58716 Federal Register / Vol. 71, No. 192 / Wednesday, October 4, 2006 / Proposed Rules 

1 69 FR 67287 (Nov. 17, 2004). 

2 15 U.S.C. 6101 et seq. This and other 

amendments to the original TSR resulting from a 

rule review mandated by the Telemarketing Act, 15 

U.S.C. 6108, took effect on March 31, 2003. TSR 

Statement of Basis and Purpose (‘‘TSR SBP’’), 68 FR 

4580 (Jan. 29, 2003). 

3TSR SBP, 68 FR at 4641–45. The Telemarketing 

Act directed the Commission to prescribe rules 

prohibiting deceptive and abusive telemarketing 

acts or practices, including ‘‘a requirement that 

telemarketers may not undertake a pattern of 

unsolicited telephone calls which the reasonable 

consumer would consider coercive or abusive of 

such consumer’s right to privacy.’’ 15 U.S.C. 

6102(a)(3)(A). 

FEDERAL TRADE COMMISSION 

16 CFR Part 310 

RIN: 3084–0098 

Telemarketing Sales Rule (‘‘TSR’’) 

AGENCY: Federal Trade Commission. 

ACTION: Denial of petition for proposed 

rulemaking; revised proposed rule with 

request for public comments; revocation 

of non-enforcement policy. 

SUMMARY: In this document, the Federal 

Trade Commission (‘‘FTC’’ or 

‘‘Commission’’) announces decisions on 

four issues involving the Telemarketing 

Sales Rule (‘‘TSR’’): the denial of a 

petition submitted by Voice Mail 

Broadcasting Corporation (‘‘VMBC’’) 

requesting creation of a new safe harbor 

for the TSR that would permit the use 

of prerecorded messages in calls to 

established customers; a new proposal 

to amend the TSR by expressly 

prohibiting unsolicited prerecorded 

telemarketing calls without the 

consumer’s prior written agreement; 

revocation of the Commission’s 

previously announced policy of 

forbearance from bringing enforcement 

actions against sellers and telemarketers 

who make prerecorded telemarketing 

calls to established customers effective 

January 2, 2007; and a new proposal to 

amend the prescribed method for 

measuring the maximum allowable call 

abandonment rate in the TSR’s existing 

safe harbor provision, in response to a 

petition from the Direct Marketing 

Association, Inc. (‘‘DMA’’). The 

Commission is requesting public 

comment on the proposed amendments 

during a comment period ending 

November 6, 2006. 

DATES: Written comments must be 

received on or before November 6, 2006. 

ADDRESSES: Interested parties are 

invited to submit written comments. 

Comments should refer to ‘‘TSR 

Prerecorded Call Prohibition and Call 

Abandonment Standard Modification, 

Project No. R411001’’ to facilitate the 

organization of comments. A comment 

filed in paper form should include this 

reference both in the text and on the 

envelope, and should be mailed or 

delivered to the following address: 

Federal Trade Commission/Office of the 

Secretary, Room H–159 (Annex K), 600 

Pennsylvania Avenue, NW., 

Washington, DC 20580. Comments 

containing confidential material must be 

filed in paper form, as explained in the 

SUPPLEMENTARY INFORMATION section. 

The FTC is requesting that any comment 

filed in paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments filed in 

electronic form should be submitted by 

visiting the Web site at https:// 

secure.commentworks.com/ftc-tsr and 

following the instructions on the Webbased form. 

To ensure that the Commission 

considers an electronic comment, you 

must file it on the Web-based form at 

the https://secure.commentworks.com/ 

ftc-tsr Web site. You may also visit 

http://www.regulations.gov to read this 

Proposed Rule, and may file an 

electronic comment through that Web 

site. The Commission will consider all 

comments that regulations.gov forwards 

to it. 

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives, 

whether filed in paper or electronic 

form. Comments received will be 

available to the public on the FTC Web 

site, to the extent practicable, at http:// 

www.ftc.gov. As a matter of discretion, 

the FTC makes every effort to remove 

home contact information for 

individuals from public comments it 

receives before placing those comments 

on the FTC Web site. More information, 

including routine uses permitted by the 

Privacy Act, may be found in the FTC’s 

privacy policy, at http://www.ftc.gov/ 

ftc/Privacy.htm. 

FOR FURTHER INFORMATION CONTACT: 

Craig Tregillus, Staff Attorney, (202) 

326–2970; Division of Marketing 

Practices, Bureau of Consumer 

Protection, Federal Trade Commission, 

600 Pennsylvania Avenue, NW., 

Washington, DC 20580. 

SUPPLEMENTARY INFORMATION: 

I. Background 

This document sets out the reasons 

for the Commission’s decision to deny 

VMBC’s petition for amendment of the 

TSR’s call abandonment provisions to 

add a new safe harbor, and to seek 

public comment on amendments the 

Commission is now proposing in 

response to the record created by the 

VMBC and DMA petitions. These 

actions are based on a careful analysis 

of the public comments received in 

response to a Notice of Proposed 

Rulemaking (‘‘NPRM’’) published in the 

Federal Register on November 17, 

2004.1 The NPRM generated nearly 

13,600 unique comments—23 submitted 

by telemarketers and business trade 

associations representing numerous 

members, and the balance from 

consumers and consumer advocates. 

Section 310.4(b)(1)(iv) of the TSR 

prohibits telemarketers from 

abandoning calls. An outbound 

telemarketing call is ‘‘abandoned’’ if the 

telemarketer does not connect the call to 

a sales representative within two 

seconds of the completed greeting of the 

person who answers. Call abandonment 

is an unavoidable consequence of the 

use of ‘‘predictive dialers’’— 

telemarketing equipment that increases 

the productivity of telemarketers by 

placing multiple calls for each available 

sales representative. Predictive dialers 

maximize the amount of time 

representatives spend speaking with 

consumers and minimize the time they 

spend waiting to speak to a prospective 

customer. An inevitable side effect of 

this functionality, however, is that the 

dialer will reach more consumers than 

can be connected to available sales 

representatives. In these situations, the 

dialer either disconnects the call 

(resulting in a ‘‘hang-up’’ call) or keeps 

the consumer connected with no one on 

the other end of the line in case a sales 

representative becomes available 

(resulting in ‘‘dead air’’). The call 

abandonment prohibition, added to the 

TSR pursuant to the Telemarketing and 

Consumer Fraud and Abuse Prevention 

Act (‘‘Telemarketing Act’’),2 is designed 

to remedy these abusive practices.3

Notwithstanding the prohibition on 

call abandonment, § 310.4(b)(4) of the 

TSR contains a safe harbor designed to 

preserve telemarketers’ ability to use 

predictive dialers, subject to four 

conditions. The safe harbor is available 

if the telemarketer or seller: (1) 

Abandons no more than three percent of 

all calls answered by a person (as 

opposed to an answering machine); (2) 

allows the telephone to ring for fifteen 

seconds or four rings; (3) plays a 

prerecorded message stating the name 

and telephone number of the seller on 

whose behalf the call was placed 

whenever a sales representative is 

unavailable within two seconds of the 


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4 16 CFR §§ 310.4(b)(4)(i)–(iv). 

5 16 CFR 1.25. 

6 16 CFR 310.2(n) (‘‘ ‘Established business 

relationship’ means a relationship between a seller 

and a 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 (18) 

months immediately preceding the date of a 

telemarketing call; or (2) the consumer’s inquiry or 

application regarding a product or service offered 

by the seller, within the three (3) months 

immediately preceding the date of a telemarketing 

call.’’). 

7 VMBC noted that the FTC suggested that ‘‘the 

incentive to nurture established business 

relationships may provide an adequate restraint on 

the growth of recorded message telemarketing’’ in 

its Report to Congress Pursuant to the Do Not Call 

Implementation Act (‘‘DNCIA Report’’), p. 35. 

8 In support of this argument, VMBC cited one 

prerecorded campaign for a major retailer in which 

only .02 of 1 percent of 5.8 million customers 

asserted their Do Not Call rights. 69 FR at 67288 n. 

8. See also n. 30, infra. The Commission noted in 

the NPRM, however, that any incentive to preserve 

consumer goodwill could be outweighed in practice 

by the fact that ‘‘it may be more economical for 

companies to contact consumers via prerecorded 

messages rather than using live telemarketers, so 

the volume of commercial calls that consumers 

receive may increase. ‘‘

9 47 CFR 64.1200. See also FCC Rules and 

Regulations Implementing the Telephone Consumer 

Protection Act of 1991, CC Docket No. 92–90, 

Report and Order, 7 FCC Rcd 8752 (1992), available 

at http://gullfoss2.fcc.gov/prod/ecfs/ 

retrieve.cgi?native_or_pdf = 

pdf&id_document=1071340001, summarized in 57 

FR 48333 (Oct. 23, 1992) (‘‘1992 FCC Order’’); 

amended by FCC Rules and Regulations 

Implementing the Telephone Consumer Protection 

Act of 1991, CG Docket No. 02–278, Report and 

Order, 18 FCC Rcd 14014, available at http:// 

hraunfoss.fcc.gov/edocs_public/attachmatch/FCC03-153A1.pdf, summarized in 68 FR 44143 (July 25, 

2003) (‘‘2003 FCC Order’’). 

10 47 U.S.C. 227 (1991). 

11 47 CFR 64.1200(a)(2). The FCC’s TCPA 

regulations make an exception for calls placed by 

a seller or telemarketer that has obtained the called 

party’s prior express consent to receive 

telemarketing calls, or has an established business 

relationship with the called party. 47 CFR 

64.1200(a)(2). The regulations also exclude calls for 

emergency purposes, calls not made for a 

commercial purpose that do not include a 

solicitation, and calls made by or on behalf of a taxexempt nonprofit organization. 47 CFR 

64.1200(a)(2)(i)–(v). In addition, the FCC’s 

regulations absolutely prohibit all live and 

prerecorded telemarketing calls to a cellular 

telephone, regardless of any established business 

relationship or prior express consent a seller or 

telemarketer may have obtained. 47 CFR 

64.1200(a)(1)(iii). 

12 69 FR at 67289. 

completed greeting of the person 

answering the call; and (4) maintains 

records documenting compliance.4

Thus, to comply with this provision of 

the TSR, at least 97 percent of a 

telemarketer’s calls that are answered by 

a person (rather than an answering 

machine) must be connected to a sales 

representative. A telemarketing 

campaign that consists solely of 

prerecorded messages, therefore, would 

violate § 310.4(b)(1)(iv) and would not 

meet the safe harbor requirements. 

VMBC submitted a request for an 

advisory opinion requesting an 

additional safe harbor for prerecorded 

message telemarketing to consumers 

with whom the seller has an established 

business relationship, which the 

Commission treated as a petition to 

amend the TSR under § 1.25 of the 

FTC’s Rules of Practice.5 VMBC’s 

submission sought permission to deliver 

prerecorded messages to consumers 

who have an established business 

relationship with the seller on whose 

behalf the telemarketing calls are made, 

asserting that such calls would not 

result in the twin harms of ‘‘hang ups’’

and ‘‘dead air’’ that the prohibition on 

abandoned calls in § 310.4(b)(1)(iv) was 

designed to remedy. 

The amendment requested by DMA, 

in contrast, sought modification of the 

method for calculating the maximum 

three percent call abandonment rate 

prescribed in the existing safe harbor 

provision. DMA asked that the 

requirement in § 310.4(b)(4)(i) that 

sellers and telemarketers use 

‘‘technology that ensures abandonment 

of no more than three (3) percent of all 

calls answered by a person, measured 

per day per calling campaign’’ be 

revised so that the three percent 

standard instead could be ‘‘measured 

over a 30-day period’’ for all of a 

telemarketer’s calling campaigns. 

II. The VMBC Petition 

The VMBC petition for an additional 

safe harbor was premised on a business 

model that, VMBC contended, would 

not result in the harms the call 

abandonment prohibition in 

§ 310.4(b)(1)(iv) was designed to 

prevent. Under VMBC’s proposed 

model, prerecorded messages would 

give the called party an opportunity to 

assert a company-specific Do Not Call 

request. The messages would allow the 

called party to do so either by pressing 

a button on the telephone keypad to 

speak to a sales representative at any 

time during the message, or 

alternatively by dialing a toll-free 

number that would connect to a sales 

representative. Finally, as indicated 

above, the prerecorded messages would 

be delivered exclusively to consumers 

who have an ‘‘established business 

relationship’’ 6 with the seller on whose 

behalf the calls are made. 

A. VMBC’s Rationale for a Safe Harbor 

VMBC advanced three primary 

reasons for adding a new safe harbor to 

the TSR’s call abandonment prohibition 

to permit calls delivering such 

prerecorded messages to consumers 

with whom the seller has an established 

business relationship. First, VMBC 

asserted that the harms that prompted 

inclusion of the call abandonment 

prohibition in the TSR would not be 

present in campaigns conducted 

according to its proposed business 

model. Specifically, VMBC argued that 

the use of prerecorded messages would 

make it unnecessary to subject a 

consumer to ‘‘dead air’’ while waiting 

for a sales representative, and would not 

result in a ‘‘hang-up’’ when no 

representative is available. Moreover, 

because the prerecorded messages 

would immediately identify the seller, 

the seller would not be engaging in 

telemarketing under the cloak of 

anonymity that often prompts consumer 

concern about ‘‘dead air’’ and ‘‘hang 

ups.’’

Second, VMBC contended that 

because the prerecorded messages 

would be delivered only to existing 

customers, sellers would have a strong 

incentive to preserve their customers’

goodwill.7 This incentive would serve, 

VMBC posited, as a sufficient check on 

the potential for abuse such that 

prerecorded calls to established 

customers would be unlikely to prompt 

substantial consumer objection.8

Finally, VMBC argued that a new safe 

harbor for prerecorded messages is 

necessary to conform the FTC’s TSR to 

the rules and regulations issued by the 

Federal Communications Commission 

(‘‘FCC’’) 9 pursuant to the Telephone 

Consumer Protection Act of 1991 

(‘‘TCPA’’).10 VMBC pointed out that the 

FCC’s rules—which largely parallel the 

Do Not Call and certain other of the 

TSR’s provisions—since the early 1990s 

have permitted prerecorded message 

telemarketing to consumers with whom 

a seller has an established business 

relationship. In most other 

circumstances, however, the FCC’s rules 

under the TCPA prohibit prerecorded 

message telemarketing, absent a 

consumer’s prior express consent.11

B. The Safe Harbor Proposal and 

Specific Issues Raised for Public 

Comment 

To assist interested parties in 

commenting on the VMBC petition, the 

NPRM included a proposed new 

§ 310.4(b)(5) that would have amended 

the TSR to permit prerecorded 

telemarketing messages to established 

customers.12 As drafted, the proposed 

safe harbor provision would have 

required sellers and telemarketers to: (1) 

Allow the telephone to ring for at least 

15 seconds or four rings before 

disconnecting an unanswered call; (2) 

play a prerecorded message within two 

seconds of the called party’s completed 


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58718 Federal Register / Vol. 71, No. 192 / Wednesday, October 4, 2006 / Proposed Rules 

13Section 310.4(d) requires the following prompt 

oral disclosures in outbound commercial 

telemarketing calls: (1) The identity of the seller; (2) 

that the purpose of the call is to sell goods or 

services; (3) the nature of the goods or services; and 

(4) that no purchase or payment is necessary to be 

able to win a prize or participate in a prize 

promotion if a prize promotion is offered, and that 

any purchase or payment will not increase the 

chances of winning. Section 310.4(e) requires the 

following oral disclosures in outbound charitable 

solicitation calls: (1) The identity of the charitable 

organization on behalf of which the request is being 

made; and (2) that the purpose of the call is to 

solicit a charitable contribution. 

14 69 FR at 67294. 

15 69 FR at 67288–89 (emphasis added). 

16 69 FR at 67289 (emphasis added). 

17 47 CFR 64.1200(b)(2). 

18 69 FR at 67289. 

19 Id. 

20 Id. at 67290. 

21See the discussion in Section II.F, infra. 

22 69 FR at 67289. 

23All of the public comments, excluding 442 

judged obscene or not germane, appear at http:// 

www.ftc.gov/os/comments/tsrcallabandon/ 

index.htm, where they are listed alphabetically 

under the name of the person who submitted the 

comment. The first citation of each comment 

greeting; (3) give the called party an 

opportunity to assert an entity-specific 

Do Not Call request at the outset of the 

message, with only the disclosures 

required by §§ 310.4(d) or (e) preceding 

that opportunity; 13 and (4) ensure that 

the message complies with all other 

requirements of the TSR and other 

applicable State and Federal laws.14

1. The ‘‘Ring-Time’’ Standard 

The NPRM explained that the first 

prerequisite for meeting the safe harbor 

requirements, the ‘‘ring time’’ standard 

requiring 15 seconds or four rings to 

elapse while awaiting an answer, is 

identical to the analogous element of the 

existing safe harbor in § 310.4(b)(4)(ii). 

That standard, modeled on what were 

then DMA’s ethical guidelines for its 

members, was designed to give 

consumers, including the elderly or 

infirm who may struggle to get to a 

telephone, a reasonable opportunity to 

answer telemarketing calls before the 

connection is terminated. 

2. The ‘‘Dead Air’’ Standard 

The second prerequisite of the 

proposed safe harbor, requiring that the 

prerecorded message be played within 

two seconds of the called party’s 

completed greeting, was intended to 

minimize ‘‘dead air.’’ It was based on 

the analogous element of the existing 

safe harbor in § 310.4(b)(4)(iii), allowing 

no more than two seconds of dead air 

before the called party is connected to 

a sales representative. The Commission 

specifically requested public comment 

on whether the maximum amount of 

dead air should be less than two 

seconds in the new safe harbor for 

prerecorded messages in which there 

would be no need to connect a sales 

representative. The Commission also 

requested information on the relative 

costs and benefits of a standard that 

would set the maximum amount of dead 

air at a level lower than two seconds. 

3. Prompt Opportunity for CompanySpecific Do Not Call Requests 

The purpose of the third prerequisite, 

mandating a prompt opportunity for 

consumers to assert a company-specific 

Do Not Call request, was to ensure the 

same Do Not Call rights for consumers 

who receive prerecorded message calls 

as are available to consumers receiving 

live telemarketing calls from a sales 

representative. Absent such parity, the 

Commission was concerned that, in 

view of the likely increase in the 

frequency of lower-cost prerecorded 

message calls (compared to the cost of 

live calls by sales representatives), the 

privacy protection provided by the 

National Do Not Call Registry might 

become illusory. The NPRM 

emphasized: 

Accordingly, the Commission believes that, 

if allowed, telemarketing calls that deliver 

prerecorded messages to consumers with 

whom a seller has an established business 

relationship must preserve the ability of 

those consumers to assert their Do Not Call 

rights quickly, effectively, and efficiently, so 

that consumers retain an effective right to 

decide whether to receive commercial calls, 

including prerecorded messages.15

The proposed safe harbor therefore 

required that the prerecorded message 

provide, ‘‘at the outset of the call’’ (i.e., 

preceded only by the prompt oral 

disclosures required by the TSR), an 

opportunity for the called party to assert 

a seller-specific Do Not Call request by 

pressing a button on his or her 

telephone keypad to connect to a sales 

representative or an automated system. 

By stressing that ‘‘the Commission 

believes that the Do Not Call option 

should allow consumers to assert their 

Do Not Call rights during the 

prerecorded message,’’ 16 the NPRM 

distinguished this element of the 

Commission’s safe harbor proposal from 

FCC rules allowing prerecorded 

messages to provide a toll-free number 

consumers may call to make a Do Not 

Call request during or after the 

message.17 The NPRM expressly 

declined to adopt the FCC approach, 

which requires ‘‘consumers to be 

prepared with pen and paper at the 

ready when they answer the phone, to 

take down the number and to place a 

separate call’’ to make a Do Not Call 

request, because that approach 

‘‘encumbers consumers’’ assertions of 

company-specific Do Not Call rights.’’ 18

Noting that the VMBC petition 

‘‘contemplates some prerecorded 

messages that would enable consumers 

to speak with a sales representative 

during the call by pressing a button on 

their telephone keypads,’’ the NPRM 

specifically ‘‘incorporated this feature 

into the proposed amendment to the call 

abandonment safe harbor,’’ 19 stating 

that it would ‘‘satisfy the proposed safe 

harbor.’’ 20 This endorsement gave 

advance assurance to sellers and 

telemarketers that they could adopt this 

means of compliance during the 

pendency of this proceeding when the 

Commission announced it would 

forebear from enforcing the call 

abandonment provision if they 

complied with the proposed safe 

harbor.21

Although the NPRM did not similarly 

endorse prerecorded messages 

providing a toll-free number for 

consumers to call to be placed on a 

company-specific Do Not Call list, the 

Commission sought ‘‘information and 

data about the costs and benefits of 

requiring that the disclosure of how to 

make a Do Not Call request be made at 

the outset of the call,’’ as well as about 

‘‘alternative methods of preserving the 

consumer’s ability to assert a Do Not 

Call request when receiving a 

prerecorded message telemarketing 

call.’’ 22 In addition, the NPRM sought 

information and data about the 

technical feasibility and costs of 

implementing the interactive technology 

that allows consumers to make a 

company-specific Do Not Call request 

with the press of a keypad button, and 

the costs to industry of requiring this 

mechanism. 

4. Effect on Other Laws 

The fourth and final element of the 

draft proposal simply made it clear that 

the new safe harbor would not obviate 

or negate any other provision of the TSR 

or other Federal or State laws, in order 

to preserve consistency with the 

existing TSR call abandonment safe 

harbor. It placed sellers and 

telemarketers on notice that other 

applicable regulations may be stricter 

than the proposed safe harbor. The 

NPRM sought comment on whether or 

not this requirement was appropriate. 

C. Public Comment 

In general, the industry comments on 

the VMBC petition supported 

liberalizing the TSR to allow the use of 

prerecorded telemarketing messages, 

and consumers and consumer advocates 

opposed it.23 Although both industry 


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includes the name of the commenter, the name in 

parentheses of the person or entity submitting the 

comment if it is different from the name of the 

commenter, and the comment number (e.g., ABC 

Corp. (Smith, J.), No. OL–123456). Comment 

numbers without a prefix were delivered to the 

Commission in paper form; those with the prefix 

‘‘OL’’ were submitted online at the FTC’s Web site; 

and those with the prefix ‘‘EREG’’ were submitted 

to http://www.regulations.gov. Subsequent citations 

to a comment omit the comment number. 

24 16 CFR 310.2(cc). For the same reason, it is 

unnecessary to grant the request made in a 

comment on behalf of credit and collection 

professionals that the Commission forbear from 

enforcing alleged violations of the Fair Debt 

Collection Practices Act based on the FCC’s 

requirement that debt collectors identify themselves 

by their State-registered name in prerecorded 

telephone messages. ACA International, No. OL–

113912. As the Commission has previously stated, 

pure debt collection calls are not covered by the 

TSR because they are not ‘‘telemarketing’’ calls. 

TSR SBP, 68 FR at 4664 n.1020 (noting, however, 

that ‘‘if the debt collection call also included an 

upsell, the upsell portion of the call would be 

subject to the Rules as long as it also met the criteria 

for ‘telemarketing’ and was not otherwise exempt 

from the Rule. All debt collection calls must 

comply with the FDCPA.’’). 

25Only 21 of the 23 industry comments addressed 

this issue. E.g., VMBC (Wiley Rein & Fielding), No. 

OL–113915 at 8; Joint Comment of the United States 

Chamber of Commerce, The Coalition for 

Healthcare Communication, The Consumer Bankers 

Association, The Magazine Publishers of America, 

The Mortgage Bankers Association, The National 

Newspaper Association, The Newspaper 

Association of America, and The Independent 

Insurance Agents and Brokers (‘‘U.S. Chamber’’) 

(Wiley Rein & Fielding), No. OL–113911 at 5; The 

Heritage Company (‘‘Heritage’’), No. OL–112918 at 

1; West Corporation (‘‘West’’), No. OL–112911 at 2. 

26 VMBC at 7, 11; U.S. Chamber at 5; West at 1; 

Direct Marketing Association and American 

Teleservices Association (‘‘DMA’’), No. OL–113918 

at 9; Visa U.S.A., Inc. (‘‘Visa’’), No. 000023 at 2; Call 

Command, LLC (‘‘Call Command’’) No. 000025 at 

1–2; Verizon Telephone Companies (‘‘Verizon’’), 

No. OL–113893 at 4. 

27 VMBC at 6, 10; U.S. Chamber at 4; Call 

Command at 2; SBC Communications, Inc. (‘‘SBC’’), 

No. 000026 at 2, 4.; National Retail Federation 

(‘‘NRF’’), No. 000027 at 3. 

28 VMBC at 2; SBC at 2; NRF at 3. 

29E.g., Call Command at 2 (asking that the 

Commission acknowledge that prerecorded 

informational messages, such as notification about 

a change in flight schedules or about a product 

recall, are permissible, and suggesting that all such 

‘‘transactional’’ messages, as that term is used in the 

CAN–SPAM Act, 15 U.S.C. 7702(17), be exempt 

from the TSR); Broadcast Solutions, No. OL–113933 

at 1; SBC at 3; NRF at 3; VMBC at 2; Verizon at 

5. 

30SBC at 3 (acknowledging that the survey 

reports were not ‘‘directly apposite, as they relate 

to service activation and related transactional 

messages’’). Similarly, VMBC cited arguably 

favorable reaction from 5.8 million consumers to 

prerecorded campaigns as measured by an increase 

of from 20 to 40 percent in response rates to 

‘‘promotions’’ and ‘‘showing up for appointments’’

with Do Not Call requests ‘‘averaging 2/100ths of 

one percent.’’ VMBC at 6. Unfortunately, this 

merging of data for prerecorded messages that are 

not governed by the TSR with those that are, 

without specifying the opt-out method provided to 

consumers, provides little help in evaluating the 

potential impact of the proposed safe harbor. 

31 15 U.S.C. 6106(4). 

32 16 CFR 310.2(cc). 

33E.g., VMBC at 10; U.S. Chamber at 5; DMA at 

9; SBC at 2; NRF at 4. 

34 VMBC at 10. However, since such ‘‘non-sale’’

calls are not governed by the TSR, the Rule does 

not prevent the use of prerecorded messages for this 

purpose. 

35West at 2. 

36SBC at 3 n.7. 

37 Infocision Management Corp. (‘‘Infocision’’), 

No. OL–113920 at 4; West at 3. 

38 VMBC at 12; Infocision at 1; SoundBite 

Communications, Inc. (‘‘Soundbite’’), No. OL–

112919 at 1–2. 

39Soundbite at 1–2; Infocision at 1; but see, 

United States Senate, No. OL–113862 (Senators Bill 

Continued 

and consumer comments addressed the 

major issues raised by the NPRM, not all 

responded to each of the questions on 

which the Commission requested public 

comment. 

Many of the comments, both from the 

telemarketing industry and consumers, 

exhibited a fundamental misconception 

of the TSR’s scope. They presumed that, 

absent the proposed safe harbor, the 

TSR’s call abandonment prohibition 

would prevent sellers from using 

prerecorded messages to provide 

important information to customers 

with whom they have an established 

business relationship, such as 

notifications of flight cancellations, 

reminders of medical appointments and 

overdue payments, and notices of dates 

and times for delivery of goods or 

service appointments. Such strictly 

informational calls, however, whether 

live or prerecorded, have never been 

covered by the TSR. The TSR applies 

only to ‘‘telemarketing,’’ which is 

defined, in pertinent part, as ‘‘a plan, 

program or campaign which is 

conducted to induce the purchase of 

goods or services.’’ 24 It does not apply 

to informational calls, unless the calls 

combine the informational message with 

a sales invitation or promotional pitch. 

1. Industry Comments 

Comments from 21 telemarketers and 

business trade associations uniformly 

favored allowing sellers to use 

prerecorded telemarketing messages to 

reach their customers, arguing that this 

is a cost-effective method for 

communicating without the need for 

sales representatives.25 Several noted 

not only that prerecorded messages 

avoid the harms associated with 

abandoned calls (i.e., ‘‘dead air’’ and 

‘‘hang ups’’), but also ensure better 

quality service to customers than 

telemarketers because there is no risk 

that the intended message will vary 

from call to call.26

Several industry comments posited 

that consumers are interested in 

receiving prerecorded messages.27

Although some of the examples cited to 

support this contention were 

prerecorded messages governed by the 

TSR (such as letting customers know of 

special promotional events or upcoming 

sales),28 many of the examples, if not 

most, were informational messages that 

are not covered by the TSR at all.29 For 

example, SBC cited a survey of 1217 of 

its DSL Internet access customers on the 

use of prerecorded informational 

messages to remind them of their 

service installation dates, in which 55.1 

percent said they would like to receive 

such messages in the future.30 As 

previously noted, such informational 

messages are neither governed nor 

prohibited by the TSR, because they are 

not ‘‘telemarketing’’ as defined by the 

Telemarketing Act 31 or the Rule.32

Adopting VMBC’s view that sellers 

would self-regulate and not abuse the 

goodwill of their customers, most of the 

industry comments that addressed the 

issue doubted that the volume of 

prerecorded telemarketing messages that 

consumers receive would increase if the 

safe harbor proposal were adopted.33

VMBC’s comment further predicted that 

the likely result would not be an 

increase in calls, but that many ‘‘nonsale’’ calls would convert from live calls 

from sales representatives to costeffective recorded messages.34 Two 

industry comments disagreed. One 

acknowledged that, if allowed, 

prerecorded telemarketing messages 

would increase in number given their 

low cost.35 Another observed that the 

proposed safe harbor would free it and 

its telemarketers from using recorded 

messages solely for informational 

purposes, ‘‘and put prerecorded 

messages to additional valuable 

uses.’’ 36

Only two industry comments 

addressed the question posed in the 

NPRM of whether the proposed safe 

harbor would complicate Commission 

enforcement actions against sellers or 

telemarketers who falsely claim to have 

an established business relationship 

with the consumers they call. Both 

opined that potential enforcement 

problems should not be an issue 

because the burden of proving the 

existence of an established business 

relationship falls on the seller or 

telemarketer, not the Commission.37

The industry comments uniformly 

urged the FTC to adjust the TSR to track 

the FCC’s regulations that permit the 

use of prerecorded messages for 

telemarketing to established 

customers.38 Some went so far as to 

argue that the Commission lacks 

jurisdiction to regulate prerecorded 

telemarketing messages because 

Congress has given exclusive authority 

to the FCC to do so.39 One conceded 


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Nelson and Dianne Feinstein commented that 

‘‘there is no reason why the FTC should promulgate 

an anti-consumer rule to meet the FCC’s lower 

standard for prerecorded messages.’’). 

40 Verizon at 5. 

41 DMA at 11; Infocision at 4; Heritage at 1–2; SBC 

at 4; West at 3; Visa at 2; Verizon at 6; Soundbite 

at 2; Convergys Corp. (‘‘Convergys’’), No. OL–

113952 at 5–6; National Association of Realtors 

(‘‘NAR’’), No. EREG–000005 at 1–2; National Retail 

Federation (‘‘NRF’’), No. 000027 at 5; The Broadcast 

Team, No. OL–112822 at 2. 

42Heritage at 2; Infocision at 3. 

43 VMBC at 10; U.S. Chamber at 5; DMA at 9; SBC 

at 2; NRF at 4; Heritage at 1–2; Soundbite at 2; SBC 

at 4; West at 3. 

44Call Command at 1; Convergys at 5; DMA at 11; 

NAR at 1–2; Visa at 2; Verizon at 6–7; NRF at 4–

5. Verizon also argued that requiring that Do Not 

Call information be provided ‘‘at the outset’’ of a 

prerecorded message would conflict with current 

FCC regulations. Verizon at 6. 

45 DMA at 11–12 (estimating that reprogramming 

calling stations would cost ‘‘$25,000 per location’’); 

SBC at 4 (citing the ‘‘significant investment of time 

and capital to synchronize telephonic dialing 

capabilities with interactive voice platforms and 

databases,’’ the significant cost of requiring the 

availability of sales agents, and asserting that the 

‘‘number of calls able to be made in a single day 

would decrease by more than 99%’’); Convergys at 

5 (arguing that connection to an agent would be cost 

prohibitive because of the increase in 

telecommunications costs to maintain ‘‘bridges’’ to 

customer service personnel); Visa at 2 (‘‘[T]he 

technology to permit registration [on companyspecific Do Not Call lists] during the telemarketing 

call presently is not widely implemented and * * * 

would be costly and complicated’’). 

46Soundbite at 2; VMBC at 10. 

47SBC at 14 n.13. 

48 VMBC at 13–14; U.S. Chamber at 6; West at 3; 

Visa at 2; cf. NRF at 4 (suggesting a more flexible 

disclosure timing such as ‘‘reasonably promptly’’). 

49E.g., Electronic Privacy Information Center 

(‘‘EPIC’’), No. OL–113823 at 2; Privacy Rights 

Clearinghouse (‘‘PRC’’), No. OL–113986 at 2–4; 

National Consumers League (‘‘NCL’’), No. OL–

112905 at 5. Well over 13,000 of the 13,550 

consumer comments in the record clearly opposed 

allowing prerecorded telemarketing messages, with 

no more than 77 of the comments indicating 

arguable support for the proposed amendment. 

50Some 2,100 of the consumer comments 

opposing prerecorded telemarketing calls 

specifically objected that they constitute an 

invasion of privacy. 

51E.g., Myers, M., No. OL–100768 (‘‘Pre-recorded 

messages are even more annoying than calls from 

live people. You can’t interrupt, you can’t ask 

questions and you can’t respond.’’); Allen, No. OL–

103079 (‘‘I cannot ask a recording to clarify who 

they are or what our existing relationship is.’’); 

Stahl, K., No. OL–101878 (‘‘The very worst form of 

telemarketing is the one made by a machine. Prerecorded messages are just as invasive and 

unwanted, and far more frustrating.’’); Levy, No. 

OL–102365 (‘‘No business should be able to call me 

unless I have a pre-existing relationship (one that 

>I< recognize), but even a company I do business 

with should hire someone to actually speak to me.’’) 

(punctuation in original); Powell, D., No. OL–

113775 (‘‘Recorded messages like this are more than 

an annoyance, they are a way for business to avoid 

talking to their customers, and instead just talk at 

them.’’). 

52Watson, B., No. OL–108960; cf. Nungesser, R., 

No. OL–112535 (uninvited prerecorded calls are 

‘‘no different than a door to door salesman breaking 

you[r] window, and entering your home to sell you 

his product only * * * it will be a robot, not a 

person.’’). 

53Of the 77 positive consumer comments, more 

than half—47—sought only to preserve prerecorded 

informational messages that are not prohibited by 

the TSR. These 47 consumers opposed any 

limitation on prerecorded ‘‘reminder’’ messages, 

with some 36 of them seeking to avoid any need 

to sign a consent form to receive such messages, 

apparently in the mistaken belief that this would be 

necessary if the proposed amendment were not 

adopted. E.g., Haas, No. OL–113929; Tran, No. OL–

113929; Lopez, No. OL–113975; Schroeter, No. OL–

113882; DeSantis, No. OL–113892. One consumer 

group correctly noted that such strictly 

informational messages ‘‘would not fall under the 

definition of ’telemarketing’’’ in the TSR. NCL at 3. 

54E.g., Matthews, D., No. OL–100004; Forrette, 

No. OL–113959; Bartholow, D., No. OL–113662; 

Auerbach, No. OL–101665; Oberly, No. OL–105967. 

55E.g., Matthews, D., No. OL–100004 (‘‘Some prerecorded computer generated calls are convenient 

and necessary’’ but ‘‘[t]elemarketing computer 

generated ’cold calls’’ are definitely a problem.’’). 

Forrette, No. OL–113959 (‘‘I can think of several 

cases where I find this very useful, such as 

notification from my airline when there’s a 

schedule change to my flight. As long as the 

prohibition on the use of pre-recorded messages for 

’cold calling’ remains in place, I think it’s okay.’’); 

Bartholow, D. No. OL–113622 (‘‘Bill reminders are 

not the same as telemarketing sales calls.’’); 

Consumer Assistance Network, No. OL–113928 

(‘‘The consumer would rather receive a [reminder] 

message rather than a telemark[et]ed call.’’). 

that the Commission may have authority 

to regulate deceptive, unfair, and 

abusive telemarketing practices, but 

cited a need for clarification of the 

TSR’s applicability to prerecorded 

messages.40

The subject that elicited the greatest 

industry comment was the proposed 

safe harbor requirement that consumers 

be presented, at the outset of a 

prerecorded message, with an 

interactive mechanism to exercise their 

company-specific Do Not Call rights. 

Almost all opposed this aspect of the 

proposal,41 with two objecting that it 

unconstitutionally mandated compelled 

or ‘‘forced speech.’’ 42 Several argued 

that requiring a disclosure at the outset 

would result in a large number of Do 

Not Call requests, and might confuse 

consumers who would otherwise wish 

to hear the message.43 Others contended 

that the method authorized by the FCC 

of providing a number during or at the 

end of the message that consumers can 

call with a Do Not Call request works 

well, and should be adopted by the 

FTC.44 Many objected that interactive 

technology, either to connect to a 

representative or to make an automated 

Do Not Call request, is costly, 

burdensome, and not widely 

available,45 notwithstanding the 

arguments by two industry members 

that the technology is available on ‘‘a 

very cost effective basis.’’ 46 One 

comment doubted that it ‘‘would 

necessarily be the case that the 

interactive feature would connect the 

consumer to a live sales representative 

any faster than if the customer were 

simply to dial an 800-number.’’ 47

Several comments recommended that 

the Commission leave the timing and 

method of providing a Do Not Call 

option up to the industry, as the FCC 

has done, so that sellers will have the 

flexibility to choose the method most 

suitable to their operations based on 

preferences and costs.48

2. Consumer Comments 

Nearly all the consumers and 

consumer advocacy groups who 

commented opposed the proposal to 

permit telemarketing calls that are 

prerecorded, regardless of whether the 

party called has an established business 

relationship with the seller.49 Their 

comments show that consumers 

overwhelmingly find prerecorded 

telemarketing messages more intrusive 

and invasive of the privacy they enjoy 

in their homes than live telemarketing 

calls,50 primarily because they are 

powerless to make themselves heard.51

As one consumer put it, ‘‘[t]he 

telephone is for conversing with another 

human being, not for invading my home 

with inexpensive advertising.’’ 52

Like many industry comments, most 

of the consumer comments that seemed 

to support the proposal to allow 

prerecorded messages in telemarketing 

calls to established customers exhibited 

a basic misunderstanding of the TSR’s 

applicability. Specifically, the majority 

of these relatively few supportive 

consumer comments indicated that they 

did not want the Commission to 

prohibit prerecorded informational 

messages such as reminder messages—

although such messages have never 

been covered, much less barred, by the 

TSR.53 These consumers expressed 

appreciation for prerecorded 

informational messages about delivery 

dates for previously purchased goods or 

services, medical prescription order 

notifications, flight cancellation alerts, 

and overdue bill and appointment 

reminders.54 Yet some of the same 

consumers made it clear they opposed 

receiving prerecorded telemarketing 

sales pitches.55 Thus, there is only the 

barest consumer support in the record 

for the proposed safe harbor for 

prerecorded telemarketing sales calls to 

established customers. 

The widespread opposition expressed 

in this record to the infringement on 

personal privacy through prerecorded 

telemarketing calls to home telephones 

stands in sharp contrast to the consumer 

support in the record of the TSR 

amendment proceeding for including an 

established business relationship 

exemption for telemarketing using sales 


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56TSR SBP, 68 FR at 4593 n.141. 57Only 15 of the 77 consumer comments that 

arguably supported prerecorded telemarketing calls 

did so without reservation or apparent 

misunderstanding. E.g., Hamilton, No. OL–113099 

(‘‘I would be in support of the change. * * * I 

would rather hang up on an automated machine 

than a live person.’’); Curran, D., No. OL–105145; 

Childress, No. OL–102612; Young, E., No. OL–

112546. Another 13 approved of prerecorded sales 

calls from businesses they know and regularly 

patronize, but not necessarily from any business 

from which they have made a purchase. E.g., 

Leader, No. OL–110416 (‘‘I am not in favor of this 

amendment. * * * [T]he only calls that should be 

allowed are to companies who have an ongoing 

existing and real business relationship with the 

customer.’’); Dusenbury, No. OL–113951 

(supporting prerecorded reminder messages 

generally, including ‘‘sale reminders from my 

favorite stores.’’); Bartholow, D., No. OL–113622. 

Two consumers backed prerecorded messages in 

the mistaken belief that such messages would be 

‘‘permission based’’ opt-in messages. Taylor, J., No. 

OL–105274; Taylor, R., No. OL–105171. The 

remaining 47 supported prerecorded ‘‘reminder’’

messages, as previously noted. See note 53, supra. 

58E.g., Allison, No. OL–108414 (‘‘In the recent 

election one citizen had her answering machine [so] 

filled with phone messages from a candidate that 

her child could not get word to her of an emergency 

at the child’s school.’’); O’Connor D., OL–111858; 

Rose, C., OL–111837; Micret, OL–111402; Rickey, 

OL–104029; see also PRC at 6–7; NCL at 3. Neither 

the TSR nor the proposed new safe harbor, 

however, prohibits the use of prerecorded messages 

when an answering machine picks up a call. See the 

discussion in Section II.E, infra. 

59E.g., Brown, R., No. OL–104366; Amsberry, No. 

OL–105113; Lasting Fitness, No. OL–110413; 

Miller, No. OL–103424; Grover, No. OL–109774; 

Pearlman, S., No. OL–112275. 

60E.g., Northeast Harbor Inn, Inc., No. OL–

113439; Bart’s Pneumatics Corp., No. OL–107508; 

Bus. Innovations, No. OL–110414; cf. Idaho Small 

Bus. Dev. Ctr., No. OL–113259; County of Berks—

Prison, No. OL–105593. 

61E.g., Graham, No. OL–104100 (‘‘If you needed 

to call for a fire truck or an ambulance or poison 

control and some recorded message was tying up 

your phone, would you think it was OK?’’); Vernen, 

No. OL–110383 (prerecorded calls ‘‘most 

dangerously—frequently fail to release the line 

promptly when hung up on. This presents an 

immediate risk to the health and safety of the call 

recipient since the telephone line is unavailable in 

an emergency.’’); see also, e.g., Adkins, No. OL–

104921; Albright, D., No. OL–105813; Alquist, No. 

OL–113229; Schmaljohn, No. OL–110028; Granzo, 

No. OL–104469; Pickett, A., OL–104461; 

Simnacher, No. OL–108720; Miller, C., No. OL–

105006. As the legislative history of the TCPA 

notes, S. Rep. No. 102–178, at 10 (1991), some 

telephone networks are not capable of notifying 

callers that a consumer has hung up, thereby 

excusing telemarketers from complying with an 

FCC requirement that they release the line ‘‘within 

5 seconds of the time [such] notification is 

transmitted.’’ 47 CFR 68.318(c). It appears from the 

comments that many networks still lack this 

capability. Thus, depending on their local network, 

consumers may have to wait until the end of what 

may be a lengthy prerecorded message before their 

telephone line is released. 

62Friedman, No. OL–110265 (a disabled 

consumer unable to make an emergency call 

because the recorded message would not 

disconnect); Gardiner, W., No. OL–100542 (an 

elderly consumer who complained that the receipt 

of prerecorded messages twice prevented him from 

contacting a doctor). See also, NCL at 3; PRC at 11 

(citing a comment it received from a self-identified 

‘‘former legitimate telemarketing salesman’’

objecting to allowing prerecorded messages because 

‘‘[t]here are one or more deaths on record 

Nationally that were precipitated by a prerecorded 

message that would not cede the line it was on, 

even though the receiving party had hung up!’’). 

63Chico Community Shelter Partnership, No. OL–

109650; cf. Udehn, No. OL–114005 (‘‘Callers are 

persistent and do not like to release phone lines 

until they make a sale, even to allow emergency 

patient calls. I need a line uncluttered by telephone 

SPAM to continue emergency room coverage.’’). 

64E.g., Sahagian, No. OL–113021 (a self-described 

‘‘unemployed telemarketing manager, laid off as a 

direct result of the national do not call list’’ who 

finds prerecorded messages ‘‘the most intrusive’’

because ‘‘I can’t ask the message to get to the point 

or never call again.’’); Bedell, No. OL–105951 (‘‘A 

machine can’t hear me say ‘put me on your do-notcall list!’ ’’); Schares, No. OL–110388 (‘‘At least 

with a live person, you can have the illusion of 

requesting removal from the list, with a machine, 

you are just out of luck.’’); Irving, No. OL103862; 

see also, e.g., Sawyer, No. OL–108895; Goltz, OL–

107085; Hancock, J., No. OL–112529; Blumberg, No. 

OL–104484; O’Daire, No. OL–113753; Salgado, No. 

OL–111816; Von Kennen, No. OL–113646; Ianson, 

No. OL–105278; Valum, No. OL–102442; Van 

Baren, No. OL–101942; Zimmerman, J., No. OL–

113999. 

65E.g., Hohm, No. OL–104448 (‘‘Allowing 

automated calls will let telemarketers flood 

consumers with sales calls * * * with no practical 

means for the consumer to challenge their propriety 

or to refuse further calls.’’); Sartin, No. OL–104554 

(‘‘If [prerecorded calls] are to be allowed, it should 

only be through opt-in, not an inherently awkward 

and unreliable opt-out.’’); Von Kennen, No. OL–

113646 (‘‘I can only imagine the telephone pingpong game between menus, voice-mail, call 

transfers, and the inevitable disconnection that I’ll 

have to play before I can hope to talk to someone 

who will listen [to a Do Not Call request].’’). 

66E.g., Sahagian, No. OL–113021 (an 

‘‘unemployed telemarketing manager’’ who states 

that ‘‘[o]ften one must wait until the end of the 

message for contact information, write down a 

phone number, call back, turn down a live sales 

offer, ask to speak with a manager, and then finally 

ask to be deleted from future calling campaigns.’’); 

Nobles, No. OL–105403, (‘‘The requirement[s] that 

they identify themselves and allow me to ask them 

to remove me from their calling list are 

meaningless, since that information is always 

supplied at the very end of the call.’’); Stahl, K., No. 

OL–101878; Schneider, P., No. OL–101484. The 

call-back requirement that consumers describe, if 

permitted by FCC rules, does not comply with the 

safe harbor proposal in the NPRM because it fails 

to give consumers an opportunity to exercise their 

Do Not Call Rights during the call. 

67E.g., Blumberg, No. OL–104484 (‘‘There is 

always an option to wait until the end of the 

message and press a number to talk with a person 

but only in rare instances does this work.’’); 

Vinegra, No. OL–104055 (‘‘[I]n my experience, 

automated phone spam is the MOST likely to not 

have a valid way to get off the list. Oh, sure, it may 

give you an 800 number to call, but that’s likely to 

reach some convoluted voicemail system that never 

gets you anywhere.’’); Fiol, No. OL–112458 (‘‘I do 

not believe that offering consumers the option of 

hanging up and calling an 800 number is an 

effective one. It only worsens the interruption and 

imposition on the consumer’s time, and * * * 

frustrate[s] the consumer if the 800 number is busy 

or even inoperative.’’). 

representatives. In that proceeding, the 

Commission provided such an 

exemption from the Do Not Call 

provisions after 40 percent of the 

consumers who commented supported 

the exemption.56 Here, only 15 

consumer comments—a scant tenth of 

one percent of the more than 13,000 

consumer comments that addressed the 

proposed amendment—expressed 

unambiguous support for the proposed 

safe harbor for prerecorded message 

telemarketing to established 

customers.57

Consumers also expressed concern 

about the potential costs, including the 

risks to health and safety, if the 

proposed safe harbor allowing 

prerecorded telemarketing messages to 

established customers were adopted. 

For example, consumers who subscribe 

to a telephone company or other voice 

mail services protested having to pay for 

storage of messages they do not want, 

which can exceed their allotted storage 

capacity and prevent them from 

receiving the messages they need, as did 

owners of answering machines.58

Consumers with home-based businesses 

objected to the costs incurred when 

their home telephone lines are tied up 

by telemarketing calls,59 and even small 

businesses and government agencies 

that are not protected by the TSR lodged 

the same complaint.60 Several 

consumers cited the danger of the loss 

of use of their telephone lines, which 

can be tied up for some period of time 

even after the recipient hangs up on a 

prerecorded message.61 A few 

consumers cited instances when 

prerecorded messages prevented them 

from making emergency calls,62 and a 

community shelter that forwards its 

calls to allow staff counselors to receive 

them on their home telephones reported 

that ‘‘[w]e are dealing with life and 

death situations from suicide to 

substance abuse to domestic violence’’

and clients ‘‘are unable to get to a crisis 

counselor due to the high volume of 

telemarketers calling our [home] phone 

number.’’ 63

Consumers emphasized the 

difficulties they experience with 

prerecorded messages in exercising their 

company-specific Do Not Call rights. 

Many objected to the fact that they 

could not tell a prerecorded message to 

put them on the seller’s Do Not Call list, 

as they could with a sales 

representative.64 Some consumers 

reported that the mechanism typically 

provided for exercising their Do Not 

Call rights is impractical,65 both because 

they have to wait until the end of what 

may be a lengthy message to get a 

number to call to speak to an agent,66

and because the Do Not Call option 

provided at the end of the message 

simply does not work.67

More generally, the comments attest 

that consumers found the companyspecific opt-out regime required to stop 

unwanted prerecorded messages prior to 


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68E.g., Gollinger, No. OL–103929 (‘‘This puts an 

undue burden upon the consumer to attempt to 

contact the company to have their name deleted 

from the call list.’’); Wahlig, No. OL–104503 at 1 

(citing the ‘‘unjustifiable burden on citizens who 

wish to assert their DNC rights’’); Tomas, No. OL–

101671 (‘‘Instead, the burden is placed on the 

victim’s shoulders to contact the telemarketer to 

have himself removed from the call list.’’); Ayers, 

T., No. OL–113131; Bashor, No. OL–113062; Fiol, 

No. OL–112458; LaMountain, No. OL–101888; 

Boyd, M., No. OL–113844; Hall, No. OL–104082; 

Grace, No. OL–113784; Piro, No. OL–112925. 

69E.g., Hancock, J., No. 112529; Sahagian, No. 

OL–113021; Kleger, No. OL–103115. 

70Sachau, No. EREG–000002; see also 

Argyropoulos, No. OL–102968 at 2 (‘‘[N]one of the 

proposed options allow a person answering on a 

non-touch-tone phone to efficiently make a Do Not 

Call request.’’). While other mechanisms 

undoubtedly exist to provide equivalent 

functionality for rotary dial telephone users, no 

industry comment addressed this problem in 

response to the NPRM’s request for information 

about ‘‘alternative mechanisms.’’

71NCL at 5 (‘‘The FTC proposal seems to assume 

that when the consumer presses the number to 

speak to a live company representative, one will be 

readily available. It is unclear what happens if that 

is not the case. Will the consumer get dead air? Be 

put on hold with recorded music? Be hung up 

on?’’); Argyropoulos, No. OL–102968 at 2. 

72PRC at 7 (arguing that most prerecorded 

telemarketing messages are left on answering 

machines or voice mail services, depriving 

consumers of the benefits of such an option, and 

ultimately clogging their message storage with 

unwanted telemarketing messages). However, 

nothing in the TSR’s call abandonment prohibition 

bars the use of equipment that channels a call to 

a sales representative if a consumer answers, but to 

a recorded message if an answering machine picks 

up. See TSR SBP, 68 FR at 4645; see also the 

discussion in Section II.E, infra. 

73 1992 FCC Order, 7 FCC Rcd 8752, ¶ 34 

(concluding that a ‘‘solicitation can be deemed 

invited or permitted by a subscriber in light of the 

business relationship.’’). 

74E.g., Sancibrian, No. OL–106078; Salem, No. 

OL–107247; Sartin, No. OL–104554; Laucik, No. 

OL–104859; Wortman, No. OL–103376; Corey, No. 

OL–105981; Innes, No. OL–105931; Brown, R., No. 

OL–107136; Troup, No. OL–103143; Goland, No. 

OL–100107. 

75See note 56, supra, and accompanying text. 

Many of the consumer comments opposing 

expansion of the ‘‘established business 

relationship’’ exemption did not distinguish 

between prerecorded calls and live calls from a 

sales representative. Consequently, it is impossible 

to determine whether these comments would 

support an established business relationship 

exemption for live telemarketing calls, or whether 

they reflect a change in consumer attitudes toward 

the exemption. 

76EPIC at 2, 14; PRC at 4, 9; NCL at 4; see also, 

e.g., Barry, A., No. OL–104109; Williams, K., No. 

OL–101321; North, W., No. OL–103090; Schnautz, 

No. OL–104508; Tipping, No. OL–109310; Twilling, 

No. OL–108395; Viggiano, No. OL–108516. 

77E.g., Nuglat, No. OL–109584 (‘‘[T]hese 

companies will be calling a purchase of a stick of 

gum a year ago the basis of an established business 

relationship.’’); Touretzky, No. OL–100891 (‘‘I work 

nights and sleep in the daytime. I do not want to 

be dragged out of bed by every low-life outfit that 

once sold me a box of paperclips.’’); Holt, C., No. 

OL–102518 (‘‘Time Warner owns some 80% of the 

media markets, does that mean if I buy one copy 

of Time magazine that I should have to receive 

phone calls from every other media outlet Time 

owns? That’s the way it functions now.’’); see also, 

e.g., Holt, C., No. OL–102518; Schendel, K., No. 

OL–101419; Veech, No. OL–110162; Ehlinger, No. 

OL–105751; Eide, No. OL–102754; Erskine, D., No. 

OL–109355; Volek, No. OL–100697; Inman, J., No. 

OL–102319; Verner, No. OL–104134; Islam-Zwart, 

No. OL–100028; Sampson, No. OL–106004; 

Salisbury, No. OL–104292. 

78Sanderson, No. OL–447. See also Sager, No. 

OL–104269; Yarrow, No. OL–102563. 

79EPIC at 14; PRC at 9; NCL at 3. 

80E.g., Hancock, J., No. OL–112529 (‘‘Since a 

‘business relationship’ is readily established by any 

inquiry or purchase, the universe of companies that 

can claim a basis to make junk phone calls is 

huge.’’); Talmo, No. OL–110438 (‘‘A few years ago, 

most of my purchases were made within my 

community.* * * The digital world has opened up 

very far-reaching so-called relationships. * * * I 

now make many one-time [Internet] purchases from 

companies I may never contact again. I fear that 

these simple one time purchases will constitute a 

so-called business relationship.’’); Argyropoulos, 

No. OL–102968 at 1 (‘‘Companies are offering free 

or below-cost inducements to establish business 

relationships for the primary purpose of acquiring 

the ability to telemarket to consumers in the Do Not 

Call registry.’’). 

81E.g., Fryman, No. OL–101503 (‘‘The established 

business relationship clause of the existing system 

has been stretched and twisted beyond all 

recognition, such that companies that we have had 

no ‘business relationship’ with in over 5 years are 

still calling.’’); Anderson, J., No. OL–102561 (‘‘I get 

3–5 calls a day, with recorded messages. And NO, 

they are NOT people I’ve done business with!’’); 

Holt, C., No. OL–102518, (‘‘I constantly receive 

solicitations from companies who claim I have a 

relationship with them, and I’ve never heard of 

them before. STILL get calls, both human and PRERecorded.* * *[A]s I was writing this, I was just 

interrupted by a TELEMARKETING CALL!!!!!! 

* * *[I]t was not a company we had ever done 

business with and they would not tell me how they 

got this number.’’). 

82E.g., Thompson, A., No. OL–104385 (‘‘I 

recently moved, and my new phone number was 

not on the Do Not Call list; I received more ‘junk’

calls than I received normal phone calls. Adding 

my new number to the list made having a phone 

bearable again.’’); Musgrave, No. OL–106135; 

Sampson, No. OL–106004; Anholt, No. OL–104141; 

Dougherty, J., No. OL–106035; Gordon, M., No. OL–

109877; Matson, No. OL–111933; Gunnells, No. 

OL–108503; McCarthy, L., No. OL–101367; Sayer, 

No. OL–100407. 

the advent of the Registry extremely 

burdensome and frequently 

ineffective.68 Apparently assuming that 

a company-specific opt-out might not 

take the form of an interactive method 

at the outset of the call (as proposed by 

the Commission), some consumers 

complained that the burden would be 

placed on them to listen until the end 

of unwanted messages to obtain an optout telephone number, to copy the optout number, and to wait to call that 

number during normal business hours 

to ask not to be called again—a process 

they would have to repeat for each 

company that calls.69

Some consumers and consumer 

groups questioned the adequacy of the 

proposed interactive mechanism that 

would permit consumers to exercise 

their Do Not Call rights by pressing a 

button on the telephone keypad. At least 

one consumer noted that this approach 

would be ineffective for her, and 

presumably many thousands of other 

consumers who still have rotary dial 

telephones without keypads.70 A 

consumer group and at least one 

consumer questioned whether the 

proposed interactive mechanism would 

be effective in the absence of a 

requirement that a representative be 

promptly available.71 Another consumer 

group doubted that consumers would 

really benefit from the proposed 

interactive mechanism.72

A number of consumers also 

challenged a presumption implicit in 

the proposed safe harbor that would 

have permitted prerecorded 

telemarketing calls to established 

customers. Notwithstanding the FCC’s 

rationale for allowing sellers to use 

prerecorded messages in calls to 

established customers,73 many 

consumers contended that neither a 

prior inquiry nor purchase implied their 

consent to receipt of future prerecorded 

solicitations from a seller,74 contrary to 

prior consumer support for live 

telemarketing calls.75 Many of the 

consumer comments argued that, given 

the intrusive and impersonal nature of 

prerecorded messages, prerecorded 

telemarketing calls should not be 

permitted at all without the consumer’s 

prior consent.76 In addition, many 

objected to what they regard as the 

overbreadth of the TSR’s definition of 

an ‘‘established business 

relationship,’’ 77 which some regarded 

as threatening to make a ‘‘mockery’’ of 

the Registry 78—especially if the use of 

prerecorded messages is permitted.79

These consumers foresee that allowing 

prerecorded messages will likely 

increase the number of ‘‘established 

business relationship’’ telemarketing 

campaigns, with the result that 

consumers will have to assert companyspecific Do Not Call requests repeatedly 

for different sellers from which they 

made a one-time purchase.80 Moreover, 

some consumers reported that they 

receive both live and prerecorded 

telemarketing calls from businesses with 

which they have no ‘‘established 

business relationship.’’ 81

Many consumers also commented that 

since they listed their telephone 

numbers on the National Do Not Call 

Registry, they have come to rely on it to 

shield them from unwanted 

telemarketing calls, including 

prerecorded messages.82 A large number 

fear the proposed safe harbor will create 

a ‘‘loophole’’ that will dilute the 

effectiveness of the Registry in 

preventing unwelcome intrusions on 


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83Over 5,900 consumer comments asserted that 

there is no need to create a ‘‘loophole’’ or to adopt 

the amendment. E.g., Brown, R., No. OL–101294; 

Hill, A., No. 000037; Moore, M., No. OL–101468; 

Fryman, No. OL–101503; Vrignaud, No. OL–

101542; Jester, No. OL–101685; Selmi, No. OL–

102168; Miller, No. OL–103424; Vogel, No. OL–

105708 at 1. 

84Sacerdote, No. OL–112192 (‘‘The cost of 

placing such automatic call[s] is essentially zero, 

and the desire to place such calls will therefore be 

nearly infinite.’’) (emphasis added); EPIC at 5–6 

(citing a 1999 news report that VMBC could leave 

‘‘messages with 1% of the U.S. population over a 

two-day period,’’ and the increasing use of low cost 

Internet services such as VoIP or Internet 

telephony); PRC at 8–9 (citing an August 10, 2004, 

CNET article about software that can deliver up to 

1,000 synthetic calls every five seconds to Internet 

Protocol addresses assigned to telephones); NCL at 

2–3 (arguing that low cost use of prerecorded 

messages rather than salespersons and expansive 

reading of ‘established business relationship’ will 

result in increase of telemarketing calls); see also, 

e.g., Allan, A., No. OL–103079; United States 

Senate, No. OL–113862 at 3; Bates, J., No. OL–

100012; Fisher, B., No. OL–109494; Watson, B., No. 

108960. 

85E.g., Anderson, No. OL–106320 (‘‘E-mail spam 

is killing e-mail for legitimate business 

communication and phone spam would do the 

same for telephone communications.’’); Kislo, No. 

OL–102924 (‘‘Such a modification would change 

telemarketing rules in such a radical fashion, you 

risk bringing the ‘e-mail spam’ problem to the 

telephones across the US.’’); Malone, S., No. OL–

107630 (objecting to FTC proposal to allow ‘‘prerecorded ‘spam blitzes’’ ’); Miller, No. OL–103424 

(‘‘Left unchecked (as I believe it is today) the phone 

system will become much like e-mail, 80% spam.’’). 86See note 54, supra. 

87S. Rep. No. 102–178, at 10 (1991). 

88E.g., Frisby v. Schultz, 487 U.S. 474 (1988); 

Rowan v. U.S. Post Office Dep’t, 397 U.S. 728 

(1970). 

89Several industry comments inconsistent with 

this rationale argue that because the burden of proof 

of an established business relationship would fall 

on the seller, no new enforcement concerns would 

be created by a safe harbor for prerecorded calls. As 

these comments reflect, the industry recognizes that 

the burden of this affirmative defense rests on 

sellers and telemarketers to prove that the seller has 

an established business relationship with the party 

called, 16 CFR 310.4(b)(1)(iii)(B)(ii), just as in the 

express written agreement exception, 16 CFR 

310.4(b)(1)(iii)(B)(i), and the Do Not Call safe 

harbor, 16 CFR 310.4(b)(3). 

their privacy at home.83 Consumers and 

their advocates expressed concern that, 

if the proposed new safe harbor were 

adopted, marketplace economics could 

soon produce a flood of prerecorded 

telemarketing messages that would 

engulf the privacy protection provided 

by the Registry. They cited, in 

particular, such recent digital 

technologies as Voice Over Internet 

Protocol (‘‘VoIP’’) as likely to lower the 

costs of prerecorded telemarketing 

messages to the point that they would 

be used extensively, if permitted.84

Thus, several comments argued that 

allowing the use of prerecorded 

messages in telemarketing to established 

customers would in effect create the 

telephonic equivalent of ‘‘spam,’’

overwhelming consumers with 

unwanted messages that cost the caller 

little or nothing to send.85

D. Analysis of the Comments, 

Discussion and Conclusion 

Two themes strikingly emerge from 

the record. First, there is virtually no 

consumer support for allowing the use 

of prerecorded messages; and second, 

neither industry nor consumers support 

the proposal’s effort to ensure that 

consumers would be able to assert an 

entity-specific Do Not Call request in an 

‘‘established business relationship’’ call 

delivering a prerecorded message as 

easily and as quickly as in a similar call 

using sales representatives. Thus, the 

Commission’s analysis begins from the 

premise that a new safe harbor that 

treats prerecorded telemarketing calls to 

established customers differently from 

other prerecorded calls might be 

appropriate if: (1) The consumer 

aversion to prerecorded calls (which led 

to enactment of the TCPA ban on such 

calls) does not apply when such calls 

are made to established customers; (2) 

any harm to consumer privacy is 

outweighed by the value of prerecorded 

calls to established customers; or (3) 

there is something unique about the 

relationship between sellers and their 

established customers that gives sellers 

a sufficient incentive to self-regulate so 

that they would avoid prerecorded 

telemarketing campaigns that their 

customers would consider abusive. 

Based on careful consideration of the 

comments, the Commission concludes 

that the record does not support any of 

these possible rationales for treating 

prerecorded telemarketing calls to 

established customers differently from 

other prerecorded calls. 

First, if consumers had little or no 

aversion to prerecorded calls from 

sellers with whom they have an 

established business relationship, the 

fact that such calls avoid the twin harms 

of ‘‘dead air’’ and ‘‘hang ups’’ associated 

with abandoned calls would weigh 

heavily in favor of the adoption of a new 

safe harbor. The record here provides 

compelling evidence, however, that 

consumer aversion to prerecorded 

message telemarketing—regardless of 

whether an established business 

relationship exists—has not diminished 

since enactment of the TCPA, which, in 

no small measure, was prompted by 

consumer outrage about the use of 

prerecorded messages. The comments in 

this record demonstrate that consumers 

continue to view such calls as an 

abusive invasion of their privacy, and 

an even greater invasion of their privacy 

than live telemarketing calls because 

they are powerless to interact with a 

recording. Indeed, almost all of the very 

few consumers who commented in favor 

of prerecorded messages confined their 

comments strictly to informational calls, 

in some cases qualifying their support 

with negative comments about 

prerecorded sales calls.86

In addition, some consumers are 

troubled by the potential hazards that 

prerecorded messages may pose for their 

health and safety when home telephone 

lines cannot be released in emergencies. 

As this record attests, in at least a few 

instances, prerecorded messages of 

indeterminate length have prevented 

consumers from making emergency 

calls—a concern which was an 

important factor leading to passage of 

the TCPA.87 While the record does not 

suggest that obstruction of emergency 

calls by prerecorded messages is a 

common occurrence, the seriousness of 

the potential consequences when it does 

occur creates legitimate cause for 

concern. 

Likewise, the possibility that any 

harm to consumer privacy might be 

outweighed by the value of prerecorded 

calls to established customers is 

convincingly refuted by the consumer 

comments. There is support in the 

record for prerecorded informational 

messages—i.e., messages without any 

sales pitch—which are not prohibited 

by the TSR; yet there is virtually none 

for prerecorded telemarketing messages. 

Accordingly, this second potential 

rationale for adoption of a new safe 

harbor is not supported by the record—

a fact that assumes particular 

importance in view of Supreme Court 

precedent that has long recognized the 

significant governmental interest in 

protecting residential privacy.88

The third possible rationale for a new 

safe harbor—that sellers will selfregulate the number of prerecorded 

messages they send in order to preserve 

the goodwill of established 

customers 89—is similarly unpersuasive. 

Although it may be that well-established 

businesses with brand or name 

recognition will engage in such 

restraint, the same is not necessarily 

true for new entrants and small 

businesses in highly competitive 

markets. The proposed safe harbor, if 

approved, would expose consumers, 

including those who have entered their 

telephone numbers on the Registry, to 

such prerecorded messages, potentially 

from every seller from whom they have 

made a single purchase in the past 18 

months. In addition, because the TSR’s 

definition of an ‘‘established business 

relationship’’ includes consumers who 

have not made a prior purchase, but 

simply an inquiry, sellers would have 


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90From December 31, 1995 until March 25, 2003, 

the Commission brought 162 cases against 

telemarketers alleging violations of the TSR. Since 

March 31, 2003, the effective date of the amended 

TSR, 24 cases alleging violations of the TSR’s Do 

Not Call provisions, and another 37 cases alleging 

other TSR violations by telemarketers have been 

brought by the Commission or the Department of 

Justice at the Commission’s request. E.g., FTC v. 

Universal Premium Serv., No. 06–0849 (C.D. Cal. 

entered Feb. 21, 2006) (ex parte TRO entered to halt 

alleged TSR violations in ‘‘WalMart Shopping Spree 

Scam’’ involving continuing calls to consumers 

who had asked to be placed on the seller’s 

company-specific Do Not Call list); United States v. 

DirecTV, Inc., No. SACV05–1211 (C.D. Cal. filed 

Dec. 12, 2005) ($5.3 million civil penalty settlement 

for alleged TSR violations in making calls to 

consumers on the Registry, and for allegedly 

assisting a telemarketer in making prerecorded 

telemarketing calls that violated the call 

abandonment safe harbor). 

91 In United States v. Columbia House Co., No. 

05C–4064 (N.D. Ill. filed July 14, 2005), the 

Commission obtained a $300,000 civil penalty 

settlement for alleged calls to tens of thousands of 

numbers on the Registry. Although the defendant 

claimed an ‘‘established business relationship’’

with the consumers it called, the Commission 

alleged, after investigation and analysis, that most 

were calls to consumers who last made a purchase 

from the defendant far outside the prior 18-month 

period during which the exemption would have 

applied, and that other calls were made to 

consumers who had previously instructed the 

company not to call them. 

92E.g., Mari-Len de Guzman, Spam may be a 

future threat to VoIP, Computerworld, Sept. 7, 2005, 

at 2, available at http://www.computerworld.com/ 

networkingtopics/networking/ story/ 

0,10801,104442,00.html (citing Spam over Internet 

Telephony (SPIT) as a growing concern for VoIP 

users because technology would allow artificial 

messages to be sent to 30,000 IP phones in a second 

and costs would be ‘‘essentially zero’’) (emphasis 

added); Associated Press, Voice Over Internet Use 

Soaring, Yahoo! News, Mar. 1, 2006, available at 

http://www. ladlass.com/ice/archives/010819.html 

(reporting that the number of users of Internet 

telephone services tripled in 2005, jumping from 

1.3 million users of VoIP to 4.5 million); Deborah 

Solomon, AARP’s Antagonist, N.Y. Times 

Magazine, Mar. 13, 2005, at 23 (explaining how 

automated telephone messages are ‘‘extraordinarily 

inexpensive’’ and efficient, and citing, as an 

example, calling every household in North Dakota 

in just four hours for $10,000); VoIP to Open Door 

for Flood of Overseas Telemarketing, VoIPNEWS, 

May 17, 2005, http://web.archive.org/eb/ 

20050316232140/www.voip-news.com/art/6q.html 

(citing Burton Group analyst Fred Cohen who 

predicts that ‘‘the average enterprise or household 

could see as much as 150 calls a day’’ from 

telemarketers using VoIP based in part on the price 

of Internet telephony which has cut costs by a factor 

of 100). 

93Public Law No. 108–10, 117 Stat. 557 (2003). 

A related argument asserted in some industry 

comments, that Congress gave exclusive jurisdiction 

to the FCC to regulate the use of automated dialing 

and announcing devices, has been rejected by each 

court that has considered the question. Mainstream 

Mktg. Servs. v. FTC, 358 F.3d 1228, 1237, 1259 

(10th Cir.), cert. denied, 543 U.S. 812 (2004); Nat’l 

Fed’n of the Blind v. FTC, 420 F.3d 331, 337 (4th 

Cir. 2005), cert. denied, 126 S.Ct. 2058 (2006); see 

also Broad. Team, Inc. v. FTC, 429 F.Supp.2d 1292, 

1301–02 (M.D. Fla. 2006), appeal docketed, No. 06–

13520–EE (11th Cir. June 23, 2006). 

94Section 3 of the DNCIA directed that ‘‘the 

Federal Communications Commission shall consult 

and coordinate with the Federal Trade Commission 

to maximize consistency with the rule promulgated 

by the Federal Trade Commission (16 CFR 

310.4(b))’’ in issuing the 2003 FCC Order to 

implement and enforce the Do Not Call Registry. 

95 1992 FCC Order, 7 FCC Rcd 8752, ¶ 34. In fact, 

the TCPA states that Congress has found that 

‘‘residential telephone subscribers consider 

automated or prerecorded telephone calls * * * to 

be a nuisance and an invasion of privacy,’’ and that 

‘‘[b]anning such automated or prerecorded 

telephone calls to the home, except when the 

receiving party consents to receiving the call * * * 

is the only effective means of protecting telephone 

consumers from this nuisance and privacy 

invasion.’’ TCPA, Pub. L. No. 102–243, 105 Stat. 

2394 (1991) at §§ 2(10) and (12). 96 47 CFR 64.1200(a)(2)(iv). The only 

requirements are that the prerecorded message must 

clearly identify the business responsible for 

initiating the call and provide, ‘‘during or after the 

message,’’ a telephone number that consumers can 

call during normal business hours to make a 

company-specific Do Not Call request. 47 CFR 

64.1200(b). 

97 1992 FCC Order, 7 FCC Rcd 8752, ¶ 34. But cf., 

Telecom Decision, CRTC 2004–35, ¶ 111 (in which 

the Canadian Radio-Television and 

Telecommunications Commission declined to 

create an established business relationship 

exemption for prerecorded telemarketing calls on 

the ground that ‘‘when a consumer purchases a 

service or product from a company * * * there is 

no ‘implied consent’ as a result of that purchase to 

receive future solicitations’’). 

98 1992 FCC Order, 7 FCC Rcd 8752, ¶ 34. 

99 2003 FCC Order, 68 FR at 44165. In comments 

filed with the FCC during the rulemaking it 

conducted pursuant to the DNCIA, the FTC 

specifically urged the FCC to eliminate this 

discrepancy, as the FCC’s ruling acknowledged. 

2003 FCC Order, 18 FCC Rcd 14014, 14109, ¶ 156 

& n.556. However, the FCC declined to conform its 

prerecorded message rules to the FTC’s TSR, with 

no explanation except that the ‘‘current exception 

is necessary to avoid interfering with ongoing 

business relationships.’’ Id. at 95. 

less of an incentive to self-regulate the 

number of prerecorded messages they 

send to such consumers, because they 

have no established customer to lose, 

but only a customer to gain. The 

likelihood that industry-wide selfrestraint would be effective must be 

assessed with an eye toward the 

industry’s record of compliance with 

the TSR to date. While overall 

compliance with the Do Not Call 

provisions of the TSR is quite good, not 

all covered entities are complying.90

The compliance record presents a 

particular problem with respect to 

consumer concerns about the breadth of 

the industry’s interpretation of what 

constitutes an ‘‘established business 

relationship,’’ as the consumer 

comments and the Commission’s law 

enforcement experience indicate.91

This argument also ignores the fact 

that the cost of conducting live 

telemarketing campaigns with sales 

agents, as now permitted by the TSR, is 

itself a separate, significant check on the 

number of such campaigns. Thus, it is 

reasonable to expect that the 

substantially lower cost of prerecorded 

message telemarketing (compared to live 

telemarketing campaigns with sales 

agents) would significantly increase the 

use of such campaigns, at least by new 

entrants and small businesses that lack 

brand or name recognition. It is no less 

reasonable to predict that, as new digital 

technologies further reduce the cost of 

prerecorded telemarketing, the volume 

of prerecorded calls will increase. The 

record indicates that new digital 

technologies, including VoIP, are likely 

to reduce the cost of transmitting 

prerecorded telemarketing messages by 

telephone dramatically, if not to 

‘‘essentially zero,’’ in the foreseeable 

future.92 As the costs decrease, the 

economic incentives to increase the use 

of prerecorded telemarketing messages 

for advertising will multiply, increasing 

the flow of prerecorded messages 

consumers receive in their homes. 

Thus, there is no apparent rationale 

for according special treatment to 

prerecorded telemarketing calls to 

established customers. Nevertheless, 

there remains the industry contention 

that failure to adopt the proposed safe 

harbor would be contrary to the 

mandate of the Do Not Call 

Implementation Act (‘‘DNCIA’’),93

because FCC regulations permit certain 

prerecorded telemarketing calls, even 

though the DNCIA directed the FCC to 

maximize the consistency of its Do Not 

Call regulations with the FTC’s TSR.94

When the FCC first promulgated its 

regulations under the TCPA in 1992, 

that agency recognized that the TCPA 

did not exempt prerecorded calls to a 

consumer who has an established 

business relationship with a seller.95 In 

adopting regulations prohibiting 

virtually all prerecorded message 

telemarketing calls where the called 

party has not given ‘‘prior express 

consent’’ to receive such calls, the FCC 

nonetheless elected to create an 

‘‘established business relationship’’

exemption from that prohibition.96 The 

FCC explained that, in its view, a 

‘‘solicitation can be deemed invited or 

permitted by a subscriber in light of the 

business relationship,’’ 97 that requiring 

‘‘prior express consent’’ would 

‘‘significantly impede communications 

between businesses and their 

customers,’’ and thus, that a 

‘‘solicitation to someone with whom a 

prior business relationship exists does 

not adversely affect subscriber privacy 

interests.’’ 98 In updating its regulations 

in 2003 to comply with the DNCIA, the 

FCC elected to retain the exemption, 

stating that ‘‘[t]he record reveals that an 

established business relationship 

exemption is necessary to allow 

companies to contact their existing 

customers.’’ 99

As a result, the relevant provisions of 

the FCC rules and the TSR differ to the 

extent that the FCC rules permit 


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100As noted, the TSR addresses only calls 

delivering a recorded message when a person 

answers, as opposed to an answering machine or 

voice mail system. 

101The Commission’s view might be otherwise if 

the two sets of regulations were so contradictory 

that they imposed inconsistent obligations on 

sellers and telemarketers, but that is not the case 

here, where compliance with the more restrictive 

requirements of the TSR does not violate the FCC 

regulations. 

102TSR SBP, 68 FR at 4631 (‘‘[T]he companyspecific approach is seriously inadequate to protect 

consumers’ privacy from an abusive pattern of calls 

placed by a seller or telemarketer.’’). 103See note 45, supra, and accompanying text. 104See note 70, supra, and accompanying text. 

105See note 71, supra, and accompanying text. 

106See note 72, supra, and accompanying text. 

107Examples of informational calls—provided 

they are not combined with a sales pitch—include 

calls from an airline notifying consumers about a 

cancelled flight or a schedule change to a booked 

flight, or calls from a company notifying consumers 

about the recall of a purchased product. See notes 

29 & 54, supra, and accompanying text. 

108Sellers would have the same opportunity if the 

amendment discussed in Section II.E, infra, is 

adopted. 

prerecorded calls where the seller has 

an established business relationship 

with the party called, and the TSR’s call 

abandonment prohibition does not.100

While regulatory uniformity may be a 

laudable goal, it is not a sufficient basis 

for conforming the TSR to the FCC’s 

regulations given the Congressional 

mandate that the Commission’s 

Telemarketing Act regulations prohibit 

abusive telemarketing calls—and 

particularly given the lack of support in 

the record for exempting such calls from 

the Rule’s prohibition.101 In sum, the 

record does not establish a rationale that 

would warrant special treatment for 

prerecorded message telemarketing 

when directed to consumers with whom 

the seller has an established business 

relationship. 

An additional consideration 

articulated in the record supports the 

Commission in its conclusion not to 

adopt the new safe harbor VMBC 

sought: the potential of such a change to 

undermine the effectiveness of the 

National Do Not Call Registry. There can 

be no question that public support for 

the Do Not Call Registry is 

overwhelming and widespread. As of 

September 1, 2006, consumers had 

registered more than 130 million 

telephone numbers, choosing to ‘‘opt 

in’’ to the protection provided by the 

Registry to keep unwanted 

telemarketing calls from invading and 

disturbing the privacy of their homes. 

The importance of the Registry to 

millions of consumers in preserving 

personal privacy in their homes cannot 

be understated or underestimated, as the 

consumer comments on the record in 

this proceeding make clear. 

Nevertheless, the Commission is 

mindful of the legitimate interest of 

businesses in communicating with their 

established customers. The 

communication interest in such calls is 

one reason the TSR expressly permits 

sellers and telemarketers to make live 

telemarketing calls to consumers whose 

telephone numbers are listed on the 

Registry, provided the seller has an 

established business relationship with 

each consumer who is called, or has 

obtained a written agreement to receive 

such calls that is signed by the 

consumer. The safe harbor VMBC 

requested would have altered the 

delicate balance the Commission has 

struck between legitimate, but 

competing, privacy and communication 

interests. If a safe harbor that would 

permit prerecorded telemarketing 

messages to established customers were 

created, it seems certain that consumers 

whose telephone numbers are listed on 

the Registry would receive some greater 

number of telemarketing messages than 

they do now. Although reasonable 

people may differ on the likely size and 

scope of that increase, there can be no 

dispute that it would come at some cost 

to the privacy of consumers in their 

homes. Based on the record to date, the 

concern is a very real one that 

consumers, to some degree, would 

return to the same burdensome situation 

that existed before the Registry, when 

they were repeatedly having to assert a 

company-specific Do Not Call remedy 

that the Commission deemed 

inadequate for commercial sales 

solicitation calls when it created the 

Registry.102

Only one issue remains to be 

considered. In drafting the proposed 

new safe harbor in response to the 

VMBC petition, the Commission sought 

to minimize the potential harms of 

prerecorded calls to established 

customers by requiring sellers and 

telemarketers to provide a prompt 

opportunity at the outset of the message 

for customers to assert a companyspecific Do Not Call request. The 

Commission specifically endorsed an 

interactive mechanism that would 

permit the party called to connect to a 

sales representative during the message 

by pressing a button on the telephone 

keypad. The purpose of this provision 

was to put recipients of a prerecorded 

message on an equal footing in asserting 

their company-specific Do Not Call 

rights with customers who now receive 

live telemarketing calls from sales 

representatives under the TSR’s 

established business relationship 

exemption. 

A majority of both industry and 

consumer comments on the record have 

resoundingly rejected this proposal. 

Most of the sellers and telemarketers 

who commented on the proposed 

interactive mechanism objected to it as 

costly, burdensome, and not widely 

available.103 Consumers and their 

advocates protested that the mechanism 

would be ineffective because touchtone 

keypads are not universal,104 there is no 

guarantee that a sales representative 

would be available promptly,105 and 

because, in their view, most prerecorded 

messages end up on answering 

machines or voice mail services, so that 

the interactive mechanism would not 

materially assist consumers in avoiding 

the costs and encumbrances of asserting 

their company-specific opt-out rights.106

No industry or consumer comment 

proffered a suitable alternative that 

would serve the same purpose as the 

interactive mechanism proposed. 

In the absence of any mechanism 

widely acceptable to industry and 

consumers that would provide 

recipients of prerecorded telemarketing 

messages the opportunity to assert their 

Do Not Call rights ‘‘quickly, effectively 

and efficiently,’’ the Commission does 

not believe that it can craft conditions 

for the proposed safe harbor that would 

preserve the balance between the 

consumer privacy interests that 

Congress intended to protect and the 

interest of sellers and telemarketers in 

communicating sales and promotional 

offers to their established customers via 

prerecorded messages. 

It is important to reiterate, however, 

that many (if not most) of the 

communications sellers wish to send via 

prerecorded messages, and that 

customers wish to receive, are 

informational communications not 

governed by the TSR, and thus are not 

prohibited by its call abandonment 

provision.107 It is equally noteworthy 

that because the proposed new safe 

harbor would have been predicated on 

an ‘‘established business relationship,’’

sellers would have had an opportunity 

during their business dealings to obtain 

the prior written agreement of their 

customers to receive telemarketing calls 

that deliver prerecorded messages.108

For this and all the other reasons 

discussed above, the Commission has 

concluded that, on balance, the record 

in this proceeding fails to provide the 

support necessary to justify the 

proposed additional safe harbor. 

Accordingly, the Commission has 

determined not to adopt the proposed 

amendment, and to deny the VMBC 

petition. The Commission’s Rules of 

Practice afford VMBC and other sellers 

and telemarketers the right to seek any 

advisory opinions they may need to 


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109 16 CFR §§ 1.1–1.4. 

110 15 U.S.C. 6102(a)(3)(A). 

111E.g., 68 Fed. Reg. at 4644; 69 Fed. Reg. at 

67,288; DNCIA Report at 33–34. 

112Broad. Team, Inc. v. FTC, 429 F.Supp.2d 

1292, 1301–02 (M.D. Fla. 2006), appeal docketed, 

No. 06–13520–EE (11th Cir. June 23, 2006). 

113 15 U.S.C. 6102(a)(3)(A); see TSR SBP, 68 FR 

at 4613. 

114This proposed language is modeled on 

existing § 310.4(b)(1)(iii)(B)(i), which permits calls 

to numbers on the Registry with the consumer’s 

prior written agreement, and is consistent with the 

call abandonment prohibition in § 310.4(b)(1)(iv). 

As such, the proposed amendment would permit 

digital and electronic signatures to the extent 

recognized by applicable Federal or State contract 

law. 16 CFR 310.4(b)(1)(iii)(B)(i) n.6; see also TSR 

SBP, 68 FR at 4608–09. 

115The proposal would not prohibit placement of 

prerecorded messages on answering machines of 

consumers who have listed their number on the 

Registry if they have an established business 

relationship with the seller, or on answering 

machines of consumers who have not listed their 

numbers on the Registry. The Commission notes, 

however, that any telemarketing campaign directed 

at leaving pre-recorded messages on answering 

machines could still run afoul of the abandoned call 

requirements of the TSR if calls that are answered 

by an actual consumer, rather than an answering 

machine, are not transferred to a sales agent as 

required by § 310.4(b)(1)(iv) But cf. 47 CFR 

64.1200(a)(2) (FCC regulation stating that ‘‘[n]o 

person or entity may initiate any telephone call to 

any residential line using an artificial or 

prerecorded voice to deliver a message.’’) (emphasis 

added). 

116 15 U.S.C. 6102(a)(3)(A). This directive appears 

consistent with the previously expressed intent of 

Congress, as stated in the preamble to the TCPA, 

that ‘‘banning * * * automated or prerecorded 

telephone calls to the home, except when the 

receiving party consents to receiving the call * * * 

is the only effective means of protecting telephone 

consumers from this nuisance and privacy 

invasion.’’ TCPA, Pub. L. No. 102–243, 105 Stat. 

2394 (1991) at § 2(12). 

clarify the types of prerecorded 

informational messages that are not 

covered by the TSR, and thus are not 

prohibited.109

Additionally, the Commission has 

decided, based on the record in this 

proceeding, to propose an amendment 

of the TSR, pursuant to § 3(a)(3)(A) of 

the Telemarketing Act,110 to add an 

express prohibition against unsolicited 

prerecorded telemarketing calls, unless 

the seller has obtained a consumer’s 

express prior written agreement to 

receive such calls. In so doing, the 

Commission also seeks to address the 

criticism, encountered by FTC staff in 

providing industry guidance, that the 

text of the TSR does not 

straightforwardly address prerecorded 

message telemarketing, and instead 

places the burden on industry members 

and their legal advisors to divine that 

the call abandonment provisions 

effectively bar this practice (except for 

the very restricted use of recorded 

messages in the call abandonment safe 

harbor). The Commission continues to 

think that the plain language of the call 

abandonment provision itself prohibits 

calls delivering prerecorded messages 

when answered by a consumer, a 

position it has repeatedly stated,111 and 

that has been accepted by at least one 

court.112 However, the Commission 

believes that it might be beneficial to 

make the prohibition more prominent 

by adding a provision that makes 

explicit the prohibition on 

telemarketing calls delivering 

prerecorded messages (while clarifying 

that the call abandonment safe harbor 

continues to allow the use of 

prerecorded messages in very limited 

circumstances). 

This record demonstrates that the 

overwhelming majority of consumers 

consider prerecorded telemarketing 

calls a particularly ‘‘coercive or 

abusive’’ infringement on their right to 

privacy.113 Nevertheless, the 

Commission believes that all interested 

parties should be afforded an 

opportunity to comment on the 

proposed prohibition, and will base its 

final decision on the full record of 

comments it receives. 

E. Proposed Amendment 

Accordingly, the Commission has 

decided to propose the following 

addition to the ‘‘Pattern of Calls’’

prohibitions in § 310.4(b)(1) of the TSR, 

and to invite public comment on the 

proposal until November 6, 2006. 

Section 3.10(b)(1) will continue to 

provide that ‘‘It is an abusive 

telemarketing act or practice and a 

violation of this rule for a telemarketer 

to engage in, or for a seller to cause a 

telemarketer to engage in, the following 

conduct:’’ The new subsection would 

add: 

(v) Initiating any outbound telemarketing 

call that delivers a prerecorded message 

when answered by a person, unless the seller 

has obtained the express agreement, in 

writing, of such person to place prerecorded 

calls to that person. Such written agreement 

shall clearly evidence such person’s 

authorization that calls made by or on behalf 

of a specific party may be placed to that 

person, and shall include the telephone 

number to which the calls may be placed and 

the signature of that person; provided, 

however, that prerecorded messages 

permitted for compliance with the call 

abandonment safe harbor in § 310.4(b)(4)(iii) 

do not require such an agreement.114

The purpose of the proposed 

amendment is to make it explicit that 

the TSR prevents sellers and 

telemarketers from delivering a 

prerecorded message when a person 

answers a telemarketing call, regardless 

of whether the call is made to a 

consumer whose number is listed on the 

Do Not Call Registry or to a consumer 

who has an established business 

relationship with the seller, without the 

consumer’s express prior written 

agreement.115 The prohibition contains 

a proviso that would permit the use of 

prerecorded messages required by the 

call abandonment safe harbor when a 

telemarketing call is answered by a 

consumer who cannot be connected to 

a sales representative. 

The proposed amendment barring 

prerecorded telemarketing calls without 

a consumer’s prior written agreement 

would make the present prohibition 

explicit, and would implement the 

Commission’s broad authority under the 

Telemarketing Act to prohibit abusive 

telemarketing practices. The 

Telemarketing Act directs the FTC to 

‘‘include in [the TSR] a requirement that 

telemarketers may not undertake a 

pattern of unsolicited telephone calls 

which the reasonable consumer would 

consider coercive or abusive of such 

consumer’s right to privacy.’’ 116

The consumer comments in this 

proceeding have made it clear that 

consumers overwhelmingly consider 

prerecorded telemarketing calls coercive 

and abusive of their right to privacy. 

They find prerecorded calls more 

coercive and abusive than live 

telemarketing calls because they are 

powerless to interact with a recording, 

either to assert their Do Not Call rights 

or to request additional information 

about the product or service offered. 

Thus, the present record supports a 

finding that a reasonable consumer 

would consider prerecorded 

telemarketing calls coercive or abusive 

of such consumer’s right to privacy, 

unless the consumer had given his or 

her express prior written agreement to 

receive such calls. 

The proposed amendment would 

prohibit only the initiation of a call 

‘‘that delivers a prerecorded message 

when answered by a person.’’ The 

Commission specifically seeks comment 

on whether the limitation ‘‘when 

answered by a person’’ is necessary and 

appropriate or whether the prohibition 

on prerecorded messages should be 

extended to calls answered by a 

voicemail system or an answering 

machine. For example, the intrusion of 

a telemarketing call delivering a 

prerecorded message would seem less 

disruptive if it arrives when the party 

called is not home than if it arrives 

when he or she is at home in the midst 

of daily activities. Nevertheless, the 

Commission seeks comment on whether 

there are other harms when a 

telemarketing call delivering a 

prerecorded message is answered by an 

answering machine or voice mail 


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117See discussion of the Commission’s authority 

to prohibit ‘‘abusive’’ practices in the notice of 

proposed rulemaking for the amended TSR. 67 FR 

4493 at 4510 (Jan. 30, 2002). 

118 16 CFR § 310.2(cc). 

119TSR SBP, 68 FR at 4643 (footnotes omitted). 

120 DMA petition at 3, available at http:// 

www.ftc.gov/os/2004/10/ 041019dmapetition.pdf. 

121 Id. at 2. 

122 69 FR at 67291 & n.19. 

123 DNCIA Report at 31. 

124 69 FR at 67291. 

service, and whether such harms rise to 

the level of an intrusion that the 

‘‘reasonable consumer would consider 

coercive or abusive of such consumer’s 

right to privacy.’’ 117

In soliciting comments on the 

proposed amendment, the Commission 

again wishes to emphasize that the 

proposed prohibition will not prevent 

telemarketers from transmitting 

prerecorded informational messages to 

consumers that are not part of a ‘‘plan, 

program or campaign which is 

conducted to induce the purchase of 

goods or services or a charitable 

contribution.’’ With that caveat, the 

Commission will be interested in 

comments that address the costs and 

benefits to industry and to consumers of 

the proposed amendment, as more fully 

elaborated in Section VIII below. 

F. Revocation of Non-Enforcement 

Policy Against Prerecorded 

Telemarketing Calls 

In view of the foregoing decision, the 

Commission will no longer continue the 

forbearance policy announced in the 

NPRM on enforcement actions for 

violation of the TSR’s call abandonment 

prohibition in § 310.4(b)(1)(iv), against 

sellers or telemarketers that, in 

conformity with the now-rejected call 

abandonment safe harbor, place 

telephone calls delivering prerecorded 

messages to consumers with whom the 

seller has an established business 

relationship. The Commission wishes to 

emphasize that although many 

prerecorded informational messages are 

not covered by the TSR, the TSR does 

cover (and prohibit) telemarketing calls 

that deliver prerecorded messages to 

consumers.118

Nevertheless, in order to prevent any 

reasonably foreseeable hardship for 

sellers or telemarketers that have relied 

on the Commission’s forbearance policy, 

the Commission will give such sellers 

and telemarketers until January 2, 2007 

to revise their practices to conform to 

the TSR, and will take no enforcement 

action based on calls to consumers with 

whom the seller has an established 

business relationship that are placed 

before that date and that conform to the 

previously proposed, and now rejected, 

safe harbor. 

III. The DMA Petition 

The DMA petition urges a change in 

the standard of the TSR’s existing call 

abandonment safe harbor in 

§ 310.4(b)(4) for measuring the 

maximum permissible percentage of 

answered calls that may be abandoned 

when a telemarketer is not available. 

Rather than measuring the three (3) 

percent maximum ‘‘per day per calling 

campaign,’’ as prescribed in 

§ 310.4(b)(4)(i), to limit ‘‘hang ups’’ and 

‘‘dead air,’’ DMA asks that the 

maximum be ‘‘measured over a 30-day 

period.’’

In adopting the ‘‘per day, per 

campaign’’ standard for calculating the 

maximum level of abandoned calls, the 

Commission stated: 

The ‘per day per campaign’ unit of 

measurement is consistent with DMA’s 

guidelines addressing its members use of 

predictive dialer equipment. Under this 

standard a telemarketer running two or more 

calling campaigns simultaneously cannot 

offset a six percent abandonment rate on 

behalf of one seller with a zero percent 

abandonment rate for another seller in order 

to satisfy the Rule’s safe harbor provision. 

Each calling campaign must record a 

maximum abandonment rate of three percent 

per day to satisfy the safe harbor.119

DMA’s petition conceded that former 

DMA Guidelines for Ethical Business 

Practices set a ‘‘per day per campaign’’

standard for the maximum percentage of 

calls that DMA members could 

abandon, but emphasized that the 

Guidelines set a five percent 

abandonment rate, rather than the three 

percent rate incorporated in the TSR’s 

safe harbor. However, as the NPRM 

noted, the petition provided no factual 

support for DMA’s apparent argument 

that a ‘‘per day per campaign’’ standard 

would be feasible at a five percent call 

abandonment rate, but not at three 

percent. 

A. DMA’s Rationale for Revising The 

Safe Harbor 

The DMA petition advanced three 

reasons for modifying the three percent 

standard: (1) The standard is ‘‘virtually 

impossible’’ for vendors who run 

multiple campaigns each day to meet; 

(2) the California Public Utilities 

Commission—whose three percent call 

abandonment rate the Commission cited 

in adopting the standard—measures 

abandoned calls on a ‘‘per 30-day’’ basis 

according to the DMA; and (3) the FTC 

should defer to the FCC’s determination 

that the call abandonment rate should 

be measured over a 30-day period, 

because the issue ‘‘lies closer to the core 

expertise of the FCC than of the 

FTC.’’ 120

As the NPRM noted, however, DMA’s 

first argument, the near impossibility for 

vendors to meet the ‘‘per day per 

campaign’’ standard when running 

multiple campaigns each day, suggested 

that telemarketers engage in precisely 

the practices that the ‘‘per day per 

campaign’’ standard was designed to 

prevent. DMA argued that predictive 

dialer systems manage call 

abandonment rates ‘‘as an average of all 

campaigns per day, so it is inevitable 

that certain logins would end the day at 

say, 3.1% and other at 2.9%, yet the 

overall average would still be 3% or 

less.’’ 121 The DMA petition did not 

explain why telemarketing systems 

cannot dynamically maintain a steady 

level of no more than three percent 

overall, or could not be modified to 

keep the abandonment rate below three 

percent separately for each campaign. 

The NPRM rejected the last two 

arguments in DMA’s petition as 

insufficient to warrant a change in the 

call abandonment standard. The 

Commission noted that ‘‘compliance 

with the FTC’s more precise standard 

would constitute acceptable 

compliance’’ with both the 30-day 

standard adopted by California and the 

FCC, and that court decisions 

‘‘controvert DMA’s argument that the 

FTC’s expertise or legal authority 

regarding the acceptable level of call 

abandonment is inferior to that of the 

FCC.’’ 122

The NPRM further explained that, in 

its petition, DMA had provided no 

information that would tend to counter 

the foreseeable shortcomings of a 30-day 

standard that the Commission set forth 

at length in its DNCIA Report.123 The 

potential for a 30-day standard to 

‘‘enable telemarketers to target call 

abandonments at certain less valued 

groups of consumers,’’ and thus ‘‘offset 

a high abandonment rate in low income 

zip codes and make up the difference by 

abandoning no calls in affluent ones’’

led the Commission to adopt the ‘‘per 

day per campaign’’ standard to reduce 

‘‘the potential for concentrating abuse 

by ensuring an even distribution of 

abandoned calls to all segments of the 

public.’’ 124

B. Request for Public Comment and 

Response 

The NPRM sought public comment on 

the petition, noting that ‘‘the 

Commission is receptive to any factual 

information that would establish that 

such a change is warranted,’’ but 

observing that DMA had ‘‘not provided 

an adequate factual basis that would 

compel’’ a modification. The 


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125Three of ten consumers who supported a 

change suggested limiting it to 30-days ‘‘per calling 

campaign,’’ with two of them proposing reducing 

the period further to ‘‘the lesser of’’ 30 days or the 

duration of a specific campaign. McCorvey, No. 

OL–104248 (‘‘As an engineer, I recognize the 

possibility that various causes outside the control 

of the marketing organization may make it difficult 

for them to ensure compliance when measured 

across a very narrow time span. This expansion of 

the compliance window would not (in my opinion) 

create any real opportunity for abuse ONLY if it is 

tied to each campaign. Therefore, wording of the 

form ‘measured over a 30-day period per campaign’

would be both fair, practical and provide continued 

protection for consumers.’’); Kaufmana, No. OL–

102724 (‘‘I would recommend the changed phrase 

to be ‘measured over a 30-day period or the calling 

campaign, whichever is less.’ ’’); Zajonc, No. OL–

102790 (‘‘I’m not against the 30-day provision for 

3% abandonment, though I would probably shrink 

it, or have it be the lesser of 30 days or a specific 

campaign.’’). See also Tukey, D, PhD, No. OL–

104725 (‘‘I understand the nature of statistical 

fluctuation, so it seems a longer time period is not 

out of order.’’); Yamane, No. OL–101436 (‘‘[A] 30- 

day period seems less of a problem, although it does 

seem to make abuses of the system more likely by 

providing a larger window over which abuses can 

be measured.’’); cf. Holm, M., No. OL–100438 (‘‘If 

this is merely a technical change * * * then I am 

not opposed.’’); Frye, T., No. OL–106806; 

VanDusen, No. OL–113869; Thornton, No. OL–

111679; Cummings, No. OL–113849. 

126E.g., Argyropoulos, No. OL–102968 at 3; 

Protigal, No. 000010 at 11. 127NCL at 5–6; PRC at 10; EPIC at 14. 

128E.g., Bullard, No. OL–101198; Kislo, No. OL–

102924; Ripple, No. OL–101379; Giuliani, No. OL–

108532. 

129E.g., DMA at 2; American Teleservices Ass’n., 

No. 000058 at 3; VMBC at 15; Heritage at 3; U.S. 

Chamber at 7; Infocision at 6 (advocating a 30-day 

standard for each separate campaign, while all other 

industry comments supported DMA’s proposal for 

an overall 30-day standard for all of a 

telemarketers’s concurrent campaigns). 

130 DMA at 8; VMBC at 15; Infocision at 6; U.S. 

Chamber at 7. 

131 Infocision at 5; DMA at 8; see U.S. Chamber 

at 8. 

132 DMA at 3–4; U.S. Chamber at 8. 

133This follows, according to DMA and ATA, 

from ‘‘a bedrock principle of statistical analysis that 

the smaller the size of the sample, the larger the 

standard deviation and sampling errors.’’ DMA at 

3; see also, U.S. Chamber at 8 (‘‘ In general, the 

smaller the list or the smaller the campaign (or the 

fewer days over which the call abandonment rate 

is measured), the more likely that the abandonment 

rate may deviate from the targeted rate of three 

percent.’’). 

134 DMA at 4. 

135 DMA and ATA not that ‘‘some’’ predictive 

dialers require callings lists of ‘‘approximately 

15,000 names’’ and ‘‘at least 7 or 8 telemarketing 

agents for any one program’’ to meet the current 

‘‘per day per campaign’’ standard. DMA at 5. 

136 DMA at 4; see also, U.S. Chamber at 8 (‘‘In 

particular, the current test for call abandonment in 

the TSR inflicts a disproportionate harm on smaller 

businesses. Smaller businesses have smaller calling 

lists; one consequence of this is that a small 

business may inadvertently exceed the three 

percent figure comparatively quickly. To stay 

within the limits, the small business must 

recalibrate its dialing equipment, hire more sales 

representatives (which could cost overtime rates 

under the per day test), or risk violating the law.’’); 

VMBC at 15–16; Visa at 3. 

137 DMA at 6. 

Commission emphasized that it was 

particularly interested in three types of 

information: (1) Any elaboration on the 

problems telemarketers who are running 

multiple campaigns at the same time 

face in attempting to comply with the 

current requirement; (2) any information 

demonstrating that telemarketers who 

make a relatively small number of calls 

per day may be differentially 

disadvantaged by the current 

requirements; and (3) information and 

data demonstrating that it is unlikely 

that, if additional flexibility were 

provided, telemarketers would 

intentionally set the abandonment rates 

above 3 percent for some campaigns or 

calls directed to certain consumers, 

while setting lower rates of call 

abandonment for other campaigns or 

calls in order to stay within the three 

percent maximum call abandonment 

rate. 

1. Consumer Comments 

Comments from some 230 consumers 

and three consumer advocacy groups 

addressed issues raised by the DMA 

petition. All but a smattering of these 

comments opposed changing the call 

abandonment standard to a 30-day 

average across all telemarketing 

campaigns.125 Many argued that the 

DMA did not offer a compelling reason 

for the change, with at least two noting 

that the difficulties DMA cited for some 

telemarketers in meeting the current 

standard could easily be eliminated by 

modifying or upgrading their 

software.126 Consumer groups expressed 

continued concern that a 30-day 

standard would enable telemarketers to 

target high call abandonment rates at 

less valued groups of consumers,127

offsetting the high rates with lower 

abandonment rates for preferred groups, 

while a number of consumers were 

more concerned that the number of 

abandoned calls would increase on 

some days or in some campaigns.128

2. Industry Comments 

Eleven comments from telemarketers, 

their trade associations and other 

business trade associations 

unanimously supported revision of the 

‘‘per day per campaign’’ standard,129

with several echoing the argument that 

the FTC should defer to the FCC 

standard,130 and some contending that 

there is no evidence that telemarketers 

would abuse a 30-day standard by 

discriminating against disfavored 

groups of consumers.131 DMA and the 

American Teleservices Association 

(‘‘ATA’’) argued in their joint comment 

that compliance with the current 

standard is difficult because the pace of 

outbound calls placed by predictive 

dialers is based on the average number 

of calls answered by consumers, and 

unexpected fluctuations in the number 

answered, or the time sales agents spend 

speaking with consumers, make it 

difficult to predict the call abandonment 

rate and ensure compliance, particularly 

in smaller campaigns, and in campaigns 

focusing on evening calls at the end of 

the day.132

DMA and ATA explained that 

predictive dialers base the rate at which 

they place calls on a projection of the 

average number of consumers who will 

answer and the number of sales agents 

available. The margin of error for these 

projections, in turn, is a function of the 

number of consumers to be called. The 

larger the number of consumers to be 

called, the smaller the deviation is 

likely to be from the projected call 

abandonment rate. Conversely, the 

smaller the number of consumers to be 

called, the greater the deviation can be 

from the desired abandonment rate.133

Since the projected average answering 

rate is determined by predictive dialer 

sampling as calls are made, larger 

periods of calling time limit the impact 

of unexpected fluctuations in the 

answering rate, while shorter periods of 

time exaggerate their effect. Any 

unexpected spike in answered calls 

could, according to DMA and ATA, 

‘‘make it impossible to recover within 

the same day based upon such a small 

time frame of calling.’’ 134

For these reasons, DMA and ATA 

argued that the present ‘‘per day per 

campaign’’ standard inhibits the use of 

smaller, ‘‘segmented’’ lists of fewer than 

15,000 names that target consumers 

most likely to be interested in an 

offer.135 This disadvantages consumers, 

the comment contended, by making it 

more likely they will receive calls about 

sales offers in which they have no 

interest, and also particularly 

disadvantages small business sellers 

with small clienteles, as well as the 

smaller telemarketing companies that 

serve them.136 DMA also asserted that 

the Commission significantly increased 

the compliance burden for small 

business users of segmented lists, given 

the difficulties of predicting 

abandonment rates with shorter calling 

lists, by setting the safe harbor call 

abandonment rate at three percent, 

rather than the five percent figure in 

DMA’s former guidelines, with the 

result that predictive dialer economic 

‘‘efficiencies disappear almost 

entirely.’’ 137

DMA and ATA further argued that 

‘‘[t]he actual number of abandoned calls 

would not increase if the measurement 


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138 In theory, if a list of 240,000 telephone 

numbers were called at the rate of 24,000 a day for 

10 days, the three percent maximum would be 720 

abandoned calls a day (.03 × 24,000 = 720), or 7200 

for 10 days, which is three percent of 240,000 

(.03 × 240,000 = 7200). 

139 DMA and ATA agreed that ‘‘ there should not 

be a group of ‘less valued’ consumers that receive 

a larger rate of abandoned calls,’’ and insisted that 

‘‘our members do not engage in such tactics,’’ but 

appeared tacitly to acknowledge that there is 

nothing in the 30-day standard they advocate that 

would necessarily prevent such an offensive 

practice. DMA at 7. Another industry comment 

objected that there has never been any evidence that 

telemarketers target less favored consumers with 

higher call abandonment rates. Infocision at 5. 

140Another comment noted that the Caller ID 

requirement should allay any concerns of elderly 

consumers that abandoned calls were precursors of 

home burglaries. Heritage at 3 n.2. 

141Heritage at 3; Infocision at 5–6 (‘‘Yes, the 

technology allows controls to be placed on the 

algorithms determining the speed at which the 

system dials. It is possible to maintain a steady 

level but it is not an exact science.’’). Both stated, 

however, that while they can comply with the 

present standard, a 30-day standard would permit 

greater efficiency and flexibility in their 

telemarketing campaigns. 

142 Infocision at 5. 

143Heritage at 3. 

144TSR SBP, 68 FR at 4633–34. The Commission 

established a limited exemption balancing the 

privacy needs of consumers and the need of 

businesses to contact their current customers, 

noting: Industry comments were nearly unanimous 

in emphasizing that it is essential that sellers be 

able to call their existing customers. Although the 

initial comments from consumer groups opposed an 

exemption for ‘established business relationships,’

* * * their supplemental comments expressed the 

view that such an exemption would be acceptable, 

as long as it was narrowly-tailored and limited to 

current, ongoing relationships. * * * 60 percent of 

consumers * * * stated that they opposed an 

exemption for ‘established business relationship,’

[although] 40 percent favored such an exemption. 

145The total number of abandoned calls might 

increase slightly, however, because telemarketers 

may have had to set their predictive dialers below 

three percent to meet the present ‘‘per day per 

calling campaign’’ standard. 

occurs on a 30-day basis rather than per 

day per campaign.’’ 138 In fact, they 

noted, if a telemarketer’s call 

abandonment rate were to exceed three 

percent on any given day under the 

current standard (e.g., due to an 

unexpected spike in answered calls at 

the end of the day), there may be more 

abandoned calls than if the telemarketer 

had 30 days to correct for the 

unexpected increase in call 

abandonments on that day. For the same 

reason, DMA and ATA contended that 

the ‘‘per day per campaign’’ standard is 

more likely to force sellers and 

telemarketers to discriminate between 

different groups of consumers than a 30- 

day standard. This is because, if the call 

abandonment rate unexpectedly exceeds 

three percent on any given day, the 

telemarketer could attempt to 

compensate by calling phone numbers 

less likely to be answered by a 

consumer, but also less likely to belong 

to a consumer interested in the product 

or service being offered. With a 30-day 

standard, DMA and ATA argued, there 

would be no need nor incentive for 

telemarketers to discriminate in the 

distribution of abandoned calls.139

Finally, DMA and ATA asserted that 

the TSR’s protection of consumers 

would not otherwise be diminished if 

the 30-day standard were adopted 

because of other protections provided to 

consumers when the TSR was amended 

in 2003. They pointed out that 

consumers can: (1) Place their numbers 

on the national Do Not Call Registry; (2) 

assert company-specific Do Not Call 

requests; and (3) use Caller ID to find 

out the names of telemarketers that have 

abandoned calls to their telephone 

numbers.140

Two of the industry comments 

appeared to acknowledge that it is 

technically possible to configure 

predictive dialers to comply with the 

current standard.141 Both argued, 

however, that compliance with the 

current standard is costly and 

burdensome. One reported that ‘‘[o]n a 

daily basis, campaigns must be shut 

down and managed in a manual mode 

to ensure compliance with this overly 

burdensome requirement,’’ and as a 

result, ‘‘[e]fficiency is destroyed and the 

resulting increase in costs has made 

many programs no longer costeffective.’’ 142 The other asserted that 

‘‘having the freedom to run a higher 

abandonment rate at times when 

customers are less likely to be home 

(such as 8 a.m. to 5 p.m.) and lowering 

it when people are more likely to be 

home (such as 6–9 p.m.) would make an 

outbound campaign more efficient,’’

noting that ‘‘[w]hile this approach could 

theoretically be used under the three 

percent per campaign per day system, it 

would be far more difficult to manage 

without significantly risking being over 

the three percent threshold.’’ 143

C. Analysis of the Comments, 

Discussion and Conclusion 

As discussed above, the Commission 

adopted the call abandonment provision 

of the TSR to prevent the abusive 

practice of ‘‘dead air’’ calls and ‘‘hangups.’’ The safe harbor exception to the 

call abandonment prohibition was 

designed to minimize this abuse, while 

allowing the telemarketing industry to 

benefit from the economies provided by 

predictive dialer technologies. In 

attempting to strike an appropriate 

balance between consumer and industry 

interests, the Commission adapted 

DMA’s ‘‘per day per campaign’’

guideline when it established the three 

percent call abandonment ceiling as an 

element of the § 310.4(b)(4) safe harbor. 

It appears from the record, however, 

that the impact of the three percent ‘‘per 

day per campaign’’ call abandonment 

limit may be disturbing the balance the 

Commission sought to achieve by 

frustrating the full realization of the 

potential economies provided by 

predictive dialers, particularly with 

respect to the use of segmented lists. 

The comments suggest that this 

unintended consequence may be having 

an adverse effect on small business 

sellers and telemarketers in particular, 

by increasing the costs of their 

telemarketing, and in some instances 

making telemarketing campaigns using 

small, segmented lists prohibitively 

expensive. 

The record also shows that many 

consumers regard their home as their 

castle, and vehemently object to 

receiving what they regard as uninvited 

telemarketing calls. Their comments 

give eloquent testimony to the fact that 

consumers despise ‘‘dead air’’ and 

‘‘hang ups’’ even more than 

telemarketing, and that many believe 

they should not receive any 

telemarketing calls at all when they 

have chosen to place their home 

telephone number on the Do Not Call 

Registry, regardless of whether they 

have an established business 

relationship with the seller who calls. 

While this popular view of the Registry 

may be widespread, as the record 

reflects, it overlooks the fact that in 

establishing the Registry, the 

Commission expressly authorized live 

telemarketing calls to consumers who 

have an established business 

relationship with the seller on whose 

behalf the calls are made, provided they 

have not asserted a company-specific Do 

Not Call request.144

The comments also illustrate 

consumer concern that any loosening of 

the current standard would enable 

telemarketers to target disfavored groups 

of consumers with a disproportionate 

share of abandoned calls, even though 

the total number of abandoned calls for 

any calling list would not exceed three 

percent if the standard were 

modified.145 For its part, the industry 

apparently cannot and does not deny 

that this offensive practice may be more 

likely to occur if a change were made to 

a 30-day average for all campaigns. It is 

left to argue the good faith of trade 

association members, and the absence of 

empirical evidence that such an abusive 

practice has occurred in the past, 

notwithstanding the existence of 

economic incentives that seem likely to 

promote the abuse. At the same time, 

the Commission does not take the 


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146Commission Rule 4.2(d), 16 CFR 4.2(d). The 

comment must be accompanied by an explicit 

request for confidential treatment, including the 

factual and legal basis for the request, and must 

identify the specific portions of the comment to be 

withheld from the public record. 147 47 CFR 64.1200(a)(2). 

industry argument lightly that the ‘‘per 

day per campaign’’ standard may be 

more restrictive than intended, given 

the limitations of predictive dialers in 

adjusting to unexpected spikes in 

average call abandonment rates. The 

record shows that particular problems 

arise in connection with the use of 

smaller, segmented lists that are the 

most economical for small businesses 

and the most useful in targeting only 

those consumers most likely to be 

interested in a particular sales offer. As 

a result, the Commission is inclined to 

believe that an amendment of the 

present standard may be warranted. 

D. Proposed Amendment 

Accordingly, the Commission has 

decided to propose the following 

substitute for the present ‘‘per day per 

campaign’’ standard in § 310.4(b)(4)(i), 

and to invite public comment on the 

proposal until November 6, 2006: 

(i) The seller or telemarketer employs 

technology that ensures abandonment of no 

more than three (3) percent of all calls 

answered by a person, measured over the 

duration of a single calling campaign, if less 

than 30 days, or separately over each 

successive 30-day period or portion thereof 

that the campaign continues. 

The proposed amendment is limited, 

in accordance with the suggestions of 

the supportive consumer comments and 

an industry comment, by requiring that 

the three percent ceiling be met 

separately by each of a seller’s or 

telemarketer’s calling campaigns. The 

Commission believes such a limitation 

is important to prevent sellers and 

telemarketers from running multiple 

campaigns with what could be 

significantly different call abandonment 

rates that together average only three 

percent over a 30-day period. Allowing 

the flexibility that DMA proposed 

would more likely create incentives for 

a seller to ensure that its most favored 

customers experience lower call 

abandonment rates, thus preserving 

their goodwill, at the cost of less favored 

customers. Thus, the Commission’s 

proposal is designed to reduce the 

potential for discriminatory treatment of 

disfavored consumer groups by 

subjecting them to higher than average 

call abandonment rates. 

Because the proposal would measure 

call abandonment on a ‘‘per campaign’’

basis, it must account for the possibility 

that a campaign may continue for less 

than 30 days, or for more than 30 days. 

The proposal would accomplish this, 

and provide needed certainty to sellers 

and telemarketers, by specifying that the 

call abandonment rate will be measured 

over the duration of the campaign. If the 

campaign continues for less than 30 

days, the call abandonment rate must be 

at or below three percent for the 

duration of the campaign; if it continues 

for more than 30 days, the three percent 

ceiling must be measured separately for 

each successive 30-day period during 

which the campaign is conducted. If the 

campaign continues for more than 30 

days, but less than an additional 30-day 

period, the three percent maximum 

would be measured both for the initial 

30-day period, and separately for the 

remaining period of less than 30 days. 

In inviting public comment on this 

proposal from interested parties, the 

Commission wishes to emphasize that it 

has not yet reached any final conclusion 

on whether or not to amend the present 

‘‘per day per campaign’’ standard, 

although it is inclined to do so on this 

record. That ultimate decision will be 

informed by the public comment 

received on the proposed amendment. 

IV. Invitation To Comment 

All persons are hereby given notice of the 

opportunity to submit written data, views, 

facts, and arguments addressing the 

amendments proposed in this notice. Written 

comments must be submitted on or before 

November 6, 2006. Comments should refer 

to: ‘‘TSR Prerecorded Call Prohibition and 

Call Abandonment Standard Modification, 

Project No. R411001’’ to facilitate the 

organization of comments. A comment filed 

in paper form should include this reference 

both in the text and on the envelope, and 

should be mailed or delivered to the 

following address: Federal Trade 

Commission/Office of the Secretary, Room 

H–159 (Annex K), 600 Pennsylvania Avenue, 

NW., Washington, DC 20580. If the comment 

contains any material for which confidential 

treatment is requested, it must be filed in 

paper (rather than electronic) form, and the 

first page of the document must be clearly 

labeled ‘‘Confidential.’’ 146 The FTC is 

requesting that any comment filed in paper 

form be sent by courier or overnight service, 

if possible, because U.S. postal mail in the 

Washington area and at the Commission is 

subject to delay due to heightened security 

precautions. 

To ensure that the Commission 

considers an electronic comment, you 

must file it on the Web-based form at 

the http://secure.commentworks.com/ 

ftc-tsr Web site. You may also visit 

http://www.regulations.gov to read this 

proposed Rule, and may file an 

electronic comment through that Web 

site. The Commission will consider all 

comments that regulations.gov forwards 

to it. 

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives, 

whether filed in paper or electronic 

form. Comments received will be 

available to the public on the FTC Web 

site, to the extent practicable, at 

http://www.ftc.gov. As a matter of 

discretion, the FTC makes every effort to 

remove home contact information for 

individuals from the public comments it 

receives before placing those comments 

on the FTC Web site. More information, 

including routine uses permitted by the 

Privacy Act, may be found in the FTC’s 

privacy policy, which is available at 

http://www.ftc.gov/ftc/privacy.htm. 

V. Communications by Outside Parties 

to Commissioners or Their Advisors 

Written communications and 

summaries or transcripts of oral 

communications respecting the merits 

of this proceeding from any outside 

party to any Commissioner or 

Commissioner’s advisor will be placed 

on the public record. See 16 CFR 

1.26(b)(5). 

VI. Paperwork Reduction Act 

Pursuant to the Paperwork Reduction 

Act (‘‘PRA’’), 44 U.S.C. §§ 3501–3502, 

the Office of Management and Budget 

(‘‘OMB’’) approved the information 

collection requirements in the TSR and 

assigned OMB Control Number 3084–

0097. The proposed rule amendments, 

as discussed above, would explicitly 

prohibit all prerecorded telemarketing 

calls answered by a person without a 

written agreement signed by the 

consumer to receive such calls, and alter 

the standard for measuring the three 

percent call abandonment rate 

permitted by the TSR’s call 

abandonment safe harbor. 

The proposed amendment explicitly 

limiting the use of prerecorded 

telemarketing calls will not change the 

existing paperwork burden on sellers or 

telemarketers. It simply makes the TSR’s 

existing prohibition explicit rather than 

imposing a new prohibition. Thus, the 

proposed amendment will, if anything, 

reduce the paperwork burden and the 

amount of time required for 

telemarketers to comply with the TSR. 

In addition, an FCC regulation 

prohibiting prerecorded calls has been 

in effect since 1992, following the 

enactment of the TCPA.147 The FCC 

regulation prohibits prerecorded calls 

delivering unsolicited advertisements or 


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148Thus, under the FCC regulation, it is unlawful 

for a seller or telemarketer to place a prerecorded 

call to a residential telephone unless it can show 

compliance with one of the two exemptions. The 

‘‘prior express consent’’ requirement, in particular, 

imposes essentially the same recordkeeping burden 

as the proposed amendment. Moreover, in adopting 

regulations to implement the Do Not Call Registry 

pursuant to the DNCIA, the FCC determined that 

sellers must obtain a written agreement signed by 

a consumer whose number is listed on the Registry 

to satisfy the ‘‘prior express consent’’ requirement. 

2003 FCC Order, 18 FCC Rcd. at 14043–44, ¶ 44. 

Although the FCC subsequently concluded that an 

oral consent would suffice to authorize calls to 

consumers whose numbers were not listed on the 

Registry, Rules and Regulations Implementing the 

Telephone Consumer Protection Act of 1991, CG 

Docket No. 02–278, Second Order on 

Reconsideration, 20 FCC Rcd. 3788 (2005), sellers 

or telemarketers still must create records evidencing 

any such oral consent because the caller bears the 

burden of demonstrating that prerecorded calls are 

lawful. See In re Septic Safety, Inc., 20 FCC Rcd. 

2179 (2005); In re Warrior Custom Golf, Inc., 19 

FCC Rcd. 23648 (2004). 

149These numbers represent the size standards 

for most retail and service industries ($6 million 

total receipts) and manufacturing industries (500 

employees). A list of the SBA’s size standards for 

all industries can be found at http://www.sba.gov/ 

size/summary-whatis.html. 

150See TSR SBP, 68 FR at 4667 (noting that 

Census data on small entities conducting 

telemarketing does not distinguish between those 

entities that conduct exempt calling, such as survey 

calling, those that receive inbound calls, and those 

that conduct outbound calling campaigns. 

Moreover, sellers who act as their own 

telemarketers are not accounted for in the Census 

data.). 

151 Id.; see also 68 FR 45134, 45143 (July 31, 

2003) (noting that comment was requested, but not 

received, regarding the number of small entities 

subject to the National Do Not Call Registry 

provisions of the amended TSR). 

152Although industry comments have argued that 

the proposed revision would remove an obstacle to 

small business compliance with the call 

abandonment safe harbor, as discussed in Section 

III, supra, none of the comments has addressed the 

number of small businesses that might benefit from 

revision of the current standard. 

telephone solicitations to residential 

telephones unless, inter alia, the caller 

has an ‘‘established business 

relationship’’ with the person called, or 

has obtained that person’s ‘‘prior 

express consent’’ to receive such 

calls.148 The proposed TSR amendment 

therefore will not change the paperwork 

burden created by the pre-existing FCC 

regulation. 

Nor will the proposed change to the 

standard for measuring the three percent 

call abandonment rate substantially 

affect the existing paperwork burden. 

The present ‘‘per day per campaign’’

standard requires sellers and 

telemarketers to establish recordkeeping 

systems evidencing their compliance, 

and the proposed amendment may 

lessen this burden slightly because it 

relaxes the current requirement. 

Thus, the proposed amendments 

would not impose any new or affect any 

existing reporting, recordkeeping, or 

third-party disclosure requirements that 

are subject to review by OMB under the 

PRA. 

VII. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(‘‘RFA’’), 5 U.S.C. §§ 601–12, requires an 

agency to provide an Initial Regulatory 

Flexibility Analysis (‘‘IRFA’’) with a 

proposed rule and a Final Regulatory 

Flexibility Analysis (‘‘FRFA’’) with the 

final rule, if any, unless the agency 

certifies that the rule will not have a 

significant economic impact on a 

substantial number of small entities. See 

5 U.S.C. §§ 603–05. 

The Commission has determined that 

it is appropriate to publish an IRFA in 

order to inquire into the impact of the 

proposed rule amendment on small 

entities. Therefore, the Commission has 

prepared the following analysis. 

A. Reasons for the Proposed Rule 

Amendment 

The proposed explicit prohibition of 

all prerecorded telemarketing calls 

answered by a person without the 

consumer’s express prior written 

agreement, discussed in Section II.E 

above, implements the Telemarketing 

Act requirement that the Commission 

prohibit a pattern of unsolicited 

telephone calls that ‘‘the reasonable 

consumer would consider coercive or 

abusive of such consumer’s right to 

privacy,’’ and effectuates the apparent 

intent of Congress in the TCPA to 

prohibit prerecorded telemarketing 

calls. 

The proposed modification of the 

TSR’s call abandonment provision, 

discussed in Section III.D above, would 

modify the existing safe harbor to allow 

sellers and telemarketers to measure the 

three percent maximum call 

abandonment rate prescribed in 

§ 310.4(b)(4)(i) for a single calling 

campaign over a 30-day period. The 

Commission proposes to revise the 

standard to permit measurement of the 

three percent maximum ‘‘over the 

duration of a single calling campaign, if 

less than 30 days, or separately over 

each successive 30-day period or 

portion thereof that the campaign 

continues.’’

B. Statement of Objectives and Legal 

Basis 

The objectives of the proposed rule 

amendments are discussed above. The 

legal basis for the proposed rule 

amendment is the Telemarketing and 

Consumer Fraud and Abuse Prevention 

Act, 15 U.S.C. §§ 6101–6108. 

C. Description of and, Where Feasible, 

an Estimate of the Number of Small 

Entities to Which the Proposed Rule 

Will Apply 

Each of the proposed rule 

amendments will affect sellers and 

telemarketers that make interstate 

telephone calls to consumers (outbound 

calls) as part of a plan, program or 

campaign which is conducted to induce 

the purchase of goods or services or a 

charitable contribution. For the majority 

of entities subject to the proposed rule, 

a small business is defined by the Small 

Business Administration as one whose 

average annual receipts do not exceed 

$6 million or that has fewer than 500 

employees.149

The Commission has not previously 

requested comment on an explicit 

prohibition of all prerecorded 

telemarketing calls answered by a 

person without the consumer’s express 

prior written agreement, but believes 

that the impact of the proposal on small 

business sellers and telemarketers 

would be de minimis because such calls 

are currently prohibited by the TSR’s 

call abandonment provision. Based on 

the absence of available data in this and 

related proceedings, the Commission 

believes that a precise estimate of the 

number of small entities that would be 

subject to the proposal is not currently 

feasible, and specifically requests 

information or comment on this issue. 

In the proceedings to amend the TSR 

in 2002, the Commission sought public 

comment and information on the 

number of small business sellers and 

telemarketers that would be impacted 

by amendment of the standard for 

measuring the three percent call 

abandonment rate. In its request, the 

Commission noted the lack of publicly 

available data regarding the number of 

small entities that might be impacted by 

the proposed Rule.150 The Commission 

received no information in response to 

its requests.151

Likewise, neither the petition to 

amend the call abandonment safe harbor 

to expand the period over which the 

three percent call abandonment ceiling 

for live telemarketing calls is calculated, 

nor the industry comments on that 

issue, provide any data regarding the 

number of small entities that may be 

affected by the Commission’s ultimate 

determination.152 Based on the absence 

of available data in this and related 

proceedings, the Commission believes 

that a precise estimate of the number of 

small entities that fall under the 

proposed rule is not currently feasible, 

and specifically requests information or 

comment on this issue. 


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153See 16 CFR 310.5(a)(5). 

154 47 CFR 64.1200(a)(2)(iv). See also, e.g., Ariz. 

Rev. Stat., § 44–1278(B)(4) (permitting prerecorded 

calls with called party’s ‘‘prior express consent’’); 

Ind. Code, § 24–5–14–5 (permitting prerecorded 

calls where there is a ‘‘current business or personal 

relationship’’). 

155See, e.g., Cal. Pub. Util. Comm’n, Decision 03–

03–038 (Mar. 13, 2003), at 19 (adopting the FCC’s 

30-day standard for measuring call abandonment 

rates). 

D. Description of the Projected 

Reporting, Recordkeeping, and Other 

Compliance Requirements of the 

Proposed Rule 

The proposed rule amendment 

explicitly prohibiting prerecorded 

telemarketing calls answered by a 

person unless the consumer has agreed 

in writing to accept such calls will affect 

the TSR’s recordkeeping requirements 

insofar as it would compel regulated 

entities to keep records of such 

agreements under the general 

recordkeeping requirements of the 

existing rule.153 It appears, however, 

that there should be no change in this 

burden since regulated entities, 

regardless of size, already should be 

maintaining records of such agreements 

in the ordinary course of business in 

order to demonstrate compliance with 

existing FTC and FCC restrictions on 

prerecorded calls, as explained in the 

prior Paperwork Reduction Act 

discussion. Likewise, the prerecorded 

calls amendment would not impose or 

affect any new or existing reporting, 

recordkeeping or third-party disclosure 

requirements within the meaning of the 

Paperwork Reduction Act. 

In addition, the Commission does not 

believe that the proposal to expand the 

period over which the three percent call 

abandonment ceiling for live 

telemarketing calls is calculated will 

create any new burden on sellers or 

telemarketers, because the existing ‘‘per 

day per campaign’’ standard of the TSR 

has already required them to establish 

recordkeeping systems to demonstrate 

their compliance. The Commission also 

does not believe that this modification 

of the Rule will increase or otherwise 

modify any existing compliance costs, 

and may in fact reduce them for small 

entities that are able to take advantage 

of the revised safe harbor requirement. 

E. Identification of Other Duplicative, 

Overlapping, or Conflicting Federal 

Rules 

The FTC is mindful that the proposed 

TSR amendment explicitly prohibiting 

all prerecorded telemarketing calls 

answered by a person without the 

consumer’s express prior written 

agreement differs from the FCC’s 

regulations and some State laws, which 

permit sellers to place such calls to 

consumers who have given their prior 

express consent or to consumers with 

whom the seller has an ‘‘established 

business relationship.’’ 154 However, the 

Commission does not believe that an 

explicit prohibition would conflict with 

the FCC regulations or similar State 

laws, because compliance with the 

TSR’s present prohibition does not 

violate those more permissive 

standards. 

Except as indicated below, the FTC 

has not identified any other Federal or 

State statutes, rules, or policies that 

would overlap or conflict with the 

proposed revision of the call 

abandonment safe harbor. The proposed 

amendment would help to reduce the 

differences on this issue between the 

TSR and the FCC’s TCPA rules, as well 

as similar state requirements.155 As 

explained in Section III above, 

compliance with the FTC’s more precise 

standard would constitute acceptable 

compliance with the FCC rule and 

similar state requirements, so there is no 

conflict between these regulations. 

F. Discussion of Significant Alternatives 

to the Proposed Rule That Would 

Accomplish the Stated Objectives and 

Minimize Any Significant Economic 

Impact of the Proposed Rule on Small 

Entities 

The proposed amendment to add an 

explicit prohibition of all prerecorded 

telemarketing calls answered by a person 

without a consumer’s express prior written 

agreement would implement the requirement 

in the Telemarketing Act that the 

Commission prescribe rules that include a 

prohibition against ‘‘a pattern of unsolicited 

telephone calls which the reasonable 

consumer would consider coercive or 

abusive of such consumer’s right to privacy.’’

The only alternatives to this explicit 

prohibition would be to continue the present 

prohibition of prerecorded calls in 

§ 310.4(b)(4)(i), the call abandonment 

provision, or to permit prerecorded calls, 

which the Commission has declined to do 

based on the record in this proceeding to 

date. 

The proposed amendment of the existing 

call abandonment safe harbor would replace 

the present requirement that the three 

percent maximum call abandonment rate be 

measured ‘‘per day per campaign,’’ with a 

revised requirement that the maximum be 

measured ‘‘over the duration of the 

campaign, if less than 30 days, or separately 

over each successive 30-day period or 

portion thereof that the campaign continues.’’

Other regulatory options under consideration 

include retaining the present ‘‘per day per 

campaign’’ standard, or, at the other end of 

the spectrum, requiring that the maximum 

call abandonment rate be measured over a 

30-day period for all of a telemarketer’s 

campaigns. The Commission has yet to be 

persuaded, however, that this more liberal 

standard would be as likely as the proposed 

standard to prevent telemarketers from 

targeting disfavored consumers with a 

disproportionate share of abandoned calls. 

The explicit prohibition on 

prerecorded calls and the proposed 

revision in the call abandonment safe 

harbor are intended to apply to all 

entities subject to the Rule, and it does 

not appear that a delayed effective date 

for small entities or other alternatives to 

the current proposal would necessarily 

result in any further reduction in the 

compliance burdens of the Rule for 

small entities. The Commission 

nonetheless seeks comments and 

information on what other alternative 

formulations, if any, of the proposed 

safe harbor might further minimize 

compliance burdens for small entities, 

without compromising the intent and 

purpose of the Rule to prevent abusive 

telemarketing practices, including the 

need, if any, for a delayed effective date 

for small business compliance. 

VIII. Specific Issues for Comment 

The Commission seeks comment on 

various aspects of the proposed 

amendment to add an explicit 

prohibition of prerecorded 

telemarketing calls to the TSR and the 

proposed amendment to the TSR’s call 

abandonment safe harbor provision. 

Without limiting the scope of issues on 

which it seeks comment, the 

Commission is particularly interested in 

receiving comments on the questions 

that follow. In responding to these 

questions, comments should include 

detailed, factual supporting information 

whenever possible. 

A. General Questions for Comment 

Please provide comment, including 

relevant data, statistics, consumer 

complaint information, or any other 

evidence, on the Commission’s proposal 

to add an explicit prohibition of 

prerecorded telemarketing calls and the 

proposal to measure the maximum 

allowable call abandonment rate under 

the existing safe harbor in 16 CFR 

310.4(b)(4)(i) ‘‘over the duration of a 

single calling campaign, if less than 30 

days, or separately over each successive 

30-day period or portion thereof that the 

campaign continues’’ rather than on a 

‘‘per day per campaign’’ basis. Please 

include answers to the following 

questions: 

1. What is the effect (including any 

benefits and costs), if any, on 

consumers? 

2. What is the impact (including any 

benefits and costs), if any, on individual 

firms that must comply with the Rule? 


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3. What is the impact (including any 

benefits and costs), if any, on industry, 

including those who may be affected by 

these proposals but not obligated to 

comply with the Rule? 

4. What changes, if any, should be 

made to the proposed Rule to minimize 

any costs to industry, individual firms 

that must comply with the Rule, and/or 

consumers? 

5. How would each suggested change 

affect the benefits that might be 

provided by the proposed Rule to 

industry, individual firms that must 

comply with the Rule, and/or 

consumers? 

6. How would the proposed Rule 

affect small business entities with 

respect to costs, profitability, 

competitiveness, and employment? 

7. How many small business entities 

would be affected by each of the 

proposed amendments? 

B. Questions on Specific Issues 

In response to each of the following 

questions, please provide: (1) Detailed 

comment, including data, statistics, 

consumer complaint information, and 

other evidence, regarding the issue 

referred to in the question; (2) comment 

as to whether the proposed changes do 

or do not provide an adequate solution 

to the problems they were intended to 

address, and why; and (3) suggestions 

for additional changes that might better 

maximize consumer protections or 

minimize the burden on industry: 

1. Should the Commission include an 

explicit prohibition of prerecorded 

telemarketing calls in the TSR? 

2. Is the Commission correct in its 

understanding that a reasonable 

consumer would consider prerecorded 

telemarketing sales calls and 

prerecorded charitable solicitation calls 

to be coercive or abusive of his or her 

right to privacy? 

3. Does a consumer’s choice not to list 

his or her telephone number on the Do 

Not Call Registry indicate not only that 

he or she is willing to accept live 

telemarketing calls, but also prerecorded 

telemarketing calls? 

4. Should the Rule specify disclosures 

that must be made when obtaining a 

consumer’s express written agreement 

to receive such calls? If so, what 

disclosures are needed? 

5. What is the effect on consumers’

privacy interests, if any, of not applying 

the call abandonment safe harbor 

requirements to calls left on consumers’

answering machines? 

6. Are prerecorded messages left on 

answering machines less intrusive than 

prerecorded messages answered by a 

person? 

7. What are the costs and benefits to 

consumers, if any, of allowing 

companies to leave prerecorded 

messages, as opposed to live messages, 

on consumers’ answering machines? Do 

consumers incur additional costs in 

terms of (a) paying for storage of 

messages they do not want; (b) 

exceeding their allotted storage 

capacity; (c) being unable to receive 

messages they want or need; (d) being 

unable to use home telephone lines tiedup by prerecorded messages; or (e) 

retrieving messages? Do consumers 

receive additional benefits, such as 

lower marketing costs that are 

eventually passed on to them? 

8. What are the costs and benefits to 

companies in not having to apply the 

call abandonment safe harbor limit to 

calls left on answering machines? 

9. Should a 30-day standard, if 

adopted, cover all of a telemarketer’s 

campaigns within that period, be 

limited to a single campaign, or be 

limited to the duration of each 

campaign? 

10. Are there significant efficiencies 

that can be obtained with a requirement 

to meet a 30-day standard averaged 

across all of a telemarketer’s campaigns 

that cannot be obtained with a 30-day 

campaign-specific requirement? If so, 

what are they and what effect do they 

have? 

11. Are there technological problems 

that limit the ability of telemarketers 

who are running multiple campaigns to 

measure abandonment rates separately 

for each campaign? If so, what are they, 

how many telemarketers do they affect, 

what remedies, if any, are available, and 

what is the cost of such remedies? 

12. Are upgrades available that can 

reduce the rate at which predictive 

dialers place calls in the case of an 

unexpected spike in call abandonments, 

so that it would not be necessary to run 

them manually? 

13. Would retaining a ‘‘per campaign’’

standard, but extending the period over 

which the call abandonment maximum 

is measured, make the use of smaller 

segmented lists by small businesses and 

other sellers more economical? Please 

provide specific examples of why or 

why not. 

14. What effect would the proposed 

change in the standard for measuring 

the call abandonment rate have on the 

number of abandoned calls that 

consumers receive? 

15. Do small businesses and other 

sellers have alternatives that are equally 

or more effective and economical than 

live telemarketing, such as postcard or 

email announcements, to notify their 

established customers of sales offers and 

to obtain orders? Would the costs of 

such alternatives be outweighed by 

benefits to consumers in avoiding 

additional abandoned calls to their 

homes? 

IX. Conclusion 

For the reasons discussed above, the 

Commission has decided, on balance, to 

deny the petition seeking amendment of 

the TSR to create an additional safe 

harbor to permit prerecorded 

telemarketing calls to established 

customers. The Commission is also 

proposing an amendment explicitly 

prohibiting unsolicited prerecorded 

telemarketing calls without a 

consumer’s express prior written 

agreement to accept such calls. The 

Commission will therefore cease its 

forbearance from considering law 

enforcement actions against sellers and 

telemarketers engaged in making 

prerecorded calls to established 

customers, after allowing a reasonable 

time, as specified above, for them to 

bring themselves into compliance with 

the TSR. 

The Commission has also decided to 

propose an amendment to the existing 

safe harbor to permit measurement of 

the three percent maximum call 

abandonment rate ‘‘over the duration of 

a single calling campaign, if less than 30 

days, or separately over each successive 

30-day period or portion thereof that the 

campaign continues.’’ The Commission 

will accept public comment on this 

proposal until November 6, 2006. 

X. Proposed Rule 

List of Subjects in 16 CFR Part 310 

Telemarketing, Trade practices. 

Accordingly, the Commission 

proposes to amend title 16, Code of 

Federal Regulations, as follows: 

PART 310—TELEMARKETING SALES 

RULE 

1. The authority citation for part 310 

continues to read as follows: 

Authority: 15 U.S.C. 6101–6108. 

2. Amend § 310.4 by adding new 

paragraph (b)(1)(v), and revising 

paragraph (b)(4)(i) to read as follows: 

§ 310.4 Abusive telemarketing acts or 

practices. 

* * * * * 

(b) * * * 

(1) * * * 

(v) Initiating any outbound 

telemarketing call that delivers a 

prerecorded message when answered by 

a person, unless the seller has obtained 

the express agreement, in writing, of 

such person to place prerecorded calls 

to that person. Such written agreement 


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58734 Federal Register / Vol. 71, No. 192 / Wednesday, October 4, 2006 / Proposed Rules 

shall clearly evidence such person’s 

authorization that calls made by or on 

behalf of a specific party may be placed 

to that person, and shall include the 

telephone number to which the calls 

may be placed and the signature of that 

person; provided, however, that 

prerecorded messages permitted for 

compliance with the call abandonment 

safe harbor in § 310.4(b)(4)(iii) do not 

require such an agreement. 

* * * * * 

(4) * * * 

(i) The seller or telemarketer employs 

technology that ensures abandonment of 

no more than three (3) percent of all 

calls answered by a person, measured 

over the duration of a single calling 

campaign, if less than 30 days, or 

separately over each successive 30-day 

period or portion thereof that the 

campaign continues. 

* * * * * 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. 06–8524 Filed 10–3–06; 8:45 am] 

BILLING CODE 6750–01–P 


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