ATA Prepares for DNC Legal Challenge

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The American Teleservices Association said that proposed telemarketing regulations, including the national do-not-call list, threaten its existence and that it is prepared to take its fight to court. Other industry groups are staying mum about their legal options.


The Federal Trade Commission, author of the proposed regulations, apparently aims to eliminate outbound telemarketing and the use of predictive dialers, the ATA said. If the rules pass as currently structured, many telemarketers would be forced out of business.


"In all likelihood, ATA would close its doors," the statement said. "Without members to support its efforts, there is no association."


In its current form, the national DNC list would not exempt calls to existing customers -- a provision that would radically change how telemarketers do business -- and would not pre-empt the more than 25 state DNC lists already in existence.


"In the event of an unfair ruling, we want to be prepared for that ahead of time," said Jason Clawson, ATA executive director.


Clawson acknowledged that the ATA, which only recently recovered from fiscal problems three years ago that led to the dismissal of previous administrator J. Scott Thornton, cannot support a court challenge on its own. The association is soliciting financial support from private companies that have expressed interest in a court challenge, and it has commitments from several, he said.


The ATA plans to meet with industry leaders in September and will continue discussions then about funding a court challenge, Clawson said. The association has sent requests for information to law firms with experience in First Amendment cases and expects to choose a legal representative by early September.


Other industry organizations that have been involved in the national DNC list debate, including the Direct Marketing Association, have no specific plans for court action, hoping instead to use lobbying to change the FTC's course.


Players in the debate have little doubt that the FTC intends to establish a national DNC list, said Molly Hemsley, director of government affairs for the Newspaper Association of America. Her organization hopes to influence the final rule through arguments to FTC officials.


Hemsley said she thinks the FTC will be reluctant to give industry-specific exemptions from the list, which the NAA had requested for newspapers. However, the commission may prove pliable on exempting existing-business relationships, which would allow newspapers access to their present subscribers, she said.


"The FTC issued its [DNC proposal] with all the rules in place," Hemsley said. "We've always assumed we could chip away at the sides."


The DMA expects a final ruling from the FTC in mid- to late-October, said Jim Conway, vice president of governmental affairs for the DMA. Until then, the rule-making process is internal to the FTC.


"We and others had our turn at bat," Conway said. "There's not much we can do in the dog days of August except keep our members informed."


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