# Appendix — Mainstream Marketing Services, Inc. v. Federal Trade Commission > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386020_1676%3A4 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 2004 - **Citation:** 543 U.S. 812 ## Text —————— INTHE Q341552MAY 14 2004 Supreme Court of the United States | AMERICAN TELESERVICES ASSOCIATION, MAINSTREAM MARKETING SERVICES, INC., AND TMG MARKETING, INC., Petitioners, V. FEDERAL TRADE COMMISSION, FEDERAL COMMUNICATIONS COMMISSION, AND UNITED STATES, Respondents. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Tenth Circuit APPENDIX TO PETITION FORA WRIT OF CERTIORARI (Continued) VOLUME III ROBERT CORN-REVERE * RONALD G. LONDON JEFFREY L. FISHER KAVITA AMAR SONJA WEST DAVIS WRIGHT TREMAINE LLP 1500 K Street, N.W., Suite 450 Washington, D.C. 20005 (202) 508-6600 SEAN R. GALLAGHER HOGAN & HARTSON LLP 1200 17th Street, Suite 1500 Denver, Colorado 80202 (303) 899-7300 * Counsel of Record Counsel for Petitioners WILSON-EPES PRINTING CO., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20001 TABLE OF CONTENTS Mainstream Mktg. Servs., Inc. v. FTC, 358 F.3d 1228 CONSE UID i eisecsnercsissnisiseedinassecptitiescoctsacecéiccz.: FTC v. Mainstream Mktg. Servs., Inc., 345 F 2d 850 Ge EE sbi oo Nn Mainstream Mktg. Servs., Inc. v. FCC, No. 03-9571, Order Denying Stay (10th Cir. Sept. 26, ri) Mainstream Mktg. Servs., Inc. v. FCC, 284 F.Supp.2d FM RP MAE TINY iicrnseesnssienceintbinncdiasnsarsiesisealc Mainstream Mktg. Servs., Inc. v. FCC, 283 F.Supp.2d BEE GD CID, DOI) isn scsecnscssincesdsncnesiioesnisesseieees oc. Telemarketing Sales Rule Fees; Final Rule, 68 Fed. WON SETI IID ses issosscsesesessochastecasenssssesssisacncce.. Telemarketing Sales Rule; Final Rule, 68 Fed. Reg. IP cc ees hah sada Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 FCC Red PP UNE Sisisisisicnctaibsceiessicindee lands eeik Rules and Regulaticns Implementing the Telephone Consumer Protection Act of 1991, 18 FCC Red lactase) eT NAL OEE eR Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 17 FCC Red NI sido acai crac et Nl a ar at Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-6108 ooo... Do-Not-Call Implementation Act, Pub. L. 108-10, 117 Stat. 557 (2003), codified as Notes to 15 U.S.C. PY seit Page la 576a 585a 858a 948a TABLE OF CONTENTS—Continued Page Telephone Consumer Protection Act, 47 U.S.C. § 227 SF CFA Sse cicticacaciaeaaaiaaciainns 983a SOE B. PE FO vicainiccniccivscnscadntntinnianahiaiacnns 993a 576a APPENDIX H Before the Federal Communications Commission Washington, D.C. 20554 CG Docket No. 02-278 In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 Adopted: August 18, 2003 Released: August 18, 2003 ORDER ON RECONSIDERATION By the Commission: 1. On July 3, 2003, the Federal Communications Commis- sion (Commission) released a Report and Order revising many of its telemarketing and facsimile advertising rules pursuant to the Telephone Consumer Protection Act of 1991 (TCPA).' Pursuant to Section 1.108 of-the Commission’s rules,” on our Own motion, we issue this limited reconsid- eration of the Report and Order and extend, until January 1, 2905, the effective date of our determination that an ' See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG Docket No. 02-278, FCC 03-153, Report and Order (rel. July 3, 2003) (Report and Order). A summary of this Report and Order was published in the Federal Register on July 25, 2003 (68 Fed. Reg. 44144). 747 C.F.R. § 1.108. 577a established business relationship will no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements. We also extend, until January 1, 2005, the effective date of amended rule 47 C.F.R. § 64.1200(a)(3)(i).? 2. In the Report and Order, the Commission reversed its prior conclusion that an established business relationship provides companies with the necessary express permission to send faxes to their customers.’ The Commission determined that the established business relationship would no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements.’ Instead, the Commission concluded that the recipient’s express invitation or permission must be in writing and include the recipient’s signature.° The recipient must clearly indicate that he or she consents to receiving such faxed advertisements from the company to which permission is given, and must provide the individual’ S or business: s fax number to which faxes may be sent.’ 3. The American Society of Association Executives (ASAE) filed a petition for emergency clarification of the rules governing unsolicited facsimile advertisements as they > Amended rule 47 C.F.R. § 64.1200(a)(3)(i) provides that ‘ta facsimile advertisement is not ‘unsolicited’ if the recipient has granted the sender prior express invitation or permission to deliver the advertisement, as evidenced by a signed, written statement that includes the facsimile number to which any advertisements may be sent and clearly indicates the recipient’s consent to receive such facsimile advertisements from the sender.” * Report and Order at para. 189. ° Id. ° Report and Order at para. 191. "Id 578a apply to tax-exempt nonprofit organizations.® In addition, ASAE filed a petition for stay of the unsolicited facsimile rules as they apply to tax-exempt nonprofits in the event the Commission is unable to clarify the rules prior to their effective date.? Many of ASAE’s members and other organi- zations have filed comments in support of ASAE’s petitions.'” The National Association of Realtors also filed a Request for Emergency Stay of all of the facsimile advertise- ment rules, asking the Commission to grant a one-year stay of the recently adopted rules.'' A Request for Stay of the amended rules concerning unsolicited facsimile advertising as they apply to the publishers of Requester Publications, along with a Request for Expedited Clarification of the unsolicited facsimile rules, were filed by Proximity Marketing.'? In addition, a Request for Stay of the amended rules concerning unsolicited facsimile advertising as they apply to political action committees was filed by the National Association of * ASAE Petition for Emergency Clarification, filed July 25, 2003 (asking the Commission to issue, on an emergency basis, a clarification that unsolicited facsimile communications are not prohibited when issued by tax-exempt nonprofit purposes). * ASAE Petition for Stay, filed July 25, 2003. '° See, e.g., Maryland Society of Association Executives Comments; Construction Management Association of America Comments; Pittsburgh Pediatric Society Comments; Albany County Convention and Visitors’ Bureau Comments; American Correctional Association Comments. ''The National Association of Realtors (NAR) requests that the Commission stay the effective date of the Commission’s rules at 64.1200(a)(3), 68.318 and other applicable rules “to permit NAR and its members sufficient time to review and comply with the Commission’s new, unanticipated, and unprecedented, unsolicited fax rules.” See NAR Request for Emergency Stay of Facsimile Advertisement Rules, filed August 1, 2003, p. 1. '? Proximity Marketing Request for Stay and Proximity Marketing Request for Expedited Clarification, filed August 6, 2003. I eS ee 579a Business Political Action Committees (NABPAC).'? The Chamber of Commerce of the United States et al. filed a Request for Stay of the amended rules that apply to unsolicited commercial faxes.'* The “Business Users Coali- tion” submitted a Petition for Emergency Stay of at least six - months of the amended rules regarding unsolicited facsimile advertisements.'> A Petition for Stay of the rules governing the nature of “express permission” required to send advertise- ments by fax was filed by American Business Media.'® A Petition for Emergency Stay & Clarification of the amended rules governing unsolicited facsimile advertisements as they apply to tax-exempt nonprofit organizations was submitted by the Air Conditioning Contractors of America (ACCA).'’? A Request for Stay of those rules governing unsolicited fax advertising was filed by the American Dietetic Association '’ NABPAC Request for Stay of Facsimile Advertisement Rules, filed August 8, 2003. '* The Chamber of Commerce of the United States, the Community Association Institute, the National Association of Manufacturers, the National Association of Wholesaler-Distributors, the National Restaurant Association, and the National Federation cf Independent Business Request for Stay of Facsimile Advertisement Rules, filed August 8, 2003. The American Society of Travel Agents, Mortgage Bankers Association of America, National Association of Mortgage Brokers, Consumer Mortgage Coalition, and the Midwest Circulation Association (collectively “Business Users Coalition”) Petition for Emergency Stay, filed August 7, 2003. '© American Business Media seeks “a stay pending reconsideration of [the requirement for written and signed permission], a Stay pending clarification that notifications to subscribers of subscription expiration and insertion orders to advertisers are not advertisements, a stay for one year in the event that the Commission retains the signature rule and a stay pending judicial review.” American Business Media Petition for Stay, filed August 6, 2003. '” Air Conditioning Contractors of America (ACCA) Petition for Emergency Stay & Clarification, filed August 12, 2003. 580a (ADA).'* Reed Elsevier Inc. submitted a Motion for Stay of the effective date of the amended fax consent rule at 64.1200(a)(3)(i).'? The Newspaper Association of America (NAA) and the National Newspaper Association (NNA) filed a Petition for Stay of the Commission’s amended rules on " unsolicited facsimile advertisements.”° 4. The American Teleservices Association (ATA) has also submitted a Request for Expedited Stay of the Commission’s revisions to the rules implementing the TCPA.”' The ATA requests that the Commission stay the revisions to the rules implementing the TCPA, pending a final decision on judicial review of the new rules. ATA’s petition relates primarily to the new telephone solicitation rules, including the national do-not-call registry. 5. We now, on our own motion, issue this limited re- consideration of the effective date of our determination that an established business relationship will no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile adver- tisements, as well as the amended unsolicited facsimile provisions at 47 C.F.R. § 64.1200(a)(3)(i). Section 64.1200 (a)(3)(i), as amended, requires the sender of a facsimile advertisement to first obtain from the recipient a signed, written statement that includes the facsimile number to which any advertisements may be sent and clearly indicates the recipient’s consent to receive such facsimile advertisements '* American Dietetic Association Request for Clarification or, in the Alternative, A Stay of the Implementation of Regulations, filed ! August 6, 2003. ” Reed Elsevier Inc. Motion for Stay, filed August 12, 2003. ?? NAA and NNA Petition for Stay, filed August 8, 2003. *! See ATA Request for Expedited Stay, filed July 25, 2003. aii aaa ia al 58la from the sender.” The comments filed after the release of the Report and Order indicate that riany organizations may need additional time to secure this written permission from individuals and businesses to whom they fax advertisements. We believe that, in light of this new information, the public interest would best be served by allowing senders of such advertisements additional time to obtain such express permis- sion before the new rules become effective. In addition, this extension will allow the Commission the opportunity to consider any petitions for reconsideration and other filings that may be made on this issue.”’ We retain the discretion to extend the effective date further should circumstances warrant such an action.” 6. We emphasize that the only effective dates of the Commission’s Report and Order extended by this Order are: 1) the determination that an established business relationship will no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements; and 2) the requirement that the sender of a facsimile advertisement first obtain the recipient’s express permission in writing. Therefore, until the amended rule at 47 C.F.R. § 64.1200(a)(3)(i) becomes effec- *” See 47 U.S.C. § 227(a)(4) for the definition of “unsolicited advertisement.” 3 Petitions for reconsideration are due on August 25, 2003. **We emphasize that our existing TCPA rules prohibiting the transmission of unsolicited advertisements to a telephone facsimile machine will remain in effect during the pendency of this extension. Under these rules, those transmitting facsimile advertisements must have an established business relationship or prior express permission from the facsimile recipient to comply with our rules. In addition, the effective date of the other amended facsimile rules remains unchanged by this Order. See, e.g., 47 C.F.R. § 68.318(d) (amending the rules to require any fax broadcaster that demonstrates a high degree of involvement in the transmission of messages to be identified on the facsimile, along with the identification of the sender). ee 582a tive on January |, 2005, an established business relationship will continue to be sufficient to show that an individual or business has given express permission to receive facsimile advertisements. The effective date of our amended definition of an “established business relationship” is not affected by our determination here.”° 7. We have considered and rejected ATA’s request to stay the revisions to the rules implementing the TCPA to the extent that such request extends beyond the fax rules discussed above. Although the Commission has declined to adopt a single standard for requests for injunctive relief, we generally consider four criteria: (1) the likelihood of success on the merits, (2) the threat of irreparable harm absent grant of preliminary relief, (3) the degree of injury to other parties if relief is granted, and (4) that a stay will be in the public interest."° We conclude that ATA’s request does not satisfy the factors governing the issuance of a stay. 8. The actions contained herein have not changed our Final Regulatory Flexibility Analysis (FRFA), which is set forth in the Report and Order. Thus, no supplemental FRFA is necessary. In addition, the action contained herein imposes no new or modified reporting and/or recordkeeping requirements or burdens on the public. 9. Accordingly, IT IS ORDERED that, pursuant to Sections 1-4, 222, 227, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-154, 222 and 227: and Section 1.108 of the Commission’s Rules, 47 C.F.R. §§ 1.108, this Order on Reconsideration in CG Docket No. °° Report and Order at para 113. © See Virginia Petroleum Jobbers Ass'n v. Federal Power Commis- sion, 259 F.2d 921 (D.C. Cir. 1958). See also Replacement of Part 90 by Part 88 to Revise the Private Land Mobile Radio Services and Modify the Policies Governing Them, PR Docket No. 92-235, 15 FCC Red 7051, 7054 at para. 7 (1999). =_— Ss. ee ae eee te ee ee ee eee ee ee Ye ee ee ee ae 583a 02-278 IS ADOPTED and that the Report and Order, FCC 03-153, IS MODIFIED as set forth herein. 10. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that the National Association of Realtors’ Request for Emergency Stay IS DISMISSED without prejudice. 11. If IS FURTHER ORDERED, subject to the extended effective dates set forth above, that the American Society of Association Executives’ Petition for Stay IS DISMISSED without prejudice. 12. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that Proximity Marketing’s Request for Stay IS DISMISSED without prejudice. 13. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that the National Association of Business Political Action Committees’ Request for Stay IS DISMISSED without prejudice. 14. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that the Chamber of Com- merce of the United States et al. Request for Stay IS DISMISSED without prejudice. 15. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that the Business Users Coali- tion’s Petition for Emergency Stay IS DISMISSED without prejudice. 16. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that the American Business Media’s Petition for Stay IS DISMISSED without prejudice. 17. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that the Air Conditioning Contractors of America’s Petition for Emergency Stay IS DISMISSED without prejudice. 584a 18. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that the American Dietetic Association’s Request for Stay of the Implementation of Regulations IS DISMISSED without prejudice. 19. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that Reed Elsevier Inc.’s Motion for Stay IS DISMISSED without prejudice. 20. IT IS FURTHER ORDERED, subject to the extended effective dates set forth above, that the Newspaper Associa- tion of America and the National Newspaper Association’s Petition for Stay IS DISMISSED without prejudice. _ 21. IT IS FURTHER ORDERED, that the American Teleservices Association Request for Expedited Stay IS DISMISSED without prejudice to the extent it seeks a stay of the rules affected by the extended effective dates set forth above, but is OTHERWISE DENIED. 22. IT IS FURTHER ORDERED, that the effective date for the Commission’s determination that an established business relationship will no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements and the require- ment that the sender of a facsimile advertisement first obtain the recipient’s express permission in writing, as codified at 47 C.F.R. § 64.1200(a)(3)(i), IS January 1, 2005, and that this Order on Reconsideration is effective upon publication in the Federal Register.”’ FEDERAL COMMUNICATIONS COMMISSION Marlene H. Dortch Secretary *” In light of the need to allow affected entities time to comply with the new faxing rules, we find good cause, pursuant to 5 U.S.C. § 553(d), to make this effective on less than thirty days’ notice. 585a APPENDIX I Before the Federal Communications Commission Washington, D.C. 20554 CG Docket No. 02-278 In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991 REPORT AND ORDER - Adopted: June 26, 2003 Released: July 3, 2003 By the Commission: Chairman Powell, Commissioners Abernathy, Copps and Adelstein issuing separate statements. 586a TABLE OF CONTENTS Paragraph Number a iinicsstysssssecssexvonsessesssevosescreceseees l ce clicsissrnnancsnatesvcevnssenscosossecssees 4 A. Telephone Consumer Protection Act of 1991 ... 4 Neen tesa riilendeiaincseseacevecsssesesevess 6 C. Marketplace Changes Since 1992............:seee 8 D. FTC National Do-Not-Call Registry and I I isascssscsasscncscsossseresesercesseoeees 9 Be Be Bee CBINS oo... cencsccceccesesssororeeee 12 F. Notice of Proposed Rulemaking...............:0:0+ 14 G. Do-Not-Call Implementation Act..............006 15 Ill. NATIONAL DO-NOT-CALL LIST................ 16 sth a tsncnesinsccssannevesocrocescecssnsesevesees 16 Nee ielnckapisanesscneccsesecocessssesees 25 1. National Do-Not-Call Registry..............::000 28 i iciisinisanrsessusctesovssconersssceseosees 42 3. Section 227(c)(3) Requirements................0++ 55 ea cciciascssisssscscosercsovcescooss 63 5. Consistency with State and FTC Do-Not- Neen ae sctstaherensseessccsssenessesses 74 IV. COMPANY SPECIFIC DO-NOT-CALL LISTS... 86 A. Background............0+ a 86 ea niciecinssnscsesnicsrestasrosenseesses 90 1. Efficacy of the Company-Specific Rules ...... 90 587a 2.Amendments to the Company-Specific in TI ceaccnniara erent uaubenaenecuemeeataa Fe iSirditinebten iain VI. ESTABLISHED BUSINESS RELATION-SHIP .. Fe iisinktteiceiniecivsalcentamaict eae BN aeeseciearesaeccseldctbenielanabatbon nt 1. Definition of Established Business cc, OR EERSTE T ASAT IIe 2. Telecommunications Common Carriers...... 3. Interplay Between Established Business Relationship and Do-Not-Call Request......... VII. TAX-EXEMPT NONPROFIT ORGANIZA- Se TT icici siebeitii ania rasan dea ae hi. Fe ecacisnicmiicces ee ai rs NE eer VII. AUTOMATED TELEPHONE _ DIALING tT | PRO eR DER ERM en ye ee eOMe arn. Mika. | TNs hase tinea ect ete i IIR secre nC ee B, PWURCEIWG TPURIOES a oscicscsccssesscecsecensesesnazeonss pa, aOR ICME oe mE MORON er CO IX. ARTIFICIAL OR PRERECORDED VOICE FURR NIIEN bins Sataseise cc traseniieenaeienorea tenia eens a Fes IIT ics Scxcsiasidassacctseeecnteadatmaenscneaes i> me es eee ae 92 97 97 100 109 109 112 113 119 124 125 125 128 129 129 131 131 135 136 136 139 588a 1. Offers for Free Goods or Services; Information-Only Messages ..............:ssseeeeee 2. Identification Requirements ................00008 3. Radio Station and Television Broadcaster Pe. TI ii cccncersiccssessssecenvnserescoentcnariccrsnexensenne De - aisiistneeceacciocmtnneionintine 1. Maximum Rate on Abandoned Calls........... 2. Two-Second-Transfer Rule .........sssssssseeeeee 3. Prerecorded Message for Identification....... 4. Established Business Relationship .............. DF I ei essiiheeirsiecicnenenccanisivnions XI. WIRELESS TELEPHONE NUMBERG ............. Ph - FE a icitactsiimciensiarsiiiimiennvasi Te. i thiinntieciedarccscncccmmiaeces 1. Telemarketing Calls to Wireless Numbers.. 2. Wireless Number Portability and Pooling... NEE, CALLER Te Ae cncissvisssscccessoensevesens A, FE avi iivvcsscciesnssesenicsenensemntinen Be 7 FN ccccansinstmncaccwvejetodenronssteomeiniaenate XIII. UNSOLICITED FACSIMILE ADVERTISE- Fe, Tain esses ccenisscasissinenivsccieemscerninsss ' ee ERO LO LONE TOP NCR SOE DE 1. Prior Express Invitation or Permission........ 589a 2. Fu Fed eens 194 3. Pek DONE, ouienonneetin eee 198 4. Identification Requirements ...............0000... 203 XIV. PRIVATE RIGHT OF ACTION.............ccccceceees 204 A. BOGRQPOUl,..nciucsmaumde mie ree SS. DROWNING. cccisicenementmn een 206 XV. INFORMAL COMPLAINT RULEG...............00+. 20° XVI. TIME OF DAY RESTRICTIONS ............0..c00000 208 XVII. ENFORCEMENT PRIORITIES.................000000 211 AVI. OTHER Tee ans aan 215 A. Access to TCPA Inquiries and Complaints aces 215 B. Reports 10 Comptes. ccissicrcecessssereresssosaverceees bias 217 AIX. PROCEDURAL, Fee rvcssinccscsccscesvecssorsnvenssees 218 A. Regulatory Flexibility Act Analysis.................. 218 B. Paperwork Reduction Act Analysis...............0... 219 C. Late-Filed Comments ..siccccccccessnscesscsesesesneovorsses 220 D. Materials in Accessible Formats............cc0c0000. 221 AX. ORDERING CL AGI wivesscccctsctcccssccesectovesespie 222 Appendix A: Final Rules Appendix B: Final Regulatory Flexibility Act Analysis Appendix C: Comments Filed Se a PRB LE EE til Rt a Ea - 4 t 4 i 4 590a I. INTRODUCTION 1. In this Order, we revise the current Telephone Consumer Protection Act (TCPA)' rules and adopt new rules to provide consumers with several options for avoiding unwanted tele- phone solicitations. Specifically, we establish with the Federal Trade Commission (FTC) a national do-not-call reg- istry for consumers who wish to avoid unwanted tele- marketing calls. The national do-not-call registry will supple- ment the current company-specific do-not-call rules for those consumers who wish to continue requesting that particular companies not call them. To address the more prevalent use of predictive dialers, we have determined that a telemarketer may abandon no more than three percent of calls answered by a person and must deliver a prerecorded identification message when abandoning a call. The new rules will also require all companies conducting telemarketing to transmit caller identification (caller ID) information, when available, and prohibits them from blocking such information. The Commission has revised its earlier determination that an established business relationship constitutes express invita- tion or permission to receive an unsolicited fax, and we have clarified when fax broadcasters are liable for the transmission of unlawful facsimile advertisements. We believe the rules the Commission adopts here strike an appropriate balance between maximizing consumer privacy protections and avoiding imposing undue burdens on telemarketers. 2. It has now been over ten years since the Commission adopted a broad set of rules that respond to Congress’s directives in the TCPA. Over the last decade, the telemarket- ing industry has undergone significant changes in the tech- nologies and methods used to contact consumers. The ' Telephone Consumer Protection Act of 1991, Pub. L. No. 102-243, 105 Stat. 2394 (1991), codified at 47 U.S.C. § 227. The TCPA amended Title II of the Communications Act of 1934, 47 U.S.C. § 201 et seq. 59la Commission has carefully reviewed the record developed in this rulemaking proceeding. The record confirms that these marketplace changes warrant modifications to our existing rules, and adoption of new rules if consumers are to continue to receive the protections that Congress intended to provide when it enacted the TCPA. The number of telemarketing calls has risen steadily; the use of predictive dialers has proliferated; and consumer frustration with unsolicited tele- marketing calls continues despite the efforts of the states, the Direct Marketing Association (DMA),’ and the company- specific approach to the problem. Consumers often feel frightened, threatened, and harassed by telemarketing calls. They are angered by hang-ups and “dead air” calls, by do- not-call requests that are not honored, and by unsolicited fax advertisements. Many consumers who commented in this proceeding “want something done” about unwanted solicita- tion calls, and the vast majority of them support the establishment of a national do-not-call registry. Congress, too, has responded by enacting the Do-Not-Call Implementa- tion Act (Do-Not-Call Act),’ authorizing the establishment of a national do-not-call registry, and directing this Commission to issue final rules in its second major TCPA proceeding that maximize consistency with those of the FTC. 3. The Commission recognizes that telemarketing is a legitimate method of selling goods and services, and that many consumers value the savings and convenience it provides. Thus, the national do-not-call registry that we adopt here will only apply to outbound telemarketing calls and will only include the telephone numbers of consumers who * The Direct Marketing Association (DMA) is a trade association of businesses that advertise their products and services directly to consumers by mail, telephone, magazine, internet, radio or television. See also infra, note 47. * Do-Not-Call Implementation Act, Pub. L. No. 108-10, 117 Stat. 557 (2003), to be codified at 15 U.S.C. § 6101 (Do-Not-Call Act). 592a indicate that they wish to avoid such calls. Consumers who want to receive such calls may instead continue to rely on the company-specific do-not-call lists to manage telemarketing calls into their homes. Based on Congress’s directives in the TCPA and the Do-Not-Call Act, the substantial record developed in this proceeding, and on the Commission’s own enforcement experience, we adopt these amended rules, as described in detail below. Il. BACKGROUND A. Telephone Consumer Protection Act of 1991 4. On December 20, 1991, Congress enacted tne TCPA in an effort to address a growing number of telephone marketing calls and certain telemarketing practices thought to be an invasion of consumer privacy and even a risk to public safety.’ The statute restricts the use of automatic telephone dialing systems, artificial and prerecorded messages, and telephone facsimile machines to send unsolicited advertise- ments. Specifically, the TCPA provides that: It shall be unlawful for any person within the United States— (A) to make any call (other than a call made for emer- gency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice— (i) to any emergency telephone line (including any “911” line and any emergency line of a hospital, medical physician or service office, health care facility, poison control center, or fire protection or law enforcement agency); (ii) to the telephone line of any guest room or patient room of a hospital, health care facility, elderly home, or similar establishment; or * See TCPA, Section 2(5), reprinted in 7 FCC Red 2736 at 2744. 593a (ili) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call; (B) to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party, unless the call is initiated for emergency purposes or is exempted by rule or order by the Commission under paragraph (2)(B); (C) to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine; or (D) to use an automatic telephone dialing system in such a way that two or more telephone lines of a multi-line business are engaged simultaneously.° Under the TCPA, those sending fax messages or transmitting artificial or prerecorded voice messages are subject to certain identification requirements.° The statute also provides consumers with several options to enforce the restrictions on unsolicited telemarketing, including a private right of action.’ * 47 U.S.C. § 227(b)(1). °47 U.S.C. §§ 227(d)(1)(B) and (d)(3)(A). See also Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CC Docket No. 92-90, Order on Further Reconsideration, 12 FCC Red 4609, 4613, para. 6 (1997) (1/997 TCPA Reconsideration Order), in which the Commission found that “[s]ection 227(d)(1) of the statute mandates that a facsimile include the identification of the business, other entity, or individual creating or originating a facsimile message and not the entity that transmits the message.” (footnotes emitted). "The TCPA permits consumers to file suit in state court if an entity violates the TCPA prohibitions on the use of facsimile machines, automatic telephone dialing systems, and artificial or prerecorded voice messages and telephone solicitation. 47 U.S.C. §§ 227(b)(3) and (c)(5). he es ee 594a 5. The TCPA requires the Commission to prescribe regula- tions to implement the statute’s restrictions on the use of autodialers, artificial or prerecorded messages and unsolicited facsimile advertisements.* The TCPA also requires the Com- mission to “initiate a rulemaking proceeding concerning the need to protect residential telephone subscribers’ privacy rights” and to consider several methods to accommodate telephone subscribers who do not wish to receive unsolicited advertisements, including live voice solicitations.’ Specifi- cally, section 227(c)(1) requires the Commission to “compare and evaluate alternative methods and procedures (including the use of electronic databases, telephone network technolo- gies, special directory markings, industry-based or company- specific ‘do not call’ systems, and any other alternatives, individually or in combination) for their effectiveness in protecting such privacy rights, and in terms of their cost and other advantages and disadvantages.”'° The TCPA specifi- cally authorizes the Commission to “require the establishment and operation of a single national database to compile a list of Consumers may recover actual damages or receive up to $500 in damages for each violation, whichever is greater. If the court finds that the entity willfully or knowingly violated the TCPA, consumers may recover an amount equal to not more than three times this amount. 47 U.S.C. § 227(b)(3). Consumers may also bring their complaints regarding TCPA violations to the attention of the state attorney general or an official designated by the state. This state entity may bring a civil action on behalf of its residents to enjoin a person or entity engaged in a pattern of telephone calls or other transmissions in violation of the TCPA. 47 U.S.C. § 227(f)(1). Additionally, a consumer may request that the Commission take enforcement actions regarding violations of the TCPA and the regulations adopted to enforce it. See 47 C.F.R. § 1.41 on informal requests for Commission action and 47 C.F.R. § 1.716 on the Commis- sion’s process for complaints filed against common carriers. * 47 U.S.C. § 227(b)(2). * 47 U.S.C. § 227(c)(1)-(4). ' 47 U.S.C. § 227(c)(1 (A). 595a telephone numbers of residential subscribers who object to receiving telephone solicitations.”'' B. TCPA Rules 6. In 1992, the Commission adopted rules implementing the TCPA, including the requirement that entities making telephone solicitations institute procedures for maintaining do-not-call lists.’ Pursuant to the Commission’s rules, a person or entity engaged in telemarketing is required to maintain a record of a called party’s request not to receive future solicitations for a period of ten years.'’ Telemarketers must develop and maintain written policies for maintaining their lists,'* and they are required to inform their employees of the list’s existence and train them to use the list.'* Com- mission rules prohibit telemarketers from calling residential telephone subscribers before 8 a.m. or after 9 p.m.'° and require telemarketers to identify themselves to called par- ties.'’ As mandated by the TCPA, the Commission’s rules also establish general prohibitions against autodialed calls being made without prior express consent to certain locations, "47 U.S.C. § 227(c)(3). ? See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CC Docket No. 92-90, Report and Order, 7 FCC Red 8752 (1992) (1992 TCPA Order); see also 47 C.F.R. § 64.1200. ” Initially telemarketers were required to honor a do-not-call request indefinitely, The Commission later modified its rules to require that the request be honored for a ten-year period. See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CC Docket No. 92-90, Memorandum Opinion and Order, 10 FCC Red 12391, 12397-98, para. 14 (1995) (/995 TCPA Reconsideration Order); 47 C.F.R. § 64.1200(e)(2)(vi). "47 C.R.R. § 64.1200(e)(2)(i), 'S 47 C.F.R. § 64.1200(e)(2)(ii). © 47 C.E.R. § 64,1200(e)(1). "” 47 C.F.R. § 64.1200(e)(2)(iv). 596a including emergency lines or health care facilities,'* the use of prerecorded or artificial voice message calls to residences,"’ line seizure by prerecorded messages,” and the transmission of unsolicited advertisements by facsimile ma- chines.”' The TCPA rules provide that facsimile and prere- corded voice transmissions, as well as telephone facsimile machines, must meet specific identification requirements.” 7. In 1995 and 1997, the Commission released orders ad- dressing petitions for reconsideration of the 1/992 TCPA Order. In a Memorandum Opinion and Order released on August 7, 1995, the Commission exempted from its TCPA rules calls made on behalf of tax-exempt nonprofit organiza- tions, clarified treatment of debt collection calls, and required telemarketers to honor a do-not-call request for a period of ten years.”> The Commission also extended its TCPA rules to respond to technical advances in computer-based facsimile modems that enable solicitors to become “fax broadcasters.” On April 10, 1997, the Commission issued an Order on Further Reconsideration requiring that all facsimile transmis- sions contain the identifying information of the business, other entity, or individual creating or originating the facsimile message, rather than the entity that transmits the message.” "8 47 C.F.R. § 64.1200(a)(1)(i)-(iii). '" 47 C.F.R. § 64.1200(a)(2). © 47 C.F.R. §§ 64.1200(a)(4) and 68.318(c). 2" 47 C.F.R. § 64.1200(a)(3). 2 47 C.F.R. §§ 64.1200(d)(1) and (2); 47 C.F.R. § 68.318(d). 23 1995 TCPA Reconsideration Order, 10 FCC Red at 12397-401, paras, 12-19. ** 1995 TCPA Reconsideration Order, 10 FCC Red at 12404-06, paras. 27-31, *S 1997 TCPA Reconsideration Order, \2 FCC Red at 4612-13, para. 6. The Commission also “{did] not find anything in the TCPA that would prohibit a facsimile broadcast provider from supplying identification of 597a C. Marketplace Changes Since 1992 8. The marketplace for telemarketing has changed signify- cantly in the last decade. When the TCPA was enacted in 1991, Congress determined that 300,000 solicitors were used to telemarket goods and services to more than 18 million Americans every day. Congress also found that in 1990 sales generated through telemarketing amounted to $435 billion dollars.*’” Some estimate that today telemarketers may attempt as many as 104 million calls to consumers and businesses every day,” and that telemarketing calls generate itself and the entity originating a message if it arranges with the message sender to do so.” /d. at 4613, para. 6. *© See TCPA, Section 2(3), reprinted in 7 FCC Red 2736 at 2744. *” See TCPA, Section 2(4), reprinted in 7 FCC Red 2736 at 2744. 8 In attempting to estimate the number of outbound marketing calls made each day in the United States, representatives of the Direct Marketing Association (DMA) have stated that, with as many as | million telemarketing representatives making 13 calls an hour, working 8 hours a day, it is possible that 104 million outbound calls are made to businesses and consumers every day. They noted that, of these calls, as many as 41% of them may be abandoned (because they get busy signals, no answer, hang-ups, or answering machines). See transcript from FTC Do-Not-Call Forum, Testimony of Jerry Cerasale, DMA, June 6, 2002 at 68. Another Study presented to the FTC during its proceeding, estimates that the annual number of outbound calls that are answered by a consumer is 16,129,411,765 (i.e., 16 billion calls). This figure does not include those calls that are abandoned. James C. Miller, III, Jonathan S. Bowater, Richard S. Higgins, and Robert Budd, “An Economic Assessment of Proposed Amendments to the Telemarketing Sales Rule,” June 5, 2002 at 28, Att. | (prepared for the Consumer Choice Coalition and its members, ACI Telecentrics Coverdell & Company, Discount Development Services, HSN LP a/b/a HSN and Home Shopping Network, Household Credit Services) MBNA America Bank, MemberWorks Incorporated, Mortgage Investors Corporation, Optima Direct, TCIM Inc., Trilegiant Corporation and West Corporation). See Telemarketing Sales Rule, Final Rule, Federal Trade Commission, 68 Fed. Reg. 4580 at 4629-30, n.591 (Jan. 29, 2003) (FTC Order). ; 5 4 g 3 ” 4 ; re 598a over $600 billion in sales each year.” The telemarketing industry is considered the single largest direct marketing system in the country, representing 34.6% of the total U.S. sales attributed to direct marketing. The number of telemarketing calls, along with the increased use of various technologies to contact consumers, has heightened public concern about unwanted telemarketing calls and control over the telephone network. Autodialers can deliver prerecorded messages to thousands of potential customers every day. Predictive dialers,’’ which initiate phene calls while tele- marketers are talking to other consumers, frequently abandon calls before a telemarketer is free to take the next call.** Using ” This figure represents telemarketing sales to consumers and businesses. See Seth Stern, “Will feds tackle telemarketers?” (April 15, 2002) (cit- ing Direct Marketing Association statistics). © See “The Economic Impact of Direct Marketing by Telephone,” a study presented by Direct Marketing Association Telephone Mar- keting Council, (visited July 3, 2002). " * predictive dialer is an automated dialing system that uses a complex set of algorithms to automatically dial consumers’ telephone numbers in a manner that “predicts” the timie when a consumer will answer the phone and a telemarketer will be available to take the call. Such software programs are set up in order to minimize the amount of downtime for a telemarketer. In some instances, a consumer answers the phone only to hear “dead ai:” because no telemarketer is free to take the call. See Telemarketing Sales Rule, Notice of Proposed Rulemaking, Federal Trade Commission, 67 Fed. Reg. 4492 at 4522 (January 30, 2002) (FTC Notice). *? Bach telemarketing company can set its predictive dialer software for a predetermined abandonment rate (i.e., the percentage of hang-up calls the system will allow). The higher the abandonment rate, the higher the number of hang-up calls. High abandonment rates increase the probability that a customer will be on the line when the telemarketer finishes each call. It also, however, increases the likelihood that the telemarketer will still be on a previously placed call and not be available 599a predictive dialers allows telemarketers to devote more time to selling products and services rather than dialing phone numbers, but the practice inconveniences and aggravates consumers who are hung up on. Despite a general ban on faxing unsolicited advertisements,” and aggressive enforce- ment by the Commission,” faxed advertisements also have proliferated, as facsimile service providers (or “fax broad- casters”) enable sellers to send advertisements to multiple destinations at relatively little cost. These unsolicited faxes impose costs on consumers, result in substantial inconven- ience and disruption, and also may have serious implications for public safety.*° when the consumer answers the phone, resulting in “dead air” or a hang- up. See FTC Notice, 67 Fed. Reg. at 4523. * 47 U.S.C. § 227(b)(1)(C) and 47 C.F.R. § 64.1200a)(3). The Commission or the Commission’s Enforcement Bureau have issued forfeiture orders totaling $1.56 million for violations of the TCPA’s prohibition on unsolicited fax advertisements. The Commission has also proposed a $5,379,000 forfeiture against a fax broadcaster. See Fax.com, Inc. Apparent Liability for Forfeiture, Notice of Apparent Liability for Forfeiture, 17 FCC Red 15927 (2002) (Fax.com NAL), stayed Missouri v. American Blast Fax, No. 4:00CV933SNL (E.D. Mo. Aug. 29, 2002). The Enforcement Bureau has also issued 189 citations for such prohibited faxes. For a description of the Commission’s enforcements actions involving the TCPA, see . Under section 503 of the Act, the Commission is required in an enforcement action to issue a warning citation to any violator that does not hold a Commission authorization. Only if the non-licensee violator subsequently engages in conduct described in the citation may the Commission propose a forfeiture, and the forfeiture may only be issued as to the subsequent violations. See 47 U.S.C. §§ 503(b)(5), (b)(2)(C). * See, e.g., Fax.com NAL, 17 FCC Red at 15932-33, para. 9, which describes a medical doctor’s complaint about unsolicited fax advertise- ments he received on a line that is reserved for the receipt of patient medical data. ‘e } @ 3 ? : 4 = : 600a D. FTC National Do-Not-Call Registry and Telemarketing Rules 9. In response to these changes in the marketplace, the FTC recently amended its own rules to better proiect consumers from deceptive and abusive telemarketing practices, including those that may be abusive of consumers’ interest in protecting their privacy. On December 18, 2002, the FTC released an order adopting a national do-not-call registry to be maintained by the federal government to help consumers avoid unwanted telemarketing calls. In that order, the FTC also adopted other changes to its Telemarketing Sales Rule (TSR), which are based on its authority under the 1994 Telemarketing Con- sumer Fraud and Abuse Prevention Act. The FTC’s amended TSR supplements its current company-specific do- not-call rules with a provision allowing consumers to stop unwanted telemarketing calls by registering their telephone numbers with a national do-not-call registry at no cost. Telemarketers will be required to pay fees to access the database and to “scrub” their calling lists of the telephone numbers in the database.*’ The FTC's list will not cover those entities over which it has no jurisdiction, including common cartiers, banks, credit unions, savings and loans, companies engaged in the business of insurance, and airlines.** It also © See FTC Order, 68 Fed. Reg. at 4580. The FTC adopted its Telemarketing Sales Rule, 16 C.F.R. Part 310, on August 16, 1995, pursuant to the Telemarketing Consumer Fraud and Abuse Prevention Act (Telemarketing Act), 15 U.S.C. §§ 6101-6108. The Telemarketing Act, which was signed into law on August 16, 1994, directed the FTC to issue a rule prohibiting deceptive and abusive telemarketing acts or practices. FTC Notice, 67 Fed. Reg. at 4492-93. — “Scrubbing” refers to comparing a do-not-call list to a company’s call list and eliminating from the call list the telephone numbers of consumers who have registered a desire not to be called. 1 Despite these jurisdictional limitations, the FTC stated that it can reach telemarketing activity conducted by non-exempt entities. Therefore, it maintains that when an exempt financial institution, telephone company, 601a will not apply to intrastate telemarketing calls. In addition, the FTC concluded that- nonprofit organizations are not subject to the national do-not-call list; however, they must, when using for-profit telemarketers, comply with the com- pany-specific do-not-call rules.*° 10. The FTC indicated in its order that it does not intend the national do-not-call registry to preempt state do-not-call laws. Instead, i* will allow all states, and the DMA if it so desires, to download into the national registry the telephone numbers of consumers on their lists. The FTC anticipates a relatively short transition period leading to one harmonized registry, and said that it will work with the states to coordi- nate implementation, minimize duplication, and maximize efficiency for consumers.*° The FTC has also announced that online registration for the do-not-call registry v.ill be avail- able nationwide on or around July 1, 2003. Telephone registration will be open on the same date for consumers in States west of the Mississippi River and open to the entire insurance company, airline, or nonprofit entity conducts its telemarketing campaign using a third-party telemarketer not exempt from the amended TSR, then that campaign is subject to the provisions of the TSR. See FTC Order, 68 Fed. Reg. 4589 at 4587. °° The FTC’s national do-not-call registry and other amendments to the TSR have been challenged on grounds that a national do-not-call registry violates the First Amendment and that the FTC exceeded its statutory authority under the Telemarketing Consumer Fraud and Abuse Prevention Act. See Mains.ream Marketing Services, Inc. v. F TC, No. 03-N-0184 (D. Colo. filed Jan. 29, 2003). See also U.S. Security et al v. FTC, Civ. No. 03-122-W (W.D. Okla. filed Jan. 29, 2003). On March 26, 2003, the U.S. District Court for the Western District of Oklahoma denied plaintiffs’ Motion for Preliminary Injunction of the FTC’s abandoned call rules, stating that plaintiffs “have failed to show a substantial likelihood that they will prevail on the merits of their challenges to the Final Rule.” See U.S. Security et al. vs. FTC, No. Case CIV-03-122-W (W.D. Okla. March 26, 2003). *° See FTC Order, 68 Fed. Reg. 4580 at 4641. POs AAR TAA AY, 1 BARAT Std oe BB A Pian | AY oe 602a country on July 8, 2003. On October 1, 2003, the FTC and the States will begin enforcing the national do-not-call provisions of the amended TSR.” !! The FTC also adopted new rules on the use of predict- ti tialers and the transmission of caller ID information. The um ued TSR prohibits telemarketers from abandoning any © vund telephone call, and provides in a safe harbor pro ion, that to avoid liability, a telemarketer must, among sc’ +’ other requirements, abandon no more than three perceni ot uii calls answered by a person.” Telemarketers will also be required to transmit the telephone number, and, when made available by the telemarketer’s carrier, the name of the telemarketer, to any caller identification service.” E. State Do-Not-Call Lists 12. A growing number of states have also adopted or are considering legislation to establish statewide do-not-call lists. To date, 36 states have passed “do-not-call” statutes, “* and *' See FTC press materials at (accessed June 3, 2003). *2 See FTC Order, 68 Fed. Reg. 4580 at 4641-45; 16 C.F.R. §§ 310.4 (b)(1)(iv) and 310.4(b)(4). 3 See FTC Order, 68 Fed. Reg. 4580 at 4623-28; 16 C.F.R. § 310.4 (a)(7). 6 Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, New Jersey, New Mexico, New York, North Dakota, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont, Wisconsin and Wyoming have no-call laws. Of these states, Connecticut, Maine, Michigan, Pennsylvania, Vermont, and Wyoming require telemarketers to use the DMA’s Telephone Preference Service (TPS) list. See infra note 47. Alaska’s statute requires telephone companies to place a black dot in the telephone directory by the names of consumers who do not wish to receive telemarketing calls. 603a numerous others have considered similar bills.*” Consumers remain enthusiastic about do-not-call lists, as they continue to register their telephone numbers with state lists.*° State do- not-call lists vary in the methods used for collecting data, the fees charged, and the types of entities required to con:ply with their restrictions. Some state statutes provide for state- managed do-not-call lists, while others require telemarkcic.’s to use the Direct Marketing Association’s Telephone Preference Service.*’ In some states, residents can register for *> States that are considering laws to create state-run do-not-call lists are Delaware, District of Columbia, Hawaii, lowa, Maryland, Michigan, Nebraska, Nevada, North Carolina, Ohio, Rhode Island, South Carolina, Washington, and West Virginia. 6 In Indiana, more than 1,000,000 residential telephone numbers have been submitted to the State’s do-not-call list. In Missouri, more than 1,000,000 residential telephone numbers are now enrolled in the State’s do-not-call database, placing approximately 40% of the State’s house- holds on that State’s do-not-call list. In Tennessee, 762,000 telephone numbers have been registered, representing an estimated 33% cof al! households. In New York, the number of residential telephone numbers enrolled on that State’s do-not-call list is nearly 2 million. Connecticut’s do-not-call list contains nearly 400,000 telephone numbers, and Georgia’s is nearing 360,000. Colorado has 977,000 registered phone numbers, almost half of the number of residential phone lines in the state. Texas has more than 782,000 registered phone lines. Kentucky has 740,000 registered phone lines, representing 46% of Kentucky residents. The Kansas list contains more than 367,000 phone lines. Approximately 1,600,000 residents enrolled in Pennsylvania’s registry in less than six weeks. See NAAG Comments at 6, n.5. * See, e.g., Wyoming (Wyo. Stat. Ann. § 40-12-301) and Maine (Me. Rev. Stat. Ann. tit. 32, § 14716 (2003). Established in 1985, the DMA’s Telephone Preference Service (TPS) is a list of residential telephone numbers for consumers who do not wish to receive telemarketing calls. The DMA requires its members to adhere to the list. Telemarketers who are not members of DMA are not required to use the list, but may purchase the TPS for a fee. See (accessed April 8, 2003). itactinte Rae Cone: SSA RIG le a Th Pe OT ASP ee eee 604a the do-not-call lists at no charge.” In others, telephone subscribers must pay a fee. For example, Georgia requires its residents to pay $5 to place their phone numbers on the do- not-call list for a period of two years.” To register with the Texas do-not-call list, residents must pay $2.25 for three years.’ In most states, telemarketers must pay to access the state do-not-call list if they wish to call residents in that state; however, such access fees vary from state to state. In Oregon, telemarketers must pay $120 per year to obtain the state do- not-call list;°' in Missouri, the fee is $600 per year, although telemarketers can pay less if they want only numbers from certain area codes.” The state “do-not-cali” statutes provide varying exceptions to their requirements. 13. As state legislatures continue to consider their own do- not-call laws, others have, in anticipation of the national do- not-call registry, begun the process of harmonizing their lists with the national list. The Illinois legislature, for example, passed a bill to reconcile differences between the state and federal no-call laws. The measure would make the FTC’s national no-call list the official state list for Illinois and would direct the Illinois Commerce Commission to work with local exchange providers on how to inform consumers about the existence of the list.°’ California’s Attorney General’s office 8 See, e.g., Connecticut (Conn. Gen. Stat. Ann. § 42-288a); Indiana (H.B. 1222, to be codified at Ind. Code Ann. § 24.4.7); Missouri (Mo. Rev. Stat. § 407.1098); and Tennessee (Tenn. Code Ann. § 65-4-404 (2002)); see also rules at Tenn. Comp. R & Regs. Chap. 1220-4-11). 49 See Ga. Code Ann. § 46-5-27 (2002); see also rules at Ga. Comp. R & Regs. R. 515-14-1. © Soe H.B. 472. to be codified at Tex. Bus. & Com. Code Ann. § 43.001. *| See Or. Rev. Stat. § 646.574. 52 See Mo. Rev. Stat. § 407.1098. 3 See Illinois H.B. 3407. 60Sa is allowing residents to pre-register for the national registry on the internet, and says it will deliver the pre-registered California telephone numbers to the FTC as soon as it is ready to receive them.” The FTC indicated in its order that it will take some time to harmonize the various state do-not-call registries with the national registry.» While some states will be able to transfer their state “do-not-call” registration infor- mation by the time telemarketers first gain access to the national registry, other states may need from 12 to 18 months to achieve those results. F. Notice of Proposed Rulemaking 14. On September 18, 2002, the Commission released a Memorandum Opinion and Order and Notice of Proposed Rulemaking seeking comment on whether the Commission’s rules need to be revised in order to carry out more effectively Congress’s directives in the TCPA.”’ Specifically, we sought comment on whether to revise or clarify our rules governing unwanted telephone solicitations’ and the use of automatic telephone dialing systems,” prerecorded or artificial voice messages,”’ and telephone facsimile machines.” We also * See (accessed April 8, 2003). *° See FTC Order, 68 Fed. Reg. 4580 at 4641. *© See FTC Order, 68 Fed. Reg. 4580 at 4641. 7 Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Notice of Proposed Rulemaking (NPRM) and Memorandum Opinion and Order (MO&O), 17 FCC Rcd 17459, CG Docket No. 02-278 and CC Docket No. 92-90 (2002) (2002 Notice). In the MO&O, the Commission closed and terminated CC Docket No. 92-90 and opened a new docket to address the issues raised in this proceeding. *8 2002 Notice, 17 FCC Red at 17468-71, paras. 13-17. *? 2002 Notice, 17 FCC Red at 17473-76, paras. 23-27. ®° 2002 Notice, 17 FCC Red at 17477-81, paras. 30-35. °! 2002 Notice, 17 FCC Red at 17482-84, paras. 37-40. OF eT te 606a sought comment on the effectiveness of company-specific do- not-call lists.” In addition, we sought comment on whether to revisit the option of establishing a national do-not-call list™ and, if so, how such action might be taken in conjunction with the FTC’s proposal to adopt a national do-not-call list and with various state do-not-call lists.“ Lastly, we sought comment on the effect propostu policies and rules would have on small business entities, including inter alia those that engage in telemarketing activities and those that rely on telemarketing as a method to solicit new business.” Follow- ing the FTC’s announcement that it had amended its TSR, the Commission extended the reply comment period in this proceeding to ensure that all interested parties had ample opportunity to comment on possible Commission action in light of the FTC’s new rules.” G. Do-Not-Call Implementation Act 15. On March 11, 2003, the Do-Not-Call Act was signed into law, authorizing the FTC to collect fees from telemarketers for the implementation and enforcement of a do-not-call registry. The Do-Not-Call Act also requires the FCC to issue a final rule in its ongoing TCPA proceeding within 180 days of enactment, and to consult and coordinate with the FTC to “maximize consistency” with the rule promulgated by the FTC. Congress recognized that because the FCC is bound by 62 9902 Notice, 17 FCC Red at 17468-71, paras. 13-17. 63 9002 Notice, 17 FCC Red at 17487-96, paras. 49-66. 64 coe FTC Notice, 67 Fed. Reg. 4492 and FTC Order, 68 Fed. Reg. 4580. 65 9902 Notice, 17 FCC Red at 17497-501, paras. 70-80. ® On December 20, 2002, the Commission extended its reply comment period until January 31, 2003. See Consumer & Governmental Affairs Bureau Announces An Extension of Time To File Reply Comments on the Telephone Consumer Protection Act (TCPA) Rules, Public Notice, DA 02-3554 (rel. Dec. 20, 2002). 607a the TCPA, it would not be possible for the FCC to adopt rules that are idew*‘eal to those of the FTC in every instance.’ In those inst...ces “here such inconsistencies exist, Congress stated that either the FTC or FCC must address them admini- stratively or Congress must address them legisla-tively.” The FTC’s recent rule changes expand that agency’s regulation of telemarketing activities and require coordination to ensure consistent and non-redundant federal enforcement. The FCC’s jurisdiction over telemarketing practices, how-ever, is significantly broader than the FTC’s. The FCC staff intends to negotiate a Memorandum of Understanding be-tween the respective agencies to achieve an efficient and effective enforcement strategy that will promote compliance with federal regulations. The FCC is required to report to Congress within 45 days after the issuance of final rules in this proceeding, and annually thereafter.” The Commiss- ion released a Further Notice of Proposed Rulemaking on March 25, 2003, seeking comment on the Do-Not-Call Act’s requirements.” By this Order, we are complying with Congress’s directives to issue final rules in our TPCA proceeding within 180 days of the Do-Not-Call Act’s enactment. Furthermore, we have consulted and coordinated ®’ See H.R. REP. No. 108-8 at 4 (2003), reprinted in 2003 U.S.C.C.A.N, 688, 671. © td. The Do-Not-Call Act provides that the FTC and FCC shall each transmit a report to Congress which shall include: “(1) an analysis of the telemarketing rules promulgated by both the Federal Trade Commission and the Federal Communications Commission; (2) any inconsistencies between the rules promulgated by each such Commission and the effect of any such inconsistencies on consumers, and persons paying for access to the registry; and (3) proposals to remedy any such inconsistencies.” See Do-Not-Call Act, Sec. 4(a). ” Rules and Regulations Implementing the Telephone Consumer Pro- tection Act of 1991, CG Docket No. 02-278, Further Notice of Proposed Rulemaking, FCC 03-62 (rel. March 25, 2003) (Further Notice). SOK a a 608a with the FTC to adopt a national do-not-call list and other telemarketing rules that maximize consistency with the FTC’s amended Telemarketing Sales Rule.’’ Pursuant to the requirements of the Do-Not-Call Act, the Commission will note the remaining inconsistencies between the FCC and FTC rules in the report to Congress. The Commission will also continue to work, within the framework of the TCPA, to maximize consistency with the FTC’s rules. Ill. NATIONAL DO-NOT-CALL LIST A. Background 16. Section 227. The TCPA requires the Commission to protect residential telephone subscribers’ privacy rights to avoid receiving telephone solicitations to which they object.” In so doing, section 227(c)(1) directs the Commission to “compare and evaluate alternative methods and procedures” including the use of electronic databases and other alterna- tives in protecting such privacy rights.”’ Pursuant to section 227(c)(3), the Commission “may require the establishment and operation of a single national database to compile a list of telephone numbers of residential subscribers who object to receiving telephone solicitations, and to make that compiled list and parts thereof available for purchase.””* If the Com- mission determines that adoption of a national database is warranted, section 227(c)(3) enumerates a number of specific ”! See Comments filed by the FTC in response to the Commission’s Further Notice. See also NARUC Winter Committee Meetings, February 23-26, 2003, at which FCC and FTC staff discussed the national do-not- call registry and ways to harmonize federal and state programs, Letter from James Bradford Ramsay, NARUC General Counsel, to FCC filed March 14, 2003 (NARUC ex parte). ” 47 U.S.C. § 227(c)(1). 47 U.S.C. § 227(c)(1A). 47 U.S.C. § 227(c)(3). 609a statutory requirements that must be satisfied.” Additionally, section 227(c)(4) requires the Commission to consider the different needs of telemarketers operating on a local or regionnal basis and small businesses.” In addition to our general authority over interstate communications, section 2(b) of the Communications Act specifically provides the Commission with the authority to apply section 227 to intrastate communications.” 17. TCPA Order and 2002 Notice. The Commission initially considered the possibility of adopting a national do- not-call database in the 1992 TCPA Order. At that time, the Commission declined to adopt a national do-not-call registry citing concerns that such a database would be costly and difficult to establish and maintain in a reasonably accurate form.”* The Commission noted that frequent updates would be required, regional telemarketers would be forced to pur- chase a national database, costs might be passed on to con- sumers, and the information compiled could present problems in protecting consumer privacy. The Commission opted instead to implement an alternative approach requiring com- mercial telemarketers to maintain their own company-specific lists of consumers who do not wish to be called.” ” See 47 U.S.C § 227(c)(3)(A)-(L). © 47 U.S.C. § 227(c)(4). ” 47 U.S.C. § 152(b). See also Texas v. American Blast Fax, 121 F. Supp. 2d 1085 at 1087-89 (W.D. Tex. 2000), Minnesota v. Sunbelt Communications and Marketing, Civil No. 02-CV-770 (D. Minn. Sept. 4, 2002). ™ 1992 TCPA Order, 7 FCC Red at 8760, para. 14. At that time commenters estimated the start-up and operational costs for a national database in the first year could be as high as $80 million. /d. at 8758, para. I 1. ” See infra paras. 86-96 for a discussion of the company-specific do- not-call requirements. 610a 18. In the 2002 Notice, the Commission sought comment on whether to revisit its 1992 determination not to adopt a national do-not-call list." As evidenced by the persistent consumer complaints regarding unwanted telephone solicita- tions, the Commission concluded that the time was ripe to revisit this issue as part of its overall review of the TCPA rules.*' In so doing, the Commission noted that the increasing number of telemarketing calls over the last decade, along with the increased use of various technologies, such as predictive dialers, to contact consumers, has heightened public concern about unwanted telemarketing calls and control over the telephone network.” The Commission also noted that tech- nological innovations may make the creation and mainte- nance of a national do-not-call database more viable than in the past. Therefore, the Commission sought comment on whether a national do-not-call list should be adopted and, if so, how such a list could be implemented in the most efficient and effective manner for consumers, businesses, and regula- tors. The Commission noted that a national list would provide consumers with a one-step method for preventing unwanted telemarketing calls. This option could be less burdensome for consumers than repeating requests on a case-by-case basis, particularly in light of the number of entities that conduct 80 5902 Notice, 17 FCC Red at 17487-96, paras. 49-66. On December 20, 2002, the Commission extended its reply comment period to allow parties an opportunity to comment on the FTC's order establishing a national do-not-call database for those entities over which it has jurisdiction. See Consumer & Governmental Affairs Bureau Announces An Extension of Time To File Reply Comments on the Telephone Consumer Protection Act (TCPA) Rules, Public Notice, DA 02-3554 (rel. Dec. 20, 2002). 5! 5902 Notice, 17 FCC Red at 17487-88, para. 49 (also noting that the FTC had received over 40,000 comments in response to its Notice on telemarketing). » 82 5002 Notice, 17 FCC Red at 17464, para. 7, n.34 (citing estimate that as many as 104 million outbound calls are made every day). 6lla telemarketing today. In particular, the Commis-sion sought comment on: (1) whether the cost, accuracy, and privacy concerns noted in 1992 remain relevant today; (2) the effectiveness of the company-specific list in protecting consumer privacy rights; (3) changes in the technology or the marketplace that might influence this analysis; (4) the consti- tutionality of a national database; (5) satisfying the statutory requirements of section 227(c); and (6) the potential reiation- ship of a national database with the FTC’s proposed rules and various state-adopted do-not-call registries.*° 19. The issues relating to the adoption and implementation of a national do-not-call registry generated extensive com- ment from consumers, businesses, and state governments. Individual consumers and consumer interest groups over- whelmingly support the adoption of a national do-not-call list.** In fact, several commenters support more restrictive alternatives such as adopting an “opt-in” list for those con- sumers that wish to receive telephone solicitations.” Com- menters supporting a national do-not-call list cite the numerous and increasing receipt of unwanted telephone solicitation calls; inadequacies of the company-specific approach due to the failure of many telemarketers to honor do-not-call requests or, the impossibility of relaying such requests in the case of “dead air” or hang-up calls initiated by predictive dialers; the burdens of making do-not-call requests for every such call, particularly on the elderly and individuals with disabilities; and the costs imposed on consumers in acquiring technologies to reduce the number of unwanted 83 See 2002 Notice, 17 FCC Red at 17487-96, paras. 49-66. 84 ' See, .g., Maureen Matthews Comments; Gloria Toso Comments; Shirley A. Weaver Comments. See also ACUTA Comments at 2; NACAA Comments at 2; Telecommunications for the Deaf Comments at 4; NJ Ratepayer Further Comments at 2. 8° See, e.g., EPiC Comments at 2-5; Private Citizens, Inc. Comments at 3: Teresa Wilkie Comments; Benjamin Philip Johnson Comments. 612a calls.*° Many such commenters argue that unwanted tele- phone solicitations have reached the point of harassment that constitutes an invasion of privacy within their homes.’ Others indicate that consumers are often frightened by dead- air and hang-up calls generated by predictive dialers believing they are being stalked.*® Several consumers indicate that they no longer answer their telephones or they disconnect the phone during the day to avoid telemarketing calls. These commenters support the adoption of a one-step option for those consumers that desire to reduce the number of unwanted solicitation calls that they receive each day. 20. Many consumers indicate that their state lists have reduced the number of unwanted calls that they receive and express concern that any federal do-not-call registry not undermine the protections afforded by the state do-not-call laws.*? Assuming that a national do-not-call database (is adopted, commenters encourage the Commission to work closely with the FTC to adopt a single national registry that operates as consistently and efficiently as possible for all 86 see, e.g., Terry L. Krodel Comments (disabled individual has diffi- culty answering phone); Brian Lawless (contends that consumers should not be forced to pay additional charges to stop telemarketing calls); J. Raymond de Varoza Comments (telemarketers hang up when he requests to be added to do-not call list); Mandy Burkart Comments (elderly grandmother targeted by telemarketers). See also AARP Comment: at | (noting that elderly consumers are often the subject of telemarketing fraud). 87 See, e.g., Emily Malek Comments, Lester D. McCurrie Comments, Andrea Sattier Comments; Sanda S. West Comments (receives aS many as 20 telemarketing calls per day). 88 Edwin Bailey Hathaway Comments; Cynthia Stichnoth Comments. ® See, e.g., Brenda J. Donat Comments (cancer patient appreciates reduction in calls due to Indiana Telephone Privacy Act); Alice and Bill Frazee Comments; Tammy Puckett Comments (Indiana law provides quiet for terminally ill family member). 613a interested parties.” State regulators generally support a national data-base provided that it does rot preempt state do-not-call rules or preclude the states from enforcing these laws.”’ 21. Industry representatives generally oppose the adoption of a national do-not-call database, but some support this approach provided the Commission adopts an established business relationship exemption and preempts state lists.” These commenters contend that the concerns noted by the Commission in 1992, including the costs, accuracy, and privacy issues involved in creating and maintaining such a database remain valid today.” In addition, industry com- menters argue that a national do-not-call database is not necessary because the current rules are sufficient to protect consumer privacy rights.” Several note the economic impor- tance of telemarketing and indicate that a national registry would have severe economic consequences for their ” See, e.g., Verizon Comments at 2; Bank of America Further Comments at 2. si See, e.g, NAAG Comments at 8-13; New York State Consumer Protection Board Comments at 7; Ohio PUC Comments at 3-7; Texas PUC Comments at 10. » See, e.g., Bank of America Comments at 2-4 (endorse national list provided it establishes a uniform national standard and retains established business relationship); Cox Enterprises Comments at 4-9 (would not oppose national list if established business relationship exemption is retained); Sprint Comments at 11-12 (state lists should be preempted); Verizon Wireless Cominents at 4-6 (support national list if state lists preempted and established business relationship retained). See also DMA Further Comments at 3 (should preempt states); DirectTV Further Comments at 3 (preempt); Nextel Further Commeniz at 8. 3 See, e.g., MBA Comments at 2; NAII Comments at 2; SBC Commeiits et 6: WorldCom Comments at 17. See, e.x, ABA Comments at 7; BellSouth Reply Comments at 5. 614a industry.”> Several industry representatives request specific exemptions from the national do-not-call requirements for newspapers, magazines, insurance companies and small busi- nesses.” These commenters contend that they provide valuable goods or services to the public and _ that telemarketing is the most cost-effective means to promote those services.”” Representatives of various non-profit organi- zations oppose any extension of the national do-not-call rules to their organizations.” Several commenters argue that a national registry would impose an unconstitutional restriction on commercial speech.” They urge more stringent enforce- ment of the Commission’s current rules. 22. FTC Order. On December 18, 2002, the FTC released an order establishing a national do-not call registry." The FTC cited an extensive record that revealed that the current rules on telemarketing were not sufficient to protect consumer privacy. The FTC’s do-not-call rules provide several options for consumers to manage telemarketing calls—one of which is to allow consumers who do not want to receive telephone solicitation calls to register their telephone number with a national do-not-call database.'"' The FTC indicates that - See, e.g., Dial America Comments at 15-18; Technion Comments at 3-4; Vector Comments at 14-15. ™ See, e.g., MPA Comments at 13-14; NAA Comments at 12-14; Seattle Times Comments at 2; Vector Comments at 14-15. 7 See, e.g., MPA Comments at 4, 13-14; NAA Commenis at 13; PLP Comments at !. 7 See, e.g., March of Dimes Comments at 2; Leukemia and Lymphoma Society Comments; Special Olympics Hawaii Comments at 2. ” See, e.g., ATA Comments at 58-91; SBC Comments at 6, 16-17; WorldCom Comments at 19-30. 1 See FTC Order, 68 Fed. Reg. at 4628-33. 10! The FTC has awarded a contract to AT&T Government Solutions for $3.5 million to create the national registry of consumers who do not want to be contacted by telemarketers. 615a consumers may do so at no cost by two methods: either through a toll-free call from the phone number that they wish to register or over the Internet.'°’ Consumer registrations will remain valid for a period of five years, with the registry purged on a monthly basis of numbers that have been discon- nected or reassigned. Each seller engaged in tele-marketing or on whose behalf telemarketing is conducted will be required to pay an annual fee for access to the database based on the number of area codes of data that the company wishes to access.'°? The only consumer information that telemarketers will receive from the national registry is the registrants’ telephone numbers. The FTC’s rules prohibit the sale, pur- chase, rental, lease, or use of the national registry for any pur- pose other than compliance with the do-not-call provision.“ 23. The FTC’s national do-not-call rules will not apply to those entities over which it has no jurisdiction, including common carriers, banks, insurance companies, and airlines. The FTC rules also will not apply to intrastate telemarketing calls. In addition, the FTC exempts certain types of calls from ? The FTC indicates that calls will be answered by an Interactive Voice Response (IVR) system. Consumers will be directed to enter their telephone numbers. That number will then be checked against an automatic number information (ANI) that is transmitted with the call. Consumers will alsc ve able to verify or cancel their registration in the same way. See FTC Order, 68 Fed. Reg. at 4638-39. 103 “ As discussed herein, the terms “seller” and “telemarketer” may refer to the same entity or separate entities. The “telemarketer” is the entity that actually initiates the telephone call. The “seller” is the entity on whose benalf the telephone call is being made. See amended 47 C.F.R. § 64.1200(f)(5) and (6). Sellers may often hire telemarketing entities to contact consumers on their behalf. See amended 47 C.F.R. § 64.1200(f)(7) for the definition of “telemarketing.” Pursuant to the FTC’s do-not-call program, each seller must pay for access to the do-not- call database., Thus, telemarketing entities cannot share do-not-call data among various client sellers. 1 See 16 C.F.R. § 310.4(b)(2). 616a the national do-not-call provisions. Specifically, the FTC has established exemptions for calls made by or on behalf of charitable organizations,'” calls to consumers with whom the seller has an “established business relationship”'”’ (as long as the consumer has not asked to be placed on the seller’s company-specific do-not-call list), and calls to businesses. The FTC also decided to retain the provision of its rules that allows sellers to obtain the express agreement of consumers who wish to receive calls from that seller. The FTC requires that such express agreement be evidenced by a signed, written agreement. As a result, consumers registered on the national do-not-call list may continue to receive calls from those sellers that have acquired their express agreement. The FTC also adopted a “safe harbor” from liability under its do-not- call provisions concluding that sellers or telemarketers that have made a good faith effort to provide consumers with an opportunity to exercise their do-not-call rights should not be liable for violations that result from an error.'°’ The FTC clarified that because wireless subscribers are often charged for the calls they receive, they will be allowed to register 105 The FTC has concluded, however, that calls on behalf of charitable organizations will be subject to the company specific do-not-call provisions. See FTC Order, 68 Fed. Reg. at 4629. '6 The FTC defines an “established business relationship” as a rela- tionship between a seller and consumer based on: (1) the consumer’s purchase, rental, or lease of the seller’s goods or services or a financial! transaction between the consumer and seller, within the eighteen months immediately preceding the date of a telemarketing call; or (2) the con- sumer’s inquiry or application regarding a product or service offered by the seller, within the three months immediately preceding the date of a telemarketing call. 16 C.F.R. § 310.2(n). Regarding the interplay between the established business relationship and do-not-call rules, the FTC concluded that if the consumer continues to do business with the seller after asking not to be called, the consumer cannot be deemed to have waived their company-specific do-not-call request. F7C Order, 68 Fed. Reg. at 4634. 07 See 16 C.F.R. § 310.4(b)(3). 617a their wireless telephone numbers on the national do-not- call database. 24. The FTC concluded that it does not intend its rules establishing a national do-not-call registry to preempt state do-not-call laws. The FTC indicated its desire to work with those states that have enacted such laws, as well as this Commission, to articulate requirements and procedures dur- ing what it anticipates will be a relatively short transition period leading to one harmonized registry system. The FTC has articulated a goal whereby consumers, in a single trans- action, can register their requests not to receive calls to solicit sales of goods or services, and sellers and telemarketers can obtain a single list to ensure that they do not contravene consumer requests not to be called.' B. Discussion 25. As discussed in greater detail below, we conclude that the record compiled in this proceeding supports the establishment of a single national database of telephone numbers of residential subscribers who object to receiving telephone solicitations. Consistent with the mandate of Con- gress in the Do-Not-Call Act, the national do-not-call rules that we establish in this order “maximize consistency” with these of the FTC."” The record clearly demonstrates wide- spread consumer dissatisfaction with the effectiveness of the current rules and network technologies available to protect '°* FTC Order, 68 Fed. Reg. at 4638-41. See also H.R. REP. NO. 108-8 at 3 (2003), reprinted in 2003 U.S.C.C.A.N. 688, 670 (“[i]t is the strongly held view of the Committee that a national do-not-call list is in the best interest of consumers, businesses and consumer protection authorities. This legislation is an important step towar (noting development of software that allows telemarketers to circumvent the telezapper and other blocking devices). 4 See, e.g., Leslie Price Comments (telezapper ineffective); Josephine Presley Comments (call blocking ineffective). j i % . 4 ‘| 632a that reliance on a solution that places the cost of reducing the number of unwanted solicitation calls entirely on the consumer is inconsistent with Congress’ intent in the TCPA.'”’ For the reasons outlined in the 1992 TCPA Order, we also decline to adopt special area codes or prefixes for telemarketers.'“* We believe this option is costly for telemar- keters that would be required to change their telephone numbers and administratively burdensome to implement. We also decline to adopt special directory markings of area white page directories because it would require telemarketers to purchase and review thousands of local telephone directories, at great cost to the telemarketers.” We also note that telemarketers often compile solicitation lists from many sources other than local telephone directories. In addition, such directories do not include unlisted or unregistered telephone numbers and are often updated infrequently. We also note that the record in this proceeding provides little support for this option. 40. We now review the other requirements of section 227(c)(1). As required by section 227(c)(1)(B), we have evaluated AT&T Government Solutions, the entity selected by the FTC to administer the national database, and conclude that it has the capacity to establish and administer the national database.'® Congress has reviewed and approved funding for the implementation of that database. We believe that it is '47 For. example, section 227(c) prohibits consumers from being charged to place their number on a national do-not-call list. See 47 U.S.C. § 227(c)(3)(E). 148 Soe 1992 TCPA Order, 7 FCC Red at 8761-62, paras. 16-17. 9 See 47 U.S.C. § 227(c)(4\(C) (requiring the Commission to consider “whether the needs of telemarketers operating on a local basis could be met through special markings of area white page directories”). This conclusion is consistent with the Commission’s conclusion in 1992. 150 coe Letter from Michael Del Casino, AT&T, to Marlene Dortch, FCC, dated March 18, 2003. 633a unnecessary to evaluate any other such entities at this time. As discussed in greater detail below, we have considered whether different methods and procedures should apply for local telephone solicitations and small businesses as required by section 227(c)(1)(C).'*' For the reasons outlined below, we conclude that the national do-not-call database takes into consideration the costs of those conducting telemarketing on a local or regional basis, including many small businesses. In particular, we note that the national do-not-call database will permit access to five or fewer area codes at no cost to the seller. Pursuant to section 227(c)(1)(D), we have considered whether there is a need for additional authority to further restrict telephone solicitations. We conclude that no such authority is required at this time.'*’ Pursuant to the Do-Not- Call Act, the Commission must report to Congress on an annual basis the effectiveness of the do-not-call registry. Should the Commission determine that additional authority is required over telephone solicitations as part of that analysis; the Commission will propose specific restrictions pursuant to that report. As required by section 227(c)(1)(E), we have developed regulations to implement the national do-not-call database in the most effective and efficient manner to protect consumer privacy needs while balancing legitimate tele- marketing interests. 41. As noted above, the FTC’s decision to adopt a national do-not-call list is currently under review in federal district 5! See infra para. 54. '? This finding is dependent, in large part, on conclusions that we have reached elsewhere in this order. For example, our conclusion that the McCarran-Ferguson Act does not necessarily prohibit the application of the national registry to insurance companies; rather, the implications of the McCarran-Ferguson Act will need to be evaluated on a case-by-case basis. The Commission may seek further clarification or authority from Congress as necessary to support these conclusions. 634a court.'*? Because Congress has approved funding for the administration of the national list only for the FTC, this Commission would be forced to stay implementation of any national list should the plaintiffs prevail in one of those proceedings. 2. Exemptions 42. Established Business Relationship. We agree with the majority of industry commenters that an exemption to the national do-not-call list should be created for calls to consumers with whom the seller has an established business relationship.’ We note that section 227(a)(3) excludes from the definition of telephone solicitation calls made to any person with whom the caller has an established business relationship.'** We believe the ability of sellers to contact existing customers is an important aspect of their business plan and often provides consumers with valuable information regarding products or services that they may have purchased from the company. For example, magazines and newspapers may want to contact customers whose subscriptions have or soon will expire and offer new subscriptions. This conclusion is consistent with that of the FTC and the majority of states that have adopted do-not-call requirements and considered this issue. As discussed in further detail below, we revise the definition of an established business relationship so that it is limited in duration to eighteen (18) months from any purchase or transaction and 3 months from any inquiry or application.'”° See supra note 39. - See, e.g., NCTA Comments at 6; NAA Comments at 14; MBA Further Comments at 4. '5 47 U.S.C. § 227(a)(3). '56 See amended 47 C.F.R. § 64.1200(f)(3). 635a 43. To the extent that some consumers oppose this exemption, we find that once a consumer has asked to be placed on the seller’s company-specific do-not-call list, the seller may not call the consumer again regardless of whether the consumer continues to do business with the seller. We believe this determination constitutes a reasonable balance between the interests of consumers that may object to such calls with the interests of sellers in contacting their customers. This conclusion is also consistent with that of the FTC. 44. Prior Express Permission. In addition to the established business relationship exemption, we conclude that sellers may contact consumers registered on a national do-not-call list if they ‘have obtained the prior express permission of those consumers. We note that section 227(a)(3) excludes from the definition of telephone solicitation calls to any person with “that person’s prior express invitation or permission.”"*’ Consistent with the FTC’s determination, we conclude that for purposes of the national do-not-call list such express permission must be evidenced only by a signed, written agreement between the consumer and the seller which states that the consumer agrees to be contacted by this seller, including the telephone number to which the calls may be placed.'** Consumers registered on the national list may wish to have the option to be contacted by particular entities. '57 47 U.S.C. § 227(a)(3). See also H.R. REP. NO. 102-317 at 13 (1991) (suggesting that Congress did not believe such prior express permission need be in writing) We believe that in discussing the form in which prior express permission must be given, Congress was addressing an exemption to the definition of telephone solicitation. Here, we are addressing the type of prior express permission that would allow calls to consumers who already have indicated that they do not wish to receive telemarketing calls (by registering on the do-not-call list). '8 For purposes of this exemption, the term “signed” shall include an electronic or digital form of signature, to the extent that such form of signature is recognized as a valid signature under applicable federal or state contract law. sdpidebake wey ae ORF ORT RDS a I a RW are Fo Lt 636a Therefore, we conclude that sellers may obtain the express written agreement to call such consumers. The express agreement between the parties shall remain in effect as long as the consumer has not asked to be placed on the seller’s company-specific do-not-call list. If the consumer subse- quently requests not to be called, the seller must cease calling the consumer regardless of whether the consumer continues to do business with the seller. We also note that telemarketers may not call consumers on the national do-not-call list to request their written permission to be called unless they fall within some other exemption. We believe that to allow such calls would circumvent the purpose of this exemption. Prior express permission must be obtained by some other means such as direct mailing. 45. Tax-Exempt Nonprofit Organizations. We agree with those commenters that contend that the national do-not-call requirements should not be extended to tax-exempt nonprofit organizations or calls made by independent telemarketers on behalf of tax-exempt nonprofit organizations.'” We note that section 227(a)(3) specifically excludes calls made by tax- exempt nonprofit organizations from the definition of telephone solicitation.'” In so doing, we believe Congress clearly intended to exclude tax-exempt nonprofit organi- zations from prohibitions on telephone solicitations under the TCPA. The legislative history indicates that commercial calls constitute the bulk of all telemarketing calls.'*' A number of commenters and the FTC agree with Congress’ conclusion as it relates to a national do-not-call list.” For this reason, we '? See, e.g., Association of Fundraising Professionals Comments at 3- 4: Fund for Public Interest Comments at 2; March of Dimes Comments at 2; Special Olympics of Hawaii Comments. 169 47 U.S.C. § 227(a)(3). 161 coe HR. REP. NO. 102-317 at 16 (1991). 102 See, e.g., Fund for Public Interest Comments at 2; March of Dimes Comments at 2; Non-for-Profit Coalition Comments at 11-13; Special 637a decline to extend the national do-not-call requirements to tax- exempt nonprofit organizations. A few commenters seek clarification that requests for blood donations will be exempt from the national do-not-call list.'"’ When such requests are made by tax-exempt nonprofit organizations, they will fall within the exemption for tax-exempt nonprofit organizations. 46. Others. We decline to create specific exemptions to the national do-not-call requirements for entities such as news- papers, magazines, regional telemarketers, or small busi- nesses.'“ For the reasons discussed above, we find unper- suasive arguments that application of the national do-not-call database adopted herein will result in severe economic consequences for these entities. In particular, we note the exemptions adopted for calls made to consumers with whom the seller has an established business relationship and those that have provided express agreement to be called. As noted, many consumers may also determine not to register on the national database. Telemarketers may continue to contact all of these consumers. We believe these exemptions provide telemarketers with a reasonable opportunity to conduct their business while balancing consumer privacy interests. Olympics Hawaii Comments. But see Wayne G. Strang Comments at 7-8; Michael C. Worsham Comments at 10. Commenters also argue that restrictions imposed on tax-exempt nonprofit organizations or organi- zations acting on their behalf are subject to more stringent scrutiny under the First Amendment as noncommercial speech. See NPCC Comments at 15-18. 1 See, e.g., American Red Cross Comments at 2; America’s Blood Centers Comments at 1. 14 See, e.g., Newspaper Association of America Comments at 12-14 (noting that newspapers are holders of second-class mail permits); Personal Legal Plans Comments at 5 (contending that small businesses should be exempt); Seattle Times Comments at 2 (proposing exemption for newspapers); Vector Comments at 7 (proposing exemption for entities that make a de minimis number of calls); Ameriquest Further Comments at 2 (“face-to-face” exemption). a 638a Although we agree that newspapers and other entities may often provide useful information and services to the public, given our conclusion that adoption of the national do-not-call list will not unduly interfere with the ability of telemarketers to reach consumers, we do not find this to be a compelling basis to exempt these entities. 47. We find that the national do-not-call rules adopted today do not apply to calls made to persons with whom the marketer has a personal relationship. As discussed herein, a “personal relationship” refers to an individual personally known to the telemarketer making the call. In such cases, we believe that calls to family members, friends and acquain- tances of the caller will be both expected by the recipient and limited in number.'® Therefore, the two most common sources of consumer frustration associated with telephone solicitations-high volume and unexpected solicitations—are not likely present when such calls are limited to persons with whom the marketer has a personal relationship.'° Accord- ingly, we find that these calls do not represent the type of “telephone solicitations to which [telephone subscribers] object” discussed in section 227(c)(1). Moreover, we con- > In determining whether a telemarketer is considered a ‘friend’ or ‘acquaintance’ of a consumer, we will look at, among other things, whether a reasonable consumer would expect calls from such a person because they have a close or, at least, firsthand relationship. If a com- plaining consumer were to indicate that a relationship is not sufficiently personal for the consumer to have expected a call from the marketer, we would be much less likely to find that the personal relationship exemption is applicable. While we do not adopt a specific cap on the number of calls that a marketer may make under this exemption, we underscore that the limited nature of the exemption creates a strong presumption against those marketers who make more than a jimited number of calls per day. ' We note that this conclusion is consistent with Congress’ rationale in exempting tax-exempt nonprofit organizations and estadlished business relationships from the definition of telephone solicitation, See H.R. Rep. No, 102-317 at 14 and 16 (1991). 639a clude that the Commission also has authority to recognize this limited carve-out pursuant to section 227(c)(1)(E). This subsection provides the Commission with discretion in implementing rules to protect consumer privacy to “develop proposed regulations to implement the methods and pro- cedures that the Commission determines are the most effective and efficient to accomplish the purpose of this section.”"*’ To the extent that any consumer objects to such calls, the consumer may request to be placed on the telemarketer’s company’s company-specific do-not-call list. We intend to monitor the rules we adopt today and caution that any individual or entity relying on personal relationships abusing this exemption may be subject to enforcement action. 48. In addition, we decline to extend this approas* seyond persons that have a personal relationship with the marketer. For example, Vector urges the Commission to adopt an exemption that covers “face-to-face” appointment calls to anyone known personally to the “referring source.”'®* We note that such relationships become increasingly tenuous as they extend to individuals not personally known to the marketer and thus such calls are more likely to be unexpected to the recipient and more voluminous. Accordingly, referrals to persons that do not have a personal relationship with the marketer will not fall within the category of calls discussed above. 49. We also decline to establish an exemption for calls made to set “face-to-face” appointments per se.'” We '67 47 U.S.C § 227(c)(1)(E). 168 See Vector Further Comments at Att. 2. Vector makes approximately 4 million calls per year. Vector Comments at 6. '© See, e.g., Ameriquest Comments at 14; Vector Comments at 6-7. Such calls may, however, be permissible when they fall within exemptions for personal or established business relationships as discussed herein. pada aia vad 640a conclude that such calls are made for the purpose of encouraging the purchase of goods and services and therefore fall within the statutory definition of telephone solicitation. We find no reason to conclude that such calls are somehow less intrusive to consumers than other commercial telephone solicitations. The FTC has reviewed this issue and reached the same conclusion.'” In addition, we decline to exempt entities that make a “de minimis” number of commercial telemarketing calls.'”' In contrast to Congress’ rationale for exempting nonprofit organizations, we believe that such commercial cails continue to be unexpected to consumers even if made in low numbers. As defined by one commenter, a de minimis number of calls would not be based on the total number of calls originating from one organization, but would be based on the number of calls placed by individual employees of the company.'” Thus, the telemarketing entity could circumvent the do-not-call regulations by hiring any number of individual marketers, so long as they each did not make more than 20 calls per day. We believe that such an exemption, extrapolated to the entire direct marketing industry, would result in a significant number of unwanted telephone solicitations. This would undoubtedly result in consumer confusion and frustration regarding the application of the national do-not-call rules. In addition, we believe that it would be difficult, if not impossible, to monitor and enforce such a requirement. For the reasons discussed below, we do not believe the costs to access the national database is unreasonable for any small business or entity making a “de minimis” number of calls. '0 ETC Order, 68 Fed. Reg. 4655-56. For example, Vector suggests that the Commission exempt individual direct sellers who make no more than 20 calls per day. Vector Commenis at 8-10. 72 Vector Further Comments at 4. Vector makes approximately 4 million calls per year. Vector Comments at 6. 641a 50. In response to the Further Notice, a few commenters contend that any new rules the Commission adopts would not apply to entities engaged in the business of insurance, because such rules would conflict with the McCarran- Ferguson Act.'” The McCarran-Ferguson Act provides that “[t]he business of insurance . . . shall be subject to the laws of the . . . States which relate to the regulation . . . of such business.”'”* The McCarran-Ferguson Act further provides that “[n]Jo Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance . . . unless such Act specifically relates to the business of insurance.”'” American Council of Life Insurers (ACLI) explains that insurers’ marketing activities are extensively regulated at the state—level. The Commission’s proposal, ACLI argues, “intrudes upon the insurance regulatory framework estab- lished by the states” and, therefore, should not be applicable to insurers sder McCarran-Ferguson.'”° 51. The McCarran-Ferguson Act does not operate to exempt insurance companies wholesale from liability under the TCPA. It applies only when their activities constitute the “business of insurance,” the state has enacted laws “for the purpose of regulating” the business of insurance, and the TCPA would “impair, invalidate, or supersede” such state "3 See ACLI Further Comments at 1-3; Stonebridge Further Comments at 5-7; Cendant Further Comments at 3-4; NAII Further Comments at 3. We note that many other commenters representing insurance interests did not raise this issue before or during the Further Notice comment period. 4 15 U.S.C. § 1012(a). 5 15 U.S.C. § 1012(b). sa See ACLI Further Cemments at 1-2. SORE NR CSL ORE RPO ih SANGER IAAIL ED a tal MTOR hast esi Kegitiet tA 67 tee Qe Meee % 5 642a laws.'”’ In the one case cited by commenters as addressing the interplay between McCarran-Ferguson and the TCPA, a federal district court dismissed a claim brought against two insurance companies under the TCPA for sending unsolicited facsimile advertisements.’ The Chair King court found that the TCPA conflicted with a Texas law that proh:bited untrue, deceptive, or misleading advertising by insurers and their agents. In its analysis, the court determined that insurance advertising was part of the “business of insurance,”'” and that the Texas law in question was enacted for the purpose of regulating the business of insurance." The court then concluded that because the TCPA “prohibits unsolicited insurance advertising by facsimile while the Texas [laws] permit [such] advertising . . . so long as the advertisements are truthful and not misleading,” the TCPA conflicts with the Texas law and is preempted under McCarran-Ferguson.'*! 52. To the extent that any state law regulates the “business of insurance”'’ and the TCPA is found to “invalidate, impair, 7 See 15 U.S.C. § 1012(b); see also The Chair King, Inc. v. Houston Cellular Corp., 1995 WL 1760037 (S.D. Tex. 1995), vacated for lack of subject matter jurisdiction 131 F.3d 507 (Sth Cir. 1997). "8 The Chair King, Inc. v. Houston Cellular Corp., 1995 WL 1760037 (S.D. Tex. 1995). ' See Chair King, 1995 WL 1760037 at 3 (citing SEC v. National Securities Inc., 393 U.S. 453, 460 (1960) and FTC v. National Casualty Co., 357 U.S. 560 (1958)). '89 See Chair King, 1995 WL 1760037 at 4. We note that the TCPA’s prohibition does not specifically reference insurance advertising. The TCPA also permits facsimile advertising to persons who have given their prior express invitation or permission. See 47 U.S.C. §§ 227(b)(1)(C) and (a)(4). 182 181 NAII explains that “[s]tate insurance codes prohibit a variety of unfair trade practices, such as rebating, deceptive advertising, inequitable claim settlement and unfair discrimination.” See NAII Further Comments at 2. 643a or supersede” such state law, it is possible that a particular activity involving the business of insurance would not fall within the reach of the TCPA. Any determination about the applicability of McCarran-Ferguson, however, requires an analysis of the particular activity and State law regulating it. In addition, McCarran-Ferguson applies only to federal statutes that “invalidate, impair, or supersede” state insurance regulation. Courts have held that duplication of state law prohibitions by a federal statute do not “invalidate, impair, or supersede” state laws regulating the business of insurance. '*’ Nor 1s the mere presence of a regulatory scheme enough to show that a state statute is “invalidated, impaired or superseded.”'™ 53. We believe that the TCPA, which was enacted to protect consumer privacy interests, is compatible with states’ regulatory interests.’ In fact, the TCPA permits States to enforce the provisions of the TCPA on behalf of residents of - their State.'*° In addition, we believe that uniform application of the national do-not-call registry to all entities that vse the telephone to advertise best serves the goals of the TCPA. To exempt the insurance industry from liability under the TCPA 8 See, e.g., Merchant Home Delivery Serv. Inc. v. Frank B. Hall & Co. Inc., 50 F.3d 1486, 1492 (9th Cir. 1995) (holding federal statute prohib‘ting acts also prohibited under state law not to “invalidate, impair, or supersede” state law under McCarran-Ferguson); United Farm Bureau Mut. Ins. Co. v. Metropolitan Human Relations Comm'n, 24 F.3d 1008, 1016 (7th Cir. 1994) (holding duplicate prohibition of redlining under Indiana law not to preempt Fair Housing Act under McCarran. Ferguson Act). 1 See, e.g., Mackey v. Nationwide Ins. Companies, 724 F.2d 419, 421 (4th Cir. 1984). 85 See U.S. v. Calvin, 39 F.3d 1299, 1305 (Sth Cir. 1994) (noting that government charges of fraud not barred by McCarran-Ferguson Act where interest in fraud protection is completely compatible with state’s regulatory interests). 186 See 47 U.S.C. § 227(f)(1). 56 Si ERR Get eI Sa ne es BORER ata RE IK ie Mee PR RRS A REN iy softs “i 3 ahaa oe lt Hak AS RRL SPADE GN ie (ecb EAM eS aa LR LIE AE 644a would likely confuse consumers and interfere with the pro- tections provided by Congress through the TCPA. Therefore, t) the extent that the operation of McCarran-Ferguson on the TCPA is unclear, we will raise this issue in our Report to Congress as required by the Do-Not-Call Act. 54. We conclude that the national do-not-call mechanism established by the FTC and this Commission adequately takes into consideration the needs of small businesses and entities that telemarket on a local or regional basis in gaining access to the national database. As required by section 227(c)(1)(C), we have considered whether different procedures shou!d apply for local solicitations and small businesses. We decline, however, to exempt such entities from the national do-not- call requirements. Given the large number of entities that solicit by telephone, and the technological tools that allow even small entities to make a significant number of solicitation calls, we believe that to do so would undermine the effectiveness of the national do-not-rules in protecting consumer privacy and create consumer confusion and frustration. In so doing, we conclude that the approach adopted herein satisfies section 227(c)(4)’s requirement that the Commission, in developing procedures for gaining access to the database, consider the different needs of telemarketers conducting business on a national, regional, State, or local level and develop a fee schedule for recouping the cost of such database that recognizes such differences.'*’ The national database will be available for purchase by sellers on an area-code-by-area-code basis. The cost to access the database will vary depending on the number of area codes requested. Sellers need only purchase those area codes in which the seller intends to telemarket. In fact, sellers that request access to five or fewer area codes will be granted access to those area codes at no cost. We note that thirty-three '87 47 U.S.C. § 227(c)(4)(A)-(B)} (emphasis added). éi| : ; » he 645a states currently have five or fewer area codes. Tus, telemarketers or sellers operating on a “local” or “regional” basis within one of these thirty-three states will have access to all of that states’ national ¢o-not-call registrants at no cost. In addition, the national database will provide a single number lookup feature whereby a small number of telephone numbers can be entered on a web page to determine whether any of those numbers are included on the national registry. We believe this fee structure adequately reflects the needs of regiorial telemarketers, small business and those marketing on a de minimis level. For these reasons, we conclude that this approach will not place any unreasonable costs on small businesses. '** 3. Section 227(c)(3) Requirements 55. We conclude that the national do-not-call database adopted jointly by this Commission and the FTC satisfies each of the statutory requirements outlined in section 227(c)(3)(A)-(L). We now discuss each such requirement. Section 227(c)(3)(A) requires the Commission to specify the method by which an entity ic administer the national database will be selected. On August 2, 2002, the FTC issued a Request for Quotes (RFQ) to selected vendors on GSA schedules seeking proposals to develop, implement, and operate the national registry. After evaluating those pro- posals, the FTC selected a competitive range of vendors and issued an amended RFQ to those vendors on November 25, 2002. After further evaluation, the FTC selected AT&T Government Solutions as the successful vendor for the national do-not-call database on March i, 2003.'*? As noted above, Congress has approved the necessary funding for implementation of the national database. 188 See 47 U.S.C. § 227(c)(4)(B)(iii). 189 ‘See also Letter from Michael Del Casino, AT&T, to Marlene Dortch, FCC, dated March 18, 2003. EO SA a a il is 646a 56. Pursuant to sections 227(c)(3)(B)-(C), we require each common carrier providing telephone exchange service to inform subscribers for telephone exchange service of the opportunity to provide notification that such subscriber objects to receiving telephone solicitations. Each telephone subscriber shall be informed, by the common carrier that provides local exchange service to that subscriber, of (i) the subscriber’s right to give or revoke a notification of an objection to receiving telephone solicitations pursuant to the national database and (11) the methods by which such righis may be exercised by the subscriber. Pursuant to section 227(c)(3)(C), we conclude that, beginning on January 1, 2004, such common carriers shall provide an annual notice, via an insert in the customer’s bill, to inform their subscribers of the opportunity to register or revoke registrations on the national do-not-call database. Although we do not specify the exact description or form that such notification should take, such notification must be clear and conspicuous. At a minimum, it must include the toll-free telephone number and internet address established by the FTC to register or revoke registrations on the national do-not-call database. 57. Section 227(c)(3)(D) requires the Commission to specify the methods by which registrations shall be collected and added to the database. As discussed above, consumers will be able to add their telephone numbers to the national do- not-call registry either through a toll-free telephone call or over the Internet.' Consumers who choose to register by phone will have to call the registration number from the telephone line that they wish to register. Their calls will be answered by an Interactive Voice Response (IVR) system. The consumers will be asked to enter on their telephone keypad the telephone number from which the consumer is calling. This number will be checked against the ANI that is '° FTC Order, 68 Fed. Reg. at 4638-39. 647a transmitted with the call. If the number entered matches the ANI, then the consumer will be informed that the number has been registered. Consumers who choose to register over the Internet will go to a website dedicated to the registration process where they will be asked to enter the telephone number they wish to register.'’' We encourage the FTC to notify consumers in the TVR message that the national registry will prevent most, but not all, telemarketing calls. Specifically, we believe consumers should be informed that the do-not-call registry does not apply to tax-exempt nonprofit organizations and companies with whom consumers have an established business relationship. The effectiveness and value of the national registry depends largely on an informed public. Therefore, we also intend to emphasize in our educational materials and on our website the purpose and scope of the new rules. 58. Section 227(c)(3)(E) prohibits any residential sub- scriber from being charged for giving or revoking notification to be included on the national do-not-call database. As discussed above, consumers may register or revoke do-not- call requests either by a toll-free telephone call or over the Internet. No charge will be imposed on the consumer. Section 227(c)(3)(F) prohibits any person from making or trans- mitting a telephone solicitation to the telephone number of any subscriber included on the national database. Subject to the exemptions discussed above, we adopt rules herein that will prohibit telephone solicitations to those consumers that have registered on the national database. '”* 59. Section 227(c)(3)(G) requires the Commission to specify (i) the methods by which any person deciding to make telephone solicitations will obtain access to the database, by area code or local exchange prefix, and (ii) the costs to be 19! ETC Order, 68 Fed. Reg. at 4639. 122 Soe also 16 C.F.R. § 310.4(b)(1)(iii)(B). aie pas nt tm, 648a recovered from such persons. Section 227(c)(3)(H) requires the Commission to specify the methods for recovering, from the persons accessing the database, the costs involved in the operations of the database. To comply with the national do- not-call rules, telemarketers must gain access to the telephone numbers in the national database. Telemarketers will have access to the national database by means of a fully- automated, secure website dedicated to providing information to these entities.'”’ The first time a telemarketer accesses the system, the company will be asked to provide certain limited identifying information, such as name and address, contact person, and contact person’s telephone number and address. If a telemarketer is accessing the registry on behalf of a client seller, the telemarketer will also need to identify that client.'™ When a telemarketer first submits an application to access registry information, the company will be asked to specify the area codes they want to access. An annual fee will be assessed based upon the number of area codes requested.'”° Each entity on whose behalf the telephone solicitation is being made must pay this fee via credit card or electronic funds transfer. After payment is processed, the telemarketer will be given an account number and permitted to access the appropriate portions of the registry.'"° Telemarketers will be permitted to access the registry as often as they wish for no additional cost, once the annual fee is paid. 60. Section 227(c)(3)(1) requires the Commission to specify the frequency with which the national database will '? ETC Order, 68 Fed. Reg. at 4640. FTC Order, 68 Fed. Reg. at 4640. Telemarketing Sales Rule Fees, 68 Fed. Reg. 16238 (April 3, 2003) (FTC Fees Notice). The FTC has proposed that sellers be charged $29 per area code with a maximum annual fee of $7,250 for access to the entire national database. Sellers may request access to five or less areas codes for free. 196 194 195 FTC Order, 68 Fed. Reg. at 4640. 649a be updated and specify the method by which such updates will take effect for purposes of compliance with the do-not- call regulations. Because the registration process will be completely automated, updates will occur continuously. Consumer registrations will be added to the registry at the same time they register-or at least within a few hours after they register. As discussed above, the safe harbor provision requires telemarketers to employ a version of the registry obtained not more than three months before any call is made. Thus, telemarketers will be required to update their lists at least quarterly. Instead of making the list available on specific dates, the registry will be available for downloading on a constant basis so that telemarketers can access the registry at any time.'”’ As a result, each telemarketer’s three-month period may begin on different dates.'” In addition, the administrator will check all telephone numbers in the do-not- call registry each month against national databases, and those numbers that have been disconnected or reassigned will be removed from the registry.'” We encourage parties that may have specific recommendations on ways to improve the overall accuracy of the database in removing disconnected and reassigned telephone numbers to submit such proposals to our attention and to the FTC directly. 61. Section 227(c)(3)(J) requires that the Commission’s regulations be designed to enable states to use the database for purposes of administering or enforcing state law.’ Section 227(c)(3)(K) prohibits the use of the database for any '"? ETC Order, 68 Fed. Reg. at 4647. ” Appropriate state and federal regulators will be capable of verifying when the telemarketer last accessed the list. F7C Order, 68 Fed. Reg. at 4641. ' ETC Order, 68 Fed. Reg. at 4640. oF ts fact, section 227(e)(2) prohibits states from using any database that does not include the part of the national database that relates to such state. See 47 U.S.C. § 227(e)(2). LSS UU eS a rat Le ¢ \ eee Sees 650a purpose other than compliance with the do-not-call rules and any such state law and requires the Commission to specify methods for protection of the privacy rights of persons whose numbers are included in such database. Consistent with the determination of the FTC, we conclude that any law enforcement agency that has responsibility to enforce federal or state do-not-call rules or regulations will be permitted to access the appropriate information in the national registry.””' This information will be obtained through a secure Internet website. Such law enforcement access to data in the national registry is critical to enable state Attorneys General, public utility commissions or an official or agency designated by a state, and other appropriate law enforcement officials to gather evidence to support enforcement of the do-not-call rules under the state and federal law. In addition, as discussed above, we have imposed restrictions on the use of the national list.°°* Consistent with the FTC’s determination, we have concluded that no person or entity may sell, rent, lease, purchase, or use the national do-not-call database for any purpose except compliance with section 227 and any such state or federal law to prevent telephone solicitations to telephone numbers on such list. We specifically prohibit any entity from purchasing this list from any entity other than the national do-not-call administrator or dispensing the list to any entity that has not paid the required fee to the administrator. The only information that will be made available to tele- marketers is the telephone number of consumers registered on the list. Given the restrictions imposed on the use of the national database and the limited amount of information provided, we believe that adequate privacy protections have been established for consumers. 201 See FTC Order, 68 Fed. Reg. at 4641. 202 See supra para. 32. 65la 62. Section 227(c)(3)(L) requires each common carrier providing services to any person for the purpose of making telephone solicitations to notify such person of the requirements of the national do-not-call rules and the regu- lations thereunder. We therefore require common carriers, beginning January 1, 2004, to make a one-time notification to any person or entity making telephone solicitations that is served by that carrier of the national do-not-call requirements. We do not specify the exact description or form that such notification should take. At a minimum, it must include a citation to the relevant federal do-not-call rules as set forth in 47 C.F.R. § 64.1200 and 16 C.F.R. Part 310, respectively. Although we recognize that carriers may not be capa [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386020_1676%3A4. Public record. Not legal advice.