FCC Ruling Highlights Strategy Differences for ATA, DMA

The Federal Communications Commission's long-anticipated decision to adopt the national no-call list and other new Federal Trade Commission telemarketing rules exposed a key strategy difference between the two trade groups.

The decision, which came just a day before the national no-call list launched June 27, put industries that fell outside the FTC's jurisdiction under the FTC rules. Critics of the FTC's rules commonly cited the jurisdictional “loophole” in their comments.

Industries affected by the FCC rulemaking include telecommunications carriers, airlines and financial services such as banks, brokers and insurers. More or less, all commercial telemarketers will come under the no-call list and tougher predictive-dialer and caller-ID rules.

The American Teleservices Association has issued sharply worded statements opposing the FCC's ruling. In contrast, the Direct Marketing Association has offered cautious support for the FCC. The rulings came as little surprise considering the FCC was under orders by Congress to make rules consistent with the FTC by September. Jerry Cerasale, senior vice president of government affairs at the DMA, had predicted the outcome of the FCC ruling at a telemarketing convention in Miami the previous week.

However, the DMA's stance caught some in telemarketing unaware, teleservices sources said. Among them was Tim Searcy, himself an industry veteran and now ATA executive director.

“We were surprised and disappointed to see a reversal of position with the DMA,” Searcy said. “Since we share members, we can't believe this position represents the opinion and interest of all their members.”

Furthermore, the DMA's position contradicts constitutional arguments made in its federal court challenge to the FTC's no-call list, Searcy said. Both the ATA and DMA have challenged the FTC on the no-call issue, though notably the two filed separate suits in different courts — the ATA in Colorado and the DMA in Oklahoma — in the same federal court circuit.

DMA spokesman Lou Mastria declined to comment on Searcy's remarks but said the DMA long had held the position that an all-encompassing no-call list was acceptable. The DMA wanted a list that applied equally across all industries and states and made compliance easier for telemarketers.

The DMA's criticism of the FTC running the no-call list was that many types of businesses would be exempt, thus creating a standard that didn't apply to all telemarketers.

The important thing now is for the industry to move forward, Mastria said.

“I'm not going to pretend this is not going to hurt,” he said. “But [telemarketing] is going to continue to be a viable medium.”

The difference between the positions adopted by the two trade groups boils down to strategy, said Joan Mullen, vice president for industry relations at Ron Weber & Associates. In the past, Mullen has been active in legislative issues with both associations.

The ATA is upfront about its issues and deals publicly with government regulators, Mullen said. The DMA, which has a considerable Washington lobbying staff, prefers to work behind the scenes, dealing privately with agency staff to head off disagreeable regulation and, when that proves impossible, trying to minimize its effect.

As a result, the DMA tends to be more circumspect about its public statements, Mullen said. But she acknowledged that some feelings may have been hurt by the DMA's public stance on the FCC issue and said the DMA could do a better job of educating its members about the differences between the two trade groups.

Both Searcy and Mastria said their groups would await publication of the FCC's rules in the Federal Register — a final step before making the rules official — before deciding on the status of their lawsuits. Telemarketers waited weeks for the FTC to publish its rules in the Federal Register, but in that case the FTC had to wait for Congress to approve funding for the no-call list.

In addition, the DMA has no plans to discontinue its Telephone Preference Service, a privately run no-call list long touted by the DMA as the first one-stop national no-call registry, as a result of the FCC rulemaking, Mastria said. Unlike government no-call lists, some nonprofits use the TPS, giving consumers an added layer of protection.

Though it followed the FTC in most respects, the FCC adopted one new tack — also anticipated by Cerasale — in its position on state no-call lists. Under the FCC rules, states can adopt more restrictive telemarketing rules than those set by the federal government, but not less.

Federal rules exempt only calls that enjoy greater degrees of free-speech protection, including non-commercial and existing-business-relationship calls, whereas states typically exempt whole industries such as newspapers and real estate brokers. According to the FCC, states will be depended upon to regulate telemarketing calls that don't cross state lines.

For now, state attorneys general appear to be staying mum on the matter, though they have exhibited protectiveness of their in-state no-call lists in the past. Indiana attorney general Steve Carter, a vocal proponent of the state's no-call list, said he would hold off commenting on the FCC decision, though he said there were no plans to merge Indiana's no-call list with the federal registry for now.

“When we promoted the law in Indiana, we gave assurances to consumers that their information wouldn't be shared except to administer the program,” Carter said, adding that the state hasn't ruled out sharing the list with the FTC.

The FCC also made life tougher for fax broadcasters, requiring them to obtain written permission from consumers before issuing faxes. In addition, the FCC said it would hold fax broadcast companies liable for violations along with their clients if there was evidence they were involved with or aware of the unlawful activity.

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