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FTC Document Reveals Do-Not-Call Focus

In planning for a national do-not-call list, the Federal Trade Commission has tried to ease the fears of state attorneys general that their state-maintained DNC lists could be pre-empted, according to an FTC document obtained by DM News.

However, the plan does not address telemarketer concerns that creating a national DNC list while leaving existing state lists in effect would create a regulatory quagmire and make complying with consumer no-call requests more expensive and difficult, industry representatives said.

The document, published Aug. 2 by the FTC, is a solicitation for price quotes outlining the technical requirements for database companies that would be candidates to maintain the agency's proposed national DNC list. The FTC sent the solicitation to a select number of firms, who had until Sept. 6 to respond, according to the document.

Three FTC officials did not return calls for comment this week.

The document makes clear that the FTC's plans for the national DNC list are preliminary. The FTC has not decided whether the list will be created and has yet to receive necessary funding approval from Congress, the document noted.

Among the “mandatory tasks” a database firm would have to perform would be to integrate existing state lists — and possibly the Direct Marketing Association's Telephone Preference Service list — with the national DNC registry on a “one-time basis,” meaning when the national DNC list is first created. Appending consumers who later register for state lists after the national registry is created is described as an “optional service,” meaning the FTC may require it once it learns more about the cost and feasibility of such an effort.

The plan fits the FTC's announced intention to “harmonize” state lists with the national DNC registry but leave the state lists intact. Discussed at an FTC forum in June, the harmonization idea was an attempt to compromise between telemarketers concerned that a national DNC list would be redundant given the existence of state lists, and the state attorneys general, many of whom lobbied for their state lists and continue to tout them to their constituents in statements and press releases.

One part of the solicitation describes an optional requirement in which consumers calling a hotline to register for the list would be greeted by a prerecorded message welcoming them to the national DNC registry, “brought to you by” the attorney general of the state from which they were calling and the FTC.

Indiana attorney general Steve Carter, whose state has enacted a DNC list, said he could not comment directly on the FTC's plan. But he said the FTC appears to be dealing with some of the issues that many states confronted while creating their DNC lists.

“We already have kind of gone through this process in Indiana,” Carter said. “It's interesting to see how, in selecting their vendor, they're getting into some of the same issues.”

State attorneys general oppose industry suggestions that, in the event of a national no-call registry, state lists no longer would be required, said Scott Holste, spokesman for the Missouri Attorney General's Office. States are mainly concerned about how the FTC would enforce the new federal telemarketing rules, which in the past have been enforced by state as well as federal law enforcement, and whether the FTC would be able to bring complaints against telemarketers in a timely fashion.

Holste declined to comment on the details of the FTC's plan.

If the FTC plan goes out of its way for state attorneys general, it does little to help telemarketers or consumers, said Matt Mattingley, legislative director for the American Teleservices Association.

“What the FTC proposes fails the common sense test,” Mattingley said. “If we're going to have a national list, let's have a national list. If we're going to have 50 state lists, let's have 50 state lists. You can't have both.”

How close the FTC is to releasing a final ruling on the national DNC list remains to be seen. The only indication of a release date the FTC has given has been for “early fall,” which many observers interpret as sometime in October.

“Clearly, the FTC is in the driver's seat,” Mattingley said. “They're calling all the shots. The industry is reduced to just spectator.”

The initial contract period for the national no-call registry would run through Sept. 20, 2003, and would be renewed annually thereafter. The database contractor would have to begin accepting consumer registration within four months after receiving the FTC's go-ahead to initiate the project and make the list effective no later than two months afterward.

Other highlights from the FTC's plan include:

· The FTC is debating whether consumers should call a toll-free hotline to register or should have to make a toll call. Online registration also is being considered. The contractor would have to develop a way to ensure the identity of consumers who register online without requiring them to provide credit card or bank account information.

· Registration would be made available in different geographic regions in phases to avoid a surge of calls, preventing jammed registration hotlines that have plagued some states with new DNC lists. As previously discussed by the FTC, the contractor would create a telephone number detection system that would register consumers automatically when they call.

· The FTC may require the contractor to collect consumer addresses and names along with telephone numbers to help the agency keep the registry current and alleviate worries that numbers will stay on the registry long after they are disconnected or after consumers move. Toward that end, the FTC may require consumers to re-register every one to five years and may require the contractor to purge the list of incorrect telephone numbers periodically. Only telephone numbers would be available to telemarketers.

· The contractor would be required to develop a Web site to allow telemarketers to obtain telephone numbers on the list online. The FTC said it could not predict the number of telemarketers who would need the list but said it expected a maximum of about 3,000, with the states receiving requests of anywhere from fewer than 100 to just under 1,000 telemarketing companies. Telemarketers would be required to pay an annual fee and access the list monthly.

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