89–006

107TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 107–13

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 tele-
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marketers 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.

§ 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.
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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
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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-notcall’’ 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).
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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. §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.
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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 inter-
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ference 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.
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ø(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) * * *

* * * * * * *

ø(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 øtelephone 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.

* * * * * * *

Æ