After the well-publicized difficulties in implementation which prevented the federal Do-Not-Call List from taking full effect on October 1, 2003 as originally planned, the list was finally allowed to take effect on October 10, 2003.  Although legal challenges are still ongoing and there is a possibility that changes will need to be made to the list in the near future, the list is up and running and already being enforced.  Recently, the Federal Communications Commission (“FCC”) issued a proposed fine of $780,000 against AT&T for violations of the Do-Not-Call Rules (assessed at $10,000 for seventy-eight apparent violations).  The FCC’s zeal to enforce the Do-Not-Call Rules means that telecommunications service providers employing telemarketing must make sure they are operating in compliance with the new Rules. Until the creation of the National Do-Not-Call Registry, the FTC and FCC each had their own set of telemarketing rules; the FTC oversaw the Telemarketing Sales Rule and the FCC maintained its own set of rules which applied specifically to telecommunications providers that telemarket.  However, now that the FTC has created the National Do-Not-Call Registry which has been approved and will also be enforced by the FCC, national telemarketing rules are becoming more uniform.  The FCC issued its own Do-Not-Call Rules in July 2003 to ensure that telecommunications providers that operate under its jurisdiction were covered by the Do-Not-Call list.  The FCC’s Rules follow the FTC’s fairly closely although there are slight differences between the two.  Telecommunications providers that utilize telemarketing and telemarketers that offer services on their behalf will need to focus on the FCC’s Rules regarding the National Do-Not-Call List.  The information below details the FCC’s Do-Not-Call List Rules and modifications to the Telecommunications Consumer Protection Act (“TCPA”) telemarketing rules as prescribed in the FCC’s July 3, 2003 Report and Order (“Order”).  Telecommunications service providers, including 1+ long distance providers, as well as telemarketers should review their procedures to ensure that they are in compliance. DO-NOT-CALL LIST RULES  In order to access the Do-Not-Call List for the first time, each company (i.e., telecommunications service provider or telemarketer) will have to provide contact information including company name, address, contact person and his/her address and telephone number.  If the entity accessing the system is a telemarketing company accessing the registry on behalf of a telecommunications provider, that provider will also need to be identified.  An annual fee will be assessed based on the number of area codes requested ($29 per area code or $7,250 for access to the entire data base—access to five or less area codes will be free).  Each entity will have to pay this fee via credit card or electronic funds transfer.  For example, if a telemarketer is accessing the database on behalf of multiple long distance provider clients, each such client will also be subject to the fee.  Each company’s version of the registry obtained will have to be updated every three months.  The FCC’s Rules state that no person or entity may sell, rent, lease, purchase, or use the national Do-Not-Call database for any purpose except compliance with FTC, FCC, state or other federal laws set to prevent telephone solicitations to persons on the list.  The Rules also state that telemarketers may not sell the list to others or divide the costs of accessing the list among various sellers.  In other words, each telecommunications service provider must purchase the database, or that portion on which it intends to base its telemarketing campaign, from the Do-Not-Call List administrator.  According to the new rules for the registry, any person or entity making telephone solicitations must have procedures to maintain a list of persons requesting not to receive telemarketing calls and meet the following minimum requirements: §         Have a written policy, available upon demand, for maintaining a Do-Not-Call List. §         Personnel involved in any aspect of telemarketing must be trained on the existence and use of the Do-Not-Call List. §         Requests by called parties not to be called must be recorded at the time of the request and available upon demand for disclosure. §         Any person making a call for telemarketing purposes must identify the name of the caller, the name of the person/entity on whose behalf the call is being made, and the telephone number (not a 900 number or any other number for which charges exceed local or long distance transmission charges) or address at which the person/entity may be contacted. Furthermore, anyone making telephone solicitations will not be liable for violating the Do-Not-Call List requirement if the violation is an error and if the company can prove that as part of its routine business practice it meets the following requirements: 1) it has established and implemented written procedures to comply with the national Do-Not-Call Rules; 2) it has personnel trained in these procedures; 3) it has maintained and recorded a list of telephone numbers the seller may not contact; 4) it has documents proving it uses a process to prevent solicitations to any number on the Do-Not-Call List (as updated within three months); and 5) it uses a process to ensure it does not sell, rent, lease, purchase or use the list for any purpose other than complying with national Do-Not-Call Registry Rules. Telemarketing Providers—Beginning January 1, 2004, any telecommunications carrier providing service to any entity for the purpose of telephone solicitation must make a one-time notification to that entity of the Do-Not-Call requirements, however, failure to receive such notification will not serve as defense to any entity making a telephone solicitation in violation of the Do-Not-Call Rules. Effect on State Do-Not-Call Lists—The federal rules and registry constitute a floor and supercede any less restrictive state Do-Not-Call rules.  Basically, many states may have their own registries and rules regarding intrastate telemarketing, however, any telephone numbers within that state which are on the national registry must also be placed on the state registry.  Telemarketers placing intrastate telemarketing calls must also be aware of these state registries and regulations as well in order to prevent violating state-specific rules.  The FCC’s Rules do not speak specifically to whether federal regulation will preempt state regulation of interstate telemarketing calls. EXEMPTIONS The FCC’s Order identifies several cases where the National Do-Not-Call Registry Rules will not apply.  These exemptions are described below.   Established business relationship – The FCC defines “established business relationship” as 18 months from a purchase or transaction or 3 months from an inquiry or application.  This exemption allows a telemarketer to contact a customer with an established business relationship for this duration of time unless the customer requests to be placed on a company-specific Do-Not-Call list, in which case he or she may not be contacted.  This exemption applies to all products offered by a company.  Additionally, the exemption applies to affiliates of the company with whom the customer has an established business relationship only if the customer would reasonably expect the affiliate to be included given the nature and type of goods. Prior Express Permission to Contact—In the case where an agreement is signed by the customer stating that he or she agrees to be contacted and gives the number he or she agrees to be contacted at, that specific company is exempt from the new telemarketing rules.  It is important to note that the agreement must be signed either by hand or e-signature. Tax-Exempt Nonprofit Organizations—The new telemarketing rules are not extended to tax-exempt nonprofit organizations or calls by independent telemarketers made on their behalf as these calls are specifically excluded from the TCPA’s definition of telephone solicitation.  These organizations are also exempt from company-specific Do-Not-Call Rules. Calls to Personal Relationships—Calls made to persons with whom the telemarketer has a personal relationship (i.e., friends, family, acquaintances) are also exempt as these calls are believed by the FCC to be expected and limited in number. COMPANY-SPECIFIC RULES In its Order, the FCC concludes that the retention of the company-specific rules (adopted in the 1992 TCPA Order) will complement the National Do-Not-Call Registry by providing consumers with an additional option for managing telemarketing calls.  Thus, telemarketers are still responsible for adhering to the existing company-specific rules.  Several modifications to these company-specific rules were adopted in the FCC’s Order, however, and are described below.  The FCC has reduced the required time to retain names of parties who have requested not to be called in a company’s database from 10 years to 5 years. Despite industry comments requesting an extension of the time limit by which to honor Do-Not-Call requests, the FCC has concluded that requests must be honored when made; the subscriber’s telephone number must be placed on the Do-Not-Call List at the time the request is made. Processing time to complete the request must not exceed 30 days of date the request was made.   The FCC’s Order also adopts a provision stating that a consumer’s Do-Not-Call request terminates the established business relationship for purposes of telemarketing calls even if the consumer continues to do business with the seller.   ADDITIONAL TELEMARKETING RULES Automated Telephone Dialing Equipment— Automated telephone dialing equipment (“ATDE”) is prohibited from dialing emergency numbers, health care facilities, telephone numbers assigned to wireless services, and any other numbers for which the consumer is charged for the call.  The FCC also prohibits the use of any technology to dial any telephone number for the purpose of determining whether the line is a fax or voice line.  The FCC has concluded that predictive dialers (which differ from normal autodialers because they use predictive dialing software and a database of numbers) should be classified as ATDE and, thus, subject to the same rules.    Artificial/Prerecorded Voice Messages—Prerecorded messages that constitute “telephone solicitations” as well as “unsolicited advertisements” are now banned, including “dual purpose” calls to existing customers (i.e., calls from phone companies to customers regarding new calling plans) as they would, in most cases, constitute “unsolicited advertisements”.    However, if the company does have an established business relationship, it would be permitted under the FCC’s Rules.  Absent an established business relationship, the telemarketer must first obtain the prior express consent of the called party to lawfully initiate the call.  Additionally, all prerecorded messages, whether delivered by automated dialing equipment or not, must identify the name of the business, individual or entity responsible for initiating the call, along with the telephone number of such business, individual or entity.  If a called party calls the number and requests to be put on a Do-Not-Call List, that request must be recorded and the company must honor that request. Abandoned Calls—Under the new Rules, telemarketers must ensure that predictive dialers abandon no more than 3 percent of placed and answered calls measured over a thirty day period.  The call will be considered abandoned if it is not transferred to a live sales agent within 2 seconds of the recipient’s completed greeting.  When a call is abandoned, a prerecorded identification message must be delivered containing the telemarketer’s name, telephone number, and notification that the call is for “telemarketing purposes”.  Additionally, telemarketers must allow the phone to ring for 15 seconds or 4 rings before disconnecting an unanswered call.  Finally, telemarketers must keep clear records with convincing evidence that the dialers used comply with these standards. Wireless Telephone Numbers—All live telephone solicitations to wireless numbers are not prohibited by the FCC’s Rules adopted in this Order.  On the other hand, wireless customers will have the same option of registering their numbers on the federal Do-Not-Call List if they do not wish to receive telemarketing calls.  The FCC has affirmed, however, that companies using prerecorded messages are banned from calling wireless telephone numbers.    Caller Identification—The FCC’s telemarketing rules state that telemarketers are prohibited from blocking caller ID information and must transmit caller ID information.  Caller ID information must include either ANI or CPN and, when available by the telemarketer’s carrier, the name of the telemarketer. Convincing evidence must be supplied by the telemarketer in the case when its carrier cannot transmit the name of the telemarketer.  The caller ID telephone number provided must permit any individual to make a Do-Not-Call request during regular business hours. Time of Day Restrictions—The FCC has decided not to adjust the restrictions for telemarketers on time of day calling.  The FCC’s Rules state that telemarketers must not call between the hours of 9 p.m. and 8 a.m. local time at the called party’s location.  A copy of the FCC’s Order with more information on these new telemarketing rules and regulations is available at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-03-153A1.pdf.  November 2003 Back