comments from 21 telemarketers and Newspaper Association, The Newspaper
with the consumers they call. Both
business trade associations uniformly Association of America, and The Independent
Insurance Agents and Brokers (‘‘U.S. Chamber’’) opined that potential enforcement
favored allowing sellers to use
(Wiley Rein & Fielding), No. OL–113911 at 5; The problems should not be an issue
prerecorded telemarketing messages to Heritage Company (‘‘Heritage’’), No. OL–112918 at because the burden of proving the
reach their customers, arguing that this 1; West Corporation (‘‘West’’), No. OL–112911 at 2.
is a cost-effective method for 26 VMBC at 7, 11; U.S. Chamber at 5; West at 1;
existence of an established business
communicating without the need for Direct Marketing Association and American relationship falls on the seller or
sales representatives.25 Several noted Teleservices Association (‘‘DMA’’), No. OL–113918 telemarketer, not the Commission.37
at 9; Visa U.S.A., Inc. (‘‘Visa’’), No. 000023 at 2; Call The industry comments uniformly
Command, LLC (‘‘Call Command’’) No. 000025 at
includes the name of the commenter, the name in 1–2; Verizon Telephone Companies (‘‘Verizon’’),
urged the FTC to adjust the TSR to track
parentheses of the person or entity submitting the No. OL–113893 at 4. the FCC’s regulations that permit the
comment if it is different from the name of the 27 VMBC at 6, 10; U.S. Chamber at 4; Call use of prerecorded messages for
commenter, and the comment number (e.g., ABC Command at 2; SBC Communications, Inc. (‘‘SBC’’), telemarketing to established
Corp. (Smith, J.), No. OL–123456). Comment No. 000026 at 2, 4.; National Retail Federation
numbers without a prefix were delivered to the customers.38 Some went so far as to
(‘‘NRF’’), No. 000027 at 3.
Commission in paper form; those with the prefix 28 VMBC at 2; SBC at 2; NRF at 3. argue that the Commission lacks
‘‘OL’’ were submitted online at the FTC’s Web site; 29 E.g., Call Command at 2 (asking that the jurisdiction to regulate prerecorded
and those with the prefix ‘‘EREG’’ were submitted Commission acknowledge that prerecorded telemarketing messages because
to http://www.regulations.gov. Subsequent citations informational messages, such as notification about
to a comment omit the comment number. Congress has given exclusive authority
a change in flight schedules or about a product
24 16 CFR 310.2(cc). For the same reason, it is
recall, are permissible, and suggesting that all such
to the FCC to do so.39 One conceded
unnecessary to grant the request made in a ‘‘transactional’’ messages, as that term is used in the
comment on behalf of credit and collection CAN–SPAM Act, 15 U.S.C. 7702(17), be exempt 31 15 U.S.C. 6106(4).
professionals that the Commission forbear from from the TSR); Broadcast Solutions, No. OL–113933 32 16 CFR 310.2(cc).
enforcing alleged violations of the Fair Debt at 1; SBC at 3; NRF at 3; VMBC at 2; Verizon at 33 E.g., VMBC at 10; U.S. Chamber at 5; DMA at
Collection Practices Act based on the FCC’s 5. 9; SBC at 2; NRF at 4.
requirement that debt collectors identify themselves 30 SBC at 3 (acknowledging that the survey 34 VMBC at 10. However, since such ‘‘non-sale’’
by their State-registered name in prerecorded reports were not ‘‘directly apposite, as they relate calls are not governed by the TSR, the Rule does
telephone messages. ACA International, No. OL– to service activation and related transactional not prevent the use of prerecorded messages for this
113912. As the Commission has previously stated, messages’’). Similarly, VMBC cited arguably purpose.
pure debt collection calls are not covered by the favorable reaction from 5.8 million consumers to 35 West at 2.
TSR because they are not ‘‘telemarketing’’ calls. prerecorded campaigns as measured by an increase 36 SBC at 3 n.7.
TSR SBP, 68 FR at 4664 n.1020 (noting, however, of from 20 to 40 percent in response rates to
37 Infocision Management Corp. (‘‘Infocision’’),

that ‘‘if the debt collection call also included an ‘‘promotions’’ and ‘‘showing up for appointments’’
upsell, the upsell portion of the call would be with Do Not Call requests ‘‘averaging 2/100ths of No. OL–113920 at 4; West at 3.
subject to the Rules as long as it also met the criteria one percent.’’ VMBC at 6. Unfortunately, this 38 VMBC at 12; Infocision at 1; SoundBite
for ‘telemarketing’ and was not otherwise exempt merging of data for prerecorded messages that are Communications, Inc. (‘‘Soundbite’’), No. OL–
from the Rule. All debt collection calls must not governed by the TSR with those that are, 112919 at 1–2.
comply with the FDCPA.’’). without specifying the opt-out method provided to 39 Soundbite at 1–2; Infocision at 1; but see,
25 Only 21 of the 23 industry comments addressed consumers, provides little help in evaluating the United States Senate, No. OL–113862 (Senators Bill
this issue. E.g., VMBC (Wiley Rein & Fielding), No. potential impact of the proposed safe harbor. Continued
that the Commission may have authority very cost effective basis.’’ 46 One Like many industry comments, most
to regulate deceptive, unfair, and comment doubted that it ‘‘would of the consumer comments that seemed
abusive telemarketing practices, but necessarily be the case that the to support the proposal to allow
cited a need for clarification of the interactive feature would connect the prerecorded messages in telemarketing
TSR’s applicability to prerecorded consumer to a live sales representative calls to established customers exhibited
messages.40 any faster than if the customer were a basic misunderstanding of the TSR’s
The subject that elicited the greatest simply to dial an 800-number.’’ 47 applicability. Specifically, the majority
industry comment was the proposed Several comments recommended that of these relatively few supportive
safe harbor requirement that consumers the Commission leave the timing and consumer comments indicated that they
be presented, at the outset of a method of providing a Do Not Call did not want the Commission to
prerecorded message, with an option up to the industry, as the FCC prohibit prerecorded informational
interactive mechanism to exercise their has done, so that sellers will have the messages such as reminder messages—
company-specific Do Not Call rights. flexibility to choose the method most although such messages have never
Almost all opposed this aspect of the suitable to their operations based on been covered, much less barred, by the
proposal,41 with two objecting that it preferences and costs.48 TSR.53 These consumers expressed
unconstitutionally mandated compelled 2. Consumer Comments appreciation for prerecorded
or ‘‘forced speech.’’ 42 Several argued informational messages about delivery
that requiring a disclosure at the outset Nearly all the consumers and dates for previously purchased goods or
would result in a large number of Do consumer advocacy groups who services, medical prescription order
commented opposed the proposal to notifications, flight cancellation alerts,
Not Call requests, and might confuse
permit telemarketing calls that are and overdue bill and appointment
consumers who would otherwise wish
prerecorded, regardless of whether the reminders.54 Yet some of the same
to hear the message.43 Others contended
party called has an established business consumers made it clear they opposed
that the method authorized by the FCC
relationship with the seller.49 Their receiving prerecorded telemarketing
of providing a number during or at the
comments show that consumers sales pitches.55 Thus, there is only the
end of the message that consumers can
overwhelmingly find prerecorded barest consumer support in the record
call with a Do Not Call request works
telemarketing messages more intrusive for the proposed safe harbor for
well, and should be adopted by the
and invasive of the privacy they enjoy prerecorded telemarketing sales calls to
FTC.44 Many objected that interactive
in their homes than live telemarketing established customers.
technology, either to connect to a calls,50 primarily because they are
representative or to make an automated The widespread opposition expressed
powerless to make themselves heard.51
Do Not Call request, is costly, in this record to the infringement on
As one consumer put it, ‘‘[t]he
burdensome, and not widely personal privacy through prerecorded
telephone is for conversing with another
available,45 notwithstanding the telemarketing calls to home telephones
human being, not for invading my home
arguments by two industry members stands in sharp contrast to the consumer
with inexpensive advertising.’’ 52
that the technology is available on ‘‘a support in the record of the TSR
46 Soundbite at 2; VMBC at 10.
amendment proceeding for including an
Nelson and Dianne Feinstein commented that 47 SBC at 14 n.13. established business relationship
‘‘there is no reason why the FTC should promulgate 48 VMBC at 13–14; U.S. Chamber at 6; West at 3; exemption for telemarketing using sales
an anti-consumer rule to meet the FCC’s lower Visa at 2; cf. NRF at 4 (suggesting a more flexible
standard for prerecorded messages.’’). disclosure timing such as ‘‘reasonably promptly’’). you[r] window, and entering your home to sell you
40 Verizon at 5. 49 E.g., Electronic Privacy Information Center his product only * * * it will be a robot, not a
41 DMA at 11; Infocision at 4; Heritage at 1–2; SBC
(‘‘EPIC’’), No. OL–113823 at 2; Privacy Rights person.’’).
at 4; West at 3; Visa at 2; Verizon at 6; Soundbite Clearinghouse (‘‘PRC’’), No. OL–113986 at 2–4; 53 Of the 77 positive consumer comments, more
at 2; Convergys Corp. (‘‘Convergys’’), No. OL– National Consumers League (‘‘NCL’’), No. OL– than half—47—sought only to preserve prerecorded
113952 at 5–6; National Association of Realtors 112905 at 5. Well over 13,000 of the 13,550 informational messages that are not prohibited by
(‘‘NAR’’), No. EREG–000005 at 1–2; National Retail consumer comments in the record clearly opposed the TSR. These 47 consumers opposed any
Federation (‘‘NRF’’), No. 000027 at 5; The Broadcast allowing prerecorded telemarketing messages, with limitation on prerecorded ‘‘reminder’’ messages,
Team, No. OL–112822 at 2. no more than 77 of the comments indicating with some 36 of them seeking to avoid any need
42 Heritage at 2; Infocision at 3. arguable support for the proposed amendment. to sign a consent form to receive such messages,
43 VMBC at 10; U.S. Chamber at 5; DMA at 9; SBC 50 Some 2,100 of the consumer comments apparently in the mistaken belief that this would be
at 2; NRF at 4; Heritage at 1–2; Soundbite at 2; SBC opposing prerecorded telemarketing calls necessary if the proposed amendment were not
at 4; West at 3. specifically objected that they constitute an adopted. E.g., Haas, No. OL–113929; Tran, No. OL–
44 Call Command at 1; Convergys at 5; DMA at 11; invasion of privacy. 113929; Lopez, No. OL–113975; Schroeter, No. OL–
NAR at 1–2; Visa at 2; Verizon at 6–7; NRF at 4– 51 E.g., Myers, M., No. OL–100768 (‘‘Pre-recorded 113882; DeSantis, No. OL–113892. One consumer
5. Verizon also argued that requiring that Do Not messages are even more annoying than calls from group correctly noted that such strictly
Call information be provided ‘‘at the outset’’ of a live people. You can’t interrupt, you can’t ask informational messages ‘‘would not fall under the
prerecorded message would conflict with current questions and you can’t respond.’’); Allen, No. OL– definition of ’telemarketing’’’ in the TSR. NCL at 3.
FCC regulations. Verizon at 6. 103079 (‘‘I cannot ask a recording to clarify who 54 E.g., Matthews, D., No. OL–100004; Forrette,
45 DMA at 11–12 (estimating that reprogramming they are or what our existing relationship is.’’); No. OL–113959; Bartholow, D., No. OL–113662;
calling stations would cost ‘‘$25,000 per location’’); Stahl, K., No. OL–101878 (‘‘The very worst form of Auerbach, No. OL–101665; Oberly, No. OL–105967.
SBC at 4 (citing the ‘‘significant investment of time telemarketing is the one made by a machine. Pre- 55 E.g., Matthews, D., No. OL–100004 (‘‘Some pre-
and capital to synchronize telephonic dialing recorded messages are just as invasive and recorded computer generated calls are convenient
capabilities with interactive voice platforms and unwanted, and far more frustrating.’’); Levy, No. and necessary’’ but ‘‘[t]elemarketing computer
databases,’’ the significant cost of requiring the OL–102365 (‘‘No business should be able to call me generated ’cold calls’’ are definitely a problem.’’).
availability of sales agents, and asserting that the unless I have a pre-existing relationship (one that Forrette, No. OL–113959 (‘‘I can think of several
‘‘number of calls able to be made in a single day >I< recognize), but even a company I do business cases where I find this very useful, such as
would decrease by more than 99%’’); Convergys at with should hire someone to actually speak to me.’’) notification from my airline when there’s a
5 (arguing that connection to an agent would be cost (punctuation in original); Powell, D., No. OL– schedule change to my flight. As long as the
prohibitive because of the increase in 113775 (‘‘Recorded messages like this are more than prohibition on the use of pre-recorded messages for
telecommunications costs to maintain ‘‘bridges’’ to an annoyance, they are a way for business to avoid ’cold calling’ remains in place, I think it’s okay.’’);
customer service personnel); Visa at 2 (‘‘[T]he talking to their customers, and instead just talk at Bartholow, D. No. OL–113622 (‘‘Bill reminders are
technology to permit registration [on company- them.’’). not the same as telemarketing sales calls.’’);
specific Do Not Call lists] during the telemarketing 52 Watson, B., No. OL–108960; cf. Nungesser, R., Consumer Assistance Network, No. OL–113928
call presently is not widely implemented and * * * No. OL–112535 (uninvited prerecorded calls are (‘‘The consumer would rather receive a [reminder]
would be costly and complicated’’). ‘‘no different than a door to door salesman breaking message rather than a telemark[et]ed call.’’).
representatives. In that proceeding, the the same complaint.60 Several as they could with a sales
Commission provided such an consumers cited the danger of the loss representative.64 Some consumers
exemption from the Do Not Call of use of their telephone lines, which reported that the mechanism typically
provisions after 40 percent of the can be tied up for some period of time provided for exercising their Do Not
consumers who commented supported even after the recipient hangs up on a Call rights is impractical,65 both because
the exemption.56 Here, only 15 prerecorded message.61 A few they have to wait until the end of what
consumer comments—a scant tenth of consumers cited instances when may be a lengthy message to get a
one percent of the more than 13,000 prerecorded messages prevented them number to call to speak to an agent,66
consumer comments that addressed the from making emergency calls,62 and a and because the Do Not Call option
proposed amendment—expressed community shelter that forwards its provided at the end of the message
unambiguous support for the proposed calls to allow staff counselors to receive simply does not work.67
safe harbor for prerecorded message them on their home telephones reported More generally, the comments attest
telemarketing to established that ‘‘[w]e are dealing with life and that consumers found the company-
customers.57 death situations from suicide to specific opt-out regime required to stop
Consumers also expressed concern substance abuse to domestic violence’’ unwanted prerecorded messages prior to
about the potential costs, including the and clients ‘‘are unable to get to a crisis
risks to health and safety, if the counselor due to the high volume of 64 E.g., Sahagian, No. OL–113021 (a self-described
proposed safe harbor allowing telemarketers calling our [home] phone ‘‘unemployed telemarketing manager, laid off as a
direct result of the national do not call list’’ who
prerecorded telemarketing messages to number.’’ 63 finds prerecorded messages ‘‘the most intrusive’’
established customers were adopted. Consumers emphasized the because ‘‘I can’t ask the message to get to the point
For example, consumers who subscribe difficulties they experience with or never call again.’’); Bedell, No. OL–105951 (‘‘A
to a telephone company or other voice prerecorded messages in exercising their machine can’t hear me say ‘put me on your do-not-
call list! ’ ’’); Schares, No. OL–110388 (‘‘At least
mail services protested having to pay for company-specific Do Not Call rights. with a live person, you can have the illusion of
storage of messages they do not want, Many objected to the fact that they requesting removal from the list, with a machine,
which can exceed their allotted storage could not tell a prerecorded message to you are just out of luck.’’); Irving, No. OL103862;
capacity and prevent them from put them on the seller’s Do Not Call list, see also, e.g., Sawyer, No. OL–108895; Goltz, OL–
107085; Hancock, J., No. OL–112529; Blumberg, No.
receiving the messages they need, as did OL–104484; O’Daire, No. OL–113753; Salgado, No.
owners of answering machines.58 60 E.g., Northeast Harbor Inn, Inc., No. OL–
OL–111816; Von Kennen, No. OL–113646; Ianson,
Consumers with home-based businesses 113439; Bart’s Pneumatics Corp., No. OL–107508; No. OL–105278; Valum, No. OL–102442; Van
Bus. Innovations, No. OL–110414; cf. Idaho Small
objected to the costs incurred when Bus. Dev. Ctr., No. OL–113259; County of Berks—
Baren, No. OL–101942; Zimmerman, J., No. OL–
their home telephone lines are tied up 113999.
Prison, No. OL–105593. 65 E.g., Hohm, No. OL–104448 (‘‘Allowing
by telemarketing calls,59 and even small 61 E.g., Graham, No. OL–104100 (‘‘If you needed
automated calls will let telemarketers flood
businesses and government agencies to call for a fire truck or an ambulance or poison
consumers with sales calls * * * with no practical
control and some recorded message was tying up
that are not protected by the TSR lodged your phone, would you think it was OK?’’); Vernen,
means for the consumer to challenge their propriety
or to refuse further calls.’’); Sartin, No. OL–104554
No. OL–110383 (prerecorded calls ‘‘most
56 TSR SBP, 68 FR at 4593 n.141. (‘‘If [prerecorded calls] are to be allowed, it should
dangerously—frequently fail to release the line
only be through opt-in, not an inherently awkward
57 Only 15 of the 77 consumer comments that promptly when hung up on. This presents an
and unreliable opt-out.’’); Von Kennen, No. OL–
arguably supported prerecorded telemarketing calls immediate risk to the health and safety of the call
113646 (‘‘I can only imagine the telephone ping-
did so without reservation or apparent recipient since the telephone line is unavailable in
pong game between menus, voice-mail, call
misunderstanding. E.g., Hamilton, No. OL–113099 an emergency.’’); see also, e.g., Adkins, No. OL–
transfers, and the inevitable disconnection that I’ll
(‘‘I would be in support of the change. * * * I 104921; Albright, D., No. OL–105813; Alquist, No.
would rather hang up on an automated machine OL–113229; Schmaljohn, No. OL–110028; Granzo, have to play before I can hope to talk to someone
than a live person.’’); Curran, D., No. OL–105145; No. OL–104469; Pickett, A., OL–104461; who will listen [to a Do Not Call request].’’).
66 E.g., Sahagian, No. OL–113021 (an
Childress, No. OL–102612; Young, E., No. OL– Simnacher, No. OL–108720; Miller, C., No. OL–
112546. Another 13 approved of prerecorded sales 105006. As the legislative history of the TCPA ‘‘unemployed telemarketing manager’’ who states
calls from businesses they know and regularly notes, S. Rep. No. 102–178, at 10 (1991), some that ‘‘[o]ften one must wait until the end of the
patronize, but not necessarily from any business telephone networks are not capable of notifying message for contact information, write down a
from which they have made a purchase. E.g., callers that a consumer has hung up, thereby phone number, call back, turn down a live sales
Leader, No. OL–110416 (‘‘I am not in favor of this excusing telemarketers from complying with an offer, ask to speak with a manager, and then finally
amendment. * * * [T]he only calls that should be FCC requirement that they release the line ‘‘within ask to be deleted from future calling campaigns.’’);
allowed are to companies who have an ongoing 5 seconds of the time [such] notification is Nobles, No. OL–105403, (‘‘The requirement[s] that
existing and real business relationship with the transmitted.’’ 47 CFR 68.318(c). It appears from the they identify themselves and allow me to ask them
customer.’’); Dusenbury, No. OL–113951 comments that many networks still lack this to remove me from their calling list are
(supporting prerecorded reminder messages capability. Thus, depending on their local network, meaningless, since that information is always
generally, including ‘‘sale reminders from my consumers may have to wait until the end of what supplied at the very end of the call.’’); Stahl, K., No.
favorite stores.’’); Bartholow, D., No. OL–113622. may be a lengthy prerecorded message before their OL–101878; Schneider, P., No. OL–101484. The
Two consumers backed prerecorded messages in telephone line is released. call-back requirement that consumers describe, if
the mistaken belief that such messages would be 62 Friedman, No. OL–110265 (a disabled permitted by FCC rules, does not comply with the
‘‘permission based’’ opt-in messages. Taylor, J., No. consumer unable to make an emergency call safe harbor proposal in the NPRM because it fails
OL–105274; Taylor, R., No. OL–105171. The because the recorded message would not to give consumers an opportunity to exercise their
remaining 47 supported prerecorded ‘‘reminder’’ disconnect); Gardiner, W., No. OL–100542 (an Do Not Call Rights during the call.
messages, as previously noted. See note 53, supra. elderly consumer who complained that the receipt 67 E.g., Blumberg, No. OL–104484 (‘‘There is
58 E.g., Allison, No. OL–108414 (‘‘In the recent of prerecorded messages twice prevented him from always an option to wait until the end of the
election one citizen had her answering machine [so] contacting a doctor). See also, NCL at 3; PRC at 11 message and press a number to talk with a person
filled with phone messages from a candidate that (citing a comment it received from a self-identified but only in rare instances does this work.’’);
her child could not get word to her of an emergency ‘‘former legitimate telemarketing salesman’’ Vinegra, No. OL–104055 (‘‘[I]n my experience,
at the child’s school.’’); O’Connor D., OL–111858; objecting to allowing prerecorded messages because automated phone spam is the MOST likely to not
Rose, C., OL–111837; Micret, OL–111402; Rickey, ‘‘[t]here are one or more deaths on record have a valid way to get off the list. Oh, sure, it may
OL–104029; see also PRC at 6–7; NCL at 3. Neither Nationally that were precipitated by a prerecorded give you an 800 number to call, but that’s likely to
the TSR nor the proposed new safe harbor, message that would not cede the line it was on, reach some convoluted voicemail system that never
however, prohibits the use of prerecorded messages even though the receiving party had hung up! ’’). gets you anywhere.’’); Fiol, No. OL–112458 (‘‘I do
when an answering machine picks up a call. See the 63 Chico Community Shelter Partnership, No. OL– not believe that offering consumers the option of
discussion in Section II.E, infra. 109650; cf. Udehn, No. OL–114005 (‘‘Callers are hanging up and calling an 800 number is an
59 E.g., Brown, R., No. OL–104366; Amsberry, No. persistent and do not like to release phone lines effective one. It only worsens the interruption and
OL–105113; Lasting Fitness, No. OL–110413; until they make a sale, even to allow emergency imposition on the consumer’s time, and * * *
Miller, No. OL–103424; Grover, No. OL–109774; patient calls. I need a line uncluttered by telephone frustrate[s] the consumer if the 800 number is busy
Pearlman, S., No. OL–112275. SPAM to continue emergency room coverage.’’). or even inoperative.’’).
the advent of the Registry extremely A number of consumers also the Registry 78—especially if the use of
burdensome and frequently challenged a presumption implicit in prerecorded messages is permitted.79
ineffective.68 Apparently assuming that the proposed safe harbor that would These consumers foresee that allowing
a company-specific opt-out might not have permitted prerecorded prerecorded messages will likely
take the form of an interactive method telemarketing calls to established increase the number of ‘‘established
at the outset of the call (as proposed by customers. Notwithstanding the FCC’s business relationship’’ telemarketing
the Commission), some consumers rationale for allowing sellers to use campaigns, with the result that
complained that the burden would be prerecorded messages in calls to consumers will have to assert company-
placed on them to listen until the end established customers,73 many specific Do Not Call requests repeatedly
of unwanted messages to obtain an opt- consumers contended that neither a for different sellers from which they
out telephone number, to copy the opt- prior inquiry nor purchase implied their made a one-time purchase.80 Moreover,
out number, and to wait to call that consent to receipt of future prerecorded some consumers reported that they
number during normal business hours solicitations from a seller,74 contrary to receive both live and prerecorded
to ask not to be called again—a process prior consumer support for live
they would have to repeat for each telemarketing calls from businesses with
telemarketing calls.75 Many of the which they have no ‘‘established
company that calls.69 consumer comments argued that, given
Some consumers and consumer business relationship.’’ 81
the intrusive and impersonal nature of
groups questioned the adequacy of the Many consumers also commented that
proposed interactive mechanism that prerecorded messages, prerecorded
since they listed their telephone
would permit consumers to exercise telemarketing calls should not be
numbers on the National Do Not Call
their Do Not Call rights by pressing a permitted at all without the consumer’s
Registry, they have come to rely on it to
button on the telephone keypad. At least prior consent.76 In addition, many
objected to what they regard as the shield them from unwanted
one consumer noted that this approach telemarketing calls, including
would be ineffective for her, and overbreadth of the TSR’s definition of
an ‘‘established business prerecorded messages.82 A large number
presumably many thousands of other fear the proposed safe harbor will create
consumers who still have rotary dial relationship,’’ 77 which some regarded
as threatening to make a ‘‘mockery’’ of a ‘‘loophole’’ that will dilute the
telephones without keypads.70 A effectiveness of the Registry in
consumer group and at least one preventing unwelcome intrusions on
consumer questioned whether the bars the use of equipment that channels a call to
proposed interactive mechanism would a sales representative if a consumer answers, but to
a recorded message if an answering machine picks 78 Sanderson, No. OL–447. See also Sager, No.
be effective in the absence of a up. See TSR SBP, 68 FR at 4645; see also the OL–104269; Yarrow, No. OL–102563.
requirement that a representative be discussion in Section II.E, infra. 79 EPIC at 14; PRC at 9; NCL at 3.
promptly available.71 Another consumer 73 1992 FCC Order, 7 FCC Rcd 8752, ¶ 34 80 E.g., Hancock, J., No. OL–112529 (‘‘Since a
group doubted that consumers would (concluding that a ‘‘solicitation can be deemed ‘business relationship’ is readily established by any
invited or permitted by a subscriber in light of the inquiry or purchase, the universe of companies that
really benefit from the proposed business relationship.’’). can claim a basis to make junk phone calls is
interactive mechanism.72 74 E.g., Sancibrian, No. OL–106078; Salem, No.
huge.’’); Talmo, No. OL–110438 (‘‘A few years ago,
OL–107247; Sartin, No. OL–104554; Laucik, No. most of my purchases were made within my
68 E.g., Gollinger, No. OL–103929 (‘‘This puts an OL–104859; Wortman, No. OL–103376; Corey, No. community.* * * The digital world has opened up
undue burden upon the consumer to attempt to OL–105981; Innes, No. OL–105931; Brown, R., No. very far-reaching so-called relationships. * * * I
contact the company to have their name deleted OL–107136; Troup, No. OL–103143; Goland, No. now make many one-time [Internet] purchases from
from the call list.’’); Wahlig, No. OL–104503 at 1 OL–100107. companies I may never contact again. I fear that
(citing the ‘‘unjustifiable burden on citizens who 75 See note 56, supra, and accompanying text. these simple one time purchases will constitute a
wish to assert their DNC rights’’); Tomas, No. OL– Many of the consumer comments opposing so-called business relationship.’’); Argyropoulos,
101671 (‘‘Instead, the burden is placed on the expansion of the ‘‘established business No. OL–102968 at 1 (‘‘Companies are offering free
victim’s shoulders to contact the telemarketer to relationship’’ exemption did not distinguish or below-cost inducements to establish business
have himself removed from the call list.’’); Ayers, between prerecorded calls and live calls from a relationships for the primary purpose of acquiring
T., No. OL–113131; Bashor, No. OL–113062; Fiol, sales representative. Consequently, it is impossible the ability to telemarket to consumers in the Do Not
No. OL–112458; LaMountain, No. OL–101888; to determine whether these comments would Call registry.’’).
Boyd, M., No. OL–113844; Hall, No. OL–104082; support an established business relationship 81 E.g., Fryman, No. OL–101503 (‘‘The established
Grace, No. OL–113784; Piro, No. OL–112925. exemption for live telemarketing calls, or whether business relationship clause of the existing system
69 E.g., Hancock, J., No. 112529; Sahagian, No.
they reflect a change in consumer attitudes toward has been stretched and twisted beyond all
OL–113021; Kleger, No. OL–103115. the exemption. recognition, such that companies that we have had
70 Sachau, No. EREG–000002; see also 76 EPIC at 2, 14; PRC at 4, 9; NCL at 4; see also, no ‘business relationship’ with in over 5 years are
Argyropoulos, No. OL–102968 at 2 (‘‘[N]one of the e.g., Barry, A., No. OL–104109; Williams, K., No. still calling.’’); Anderson, J., No. OL–102561 (‘‘I get
proposed options allow a person answering on a OL–101321; North, W., No. OL–103090; Schnautz, 3–5 calls a day, with recorded messages. And NO,
non-touch-tone phone to efficiently make a Do Not No. OL–104508; Tipping, No. OL–109310; Twilling, they are NOT people I’ve done business with!’’);
Call request.’’). While other mechanisms No. OL–108395; Viggiano, No. OL–108516. Holt, C., No. OL–102518, (‘‘I constantly receive
undoubtedly exist to provide equivalent 77 E.g., Nuglat, No. OL–109584 (‘‘[T]hese solicitations from companies who claim I have a
functionality for rotary dial telephone users, no companies will be calling a purchase of a stick of relationship with them, and I’ve never heard of
industry comment addressed this problem in gum a year ago the basis of an established business them before. STILL get calls, both human and PRE-
response to the NPRM’s request for information relationship.’’); Touretzky, No. OL–100891 (‘‘I work Recorded.* * *[A]s I was writing this, I was just
about ‘‘alternative mechanisms.’’ nights and sleep in the daytime. I do not want to interrupted by a TELEMARKETING CALL!!!!!!
71 NCL at 5 (‘‘The FTC proposal seems to assume * * *[I]t was not a company we had ever done
be dragged out of bed by every low-life outfit that
that when the consumer presses the number to once sold me a box of paperclips.’’); Holt, C., No. business with and they would not tell me how they
speak to a live company representative, one will be OL–102518 (‘‘Time Warner owns some 80% of the got this number.’’).
readily available. It is unclear what happens if that media markets, does that mean if I buy one copy 82 E.g., Thompson, A., No. OL–104385 (‘‘I
is not the case. Will the consumer get dead air? Be of Time magazine that I should have to receive recently moved, and my new phone number was
put on hold with recorded music? Be hung up phone calls from every other media outlet Time not on the Do Not Call list; I received more ‘junk’
on?’’); Argyropoulos, No. OL–102968 at 2. owns? That’s the way it functions now.’’); see also, calls than I received normal phone calls. Adding
72 PRC at 7 (arguing that most prerecorded e.g., Holt, C., No. OL–102518; Schendel, K., No. my new number to the list made having a phone
telemarketing messages are left on answering OL–101419; Veech, No. OL–110162; Ehlinger, No. bearable again.’’); Musgrave, No. OL–106135;
machines or voice mail services, depriving OL–105751; Eide, No. OL–102754; Erskine, D., No. Sampson, No. OL–106004; Anholt, No. OL–104141;
consumers of the benefits of such an option, and OL–109355; Volek, No. OL–100697; Inman, J., No. Dougherty, J., No. OL–106035; Gordon, M., No. OL–
ultimately clogging their message storage with OL–102319; Verner, No. OL–104134; Islam-Zwart, 109877; Matson, No. OL–111933; Gunnells, No.
unwanted telemarketing messages). However, No. OL–100028; Sampson, No. OL–106004; OL–108503; McCarthy, L., No. OL–101367; Sayer,
nothing in the TSR’s call abandonment prohibition Salisbury, No. OL–104292. No. OL–100407.
their privacy at home.83 Consumers and easily and as quickly as in a similar call indeterminate length have prevented
their advocates expressed concern that, using sales representatives. Thus, the consumers from making emergency
if the proposed new safe harbor were Commission’s analysis begins from the calls—a concern which was an
adopted, marketplace economics could premise that a new safe harbor that important factor leading to passage of
soon produce a flood of prerecorded treats prerecorded telemarketing calls to the TCPA.87 While the record does not
telemarketing messages that would established customers differently from suggest that obstruction of emergency
engulf the privacy protection provided other prerecorded calls might be calls by prerecorded messages is a
by the Registry. They cited, in appropriate if: (1) The consumer common occurrence, the seriousness of
particular, such recent digital aversion to prerecorded calls (which led the potential consequences when it does
technologies as Voice Over Internet to enactment of the TCPA ban on such occur creates legitimate cause for
Protocol (‘‘VoIP’’) as likely to lower the calls) does not apply when such calls concern.
costs of prerecorded telemarketing are made to established customers; (2) Likewise, the possibility that any
messages to the point that they would any harm to consumer privacy is harm to consumer privacy might be
be used extensively, if permitted.84 outweighed by the value of prerecorded outweighed by the value of prerecorded
Thus, several comments argued that calls to established customers; or (3) calls to established customers is
allowing the use of prerecorded there is something unique about the convincingly refuted by the consumer
messages in telemarketing to established relationship between sellers and their comments. There is support in the
customers would in effect create the established customers that gives sellers record for prerecorded informational
telephonic equivalent of ‘‘spam,’’ a sufficient incentive to self-regulate so messages—i.e., messages without any
overwhelming consumers with that they would avoid prerecorded sales pitch—which are not prohibited
unwanted messages that cost the caller telemarketing campaigns that their by the TSR; yet there is virtually none
little or nothing to send.85 customers would consider abusive. for prerecorded telemarketing messages.
Based on careful consideration of the Accordingly, this second potential
D. Analysis of the Comments, comments, the Commission concludes rationale for adoption of a new safe
Discussion and Conclusion that the record does not support any of harbor is not supported by the record—
Two themes strikingly emerge from these possible rationales for treating a fact that assumes particular
the record. First, there is virtually no prerecorded telemarketing calls to importance in view of Supreme Court
consumer support for allowing the use established customers differently from precedent that has long recognized the
of prerecorded messages; and second, other prerecorded calls. significant governmental interest in
neither industry nor consumers support First, if consumers had little or no protecting residential privacy.88
the proposal’s effort to ensure that aversion to prerecorded calls from The third possible rationale for a new
consumers would be able to assert an sellers with whom they have an safe harbor—that sellers will self-
entity-specific Do Not Call request in an established business relationship, the regulate the number of prerecorded
‘‘established business relationship’’ call fact that such calls avoid the twin harms messages they send in order to preserve
delivering a prerecorded message as of ‘‘dead air’’ and ‘‘hang ups’’ associated the goodwill of established
with abandoned calls would weigh customers 89—is similarly unpersuasive.
83 Over 5,900 consumer comments asserted that heavily in favor of the adoption of a new Although it may be that well-established
there is no need to create a ‘‘loophole’’ or to adopt safe harbor. The record here provides businesses with brand or name
the amendment. E.g., Brown, R., No. OL–101294; compelling evidence, however, that recognition will engage in such
Hill, A., No. 000037; Moore, M., No. OL–101468; consumer aversion to prerecorded restraint, the same is not necessarily
Fryman, No. OL–101503; Vrignaud, No. OL–
101542; Jester, No. OL–101685; Selmi, No. OL– message telemarketing—regardless of true for new entrants and small
102168; Miller, No. OL–103424; Vogel, No. OL– whether an established business businesses in highly competitive
105708 at 1. relationship exists—has not diminished markets. The proposed safe harbor, if
84 Sacerdote, No. OL–112192 (‘‘The cost of
since enactment of the TCPA, which, in approved, would expose consumers,
placing such automatic call[s] is essentially zero, including those who have entered their
and the desire to place such calls will therefore be
no small measure, was prompted by
nearly infinite.’’) (emphasis added); EPIC at 5–6 consumer outrage about the use of telephone numbers on the Registry, to
(citing a 1999 news report that VMBC could leave prerecorded messages. The comments in such prerecorded messages, potentially
‘‘messages with 1% of the U.S. population over a this record demonstrate that consumers from every seller from whom they have
two-day period,’’ and the increasing use of low cost made a single purchase in the past 18
Internet services such as VoIP or Internet
continue to view such calls as an
telephony); PRC at 8–9 (citing an August 10, 2004, abusive invasion of their privacy, and months. In addition, because the TSR’s
CNET article about software that can deliver up to an even greater invasion of their privacy definition of an ‘‘established business
1,000 synthetic calls every five seconds to Internet than live telemarketing calls because relationship’’ includes consumers who
Protocol addresses assigned to telephones); NCL at they are powerless to interact with a have not made a prior purchase, but
2–3 (arguing that low cost use of prerecorded
messages rather than salespersons and expansive recording. Indeed, almost all of the very simply an inquiry, sellers would have
reading of ‘established business relationship’ will few consumers who commented in favor
result in increase of telemarketing calls); see also, of prerecorded messages confined their 87 S. Rep. No. 102–178, at 10 (1991).
e.g., Allan, A., No. OL–103079; United States comments strictly to informational calls, 88 E.g.,Frisby v. Schultz, 487 U.S. 474 (1988);
Senate, No. OL–113862 at 3; Bates, J., No. OL– Rowan v. U.S. Post Office Dep’t, 397 U.S. 728
100012; Fisher, B., No. OL–109494; Watson, B., No. in some cases qualifying their support (1970).
108960. with negative comments about 89 Several industry comments inconsistent with
85 E.g., Anderson, No. OL–106320 (‘‘E-mail spam prerecorded sales calls.86 this rationale argue that because the burden of proof
is killing e-mail for legitimate business In addition, some consumers are of an established business relationship would fall
communication and phone spam would do the troubled by the potential hazards that on the seller, no new enforcement concerns would
same for telephone communications.’’); Kislo, No. be created by a safe harbor for prerecorded calls. As
OL–102924 (‘‘Such a modification would change prerecorded messages may pose for their these comments reflect, the industry recognizes that
telemarketing rules in such a radical fashion, you health and safety when home telephone the burden of this affirmative defense rests on
risk bringing the ‘e-mail spam’ problem to the lines cannot be released in emergencies. sellers and telemarketers to prove that the seller has
telephones across the US.’’); Malone, S., No. OL– As this record attests, in at least a few an established business relationship with the party
107630 (objecting to FTC proposal to allow ‘‘pre- called, 16 CFR 310.4(b)(1)(iii)(B)(ii), just as in the
recorded ‘spam blitzes’’ ’); Miller, No. OL–103424 instances, prerecorded messages of express written agreement exception, 16 CFR
(‘‘Left unchecked (as I believe it is today) the phone 310.4(b)(1)(iii)(B)(i), and the Do Not Call safe
system will become much like e-mail, 80% spam.’’). 86 See note 54, supra. harbor, 16 CFR 310.4(b)(3).
less of an incentive to self-regulate the record indicates that new digital that agency recognized that the TCPA
number of prerecorded messages they technologies, including VoIP, are likely did not exempt prerecorded calls to a
send to such consumers, because they to reduce the cost of transmitting consumer who has an established
have no established customer to lose, prerecorded telemarketing messages by business relationship with a seller.95 In
but only a customer to gain. The telephone dramatically, if not to adopting regulations prohibiting
likelihood that industry-wide self- ‘‘essentially zero,’’ in the foreseeable virtually all prerecorded message
restraint would be effective must be future.92 As the costs decrease, the telemarketing calls where the called
assessed with an eye toward the economic incentives to increase the use party has not given ‘‘prior express
industry’s record of compliance with of prerecorded telemarketing messages consent’’ to receive such calls, the FCC
the TSR to date. While overall for advertising will multiply, increasing nonetheless elected to create an
compliance with the Do Not Call the flow of prerecorded messages ‘‘established business relationship’’
provisions of the TSR is quite good, not consumers receive in their homes. exemption from that prohibition.96 The
all covered entities are complying.90 Thus, there is no apparent rationale FCC explained that, in its view, a
The compliance record presents a for according special treatment to ‘‘solicitation can be deemed invited or
particular problem with respect to prerecorded telemarketing calls to permitted by a subscriber in light of the
consumer concerns about the breadth of established customers. Nevertheless, business relationship,’’ 97 that requiring
the industry’s interpretation of what there remains the industry contention ‘‘prior express consent’’ would
constitutes an ‘‘established business that failure to adopt the proposed safe ‘‘significantly impede communications
relationship,’’ as the consumer harbor would be contrary to the between businesses and their
comments and the Commission’s law mandate of the Do Not Call customers,’’ and thus, that a
enforcement experience indicate.91 Implementation Act (‘‘DNCIA’’),93 ‘‘solicitation to someone with whom a
This argument also ignores the fact because FCC regulations permit certain prior business relationship exists does
that the cost of conducting live prerecorded telemarketing calls, even not adversely affect subscriber privacy
telemarketing campaigns with sales though the DNCIA directed the FCC to interests.’’ 98 In updating its regulations
agents, as now permitted by the TSR, is maximize the consistency of its Do Not in 2003 to comply with the DNCIA, the
itself a separate, significant check on the Call regulations with the FTC’s TSR.94 FCC elected to retain the exemption,
number of such campaigns. Thus, it is When the FCC first promulgated its stating that ‘‘[t]he record reveals that an
reasonable to expect that the regulations under the TCPA in 1992, established business relationship
substantially lower cost of prerecorded exemption is necessary to allow
message telemarketing (compared to live 92 E.g., Mari-Len de Guzman, Spam may be a
companies to contact their existing
telemarketing campaigns with sales future threat to VoIP, Computerworld, Sept. 7, 2005,
at 2, available at http://www.computerworld.com/
customers.’’ 99
agents) would significantly increase the networkingtopics/networking/ story/ As a result, the relevant provisions of
use of such campaigns, at least by new 0,10801,104442,00.html (citing Spam over Internet the FCC rules and the TSR differ to the
entrants and small businesses that lack Telephony (SPIT) as a growing concern for VoIP extent that the FCC rules permit
users because technology would allow artificial
brand or name recognition. It is no less messages to be sent to 30,000 IP phones in a second
reasonable to predict that, as new digital and costs would be ‘‘essentially zero’’) (emphasis
95 1992 FCC Order, 7 FCC Rcd 8752, ¶ 34. In fact,
technologies further reduce the cost of added); Associated Press, Voice Over Internet Use the TCPA states that Congress has found that
Soaring, Yahoo! News, Mar. 1, 2006, available at ‘‘residential telephone subscribers consider
prerecorded telemarketing, the volume automated or prerecorded telephone calls * * * to
http://www. ladlass.com/ice/archives/010819.html
of prerecorded calls will increase. The (reporting that the number of users of Internet be a nuisance and an invasion of privacy,’’ and that
telephone services tripled in 2005, jumping from ‘‘[b]anning such automated or prerecorded
90 From December 31, 1995 until March 25, 2003, 1.3 million users of VoIP to 4.5 million); Deborah telephone calls to the home, except when the
the Commission brought 162 cases against Solomon, AARP’s Antagonist, N.Y. Times receiving party consents to receiving the call * * *
telemarketers alleging violations of the TSR. Since Magazine, Mar. 13, 2005, at 23 (explaining how is the only effective means of protecting telephone
March 31, 2003, the effective date of the amended automated telephone messages are ‘‘extraordinarily consumers from this nuisance and privacy
TSR, 24 cases alleging violations of the TSR’s Do inexpensive’’ and efficient, and citing, as an invasion.’’ TCPA, Pub. L. No. 102–243, 105 Stat.
Not Call provisions, and another 37 cases alleging example, calling every household in North Dakota 2394 (1991) at §§ 2(10) and (12).
96 47 CFR 64.1200(a)(2)(iv). The only
other TSR violations by telemarketers have been in just four hours for $10,000); VoIP to Open Door
brought by the Commission or the Department of for Flood of Overseas Telemarketing, VoIPNEWS, requirements are that the prerecorded message must
Justice at the Commission’s request. E.g., FTC v. May 17, 2005, http://web.archive.org/eb/ clearly identify the business responsible for
Universal Premium Serv., No. 06–0849 (C.D. Cal. 20050316232140/www.voip-news.com/art/6q.html initiating the call and provide, ‘‘during or after the
entered Feb. 21, 2006) (ex parte TRO entered to halt (citing Burton Group analyst Fred Cohen who message,’’ a telephone number that consumers can
alleged TSR violations in ‘‘WalMart Shopping Spree predicts that ‘‘the average enterprise or household call during normal business hours to make a
Scam’’ involving continuing calls to consumers could see as much as 150 calls a day’’ from company-specific Do Not Call request. 47 CFR
who had asked to be placed on the seller’s telemarketers using VoIP based in part on the price 64.1200(b).
company-specific Do Not Call list); United States v. of Internet telephony which has cut costs by a factor 97 1992 FCC Order, 7 FCC Rcd 8752, ¶ 34. But cf.,
DirecTV, Inc., No. SACV05–1211 (C.D. Cal. filed of 100). Telecom Decision, CRTC 2004–35, ¶ 111 (in which
Dec. 12, 2005) ($5.3 million civil penalty settlement 93 Public Law No. 108–10, 117 Stat. 557 (2003). the Canadian Radio-Television and
for alleged TSR violations in making calls to A related argument asserted in some industry Telecommunications Commission declined to
consumers on the Registry, and for allegedly comments, that Congress gave exclusive jurisdiction create an established business relationship
assisting a telemarketer in making prerecorded to the FCC to regulate the use of automated dialing exemption for prerecorded telemarketing calls on
telemarketing calls that violated the call and announcing devices, has been rejected by each the ground that ‘‘when a consumer purchases a
abandonment safe harbor). court that has considered the question. Mainstream service or product from a company * * * there is
91 In United States v. Columbia House Co., No. Mktg. Servs. v. FTC, 358 F.3d 1228, 1237, 1259 no ‘implied consent’ as a result of that purchase to
05C–4064 (N.D. Ill. filed July 14, 2005), the (10th Cir.), cert. denied, 543 U.S. 812 (2004); Nat’l receive future solicitations’’).
Commission obtained a $300,000 civil penalty Fed’n of the Blind v. FTC, 420 F.3d 331, 337 (4th 98 1992 FCC Order, 7 FCC Rcd 8752, ¶ 34.
settlement for alleged calls to tens of thousands of Cir. 2005), cert. denied, 126 S.Ct. 2058 (2006); see 99 2003 FCC Order, 68 FR at 44165. In comments
numbers on the Registry. Although the defendant also Broad. Team, Inc. v. FTC, 429 F.Supp.2d 1292, filed with the FCC during the rulemaking it
claimed an ‘‘established business relationship’’ 1301–02 (M.D. Fla. 2006), appeal docketed, No. 06– conducted pursuant to the DNCIA, the FTC
with the consumers it called, the Commission 13520–EE (11th Cir. June 23, 2006). specifically urged the FCC to eliminate this
alleged, after investigation and analysis, that most 94 Section 3 of the DNCIA directed that ‘‘the discrepancy, as the FCC’s ruling acknowledged.
were calls to consumers who last made a purchase Federal Communications Commission shall consult 2003 FCC Order, 18 FCC Rcd 14014, 14109, ¶ 156
from the defendant far outside the prior 18-month and coordinate with the Federal Trade Commission & n.556. However, the FCC declined to conform its
period during which the exemption would have to maximize consistency with the rule promulgated prerecorded message rules to the FTC’s TSR, with
applied, and that other calls were made to by the Federal Trade Commission (16 CFR no explanation except that the ‘‘current exception
consumers who had previously instructed the 310.4(b))’’ in issuing the 2003 FCC Order to is necessary to avoid interfering with ongoing
company not to call them. implement and enforce the Do Not Call Registry. business relationships.’’ Id. at 95.
prerecorded calls where the seller has delicate balance the Commission has would be available promptly,105 and
an established business relationship struck between legitimate, but because, in their view, most prerecorded
with the party called, and the TSR’s call competing, privacy and communication messages end up on answering
abandonment prohibition does not.100 interests. If a safe harbor that would machines or voice mail services, so that
While regulatory uniformity may be a permit prerecorded telemarketing the interactive mechanism would not
laudable goal, it is not a sufficient basis messages to established customers were materially assist consumers in avoiding
for conforming the TSR to the FCC’s created, it seems certain that consumers the costs and encumbrances of asserting
regulations given the Congressional whose telephone numbers are listed on their company-specific opt-out rights.106
mandate that the Commission’s the Registry would receive some greater No industry or consumer comment
Telemarketing Act regulations prohibit number of telemarketing messages than proffered a suitable alternative that
abusive telemarketing calls—and they do now. Although reasonable would serve the same purpose as the
particularly given the lack of support in people may differ on the likely size and interactive mechanism proposed.
the record for exempting such calls from scope of that increase, there can be no In the absence of any mechanism
the Rule’s prohibition.101 In sum, the dispute that it would come at some cost widely acceptable to industry and
record does not establish a rationale that to the privacy of consumers in their consumers that would provide
would warrant special treatment for homes. Based on the record to date, the recipients of prerecorded telemarketing
prerecorded message telemarketing concern is a very real one that messages the opportunity to assert their
when directed to consumers with whom consumers, to some degree, would Do Not Call rights ‘‘quickly, effectively
the seller has an established business return to the same burdensome situation and efficiently,’’ the Commission does
relationship. that existed before the Registry, when not believe that it can craft conditions
An additional consideration they were repeatedly having to assert a for the proposed safe harbor that would
articulated in the record supports the company-specific Do Not Call remedy preserve the balance between the
Commission in its conclusion not to that the Commission deemed consumer privacy interests that
adopt the new safe harbor VMBC inadequate for commercial sales Congress intended to protect and the
sought: the potential of such a change to solicitation calls when it created the interest of sellers and telemarketers in
undermine the effectiveness of the Registry.102 communicating sales and promotional
National Do Not Call Registry. There can Only one issue remains to be offers to their established customers via
be no question that public support for considered. In drafting the proposed prerecorded messages.
the Do Not Call Registry is new safe harbor in response to the It is important to reiterate, however,
overwhelming and widespread. As of VMBC petition, the Commission sought that many (if not most) of the
September 1, 2006, consumers had to minimize the potential harms of communications sellers wish to send via
registered more than 130 million prerecorded calls to established prerecorded messages, and that
telephone numbers, choosing to ‘‘opt customers by requiring sellers and customers wish to receive, are
in’’ to the protection provided by the telemarketers to provide a prompt informational communications not
Registry to keep unwanted opportunity at the outset of the message governed by the TSR, and thus are not
telemarketing calls from invading and for customers to assert a company- prohibited by its call abandonment
disturbing the privacy of their homes. specific Do Not Call request. The provision.107 It is equally noteworthy
The importance of the Registry to Commission specifically endorsed an that because the proposed new safe
millions of consumers in preserving interactive mechanism that would harbor would have been predicated on
personal privacy in their homes cannot permit the party called to connect to a an ‘‘established business relationship,’’
be understated or underestimated, as the sales representative during the message sellers would have had an opportunity
consumer comments on the record in by pressing a button on the telephone during their business dealings to obtain
this proceeding make clear. keypad. The purpose of this provision the prior written agreement of their
Nevertheless, the Commission is was to put recipients of a prerecorded customers to receive telemarketing calls
mindful of the legitimate interest of message on an equal footing in asserting that deliver prerecorded messages.108
businesses in communicating with their their company-specific Do Not Call For this and all the other reasons
established customers. The rights with customers who now receive discussed above, the Commission has
communication interest in such calls is live telemarketing calls from sales concluded that, on balance, the record
one reason the TSR expressly permits representatives under the TSR’s in this proceeding fails to provide the
sellers and telemarketers to make live established business relationship support necessary to justify the
telemarketing calls to consumers whose exemption. proposed additional safe harbor.
telephone numbers are listed on the A majority of both industry and Accordingly, the Commission has
Registry, provided the seller has an consumer comments on the record have determined not to adopt the proposed
established business relationship with resoundingly rejected this proposal. amendment, and to deny the VMBC
each consumer who is called, or has Most of the sellers and telemarketers petition. The Commission’s Rules of
obtained a written agreement to receive who commented on the proposed Practice afford VMBC and other sellers
such calls that is signed by the interactive mechanism objected to it as and telemarketers the right to seek any
consumer. The safe harbor VMBC costly, burdensome, and not widely advisory opinions they may need to
requested would have altered the available.103 Consumers and their
advocates protested that the mechanism 105 See note 71, supra, and accompanying text.
106 See note 72, supra, and accompanying text.
100 As noted, the TSR addresses only calls would be ineffective because touchtone
107 Examples of informational calls—provided
delivering a recorded message when a person keypads are not universal,104 there is no
answers, as opposed to an answering machine or they are not combined with a sales pitch—include
voice mail system. guarantee that a sales representative calls from an airline notifying consumers about a
101 The Commission’s view might be otherwise if cancelled flight or a schedule change to a booked
102 TSR SBP, 68 FR at 4631 (‘‘[T]he company- flight, or calls from a company notifying consumers
the two sets of regulations were so contradictory
that they imposed inconsistent obligations on specific approach is seriously inadequate to protect about the recall of a purchased product. See notes
sellers and telemarketers, but that is not the case consumers’ privacy from an abusive pattern of calls 29 & 54, supra, and accompanying text.
here, where compliance with the more restrictive placed by a seller or telemarketer.’’). 108 Sellers would have the same opportunity if the
103 See note 45, supra, and accompanying text.
requirements of the TSR does not violate the FCC amendment discussed in Section II.E, infra, is
regulations. 104 See note 70, supra, and accompanying text. adopted.
clarify the types of prerecorded addition to the ‘‘Pattern of Calls’’ consumer who cannot be connected to
informational messages that are not prohibitions in § 310.4(b)(1) of the TSR, a sales representative.
covered by the TSR, and thus are not and to invite public comment on the The proposed amendment barring
prohibited.109 proposal until November 6, 2006. prerecorded telemarketing calls without
Additionally, the Commission has Section 3.10(b)(1) will continue to a consumer’s prior written agreement
decided, based on the record in this provide that ‘‘It is an abusive would make the present prohibition
proceeding, to propose an amendment telemarketing act or practice and a explicit, and would implement the
of the TSR, pursuant to § 3(a)(3)(A) of violation of this rule for a telemarketer Commission’s broad authority under the
the Telemarketing Act,110 to add an to engage in, or for a seller to cause a Telemarketing Act to prohibit abusive
express prohibition against unsolicited telemarketer to engage in, the following telemarketing practices. The
prerecorded telemarketing calls, unless conduct:’’ The new subsection would Telemarketing Act directs the FTC to
the seller has obtained a consumer’s add: ‘‘include in [the TSR] a requirement that
express prior written agreement to (v) Initiating any outbound telemarketing
telemarketers may not undertake a
receive such calls. In so doing, the call that delivers a prerecorded message pattern of unsolicited telephone calls
Commission also seeks to address the when answered by a person, unless the seller which the reasonable consumer would
criticism, encountered by FTC staff in has obtained the express agreement, in consider coercive or abusive of such
providing industry guidance, that the writing, of such person to place prerecorded consumer’s right to privacy.’’ 116
text of the TSR does not calls to that person. Such written agreement The consumer comments in this
straightforwardly address prerecorded shall clearly evidence such person’s proceeding have made it clear that
message telemarketing, and instead authorization that calls made by or on behalf consumers overwhelmingly consider
of a specific party may be placed to that prerecorded telemarketing calls coercive
places the burden on industry members person, and shall include the telephone
and their legal advisors to divine that number to which the calls may be placed and and abusive of their right to privacy.
the call abandonment provisions the signature of that person; provided, They find prerecorded calls more
effectively bar this practice (except for however, that prerecorded messages coercive and abusive than live
the very restricted use of recorded permitted for compliance with the call telemarketing calls because they are
messages in the call abandonment safe abandonment safe harbor in § 310.4(b)(4)(iii) powerless to interact with a recording,
harbor). The Commission continues to do not require such an agreement.114 either to assert their Do Not Call rights
think that the plain language of the call The purpose of the proposed or to request additional information
abandonment provision itself prohibits amendment is to make it explicit that about the product or service offered.
calls delivering prerecorded messages the TSR prevents sellers and Thus, the present record supports a
when answered by a consumer, a telemarketers from delivering a finding that a reasonable consumer
position it has repeatedly stated,111 and prerecorded message when a person would consider prerecorded
that has been accepted by at least one answers a telemarketing call, regardless telemarketing calls coercive or abusive
court.112 However, the Commission of whether the call is made to a of such consumer’s right to privacy,
believes that it might be beneficial to consumer whose number is listed on the unless the consumer had given his or
make the prohibition more prominent Do Not Call Registry or to a consumer her express prior written agreement to
by adding a provision that makes who has an established business receive such calls.
explicit the prohibition on relationship with the seller, without the The proposed amendment would
telemarketing calls delivering consumer’s express prior written prohibit only the initiation of a call
prerecorded messages (while clarifying agreement.115 The prohibition contains ‘‘that delivers a prerecorded message
that the call abandonment safe harbor a proviso that would permit the use of when answered by a person.’’ The
continues to allow the use of prerecorded messages required by the Commission specifically seeks comment
prerecorded messages in very limited call abandonment safe harbor when a on whether the limitation ‘‘when
circumstances). telemarketing call is answered by a answered by a person’’ is necessary and
This record demonstrates that the appropriate or whether the prohibition
overwhelming majority of consumers 114 This proposed language is modeled on on prerecorded messages should be
consider prerecorded telemarketing existing § 310.4(b)(1)(iii)(B)(i), which permits calls extended to calls answered by a
calls a particularly ‘‘coercive or to numbers on the Registry with the consumer’s voicemail system or an answering
prior written agreement, and is consistent with the machine. For example, the intrusion of
abusive’’ infringement on their right to call abandonment prohibition in § 310.4(b)(1)(iv).
privacy.113 Nevertheless, the As such, the proposed amendment would permit
a telemarketing call delivering a
Commission believes that all interested digital and electronic signatures to the extent prerecorded message would seem less
parties should be afforded an recognized by applicable Federal or State contract disruptive if it arrives when the party
law. 16 CFR 310.4(b)(1)(iii)(B)(i) n.6; see also TSR called is not home than if it arrives
opportunity to comment on the SBP, 68 FR at 4608–09.
proposed prohibition, and will base its 115 The proposal would not prohibit placement of
when he or she is at home in the midst
final decision on the full record of prerecorded messages on answering machines of of daily activities. Nevertheless, the
comments it receives. consumers who have listed their number on the Commission seeks comment on whether
Registry if they have an established business there are other harms when a
E. Proposed Amendment relationship with the seller, or on answering telemarketing call delivering a
machines of consumers who have not listed their
Accordingly, the Commission has numbers on the Registry. The Commission notes,
prerecorded message is answered by an
decided to propose the following however, that any telemarketing campaign directed answering machine or voice mail
at leaving pre-recorded messages on answering
109 16 machines could still run afoul of the abandoned call 116 15 U.S.C. 6102(a)(3)(A). This directive appears
CFR §§ 1.1–1.4.
requirements of the TSR if calls that are answered consistent with the previously expressed intent of
110 15 U.S.C. 6102(a)(3)(A). by an actual consumer, rather than an answering Congress, as stated in the preamble to the TCPA,
111 E.g., 68 Fed. Reg. at 4644; 69 Fed. Reg. at
machine, are not transferred to a sales agent as that ‘‘banning * * * automated or prerecorded
67,288; DNCIA Report at 33–34. required by § 310.4(b)(1)(iv) But cf. 47 CFR telephone calls to the home, except when the
112 Broad. Team, Inc. v. FTC, 429 F.Supp.2d
64.1200(a)(2) (FCC regulation stating that ‘‘[n]o receiving party consents to receiving the call * * *
1292, 1301–02 (M.D. Fla. 2006), appeal docketed, person or entity may initiate any telephone call to is the only effective means of protecting telephone
No. 06–13520–EE (11th Cir. June 23, 2006). any residential line using an artificial or consumers from this nuisance and privacy
113 15 U.S.C. 6102(a)(3)(A); see TSR SBP, 68 FR prerecorded voice to deliver a message.’’) (emphasis invasion.’’ TCPA, Pub. L. No. 102–243, 105 Stat.
at 4613. added). 2394 (1991) at § 2(12).
service, and whether such harms rise to maximum permissible percentage of campaign’’ standard when running
the level of an intrusion that the answered calls that may be abandoned multiple campaigns each day, suggested
‘‘reasonable consumer would consider when a telemarketer is not available. that telemarketers engage in precisely
coercive or abusive of such consumer’s Rather than measuring the three (3) the practices that the ‘‘per day per
right to privacy.’’ 117 percent maximum ‘‘per day per calling campaign’’ standard was designed to
In soliciting comments on the campaign,’’ as prescribed in prevent. DMA argued that predictive
proposed amendment, the Commission § 310.4(b)(4)(i), to limit ‘‘hang ups’’ and dialer systems manage call
again wishes to emphasize that the ‘‘dead air,’’ DMA asks that the abandonment rates ‘‘as an average of all
proposed prohibition will not prevent maximum be ‘‘measured over a 30-day campaigns per day, so it is inevitable
telemarketers from transmitting period.’’ that certain logins would end the day at
prerecorded informational messages to In adopting the ‘‘per day, per say, 3.1% and other at 2.9%, yet the
consumers that are not part of a ‘‘plan, campaign’’ standard for calculating the overall average would still be 3% or
program or campaign which is maximum level of abandoned calls, the less.’’ 121 The DMA petition did not
conducted to induce the purchase of Commission stated: explain why telemarketing systems
goods or services or a charitable The ‘per day per campaign’ unit of cannot dynamically maintain a steady
contribution.’’ With that caveat, the measurement is consistent with DMA’s level of no more than three percent
Commission will be interested in guidelines addressing its members use of overall, or could not be modified to
comments that address the costs and predictive dialer equipment. Under this keep the abandonment rate below three
benefits to industry and to consumers of standard a telemarketer running two or more percent separately for each campaign.
the proposed amendment, as more fully calling campaigns simultaneously cannot The NPRM rejected the last two
elaborated in Section VIII below. offset a six percent abandonment rate on
behalf of one seller with a zero percent
arguments in DMA’s petition as
F. Revocation of Non-Enforcement abandonment rate for another seller in order insufficient to warrant a change in the
Policy Against Prerecorded to satisfy the Rule’s safe harbor provision. call abandonment standard. The
Telemarketing Calls Each calling campaign must record a Commission noted that ‘‘compliance
maximum abandonment rate of three percent with the FTC’s more precise standard
In view of the foregoing decision, the per day to satisfy the safe harbor.119 would constitute acceptable
Commission will no longer continue the compliance’’ with both the 30-day
DMA’s petition conceded that former
forbearance policy announced in the standard adopted by California and the
DMA Guidelines for Ethical Business
NPRM on enforcement actions for FCC, and that court decisions
Practices set a ‘‘per day per campaign’’
violation of the TSR’s call abandonment ‘‘controvert DMA’s argument that the
standard for the maximum percentage of
prohibition in § 310.4(b)(1)(iv), against FTC’s expertise or legal authority
calls that DMA members could
sellers or telemarketers that, in regarding the acceptable level of call
abandon, but emphasized that the
conformity with the now-rejected call abandonment is inferior to that of the
Guidelines set a five percent
abandonment safe harbor, place FCC.’’ 122
abandonment rate, rather than the three
telephone calls delivering prerecorded The NPRM further explained that, in
percent rate incorporated in the TSR’s
messages to consumers with whom the its petition, DMA had provided no
safe harbor. However, as the NPRM
seller has an established business information that would tend to counter
noted, the petition provided no factual
relationship. The Commission wishes to the foreseeable shortcomings of a 30-day
support for DMA’s apparent argument
emphasize that although many standard that the Commission set forth
that a ‘‘per day per campaign’’ standard
prerecorded informational messages are at length in its DNCIA Report.123 The
would be feasible at a five percent call
not covered by the TSR, the TSR does potential for a 30-day standard to
abandonment rate, but not at three
cover (and prohibit) telemarketing calls ‘‘enable telemarketers to target call
percent.
that deliver prerecorded messages to abandonments at certain less valued
consumers.118 A. DMA’s Rationale for Revising The groups of consumers,’’ and thus ‘‘offset
Nevertheless, in order to prevent any Safe Harbor a high abandonment rate in low income
reasonably foreseeable hardship for The DMA petition advanced three zip codes and make up the difference by
sellers or telemarketers that have relied reasons for modifying the three percent abandoning no calls in affluent ones’’
on the Commission’s forbearance policy, standard: (1) The standard is ‘‘virtually led the Commission to adopt the ‘‘per
the Commission will give such sellers impossible’’ for vendors who run day per campaign’’ standard to reduce
and telemarketers until January 2, 2007 multiple campaigns each day to meet;
to revise their practices to conform to ‘‘the potential for concentrating abuse
(2) the California Public Utilities by ensuring an even distribution of
the TSR, and will take no enforcement Commission—whose three percent call
action based on calls to consumers with abandoned calls to all segments of the
abandonment rate the Commission cited public.’’ 124
whom the seller has an established
in adopting the standard—measures
business relationship that are placed B. Request for Public Comment and
abandoned calls on a ‘‘per 30-day’’ basis
before that date and that conform to the Response
according to the DMA; and (3) the FTC
previously proposed, and now rejected, The NPRM sought public comment on
should defer to the FCC’s determination
safe harbor. the petition, noting that ‘‘the
that the call abandonment rate should
III. The DMA Petition be measured over a 30-day period, Commission is receptive to any factual
The DMA petition urges a change in because the issue ‘‘lies closer to the core information that would establish that
the standard of the TSR’s existing call expertise of the FCC than of the such a change is warranted,’’ but
abandonment safe harbor in FTC.’’ 120 observing that DMA had ‘‘not provided
§ 310.4(b)(4) for measuring the As the NPRM noted, however, DMA’s an adequate factual basis that would
first argument, the near impossibility for compel’’ a modification. The
117 See discussion of the Commission’s authority vendors to meet the ‘‘per day per
121 Id.at 2.
to prohibit ‘‘abusive’’ practices in the notice of
122 69 FR at 67291 & n.19.
proposed rulemaking for the amended TSR. 67 FR 119 TSRSBP, 68 FR at 4643 (footnotes omitted).
4493 at 4510 (Jan. 30, 2002). 120 DMA petition at 3, available at http:// 123 DNCIA Report at 31.
118 16 CFR § 310.2(cc). www.ftc.gov/os/2004/10/ 041019dmapetition.pdf. 124 69 FR at 67291.
Commission emphasized that it was software.126 Consumer groups expressed called, the greater the deviation can be
particularly interested in three types of continued concern that a 30-day from the desired abandonment rate.133
information: (1) Any elaboration on the standard would enable telemarketers to Since the projected average answering
problems telemarketers who are running target high call abandonment rates at rate is determined by predictive dialer
multiple campaigns at the same time less valued groups of consumers,127 sampling as calls are made, larger
face in attempting to comply with the offsetting the high rates with lower periods of calling time limit the impact
current requirement; (2) any information abandonment rates for preferred groups, of unexpected fluctuations in the
demonstrating that telemarketers who while a number of consumers were answering rate, while shorter periods of
make a relatively small number of calls more concerned that the number of time exaggerate their effect. Any
per day may be differentially abandoned calls would increase on unexpected spike in answered calls
disadvantaged by the current some days or in some campaigns.128 could, according to DMA and ATA,
requirements; and (3) information and ‘‘make it impossible to recover within
2. Industry Comments
data demonstrating that it is unlikely the same day based upon such a small
Eleven comments from telemarketers, time frame of calling.’’ 134
that, if additional flexibility were
their trade associations and other For these reasons, DMA and ATA
provided, telemarketers would
business trade associations argued that the present ‘‘per day per
intentionally set the abandonment rates
unanimously supported revision of the campaign’’ standard inhibits the use of
above 3 percent for some campaigns or
‘‘per day per campaign’’ standard,129 smaller, ‘‘segmented’’ lists of fewer than
calls directed to certain consumers, with several echoing the argument that 15,000 names that target consumers
while setting lower rates of call the FTC should defer to the FCC most likely to be interested in an
abandonment for other campaigns or standard,130 and some contending that offer.135 This disadvantages consumers,
calls in order to stay within the three there is no evidence that telemarketers the comment contended, by making it
percent maximum call abandonment would abuse a 30-day standard by more likely they will receive calls about
rate. discriminating against disfavored sales offers in which they have no
1. Consumer Comments groups of consumers.131 DMA and the interest, and also particularly
American Teleservices Association disadvantages small business sellers
Comments from some 230 consumers (‘‘ATA’’) argued in their joint comment with small clienteles, as well as the
and three consumer advocacy groups that compliance with the current smaller telemarketing companies that
addressed issues raised by the DMA standard is difficult because the pace of serve them.136 DMA also asserted that
petition. All but a smattering of these outbound calls placed by predictive the Commission significantly increased
comments opposed changing the call dialers is based on the average number the compliance burden for small
abandonment standard to a 30-day of calls answered by consumers, and business users of segmented lists, given
average across all telemarketing unexpected fluctuations in the number the difficulties of predicting
campaigns.125 Many argued that the answered, or the time sales agents spend abandonment rates with shorter calling
DMA did not offer a compelling reason speaking with consumers, make it lists, by setting the safe harbor call
for the change, with at least two noting difficult to predict the call abandonment abandonment rate at three percent,
that the difficulties DMA cited for some rate and ensure compliance, particularly rather than the five percent figure in
telemarketers in meeting the current in smaller campaigns, and in campaigns DMA’s former guidelines, with the
standard could easily be eliminated by focusing on evening calls at the end of result that predictive dialer economic
modifying or upgrading their the day.132 ‘‘efficiencies disappear almost
DMA and ATA explained that entirely.’’ 137
125 Three of ten consumers who supported a
predictive dialers base the rate at which DMA and ATA further argued that
change suggested limiting it to 30-days ‘‘per calling they place calls on a projection of the ‘‘[t]he actual number of abandoned calls
campaign,’’ with two of them proposing reducing average number of consumers who will would not increase if the measurement
the period further to ‘‘the lesser of’’ 30 days or the answer and the number of sales agents
duration of a specific campaign. McCorvey, No. available. The margin of error for these 133 This follows, according to DMA and ATA,
OL–104248 (‘‘As an engineer, I recognize the
possibility that various causes outside the control projections, in turn, is a function of the from ‘‘a bedrock principle of statistical analysis that
number of consumers to be called. The the smaller the size of the sample, the larger the
of the marketing organization may make it difficult
standard deviation and sampling errors.’’ DMA at
for them to ensure compliance when measured larger the number of consumers to be 3; see also, U.S. Chamber at 8 (‘‘ In general, the
across a very narrow time span. This expansion of called, the smaller the deviation is smaller the list or the smaller the campaign (or the
the compliance window would not (in my opinion)
create any real opportunity for abuse ONLY if it is likely to be from the projected call fewer days over which the call abandonment rate
abandonment rate. Conversely, the is measured), the more likely that the abandonment
tied to each campaign. Therefore, wording of the
rate may deviate from the targeted rate of three
form ‘measured over a 30-day period per campaign’ smaller the number of consumers to be percent.’’).
would be both fair, practical and provide continued 134 DMA at 4.
protection for consumers.’’); Kaufmana, No. OL– 126 E.g., Argyropoulos, No. OL–102968 at 3; 135 DMA and ATA not that ‘‘some’’ predictive
102724 (‘‘I would recommend the changed phrase
Protigal, No. 000010 at 11. dialers require callings lists of ‘‘approximately
to be ‘measured over a 30-day period or the calling 127 NCL at 5–6; PRC at 10; EPIC at 14.
campaign, whichever is less.’ ’’); Zajonc, No. OL– 15,000 names’’ and ‘‘at least 7 or 8 telemarketing
128 E.g., Bullard, No. OL–101198; Kislo, No. OL–
102790 (‘‘I’m not against the 30-day provision for agents for any one program’’ to meet the current
3% abandonment, though I would probably shrink 102924; Ripple, No. OL–101379; Giuliani, No. OL– ‘‘per day per campaign’’ standard. DMA at 5.
it, or have it be the lesser of 30 days or a specific 108532. 136 DMA at 4; see also, U.S. Chamber at 8 (‘‘In
129 E.g., DMA at 2; American Teleservices Ass’n.,
campaign.’’). See also Tukey, D, PhD, No. OL– particular, the current test for call abandonment in
104725 (‘‘I understand the nature of statistical No. 000058 at 3; VMBC at 15; Heritage at 3; U.S. the TSR inflicts a disproportionate harm on smaller
fluctuation, so it seems a longer time period is not Chamber at 7; Infocision at 6 (advocating a 30-day businesses. Smaller businesses have smaller calling
out of order.’’); Yamane, No. OL–101436 (‘‘[A] 30- standard for each separate campaign, while all other lists; one consequence of this is that a small
day period seems less of a problem, although it does industry comments supported DMA’s proposal for business may inadvertently exceed the three
seem to make abuses of the system more likely by an overall 30-day standard for all of a percent figure comparatively quickly. To stay
providing a larger window over which abuses can telemarketers’s concurrent campaigns). within the limits, the small business must
130 DMA at 8; VMBC at 15; Infocision at 6; U.S.
be measured.’’); cf. Holm, M., No. OL–100438 (‘‘If recalibrate its dialing equipment, hire more sales
this is merely a technical change * * * then I am Chamber at 7. representatives (which could cost overtime rates
not opposed.’’); Frye, T., No. OL–106806; 131 Infocision at 5; DMA at 8; see U.S. Chamber under the per day test), or risk violating the law.’’);
VanDusen, No. OL–113869; Thornton, No. OL– at 8. VMBC at 15–16; Visa at 3.
111679; Cummings, No. OL–113849. 132 DMA at 3–4; U.S. Chamber at 8. 137 DMA at 6.
occurs on a 30-day basis rather than per however, that compliance with the small, segmented lists prohibitively
day per campaign.’’ 138 In fact, they current standard is costly and expensive.
noted, if a telemarketer’s call burdensome. One reported that ‘‘[o]n a The record also shows that many
abandonment rate were to exceed three daily basis, campaigns must be shut consumers regard their home as their
percent on any given day under the down and managed in a manual mode castle, and vehemently object to
current standard (e.g., due to an to ensure compliance with this overly receiving what they regard as uninvited
unexpected spike in answered calls at burdensome requirement,’’ and as a telemarketing calls. Their comments
the end of the day), there may be more result, ‘‘[e]fficiency is destroyed and the give eloquent testimony to the fact that
abandoned calls than if the telemarketer resulting increase in costs has made consumers despise ‘‘dead air’’ and
had 30 days to correct for the many programs no longer cost- ‘‘hang ups’’ even more than
unexpected increase in call effective.’’ 142 The other asserted that telemarketing, and that many believe
abandonments on that day. For the same ‘‘having the freedom to run a higher they should not receive any
reason, DMA and ATA contended that abandonment rate at times when telemarketing calls at all when they
the ‘‘per day per campaign’’ standard is customers are less likely to be home have chosen to place their home
more likely to force sellers and (such as 8 a.m. to 5 p.m.) and lowering telephone number on the Do Not Call
telemarketers to discriminate between it when people are more likely to be Registry, regardless of whether they
different groups of consumers than a 30- home (such as 6–9 p.m.) would make an have an established business
day standard. This is because, if the call outbound campaign more efficient,’’ relationship with the seller who calls.
abandonment rate unexpectedly exceeds noting that ‘‘[w]hile this approach could While this popular view of the Registry
three percent on any given day, the theoretically be used under the three may be widespread, as the record
telemarketer could attempt to percent per campaign per day system, it reflects, it overlooks the fact that in
compensate by calling phone numbers would be far more difficult to manage establishing the Registry, the
less likely to be answered by a without significantly risking being over Commission expressly authorized live
consumer, but also less likely to belong the three percent threshold.’’ 143 telemarketing calls to consumers who
to a consumer interested in the product have an established business
or service being offered. With a 30-day C. Analysis of the Comments, relationship with the seller on whose
standard, DMA and ATA argued, there Discussion and Conclusion behalf the calls are made, provided they
would be no need nor incentive for As discussed above, the Commission have not asserted a company-specific Do
telemarketers to discriminate in the adopted the call abandonment provision Not Call request.144
distribution of abandoned calls.139 of the TSR to prevent the abusive The comments also illustrate
Finally, DMA and ATA asserted that practice of ‘‘dead air’’ calls and ‘‘hang- consumer concern that any loosening of
the TSR’s protection of consumers ups.’’ The safe harbor exception to the the current standard would enable
would not otherwise be diminished if call abandonment prohibition was telemarketers to target disfavored groups
the 30-day standard were adopted designed to minimize this abuse, while of consumers with a disproportionate
because of other protections provided to allowing the telemarketing industry to share of abandoned calls, even though
consumers when the TSR was amended benefit from the economies provided by the total number of abandoned calls for
in 2003. They pointed out that predictive dialer technologies. In any calling list would not exceed three
consumers can: (1) Place their numbers attempting to strike an appropriate percent if the standard were
on the national Do Not Call Registry; (2) balance between consumer and industry modified.145 For its part, the industry
assert company-specific Do Not Call interests, the Commission adapted apparently cannot and does not deny
requests; and (3) use Caller ID to find DMA’s ‘‘per day per campaign’’ that this offensive practice may be more
out the names of telemarketers that have guideline when it established the three likely to occur if a change were made to
abandoned calls to their telephone percent call abandonment ceiling as an a 30-day average for all campaigns. It is
numbers.140 element of the § 310.4(b)(4) safe harbor. left to argue the good faith of trade
Two of the industry comments It appears from the record, however, association members, and the absence of
appeared to acknowledge that it is that the impact of the three percent ‘‘per empirical evidence that such an abusive
technically possible to configure day per campaign’’ call abandonment practice has occurred in the past,
predictive dialers to comply with the limit may be disturbing the balance the notwithstanding the existence of
current standard.141 Both argued, Commission sought to achieve by economic incentives that seem likely to
frustrating the full realization of the promote the abuse. At the same time,
138 In theory, if a list of 240,000 telephone
potential economies provided by the Commission does not take the
numbers were called at the rate of 24,000 a day for
10 days, the three percent maximum would be 720 predictive dialers, particularly with
144 TSR SBP, 68 FR at 4633–34. The Commission
abandoned calls a day (.03 × 24,000 = 720), or 7200 respect to the use of segmented lists. established a limited exemption balancing the
for 10 days, which is three percent of 240,000 The comments suggest that this privacy needs of consumers and the need of
(.03 × 240,000 = 7200).
139 DMA and ATA agreed that ‘‘ there should not
unintended consequence may be having businesses to contact their current customers,
an adverse effect on small business noting: Industry comments were nearly unanimous
be a group of ‘less valued’ consumers that receive in emphasizing that it is essential that sellers be
a larger rate of abandoned calls,’’ and insisted that sellers and telemarketers in particular, able to call their existing customers. Although the
‘‘our members do not engage in such tactics,’’ but by increasing the costs of their initial comments from consumer groups opposed an
appeared tacitly to acknowledge that there is telemarketing, and in some instances exemption for ‘established business relationships,’
nothing in the 30-day standard they advocate that * * * their supplemental comments expressed the
would necessarily prevent such an offensive making telemarketing campaigns using
view that such an exemption would be acceptable,
practice. DMA at 7. Another industry comment as long as it was narrowly-tailored and limited to
objected that there has never been any evidence that algorithms determining the speed at which the current, ongoing relationships. * * * 60 percent of
telemarketers target less favored consumers with system dials. It is possible to maintain a steady consumers * * * stated that they opposed an
higher call abandonment rates. Infocision at 5. level but it is not an exact science.’’). Both stated, exemption for ‘established business relationship,’
140 Another comment noted that the Caller ID however, that while they can comply with the [although] 40 percent favored such an exemption.
requirement should allay any concerns of elderly present standard, a 30-day standard would permit 145 The total number of abandoned calls might
consumers that abandoned calls were precursors of greater efficiency and flexibility in their increase slightly, however, because telemarketers
home burglaries. Heritage at 3 n.2. telemarketing campaigns. may have had to set their predictive dialers below
141 Heritage at 3; Infocision at 5–6 (‘‘Yes, the 142 Infocision at 5.
three percent to meet the present ‘‘per day per
technology allows controls to be placed on the 143 Heritage at 3. calling campaign’’ standard.
industry argument lightly that the ‘‘per days, the call abandonment rate must be The FTC Act and other laws the
day per campaign’’ standard may be at or below three percent for the Commission administers permit the
more restrictive than intended, given duration of the campaign; if it continues collection of public comments to
the limitations of predictive dialers in for more than 30 days, the three percent consider and use in this proceeding as
adjusting to unexpected spikes in ceiling must be measured separately for appropriate. The Commission will
average call abandonment rates. The each successive 30-day period during consider all timely and responsive
record shows that particular problems which the campaign is conducted. If the public comments that it receives,
arise in connection with the use of campaign continues for more than 30 whether filed in paper or electronic
smaller, segmented lists that are the days, but less than an additional 30-day form. Comments received will be
most economical for small businesses period, the three percent maximum available to the public on the FTC Web
and the most useful in targeting only would be measured both for the initial site, to the extent practicable, at
those consumers most likely to be 30-day period, and separately for the http://www.ftc.gov. As a matter of
interested in a particular sales offer. As remaining period of less than 30 days. discretion, the FTC makes every effort to
a result, the Commission is inclined to In inviting public comment on this remove home contact information for
believe that an amendment of the proposal from interested parties, the individuals from the public comments it
present standard may be warranted. Commission wishes to emphasize that it receives before placing those comments
has not yet reached any final conclusion on the FTC Web site. More information,
D. Proposed Amendment
on whether or not to amend the present including routine uses permitted by the
Accordingly, the Commission has Privacy Act, may be found in the FTC’s
decided to propose the following ‘‘per day per campaign’’ standard,
although it is inclined to do so on this privacy policy, which is available at
substitute for the present ‘‘per day per http://www.ftc.gov/ftc/privacy.htm.
campaign’’ standard in § 310.4(b)(4)(i), record. That ultimate decision will be
and to invite public comment on the informed by the public comment V. Communications by Outside Parties
proposal until November 6, 2006: received on the proposed amendment. to Commissioners or Their Advisors
(i) The seller or telemarketer employs IV. Invitation To Comment Written communications and
technology that ensures abandonment of no summaries or transcripts of oral
All persons are hereby given notice of the
more than three (3) percent of all calls communications respecting the merits
opportunity to submit written data, views,
answered by a person, measured over the
facts, and arguments addressing the of this proceeding from any outside
duration of a single calling campaign, if less party to any Commissioner or
amendments proposed in this notice. Written
than 30 days, or separately over each Commissioner’s advisor will be placed
comments must be submitted on or before
successive 30-day period or portion thereof on the public record. See 16 CFR
that the campaign continues. November 6, 2006. Comments should refer
to: ‘‘TSR Prerecorded Call Prohibition and 1.26(b)(5).
The proposed amendment is limited, Call Abandonment Standard Modification,
in accordance with the suggestions of Project No. R411001’’ to facilitate the VI. Paperwork Reduction Act
the supportive consumer comments and organization of comments. A comment filed Pursuant to the Paperwork Reduction
an industry comment, by requiring that in paper form should include this reference Act (‘‘PRA’’), 44 U.S.C. §§ 3501–3502,
the three percent ceiling be met both in the text and on the envelope, and the Office of Management and Budget
separately by each of a seller’s or should be mailed or delivered to the (‘‘OMB’’) approved the information
following address: Federal Trade
telemarketer’s calling campaigns. The Commission/Office of the Secretary, Room
collection requirements in the TSR and
Commission believes such a limitation H–159 (Annex K), 600 Pennsylvania Avenue, assigned OMB Control Number 3084–
is important to prevent sellers and NW., Washington, DC 20580. If the comment 0097. The proposed rule amendments,
telemarketers from running multiple contains any material for which confidential as discussed above, would explicitly
campaigns with what could be treatment is requested, it must be filed in prohibit all prerecorded telemarketing
significantly different call abandonment paper (rather than electronic) form, and the calls answered by a person without a
rates that together average only three first page of the document must be clearly written agreement signed by the
percent over a 30-day period. Allowing labeled ‘‘Confidential.’’ 146 The FTC is consumer to receive such calls, and alter
the flexibility that DMA proposed requesting that any comment filed in paper the standard for measuring the three
form be sent by courier or overnight service,
would more likely create incentives for percent call abandonment rate
if possible, because U.S. postal mail in the
a seller to ensure that its most favored Washington area and at the Commission is permitted by the TSR’s call
customers experience lower call subject to delay due to heightened security abandonment safe harbor.
abandonment rates, thus preserving precautions. The proposed amendment explicitly
their goodwill, at the cost of less favored limiting the use of prerecorded
customers. Thus, the Commission’s To ensure that the Commission telemarketing calls will not change the
proposal is designed to reduce the considers an electronic comment, you existing paperwork burden on sellers or
potential for discriminatory treatment of must file it on the Web-based form at telemarketers. It simply makes the TSR’s
disfavored consumer groups by the http://secure.commentworks.com/ existing prohibition explicit rather than
subjecting them to higher than average ftc-tsr Web site. You may also visit imposing a new prohibition. Thus, the
call abandonment rates. http://www.regulations.gov to read this proposed amendment will, if anything,
Because the proposal would measure proposed Rule, and may file an reduce the paperwork burden and the
call abandonment on a ‘‘per campaign’’ electronic comment through that Web amount of time required for
basis, it must account for the possibility site. The Commission will consider all telemarketers to comply with the TSR.
that a campaign may continue for less comments that regulations.gov forwards In addition, an FCC regulation
than 30 days, or for more than 30 days. to it.
prohibiting prerecorded calls has been

The proposal would accomplish this, in effect since 1992, following the
and provide needed certainty to sellers 146 Commission Rule 4.2(d), 16 CFR 4.2(d). The
enactment of the TCPA.147 The FCC
and telemarketers, by specifying that the comment must be accompanied by an explicit regulation prohibits prerecorded calls
request for confidential treatment, including the
call abandonment rate will be measured factual and legal basis for the request, and must delivering unsolicited advertisements or
over the duration of the campaign. If the identify the specific portions of the comment to be
campaign continues for less than 30 withheld from the public record. 147 47 CFR 64.1200(a)(2).
telephone solicitations to residential A. Reasons for the Proposed Rule The Commission has not previously
telephones unless, inter alia, the caller Amendment requested comment on an explicit
has an ‘‘established business The proposed explicit prohibition of prohibition of all prerecorded
relationship’’ with the person called, or all prerecorded telemarketing calls telemarketing calls answered by a
has obtained that person’s ‘‘prior answered by a person without the person without the consumer’s express
express consent’’ to receive such consumer’s express prior written prior written agreement, but believes
calls.148 The proposed TSR amendment agreement, discussed in Section II.E that the impact of the proposal on small
therefore will not change the paperwork above, implements the Telemarketing business sellers and telemarketers
burden created by the pre-existing FCC Act requirement that the Commission would be de minimis because such calls
regulation. prohibit a pattern of unsolicited are currently prohibited by the TSR’s
Nor will the proposed change to the telephone calls that ‘‘the reasonable call abandonment provision. Based on
standard for measuring the three percent consumer would consider coercive or the absence of available data in this and
call abandonment rate substantially abusive of such consumer’s right to related proceedings, the Commission
affect the existing paperwork burden. privacy,’’ and effectuates the apparent believes that a precise estimate of the
The present ‘‘per day per campaign’’ intent of Congress in the TCPA to number of small entities that would be
standard requires sellers and prohibit prerecorded telemarketing subject to the proposal is not currently
telemarketers to establish recordkeeping calls. feasible, and specifically requests
systems evidencing their compliance, The proposed modification of the information or comment on this issue.
and the proposed amendment may TSR’s call abandonment provision, In the proceedings to amend the TSR
lessen this burden slightly because it discussed in Section III.D above, would in 2002, the Commission sought public
relaxes the current requirement. modify the existing safe harbor to allow comment and information on the
Thus, the proposed amendments sellers and telemarketers to measure the number of small business sellers and
would not impose any new or affect any three percent maximum call telemarketers that would be impacted
existing reporting, recordkeeping, or abandonment rate prescribed in by amendment of the standard for
third-party disclosure requirements that § 310.4(b)(4)(i) for a single calling measuring the three percent call
are subject to review by OMB under the campaign over a 30-day period. The abandonment rate. In its request, the
PRA. Commission proposes to revise the Commission noted the lack of publicly
VII. Regulatory Flexibility Act standard to permit measurement of the available data regarding the number of
three percent maximum ‘‘over the small entities that might be impacted by
The Regulatory Flexibility Act duration of a single calling campaign, if the proposed Rule.150 The Commission
(‘‘RFA’’), 5 U.S.C. §§ 601–12, requires an less than 30 days, or separately over received no information in response to
agency to provide an Initial Regulatory each successive 30-day period or its requests.151
Flexibility Analysis (‘‘IRFA’’) with a portion thereof that the campaign
proposed rule and a Final Regulatory Likewise, neither the petition to
continues.’’
Flexibility Analysis (‘‘FRFA’’) with the amend the call abandonment safe harbor
final rule, if any, unless the agency B. Statement of Objectives and Legal to expand the period over which the
certifies that the rule will not have a Basis three percent call abandonment ceiling
significant economic impact on a The objectives of the proposed rule for live telemarketing calls is calculated,
substantial number of small entities. See amendments are discussed above. The nor the industry comments on that
5 U.S.C. §§ 603–05. legal basis for the proposed rule issue, provide any data regarding the
The Commission has determined that amendment is the Telemarketing and number of small entities that may be
it is appropriate to publish an IRFA in Consumer Fraud and Abuse Prevention affected by the Commission’s ultimate
order to inquire into the impact of the Act, 15 U.S.C. §§ 6101–6108. determination.152 Based on the absence
proposed rule amendment on small of available data in this and related
entities. Therefore, the Commission has C. Description of and, Where Feasible, proceedings, the Commission believes
prepared the following analysis. an Estimate of the Number of Small that a precise estimate of the number of
Entities to Which the Proposed Rule small entities that fall under the
148 Thus, under the FCC regulation, it is unlawful Will Apply proposed rule is not currently feasible,
for a seller or telemarketer to place a prerecorded Each of the proposed rule and specifically requests information or
call to a residential telephone unless it can show
amendments will affect sellers and comment on this issue.
compliance with one of the two exemptions. The
‘‘prior express consent’’ requirement, in particular, telemarketers that make interstate
150 See TSR SBP, 68 FR at 4667 (noting that
imposes essentially the same recordkeeping burden telephone calls to consumers (outbound
as the proposed amendment. Moreover, in adopting Census data on small entities conducting
calls) as part of a plan, program or telemarketing does not distinguish between those
regulations to implement the Do Not Call Registry
pursuant to the DNCIA, the FCC determined that
campaign which is conducted to induce entities that conduct exempt calling, such as survey
sellers must obtain a written agreement signed by the purchase of goods or services or a calling, those that receive inbound calls, and those
a consumer whose number is listed on the Registry charitable contribution. For the majority that conduct outbound calling campaigns.
to satisfy the ‘‘prior express consent’’ requirement. Moreover, sellers who act as their own
of entities subject to the proposed rule, telemarketers are not accounted for in the Census
2003 FCC Order, 18 FCC Rcd. at 14043–44, ¶ 44.
Although the FCC subsequently concluded that an
a small business is defined by the Small data.).
oral consent would suffice to authorize calls to Business Administration as one whose 151 Id.; see also 68 FR 45134, 45143 (July 31,
consumers whose numbers were not listed on the average annual receipts do not exceed 2003) (noting that comment was requested, but not
Registry, Rules and Regulations Implementing the $6 million or that has fewer than 500 received, regarding the number of small entities
Telephone Consumer Protection Act of 1991, CG subject to the National Do Not Call Registry
employees.149
Docket No. 02–278, Second Order on provisions of the amended TSR).

Reconsideration, 20 FCC Rcd. 3788 (2005), sellers 152 Although industry comments have argued that
or telemarketers still must create records evidencing 149 These numbers represent the size standards the proposed revision would remove an obstacle to
any such oral consent because the caller bears the for most retail and service industries ($6 million small business compliance with the call
burden of demonstrating that prerecorded calls are total receipts) and manufacturing industries (500 abandonment safe harbor, as discussed in Section
lawful. See In re Septic Safety, Inc., 20 FCC Rcd. employees). A list of the SBA’s size standards for III, supra, none of the comments has addressed the
2179 (2005); In re Warrior Custom Golf, Inc., 19 all industries can be found at http://www.sba.gov/ number of small businesses that might benefit from
FCC Rcd. 23648 (2004). size/summary-whatis.html. revision of the current standard.
D. Description of the Projected Commission does not believe that an persuaded, however, that this more liberal
Reporting, Recordkeeping, and Other explicit prohibition would conflict with standard would be as likely as the proposed
Compliance Requirements of the the FCC regulations or similar State standard to prevent telemarketers from
Proposed Rule laws, because compliance with the targeting disfavored consumers with a
disproportionate share of abandoned calls.
The proposed rule amendment TSR’s present prohibition does not
explicitly prohibiting prerecorded violate those more permissive The explicit prohibition on
telemarketing calls answered by a standards. prerecorded calls and the proposed
person unless the consumer has agreed Except as indicated below, the FTC revision in the call abandonment safe
in writing to accept such calls will affect has not identified any other Federal or harbor are intended to apply to all
the TSR’s recordkeeping requirements State statutes, rules, or policies that entities subject to the Rule, and it does
insofar as it would compel regulated would overlap or conflict with the not appear that a delayed effective date
entities to keep records of such proposed revision of the call for small entities or other alternatives to
agreements under the general abandonment safe harbor. The proposed the current proposal would necessarily
recordkeeping requirements of the amendment would help to reduce the result in any further reduction in the
existing rule.153 It appears, however, differences on this issue between the compliance burdens of the Rule for
that there should be no change in this TSR and the FCC’s TCPA rules, as well small entities. The Commission
burden since regulated entities, as similar state requirements.155 As nonetheless seeks comments and
regardless of size, already should be explained in Section III above, information on what other alternative
maintaining records of such agreements compliance with the FTC’s more precise formulations, if any, of the proposed
in the ordinary course of business in standard would constitute acceptable safe harbor might further minimize
order to demonstrate compliance with compliance with the FCC rule and compliance burdens for small entities,
existing FTC and FCC restrictions on similar state requirements, so there is no without compromising the intent and
prerecorded calls, as explained in the conflict between these regulations. purpose of the Rule to prevent abusive
prior Paperwork Reduction Act F. Discussion of Significant Alternatives telemarketing practices, including the
discussion. Likewise, the prerecorded to the Proposed Rule That Would need, if any, for a delayed effective date
calls amendment would not impose or Accomplish the Stated Objectives and for small business compliance.
affect any new or existing reporting, Minimize Any Significant Economic VIII. Specific Issues for Comment
recordkeeping or third-party disclosure Impact of the Proposed Rule on Small
requirements within the meaning of the Entities The Commission seeks comment on
Paperwork Reduction Act. various aspects of the proposed
In addition, the Commission does not The proposed amendment to add an amendment to add an explicit
explicit prohibition of all prerecorded prohibition of prerecorded
believe that the proposal to expand the telemarketing calls answered by a person
period over which the three percent call telemarketing calls to the TSR and the
without a consumer’s express prior written
abandonment ceiling for live agreement would implement the requirement proposed amendment to the TSR’s call
telemarketing calls is calculated will in the Telemarketing Act that the abandonment safe harbor provision.
create any new burden on sellers or Commission prescribe rules that include a Without limiting the scope of issues on
telemarketers, because the existing ‘‘per prohibition against ‘‘a pattern of unsolicited which it seeks comment, the
day per campaign’’ standard of the TSR telephone calls which the reasonable Commission is particularly interested in
has already required them to establish consumer would consider coercive or receiving comments on the questions
abusive of such consumer’s right to privacy.’’ that follow. In responding to these
recordkeeping systems to demonstrate The only alternatives to this explicit
their compliance. The Commission also questions, comments should include
prohibition would be to continue the present
does not believe that this modification prohibition of prerecorded calls in detailed, factual supporting information
of the Rule will increase or otherwise § 310.4(b)(4)(i), the call abandonment whenever possible.
modify any existing compliance costs, provision, or to permit prerecorded calls, A. General Questions for Comment
and may in fact reduce them for small which the Commission has declined to do
entities that are able to take advantage based on the record in this proceeding to Please provide comment, including
of the revised safe harbor requirement. date. relevant data, statistics, consumer
The proposed amendment of the existing complaint information, or any other
E. Identification of Other Duplicative, call abandonment safe harbor would replace evidence, on the Commission’s proposal
Overlapping, or Conflicting Federal the present requirement that the three
to add an explicit prohibition of
Rules percent maximum call abandonment rate be
measured ‘‘per day per campaign,’’ with a prerecorded telemarketing calls and the
The FTC is mindful that the proposed revised requirement that the maximum be proposal to measure the maximum
TSR amendment explicitly prohibiting measured ‘‘over the duration of the allowable call abandonment rate under
all prerecorded telemarketing calls campaign, if less than 30 days, or separately the existing safe harbor in 16 CFR
answered by a person without the over each successive 30-day period or 310.4(b)(4)(i) ‘‘over the duration of a
consumer’s express prior written portion thereof that the campaign continues.’’ single calling campaign, if less than 30
agreement differs from the FCC’s Other regulatory options under consideration days, or separately over each successive
regulations and some State laws, which include retaining the present ‘‘per day per 30-day period or portion thereof that the
campaign’’ standard, or, at the other end of
permit sellers to place such calls to campaign continues’’ rather than on a
the spectrum, requiring that the maximum
consumers who have given their prior call abandonment rate be measured over a ‘‘per day per campaign’’ basis. Please
express consent or to consumers with 30-day period for all of a telemarketer’s include answers to the following
whom the seller has an ‘‘established campaigns. The Commission has yet to be questions:
business relationship.’’ 154 However, the 1. What is the effect (including any
calls where there is a ‘‘current business or personal benefits and costs), if any, on
153 See 16 CFR 310.5(a)(5). relationship’’). consumers?
154 47 CFR 64.1200(a)(2)(iv). See also, e.g., Ariz. 155 See, e.g., Cal. Pub. Util. Comm’n, Decision 03–
Rev. Stat., § 44–1278(B)(4) (permitting prerecorded 03–038 (Mar. 13, 2003), at 19 (adopting the FCC’s
2. What is the impact (including any
calls with called party’s ‘‘prior express consent’’); 30-day standard for measuring call abandonment benefits and costs), if any, on individual
Ind. Code, § 24–5–14–5 (permitting prerecorded rates). firms that must comply with the Rule?
3. What is the impact (including any 7. What are the costs and benefits to such alternatives be outweighed by
benefits and costs), if any, on industry, consumers, if any, of allowing benefits to consumers in avoiding
including those who may be affected by companies to leave prerecorded additional abandoned calls to their
these proposals but not obligated to messages, as opposed to live messages, homes?
comply with the Rule? on consumers’ answering machines? Do
IX. Conclusion
4. What changes, if any, should be consumers incur additional costs in
made to the proposed Rule to minimize terms of (a) paying for storage of For the reasons discussed above, the
any costs to industry, individual firms messages they do not want; (b) Commission has decided, on balance, to
that must comply with the Rule, and/or exceeding their allotted storage deny the petition seeking amendment of
consumers? capacity; (c) being unable to receive the TSR to create an additional safe
5. How would each suggested change messages they want or need; (d) being harbor to permit prerecorded
affect the benefits that might be unable to use home telephone lines tied- telemarketing calls to established
provided by the proposed Rule to up by prerecorded messages; or (e) customers. The Commission is also
industry, individual firms that must retrieving messages? Do consumers proposing an amendment explicitly
comply with the Rule, and/or receive additional benefits, such as prohibiting unsolicited prerecorded
consumers? lower marketing costs that are telemarketing calls without a
6. How would the proposed Rule eventually passed on to them? consumer’s express prior written
affect small business entities with 8. What are the costs and benefits to agreement to accept such calls. The
respect to costs, profitability, companies in not having to apply the Commission will therefore cease its
competitiveness, and employment? call abandonment safe harbor limit to forbearance from considering law
7. How many small business entities calls left on answering machines? enforcement actions against sellers and
would be affected by each of the 9. Should a 30-day standard, if telemarketers engaged in making
proposed amendments? adopted, cover all of a telemarketer’s prerecorded calls to established
campaigns within that period, be customers, after allowing a reasonable
B. Questions on Specific Issues limited to a single campaign, or be time, as specified above, for them to
In response to each of the following limited to the duration of each bring themselves into compliance with
questions, please provide: (1) Detailed campaign? the TSR.
10. Are there significant efficiencies The Commission has also decided to
comment, including data, statistics,
that can be obtained with a requirement propose an amendment to the existing
consumer complaint information, and
to meet a 30-day standard averaged safe harbor to permit measurement of
other evidence, regarding the issue
across all of a telemarketer’s campaigns the three percent maximum call
referred to in the question; (2) comment
that cannot be obtained with a 30-day abandonment rate ‘‘over the duration of
as to whether the proposed changes do
campaign-specific requirement? If so, a single calling campaign, if less than 30
or do not provide an adequate solution
what are they and what effect do they days, or separately over each successive
to the problems they were intended to
have? 30-day period or portion thereof that the
address, and why; and (3) suggestions
11. Are there technological problems campaign continues.’’ The Commission
for additional changes that might better
that limit the ability of telemarketers will accept public comment on this
maximize consumer protections or
who are running multiple campaigns to proposal until November 6, 2006.
minimize the burden on industry:
measure abandonment rates separately
1. Should the Commission include an for each campaign? If so, what are they, X. Proposed Rule
explicit prohibition of prerecorded how many telemarketers do they affect,
telemarketing calls in the TSR? List of Subjects in 16 CFR Part 310
what remedies, if any, are available, and
2. Is the Commission correct in its what is the cost of such remedies? Telemarketing, Trade practices.
understanding that a reasonable 12. Are upgrades available that can Accordingly, the Commission
consumer would consider prerecorded reduce the rate at which predictive proposes to amend title 16, Code of
telemarketing sales calls and dialers place calls in the case of an Federal Regulations, as follows:
prerecorded charitable solicitation calls unexpected spike in call abandonments,
to be coercive or abusive of his or her so that it would not be necessary to run PART 310—TELEMARKETING SALES
right to privacy? them manually? RULE
3. Does a consumer’s choice not to list 13. Would retaining a ‘‘per campaign’’
his or her telephone number on the Do 1. The authority citation for part 310
standard, but extending the period over
Not Call Registry indicate not only that continues to read as follows:
which the call abandonment maximum
he or she is willing to accept live is measured, make the use of smaller Authority: 15 U.S.C. 6101–6108.
telemarketing calls, but also prerecorded segmented lists by small businesses and 2. Amend § 310.4 by adding new
telemarketing calls? other sellers more economical? Please paragraph (b)(1)(v), and revising
4. Should the Rule specify disclosures provide specific examples of why or paragraph (b)(4)(i) to read as follows:
that must be made when obtaining a why not.
consumer’s express written agreement 14. What effect would the proposed § 310.4 Abusive telemarketing acts or
to receive such calls? If so, what change in the standard for measuring practices.
disclosures are needed? the call abandonment rate have on the * * * * *
5. What is the effect on consumers’ number of abandoned calls that (b) * * *
privacy interests, if any, of not applying consumers receive? (1) * * *
the call abandonment safe harbor 15. Do small businesses and other (v) Initiating any outbound
requirements to calls left on consumers’ sellers have alternatives that are equally telemarketing call that delivers a
answering machines? or more effective and economical than prerecorded message when answered by
6. Are prerecorded messages left on live telemarketing, such as postcard or a person, unless the seller has obtained
answering machines less intrusive than email announcements, to notify their the express agreement, in writing, of
prerecorded messages answered by a established customers of sales offers and such person to place prerecorded calls
person? to obtain orders? Would the costs of to that person. Such written agreement
shall clearly evidence such person’s safe harbor in § 310.4(b)(4)(iii) do not separately over each successive 30-day
authorization that calls made by or on require such an agreement. period or portion thereof that the
behalf of a specific party may be placed * * * * * campaign continues.
to that person, and shall include the (4) * * * * * * * *
telephone number to which the calls (i) The seller or telemarketer employs
By direction of the Commission.
may be placed and the signature of that technology that ensures abandonment of
no more than three (3) percent of all Donald S. Clark,
person; provided, however, that
calls answered by a person, measured Secretary.
prerecorded messages permitted for
over the duration of a single calling [FR Doc. 06–8524 Filed 10–3–06; 8:45 am]
compliance with the call abandonment
campaign, if less than 30 days, or BILLING CODE 6750–01–P

Proposed Rule: Telemarketing Sales Rules: Prerecorded Telemarketing Calls, Etc. Seller and Telemarketer Compliance

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Proposed Rule: Telemarketing Sales Rules: Prerecorded Telemarketing Calls, Etc. Seller and Telemarketer Compliance

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Wednesday,

response to a Notice of Proposed Act directed the Commission to prescribe rules

21 See the discussion in Section II.F, infra.

37 Infocision Management Corp. (‘‘Infocision’’),

prohibiting prerecorded calls has been

Docket No. 02–278, Second Order on provisions of the amended TSR).

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