What the FCC Order Means to You

We have all read articles about the national do-not-call registry established by the Federal Trade Commission several months ago. Recently, however, the Federal Communications Commission issued an order that has received less attention, but which may have broad implications further limiting the use of outbound telemarketing.

Some implications are more obvious. First and foremost, by adopting the FTC’s registry in virtually identical form, the FCC accomplished one of Congress’ main goals in passing the Do-Not-Call Implementation Act in January: maximum consistency between the FTC and FCC no-call provisions. There will be only one database, which will be administered by the FTC, and the FCC and FTC will coordinate and cooperate with each other in respect to enforcement of the registry.

With only one database, consumers register their telephone numbers only once to be covered by both the FCC and FTC do-not-call provisions. Since the end of June, when consumers were first allowed to register, more than 26 million have placed their telephone numbers on the registry.

Additionally, the federal do-not-call rules require each state that has a no-call list to incorporate into its list the part of the registry that pertains to such state. Thus, consumers who register their telephone numbers on the registry also will be automatically registered on their respective state lists.

Conversely, of the more than 30 states that have enacted do-not-call laws, it appears only 11 will not automatically incorporate their no-call list into the registry. These states are Alaska, Georgia, Idaho, Indiana, Louisiana, Missouri, Tennessee, Texas, Vermont, Wisconsin and Wyoming.

However, the FCC order has implications beyond uniformity. Because the FCC’s jurisdiction exceeds that of the FTC, its adoption of the registry results in certain telemarketing calls being subject to the registry that previously were exempt from its coverage. Intrastate telemarketing calls (i.e., calls from within a particular state to consumers in that state) are now subject to the registry, as are calls by entities outside FTC jurisdiction, such as common carriers, banks, insurance companies and airlines.

For example, before the FCC order, calls made from a call center in Texas to a Texas consumer were not subject to the registry. Similarly, before the FCC order, solicitation calls by an airline, bank or long-distance carrier were not subject to the registry. These exceptions have been eliminated.

The FCC order also appears to eliminate any state do-not-call exemptions that are less restrictive than the federal rules. The FCC order states that the federal no-call rules will be a “floor” for both interstate and intrastate telemarketing calls. This means that the state no-call laws may not be less restrictive than the federal rules.

This is likely to have the most effect on do-not-call exemptions. Many telemarketers who rely on specific state no-call exemptions may lose their ability to do so. For example, an exemption exists in certain states for calls made for the purpose of setting up face-to-face meetings with consumers.

Because such an exemption would affect telemarketers who may not otherwise be exempt from the registry, it is less restrictive than the federal rules and presumably will have no force or effect after Oct. 1, the date that enforcement of the registry begins.

Other state no-call exemptions that may no longer be available include outbound calls made by telemarketers licensed under a specific state statute, such as a state securities act or timeshare act, and exemptions for businesses that make a minimal number of outbound telemarketing calls per week.

As far as more restrictive state do-not-call laws are concerned, the FCC order provides that the federal rules will be a “ceiling” for interstate telemarketing calls. Thus, a state no-call law that does not exempt telemarketing calls exempted by the federal rules will be enforceable only for intrastate calls.

Therefore, it appears that, except for intrastate telemarketing, which states may regulate more strictly than the registry, there effectively will be only the three do-not-call exemptions provided for by the federal rules. These are calls made: with the prior express invitation or permission of a consumer, which must be evidenced by a signed, written agreement by the consumer that includes the consumer’s telephone number; to consumers with whom the telemarketer has an established business relationship, which is limited in duration by definition and which may be terminated by the consumer at any time; and by tax-exempt nonprofit organizations.

The foregoing implications are, of course, subject to interpretation and challenge and may change before enforcement of the registry begins. But all indications from the FCC and FTC are that their current rules regarding the registry will be those that are in effect on Oct. 1.

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