Trade Groups Split on FCC Telemarketing Rules

The Federal Communications Commission announced new telemarketing rules yesterday that follow in the footsteps of the Federal Trade Commission, but reactions to the changes revealed a split between two industry trade groups.

In a public meeting, FCC commissioners approved a plan for the agency to enforce the FTC's no-call registry. The plan described at the meeting also called for the FCC to create rules on existing business relationships, predictive dialers and caller ID in line with the FTC's new rules on these issues.

In addition, the FCC toughened rules on commercial fax advertising, requiring companies to obtain written permission from consumers before sending faxes. The agency also said it may hold fax broadcast companies liable for unsolicited faxes sent for clients.

The FCC's adoption of the new rules expands the scope of the FTC's new telemarketing requirements. Whereas the FTC lacks jurisdiction over several industries including financial firms, common carriers and airlines, the FCC holds sway over all for-profit companies that market by phone.

The FCC decision came on the eve of the FTC's planned launch of the national no-call registry at a White House ceremony with President Bush today.

K. Dane Snowden, chief of the FCC's consumer and governmental affairs bureau, said the agency would not pre-empt state no-call lists but would set a regulatory “floor.” States could exceed the FCC standard but not make rules that are less restrictive.

The FCC rules would apply to both interstate and intrastate calls. States could make more restrictive rules for intrastate telemarketing calls but could not set rules that conflict with the FCC. But the agency said it would consider conflicts on a case-by-case basis. Many industries enjoy exemptions under state no-call laws and would lose their exempt status under the FCC rules.

Responses to the FCC announcement revealed a break between the Direct Marketing Association and American Teleservices Association. Both trade groups have filed federal lawsuits challenging the FTC's plan to start a national no-call list but filed their suits separately and adopted different strategies in their legal arguments.

In a statement, the DMA said it supported the FCC's actions and that it looked forward to working with the FTC and FCC to educate telemarketers about the new rules. The DMA, which has said it supports a national no-call list, said the FCC rules create a national standard that makes it easier for telemarketers to comply.

The DMA did not specify whether it would continue to challenge the FTC no-call rules. Its argument against the FTC no-call list was that it failed to cover key industries and would lead to consumer confusion.

In contrast, the ATA issued a statement from chairman Tom Rocca condemning the FCC's no-call plan, saying it would “cost the jobs of 2 million American workers.” Rocca criticized the FCC for issuing its no-call rules two months before the Sept. 8 deadline set by Congress and said the agency rushed to make its rules under political pressure.

Rocca's statement did not say whether the ATA planned to start an additional legal action against the FCC.

The Newspaper Association of America, many of whose members will lose exemptions from state telemarketing rules under the FCC plan, also expressed opposition to the FCC's rule changes. The FCC ignored efforts by states to exempt industries in recognition of their contributions to communities, the NAA said.

Approval for the telemarketing rules changes was unanimous among FCC commissioners, who often have a rancorous relationship. FCC chairman Michael Powell said the agency's actions provided the “eye teeth” of the national no-call program. Other commissioners called the plan the “best thing” the FCC has ever done.

“The telephone is what it's all about here,” commissioner Jonathan S. Adelstein said. “These calls are not just disturbing people but are driving them away from their phones.”

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