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[House Report 107-13]
[From the U.S. Government Publishing Office]

107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     107-13

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                      KNOW YOUR CALLER ACT OF 2001

                                _______
                                

 March 12, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Tauzin, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                         [To accompany H.R. 90]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 90) to amend the Communications Act of 1934 to 
prohibit telemarketers from interfering with the caller 
identification service of any person to whom a telephone 
solicitation is made, and for other purposes, having considered 
the same, report favorably thereon without amendment and 
recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     3
Federal Mandates Statement.......................................     5
Advisory Committee Statement.....................................     5
Constitutional Authority Statement...............................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     6

                          Purpose and Summary

    The purpose of H.R. 90 is to prevent telemarketers from 
interfering with or circumventing caller identification 
information from being transmitted to consumers. This bill 
specifically prevents telemarketers from blocking caller 
identification information and requires telemarketers to 
provide that information when they have the capability to do 
so. If a telemarketer's telecommunications service or equipment 
is incapable of transmitting caller identification information, 
it will not constitute a violation of the bill if that 
information is not transmitted. The bill also prohibits 
telemarketers from using information on ``do-not-call'' lists 
for any other marketing purpose.

                  Background and Need for Legislation

    Telemarketing has been, and continues to be, a 
controversial marketing practice. Telemarketing can provide 
huge benefits for consumers. In many instances, consumers are 
introduced to new opportunities or products through 
telemarketing. Telemarketing can also promote the availability 
of competitive alternatives to incumbent providers and help 
facilitate a competitive marketplace. Unfortunately, certain 
telemarketing practices can be a significant and intrusive 
nuisance for consumers, as well as a source of consumer 
confusion. In some instances, rogue telemarketers can take 
advantage of this confusion to commit fraud against consumers.
    To protect against these abuses, Congress enacted the 
Telephone Consumer Protection Act of 1991 (TCPA) (P.L. 102-243; 
47 U.S.C. Sec. 227). Regulated by the Federal Communications 
Commission (FCC), the TCPA, among other things, requires 
telemarketers to follow ``do not call'' requests from 
consumers, restricts telemarketing calling hours to 8:00 a.m.-
9:00 p.m., mandates that telemarketers provide the name of the 
solicitor, name of the entity calling, and the telephone number 
or address where that person may be contacted, and includes a 
private right of action. Established business relationships and 
tax-exempt non-profit organizations are specifically exempted 
under the TCPA.
    The Federal Trade Commission (FTC) has implemented the 
Telemarketing Sales Rule which requires telemarketers to make 
certain disclosures and prohibits certain misrepresentations. 
These rules give the consumer the power to stop unwanted 
telemarketing calls, requires solicitors to identify the 
seller, their purpose and the nature of what is being sold, 
limits commercial telephone solicitations to between 8:00 a.m. 
and 9:00 p.m., and gives State law enforcement officers the 
authority to prosecute fraudulent telemarketers who operate 
across State lines.
    Despite these restrictions, telemarketing complaints 
continue to rise. According to the FTC, telemarketing 
complaints have increased significantly from 1997-1999. In 
1997, the FTC received 2,260 complaints, in 1998 complaints 
rose to 8,667, and in 1999 complaints totaled 17,423. In light 
of these concerns, H.R. 3100 was drafted to create additional 
consumer protections.

                                Hearings

    The Committee on Energy and Commerce has not held hearings 
on H.R. 90.

                        Committee Consideration

    On February 28, 2001, the Full Committee met in open markup 
session and ordered H.R. 90 reported to the House, by a voice 
vote, a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were no record votes taken in connection with ordering 
H.R. 90 reported. A motion by Mr. Tauzin to order H.R. 90 
reported to the House passed by a voice vote.

                      Committee Oversight Findings

    The Committee did not hold a legislative or oversight 
hearing on H.R. 90 in the 107th Congress.

         Statement of General Performance Goals and Objectives

    H.R. 90 will enhance current consumer protection law by 
giving consumers better information about the telemarketers 
that are calling them.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
90, the Know Your Caller Act of 2001, would result in no new or 
increased budget authority, entitlement authority, or tax 
expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 7, 2001.
Hon. W.J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 90, the Know Your 
Caller Act of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Ken Johnson 
(for federal costs), Shelley Finlayson (for the state and local 
impact), and Jean Talarico (for the private-sector impact).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 90--Know Your Caller Act of 2001

    H.R. 90 would require the Federal Communications Commission 
(FCC) to issue regulations prohibiting telephone solicitors 
from purposefully blocking their name, phone number, and other 
identifying information from appearing on caller identification 
systems. In addition, the bill would establish a private right 
of action in state courts to punish violations of these 
provisions. Finally, the bill would require the FCC to study 
issues surrounding the transmission of caller identification 
information and report to the Congress within one year of the 
bill's enactment.
    Based on information from the FCC, CBO estimates that the 
FCC would spend less than $500,000 a year to implement H.R. 90, 
assuming the availability of appropriated funds. Under current 
law, the FCC is authorized to collect fees from the 
telecommunications industry sufficient to offset the cost of 
its enforcement programs. Therefore, CBO assumes that the 
additional costs of enforcing H.R. 90 would be offset by an 
increase in collections credited to the FCC's annual 
appropriations.
    Under current law, the FCC has the authority to assess 
forfeiture penalties for violations of regulations such as 
those that would be promulgated under H.R. 90. Based on 
information from the FCC, CBO estimates that implementation of 
H.R. 90 would increase the forfeiture penalties collected by 
the agency by about $1 million annually. Because such penalties 
are classified as governmental receipts, pay-as-you-go 
procedures would apply.
    H.R. 90 contains an intergovernmental mandate as defined in 
Unfunded Mandates Reform Act (UMRA). The bill would preempt 
caller identification provisions of some state telemarketing 
statutes, which could affect the associated fines and 
penalties. Because states vary significantly in their 
regulation of telephone solicitors, CBO cannot determine 
precisely the total revenue loss they would experience as a 
result of this bill. However, based on our estimate of the 
number of states regulating in this area, the size of the fines 
assessed, and the amount of fine revenue generated, CBO 
estimates that state revenue losses would not exceed the 
threshold established by UMRA ($55 million in 2000, adjusted 
annually for inflation).
    H.R. 90 would impose private-sector mandates, as defined by 
UMRA, on telephone solicitors. A company that has 
telecommunication services or equipment that is capable of 
transmitting its name and phone number would be required to do 
so. The bill also would prohibit those companies from using a 
person's name and number for telemarketing, mail marketing, or 
any other marketing purposes when that person has requested to 
be placed on a ``do-not-call'' list. Based on information from 
the FCC and industry representatives, CBO estimates that the 
cost of the mandates would be well below the threshold 
established by UMRA for private-sector mandates ($109 million 
in 2000, adjusted annually for inflation).
    The CBO staff contacts for this estimate are Ken Johnson 
(for federal costs), Shelley Finlayson (for the state and local 
impact), and Jean Talarico (for the private-sector impact). 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

Sec. 1. Short title

    Section 1 establishes the short title of the legislation, 
the ``Know Your Caller Act of 2001''.

Sec. 2. Prohibition of interference with caller identification services

    Section 2 amends section 227 of the Communications Act of 
1934 (47 U.S.C. Sec. 227) by making it unlawful for any person 
making a telephone solicitation to interfere with or circumvent 
the transmission of caller identification information. If a 
person making a telephone solicitation has the ability to 
provide caller identification information, that person must 
provide such information. The use of telecommunications service 
or equipment that is incapable of transmitting such information 
does not constitute interference or circumvention pursuant to 
the bill.
    Section 2 also directs the FCC to prescribe regulations 
implementing the subsection. The regulations must direct the 
person making the telemarketing call to disclose the following 
caller identification information: the name of the person 
placing the telephone solicitation, the name of the person on 
whose behalf the solicitation is being made, and a valid 
working telephone number of the person or entity on whose 
behalf the telephone solicitation is being made. This section 
also provides that the names and telephone numbers compiled as 
part of a ``do-not-call'' list may not be used for any 
marketing purpose.
    Section 2 further allows a person or entity to bring a 
private right of action for an injunction, actual monetary 
damages or $500 per violation, or both. If a court finds the 
defendant acted willfully or knowingly, the court may award 
treble damages.
    Section 2 also defines a ``caller identification service'' 
and ``telephone call.''

Sec. 3. Effect on State law and State actions

    Section 3 makes it clear that any State may bring an action 
for blocking caller identification information during a 
telephone solicitation or telephone call. This section also 
preempts State laws that deal with the same subject matter, 
although it allows States to set fines higher than the $500 
fine set forth in section 2(e)(3)(B).

Sec. 4. Study regarding transmission of caller identification 
        information

    Section 4 requires that the FCC, within one year, conduct a 
study to determine the capability of the public switched 
network to transmit caller identification information; the 
types of equipment being used by the telemarketing industry and 
the capability of such equipment to transmit caller 
identification information; the changes necessary to the public 
switched network and telemarketing equipment to allow for the 
transmission of caller identification information in all 
instances; and the cost related to those changes.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

             SECTION 227 OF THE COMMUNICATIONS ACT OF 1934

SEC. 227. RESTRICTIONS ON THE USE OF TELEPHONE EQUIPMENT.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Prohibition on Interference With Caller Identification 
Services.--
          (1) In general.--It shall be unlawful for any person 
        within the United States, in making any telephone 
        solicitation--
                  (A) to interfere with or circumvent the 
                capability of a caller identification service 
                to access or provide to the recipient of the 
                telephone call involved in the solicitation any 
                information regarding the call that such 
                service is capable of providing; and
                  (B) to fail to provide caller identification 
                information in a manner that is accessible by a 
                caller identification service, if such person 
                has capability to provide such information in 
                such a manner.
        For purposes of this section, the use of a 
        telecommunications service or equipment that is 
        incapable of transmitting caller identification 
        information shall not, of itself, constitute 
        interference with or circumvention of the capability of 
        a caller identification service to access or provide 
        such information.
          (2) Regulations.--Not later than 6 months after the 
        enactment of the Know Your Caller Act of 2001, the 
        Commission shall prescribe regulations to implement 
        this subsection, which shall--
                  (A) specify that the information regarding a 
                call that the prohibition under paragraph (1) 
                applies to includes--
                          (i) the name of the person or entity 
                        who makes the telephone call involved 
                        in the solicitation;
                          (ii) the name of the person or entity 
                        on whose behalf the solicitation is 
                        made; and
                          (iii) a valid and working telephone 
                        number at which the person or entity on 
                        whose behalf the telephone solicitation 
                        is made may be reached during regular 
                        business hours for the purpose of 
                        requesting that the recipient of the 
                        solicitation be placed on the do-not-
                        call list required under section 
                        64.1200 of the Commission's regulations 
                        (47 CFR 64.1200) to be maintained by 
                        such person or entity; and
                  (B) provide that any person or entity who 
                receives a request from a person to be placed 
                on such do-not-call list may not use such 
                person's name and telephone number for 
                telemarketing, mail marketing, or other 
                marketing purpose (including transfer or sale 
                to any other entity for marketing use) other 
                than enforcement of such list.
          (3) Private right of action.--A person or entity may, 
        if otherwise permitted by the laws or rules of court of 
        a State, bring in an appropriate court of that State--
                  (A) an action based on a violation of this 
                subsection or the regulations prescribed under 
                this subsection to enjoin such violation;
                  (B) an action to recover for actual monetary 
                loss from such a violation, or to receive $500 
                in damages for each such violation, whichever 
                is greater; or
                  (C) both such actions.
        If the court finds that the defendant willfully or 
        knowingly violated this subsection or the regulations 
        prescribed under this subsection, the court may, in its 
        discretion, increase the amount of the award to an 
        amount equal to not more than 3 times the amount 
        available under subparagraph (B) of this paragraph.
          (4) Definitions.--For purposes of this subsection:
                  (A) Caller identification service.--The term 
                ``caller identification service'' means any 
                service or device designed to provide the user 
                of the service or device with the telephone 
                number of an incoming telephone call.
                  (B) Telephone call.--The term ``telephone 
                call'' means any telephone call or other 
                transmission which is made to or received at a 
                telephone number of any type of telephone 
                service and includes telephone calls made using 
                the Internet (irrespective of the type of 
                customer premises equipment used in connection 
                with such services). Such term also includes 
                calls made by an automatic telephone dialing 
                system, an integrated services digital network, 
                and a commercial mobile radio source.
  [(e)] (f) Effect on State Law.--
          (1) State law not preempted.--Except for the 
        standards prescribed under subsection (d) and the 
        prohibition under paragraphs (1) and (2) of subsection 
        (e), and subject to paragraph (2) of this subsection, 
        nothing in this section or in the regulations 
        prescribed under this section shall preempt any State 
        law that imposes more restrictive intrastate 
        requirements or regulations on, or which prohibits--
                  (A) * * *

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  [(f)] (g) Actions by States.--
          (1) Authority of states.--Whenever the attorney 
        general of a State, or an official or agency designated 
        by a State, has reason to believe that any person has 
        engaged or is engaging in a pattern or practice of 
        [telephone calls] telephone solicitations, telephone 
        calls, or or other transmissions to residents of that 
        State in violation of this section or the regulations 
        prescribed under this section, the State may bring a 
        civil action on behalf of its residents to enjoin such 
        calls, an action to recover for actual monetary loss or 
        receive $500 in damages for each violation, or both 
        such actions. If the court finds the defendant 
        willfully or knowingly violated such regulations, the 
        court may, in its discretion, increase the amount of 
        the award to an amount equal to not more than 3 times 
        the amount available under the preceding sentence.

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