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DialAmerica Seeks No-Call Exemption for Magazine-Charity Program

DialAmerica wants a national no-call exemption for its 27-year-old telemarketing program to sell magazine subscriptions on behalf of charities, according to papers filed with the Federal Communications Commission last month.

Since 1977, DialAmerica has made agreements with charities to sell magazine subscriptions in their name, offering the subscriptions to consumers and giving 12.5 percent of the purchase price to the charities.

DialAmerica's petition is one of more than 60 requests for reconsideration businesses and trade groups have filed with the FCC since it published its new telemarketing rules last summer.

An exemption for the program, if granted, could arouse consumer suspicions about telemarketers creating loopholes in the national no-call list. In its petition, DialAmerica argued that the FCC could narrowly tailor the exemption to avoid creating a loophole.

“The fundraising efforts that DialAmerica seeks to exempt from the do-not-call list are a targeted type of activity that, if exempted, would not open the floodgates to for-profit sellers attempting to evade the rules,” the company wrote in its petition.

According to DialAmerica's petition, the national no-call list has decreased the pool of potential contacts for its magazines-for-charity programs 35 percent, causing a corresponding reduction in money raised for charities. The company has used the no-call list for the program despite its belief that the program should be exempt.

DialAmerica declined to comment for this story. An FCC spokeswoman did not respond to an e-mail for comment.

DialAmerica's petition has attracted the attention of at least one consumer, John Shaw of Rochester, NY. Shaw, who told DM News that he is not affiliated with any privacy group, filed a response to DialAmerica's petition with the FCC on April 9.

“I am worried that there is an effort to chip away at the DNC regulations by way of exemptions for certain industry sectors or for certain types of calls,” Shaw said in an e-mail reply to DM News' inquiries. “There have been many petitions for reconsideration filed with the FCC. If the industry succeeds in obtaining exemptions, the value of the DNC regulations could be lost.”

DialAmerica filed a three-page petition in August suggesting criteria by which the FCC could determine whether a program such as its own could receive a nonprofit exemption. These included requirements that more than 10 percent of the proceeds of the sale go to charity, that the sale price is competitive and does not exceed $100, that consumers receive full disclosure of the percentage going to the charity and that the offer include a 100 percent refund and cancellation on request.

On March 26, DialAmerica filed a lengthier petition to reassert its request for reconsideration. In this filing, the company noted that the FCC specifically referenced its program as not being eligible for a nonprofit exemption in its July rule publication.

DialAmerica said it did not sell magazines and give part of the profits to charity, but rather signed “written contracts to place calls on behalf of the charity to sell magazines.” DialAmerica contracts with magazine publishers to sell subscriptions, then obtains permission from the charities to place calls on their behalf at no cost, according to the petition.

The FCC is putting charities in a no-win situation, DialAmerica said. If they contract with magazine publishers to sell subscriptions on their own and have DialAmerica make the calls, they would be exempt from the no-call list but would have to pay taxes on the proceeds. If they license their name to DialAmerica under the program, they avoid taxes but must abide by the no-call list.

The program has raised millions for charities, including Mothers Against Drunk Driving, Special Olympics and the Leukemia & Lymphoma Society, according to the petition. Special Olympics alone has received $105 million since 1979.

However, in his filed response to DialAmerica's petition, Shaw stated that by using DialAmerica's argument any telemarketer could evade the no-call list by entering into such agreements with charities. He noted that though charities get 12.5 percent of sales through the program, the magazine publishers and DialAmerica keep the other 87.5 percent. DialAmerica conducts billing for the program and arranges for fulfillment of the orders.

“If DialAmerica is calling on behalf of anyone, they are calling on behalf of the publisher, not the charity,” Shaw wrote.

Other petitions for reconsideration filed with the FCC include:

· Many individual businesses, trade groups and associations want the FCC to repeal a new rule that written permission, rather than just an established business relationship, is required to send commercial faxes. The FCC delayed implementation of this rule but it is slated to take effect in January.

· InfoCision asked the FCC to raise the maximum abandonment rate from 3 percent to the former industry standard of 5 percent.

· Common carriers, including Verizon and BellSouth, asked for a repeal of the rule requiring them to notify consumers of their rights under the no-call list, and their telemarketing customers of their obligations to use the list.

· State and regional newspaper associations argued that their members should be exempt from the no-call list because telemarketing supports the publishing of First Amendment-protected speech.

· Trader Publishing Co. argued that calls to individuals who advertise items for sale should be covered under the “express permission or invitation” exemption.

· The National Association of Realtors wants the FCC to consider calls to people who have property listed as “for sale by owner” to be considered business-to-business calls.

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