ATA Asks Court to Overturn FCC Telemarketing Rules

The American Teleservices Association asked a federal appeals court in Denver to overturn the Federal Communications Commission's new telemarketing rules that expand the scope of the national no-call list, the ATA said yesterday.

The association also asked the FCC to delay implementation of the new rules until after the court's review. The appeal, filed July 25 with the U.S. 10th Circuit Court of Appeals, came in response to the FCC's publication of its new telemarketing rules in the Federal Registry.

Publication means that the new rules take effect 30 days later, in late August. However, the Federal Trade Commission, which is launching the national no-call list, won't begin enforcement until Oct. 1.

In its appeal, the ATA argues that the FCC failed to give proper consideration to the economic effect of the national no-call list in violation of its mandate, said Tim Searcy, ATA executive director. Under the Telephone Consumer Protection Act, Congress directed the FCC to avoid solutions that have an adverse economic effect, he said.

The ATA estimates that the national no-call list will cost 2 million teleservices jobs, or roughly half of the nation's 4 million outbound teleservices workers. That estimate does not include workers in related industries who also will lose jobs, Searcy said.

“This is part of the fabric of marketing in the United States,” he said. “You're tearing the fabric in half by eliminating the teleservices component.”

The ATA also argued that by exempting political and nonprofit calls, the government is dictating which forms of speech are acceptable in violation of the First Amendment.

Furthermore, in the third and final part of its legal argument, the ATA claimed that the FCC harms consumers by offering them a blanket option to block all calls without giving them the chance to decide to receive telemarketing offers they want.

As of July 23, consumers had registered more than 28 million phone lines to the national no-call register, and the FTC predicts that number will reach 60 million within a year. Searcy said that the list's popularity was not surprising and that, given an easy opportunity to do so, consumers would opt out of any commercial speech, including television advertising.

An FCC spokesman said the agency would not comment on a pending legal matter.

Under federal judicial guidelines, legal challenges to FCC rules must be filed with the Circuit Court of Appeals. The ATA's ongoing lawsuit against the FTC is currently under consideration by a federal district judge, also in Denver.

The Direct Marketing Association also has a pending challenge to the FTC's national no-call list filed in U.S. District Court in Oklahoma. But unlike the ATA, the DMA welcomed the FCC's telemarketing rules, which broadened the scope of the no-call list to all industries and provided for consistency among state telemarketing regulations regarding interstate telemarketing calls. The DMA has not decided whether it will continue with its no-call list challenge, DMA spokesman Louis Mastria said.

Others are contemplating legal action against the FCC, including the state of Wisconsin, where the state lawmaker who helped found the Wisconsin no-call list is upset about the FCC's plans to pre-empt state no-call laws.

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