```

[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]

     THE KNOW YOUR CALLER ACT OF 1999 AND THE TELEMARKETING VICTIM 
                         PROTECTION ACT OF 1999

=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON TELECOMMUNICATIONS,
                     TRADE, AND CONSUMER PROTECTION

                                 of the

                         COMMITTEE ON COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                                   on

                        H.R. 3100 and H.R. 3180

                               __________

                             JUNE 13, 2000

                               __________

                           Serial No. 106-117

                               __________

            Printed for the use of the Committee on Commerce

                   U.S. GOVERNMENT PRINTING OFFICE
65-901CC                   WASHINGTON : 2000

                         COMMITTEE ON COMMERCE

                     TOM BLILEY, Virginia, Chairman
W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    RALPH M. HALL, Texas
FRED UPTON, Michigan                 RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
CHRISTOPHER COX, California          PETER DEUTSCH, Florida
NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California         BART STUPAK, Michigan
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
GREG GANSKE, Iowa                    TOM SAWYER, Ohio
CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma              GENE GREEN, Texas
RICK LAZIO, New York                 KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
HEATHER WILSON, New Mexico           BILL LUTHER, Minnesota
JOHN B. SHADEGG, Arizona             LOIS CAPPS, California
CHARLES W. ``CHIP'' PICKERING, 
    Mississippi
VITO FOSSELLA, New York
ROY BLUNT, Missouri
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland
                   James E. Derderian, Chief of Staff
                   James D. Barnette, General Counsel
      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

   Subcommittee on Telecommunications, Trade, and Consumer Protection

               W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL G. OXLEY, Ohio,              EDWARD J. MARKEY, Massachusetts
  Vice Chairman                      RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               BART GORDON, Tennessee
PAUL E. GILLMOR, Ohio                BOBBY L. RUSH, Illinois
CHRISTOPHER COX, California          ANNA G. ESHOO, California
NATHAN DEAL, Georgia                 ELIOT L. ENGEL, New York
STEVE LARGENT, Oklahoma              ALBERT R. WYNN, Maryland
BARBARA CUBIN, Wyoming               BILL LUTHER, Minnesota
JAMES E. ROGAN, California           RON KLINK, Pennsylvania
JOHN SHIMKUS, Illinois               TOM SAWYER, Ohio
HEATHER WILSON, New Mexico           GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING,       KAREN McCARTHY, Missouri
    Mississippi                      JOHN D. DINGELL, Michigan,
VITO FOSSELLA, New York                (Ex Officio)
ROY BLUNT, Missouri
ROBERT L. EHRLICH, Jr., Maryland
TOM BLILEY, Virginia,
  (Ex Officio)

                            C O N T E N T S

                              ----------                              
                                                                   Page

Testimony of:
    Brubacher, Steven R., Senior Vice President for Operations, 
      Infocision Management Corporation, representing American 
      Telemarketers Association..................................    69
    Frelinghuysen, Hon. Rodney, a Representative in Congress from 
      the State of New Jersey....................................    13
    Harrington, Eileen, Assistant Director of Marketing 
      Practices, Federal Trade Commission........................    26
    Hatch-Miller, Hon. Jeff, Arizona House of Representatives....    63
    Salmon, Hon. Matt, a Representative in Congress from the 
      State of Arizona...........................................     9
    Tierney, Virginia, Member of Board of Directors, American 
      Association of Retired Persons.............................    67
Material submitted for the record by:
    Barton, Richard A., Senior Vice President, Congressional 
      Relations, Direct Marketing Association, latter dated June 
      13, 2000, enclosing material for the record................    93

 
     THE KNOW YOUR CALLER ACT OF 1999 AND THE TELEMARKETING VICTIM 
                         PROTECTION ACT OF 1999

                              ----------                              

                         TUESDAY, JUNE 13, 2000

              House of Representatives,    
                         Committee on Commerce,    
                    Subcommittee on Telecommunications,    
                            Trade, and Consumer Protection,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 11 a.m., in 
room 2322, Rayburn House Office Building, Hon. W.J. ``Billy'' 
Tauzin (chairman) presiding.
    Members present: Representatives Tauzin, Deal, Largent, 
Cubin, Shimkus, Ehrlich, Rush, Wynn, Sawyer, Green, and Dingell 
(ex officio).
    Staff present: Kelly Zerzan, majority counsel; Cliff 
Riccio, legislative analyst; and Andy Levin, minority counsel.
    Mr. Tauzin. The subcommittee will please come to order.
    Good morning. Welcome. The subcommittee meets today to 
discuss two bills addressing telemarketing.
    The practice of telemarketing is certainly not a new 
practice. To the contrary, there have been telemarketers in 
business for many years. Telemarketing, however, is an amazing 
phenomenon when it is connected to the Internet. And now that 
telephones and computers are merging so rapidly in the Internet 
world, telemarketing is becoming an incredibly productive tool 
for the sale of products and services in our country and 
throughout the world. In fact, I understand that the 
telemarketing market last year was well over $330 billion. It 
is an amazingly strong, lucrative market.
    However, telemarketing may not be a phenomena as they say 
electronic commerce is, and complaints regarding telemarketing 
are dramatically on the rise in recent years. According to FTC 
estimates, it received over 2,000 complaints about 
telemarketers in the year 1997, but in 1999 it received well 
over 17,000 complaints, indicating a rapid increase in consumer 
concern and complaint about the way in which telemarketing 
practices occur.
    We, of course, can only speculate as to the reason for this 
rise in consumer complaint. Perhaps more and more people see 
telemarketing as an intrusion on their personal in-home 
privacy, particularly during meal time. Don't we all have a 
sense of that? And perhaps pitches and telemarketing sales 
pitches and consumer relation practices are becoming more 
offensive. Who knows? We are going to find out a lot more about 
that today.
    I can only tell you that this last month I was receiving 
five calls a day from British Columbia. I mean, caller ID was 
identifying a number of British Columbia. No messages were 
being left. And I tried calling that number back. It obviously 
was a computer because I could never reach anyone to find out 
why British Columbia was calling me.
    And most citizens of this country don't have the services 
of the Capitol Police at their disposal, but I fortunately did. 
I called the Capitol Police. My concern was--I called my 
telephone company as well. My concern was that perhaps my 
telephone was being used as a conduit for some illicit activity 
or perhaps some scam and that this computer was using my 
telephone and my telephone number for some bad purpose. I 
didn't know. How could I know?
    The Capitol Police chased it down for me and thankfully 
shut it down. I am no longer bothered by these calls from 
British Columbia. But I get a lot of calls that say just 
personal, unavailable. I don't know who is calling. I can't 
call them back to tell them quit bothering me; and yet, at the 
same time, every now and then I get a call from someone who is 
telling me about a product or service I am really interested 
in.
    Now how do we wade through this, this maze of what I 
consider to be commercial tension that is developing in this 
new electronic age where telemarketing is becoming an 
increasingly important function? In fact, in our privacy 
session we had at Lansdowne, one of the guest panelists at the 
privacy sessions told us that when you think about e-commerce, 
it is telemarketing. It is all about using the new Internet 
services and eventually the broad band interactive services 
with incredibly new and powerful techniques by which to sell 
products by which to broaden the market from the marketplace of 
easy access and walking or driving distance to a global 
marketplace. So it really is about telemarketing. It is 
essential that we examine and think about it today.
    What we do know is that the committee indeed has a 
compelling interest in determining how to bring down the number 
of complaints and, at the same time, how to keep a vibrant and 
very productive telemarketing marketplace alive.
    We begin today by conducting hearings on two bills which 
address very specific telemarketing practices that are, I 
think, worthy of our review. The H.R. 3100, the Know Your 
Caller Act, which is introduced by Congressman Rodney 
Frelinghuysen of New Jersey, he is seeking, among other things, 
to prohibit telemarketers from disabling or interfering with 
the ability of your caller ID to display a caller's identity 
and phone number.
    By the way, Rodney, apparently some telephone companies are 
allowing folks to sign up for a service that will not put a 
call through unless it is identifiable on an ID--on a caller 
ID. That may work good for some people, but for the last 2 
months I haven't been able to call my mother from my telephone 
in my car because it won't put the call through. And mom for a 
month now has been trying to disable that system so that I 
could call her, and thankfully this weekend she announced to me 
that I could finally start calling her from my car phone again.
    H.R. 3180, the Telemarketing Victim Protection Act, which 
is being introduced by Matt Salmon of Arizona, will direct the 
FTC to impose four new requirements and prohibitions on 
telemarketing. Most important would be that telemarketers could 
not make any calls between the hours of 5 and 7 p.m., the hours 
when, obviously, they can generally reach us the best but 
generally when we want to have family time.
    So what is the role of government in this critical 2-hour 
period when most of us are trying to enjoy our families? We 
look forward to debate on these proposals and hope to learn 
more from the witnesses today.
    I want to thank you all for being here. I particularly want 
to welcome my two colleagues, first of all, to the witness 
panel, the Honorable Matt Salmon and Rodney Frelinghuysen. But, 
first, I will yield to my friend in Ohio for an opening 
statement and any other members in order.
    Mr. Sawyer is recognized.
    Mr. Sawyer. Thank you, Mr. Chairman. Thank you very much 
for calling this hearing.
    As you point out, the direct marketing industry is an 
enormous and rapidly growing business in this country. 
Concerning telemarketing, my figures show some $460 billion in 
the United States. Who knows? By tomorrow, it may be $560 
billion.
    While telemarketing has in some quarters been a 
controversial marketing practice, it can provide some benefits 
for consumers. In many instances, consumers are introduced to 
new opportunities or products through telemarketing. 
Telemarketing can also promote the availability of competitive 
alternatives to incumbent providers and thus facilitate a 
competitive marketplace.
    Unfortunately certain telemarketing practices can also be a 
significant and intrusive nuisance for consumers as well as 
promote consumer confusion. In some instances, rote 
telemarketers can take advantage of this confusion to commit 
fraud against consumers.
    Let me say again, the vast majority of telemarketers are 
legitimate business people attempting to sell a particular 
product or service. But some are not.
    I am interested in examining the two bills that are before 
us today, but I am also interested in hearing from our 
witnesses on a couple of other topics concerning telemarketing 
practices. I am particularly concerned about two articles that 
appeared within the last several days in the Washington Post 
and in Roll Call regarding a company that is a constituent of 
mine. I am hopeful that, as a product of their presence here 
today, that they will be able to comment on those articles and 
some of the suggested allegations that are embodied in them.
    In that sense, while I am looking forward to the debate on 
the new policies regarding telemarketing that are part of this 
hearing--they are important--I also want to make sure that the 
Congress is conducting proper oversight on the enforcement of 
the laws that we have already promulgated.
    Concerning the case presented in Roll Call, I understand 
that the FTC does not investigate complaints about a for-profit 
company when they are contractors for a nonprofit or political 
entity. It is also my understanding that the limitations on 
for-profit advertising and telemarketing are much more rigorous 
than nonprofit or political entities. I believe that is why the 
FTC does not get involved in such matters.
    While the FTC doesn't, I believe the FCC does. If not, I 
would like to know who does investigate telemarketing 
activities contracted out to a nonprofit or political entity 
from a for-profit. It seems to me there is a rather large gap 
in the law if, in fact, no one has the authority to invetigate 
these matters.
    In reviewing the testimony I think Mr. Brubaker put it best 
when explaining why rules should apply across the board 
regardless of nonprofit, for profit or political status. I 
quote from page 6 of his testimony: ``Our experience has been 
that those who profess to be annoyed at telemarketing contacts 
are not selectively annoyed, they are universally annoyed, 
regardless of who the caller is.'' A telemarketing violation 
should be subject to the same punishment under the law 
regardless of who sponsored the call.
    Let me also mention that, in just looking through all of 
this, I came across a report from the Ohio attorney general 
citing a Better Business Bureau standard avering that a 
reasonable telemarketing campaign is defined by a return of 65 
percent of every donated dollar to the nonprofit. I would 
welcome alternative views about that and whether or not that is 
an appropriate standard to apply to telemarketers.
    Finally, just let me say, Mr. Chairman, I am interested in 
hearing from our colleague, Mr. Frelinghuysen, if, in fact, 
H.R. 3100, the Know Your Caller Act, would apply to for profits 
working for nonprofits. I am curious to know whether H.R. 3100 
would address the ability of the FCC and the FTC to investigate 
and regulate in those situations.
    With that, Mr. Chairman, I yield back the balance of my 
time.
    Mr. Tauzin. I thank my friend.
    I wonder if the original namesake of yours, Tom Sawyer, 
would have used telemarketing to get someone to come and paint 
his fence for him?
    Mr. Sawyer. He might have. But, given the connotations of 
the term ``white wash'', we might use that as well.
    Mr. Tauzin. I thank my friend.
    We welcome our first panel. If our two colleagues would 
join us at the witness table.
    While they are joining us, we want to announce on the 
second panel we will be hearing from the Federal Trade 
Commission, from Ms. Harrington, about what is going on in the 
Federal Trade Commission in this area. And we will have other 
representatives, including the State of Arizona House of 
Representatives and also from the American Association of 
Retired Persons and the American Telemarketers Association, so 
we get a good sense of what is going on not only in the States 
but in the industry and seniors who very often are the ones who 
complain to us about the kinds of telemarketing frauds that 
might occur in the middle of all this good business.
    Mr. Sawyer. Mr. Chairman, if I might interrupt, would it be 
possible to put those two articles in the record?
    Mr. Tauzin. Without objection, the articles will be 
introduced into the record.
    [The articles referred to follow:]

                [Sunday, June 4, 2000--Washington Post]

                                Politics
                              By Mike Allen

    Since March, the calls have been going out to thousands of doctors, 
telling them they have been ``nominated for a national leadership 
award'' that is ``given to doctors, dentists and community leaders.''
    The caller says the invitation is from House Majority Whip Tom 
DeLay (R-Tex.), who is ``Pulling out all stops to finally allow 
physicians like you to have a voice in the health care debate, and to 
do that, we've created the Physicians Advisory Board.
    The doctors are assured that it's ``a completely honorary 
position'' that won't take time away from their busy schedules.
    The callers are telemarketers from the National Republican 
Congressional Committee. Physicians who sound interested are invited to 
call an 800 number, where the find out they can join the ``board'' a 
get a handsome certificate for their office walls for a contribution of 
$300 or more.
    Jim Wilkinson, communications director for the House Republicans, 
said the pitch is one of the committee's most successful programs, and 
he said the only complaint he has heard is from a Democrat.
    ``This is a voluntary program,'' Wilkinson said. ``If people 
support us, they give us money. If they don't like us, they don't give 
us money. It's called freedom.''
    Doctors are called at their offices, not at hospitals. The 
telemarketers say they are ``calling from Congressman Tom DeLay and the 
Physicians Advisory Board in Washington.''
    The telemarketers are told to brush off efforts to take the doctor 
away from a patient by saying, ``We don't want to interfere with 
patient care.'' But then the script tells them to add that they'd 
``very much like to have Doctor [blank] serve with us, so I hope you'll 
have him (or her) call me as soon as he (or she) has a chance.''
    House Republicans have a similar program designed to reach small-
business owners.
    John DelCecato, a spokesman for the Democratic Congressional 
Campaign Committee, called the solicitation ``deceptive'' and 
``shameless.''
    Wilkinson replied that House Republicans have out-raised House 
Democrats ``because we're using cutting-edge methods to rally our 
supporters.''
    ``Democrats are screaming, so it must be working,'' he said.
                                 ______
                                 

                   [Monday, June 12, 2000--Roll Call]

    Doctors Angered By Fundraising Calls Offering Award in Swap for 
                                Donation
                            By John Bresnahan

     In the midst of a high-stakes battle on Capitol Hill over health 
care, House Majority Whip Tom DeLay (R-Texas) is offering doctors a 
chance to join a ``physicians advisory board'' in return for campaign 
contributions.
    Democratic officials claim to have received complaints from doctors 
in at least four states, including New York and California, targeted by 
DeLay and the National Republican Congressional Committee during the 
effort.
    A call received last week by Dr. Charles DeCarli, a neurologist at 
the University of Kansas Medical Center, was typical of the DeLay 
program.
    DeCarli's assistant was told her boss was being ``recommended for a 
national award'' by the Texas Republican, and was given an 800 number 
for DeCarli to contact.
    But when DeCarli called back the number of the ``Physicians 
Referral Service'' that had placed the call, he was told it was 
actually a fundraising solicitation on behalf of the NRCC.
    DeLay and the NRCC were offering DeCarli a chance to belong to a 
``physicians advisory board''--but to do so would cost DeCarli some 
money.
    Another call to DeCarli said he would be made an ``honorary 
chairman'' of the advisory board if he gave $300 to $500.
    In return, DeCarli would get his name in an upcoming ad in The New 
York Times placed by the ``advisory board,'' as well as the chance to 
participate in conference calls with influential Members of Congress, 
although those lawmakers were not named.
    DeCarli said he was told directly that he would have to make a 
donation in order to become an honorary chairman.
    ``I felt very offended by this,'' said DeCarli, a self-proclaimed 
``rabid Democrat.''
    ``I thought the assumption was that the Congressman was interested 
in a national award I had won,'' he said in an interview. ``It was 
really insulting to me.''
    Another Kansas-based doctor, speaking on the condition of 
anonymity, was told she ``received a national award.''
    ``They didn't say they were a political party or anything,'' said 
the doctor.
    InfoCision Management Corporation, an Akron, Ohio-based 
telemarketing firm that often runs such programs for the NRCC, is 
placing the calls.
    A supervisor named Brian Gray at the physicians Referral Service, 
which placed the call to DeCarli, insisted the award ``doesn't cost 
anything,'' although he acknowledged that the calls were designed to 
raise money for the NRCC.
    InfoCision officials didn't return several calls seeking comment.
    ``We've received half a dozen complaints here at the [Democratic 
National Committee] from real doctors, some of them Republicans, who 
resent this misleading appeal by the Republicans,'' said DNC Press 
Secretary Jenny Backus.
    ``Now we know that they are willing to risk real patients' best 
interests by calling doctors away from tending to patients to listen to 
yet another fundraising appeal,'' she added.
    GOP officials, for their part, dismiss the Democratic complaints as 
much ado about nothing.
    ``It is my general understanding that this is a successful 
fundraising program to grow the majority by getting citizens to 
participate,'' said Jonathan Baron, communications director for DeLay.
    ``Telemarketing is a standard aspect of fundraising and Mr. DeLay 
wants to support the NRCC and its efforts,'' he added.
    Baron said the script for the fundraising appeal was appropriate 
and denied that there was any link between GOP efforts to solicit money 
from doctors at the same time health care legislation is high on the 
House's legislative schedule.
    Both the House and the Senate are scheduled to vote in the coming 
weeks on various pieces of legislation covering HMO reform, a 
prescription drug plan for Medicare recipients and a so-called 
``Patients' Bill of Rights.''
    Baron, however, insisted, ``When Washington is affecting peoples' 
lives, voters have not only a right, but an obligation, to speak up.''
    ``The only people who seem to be mad about this voluntary program 
are the Democrats because we out-raised them in the last quarter and 
the cycle,'' said Jim Wilkinson, the NRCC communications director.
    Several GOP insiders claim the organization has raised millions of 
dollars through telemarketing programs focusing on industry groups 
facing legislative initiatives, including the program targeting 
doctors. And much of the success of the NRCC's fundraising campaign 
relies on DeLay's popularity.
    The NRCC devotes considerable time and resources to its 
telemarketing efforts, despite all of the media attention on 
blockbuster fundraisers with big political stars such as Texas Gov. 
George W. Bush (R). Telemarketing will account for as much as ``one-
third'' of the $130 million-plus the NRCC expects to rake in this 
cycle. according to an informed GOP source.
    Republican leaders also used a similar program during the last 
election cycle, although that too attracted complaints.
    Late in 1998, the NRCC, using then-Speaker Newt Gingrich's (R-Ga.) 
name as the draw, placed tens of thousands of calls offering small-
business owners a ``national leadership award'' while at the same time 
asking for a ``one time'' contribution to the party.

    Mr. Tauzin. And the gentleman asked unanimous consent that 
all written statements of our witnesses and of members be 
allowed into the record, without objection.
    [Additional statements submitted for the record follow:]
Prepared Statement of Hon. Steve Largent, a Representative in Congress 
                       from the State of Oklahoma
    Mr. Chairman, thank you holding for this morning's hearing on H.R. 
3100, the Know Your Caller Act, introduced by our colleague, Mr. 
Frelinghuysen, and H.R. 3180, the Telemarketing Victims Protection Act, 
introduced by our colleague, Mr. Salmon.
    I believe that these two bills serve as a wake up call to the 
telemarketing industry. I, along with most Members of Congress, have 
received correspondence from constituents who are tired of receiving 
calls from telemarketers during what is traditionally considered 
``dinner time.'' They are further frustrated that when they go to 
answer the phone, there is no one on the other end of the line because 
the call has been generated by an autodialer.
    In 1991, congress enacted the Telephone Consumer Protection Act 
requiring telemarketers to follow ``do not call'' requests, restricting 
telemarketing calling hours from 8:00 a.m. to 9:00 p.m., instructing 
telemarketers to give the name of the solicitor, phone number and 
address where that person can be contacted, as well as providing for a 
private right of action.
    In addition, the Federal Trade Commission has established 
telemarketing sales rules requiring telemarketers to make certain 
disclosures while banning fraudulent sales practices.
    Despite these safeguards, consumers complaints continue to rise. 
From 1997 to 1999, complaints to the FTC have grown from 2,260 to 
17,423.
    As a consumer myself, I too am sometimes annoyed by telemarketers, 
and would hope that the telemarketing industry would do a better job in 
policing itself. However, I think it is important to note that this is 
an industry that employs 3.4 million people nationwide with annual 
revenues of $550 billion. It's apparent that millions of Americans take 
advantage of the opportunity to purchase goods and services offered by 
telemarketers and therefore, we should carefully consider the impact of 
restricting legitimate business practices.
    One of my concerns is a provision included in both H.R. 3180 and 
H.R. 3100 that would make it illegal for someone making a telephone 
solicitation to circumvent a caller I.D. device. I believe that that is 
a laudable goal, however, it's my understanding that many telemarketing 
calls originate from T-1 or trunk lines that do not go through a local 
switch, thus creating technological barriers to display the originating 
phone number. To rectify this problem could cost millions of dollars. 
I'm interested to learn if there are other alternatives to allow 
consumers to determine who is calling without imposing an unfunded 
Federal mandate.
    My other concern is that H.R. 3180 exempts non-profit organizations 
and political campaigns from the 5:00 p.m. to 7:00 p.m. do not call 
period. I suspect that people who don't want to be called by commercial 
telemarketers during these particular hours do not want to be called 
regardless of who is making the solicitation.
    I commend the authors of these two bills for raising the awareness 
on this issue. And once again, I believe the legislation before us 
serves as a wake up call to the telemarketing industry that it needs to 
balance people's privacy with their own commercial interests.
    Mr. Chairman, I look forward to hearing from our witnesses and I 
yield back.
                                 ______
                                 
Prepared Statement of Hon. Barbara Cubin, a Representative in Congress 
                       from the State of Wyoming

    Thank you, Mr. Chairman, for holding this important legislative 
hearing on two bills that would further restrict the activities of 
telemarketing companies.
    Although marketing and selling products over the telephone is an 
important way in which companies provide their customers with goods and 
services, there's no question that many people find the constant 
barrage of telemarketing phone calls one of the most annoying 
occurrences in our society today.
    Legislative and regulatory measures have tried to protect consumers 
from abuses, but a few bad actors have given the telemarketing industry 
a black eye.
    I understand the necessity of legislating additional measures to 
protect the public from telemarketing abuses.
    It worries me, however, that the legislative initiatives before us 
today seem to blur the lines between a phone solicitor and someone who 
has a legitimate reason for not wanting their identity known when 
placing a phone call.
    For example, my husband is a physician and frequently makes calls 
from our home in Wyoming to his patients.
    We have a caller I.D. block on our phone because we don't 
necessarily want those who we call to know our home phone number. That, 
I'm sure, is not uncommon.
    H.R. 3100 makes it unlawful for any person, in making any telephone 
solicitation, to interfere with or circumvent the ability of a caller 
I.D. service.
    I would like the author of the legislation, who will be testifying 
on behalf of his bill this morning, to clarify where the line will be 
drawn between a telephone solicitor and a person who makes business 
calls from their house and wants their privacy protected.
    Furthermore, how do the proper federal and state agencies go about 
regulating and enforcing these laws and drawing these seemingly narrow 
lines?
    I have some of these same concerns regarding the other bill we are 
considering today.
    Although both bills merit a great deal of attention and must be 
thoughtfully considered to protect consumers from intrusive and 
annoying telemarketers, this Subcommittee must take into consideration 
the sometimes ill-gotten side effects that this type of all-
encompassing legislation brings about.
    Mr. Chairman, I look forward to learning more about these issues 
and getting some answers to the questions I have just outlined.
    Thank you. I yield back the balance of my time.
                                 ______
                                 
 Prepared Statement of Hon. Tom Bliley, Chairman, Committee on Commerce

    Thank you, Mr. Chairman.
    For years this Committee has reviewed the regulation of unwanted 
solicitations to consumers. Of specific concern today is telemarketing. 
As you all know, this particular business practice has been, and 
continues to be, a controversial one.
    There are thousands of reputable telemarketing companies that 
provide a benefit to consumers by offering a broad range of consumer 
options and opportunities. In fact, we will hear from one such company 
today.
    Increasingly, however, consumers are concerned about their personal 
privacy, claiming that telemarketers are intruding into their homes. 
Moreover, we continue to hear stories about fraudulent telemarketing 
scams that separate citizens from their savings. The telemarketing 
complaints lodged with the Federal Trade Commission seem to underscore 
these concerns--in 1997 there were 2,260 complaints--in 1999, that 
number rose to 17,423.
    We must be vigilant to ensure that the consumers' concerns for 
privacy and safety are addressed. However, we must be also be mindful 
of striking the appropriate balance between the consumers right to 
privacy and safety, and the telemarketer's legitimate business 
interests.
    I look forward to learning more about the two bills that have been 
introduced in the House to address telemarketing. I remain interested 
in finding ways to protect consumers as well as our thriving commercial 
industry.
    I thank today's witnesses in advance for their thoughtful testimony 
and I thank Mr. Tauzin for holding this hearing this morning.
                                 ______
                                 
  Prepared Statement of Hon. Gene Green, a Representative in Congress 
                        from the State of Texas

    Mr. Chairman: How many of us have sat down at night to have dinner 
with our families and had the phone ring?
    Is that phone call a friend or family member? Probably not.
    If you eat dinner between 5 p.m. and 7 p.m. at night then that call 
is probably a telemarketer.
    We have all been asked to buy something over the phone from life 
insurance to burial plots.
    For some people this type of information is useful and provides 
companies with an inexpensive way to reach a target consumer group.
    However, for most consumers telemarketers represent a daily 
unavoidable annoyance.
    But, consumers can take steps to limit the number of calls 
telemarketers make to their homes.
    By purchasing caller identification systems and placing your name 
on industry ``do-not-call'' lists consumer can limit the number of 
calls they receive.
    Unfortunately, attempts by consumers to limit sales calls using 
caller ID is running into problems.
    The telemarketing industry, while not an official policy, is using 
readily available technology to hide their true identity from consumers 
caller ID devices.
    I am pleased that Mr. Frelinghuysen's bill would make it illegal 
for telemarketing companies to ``interfere or circumvent'' caller ID.
    I would not answer the phone if I knew I was about to get a sales 
pitch.
    In addition, Mr. Salmon's legislation will reserve more of the 
dinner time for uninterrupted family time by not allowing telemarketing 
calls to start until after 7 p.m.
    Currently, telemarketers can call your home between the hours of 
the 8 a.m. and 9 p.m.
    Even though you can receive calls at just about anytime during the 
day it is the dinner hour when most sales calls are placed.
    While I understand that 5 p.m. to 7 p.m. is the time telemarketers 
most likely to catch consumers.
    Calls at this hour disrupt one of the only daily events that all 
family members are present.
    This time is even more important given the fact that parents are 
working longer hours and seeing their families less and less.
    Mr. Chairman, I support both bills because they empower our 
constituents with the ability to regulate whom they receive calls from.
    I think these are both important pieces of legislation and I look 
forward to hearing the panel discussion on the benefits each will 
provide our constituents.
    Thank you Mr. Chairman and I yield back the balance of my time.

    Mr. Tauzin. We will proceed now to hearing from our two 
colleagues. First of all, the Honorable Matt Salmon, who will 
be telling us a little bit about the Telemarketing Victim 
Protection Act, H.R. 3180. Mr. Salmon.

     STATEMENT OF THE HON. MATT SALMON, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Salmon. Thank you, Mr. Chairman. I commend you for 
bringing attention to this important matter and for your work 
on protecting consumers.
    As you know, last year I introduced the Telemarketing 
Victims Protection Act of 1999, also known as the Do Not 
Disturb My Dinner Act. Actually, I think the biggest opponents 
of this legislation are the makers of Alka Seltzer and Pepto-
Bismol because their sales flourish when their telemarketers 
call during the dinner hour. It is a joke.
    Mr. Tauzin. ``Tums up'' for that.
    Mr. Salmon. It is also interesting to note, I was recently 
on a talk show program--popular radio talk show program back in 
Arizona; and part of my bill actually disallows the 
telemarketers from calling during the dinner hour, which is 
important to especially us family people with children who 
don't get an opportunity to see most of them during the day. 
Dinner hour is the only time we really get to talk, and it 
really is frustrating to be disturbed during that time.
    But when I announced to him that this bill would disallow 
them from calling between the hours of 5 and 7, he said, I 
don't like your bill. I said, really? You think that is too 
intrusive, too heavy-handed government? He said, no, I want you 
to ban them 24 hours a day.
    The bill directs the Federal Trade Commission to promulgate 
rules and regulations which require telemarketing firms to 
notify consumers that they are eligible to be placed on State 
do-not-call lists. If a consumer elects not to be called, the 
telemarketing firm must report that request to the appropriate 
State or national authority. Additionally, the legislation 
prohibits telemarketing firms from blocking the identity of 
their phone number in order to evade caller ID services.
    Mr. Chairman, I have the same experience. My parents bought 
the call blocking device, and my father just had open heart 
surgery. I can't call him from Washington, DC. I have to call 
and wait. And it is sad that we have come to this, that people 
have to spend money out of their pockets to try to protect 
their privacy.
    To that end, I also support Congressman Frelinghuysen's 
bill, which would achieve the same result.
    Furthermore, the bill requires telemarketing firms to 
obtain and reconcile with their own lists the appropriate do-
not-call list. It also amends the time of day telemarketers are 
allowed to call, as I mentioned earlier. Under current law, the 
telemarketers are prohibited from calling consumers from 
between the hours of 8 a.m. and after the hours of 9 p.m. As I 
mentioned, my bill would amend current law to prohibit pesky 
telemarketers from disturbing families during the dinner hours. 
My legislation does not affect organizations that are already 
exempt from the current law.
    As you know, Congress has spent the last decade trying to 
help consumers cope with an industry which at times is out of 
control. The problem is twofold--consumers are being robbed of 
their money and privacy.
    Despite Congress' efforts, great advances in technology 
have helped enable fraudulent telemarketers to continue to 
flourish. According to numerous sources, it is estimated that 
consumers lose $40 billion a year to fraudulent telemarketers. 
As fraudulent telemarketing operations become more 
sophisticated, so must our laws governing the industry.
    Many consumers--especially seniors in my home State--have 
been victimized. The FTC has repeatedly reported that the 
elderly are disproportionately represented among victims of 
telemarketing fraud. If fact, it seems like Arizona has become 
a haven for the business of fraudulent telemarketers. According 
to the FBI, Arizona continues to be a high target area for 
illegal telemarketers due to the State's significant number of 
elderly residents. They believe that the average Arizona victim 
loses between $20,000 to $100,000.
    Some telemarketing firms believe that my bill will not help 
combat fraud. They are wrong. My bill clearly redefines for 
telemarketers what is legal and what is fraudulent. If we arm 
law enforcement with clear, no-nonsense regulations, I believe 
that we will enhance their ability to crack down on 
telemarketing fraud.
    The Telemarketing Victims Protection Act amends current 
Federal law to subject violators of FTC telemarketing sales 
rules to civil penalties of up to $10,000 per violation. And, 
finally, it requires the FTC to study and recommend appropriate 
penalties for telemarketers who repeatedly violate the law.
    Opponents also argue that banning dinner time calls will 
only increase the number of post-dinner time calls. This is a 
ridiculous argument to not pass the bill. We shouldn't be held 
hostage to those who continually violate our privacy with 
unwarranted, unsolicited calls.
    As I mentioned previously, it is just as important to 
protect consumers from assaults on their privacy. Even law-
abiding telemarketing firms seem to push the limits of decency. 
Many States are beginning to recognize that telemarketers are 
invading people's privacy. Texas, California, Georgia, Indiana, 
Pennsylvania, Florida, Missouri, Colorado, New York, Idaho, 
Maryland and Pennsylvania, to name a few, have or are 
considering legislation to set up a do-not-call list.
    Last year, the legislature in my home State reformed its 
laws governing in-State telemarketing. The new law, which will 
be described in greater detail later by Arizona Representative 
Jeff Hatch-Miller, goes a long way to protecting the privacy of 
Arizonans. It prohibits telemarketers from call-blocking their 
number, limits automated random dialing, prohibits 
intentionally dialing cellular phones or pagers, prohibits 
phoning prerecorded messages without your prior consent, and 
requires these businesses to maintain a do-not-call list. As 
usual, meaningful reform begins at the State level and my bill 
will enhance these efforts.
    Most consumers are not even aware of their rights dealing 
with professional telemarketers. A survey by the American 
Association of Retired Persons, AARP, found that seniors, on 
the whole, were less familiar with their consumer rights than 
younger people, and they were less suspecting of deceptive 
sales practices. For consumers who know their rights and ask to 
be placed on a do-not-call list, it usually takes months before 
their request is honored--if at all.
    Invading the privacy of consumers doesn't seem to concern 
many of these telemarketing businesses. That is why I believe 
that my legislation, particularly the consumer information 
section, is desperately needed. The FTC, which has been working 
diligently on this matter, agrees with me. Recently, the FTC 
Chairman Robert Pitofsky wrote me to say that the Commission 
generally favors the underlying goal of H.R. 3180, which is to 
support consumer choice in the matter of whether to receive 
telemarketing calls.
    The FTC is simply reflecting our Nation's desire to protect 
our privacy. Recently, AARP released findings in New York of a 
poll that showed the majority of people surveyed by an 
independent pollster favored stricter telemarketing regulation 
of telemarketers. In Minnesota, 86 percent of the 1,021 adults 
polled earlier this year said they favor a State-run do-not-
call list that they could sign to keep telemarketers away. When 
contacted, Gary Winter, a 54-year-old teacher from Rochester, 
said, ``I think our privacy is overly invaded. If I want to 
talk to someone, I will call them.''
    In Denver, polls overwhelmingly support legislation to curb 
telemarketing practices. In a Statewide poll conducted by Dan 
Jones & Associates, 85 percent of the respondents said they 
favor creating such a no-call list in Utah; and 84 percent 
indicated they would like to put their names on it.
    The issue is neither partisan nor political. Leaders on all 
sides of the political spectrum have joined in the fight to 
help protect consumers against telemarketing abuses, including 
President Clinton and Republican Presidential nominee George W. 
Bush. And my bill is cosponsored by 40 percent on both sides of 
the aisle.
    I believe this issue is best summarized by a recent Buffalo 
News editorial which said that ``telemarketing has gotten 
completely out of control, with seemingly no outside 
regulation. It is an invasion of privacy and has made me a 
prisoner in my own home.''
    Again, I thank you for holding this important hearing; and 
I urge my colleagues on the committee to move forward with a 
comprehensive telecommunication privacy bill which provides 
consumers with the protections sought by Mr. Frelinghuysen and 
myself.
    [The prepared statement of Hon. Matt Salmon follows:]

 Prepared Statement of Hon. Matt Salmon, a Representative in Congress 
                       from the State of Arizona

    Mr. Chairman, I commend you for bringing attention to this 
important matter and for your work on protecting consumers. As you 
know, last year I introduced the Telemarketing Victims Protection Act 
of 1999, also known as the Do Not Disturb My Dinner Act. The bill 
directs the Federal Trade Commission (FTC) to promulgate rules and 
regulations which require telemarketing firms to notify consumers that 
they are eligible to be placed on national and state do-not-call lists. 
If a consumer elects not to be called, the telemarketing firm must 
report that request to the appropriate state or national authority. 
Additionally, the legislation prohibits telemarketing firms from 
blocking the identity of their phone number in order to evade caller ID 
devices. Furthermore, it requires telemarketing firms to obtain (and 
reconcile with their own lists) the appropriate do-not-call list. It 
also amends the time of day telemarketers are allowed to call 
consumers. Under current law, telemarketers are prohibited from calling 
consumers before 8 a.m. or after 9 p.m. My bill would amend current law 
to prohibit pesky telemarketers from disturbing families during dinner 
hours. My legislation does not affect organizations already exempt from 
current law.
    As you know, Congress has spent the last decade trying to help 
consumers cope with an industry that, at times, is out of control. The 
problem is twofold--consumers are being robbed of their money and their 
privacy. Despite Congress' efforts, great advances in technology have 
enabled fraudulent telemarketers to continue to flourish. According to 
numerous sources, it is estimated that consumers lose $40 billion a 
year to fraudulent telemarketers. As fraudulent telemarketing 
operations become more sophisticated, so must our laws governing the 
industry.
    Many consumers--especially seniors in my home state--have been 
victimized. The FTC has repeatedly reported that the elderly are 
disproportionately represented among victims of telemarketing fraud. In 
fact, it seems like Arizona has become a haven for the business of 
fraudulent telemarketers. According to the FBI, Arizona continues to be 
a high target area for illegal telemarketers due to the State's 
significant number of elderly residents. They believe that the average 
Arizona victim loses $20,000 to $100,000.
    Some telemarketing firms believe that my bill will not help combat 
fraud. They are wrong. My bill clearly redefines for telemarketers what 
is legal and what is fraudulent. If we arm law enforcement with clear, 
no-nonsense regulations, I believe that we will enhance their ability 
to crack down on telemarketing fraud. The Telemarketing Victims 
Protection Act amends current federal law to subject violators of FTC 
telemarketing sales rules to civil penalties of up to $10,000 per 
violation. And finally, it requires the FTC to study and recommend 
appropriate penalties for telemarketers who repeatedly violate the law. 
Opponents also argue that banning dinner time calls will only increase 
the number of post-dinner time calls. This is a ridiculous argument not 
to pass this bill. We shouldn't be held hostage to those who 
continually violate our privacy with unwanted, unsolicited calls.
    As I mentioned previously, it is just as important to protect 
consumers from assaults on their privacy. Even law-abiding 
telemarketing firms seem to push the limits of decency. Many states are 
beginning to recognize that telemarketers are invading people's 
privacy. Texas, California, Georgia, Indiana, Pennsylvania, Florida, 
Missouri, Colorado, New York, Idaho, Maryland, and Pennsylvania, to 
name a few, have or are considering legislation to set up a do-not-call 
list. Last year, the legislature in my home state reformed its laws 
governing in-state telemarketing. The new Arizona law, which will be 
described in greater detail by Arizona Representative Jeff Hatch-
Miller, goes a long way to protecting the privacy of Arizonans. It 
prohibits telemarketers from call-blocking their number, limits 
automated random dialing, prohibits intentionally dialing cellular 
phones or pagers, prohibits phoning pre-recorded messages without your 
prior consent, and requires these businesses to maintain a no-call 
list. As usual, meaningful reform begins at the state level and my bill 
will enhance these efforts.
    Most consumers are not even aware of their current rights dealing 
with professional telemarketers. A survey by the American Association 
of Retired Persons (AARP) found that seniors, on the whole, were less 
familiar with their consumer rights than younger people, and they were 
less suspecting of deceptive sales practices. For consumers who know 
their rights and ask to be placed on a do-not-call list, it usually 
takes months before their request is honored--if at all.
    Invading the privacy of consumers doesn't seem to concern many of 
these telemarketing businesses. That is why I believe that my 
legislation, particularly the consumer information section, is 
desperately needed. The FTC, which has been working diligently on this 
matter, agrees with me. Recently, the FTC Chairman Robert Pitofsky 
wrote me to say that ``the Commission generally favors the underlying 
goal of H.R. 3180, which is to support consumer choice in the matter of 
whether to receive telemarketing calls.''
    The FTC is simply reflecting our nation's rising desire to protect 
our privacy. Recently, AARP released findings in New York of a poll 
that showed the majority of people surveyed by an independent pollster 
favored stricter regulation of telemarketers. In Minnesota, eighty-six 
percent of the 1,021 adults polled earlier this year said they favor 
establishing a state-run ``don't call'' list that they could sign to 
keep telemarketers away. When contacted, Gary Winter, a 54-year-old 
teacher from Rochester said ``I think our privacy is overly invaded. If 
I want to talk to someone, I'll call them.''
    In Denver, polls overwhelmingly support legislation to curb 
telemarketing practices. And, in a statewide Deseret News/KSL-TV poll 
conducted by Dan Jones & Associates, 85 percent of the respondents said 
they favor creating such a no-call list in Utah--and 84 percent 
indicated they would like to put their names on it.
     The issue is neither partisan nor political. Leaders on all sides 
of the political spectrum have joined in the fight to help protect 
consumers against telemarketing abuses--including President Clinton and 
Republican Presidential nominee George W. Bush. And, my bill is 
cosponsored by 40 members from both sides of the aisle. I believe the 
issue is best summarized by a recent Buffalo News editorial which said 
that telemarketing ``has gotten completely out of control, with 
seemingly no outside regulation. It is an invasion of privacy and has 
made me a prisoner in my own home.'' Again, I thank you for holding 
this important hearing and I urge my colleagues on the committee to 
pass these bills.

    Mr. Tauzin. Thank you, Matt.
    Now we will hear about the Know Your Caller Act of 1999. 
Rodney.

  STATEMENT OF HON. RODNEY FRELINGHUYSEN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Frelinghuysen. Thank you, Mr. Chairman and members, for 
the opportunity to appear before your committee along with my 
colleague, Congressman Salmon, to talk in support of my bill 
H.R. 3100, the Know Your Caller Act.
    As you know, Mr. Chairman, our bills are similar. We hope 
we can work out the differences. I believe the bills are 
straightforward and provide a simple but important consumer 
protection.
    Mr. Chairman, here is a caller ID box. This happens to be a 
Bell Atlantic caller ID box. Incidentally, 30 percent of Bell 
Atlantic customers, or about 8 million of them, have these 
caller ID boxes, so a lot of people have them.
    Many consumers or constituents purchase and pay for this 
service for several reasons: first and foremost, to protect 
their privacy; second, to provide for their safety and security 
by identifying incoming calls and to allow them the opportunity 
to decide before picking up the receiver whether they want to 
answer that call or not.
    But, guess what? Some of the most frequent calls from those 
telemarketers appear with the message ``Out of the Area.'' Mr. 
Chairman, telemarketing is a commercial enterprise, as we know. 
As such, what would be the reason for not disclosing your 
business telephone number? There simply is none. I believe that 
all commercial enterprises that use the phone to advertise or 
sell their services, to solicit contributions, to encourage the 
purchase of property or goods, or for any commercial purpose 
should be required to have the name of their business and their 
business telephone number disclosed on caller ID boxes. 
Telemarketing enterprises block out caller ID. Yet these same 
companies know your name, your address, and your telephone 
number. Isn't it only fair that they share their company name 
and telephone number so a person can make sure that they are 
actually legitimate callers?
    Also, if you are like me and politely ask to have your name 
removed from their list, I think you should also be able to 
track the name and number of these callers to ensure that they 
don't call back again. My legislation will simply require any 
person making a telephone solicitation to identify on their 
caller ID devices their names and their telephone numbers.
    Mr. Chairman, this legislation will help separate the 
legitimate telemarketers from fraudulent telemarketers. While a 
majority of them are legitimate business people attempting to 
sell a particular product or service, there are some 
unscrupulous individuals and companies violating telemarketing 
rules and scamming consumers.
    Consumers, as we are aware, pay a monthly fee to subscribe 
to the caller ID service because they want to protect their 
privacy and their pocketbooks. But they have little recourse 
because most telemarketers intentionally block their identity 
from being transmitted to caller ID devices.
    Mr. Chairman, we already require telemarketers to identify 
themselves over the telephone and via telephone fax 
transmissions. This bill would extend that protection by giving 
full disclosure to consumers with caller ID devices.
    H.R. 3100 won't solve all problems, but it will provide 
some additional consumer protection.
    In closing, when someone knocks at your door, don't you 
usually look out the window to see who it is before answering 
it? Well, caller ID acts as a window to let you know who is 
calling before you answer the telephone.
    Mr. Chairman, I thank you for the public service you and 
your committee are rendering by having this hearing and 
encourage to you take a serious look at both of our pieces of 
legislation.
    [The prepared statement of Hon. Rodney Frelinghuysen 
follows:]

Prepared Statement of Hon. Rodney P. Frelinghuysen, a Representative in 
                 Congress from the State of New Jersey

    Thank you, Chairman Tauzin, for the opportunity to appear before 
your subcommittee today along with my colleague, Congressman Salmon, to 
testify in support of my bill, H.R. 3100, the Know Your Caller Act. As 
you know, Mr. Chairman, Congressman Salmon and I have similar bills 
pending before your subcommittee. Both bills are very straightforward, 
and provide a simple but important consumer protection. It is my hope 
that Congressman Salmon and I can work out any small differences 
between our two bills, and provide you with one bill that will be 
favorably considered by your subcommittee.
    Mr. Chairman, here is a ``caller ID box.'' Many consumers purchase 
and pay for this service for several reasons: to protect their privacy, 
to provide security by identifying an incoming call and to allow them 
the opportunity to decide before picking up the receiver whether or not 
to answer the call.
     But, guess what? Some of the most frequent calls--those from 
telemarketers--appear with the message ``Out of the Area.'' Mr. 
Chairman, telemarketing is a commercial enterprise. As such, what would 
be the reason for not disclosing your businesses telephone number? 
There simply is none. I believe that all commercial enterprises that 
use the phone to advertise or sell their services, to solicit 
contributions, to encourage the purchase of property or goods, or for 
any other commercial purpose, should be required to have the name of 
their business and their business telephone number disclosed on caller 
ID boxes. Telemarketing enterprises block out caller ID. Yet, these 
same companies know your name, your address and your telephone number. 
Isn't it only fair that they share their company name and telephone 
number so a person can make sure that they are a legitimate company.
    Also, if you are like me, and politely ask to have your name 
removed from their list, I think you should also be able to track the 
name and number of these callers to ensure that they don't call back 
again. My legislation will simply require any person making a telephone 
solicitation to identify on caller ID devices their names and their 
telephone numbers.
    Mr. Chairman, this legislation will help separate the legitimate 
telemarketers from fraudulent telemarketers. While a majority of 
telemarketers are legitimate business people attempting to sell a 
particular product or service, there are some unscrupulous individuals 
and companies violating telemarketing rules and scamming consumers.
    Consumers, pay a monthly service fee to subscribe to caller 
identification service because they want to protect their privacy and 
their pocketbooks. But, they have little recourse because most 
telemarketers intentionally block their identity from being transmitted 
to caller ID devices.
    Mr. Chairman, we already require telemarketers to identify 
themselves over the telephone and via telephone fax transmissions, this 
bill would extend that protection by giving full disclosure to 
consumers with caller ID devices.
    H.R. 3100 won't solve all problems, but it will provide some 
additional consumer protection.
    In closing, when someone knocks at your door, don't you usually 
look out the window to see who it is before answering it? Well, caller 
ID acts as a window to let you know who is calling before you answer 
the telephone.
    Mr. Chairman, thank you again for allowing me to testify before you 
today and I hope you will favorably consider my proposal.

    Mr. Tauzin. Thank you very much, Rodney.
    Let me start by recognizing myself for 5 minutes and 
members in order and see if we can understand a little bit more 
about the bills and the underlying reasons and the philosophy 
of the two bills. They are a little different.
    Obviously, Matt, you have got some of Rodney's protections 
in your own bill, but you go further by allowing the creation 
of the State-run don't call list. Let me ask you, first of all, 
the bill doesn't start with the presumption that people can't 
call you during those hours. It starts with the presumption 
that they can unless you have said no, unless you have put your 
name on a list that says don't call within these hours. Right?
    Mr. Salmon. Right.
    Mr. Tauzin. So it is, essentially, an opt-out that the 
industry can--the telemarketers can call me unless I decide I 
want out, I don't want you to call now, put my name on the 
State-run list, is that right?
    Mr. Salmon. Well, if they put themselves on a do-not-call 
list, then the telemarketer cannot call for any reason at any 
time. My bill currently under Federal law or under FTC 
regulations, they cannot call before 8 in the morning at all, 
they cannot call after 9 at all, anybody, whether they are on a 
do-not-call list or not. My bill would also add to those 
requirements the dinner hour.
    Mr. Tauzin. So in that hour it is an absolute prohibition 
against calling.
    Mr. Salmon. An absolute prohibition.
    Mr. Tauzin. Suppose I don't mind, I want people to call me 
then, your bill would prohibit that?
    Mr. Salmon. During the dinner hour, it would.
    Mr. Tauzin. Who operates the State do-not-call list and who 
pays for it?
    Mr. Salmon. The State do-not-call lists, in different 
States they are handled differently. Some are handled by 
nonprofit organizations; some are handled by the State entities 
themselves. But I think it would work hand in hand with the 
States that do set up.
    Mr. Tauzin. In the case, though, where you are federally 
mandating it, you know we do have a provision that we were very 
successful in passing in Congress. We were not going to mandate 
the cost on the States without putting up the money. Does this 
create a cost on the State that we may have to fund?
    Mr. Salmon. It doesn't tell the States how they have to set 
up a do-not-call system, so it doesn't say that you have to set 
up----
    Mr. Tauzin. It may or may not.
    Mr. Salmon. Right.
    Mr. Tauzin. The phone book itself is a fairly good 
example--in fact, it was used as an example of an opt-out 
system in our recent privacy seminars in Lansdowne. The phone 
book was described as essentially that, as a great opt-out 
mechanism. Our names are all in that phone book. Our phone 
numbers, our addresses are in that phone book. And the phone 
company doesn't have to call each one of us and ask us and fill 
out forms and we don't have to go through an expensive and very 
difficult process of getting our names in the phone book. In 
fact, we get upset when they leave us out, which happened in my 
own community just recently and the--some of the local 
businesses were left out. They raised hell. They want to be in 
that phone book.
    But any time I want I can call them up and say I don't want 
to be in the next phone book. I want an unlisted number. I want 
my number listed, but I don't want to you have my address 
listed. I don't want people knocking on my door.
    So it is a very good opt-out system. Why doesn't that work? 
I want to keep people from calling me at any hours of the day, 
I can just get an unlisted number and give the number out to my 
friends.
    Mr. Salmon. You may want to be accessed by people in your 
church, coworkers. You may not know exactly everybody that may 
have a reason to call you at any given point in time.
    I think that the point here is we do have regulations in 
virtually every city in America as far as sales, door-to-door 
sales, when they can approach your home, when they can't. With 
the new technologies actually knocking on a person's door isn't 
required anymore, but you can call them on the phone.
    Mr. Tauzin. Well, Rodney, you mentioned that. So let me 
switch to you very quickly.
    Mr. Frelinghuysen. My bill only requires telemarketers not 
to intentionally interfere with these devices. People buy 
caller ID service, and they assume this is going to afford them 
some protection.
    Mr. Tauzin. I have one at home, and I am really upset 
whenever I see unavailable or private call or out of market. I 
can't tell who is calling me.
    Mr. Frelinghuysen. But there are a lot of other 
frustrations I would like you to address. You pay for this 
service. This is primarily what I am aiming at.
    Mr. Tauzin. If I pay for the right to look out the window 
and see who is knocking at my door, I want to identify them. 
You can't come in wearing a mask. You can't come in hooded. I 
have to be able to see who you are before I let you in on my 
phone in this case. We often do that in this committee. We 
try--as we think through these new telemarketing e-commerce 
issues, we try to think about how they apply in the brick-and-
mortar world and try to make rules that are comparable in the 
new electronic world.
    In this case, what you are saying is, sure, people can 
knock on my door on most hours of the day. Some communities 
have prohibitions against knocking on your door at certain 
hours. A lot of that has to do with safety and interference and 
privacy concerns. What you are saying is, in all cases where I 
paid for the right to know who is calling me, I ought to be 
able to know that; and no one ought to be able to block that.
    You also made a very interesting statement that you can't 
imagine a business who is trying to sell products that wouldn't 
want me to know who they are. But there are a lot of businesses 
like that, aren't there?
    I am told of a business, for example, that calls our homes 
just to find out if we are there, if we are answering the 
phone, and they hang up quickly, and building data bases which 
they then sell of people who are at home between the hours of 8 
and 9 and 9 and 10 and 10 and 12 and 12 and 1. Those data bases 
become valuable data bases for whom? For other telemarketers 
who then can target the calls to people they know are home. So 
there is all----
    Mr. Frelinghuysen. Often, there is no voice on the other 
end of the phone, which is even worse.
    Mr. Tauzin. It is like the British Columbia machine that 
was calling me. I was totally helpless there because the 
machine wouldn't answer the phone so I could find out what was 
going on. If I didn't have the help of law enforcement, I would 
never have known whether I was being scammed or whether my 
phone number was being co-opted to conduct a scam on someone 
else and whether I would wake up 1 day to read a headline that 
Congressman Tauzin's phone has been used to scam 20 senior 
citizens. It could have happened. I didn't know if it was 
happening.
    So we have got some real problems here that I think your 
two bills are attempting to address and going to wrap up. Then 
I will move on.
    Mr. Salmon. I want to further address the question about--
you asked about, doesn't the phone book actually provide the 
kind of benefit that we need to enforce the privacy? I 
personally have two phone lines at my home. One of them is 
listed. The other one is not listed in the phone book. We still 
get telemarketing known calls on the unlisted numbers.
    Mr. Tauzin. Because of rotary dial. They just dial every 
number. The computer just dials every conceivable number in 
that area code and therefore picks up your unlisted number.
    Mr. Salmon. My unlisted number gets nearly as many of these 
unwanted unsolicited calls as my listed.
    Mr. Frelinghuysen. Mr. Sawyer recognized the issue--I think 
it was more than a rhetorical question--my legislation does not 
affect organizations that are already exempt under current law. 
So in terms of nonprofits, it would not interfere with 
nonprofits.
    Mr. Tauzin. I will give Mr. Sawyer a chance right now. Mr. 
Sawyer is recognized for 5 minutes.
    Mr. Sawyer. Thank you, Mr. Chairman. Those were really more 
directed at the FTC and the FCC.
    Mr. Frelinghuysen. Excuse me.
    Mr. Sawyer. But I would expect that you would have done 
exactly that.
    How many States maintain do-not-call lists?
    Mr. Salmon.  There are very few currently that maintain do-
not-call lists.
    Mr. Tauzin. Somebody is saying 11. Is that right?
    Mr. Sawyer. Do you have any sense of----
    Mr. Salmon.  There are probably about another 10 to 15 that 
are considering.
    Mr. Sawyer. Do you have any sense of how those are paid 
for? If we look to the brick-and-mortar counterpart, when you 
opt out of the phone book you pay a fee for being unlisted in 
order to maintain the work that it takes to do that. It would 
seem to me that is one possible source of a revenue stream to 
sustain a do-not-call list. Do you know whether that is done in 
any----
    Mr. Salmon. In our own State it is maintained by the 
Secretary of State's Office. So it is actually covered for by 
the State government.
    Mr. Sawyer. I see. For either one of you, are there 
particular areas that we ought to look for where there will be 
problems in reconciling your two pieces of legislation?
    Mr. Frelinghuysen. I think--generally, I wouldn't want to 
characterize my colleague's bill as somewhat more restricted 
than mine, but I think we can work out some differences. I 
think we are on the same path. We have the same goals.
    Mr. Salmon. The overall goal is privacy and invasion of 
privacy, and we absolutely are more than happy to work together 
to come up with something that works hand in hand together. 
Absolutely.
    Mr. Sawyer. Thank you, Mr. Chairman.
    Mr. Tauzin. Thank you, Mr. Sawyer.
    The Chair recognizes the gentleman from Georgia, Mr. Deal, 
for a round of questions.
    Mr. Deal. Thank you, Mr. Tauzin. I would yield to my 
colleague, Mrs. Cubin.
    Mrs. Cubin. Thank you very much, Mr. Deal.
    I have but one question. As we are sitting here today, 
everyone is well aware that we are talking about telephone 
solicitors, someone trying to sell you something. But sometimes 
when we pass legislation there are unintended consequences. I 
just wanted to ask if you, both of you, think that this is 
something that might need to be clarified in the language of 
the bill or if it is something that would have an effect that 
you would intend to happen.
    As you know, I am married to a physician; and a lot of 
times he calls from our home to patients' homes. Sometimes 
those are return calls, and sometimes he calls to just check 
and see how the patients are doing. And if everybody--if all of 
his patients had his phone number, I can tell you he would 
never have a day off and he would probably never get a full 
night's sleep. So I wanted to make sure that there were some 
exceptions like that that were included in your legislation or 
find out if there were.
    Mr. Salmon. If I can start, under current law, this only 
affects telemarketing firms.
    Mrs. Cubin. And in Rodney's bill the language says in 
making any telephone--in any telephone solicitation. I just--
again, I just wanted to make sure that the doctor calling to 
check and see how the patient is--and I don't know, sometimes 
doctors--Wyoming they don't, but I know sometimes they do 
charge for that call. I just want to make sure that that isn't 
an unintended consequence.
    Mr. Frelinghuysen. Private citizens can call block, and I 
think there is a difference between commercial telemarketers 
and, you know, individual physicians and professionals. Again, 
I think there can be a distinction made.
    Mrs. Cubin. I would be more comfortable if a distinction 
were made in the legislation. Because I do think there are some 
times--and I am all in favor of the privacy that you are trying 
to achieve, absolutely. I just get furious when I get those 
calls. But I just want to make sure that people aren't affected 
that don't want to be or need not to be. Thank you.
    Thank you, Mr. Chairman. I yield back to Mr. Deal.
    Mr. Deal. I have two further questions or comments.
    First of all, I think any time we undertake Federal 
legislation on any issue there are two questions we should ask. 
The first is, is it necessary that the Federal Government act, 
as opposed to the States acting? We heard the comment about 11 
States--and I believe mine is one of those--that has State 
legislation. I would like to hear your comments a little more 
detailed as to why States cannot adequately regulate this. I 
assume part of this is across the State lines interstate 
commerce.
    The second question is, we do have Federal regulatory 
agencies that supposedly can adapt regulations and rules to 
meet changing situations. And we are going to hear from the FTC 
I believe in just a minute. Would you comment on whether or not 
you think there is adequate statutory authority currently to 
address this by rule and regulation; and, if not, why is your 
legislation necessary as a basis for further action?
    Mr. Frelinghuysen. I am not qualified enough in the law to 
tell you. I think the FTC could tell you. But all I can tell 
you is that our constituents who pay for these devices feel 
that these devices are being thwarted, and I assume that the 
Commission can testify actually to what exists now and 
substantiate that this is a national issue. And nothing in my 
bill would preempt States, in some cases, enacting more 
restrictive laws. The Commission has jurisdiction, but I just 
don't know enough of their mission.
    Mr. Salmon. The Congress has historically given this kind 
of guidance to the FTC. The current laws under which the FTC 
operates regarding telemarketing was promulgated by statute. 
All I can say is that the FTC people that we have spoken with 
are very supportive of the legislation that I have introduced. 
Obviously, there are some gaps, some holes, because people's 
privacy is still being invaded.
    As far as the States rights issue, I mean, having served on 
the State legislature--and I think I am just about as 
conservative on that issue as anybody here--and having voted a 
few years ago for the unfunded Federal mandates legislation, I 
very much am cognizant of that issue. But we do have interstate 
commerce going on. And the States really cannot do anything 
when somebody from Texas or British Columbia is calling 
Arizona. The Federal Government has to become involved.
    Mr. Deal. One other quick question: In the event States do 
not set up a do-not-call list, does your legislation mandate a 
Federal do-not-call list?
    Mr. Salmon. No.
    Mr. Deal. Thank you, Mr. Chairman.
    Mr. Tauzin. Thank the gentleman.
    The Chair recognizes the gentleman from Texas, Mr. Green.
    Mr. Green. Thank you, Mr. Chairman.
    And to follow up my colleague from Wyoming, the concern 
about physicians, my wife is a high school teacher, and one of 
her requirements is that she call parents. And she will 
intentionally not call from our house because of the caller ID.
    Mr. Frelinghuysen. This is only for commercial 
telemarketers. It is not for individuals, private citizens.
    Mr. Green. Currently, I have a similar system on the phone 
system I have in Houston to block calls that are not ID'd.
    Mr. Salmon. It is not offered in all jurisdictions, but I 
know it is the same way in my State. In fact, I think 
Congressman Tauzin and myself were just talking about that 
dilemma--I don't know if you have ever faced it--but my folks 
have purchased that because they are sick and tired of these 
telemarketers----
    Mr. Frelinghuysen. You pay extra for it.
    Mr. Salmon. [continuing] the other debate. Why should she 
have to do that? But now I can't from--try to dial from 
Washington DC or from your Washington office to one of those 
phones, and you won't be able to get through.
    Mr. Green. So we block ours?
    Mr. Salmon. Yeah, for some reason, I can't call from my 
office, and Congressman Tauzin is saying the same thing. My 
father just recently had open heart surgery, and I have been 
trying to get in contact with them. I can't call from the phone 
here.
    Mr. Green. Because we block our numbers going out.
    Mr. Salmon. Right.
    Mr. Green. Our district offices aren't that way, because I 
have returned phone calls. And the constituents--the phone--
when they say U.S. Government, they think I am the IRS.
    Mr. Salmon. It is also interesting--one of the arguments I 
hear back from the people within the industry is, well, hey, if 
they don't want the phone call--the phone book issue has been 
brought up, and I think I have dealt with that. The other one 
is, just don't answer your phone. If you are like me--I have 
teenagers. They are out all over the place. Are they calling 
because they are in need or are they calling because they have 
a problem? I have elderly parents, one that has just had open 
heart surgery. You can't just not answer the phone.
    Mr. Green. When your children are past their teenage years 
you are still wondering if that is them calling you.
    Rodney, in your bill, in one of the parts of it, it says 
that do-not-call lists are maintained by the Direct Marketing 
Association, utilized only by DMA members. More specifically, 
are the DMA members required to use that do-not-call list so 
they don't keep contacting customers who have been added to 
that list? I was under an impression that list was available, 
but telemarketers aren't required to use that list.
    Mr. Frelinghuysen. It is self-regulating. It is not 
required.
    Mr. Green. Because over a period of time--I don't know if 
you have had heard from your constituents, but I have had 
people contact me, and I have asked to be taken off the list. I 
dump calls, and then I continue to get them. So what we do is 
end up going to the--saying we will contact the FTC for you, 
and if you will do it, we will so that telemarketers--direct 
telemarketers are not required to use that list as a membership 
of their organization.
    Mr. Frelinghuysen. Legitimate businesses subscribe to that 
list. We are after the fraudulent, illegal, illegitimate 
businesses that totally ignore that list.
    Mr. Green. Like my colleague again from Wyoming, I 
understand the frustration because--not only personally but 
also from our constituents. And, hopefully, we can put the two 
bills together, not unlike Congressman Wilson and I did with 
our spam bills. And thank you, Mr. Chairman, for that. Because 
we have full committee mark-up for that and put the bills 
together so we can address it.
    Thank you, Mr. Chairman. I yield back.
    Mr. Tauzin. Thank you, Mr. Green.
    Let me announce to the committee that the spam language 
apparently has been worked out. We are prepared to mark it up 
in full committee tomorrow. So we might be prepared to deal 
with that very important issue tomorrow.
    The Chair is pleased now to welcome the gentleman from 
Illinois, Mr. Shimkus, for a round of questions.
    Mr. Shimkus. Thank you, Mr. Chairman. It is great to be 
with my colleague here, and I appreciate their legislation.
    I, too, like most consumers today, have the caller ID; and 
I, like most consumers, they don't know who is calling us. But 
I have--my phone number is listed; and, as Congressman Ehrlich 
and I were talking, I probably receive less calls now today as 
a Member of Congress at home----
    Mrs. Cubin. Because you are never home.
    Mr. Shimkus. [continuing] than I did with my other 
employment. But this raised the issue, and I know for sure that 
the calls originating from here to my home in Illinois are 
blocked. And the industry has been telling me that call--and, 
Matt, you were formerly in this business, is that correct?--
calls originating on a telephone service outside the consumer's 
local area which are routed over a switchline that is different 
from the consumer's local service provider will not allow the 
caller's name or any other identification to be displayed. In 
your research of legislation--obviously, I believe technology 
can overcome all these obstacles, but the industry at least is 
claiming that there are some obstacles in technology to do this 
because of the, you know, the different service areas.
    Mr. Salmon. My personal feeling is that we can--I know I 
worked in telecommunications for 13 years before I came to 
Congress, and these are issues that we can resolve. 
Technologically, we can resolve these issues. I think this 
debate is probably--to me, it is a cop-out just to say we can't 
come up with a solution. We are smart enough to come up with a 
solution. I think the technology exists that we can solve the 
problem.
    I mean, if worse came to worse, one of the reasons that 
their calls are not identifiable is because they haven't an 
automated system that does all the phone calling. If they go 
back to the calling one by one where they have got the line of 
people calling on the phones, those are identifiable. So, you 
know, I really believe it is just a cop-out to say 
technologically we can't make it happen. I think we can--if we 
put our heads together, we can make it happen.
    Mr. Shimkus. And, Congressman Frelinghuysen, can you talk 
about in your bill H.R. 3100 the difference between the 
intentionally interfere with or unintentionally interfere with?
    Mr. Frelinghuysen. The caller ID service is available in 
some places; in some places, it is not available.
    Mr. Shimkus. So that was the intent of the language, just 
the availability?
    Mr. Frelinghuysen. Some parts of the country have this big 
time, and others do not.
    Mr. Salmon. That is one of the reasons that I have included 
some other language in addition to the just you can't block 
your caller ID. Why have we gotten to that point in our society 
if you really don't want your privacy invaded you have to spend 
money on a monthly basis to protect your privacy?
    Mr. Tauzin. Would the gentleman yield?
    Mr. Shimkus. I would.
    Mr. Tauzin. Just to point out, too, we passed Federal laws 
that gave us the right to call people and tell them not to call 
us. But if we can't know who it is that is calling us so that 
we can stop the calls when we want to, then it is a right 
without a remedy, and we need to think about that. What we have 
done is we have given the people a right they can't use.
    I have also got another question that popped up in my mind 
out of your questions. Mr. Shimkus, if you don't mind, let me 
ask it.
    Does either one of your bills cover political 
solicitations? There is a new phenomena in political 
campaigning of computer-generated calls where people's homes 
are dialed, and if you are home then a real person gets on the 
phone. If you are not, then a recorded message is left on your 
machine asking you to vote for someone. And it is--often, it is 
a little fraudulent. Very often, it is--the message is made to 
sound like a real one, that this is the President of the United 
States, and I am calling to you tell you I am on the ballot 
tomorrow and sure appreciate--people say, the President called 
me. You know, I got to go vote.
    It is a little kind--there is a little kind of fraud 
involved in the way those calls are generated. Either one 
touches political solicitations?
    Mr. Frelinghuysen. Evidently, it is exempt under the law.
    Mr. Tauzin. First amendment problem, right?
    Mr. Salmon. My bill doesn't change any of the existing 
laws. You might want to talk to the FTC folks.
    Mr. Tauzin. We will.
    Mr. Shimkus. But the issue is all the stuff that we talked 
about would be, except under your time constraints, would be 
legal if they would just identify their phone number. Truth in 
advertising.
    Mr. Frelinghuysen. We want to know where they are calling 
from, who they are. They know everything about us.
    Mr. Shimkus. Thank you, Mr. Chairman. I yield back.
    Mr. Tauzin. I thank the gentleman.
    The Chair recognizes in her own time the gentlelady, Mrs. 
Cubin, if she would like some.
    Ms. Cubin. [Shaking head].
    Mr. Tauzin. Thank the gentlelady.
    The gentleman from Oklahoma, Mr. Largent, for a round of 
questions.
    Mr. Largent. Thank you, Mr. Chairman I have an opening 
statement I would like to submit for the record.
    Mr. Tauzin. Without objection, opening statements are part 
of the record.
    Matt and Rod, let me ask you a question, if you were to say 
the principal problem that you are trying to address with each 
of your pieces of legislation is the fact that the caller ID is 
blocked or is it the calls themselves?
    Mr. Salmon. I will answer that first.
    My problem is just that there are a lot of people out there 
that don't want to be bothered, and their requests ought to be 
honored. So, in addition to knowing that who is calling, if 
they request they are not called anymore, I would like to see 
that they are not called.
    The other issue again is that right now the hours that 
telemarketers are prohibited by current statute from calling is 
before 8 in the morning for obvious reasons and after 9 p.m. I 
am trying to add to that the hours of 5 to 7. Steve, you know 
as well I as I do with the busy schedules that we have, that 
every family has, the only time that you ever really get a 
chance to sit down and chat with your children or with your 
family or with your spouse is during the dinner hour. And yet 
you get--that is the time that they call because they know you 
are there. So between the hours of 5 to 7 you get 45 different 
telemarketers calls and you got indigestion after you are done. 
So I am trying to add to the hours the hours of 5 to 7 just to 
make it a little bit more user friendly.
    Mr. Frelinghuysen. My response if I can give it to you as 
well, our constituents or consumers should have a right to pick 
up the call or not. And this bill, our bills are basically 
saying people ought to identify who they are, then have you the 
choice as to whether you want to pick up that call or not.
    Mr. Largent. Is it your understanding, Rod, that these 
telemarketers are intentionally blocking their caller ID.
    Mr. Frelinghuysen. Absolutely. That is my gut feeling. I 
think that is what the evidence shows.
    Mr. Largent. That 100 percent of them are blocking.
    Mr. Frelinghuysen. So I think what we are talking about, 
there are some that are abiding by the rules, then there are 
others out there just doing their own thing.
    Mr. Largent. A 100 percent of the ones that are blocked, 
they are doing it intentionally.
    Mr. Salmon. Some of them really truly are technological 
reasons. They have been using that I think really as a cop out. 
I think as I addressed earlier, I think we can come up with 
some technical solutions but to their defense part of the 
problem is technical.
    Mr. Tauzin. Would the gentleman yield? For example, the 
call from your office to a constituent would show up as a 
blocked caller ID. The reason is they are not identifiable to 
your office right now. That could maybe get cured but in fact 
if the gentleman would further yield we mention as a real 
problem my mother and Matt's father purchased blocking devices 
through their local telephone company to stop these calls from 
coming in because the call from my office is unavailable. If I 
call mom to find out, you know, who died there this week and at 
home that I would like to keep up with those kind of things, 
that with my constituents she has been my best eyes and ears on 
the ground, she can't receive my call because it is 
unintentionally blocked. So we have got both problems.
    Mr. Largent. That is what your mother is telling you. She 
may be----
    Mr. Salmon. They actually changed their address.
    Mr. Tauzin. It could well be. I don't know.
    Mr. Largent. The reason I ask that question is it was my 
understanding that some of these calls you can't identify them 
because they are on T-1 lines or that sort of thing, and that 
it is just maybe there are technological solutions that will 
cost real dollars to fix and perhaps it would. I mean, I guess 
I am thinking, you know, when I don't want to take any phone 
calls I take my phone off the hook. It is a real easy solution. 
I turn my cell phone off. You know I get more disgruntled 
with--I mean I literally spend more time taking my junk mail 
out of my mailbox into the trash can than answering 
solicitations over the phone. I mean, I could get disability 
for, you know, my back carrying all this junk that I get out of 
my mailbox.
    Mr. Tauzin. If you can make it through the NFL I know you 
can carry a little junk mail.
    Mr. Largent. Carrying the mail. But so I guess I'm just 
trying to seek some balance here. I mean I can appreciate the 
fact that, you know, I get those calls too. And when I get them 
I say no, thanks, and I hang up and it is the end of the story 
and it takes me 5 seconds. I keep going back to what Nathan 
said. I wonder if this is something that really requires 
Federal intervention here and perhaps we will hear that from 
our next panel. So I appreciate you having this hearing because 
we get constituent calls, I get those calls in my home as well. 
So I look forward to hearing the next panel.
    Mr. Tauzin. I thank the gentleman. The Chair now is pleased 
to recognize the gentleman from Maryland, Mr. Ehrlich, for a 
round of questions.
    Mr. Ehrlich. Two real brief questions to you and maybe the 
chairman, I will direct it to Matt and Rod and you, Chairman. 
One question, Matt, you talked about whether the technology 
exists. You characterize it a cop out. Do you know for a fact 
that technology exists, to follow up to John's question, or is 
that just your speculation?
    Mr. Salmon. Yes, I know for a fact that technology exists. 
It may be right now costly, but, yes, it exists. Absolutely.
    Mr. Ehrlich. Intuitively----
    Mr. Salmon. One example that I used before, yeah, the 
telemarketers could actually go back to physically dialing on 
individual phones instead of these automated systems. And yes, 
they could comply. It might cost them some money to comply with 
it, but they could comply.
    Mr. Ehrlich. I do not know the answer to that in regard I 
guess to the constitutional history of calling within 
prohibited hours and expanding, which is what this bill does, 
expanding it in the statutory prohibition, what has been the 
commerce clause foundational challenge to this prohibition and 
do you not think expanding it to dinner time, which I 
understand is your purpose, would give rise clearly to a court 
challenge? Are you familiar with I guess the Constitutional 
history of case law?
    Mr. Salmon. I just know that for the last several years we 
have already had restrictions in place on the hours per the FTC 
guidelines regulations. You cannot call before 8 in the 
morning, you cannot call after 9 p.m. So the precedence already 
exists for limiting the times that they can call. I can't speak 
to whether or not there have been challenges.
    Mr. Tauzin. Would the gentleman yield? That is the point. I 
don't think there have been challenges.
    Mr. Ehrlich. I guess we will hear from the expert 
testimony.
    Mr. Tauzin. But keep in mind that commercial free speech is 
generally treated differently under the Constitution than 
political free speech. So there is a little more latitude.
    Mr. Ehrlich. Clearly you have a little more authority to do 
that given the easier standard to meet. But when you now take 
that extra yard and----
    Mr. Tauzin. Would the gentleman yield again? I am not sure 
it is clear. I think there could be a constitutional challenge 
even in the commercial free speech area. We are going to get 
some research done on it. But what I am saying is that it would 
clearly pose a problem if you went to trying to regulate 
political speech as well, which we are not doing in this bill.
    Mr. Ehrlich. But even commercial speech in this context 
could raise a problem. I yield back.
    Mr. Tauzin. I thank the gentleman. Let me thank both of our 
friends for their efforts. Let me tell you both as you complete 
your session with our committee, we are not through with this 
issue. You have raised some very intriguing concepts and some 
very intriguing subjects for further debate. I would urge all 
the members to read these two bills, think them through, get 
with their staffs and maybe we will have another little session 
with the committee where we can get some thoughts from all of 
you as to how you might like to proceed and whether you want to 
see these two bills somehow merged into a single concept that 
makes some sense. But I have to agree with you I think you 
touched a very hot button here that people across America are 
going to obviously appreciate us paying a lot more attention to 
than perhaps we have so for. I thank you both for raising the 
level of interest in these subjects to our committee. Thank you 
very much.
    The Chair is now pleased to welcome the second panel, 
beginning with Ms. Eileen Harrington, who is Assistant Director 
of Marketing Practices for the FTC. And we are pleased to 
welcome the honorable Jeff Hatch-Miller from the Arizona House 
of Representative, who will give us some idea of what is 
happening on the State level. Then Ms. Virginia Tierney, a 
Member of the Board of Directors of the American Association of 
Retired Persons, which has a big interest in this issue; and 
Mr. Steven Brubaker, the Senior Vice President of Operations of 
InfoCision Management Corporation, who will be speaking on 
behalf of the American Telemarketers Association, one of the 
organizations of the telemarketers in our country who try their 
best as I can understand it to self regulate the business 
practices of telemarketers. We are pleased to have you all 
here.
    We will begin with the FTC. Welcome again, Eileen, we are 
always pleased to have you and we are always extraordinarily 
educated by your testimony. We appreciate your testimony. 
Remember all of your written statements are part of our record, 
if you can use your 5 minutes to summarize for us the high 
points of your testimony.
    Ms. Harrington.

     STATEMENTS OF EILEEN HARRINGTON, ASSISTANT DIRECTOR OF 
 MARKETING PRACTICES, FEDERAL TRADE COMMISSION; THE HONORABLE 
 JEFF HATCH-MILLER, ARIZONA HOUSE OF REPRESENTATIVES; VIRGINIA 
TIERNEY, MEMBER OF BOARD OF DIRECTORS, AMERICAN ASSOCIATION OF 
RETIRED PERSONS; AND STEVEN R. BRUBACHER, SENIOR VICE PRESIDENT 
FOR OPERATIONS, INFOCISION MANAGEMENT CORPORATION, REPRESENTING 
               AMERICAN TELEMARKETERS ASSOCIATION

    Ms. Harrington. Thank you. I want to begin by wishing you 
happy birthday. I know it is not until tomorrow, but I wanted 
to tell you.
    Mr. Tauzin. You realize what you have done: I am going to 
get all kind of calls between 5 and 7 p.m.
    Ms. Harrington. I found turning 40 to be really traumatic 
and I hope it is easier for you.
    Mr. Tauzin. You are very sweet.
    Ms. Harrington. I am pleased to be here again before the 
committee to present the views of the Federal Trade Commission 
on this issue, and I am going to comment a little bit I think 
on some of the issues that were raised in the first round of 
questioning as I summarize our views.
    First of all, the Congress did a very good job of defining 
telemarketing in the act that directed the FTC to issue its 
telemarketing sales rule. That definition is tied to phone 
calls that are part of a plan, program or campaign designed to 
induce the sale of goods or services. And so questions, for 
example, from Mrs. Cubin about calls from her husband the 
physician would not be and from Mr. Sawyer and Mr. Green, those 
would not be considered under the statutory definition to be 
telemarketing because they are not part of a planned program or 
campaign to induce the sale of goods or services.
    The FTC right now is in the process of reviewing its 
telemarketing sales rule. We review all of our trade regulation 
rules every so often to see to it that the rules still make 
sense, and that they are effective. And the Congress asked us 
to review the telemarketing sales rule after 5 years and we are 
in the process of doing that now and preparing a report back to 
Congress as well as looking at the rule to see whether it needs 
to be changed. We expect to have that report back to you by 
late this year or early next year. The rule review will be 
finished before that time.
    In January, we held the first public workshop as part of 
this rule review and it was focused exclusively on this issue 
of do not call. We learned a fair amount at the workshop on 
this issue. First of all, we took a look at our own complaint 
data base and we see that while we have a lot of complaints 
about telemarketing, almost all of them concern allegations of 
fraud. Only about 1 in 10 of the complaints that we have 
concern unwanted calls.
    At the workshop we asked questions about whether there are 
technological fixes on the horizon or applications that would 
give consumers greater sovereignty to protect against unwanted 
calls. We did hear about some technological applications that 
are already extant. They aren't being used much but they are in 
existence and would enable telemarketing companies to be able 
to block calls to telephone numbers owned by consumers who have 
said that they don't want to receive calls. We also heard that 
the reason that caller ID frequently fails to identify the 
caller has in the minds of some at least to do with technical 
shortcomings on T-1 and trunk lines.
    On the other hand, just yesterday folks on our staff 
working on this visited Bell Atlantic and the Bell Atlantic 
folks told them that that is not so. I think we have to do some 
more investigation to find out what the truth is about why 
calls aren't adequately revealed and displayed on caller ID. We 
learned that many States, as you have heard this morning, have 
adopted statewide opt-out lists for telemarketing. We also 
learned that in some instances at least those State laws have 
more exemptions in them than, you know, the holes in a piece of 
Swiss cheese and so that the exemption really swallows the 
rule.
    For example, we heard from an Assistant Attorney General in 
the State of Kentucky who told us that there are 20 some 
exemptions to Kentucky's ``do not call'' law and that those 
exemptions include calls from insurance companies, calls from 
charities, and so forth. Now, as to these specific bills H.R. 
3180 would require telemarketers to tell consumers that they 
have the right to be placed on centralized ``do not call'' 
lists and to actually see to it that the consumer is enrolled.
    As Mr. Salmon noted, the Commission generally favors the 
underlying goal of this legislation. We favor the notion that 
consumers should have greater choice. On the other hand, we 
recognize that there are costs that are going to be imposed by 
this kind of regime and we have some concern about that. We 
know from the Direct Marketing Association, which right now 
operates a voluntary mail phone preference service list, that 
its costs in maintaining that has really skyrocketed and 
certainly if this became a mandatory scheme the cost would 
increase greatly.
    And so the question is who pays those costs? And how are 
they borne directly and indirectly? Our assumption is that if 
telemarketing companies have to pay costs to have their lists 
scrubbed against ``do not call'' lists, as they do now under 
many State laws, there would be costs passed on indirectly to 
consumers. So the question is who has to bear the cost and are 
consumers who want greater privacy willing to bear those costs. 
That is a hard question.
    I can also say that under our current ``do not call'' 
regime, consumers have the right to tell specific individual 
telemarketing companies not to call them again. I think it is 
very difficult for consumers to know whether their wishes are 
being respected because it is a company-by-company deal. So you 
almost have to keep a record by your phone about who 
specifically you asked to not call and when you told them not 
to call, and so on and so forth. A general opt-out provision 
would give consumers a more meaningful way to know whether 
their wishes are being respected. But it would come with costs.
    I would also observe that under the current regime there 
are exemptions from the FTC's jurisdiction, and in my 
experience as a consumer it is the parties who are exempt who 
keep calling me. I generally tell any telemarketers to put me 
on the ``do not call'' list because that is my preference. I 
can tell you that the calls I receive at my home generally are 
from financial institutions that aren't subject to our 
jurisdiction, phone common carriers that aren't subject to our 
jurisdiction and nonprofits that aren't subject to our 
jurisdiction.
    We have raised to the committee before on other Internet e-
commerce related issues concerns about these ongoing 
limitations in the FTC's fundamental jurisdiction, particularly 
with regard to common carriers. I think that it just doesn't 
make sense that a common carrier doesn't have to comply or 
arguably doesn't have to comply with fundamental consumer 
protections because some time ago the Federal Trade Commission 
Act was written to exclude common carriers at a time when 
common carrier had some real meaning in the telecommunications 
area. I think that with convergence and the growth of e-
commerce, Mr. Chairman, you have it just right that 
telemarketing is e-commerce, and the question is whether some 
telemarketers have to play by the rules and others don't.
    On the issue of blocking identity of callers that is raised 
in H.R. 3100, we certainly would favor greater information to 
consumers, not less. We also favor the scheme that gives 
consumers a private right of action but would caution that if 
consumers can't tell who is calling them, a private right of 
action doesn't do them a whole lot of good. That would conclude 
my remarks, and I'd be happy to answer any questions.
    [The prepared statement of Eileen Harrington follows:]
    Prepared Statement of Eileen Harrington, Assistant Director of 
             Marketing Practices, Federal Trade Commission
    Mr. Chairman, I am Eileen Harrington of the Federal Trade 
Commission's Bureau of Consumer Protection. The Federal Trade 
Commission is pleased to provide testimony today on two bills now under 
consideration, the ``Telemarketing Victims Protection Act'' (HR 3180) 
and the ``Know Your Caller Act'' (HR 3100).1 Both of these 
bills address consumer protection issues relating to telemarketing, a 
longstanding focus of Commission concern both in the law enforcement 
and the regulatory arena.
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    \1\ The views expressed in this statement represent the views of 
the Commission. My responses to any questions you may have are my own 
and do not necessarily reflect the views of the Commission or of any 
individual Commissioner.
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                       the commission's authority
    As the federal government's principal consumer protection agency, 
the FTC's mission is to promote the efficient functioning of the 
marketplace by taking action against unfair or deceptive acts or 
practices, and increasing consumer choice by promoting vigorous 
competition. To fulfill this mission, the Commission enforces the 
Federal Trade Commission Act (``FTC Act''), which prohibits unfair 
methods of competition and unfair or deceptive acts or practices in or 
affecting commerce.2 There are two primary modes open to the 
Commission to enforce the prohibition against unfair or deceptive acts 
or practices. The Commission may pursue such acts or practices through 
administrative litigation that may ultimately result in the issuance of 
a cease and desist order. In addition, Section 13(b) of the FTC Act, 15 
U.S.C. Sec. 53(b), empowers the Commission to file law enforcement 
actions in federal district courts to obtain preliminary and permanent 
injunctive relief, restitution for injured consumers, and, where 
restitution is not practicable, disgorgement of ill-gotten gains from 
fraud operators.
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    \2\ 15 U.S.C. Sec. 45(a). The Commission also has responsibilities 
under 45 additional statutes, e.g., the Fair Credit Reporting Act, 15 
U.S.C. Sec. 1681 et seq., which establishes important privacy 
protections for consumers' sensitive financial information; the Truth 
in Lending Act, 15 U.S.C. Sec. Sec. 1601 et seq., which mandates 
disclosures of credit terms; and the Fair Credit Billing Act, 15 U.S.C. 
Sec. Sec. 1666 et. seq., which provides for the correction of billing 
errors on credit accounts. The Commission also enforces approximately 
30 rules governing specific industries and practices, e.g., the Used 
Car Rule, 16 C.F.R. Part 455, which requires used car dealers to 
disclose warranty terms via a window sticker; the Franchise Rule, 16 
C.F.R. Part 436, which requires the provision of information to 
prospective franchisees; and the Telemarketing Sales Rule, 16 C.F.R. 
Part 310, which defines and prohibits deceptive telemarketing practices 
and other abusive telemarketing practices.
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the commission's efforts against fraudulent and deceptive telemarketing
    Using its authority under Section 13(b) and Section 5 of the FTC 
Act, the Commission has filed hundreds of law enforcement actions 
against fraudulent and deceptive telemarketers in the past 15 years. To 
assist the Commission in its vigorous efforts to combat fraudulent 
telemarketing, Congress, in 1994, added to the range of weapons 
available to the Commission in this law enforcement work by enacting 
the Telemarketing and Consumer Fraud and Abuse Prevention Act 
3 (``the Telemarketing Act'' or ``the Act''). The Act 
directed the Commission to promulgate a Trade Regulation Rule 
prohibiting ``deceptive telemarketing acts or practices and other 
abusive telemarketing acts or practices.'' 4 The 
Telemarketing Act also reached beyond hard-core fraud and deception, 
directing the Commission to include in the rule provisions designed to 
bolster consumers' right to privacy in their own homes, and their 
sovereignty over the issue of whether to receive telemarketing calls.
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    \3\ 15 U.S.C. Sec. Sec. 6101-08.
    \4\ 15 U.S.C. Sec. 6102(a)(1).
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    Specifically, the Telemarketing Act mandated that the rule include 
prohibitions against any pattern of unsolicited telemarketing calls 
``which the reasonable consumer would consider coercive or abusive of 
such consumer's right to privacy,'' 5 and restrictions on 
the hours of the day and night when unsolicited telephone calls can be 
made to consumers.6 Accordingly, the Commission adopted the 
Telemarketing Sales Rule (``TSR'') on August 16, 1995, which, inter 
alia, defined and prohibited certain deceptive telemarketing practices, 
7 prohibited calls by any telemarketer or seller to any 
consumer that had previously stated the wish not receive such calls 
from that telemarketer or seller, 8 and prohibited calls to 
consumers before 8:00 AM or after 9:00 PM, local time for the consumer.
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    \5\ 15 U.S.C. Sec. 6102(a)(3)(A).
    \6\ 16 U.S.C. Sec. 6102(a)(3)(B).
    \7\ 16 C.F.R. Sec. 310.3.
    \8\ 16 C.F.R. Sec. 310.4(b)(1)(ii).
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    The Telemarketing Act enhanced the Commission's law enforcement 
tools by enabling the Commission to seek civil penalties of $11,000 for 
each violation of the Rule, in addition to the equitable relief already 
available to the Commission under Sections 5 and 13(b).9 As 
discussed in greater detail below, the two bills currently under 
consideration would build further on the consumer protections adopted 
by the Commission under the Telemarketing Act. In this regard, it is 
important to note that the Commission is also in process of reviewing 
whether the TSR could be strengthened to provide greater consumer 
protection, consistent with avoiding any undue compliance burden on 
legitimate telemarketers, as part of a broad regulatory review of the 
TSR.10 As the opening action of this process, the Commission 
held a workshop conference on January 11, 2000, that focused on ``do-
not-call'' issues. The regulatory review of the TSR will evaluate the 
costs and benefits of the Rule and its overall regulatory and economic 
impact since its adoption in 1995. Based on the information received 
during this rule review, the Commission will determine whether to 
recommend modifications to the Rule or to retain the Rule unchanged. 
The Commission will report its findings to Congress at the conclusion 
of this evaluation of the Rule's operation.
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    \9\ While the FTC is empowered by Section 16(a) of the FTC Act, 15 
U.S.C. Sec. 56(a), to file its actions for injunctive relief, 
restitution, disgorgement and other equitable relief through its own 
attorneys, FTC actions for civil penalties are referred to the 
Department of Justice for filing.
    \10\ The Telemarketing Act requires that five years following the 
promulgation of the TSR, the Commission review the implementation of 
the Act and its effect on fraudulent telemarketing and report the 
results of the review to Congress. 15 U.S.C. Sec. 6108. On February 28, 
2000, the Commission published a notice in the Federal Register 
soliciting comments on the TSR. 65 Fed. Reg. 10,428.
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    The Commission generally favors the underlying goal of the bills 
under consideration, which is to support consumer choice in the matter 
of whether to receive telemarketing calls. The Commission's views, set 
forth below, on each of the various requirements of the bills are 
informed by oral and written comments supplied to the Commission at the 
workshop and in the regulatory review comments received to date, as 
well as the Commission's long law enforcement experience in the area of 
telemarketing.
         the ``telemarketing victims protection act'' (hr 3180)
    HR 3180 would amend the Telemarketing Act to mandate that the 
Commission include in the TSR the following: 11 (1) a 
requirement that telemarketers notify any consumer whom they call that 
the consumer has the right to be placed on the ``do-not-call'' list 
maintained either by the Direct Marketing Association (``DMA'') or by 
the consumer's state; (2) a requirement that, if the consumer elects to 
be placed on a ``do-not-call'' list, the telemarketer notify the DMA or 
the appropriate state, as the case may be, within a reasonable time; 
(3) a requirement that telemarketers obtain and reconcile, on a regular 
basis, the ``do-not-call'' lists maintained by the DMA and the states 
with the telemarketers' lists of prospective purchasers; (4) a 
prohibition against telemarketing calls between 5:00 p.m. and 7:00 
p.m.; and (5) a prohibition against telemarketers evading consumers' 
``caller-ID'' devices. Like the existing provisions of the TSR, all of 
these additional rule provisions would be enforceable by both the FTC 
and the state attorneys general in federal court actions.12 
The bill would also mandate a study by the Commission within one year 
covering violations of the Telemarketing Act, ``especially of repeated 
violations by a single telemarketer.''
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    \11\ HR 3180 would not expand the scope of the TSR, which, pursuant 
to the Telemarketing Act, is limited to activities within the 
jurisdiction of the FTC as delimited by the FTC Act. 15 U.S.C. 
Sec. 6105(a). The FTC Act limits the FTC's jurisdiction to entities 
which are ``organized to carry on business for [their] own profit or 
that of [their] members,'' 15 U.S.C. Sec. 44, and also expressly 
excludes the activities of several specific types of entities from 
coverage under that Act. The exclusions are: ``banks, savings and loan 
institutions described in section 57a(f)(3) of this title, Federal 
credit unions described in section 57a(f)(4) of this title, common 
carriers subject to the Acts to regulate commerce, air carriers and 
foreign air carriers subject to part A of subtitle VII of title 49, and 
persons, partnerships, or corporations insofar as they are subject to 
the Packers and Stockyards Act, 1921, as amended (7 U.S.C. Sec. 181 et 
seq.), except as provided in section 406(b) of said Act (7 U.S.C. 
Sec. 227(b)).'' 15 U.S.C. Sec. 45(a)(2). Also, the McCarran-Ferguson 
Act generally exempts the ``business of insurance'' from the FTC Act. 
15 U.S.C. Sec. 1012(b).
    \12\ The FTC, through the Department of Justice, could file actions 
seeking civil penalties of $11,000 per violation, as well as injunctive 
relief. States are empowered only to recover restitution for their 
citizens, and to obtain injunctive relief. 15 U.S.C. Sec. 6103(a). 
There is also a private right of action with a jurisdictional threshold 
of $50,000.
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                 the ``know your caller act'' (hr 3100)
    HR 3100 would amend the Telephone Consumer Protection Act 
13 (``TCPA'') by adding a provision that declares it 
unlawful for any person making ``any telephone solicitation to 
interfere with or circumvent the ability of a caller identification 
service to access or provide to the recipient of the call'' information 
to be specified in regulations that the bill directs the Federal 
Communications Commission (``FCC'') to adopt within six months of 
enactment. HR 3100 further directs that the mandated FCC regulations 
must require that telephone solicitations be made in such a manner that 
the consumer on the receiving end who has a caller identification 
service will be provided with a name and number the consumer can use to 
assert his or her ``do-not-call'' rights. In addition, HR 3100 directs 
that the mandated FCC regulations must prohibit any telephone solicitor 
to whom a consumer directs a ``do-not-call'' request from using that 
consumer's name and telephone number ``for any other telemarketing, 
mail marketing or other marketing purpose (including transfer or sale 
to any other entity for marketing use)'' other than to effectuate the 
``do-not-call'' request. The FCC would have responsibility for 
enforcement, but HR 3100 also would expand the TCPA's private right of 
action for failure to honor a ``do-not-call'' request, so that a 
consumer could also sue in state court to enjoin violation of the 
``Know Your Caller'' provisions or regulations promulgated under them, 
and to recover actual damages or $500 for such violation. States' 
attorneys general could also bring such actions in federal 
court.14 At the court's discretion, these damages could be 
tripled for willful or knowing violation. Finally, HR 3100 provides 
that there will be no preemption of state law that imposes more 
restrictive intrastate requirements or regulations on, or which 
prohibits interfering with or circumventing, caller identification 
services.
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    \13\ Codified at 47 U.S.C. Sec. 227.
    \14\ 47 U.S.C. Sec. 227(f).
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Requirements That Telemarketers Notify Any Consumer Whom They Call That 
        the Consumer Has the Right to Be Placed on a ``Do-Not-Call'' 
        List, and That Telemarketers Notify the DMA or the Appropriate 
        State of the Consumer's Desire to Be Placed on Such a List.
    The ``do-not-call'' notification requirement in HR 3180 likely 
would benefit consumers. Some consumers object to receiving 
telemarketing calls because they view such calls as an intrusion on 
their privacy and a burden on their time. ``Do-not-call'' requirements 
give consumers the right to avoid receiving telemarketing calls. 
Consumers, however, need to be aware of this right if they are to make 
use of it. HR3180's ``do-not-call'' notification requirement likely 
would increase consumer awareness of the right not to be called, 
thereby assisting them in their exercise of this right.
    The ``do-not-call'' notification requirement, however, also likely 
would impose costs on telemarketers. Telemarketing is likely to be less 
effective if consumers are promptly 15 notified of their 
opt-out right. The ``do-not-call'' notification requirement also would 
charge telemarketers with the responsibility for communicating 
consumers' wishes to a centralized ``do-not-call'' list. While a 
telemarketer itself may fairly be required to comply with a consumer's 
stated desire not to be called again, it may be an undue burden to 
require the telemarketer to communicate to a third party the consumer's 
preferences as to other telemarketers.
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    \15\ Like other disclosures mandated under the TSR, see 16 C.F.R. 
Sec. 310.4(d), the ``do-not-call'' notification presumably would be 
required to be made ``promptly and in a clear and conspicuous manner.''
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    Assuming that the ``do-not-call'' notification requirement is 
imposed, HR 3180 as drafted does not address the fact that many states 
administering ``do-not-call'' lists require payment of a fee by 
consumers who wish to be included on the list. Thus, it is not clear 
how such a fee, where applicable, would be paid or by whom. As an 
alternative, HR 3180 could require only that telemarketers inform 
consumers of the existence of ``do-not-call'' options or that they 
inform them of the existence of the options and provide the information 
about how consumers may directly contact the appropriate association or 
state regulatory body.
    Even beyond the issue of fees, the Commission might be concerned 
about whether this approach would impose an undue burden on DMA, the 
industry association that developed its own ``do-not-call'' list and 
makes adherence to it a condition of membership.16 During 
the Commission's recent workshop conference on TSR ``do-not-call'' 
issues, DMA representatives noted that the cost of maintaining the list 
was high and growing.17 Requiring that all telemarketers--
even non-DMA members--specifically tell consumers about the DMA's ``do-
not-call'' list may result in substantially increased consumer use of 
that service. Legislation should encourage self-regulatory initiatives 
like DMA's ``do-not-call'' list, but not impose additional burdens on 
them.
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    \16\ The ``do-not-call'' list maintained by the DMA for its members 
is currently offered as a free service to consumers.
    \17\ DNC Tr. 98:4-99:12 (statement of Bob Sherman for the DMA, 
noting that their list is ``getting out of control cost-wise.''). Note: 
copies of the transcript pages cited in this letter are attached to 
this statement; the entire transcript may be accessed at the FTC's Web 
site at www.ftc.gov/bcp/rulemaking/tsr/dncforum/index.html.
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The Requirement That Telemarketers Obtain and Reconcile the ``Do-Not-
        Call'' Lists Maintained by the DMA and the States with the 
        Telemarketers' Call Lists.
    The DMA requires that its members obtain and reconcile the DMA 
``do-not-call'' list with their call lists. HR 3180 would add the force 
of law to that private requirement, and would enlarge it to encompass 
non-members of DMA. Currently, non-members of DMA can purchase the list 
to avoid making calls to consumers who have expressed a desire not to 
be called by telemarketers. HR 3180 requires telemarketers to offer 
consumers the opportunity to be placed on either DMA's ``do-not-call'' 
list or an appropriate state list. Since inclusion on DMA's list is 
free for consumers and inclusion on a state list may require payment of 
a fee, it is likely that DMA's list would effectively become a 
centralized, national ``do-not-call'' list. Since a number of states 
already administer their own ``do-not-call'' system, this requirement 
raises issues of federalism. Consideration should be given to including 
in HR 3180 language that makes explicit whether and to what extent 
Congress intends the proposed federal scheme to preempt existing state 
schemes.18
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    \18\ Industry representatives and others at the workshop conference 
on TSR ``do-not-call'' issues strenuously argued in favor of ensuring 
that if a national ``do-not-call'' list were to take effect, it preempt 
existing state lists. See DNC Tr. 185:5-197:4.
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The Prohibition Against Telemarketing Calls Between 5:00 p.m. and 7:00 
        p.m.
    If enacted, HR 3180 would prohibit telemarketing calls from 5:00 
p.m. to 7:00 p.m. This would benefit consumers who do not want to be 
called by telemarketers during the dinner hour. On the other hand, it 
may be more difficult for telemarketers to sell their goods and 
services if they are prevented from making calls during this particular 
two-hour period, a time when many consumers are likely to be at home. 
As noted above, pursuant to the mandate of the Telemarketing Act to 
include ``restrictions on the hours of the day and night when 
unsolicited telephone calls can be made to consumers,'' 19 
the Commission specified in the TSR that such calls may be made only 
``between 8:00 a.m. and 9:00 p.m. local time at the called person's 
location.'' 20 The Commission specified these times in order 
to achieve consistency with existing similar restrictions included in 
regulations enforced by the Federal Communications Commission under the 
Telephone Consumer Protection Act of 1991.21
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    \19\ 15 U.S.C. Sec. 6102(3)(B).
    \20\ 16 C.F.R. Sec. 310.4(c).
    \21\ 47 U.S.C. Sec. 62.1200 et seq.; 47 C.F.R. Sec. 1200(e).
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    At the Commission workshop focusing on the ``do-not-call'' 
provision of the Rule, some participants suggested technological 
solutions which currently exist or may soon be available to give 
consumers the ability to accept and reject telemarketing calls 
selectively based on their individual schedules. It is important, 
however, to bear in mind the cost to consumers of technological 
solutions. A consistent thread in comments by consumers received thus 
far in the rule review suggests that consumers resent having to pay for 
the privilege of being free from telemarketing calls. In the ensuing 
stages of the TSR regulatory review, the staff of the Commission will 
be soliciting and reviewing information about possible technological 
solutions to give consumers sovereignty vis-a-vis telemarketers, 
including technologies that would enable consumers to determine the 
times they are willing to receive telemarketing calls.
Provisions Addressing the Evasion of Consumers' ``Caller-ID'' Devices 
        by Telemarketers.
    Both bills contain provisions designed to empower consumers to use 
their ``caller-ID'' equipment to screen unwanted telemarketing calls. 
The language in HR3180 as drafted would prohibit telemarketers, through 
FTC regulation (including the threat of civil penalties), from actively 
blocking identifying information, but the proposal may not reach the 
widespread technological problem that results in what might be termed 
``passive blocking.'' According to representatives from telemarketers 
and common carriers, telemarketers generally do not actively ``block'' 
their identifying information; rather, such information is not 
transmitted because of the types of phone lines used by most 
telemarketers.22
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    \22\ DNC Tr. at 113:10-114:1 (comments of Annette Kleckner, a 
representative of MCI WorldCom, noting that telemarketing calls go out 
over T-1 or trunk lines and not through a local switch that would pick 
up a specific telephone number that could be transmitted to ``caller-
ID'' equipment).
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    By contrast, HR 3100 takes a two-fold approach to accomplishing 
similar goals.23 It prohibits any affirmative interference 
or circumvention of consumers' ``caller-ID'' service, and at the same 
time requires, via FCC regulation, that telephone solicitations 
transmit through ``caller-ID'' services the name of their company or 
the entity on behalf of whom they are soliciting and a valid working 
phone number at which the caller may be reached during business hours. 
The FCC would have enforcement responsibility, but HR 3100 would also 
be enforceable through a private right of action, and through actions 
by state attorneys general in federal court.24
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    \23\ Because HR 3100 amends the TCPA rather than the Telemarketing 
Act, it does not incorporate the jurisdictional limitations written 
into the FTC Act, and included by reference in the Telemarketing Act 
(described, supra, at note 11).
    \24\ As a practical matter, it would likely be difficult for 
consumers to bring a private right of action for violation of the 
``Know Your Caller'' requirements, since such violation would deprive 
the consumer of a piece of information essential to bringing an action, 
namely, the identity and location of the potential defendant. Moreover, 
the consumer experiencing violation of these requirements would not 
have a realistic alternative for discovering this information.
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    The approach taken in HR 3100 to require disclosure of identifying 
information has the added benefit of helping to remedy the situation 
where consumers answer calls only to find no one on the other end of 
the line. Telemarketing calls give rise to this occurrence because 
telemarketers use ``predictive dialers.'' These systems--designed to 
maximize the time each telemarketing representative spends selling--
simultaneously dial many more phone numbers than could be handled by 
available telemarketing representatives. If a consumer answers a call 
when there is no sales representative to handle it, the call is 
automatically disconnected or abandoned. Consumers who answer calls 
that are disconnected or abandoned by predictive dialers do so only to 
find no one at the other end. When a telemarketer hangs up without 
identifying himself or herself, consumers have no way to exercise their 
right to request to be placed on a ``do-not-call'' list unless the 
``caller-ID'' system shows a number where the telemarketer or seller 
can be reached. The Commission therefore favors the approach taken in 
HR 3100, specifying that the phone number displayed be one that is 
useful to a consumer who wishes to call back and request that he or she 
be placed on the company's ``do-not-call'' list.
    At the Commission's January 2000 workshop conference on TSR ``do-
not-call'' issues, participants expressed disparate views on whether it 
is technologically possible for consumers' ``caller-ID'' equipment to 
display a telemarketer's name and phone number when the telemarketer is 
calling via a trunk line and, if so, at what cost.25 As part 
of its rule review, the Commission has requested information on the 
feasibility and cost of transmitting this information. Based on the 
debate reflected in the TSR review proceeding to date, it may be that 
broader protection could be achieved through a requirement to disclose 
certain identifying information, as in HR 3100, rather than just a 
prohibition against blocking.26
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    \25\ See generally, DNC Tr. 109:8-121:25.
    \26\ HR 3100 may raise other issues that would more appropriately 
be addressed by the FCC, the designated enforcement agency under that 
bill.
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The Provision That Within One Year the Commission Conduct a Study of 
        Violations of the Telemarketing and Consumer Fraud and Abuse 
        Prevention Act, ``Especially of Repeated Violations By a Single 
        Telemarketer.''
    If the HR 3180 requirement for a study of the violations of the 
Telemarketing Act, as amended by HR 3180, is enacted, such a study 
would be based largely on the complaint data from the Commission's 
ongoing TSR enforcement effort. A central component of this effort is 
``Consumer Sentinel,'' the FTC's confidential database shared by law 
enforcement officials throughout the United States and Canada. Numerous 
organizations contribute complaint data to Consumer Sentinel, including 
the Federal Trade Commission, the National Fraud Information Center, 
the Better Business Bureaus, Canada's Phone Busters, and other federal 
and state sources. The Commission uses the database to assess the 
extent of law violations, to spot emerging trends, and to target its 
enforcement efforts on the most serious problems. Through Consumer 
Sentinel the Commission would be able to track trends in violations of 
the new law in the first year, but a study after the new law has been 
in effect for a longer time would likely be more informative, as it may 
take some time for trends to emerge and for consumer awareness of their 
rights to grow.
    In conjunction with the regulatory review of the TSR, the 
Commission has undertaken a study of the life cycle of telemarketing 
generally: the historical nature of telemarketing, its current status, 
emerging trends, and how the industry is changing to meet the future. 
The goal of this study is to document the historical trends that have 
shaped the practice of telemarketing, and to document factors likely to 
shape its future, including technological innovations, shifting 
markets, consumer attitudes about choice, regulatory and law 
enforcement efforts at the state and federal levels, and telemarketers' 
self-regulatory efforts. The results of this study will help 
legislators, regulators, and law enforcement to better understand 
telemarketing and to anticipate and respond more effectively to changes 
on the horizon.
    In conclusion, the Commission appreciates the efforts of the 
sponsors of HR 3100 and HR 3180 to protect the consumers' ability to 
chose whether to receive telemarketing calls, and to know the identify 
of callers so that they can decide whether to accept such calls. The 
Commission also is appreciative of the opportunity the Subcommittee has 
provided to present testimony today on theses legislative proposals, 
and I would be pleased to answer any questions.

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    Mr. Tauzin. Thank you very much Ms. Harrington.
    Mr. Hatch-Miller, from the State of Arizona, welcome. It is 
Representative?
    Mr. Hatch-Miller. Yes, it is.
    Mr. Tauzin. Give us a picture of what is happening in the 
home field.

               STATEMENT OF HON. JEFF HATCH-MILLER

    Mr. Hatch-Miller. I would be glad to. Thank you for 
inviting me here today and also your efforts on behalf of 
citizens in our State and across the country. When I first 
started thinking about coming to talk to you, I was thinking of 
the Fuller Brush salesmen from 1906, when they first started 
going door to door. In those days it was pretty easy. You 
didn't want solicitors, you just painted a little sign and hung 
it on your door and most of the solicitors would stay away.
    Mr. Tauzin. Or you got a dog.
    Mr. Hatch-Miller. Or you got a dog. Things are certainly a 
lot more complex nowadays in this world of telecommunications. 
Putting up a no solicitor sign is actually a process where you 
have to put one up for every solicitor that comes calling. And 
then along with predictive dialing and answering machine 
detection and sophisticated sales techniques, the telemarketers 
have some powerful arsenal at their disposal.
    Telemarketers I think intimidate a lot of people, and some 
people still feel that it is impolite to hang up. And quite 
frankly telemarketers are practiced in how to turn a no into a 
yes. So they are sophisticated. They intimidate many people. 
Some people feel that it is reasonable for them to want to say 
that I don't want to receive a phone call but they don't know 
how. And I am not talking about fraudulent schemes here. Even 
in legitimate cases the target is sometimes convinced to buy 
products that they don't want or don't need or can't use and 
often can't afford. And some citizens are simply not 
emotionally or intellectually able to ward off repeated calls. 
Senior citizens are often targeted relentlessly and some report 
getting more than 20 calls a day.
    The Arizona departments that I talked to frequently get 
these telemarketing complaints from citizens, and one gentleman 
called up, he was furious that he had to pay the telephone 
company for caller ID and pay them again when the caller ID was 
blocked from finding out who had called him and find out he had 
to pay even more to get it listed in the phone book as somebody 
that didn't want to be called. A woman called us and she was 
very thankful that the voice calls eventually stopped after a 
while, but then she started receiving fax calls in the middle 
of the night.
    These nuisance calls are bad enough, but even worse are the 
ones that are schemes. And in Arizona we do get a lot of 
fraudulent scheme type calls, especially to our elderly 
citizens. I learned of victims who were persuaded to mortgage 
their home to claim a nonexistent sweepstakes prize or make a 
money losing investment.
    It is difficult to tell the honest from the dishonest 
salesperson. You certainly can't do it by their telephone 
number or the sound of their voice. So in Arizona the Secretary 
of State and the Attorney General have focused their attention 
on this problem for several years and we have passed as a State 
legislature a number of bills on this subject. And we were 
forced to update our laws in 1999 because what we discovered 
was that even though we had regulations supposedly in place, 
out of the hundreds of telemarketing operations that existed, 
only four companies were registered in the State and two of 
those four didn't have to comply with our regulations because 
they were exempted. Everyone else fell through the cracks.
    Our purpose in revising statutes and having the regulations 
in Arizona is very simple. We want to develop a registry of 
those companies engaged in telemarketing so that we can ban--
and then we also ban intrusive practices. You can imagine the 
debate was pretty heated and that the arguments for free 
commerce were pretty strong. And I am certainly a proponent of 
free commerce. But society's need to define and require 
appropriate business practices prevailed in our discussions.
    In Arizona now we require that basic information be filed 
by a company that wants to conduct telemarketing. And there are 
two levels of that. We had a lot of loopholes, as mentioned 
over here. We had 17 loopholes in our State. We closed 11 of 
them. And we asked for those 11 who were previously exempted to 
provide limited information, just the name of their company and 
a basic contact person and phone number. They can register 
their information online, they can do it, there is no fee, 
there is no bond and they are not required to provide annual 
reports, just an update if things change.
    Our largest telemarketers of course are fully registered 
and we do have a fee for them and a bond and an annual report. 
And we even ask that those that say they are exempt from our 
process file a report, at least giving us their name and 
telling us why they think they are exempted.
    In addition to regulation or registration, bans have been 
placed on caller ID blocking, prerecorded messages and similar 
kinds of technology. And complementing H.R. 3180, companies in 
Arizona must maintain ``do not call'' lists. Unfortunately at 
present we do not have a State call list in place. And we do 
hope to establish that in the next year or 2. And there are 
really a lot of numbers in our state, hospitals, nursing homes, 
emergency facilities, there are numbers that shouldn't be 
called and we know them and it would be fairly easy to put 
those on a list. And also we have people that call the 
Secretary of State's Office and Attorney General'S Office and 
say we don't want to receive any phone calls anymore. So it 
would be fairly easy to put those names again on that list.
    So even though citizens ask us to put them on a ``do not 
call'' list, right now citizens have to deal with each company 
separately, in effect being forced to put up a ``no 
solicitors'' sign for every salesperson that comes calling.
    We also have another serious limitation. First of all, the 
language is fairly narrowly crafted. It only applies to 
sellers. So if you are calling to set an appointment for later 
sale, it doesn't apply to you. If you are calling to set up an 
investment relationship, it doesn't apply to you. There are a 
lot of companies for the purpose of our law they remain 
unregulated because of that sales definition in particular. And 
then there are also ways to circumvent the law. One way is that 
our law says that you have to have permission in order to use a 
prerecorded message. So you have to have prior permission. So 
we have people calling up saying will you hold for a very 
important message. It is a live person that asks you that, then 
the recorded message starts.
    Another continuing difficulty is establishing the fact that 
a citizen actually did say do not call me. Sometimes the 
numbers change, the names of the companies change even though 
it is the same marketer, and how do you prove that I said I 
don't want that call. And then of course we don't regulate 
faxes or e-mail and those can be just as problematic. Some 
agencies have also expressed the concern that at least in 
Arizona the penalties for noncompliance and violations are too 
low. So we have a difficulty there.
    We have advertised our changes around the State. We get 
lots of people calling every time we do, telling us they want 
these regulations. They say thank you for controlling 
telemarketing, now do more. And what I am hoping that you will 
do is do more by amending the Telemarketing Consumer Fraud and 
Abuse Prevention Act and provide our citizens with additional 
protections. A national ``do not call'' data base linked to 
State data bases makes sense to me for both businesses and 
citizens. Requiring notification that these data bases exist 
give citizens added power to decide whether or not they do want 
to be called. And I thank you, Mr. Chairman.
    [The prepared statement of Hon. Jeff Hatch-Miller follows:]
Prepared Statement of Hon. Jeff Hatch-Miller, Member, Arizona House of 
                            Representatives
    Mr. Chairman and members of the committee.
    My name is Jeff Hatch-Miller, a resident of Arizona and a member of 
the state House of Representatives. I thank you for this opportunity to 
discuss telemarketing laws. Your efforts to solve problems related to 
undesired telemarketing practices are greatly appreciated.
    In 1906, when the first Fuller Brush salesmen began going door to 
door, I'm certain that many residents were irritated at being disturbed 
by the unwanted intrusion. Those that were bothered could easily print 
``No Solicitors'' on a small sign and post it on their door. The honest 
and considerate salesman stayed away.
    In today's world of telecommunications, putting up a ``No 
Solicitor's'' sign is not nearly that simple. With predictive dialing, 
answering machine detection, high pressure sales tactics and other 
modern techniques, the phone solicitor has a powerful arsenal.
    They intimate many people. Some people still feel that it's 
impolite to hang up. Telemarketers have practiced how to take control 
of a conversation, learned how to turn that ``no'' into a ``yes.''
    I'm not necessarily talking about fraudulent schemes. Even in 
``legitimate'' cases the target is convinced to buy products they don't 
want, don't need, can't use, and often can't afford.
    Some citizens are simply not emotionally or intellectually able to 
ward off repeated calls. Senior citizens are often targeted 
relentlessly, some getting more than 20 calls a day.
    Staff officials frequently receive telemarketing complaints from 
distressed citizens. One gentleman was furious that he had to pay the 
telephone company for Caller ID, and then pay more to find out who it 
was when the call information was blocked. He was doubly upset to learn 
he had to actually pay the phone company to be listed in the phone book 
as someone who did not want to receive telemarketing calls. A woman 
called us, thankful that voice calls did eventually stop, but now 
wanting to know how to stop the fax calls that came all night long.
    These ``nuisance'' calls are bad enough. Even worse are those 
telemarketing schemes that are truly fraudulent. I've learned of 
victims that were persuaded to mortgage their homes in order to claim 
non-existent sweepstakes winnings or make money-loosing investments. 
It's difficult to tell the honest from the dishonest salesperson--
certainly one cannot from the phone number used nor from the sound of 
the salesperson's voice.
    In Arizona the Secretary of State and Attorney General have focused 
attention on this problem for several years amid growing concerns 
raised by both consumers and businesses. The state legislature passed 
several bill on the subject. We were forced to update our laws again in 
1999 after learning that even though regulations were supposedly in 
place, only four companies were actually registered in Arizona as 
telemarketers, and two of these four were exempted from our 
regulations. Everyone else simply fell through the cracks.
    Our purpose in revising the statutes was simple. Develop a registry 
of those companies engaged in telemarketing in Arizona and ban 
intrusive and inappropriate practices. Debate was heated. Arguments for 
free commerce were strong. But society's need to define and require 
appropriate business practices prevailed.
    In Arizona we now require that basic information be filed about who 
was calling our citizens, from where, and for what purpose--so when 
problems arise we know whom to contact.
    We closed gaping loopholes in prior legislation. Of the 17 types of 
telemarketers exempted previously, 11 now must provide our Secretary of 
State with ``limited'' information. These solicitors can register 
online, without a fee or bond, must provide only basic information 
about themselves, and are not required to file an annual report.
    Our largest telemarketers are required to complete full 
registration including payment of an application fee, posting of a 
bond, and an annual report of activities. Even those that believe they 
are exempt must now register their exemption, letting us know who they 
are and why they believe they are exempt.
    In addition to registration, bans were placed on Caller ID 
blocking, prerecorded messages, and similar technologies.
    And, complimenting H.R. 3180, companies in Arizona must maintain 
``do-not-call'' lists. Unfortunately, at present we have no provision 
for a statewide list. I hope to establish such a list next session. 
There are numbers for hospitals, nursing homes, emergencies and other 
locations that no telemarketer should call--but we don't keep track of 
them on a central database. Many citizens ask us to put them on a 
general ``do-not-call'' but as of now they must deal with each company 
separately--in effect being forced to put up a new ``no solicitor'' 
sign for every salesperson who comes calling.
    A serious limitation to Arizona's new statutes is that the language 
is very narrowly crafted. The rules only apply to ``sellers'' and many 
telemarketers are not technically sellers. Some offer ``informational 
programs'' about time shares, others are brokerage firms wanting to 
establish an investment relationship, and others are telecom companies 
offering their services. The description of unlawful practices only 
applies to sellers--so these companies, for the purposes of these laws, 
remain unregulated.
    There are also ways to circumvent the specific restrictions in the 
law. For example, we say that a telemarketer cannot use a pre-recorded 
message without prior consent. So, some companies will have a live 
person ask ``will you please hold for a very important message . . .'' 
Once the citizen says ``yes,'' they have technically given their 
permission.
    One continuing difficulty is establishing in fact that the citizen 
really did say ``do not call.'' Another is that the regulations don't 
apply to faxes or e-mail, which can be just as intrusive and difficult 
to stop when undesired.
    Some agencies have expressed concern that the penalties for non-
compliance and violations are too low and that enforcement is made more 
difficult as a result.
    We've advertised these changes broadly. Whenever a staff member 
addresses a public meeting the topic of telemarketing generates a great 
deal of interest. Invariably telemarketing complaints increase 
immediately afterwards.Since passing our revised laws, state offices 
have received hundreds of calls saying ``Thank you for controlling 
telemarketing. Now do more.''
    That is why I welcome your complimentary federal law.
    I'm hoping that you can do more by amending the ``Telemarketing and 
Consumer Fraud and Abuse Prevention Act''--providing our citizens with 
additional protections. A national ``do not call'' database, linked to 
state lists, makes sense for both businesses and citizens. Requiring 
notification that these databases exist gives citizens added power to 
decide whether or not they want to be called.
    In closing, I encourage you to apply these requirements to everyone 
who makes unsolicited calls to our citizens for the purpose of sales, 
proposals and other offers of products or services.
    Thank you, Mr. Chairman, for your work on this very important issue 
and for giving me the opportunity to address your committee. I welcome 
your committee's questions.

    Mr. Tauzin. Thank you. Appreciate it.
    Now we will turn to the AARP and we are pleased to welcome 
Ms. Virginia Tierney, a Member of the Board of Directors in 
Washington, DC. I might mention to you that despite what my 
friends teasingly said my mother gets angry when I don't call. 
So I have that additional problem. We are pleased to hear your 
testimony.

                  STATEMENT OF VIRGINIA TIERNEY

    Ms. Tierney. Being a mother I can relate to that. As you 
said, my name is Virginia Tierney, and I am a member of AARP's 
board of directors. On behalf of the Association I thank you 
for inviting us to offer testimony on two pieces of legislation 
that aim to curtail the practice of telemarketing fraud. Both 
H.R. 3100, the Know Your Caller Act of 1999, and H.R. 3180, the 
Telemarketing Victims Protection Act, offer consumers needed 
protection from the general nuisance of telemarketing while 
working to shield them from potential fraud. In our comments 
this morning, AARP will provide the committee with input on two 
of these important bills.
    Telemarketing fraud is a major concern to AARP because of 
the severe effects it has on older Americans who are victimized 
in disproportionate numbers. In 1996 we launched a campaign 
against telemarketing fraud that involved research examining 
older victims and their behaviors, partnerships with 
enforcement and consumer protection agencies and repeated 
delivery of a consistent research based messages and that 
fraudulent telemarketers are criminals, don't fall for a 
telephone line.
    For the past 3 years AARP has repeated this warning to 
consumers through public service announcements, educational 
workshops and program activities. AARP believes that these two 
pieces of legislation, if enacted into law, will make it easier 
for consumers to heed AARP's advice and will reduce consumer 
susceptibility to deception over the phone.
    H.R. 3100 includes provisions that are consistent with 
AARP's work on telemarketing fraud legislation at the State 
level as well as supporting comments the Association has made 
to the Federal Trade Commission. The main component of H.R. 
3100 is the section 2 prohibition of interference with caller 
identification services. AARP believes that telemarketers 
should be prohibited from blocking caller identification 
devices used by consumers. Telemarketers routinely argue that 
consumers can screen calls they do not wish to receive through 
the use of answering machines or call identification services. 
But unfortunately many telemarketers render the caller 
identification devices useless by blocking the name and phone 
number, preventing a consumer from viewing the information. The 
prohibition in section 2 will assist consumers in screening 
unwanted calls consistent with the argument made by the 
telemarketers.
    AARP also supports the provision in H.R. 3100 that requires 
that a telephone number be provided to consumers if they want 
to be included on a ``do not call'' list. The requirement will 
help facilitate greater information about and access to being 
placed on these lists.
    H.R. 3180 includes provisions that would protect consumers 
as well. Amending the Telemarketing and Consumer Fraud and 
Abuse Prevention Act to require that telemarketers notify 
consumers that they have the right to be placed on either the 
Direct Marketing Association'S, DMA, ``do not call'' list or 
the appropriate State ``do not call'' list will foster greater 
knowledge and use of these lists.
    Since AARP research has shown that many consumers are 
unaware that this right exists, the individual notification is 
critically important. Additionally, the prohibition on calls 
being made between the hours of 5 and 7 p.m. is a welcome 
relief to consumers who have grown weary of dinner time 
interruptions.
    While the vast majority of the provisions of H.R. 3180 are 
consistent with AARP's advocacy efforts, we are concerned about 
one element of the bill. There is a clause in the bill that 
requires a telemarketer to have the consumer's name added 
either to the DMA or appropriate State ``do not call'' list. 
AARP would prefer that the consumer call to place his or her 
name on the respective lists rather than the telemarketer. This 
would reduce the likelihood of an error occurring that would 
leave that consumer off a list and would ensure that the 
consumer would get a firsthand account of the extent or 
limitations of protections the DMA or State specific ``do not 
call'' lists would provide.
    Mr. Chairman, in conclusion, AARP welcomes your efforts to 
enact legislation designed to reduce fraudulent telemarketing 
situations. H.R. 3100 and H.R. 3180 are well crafted efforts to 
accomplish that goal. Passage of legislation that combines the 
key provisions in these bills will go a long way toward 
providing consumers with safeguards against deceptive 
telemarketing calls, keeping those consumers who will be 
susceptible to falling for a telephone line from ever speaking 
to a telemarketer if they so choose. Thank you, and we would be 
very glad to answer any questions.
    [The prepared statement of Virginia Tierney follows:]
Prepared Statement of Virginia Tierney, Member, AARP Board of Directors
    Mr. Chairman and Members of the Committee: My name is Virginia 
Tierney and I am a member of the Board of Directors of AARP. On behalf 
of the Association, I thank you for inviting us to offer testimony on 
two pieces of legislation that aim to curtail the practice of 
telemarketing fraud. Both H.R. 3100, the ``Know Your Caller Act of 
1999,'' and H.R. 3180, the ``Telemarketing Victims Protection Act,'' 
offer consumers needed protection from the general nuisance of 
telemarketing while working to shield them from potential fraud. In our 
comments this morning, AARP will provide the Committee with input on 
these two important bills.
    Telemarketing fraud is a major concern for AARP because of the 
severe effects it has on older Americans, who are victimized in 
disproportionate numbers. In 1996, the Association launched a campaign 
against telemarketing fraud that has involved research examining older 
victims and their behavior, partnerships with enforcement and consumer 
protection agencies, and repeated delivery of a consistent research-
based message. That is: ``Fraudulent telemarketers are criminals. Don't 
fall for a telephone line.'' This slogan came into being after AARP 
qualitative research revealed that although older consumers knew 
telemarketing fraud was wrong, they found it hard to believe that it 
was a crime. Our research suggested that older consumers must be 
convinced that fraudulent telemarketers are criminals before they will 
exercise greater caution.
    The Association believes that the two pieces of legislation under 
discussion today, if enacted into law, will make it easier for 
consumers to heed AARP's advice and will reduce their susceptibility to 
deception over the phone.
    H.R. 3100, the ``Know Your Caller Act of 1999,'' introduced by 
Congressman Frelinghuysen, includes provisions that are consistent with 
provisions AARP has advocated the state level and to the Federal Trade 
Commission (FTC). AARP has voiced support for a similar piece of 
legislation that has been introduced in the Senate, Senators Frist and 
Robb.
    The main component of H.R. 3100 is the Section 2 ``Prohibition of 
Interference with Caller Identification Services.'' AARP believes that 
telemarketers should be prohibited from blocking caller identification 
devices used by consumers. Telemarketers often argue that consumers can 
screen calls they do not wish to receive through the use of answering 
machines or caller identification services. Unfortunately, many 
telemarketers render the caller identification devices useless by 
blocking the name and phone number, preventing a consumer from viewing 
the information. The prohibition in Section 2 of H.R. 3100 will assist 
consumers in screening unwanted calls, consistent with the argument 
made by telemarketers. Further, the provision is written so as to 
ensure that the law is applied fairly. A telemarketer would not be 
liable for the inadvertent failure of a caller identification system.
    AARP also supports the provision in H.R. 3100 that requires that a 
telephone number be provided to consumers if they want to be included 
on a ``do-not-call'' list. This requirement will facilitate consumers' 
learning about and being placed on these lists. Finally, Congressman 
Frelinghuysen's legislation addresses another of AARP's concerns by 
prohibiting the use of ``do-not-call'' lists for any other direct 
marketing purpose. This will protect consumers who unwittingly request 
to be on such lists, only to be targeted by direct mail or other 
telemarketing solicitations.
    The ``Telemarketing Victims Protection Act,'' H.R. 3180, introduced 
by Congressman Salmon, includes consumer protection provisions as well. 
Amending the Telemarketing and Consumer Fraud and Abuse Prevention Act 
to require that telemarketers notify consumers that they have the right 
to be placed on either the Direct Marketing Association's (DMA) ``do-
not-call'' list or the appropriate State ``do-not-call'' list, should 
foster greater knowledge and use of these lists. Since AARP research 
has shown that many consumers are unaware that this right exists, 
individual notification is critically important. Additionally, the 
prohibition on calls being made between the hours of 5 and 7 p.m. is a 
welcome relief to consumers who have grown weary of dinner-time 
interruptions.
    While the majority of the provisions of H.R. 3180 are consistent 
with AARP's advocacy efforts, we are concerned about one element of the 
bill. There is a clause in the bill that requires the telemarketer to 
have the consumer's name added to either the DMA or appropriate state 
``do-not-call'' list. AARP would prefer that the consumer call to place 
his or her name on the respective list rather than the telemarketer. 
This would reduce the likelihood of an error occurring that could leave 
that consumer off of the lists. It would also ensure that the consumer 
would get a first-hand account of the extent or limitations of 
protections afforded them by either the DMA or state-specific ``do-not-
call'' lists.
    Mr. Chairman, in conclusion, AARP welcomes your efforts to enact 
legislation designed to reduce fraudulent telemarketing situations. 
H.R. 3100 and H.R. 3180 are well-crafted efforts to accomplish that 
goal. Passage of legislation that combines the key provisions in these 
bills will go a long way toward providing consumers with safeguards 
against deceptive telemarketing calls, and keeping those consumers who 
may be susceptible to ``Falling for a Telephone Line'' from ever 
speaking to telemarketer, if that is their choice.
    On behalf of AARP, thank you again for providing us with this forum 
to discuss deceptive telemarketing practices and to comment on the 
legislative proposals before you. AARP stands ready to work with you in 
seeking final passage of these important bills.

    Mr. Tauzin. Thank you very much, Ms. Tierney.
    Finally, Mr. Steven Brubaker, Senior VP of InfoCision 
Management Corporation, but also representing the American 
Telemarketers Association.
    Mr. Brubaker.

                 STATEMENT OF STEVEN R. BRUBAKER

    Mr. Brubaker. Thank you, Mr. Chairman and members of the 
subcommittee. It is my privilege to address you today on behalf 
of the ATA and my company InfoCision. We at InfoCision 
specialize in providing inbound and outbound teleservices for 
many groups, nonprofit groups and commercial companies. We are 
members not only of the ATA but also of the Direct Marketing 
Association, the DMA. The ATA is dedicated to representing 
solely the teleservices industry.
    We represent the providers and users of teleservices in the 
U.S. And around the globe. Today we have more than 2000 members 
in 43 States and 19 countries. According to a report issued by 
the Texas House of Representatives last year, telemarketing is 
now the single largest direct marketing system in the country 
employing more than 3.4 million people nationwide and 
generating--now the number is even going up again--$550 billion 
in revenue.
    Mr. Sawyer. Told you.
    Mr. Brubaker. We like that one better. Job growth in this 
industry is more than three times than the national job growth 
average. With those kind of numbers it is obvious that 
consumers are using the telephone to make informed decisions 
and that many--and the majority of the companies are doing it 
legally and ethically and responsibly.
    The Association is dedicated to promoting a positive image 
of our industry to talk about our ethical practices. We have 
established a code of ethics, which I will show you here, which 
attempts to educate our members on the legal and ethical 
behavior, how to do it responsibly.
    We are also a founding member of the FTC's Partnership for 
Consumer Education as part of our continuing effort to help law 
enforcement agencies identify and prosecute criminals posing as 
telemarketers. The ATA and the FTC have joined with the 
nationwide consumer education program that began in 1996. As 
part of this campaign we have distributed a brochure which we 
call Consumer Guidelines. In here we tell consumers their 
rights and give them the 800 number for the National Fraud 
Information Center. We basically suggest to consumers if an 
offer sounds too good to be true it probably is.
    Our commitment to encouraging and conducting honest 
telemarketing is without question. It is with that background 
that we offer comments to the proposed legislation. We are 
strongly opposed to the major provisions of H.R. 3180, which 
would restrict telemarketing calls to residential consumers by 
entities that fall under the telemarketing sales rule between 
the so-called dinner time hours of 5 and 7 p.m. Under Federal 
regulations, implemented by both the FCC and the FTC, 
telemarketers are guaranteed the right to call residential 
consumers between 8 a.m. and 9 p.m., and we feel that is a rule 
of reasonableness. Stating a dinner time hour restriction would 
negatively impact our industry, particularly those companies 
who focus on marketing to consumers.
    As an example, one of our members in Charlotte, North 
Carolina, Personal Legal Plans, they conduct 100 percent of 
their business contacting consumers between 5 and 7 p.m. 
Reducing their calling by 50 percent would put this 20-year 
firm out of business. Company sales would drop drastically and 
its ability to hire a qualified labor force would certainly be 
impossible. Few people would be willing to drive to work for 
only 2 hours of work. They pay on average over $14 an hour to a 
labor force consisting of retirees, single patients and daytime 
stay at home moms, all of whom rely on the evening employment 
to meet their living expenses.
    The wisdom of government legislating meal times is really a 
problem. Meal times differ from household to household. And 
just setting a standard meal time of 5 to 7 will still result 
in calls being made during someone's dinner time whether they 
eat before 5 or after 7. In short there will still be calls 
during dinner.
    Now, when our company reaches someone that tells us they 
are having dinner, we apologize profusely and ask them if there 
is a better time for us to call. We certainly never want to 
upset anyone because our clients want us to build a 
relationship with the customer. As we have seen with other 
legislative and regulatory attempts at both the Federal and 
State level to restrict calling, any legislation would 
certainly cause exemptions for favored groups and we talked a 
bit about that.
    We are all aware that there are several areas of 
constitutionally protected speech that use telemarketing to 
contact consumers, nonprofits, political campaigns, and that 
this regulatory scheme will not apply to those types of calls. 
These exemptions will frustrate consumers and frustrate the 
purpose of the legislation when people were promised 2 hours 
free from telemarketing.
    Applied to this legislation, the practice of granting 
exemptions would simply create an exclusive 5 to 7 p.m. niche 
for marketing for the favored entities. Our experience has been 
that those who profess to be annoyed at telemarketing are not 
selectively annoyed. They are universally annoyed regardless of 
who the caller is. A call from an exempted group during the 
restricted hours is still a call. The excluded groups are then 
pushed to the 7 to 9 p.m. timeframe, which would result in an 
upsurge of calls, as we have stated.
    How would restaurants survive if they couldn't open until 7 
p.m. After the dinner time hour? How would retail 
establishments survive if they weren't able to be open the 2 
weeks or even 2 days before Christmas? How would movie theaters 
survive if they couldn't be open in the evenings?
    The consumer has options. They can use an answering 
machine, install caller ID or privacy manager type product, 
have a cell phone or get an unlisted number. While the intent 
of H.R. 3108 is to protect consumers from fraud, consumers and 
legitimate users of the telephone will ultimately be the ones 
who bear the burden of this bill.
    Telemarketing provides many benefits to consumers and the 
economy. We provide a cost effective way for legitimate 
business to reach potential consumers. We also provide 
consumers with lower costs for goods and services, a wider 
variety of choice, and increased convenience to make their 
purchase decisions. Consumers are able to complete their 
transactions quickly and conveniently from the comforts of 
their own home, thereby saving any inconvenience.
    H.R. 3180 also contains a provision that would require 
telemarketers to advise consumers they have the right to be 
placed on a ``do not call'' list, even if the consumer does not 
make such a request. Such a requirement is inconsistent with 
the telemarketing sales rule. Any person requesting to be 
placed on a list can already--already has that right. Making a 
telephone contact is a legal action. It is inappropriate to 
require honest businessmen and women engaged in a lawful 
legitimate business practice to Mirandize the customers they 
contact.
    The proposed legislation would also require telemarketers 
to obtain and reconcile on a regular basis the DMA's telephone 
preference service list. This is a voluntary program. We 
believe it is inappropriate for the FTC to codify a voluntary 
program. The legislation presented here assumes that consumers 
do not already know their rights. How can we assume this? Last 
year every household in America received a postcard from 
Project kNOw Fraud listing their rights when receiving a phone 
call. Every phone book in the country has a page at the 
beginning listing telemarketing consumers' rights. And we have 
already documented the FTC's Partnership for Consumer 
Education.
    I personally have proof in our company that consumers do 
know their rights. We manage internal company specific lists 
for all our clients whether they are exempt or not. And we have 
seen the requests to be added to the list triple in the last 
few years.
    As we mentioned earlier, the industry is already regulated 
by both the FCC and the FTC. One of the key areas in each rule 
is requiring companies keep specific ``do not call'' lists. We 
feel that the company specific list is the best way to empower 
consumers to choose which calls they want to receive and which 
calls they would like to keep out of their home. We feel the 
best way to protect consumers from fraud is to provide 
additional funding for the Federal and State law enforcement 
agencies and to help to protect consumers in that way.
    And the final provision of 3180 and the major tenet of 3100 
is to prohibit the blocking of caller ID. I would welcome 
questions on that because we have no opposition to the point of 
blocking. We believe that using a blocking of any kind, whether 
it is per call blocking, per line blocking or any other method, 
is wrong.
    We are proud of the business we are in and we have 
supported measures in several States just like this; however, 
we have been told from the telephone companies that it is not 
possible to provide that information. In my own company I have 
asked the telephone company that we work with to allow us to 
provide our name and number to consumers over our T-1 and DS-3 
digital lines, and they have told us that is not possible.
    Thank you.
    [The prepared statement of Steven R. Brubaker follows:]

    Prepared Statement of Steven Brubaker on Behalf of the American 
                        Teleservices Association

    Mr. Chairman and Members of the Subcommittee: I appreciate the 
opportunity to appear before the Subcommittee today to discuss the 
important legislation pending before you on telemarketing concerns. I 
have a prepared statement, which I would like to present to the panel.
    It is my privilege to address you today on behalf of the American 
Teleservices Association, the ATA. My name is Steve Brubaker. I am 
Senior Vice President of Operations for InfoCision Management 
Corporation headquartered in Akron, Ohio. We are a leading teleservices 
agency employing nearly 2000 people. We specialize in providing inbound 
and outbound call center services for many non-profit organizations and 
commercial companies. We are members not only of the ATA, but also of 
the Direct Marketing Association, the DMA.
    The ATA is the trade association dedicated solely to the 
teleservices industry, representing the providers and users of 
teleservices in the United States and around the globe. The ATA was 
founded in 1983 to provide leadership and education in the professional 
and ethical use of the telephone, to increase service effectiveness, 
enhance customer satisfaction and improve decision-making.
    Today, the ATA has more than 2,000 members in 43 states and 19 
countries, representing all segments of the industry, including 
telemarketing service agencies, consultants, customer service trainers, 
providers of telephone and Internet systems, and the users of 
teleservices, such as advertisers, non-profit organizations, retailers, 
catalogers, manufacturers, financial service providers, and many 
others.
    According to a report issued by the Texas House of Representatives 
in 1999, the telemarketing industry is now the single largest direct 
marketing system in the country, employing more than 3.4 million people 
nationwide and generating $550 billion in annual revenue. Job growth in 
this industry is more than three times that of the overall national job 
growth average. With those kind of numbers, it is obvious that U.S. 
consumers are making use of the telephone to purchase goods and 
services, they enjoy having that option, and will continue to use it. 
Those numbers also suggest that the vast majority of telemarketing 
companies are doing it legally, ethically and responsibly.
    The ATA membership is made up of a wide range of businesses and 
other entities, large and small, national and local. It is important to 
note that while our membership includes major players in the American 
economy such as AT&T, Chase Manhattan, the Chicago Tribune, IBM, GTE 
and SBC, it also includes a multi-faceted group of users of 
teleservices, such as the American Cancer Society, the Maryland 
Department of Business & Economic Development, Highlights for Children, 
the City of Austin, Texas, the Metropolitan Opera, Ohio State 
University, St. Judes Children's Research Hospital, the Collin Street 
Bakery, and the Texas Work Force Commission.
    The Association is dedicated to promoting a positive image of 
telephone marketing through the highest standards of ethical practices 
throughout the industry. A primary mission of the ATA is to educate its 
members on the laws that govern teleservices through its annual 
legislative conferences, other educational seminars and conferences, 
and through its membership bulletins detailing trends in legislation 
affecting the industry. The ATA also serves as a resource to the 
Congress, state legislatures, state attorneys general and federal 
regulatory agencies in drafting appropriate and focused legislation and 
rules to combat deceptive practices. In support of that goal, the ATA 
has established a Code of Ethics, which attempts to educate Association 
members, the public and public officials concerning the legal and 
ethical behavior for telemarketing. The Code is provided to all members 
as they join the Association and is available by request to the general 
public. It is also posted on the ATA's website (www.ataconnect.org).
    The ATA is also a founding member of the FTC's Partnership for 
Consumer Education. As part of our continuing effort to help law 
enforcement agencies identify and prosecute criminals posing as 
telemarketers, the ATA and the FTC launched a nationwide consumer 
education program in 1996. The campaign's goal was to promote the 
Telemarketing Sales Rule. As part of that nationwide education 
campaign, the ATA distributes a brochure, entitled Consumer Guidelines, 
which contains tips for consumers on how they can obtain safe and 
satisfying sales and services through the convenience of the telephone 
and identify those tactics used by criminals in their fraudulent 
activities.
    The ATA's commitment to encouraging and conducting legitimate and 
honest telemarketing programs is without question. It is with that 
background that we offer the following comments regarding the 
legislation pending before the Subcommittee today.
    We are strongly opposed to the major provisions of H.R. 3180, which 
would restrict telemarketing calls to residential consumers by entities 
that fall under the FTC Telemarketing Sales Rule between the so-called 
``dinner time'' hours of 5:00 pm and 7:00 pm. Under federal regulations 
implemented by the Federal Communications Commission in 1992 and the 
Federal Trade Commission in 1995, telemarketers are guaranteed to the 
right to call residential consumers between the hours of 8:00 a.m. and 
9:00 p.m.
    Instituting a ``dinner time'' hour restriction would negatively 
impact the telemarketing industry, particularly those companies who 
focus on marketing goods and services to consumers. As an example, 
small companies such as Personal Legal Plans, one of our members in 
Charlotte, NC, generate 100% of its business contacting consumers 
between the hours of 5 PM and 9 PM. Reducing the calling hours by 50% 
would put this twenty (20) year firm out of business. Company sales 
would drop drastically and its ability to hire a qualified labor force 
would be almost impossible. Few prospective employees would be willing 
to drive to work for only two (2) hours of work. Personal Legal Plans 
pays on average over $14 per hour to a labor force consisting of 
retirees, single parents, and daytime stay-at-home moms--all of whom 
rely on this evening employment to meet their living expenses.
    The justification provided for the bill is based on constituent 
feedback that objects to telemarketer contacts at mealtimes. While no 
elected official can take voter concerns lightly, there is some 
question as to whether those that complain are in fact representative 
of the voting population. No scientifically based data has been 
presented in support of this premise. What has been advanced is 
essentially anecdotal in nature. Since industry reports that sales 
figures show the evening hours are the overwhelming prime period for 
consumer contacting, the question arises--If the majority of consumers 
object to evening contacts, then who is conducting all this business? 
The complaints clearly are not manifest in consumer turn-off.
    The wisdom of government legislating mealtimes for society is 
fraught with far-reaching implications. Mealtime differs from household 
to household. An arbitrary selection of a ``standard'' mealtime will 
result in calls being made during mealtimes of those who do not conform 
to the federal standard. In short, there will still be contacts during 
the dinner hours, whenever they might be. As we have seen with other 
legislative and regulatory attempts at the federal and state level to 
restrict calling, any legislation would be laden with exceptions for 
favored groups.
    We are all well aware that there are several areas of 
constitutionally protected speech that use telemarketing to contact 
consumers, including non-profits and political campaigns, and that this 
regulatory scheme will not apply to those types of calls. These 
exemptions will serve to frustrate the purpose of this legislation and 
frustrate those consumers that had been promised two hours free from 
telemarketing each night.
    Applied to this legislation, the practice of granting exemptions 
would simply create an exclusive 5pm-7pm niche for telephone marketing 
for the favored entities. So we must ask the question: does a dinner 
time bill stop calls during the legislated timeframe? No, it simply 
leaves the field to the exempted groups.
    Our experience has been that those who profess to be annoyed at 
telemarketing contacts are not selectively annoyed; they are 
universally annoyed, regardless of who the caller is. A call from an 
exempted group during the restricted hours is still a call. The 
excluded groups are then pushed to the 7pm-9pm timeframe, which will 
surely result in an upsurge of calls at those times. This will, no 
doubt, result in calls for more legislation to protect the ``post 
dinner time'' hours. Carried to its logical conclusion, we will soon 
have ``breakfast time'' hours, ``lunch time'' hours, ``after school'' 
hours, and ``daylight savings'' hours. In no time, the entire 
telemarketing industry will have just that--no time.
    How would restaurants survive if they couldn't be open after 7 PM 
(after the so called dinner hour)? How would retail establishments 
survive if stores were required to be closed the last two weeks, or 
even the last two days, before Christmas?--How would movie theatre's 
survive if they couldn't be open in the evenings? The consumer--not 
only has the option of not answering the telephone, they could use an 
answering machine, install caller ID or a ``Privacy Manager''-type 
product, have a cellular phone, and get an unlisted number.
    While the intent of H.R. 3180 may be to protect consumers from 
fraud, consumers and legitimate users of the telephone will ultimately 
be the ones who bear the burden of this bill. Telemarketing provides 
many benefits to consumers and the economy. Telemarketing provides a 
cost-effective way for legitimate businesses to reach potential 
consumers. Telemarketing also provides consumers with lower costs for 
goods or services, a wider variety of choices, and increased 
convenience to make their purchasing decisions. Consumers are able to 
complete their transactions quickly and conveniently from the comforts 
of their own home, thereby saving the time, effort and inconvenience of 
traveling to the store.
    H.R. 3180 also contains a provision that would require 
telemarketers to advise consumers they have the right to be placed on a 
do-not-call list, even if the consumer does not make such a request. 
Such a requirement is inconsistent with the provisions of the 
Telemarketing Sales Rule (TSR) administered by the Federal Trade 
Commission. Any person requesting to be placed on a do-not-call list 
already has that right. Making a telephone contact is a legal action. 
It is inappropriate to require honest businessmen and women, engaged in 
a lawful, legitimate business practice, to ``Mirandize'' the consumers 
they contact.
    The proposed legislation would also require telemarketers to obtain 
and reconcile, on a regular basis, the Direct Marketing Association's 
do-not-call list or the appropriate state list. The DMA's Telephone 
Preference Service was developed as a voluntary program; it is wholly 
inappropriate that the Federal Government should now attempt to codify 
a voluntary program. Additionally, for the Federal Government to 
endorse a private company is ethically questionable.
    The legislation presented here assumes that consumers do not 
already know their rights. How can we assume this? Last year every 
household in America received a postcard from ``Project kNOw Fraud'' 
clearly listing their rights when receiving a call. Every phonebook in 
the country has a page at the beginning listing telemarketing 
consumers' rights. And, we have already documented the FTC's 
Partnership for Consumer Education.
    I personally have proof that a large number of consumers do know 
their rights. Our company manages internal company-specific do not call 
lists for each of our clients and we've seen the requests to be added 
to the list triple in the last few years.
    As we mentioned earlier, the telemarketing industry is already 
regulated nationwide by both the FCC rules implementing the Telephone 
Consumer Protection Act and the FTC's Telemarketing Sales Rule 
(``TSR''). One of the key areas in each of these rules is the 
requirement that companies keep specific Do-Not-Call lists of 
individuals who have requested not to receive any more telemarketing 
calls from that company.
    The telemarketing industry is a unique industry. The primary 
expenses of the business are determined by the time spent on the 
telephone. A company is often measured by an amount of dollars 
generated per telephone or per chair. The single greatest predictor of 
failure in the industry is low per chair production. And the single 
greatest contributor to low per chair production is spending time on 
the telephone with people who don't want to talk to you. Thus the 
industry goes to great lengths to target only those consumers who are 
likely purchasers of their products. The successful telemarketer is the 
business that talks to the fewest uninterested parties. Consequently, 
it is in the industry's best interests to keep a detailed ``Do-Not-
Call'' list. Not only does it make sense for a company's bottom line, 
but it increases morale and production among the sales force if they 
are not talking to hundreds of people who say ``No'' at the beginning 
of the call.
    Additionally, the company specific ``Do-Not-Call'' list is the best 
way to empower consumers to make the type of informed purchasing 
decisions that are necessary for a satisfactory sale. For consumers who 
do not want to receive calls from a particular company telemarketing 
them goods or services, all they have to do is tell the telemarketer 
during the call. However, for those consumers who want to receive calls 
or really only want to receive certain types of calls, the existing 
federal rule allows them the freedom to determine which calls they want 
to receive and prohibits those calls they don't. This is an area where 
consumers alone hold the key to keeping telemarketers out of their 
home.
    We maintain the best way to protect consumers from fraud is through 
increased consumer education and funding for the federal and state law 
enforcement agencies, namely, the Federal Trade Commission, Federal 
Communications Commission, and the Department of Justice and Federal 
Bureau of Investigation, so efforts can be further continued and 
coordinated to get the perpetrator of fraud off the telephone and 
protect consumers--senior citizens in particular--from becoming victims 
of telemarketing fraud. The solution is not to limit the telemarketing 
industry's right to call to consumers or establishing a precedent that 
would not be cost effective or beneficial to industry or consumers.
    A final provision in H.R. 3180, and the major tenet of H.R. 3100 is 
to prohibit the blocking of Caller ID devices. The ATA has no 
opposition to this point. We believe that using Caller-ID blocking of 
any kind, whether it is per-call blocking, per-line blocking or another 
similar method, is wrong. The members of the ATA are proud of the 
business they are in and the service they provide to consumers. They 
would rather consumers knew exactly who they were taking calls from and 
who they were purchasing goods or services from. The ATA supported 
similar measures in several states in recent years. However, any 
requirement that either the telemarketer's name or the word 
``telemarketer'' show up on a consumer's Caller-ID will pose a 
significant problem for the majority of telemarketers, as in most 
instances, the technology does not exist to allow such a designation to 
be displayed.
    It is my understanding that in most cases, telemarketing calls 
originating on a telephone service outside the consumer's local calling 
area and being routed over a switch such as a T-1 line that is 
different from the consumer's local service provider will not allow the 
caller's name or any other information to be displayed. Obviously we 
cannot support legislation that we cannot, despite our best efforts, 
comply with.
    Thank you, and I am happy to take any questions.

    Mr. Tauzin. I thank the gentleman. I thank you all. The 
Chair recognizes himself and other members in order. Let me 
first, Mr. Brubaker, your testimony, what you have been told 
contradicts what Ms. Herrington apparently was told that there 
was no problem with the T-1 lines. I think obviously we are 
going to need to hear from the phone companies to find out what 
is correct. If your position is that the marketers don't oppose 
legislation that requires companies not to block information, 
which I am glad you took that position because frankly I was 
going to question you about it, you know, because what is our 
consumer rights if I can't call you because I don't know who 
you are when you are bothering me at any time of the day I 
don't want to be bothered. So obviously we need to find out 
what are the technological problems with that. But clearly 
there seems to be some consensus that that at least ought to be 
part of some legislative remedy.
    Let me on the other hand, however, tell you that you make a 
great point. I want to hear comments from the other witnesses 
here. You make a great point that these laws tends to have a 
lot of exemptions. The first panel was met with questions about 
exemptions from some of our members. Are physicians exempt, are 
teachers exempt from calling their students? I raise the 
question of political call exemptions, nonprofit exemptions. In 
other words--and this is the point I think you made--if we were 
to adopt and could adopt constitutionally the no call between 5 
and 7 p.m. rule, it would only apply to a certain class of 
calls. The consumers would still get political solicitations, 
nonprofit solicitations, they would still get physicians 
calling patients and teachers calling kids all during the so-
called dinner hour, and my suspicion is that consumers would 
think that the legislation was a fraud, that we defrauded them. 
They are still being bothered.
    The fact is that the nonprofits and the political 
solicitations would concentrate on the hours when the 
commercial callers are not permitted to engage consumers and 
that would probably get as many calls. They would just be 
different calls during the lunch hour. And that I think is 
probably the best point you made. I would love to hear comment, 
feedback from the rest of you on the panel. Any one of you on 
that point?
    Mr. Hatch-Miller, you commented on the many exemptions. If 
I am right about that, if all we would be doing if we passed a 
law that said some callers can't bother you, the commercial 
ones defined in the law, but everybody else can, including 
political calls and nonprofit solicitations and calls by other 
people not necessarily selling a product, maybe only trying to 
set up a meeting with you to sell their product, all these 
exemptions would end up bothering us as much as the current 
calls bother us and yet people would have said I thought you 
passed a law to protect us. What the heck is wrong with you 
all? I can't write a good law? Would we be better with that 
problem?
    Please come back to me. Any one of you. Ms. Harrington.
    Ms. Harrington. We have concern about the exemptions that 
are already written into the FTC Act. Our jurisdiction under 
the telemarketing sales rule goes only as far as our general 
jurisdiction goes. I think that the Congress wisely defined 
telemarketing to cover plans, programs and campaigns in 
connection with the sale of goods. ``Sale'' seems to me to be a 
fair term of inclusion. So our concern----
    Mr. Tauzin. So we have done that.
    Ms. Harrington. It has been done, but already the playing 
field is uneven because----
    Mr. Tauzin. But Mr. Hatch-Miller told us when we try to 
legislate in this area, when we tightly define who is 
prohibited, even then the politics of exemption works its 
weight and that all of the States have experienced that. I 
suspect we would experience it in this committee. There would 
be members on both sides of the aisle saying, hey, I want an 
exemption for my favorite entity that is making these phone 
calls. Would we not be faced with the same problem? Would we 
end up not producing legislation that had to constitutionally 
exempt a bunch of people and politically exempt a bunch of 
people, and where would we be when that happened?
    Mr. Hatch-Miller. You raise a very important point. My 
citizens are pretty straightforward. They are saying that they 
don't want to be hassled by an intrusive call by someone 
offering a product or a service, whether they are selling it to 
them right then or they are trying to get them to sign up on a 
list to try to get them to come to a meeting. It is the fact 
they don't know who is calling them and they are being called 
for a commercial purpose during a time they would rather have 
for their own purposes. The simplest remedy also is for that 
citizen to have a right to say I don't want to be called for 
these kind of matters.
    Mr. Tauzin. So let me interrupt you. Would a better, 
simpler approach be instead of saying no calls by these 
entities within these hours, to simply say that if a person 
wanted to they could make a call, as Ms. Tierney pointed out, 
themselves to put their names on a no call during whatever 
hours they don't want to be on a call list that would be 
maintained by either DMA or telemarketers or the state, whoever 
we want to put in charge of such a list.
    Please come back to me.
    Ms. Tierney. I think AARP's main concern about this is the 
fraud and any way of eliminating fraud or preventing abuse in 
that way, and so the telemarketers who are fraudulent are the 
ones that we are particularly concerned about for the elderly 
population. But another area is we found in a survey that was 
done that many people did not know, they weren't aware that 
they could be on a do not call list, and so we are very anxious 
that that be made more available to a large number of people 
and there be education and awareness about this. And some of 
the other points that you have brought up about this in 
retrospect don't seem to be as important to the elderly 
population as the two I have mentioned.
    Mr. Tauzin. Thank you very much. Let me turn now to the 
ranking member, Mr. Dingell, who is here and I would like to 
recognize him for a round of questions.
    Mr. Dingell. Mr. Chairman, thank you, appreciate your 
courtesy. Mr. Brubaker, you are here to oppose the legislation, 
is that right?
    Mr. Brubaker. We are definitely opposed to 3180. As I do 
say, we do support the efforts of 3100 to block.
    Mr. Dingell. Now, I'd like to address if I could, please, 
your opposition to some of your current business practices. As 
I note under existing law, the FTC has the power to put forward 
regulations and to require certain kinds of behavior and 
compliance with the law. The Commission has said, and I now 
quote, shall have--shall include in such rules respecting other 
abusive telemarketing acts or practices, and then coming on 
down under paragraph (c), a requirement that any person engaged 
in telemarketing for the sale of goods or services shall 
promptly and clearly disclose to the person receiving the call 
that the purpose of the call is to sell goods or services and 
to make such disclosures as the Commission deems appropriate, 
including the nature and price of goods and services. You are 
aware of that law, are you not?
    Mr. Brubaker. Yes.
    Mr. Dingell. Do you support it or you oppose it?
    Mr. Brubaker. We support it.
    Mr. Dingell. Now, it was reported yesterday in Roll Call 
and in the Washington Post that your company InfoCision 
Management has been placing telemarketing calls to doctors' 
offices, is that correct?
    Mr. Brubaker. I am not familiar with that article.
    Mr. Dingell. Has your firm been placing calls to doctors' 
offices as a part of business for clients, or do you know?
    Mr. Brubaker. I am not sure what----
    Mr. Dingell. Let me put this question. Your firm has been 
placing calls, your firm has not been placing calls or you 
don't know which is the answer ?
    Mr. Brubaker. We have a number of different campaigns for 
our clients running. I couldn't speak to any particular one 
today.
    Mr. Dingell. Well, I tell you what, I think you ought to 
have a copy of the article here, and let's then address the 
article. Are you going to tell me then that employees of your 
firm did not place calls to physicians' offices? You either did 
or you did not or you don't know. Which is the case?
    Mr. Brubaker. I will be happy to review it.
    Mr. Dingell. No, no, no. I have got you here now and I 
won't have you in a little bit. I don't want you to review it. 
I just want you to tell me whether your firm placed these calls 
or not or whether you know about it.
    Mr. Brubaker. I would need to review that and take it for 
the record and respond later.
    Mr. Dingell. Did your employees identify themselves when 
placing these calls?
    Mr. Brubaker. Again I am not familiar with this particular 
campaign.
    Mr. Dingell. What is your precise position in the company?
    Mr. Brubaker. I oversee our operations.
    Mr. Dingell. Pardon?
    Mr. Brubaker. I oversee our operations.
    Mr. Dingell. What does that mean?
    Mr. Brubaker. It means I am responsible for our call center 
operations, the hiring, the development of the staff.
    Mr. Dingell. You don't know what the staff does?
    Mr. Brubaker. Well, excuse me, if I may say that I do know. 
I am----
    Mr. Dingell. Who would know what the staff does?
    Do you know what the staff does? Do you know what the staff 
does or do you not know what the staff does?
    Mr. Brubaker. Of course I do, sir.
    Mr. Dingell. You do.
    Do you have a client, Physicians Referral Service?
    Mr. Brubaker. Not that I am aware of.
    Mr. Dingell. Not that you are aware of.
    Have you ever heard the name, Physicians Referral Service?
    Mr. Brubaker. I apologize. I honestly would have to look 
into that. I do not know.
    Mr. Dingell. Is the National Republican Campaign Committee 
a client of your firm?
    Mr. Brubaker. Well, I cannot discuss particular clients; 
our confidentiality precludes me from talking about that.
    Mr. Dingell. You can't tell us whether you have clients?
    Mr. Brubaker. I would ask whether that is relevant to our 
discussion today, to talk about H.R. 3180.
    Mr. Dingell. Well, we are talking here about abuses of 
telemarketing practices which are referred to in articles which 
have appeared in the press, first Roll Call, and then second of 
all, The Washington Post. You have not read The Washington 
Post?
    Mr. Brubaker. I don't read The Washington Post or Roll 
Call.
    Mr. Dingell. Where are you stationed?
    Mr. Brubaker. Akron, Ohio.
    Mr. Dingell. Akron, Ohio. And this has not been reported in 
Akron, Ohio?
    Mr. Brubaker. I am not familiar with it.
    Mr. Dingell. Okay.
    Now, when your company places telemarketing calls on behalf 
of other businesses, do you disclose the name of the business 
for whom you are calling?
    Mr. Brubaker. Absolutely. That is our intent.
    Mr. Dingell. Do you always do that?
    Mr. Brubaker. It is my understanding that we do.
    Mr. Dingell. Well, just yes or no. I gather you are saying 
the answer to that question is yes.
    Now, when you place calls on behalf of political entities, 
do you identify the parties on behalf of whom you are calling?
    Mr. Brubaker. I believe that we do. We are----
    Mr. Dingell. Well, you either do or you don't. Which is the 
answer?
    Mr. Brubaker. We are clearly, in any of our campaigns for 
our clients, supporting the----
    Mr. Dingell. Do you identify the client on behalf of whom 
you are calling?
    Mr. Brubaker. We----
    Mr. Dingell. Or do you not?
    Mr. Brubaker. In every case that I am aware of, we do.
    Mr. Dingell. Do you have written instructions which you 
give to your callers?
    Mr. Brubaker. Yes, we do.
    Mr. Dingell. Would you submit copies of those written 
instructions that you submit to your callers so that we can 
know?
    Now, we have already agreed that it is a requirement by law 
or regulation that you identify the party on behalf of whom you 
call; is that correct? That was part of--that was the provision 
that I read to you earlier; is that right?
    Mr. Brubaker. My question is, I don't understand this line 
of questioning.
    Mr. Dingell. You don't?
    Mr. Brubaker. I don't understand what we----
    Mr. Dingell. Well, just play along with me, because it is 
interesting. Your firm has achieved a certain prominence in the 
press into which we are inquiring on the subject.
    Mr. Tauzin. The gentleman's time has expired.
    Mr. Green. Mr. Chairman, if I could ask that this panel be 
sworn. I just left an O&I committee hearing, and I would like 
to have this panel sworn just like we do in Oversight and 
Investigations.
    Mr. Tauzin. The Chair will remind all members, this is not 
an O&I hearing, this is a general information hearing on the 
subject of two bills, neither of which has anything to do with 
political solicitations, and therefore it is outside the scope 
of the hearing.
    The gentleman is not in order.
    The Chair will be glad to extend the time of the 
gentleman----
    Mr. Dingell. If the Chair would permit, I would simply like 
to observe, I am talking about specific telemarketing practices 
of the firm which is the employer of the witness of whom I am 
inquiring.
    Mr. Tauzin. The gentleman is permitted to ask his 
questions. My only point is that this is not an O&I hearing. 
The subject of this hearing is two bills which are before the 
Congress, both of which deal with commercial telemarketing 
sales practices, not with political solicitations or political 
fund-raising nor, for that matter, other types of activities.
    So the questions--I have tried to give the gentleman as 
much latitude as I can. I simply want to point out that the 
hearing is not about Mr. Brubaker's firm or his firm's 
activities and political activities; the hearing is about two 
commercial sales practices, of bills that are before the 
committee only.
    The gentleman's time has expired.
    The Chair will be generous if the gentleman asks for an 
extension of time.
    Mr. Dingell. I will get more time on the next round, but I 
would ask unanimous consent that the two articles from which I 
am working be inserted in the record, the one from the 
Washington Post and the one from Roll Call.
    Mr. Tauzin. I think the two articles are already in the 
record at this time.
    Mr. Dingell. They are?
    Mr. Tauzin. Yes, sir.
    Mr. Dingell. Oh. May I ask that both of them are made 
available then to the witness, so that he will know what it is 
I am questioning him about. When the next opportunity comes to 
the members of the committee, I will persist.
    Mr. Tauzin. If the gentleman wishes to see those articles, 
he certainly may.
    Mr. Dingell. I thank the Chair.
    Mr. Tauzin. The Chair recognizes the gentleman from 
Illinois, Mr. Shimkus, for a round of questions.
    Mr. Shimkus. Thank you, Mr. Chairman. I want to kind of go 
back to the intent of the legislation proposed.
    I would ask each panel member, starting with Ms. 
Harrington, do you support--would you support legislation that 
would require that anyone using the telephone not have the 
ability to block their phone number?
    Ms. Harrington. I don't think so. I think that when Caller 
ID first became available, there was a very vigorous discussion 
about the tension between the right of a call recipient to know 
who is calling and the privacy interest that some have in being 
able to block their identity.
    For example, I remember that there was a concern about 
women who might be calling from domestic violence shelters 
being able to block the phone number that they are calling from 
so that the location couldn't be discerned.
    Mr. Shimkus. Why would a phone number address the location?
    Ms. Harrington. Because there are Polk and other 
directories widely available.
    Mr. Shimkus. I think we discussed initially how, in 
telephone that either phone numbers can be--they can be not 
listed and addresses can be unlisted.
    Ms. Harrington. That is true, but I am recalling quite a 
vigorous debate about tensions between disclosure and privacy 
for--if you are getting into all phone uses. The FTC, of 
course, is concerned with commercial practices, not all uses.
    Mr. Shimkus. Okay. Let's go to commercial practices. You 
would be supportive of the all commercial practices of phone 
numbers being listed?
    Ms. Harrington. Yes.
    Mr. Shimkus. Mr. Miller.
    Mr. Hatch-Miller. Yes, I, too, would support that 
commercial calls be open.
    Mr. Shimkus. Ms. Tierney.
    Ms. Tierney. I don't know that I have the right to speak 
for AARP on the exact support of this legislation. Our interest 
is that our membership be aware of what is available, what is 
out there, and what we help them do if they wish to protect 
their privacy, or to help them in any way possible.
    Mr. Shimkus. Well, since you all have been invited to 
testify in support or in opposition to the two pieces of 
legislation, my friend and colleague, Rodney Frelinghuysen's 
bill, is it the AARP's duty to support these two pieces of 
legislation?
    Ms. Tierney. These two pieces of legislation we do support.
    Mr. Shimkus. Could you take back to the board the question 
of what AARP support the requirement that commercial use of the 
telephone must follow the display of the commercial phone 
number?
    Ms. Tierney. I would be very glad to take it back to the 
board.
    Mr. Shimkus. Thank you.
    Mr. Brubaker, you have already testified that you would 
support that?
    Mr. Brubaker. Well, we are in support of prohibiting the 
blocking of Caller ID. We are not in support of enforcing a 
mandatory disclosure, because it is our understanding that that 
is not technologically possible.
    Mr. Shimkus. But we are talking about the same thing.
    Mr. Brubaker. They are two different things really, though, 
because you are talking about blocking. We are against the 
blocking of Caller ID in any way. But if it is not there, if we 
are using a T-1 line, which is a group of 24 circuits, there is 
no number.
    Mr. Shimkus. Congressman Salmon mentioned that. I really 
concur with him, especially having served on this committee for 
4 years. Technology, given the time, effort and energy and 
finances, can overcome all of those. If you have to resort to 
Direct Dial and prohibit the caller from doing star or pound 69 
or star 69, prohibiting that, then they would be identified.
    Mr. Brubaker. Well, we obviously would not be in support of 
going back to Direct Dial.
    Mr. Shimkus. I agree. But we do want our consumers to know 
commercially who is calling them.
    Mr. Brubaker. Sure we do. And if there is any way 
technologically to do it, we would support it.
    Mr. Shimkus. I would suggest that the industry start 
looking for that option.
    In the military, Mr. Chairman, we have that acronym KISS, 
which means ``Keep it simple, stupid.'' and if you listen to 
this debate and all of the permutations, we can evolve 
ourselves into a do-not-call list, how is it funded, how is it 
controlled, what are the time limits, what are the exemptions.
    Mr. Chairman, I think a simple way to address this is, I 
don't know if it is going to be possible to merge the two 
pending bills together, because I think they represent--
Congressman Largent brought the questions, what are you trying 
to do? Congressman Salmon's legislation is trying to prohibit 
the actual calling, Congressman Frelinghuysen is really trying 
to allow people to see who is calling them; and they are 
different.
    I don't know if it is going to be possible, but I would say 
that if we can provide the ability of the consumer to see who 
is calling them, and if it is at a time that they don't like, 
then they have a number by which they can call back and make 
formal application to no longer be put on that list. That is a 
very simple, precise way of trying to address this without 
addressing the unfunded mandate, who does it.
    And I see us all trying to get to the same arena, and we 
want to know who is calling us.
    I think--Ms. Harrington, I think we have as much right to 
know who is calling us as we do of placing a call to someone. I 
don't think there is any difference. If you are talking free 
speech--free speech, if a person goes to a corner and gets on a 
soap box, and he is proclaiming free speech, everyone sees who 
he is; and if someone comes to your door, you see who he is.
    What I think is incumbent upon us is to make sure that when 
someone intrudes on our house in making a phone call, we know 
who that is, and then it is up to us to decide whether to pick 
it up.
    I am kind of doing a little filibuster, but I think that is 
where my support would lend itself; and I think something could 
move on a requirement that commercial calls be listed, and I 
think--I would be very optimistic about the success of that, 
and I appreciate the hearing.
    I learned a lot, and I appreciate the panel's 
participation.
    Mr. Tauzin. At this point, the right of free speech does 
not include the obligation to listen, it is kind of up to you.
    The gentleman from Ohio, Mr. Sawyer, is recognized.
    Mr. Sawyer. Thank you very much, Mr. Chairman.
    At least in H.R. 3100, what we are really talking about is 
the ability to know who is calling. In a sense, though, Ms. 
Harrington, don't we already have that through the Telephone 
Consumer Protection Act in which you promulgate rules requiring 
the clear identification of who is making the phone call and on 
whose behalf it is being made?
    Ms. Harrington. Yes. The Telephone Fraud Abuse and Consumer 
Protection Act is the statute that we enforce; the Telephone 
Consumer Protection Act is a law that the FCC enforces. Under 
the statute that we enforce and the telemarketing sales rule 
that we issued to implement that statute, there is a 
requirement that in telemarketing, the caller must promptly 
identify the calling entity and state the purpose of the call.
    Mr. Sawyer. What is the process for investigating alleged 
misrepresentation?
    Ms. Harrington. Well, the Commission staff has fairly wide 
latitude to commence nonpublic investigations and the process 
for investigating is a fact-gathering one.
    Mr. Sawyer. Is there a difference between the process for 
nonprofit, for-profits and political entities?
    Ms. Harrington. Well, there is always a question about 
whether we have jurisdiction over the subject complained of, 
and generally, we would not use our resources to investigate 
something over which we have no jurisdiction. We can legally 
investigate to determine whether or not we have jurisdiction, 
but as a matter of----
    Mr. Sawyer. You are suggesting there is a difference, 
though, is that right, among the categories?
    Ms. Harrington. Oh, yes, yes. Commercial practices, 
generally we have jurisdiction over. Telemarketing is defined, 
as I have mentioned, in the statute.
    Mr. Sawyer. How do you distinguish between a call made by a 
commercial, for-profit telemarketer and the party on whose 
behalf that call is being made, if it is not--if it does not 
fit into one of those specific categories?
    Ms. Harrington. Well, generally if the call is made by a 
commercial telemarketing company, our position is that we have 
jurisdiction. There may be some limitations on that 
jurisdiction, though, that we determine further down the road 
when we gather more facts.
    Mr. Sawyer. But that doesn't preclude you from looking into 
that to begin with----
    Ms. Harrington. No.
    Mr. Sawyer. [continuing] as long as it involves a 
commercial entity conducting the campaign?
    Ms. Harrington. Right. And as long as there aren't some 
other limitations, for example----
    Mr. Sawyer. Well, let me ask you, does political speech 
shield a commercial entity acting on behalf of a political 
entity or a nonprofit?
    Ms. Harrington. Well, telemarketing is defined in the 
statute that I referred to as including telephone calls that 
are made as parts of a plan, program or campaign to sell. 
Political speech isn't selling something; political speech is 
trying to--is expressing protected--views that are protected--
--
    Mr. Sawyer. Well, that is expressing views. What about 
solicitation of donations, or the offering of a position in 
return for money; when does this stop being speech and start 
becoming commerce?
    Ms. Harrington. Generally, we have taken the view that 
soliciting contributions does not involve sales, but you are 
asking a question that really would require investigation and 
parsing through facts before we would make some sort of 
general----
    Mr. Sawyer. Does it shield people from identifying who they 
are and whether or not they are calling on behalf of an entity? 
It seems to me that is the threshold, the opening threshold.
    Ms. Harrington. Well, if the call is not part of a 
telemarketing campaign, then the rule doesn't apply.
    Mr. Sawyer. Sure. But if it is professional telemarketing, 
then presumably it does?
    Ms. Harrington. Well, professional telemarketers telemarket 
or make calls in connection with programs that aren't part of 
what the Congress defined as ``telemarketing''. That is, if I 
am calling for one of the charities----
    Mr. Sawyer. I am trying to get back to the question of, as 
a receiver of a call, whether I have the right to know on whose 
behalf the call is being made, particularly when the call is 
placed by a commercial telemarketer.
    Ms. Harrington. Well, the telemarketing sales rule imposes 
an obligation on the caller if the caller is engaged in 
commercial sales. So the question about whether that obligation 
applies depends on the purpose of the call.
    Mr. Sawyer. Mr. Chairman, I am not sure that my time got 
turned on, so I am not sure----
    Mr. Tauzin. Actually, it didn't get turned on, but we are 
monitoring, and you are at about 5 minutes and 30 seconds right 
now.
    Mr. Sawyer. We will have a second round, won't we?
    Mr. Tauzin. If you would like.
    Mr. Sawyer. Thank you, sir.
    Mr. Tauzin. The Chair recognizes the gentleman from Texas, 
Mr. Green.
    Mr. Green. Thank you, Mr. Chairman.
    Ms. Harrington, is the FTC familiar with the types of 
technologies that telemarketers use to circumvent Caller ID 
systems or devices?
    Ms. Harrington. Our staff is generally familiar and working 
hard as we review our telemarketing sales rule to make sure 
that our knowledge is completely current, yes.
    Mr. Green. Mr. Chairman, I apologize. Could we have the--
there are some other questions I would like to ask and I know 
other members might, if we could open the record so that we 
could submit questions.
    Mr. Tauzin. It is a practice of the committee to hold the 
Record for 30 days and to allow members to submit additional 
questions in writing to the witnesses, who are requested to 
respond within a similar period of time.
    Mr. Green. Thank you, Mr. Chairman.
    Mr. Tauzin. Without objection.
    Mr. Green. Mr. Miller, having served 20 years in the 
legislature in Texas, I understand the concern, and in fact, I 
mentioned earlier a bill that Congresswoman Wilson and I have 
that I picked up the bill from a State rep in Texas on spam, 
because there was no way they could do it on a State level.
    Is that your same frustration?
    Mr. Hatch-Miller. Yes, it is, sir. I see this as 
cooperative. We have things that we are doing at the State 
level, and I believe if you are doing things at the Federal 
level, we could work together and actually make a better 
product.
    Mr. Green. In working with my State rep, we have actually 
been able to put that legislation together, for telemarketing 
doesn't recognize State lines any more than spam does. Frankly, 
sometimes they don't recognize international boundaries, and 
that is something we have to deal with the State Department on, 
I guess.
    Mr. Brubaker, is your company a member of the Direct 
Marketing Association?
    Mr. Brubaker. Yes, we are.
    Mr. Green. And do you comply with their guidelines, as far 
as you know?
    Mr. Brubaker. Yes.
    Mr. Green. And do you distinguish between your commercial 
telemarketing and your political telemarketing?
    Mr. Brubaker. Well, certainly there are differences in how 
we approach those two different entities.
    Mr. Green. But the guidelines are used for your company; so 
whether you have a staff member making a call for a product or 
a political issue, for example, would you still be under the 
guidelines of the Direct Marketing Association?
    Mr. Brubaker. Well, we apply the guidelines based upon the 
type of call that we are doing.
    Mr. Green. Okay. So the guidelines--and I know what the 
guidelines are because you are a member of the Direct Marketing 
Association. So you distinguish between the type of call on 
whether those guidelines apply?
    Mr. Brubaker. Well, it depends upon the laws that are in 
place for each type of----
    Mr. Green. We are not talking about the laws, we are 
talking about the guidelines, the Direct Marketing Association 
guidelines, because one of the bills we have today would be to 
encourage the compliance with those guidelines.
    Mr. Brubaker. Sure.
    Mr. Green. And since they are voluntary, you don't have to 
be a member of the Direct Marketing Association.
    Do you agree by being a member, though, to comply with 
those guidelines?
    Mr. Brubaker. Yes.
    Mr. Green. But you are saying that those guidelines in your 
company are used, depending on the type of call?
    Mr. Brubaker. We enforce the guidelines depending on the 
type of call that we are doing. When we are involved in a 
commercial sale, there are certain types of issues that we are 
responsible for, such as the Telephone Preference Service, and 
when we are calling for a nonprofit organization, that 
guideline does not apply.
    Mr. Green. Okay. So the Direct Marketing Association 
guidelines don't apply to nonprofit, to political calls that 
you do?
    Mr. Brubaker. Depending on exactly which terms we are 
talking about, but the Telephone Preference Service list 
applies only to sales of products and not to nonprofit 
organizations.
    Mr. Green. I know it is difficult in the sale of a product, 
and I know you had the article there, but if your company 
called and offered to a physician, for example, a chance to 
join a physicians advisory board in return for a campaign 
contribution, those guidelines would not be covered by that 
effort, then?
    Mr. Brubaker. The Telephone Preference Service would not. 
But again, we are calling--if we are calling doctors, that 
would be a business and the Telephone Preference Service would 
cover consumers, so we are talking about two different things.
    Mr. Green. Okay. Well, what I am trying to find out is that 
by being a member of the Direct Marketing Association, you 
agree to comply with guidelines. One is to identify yourself.
    Mr. Brubaker. We agree to comply with the guidelines that 
are appropriate for the type of business we are in, absolutely.
    Mr. Green. That apply to the type of business, which is a 
telemarketer.
    Mr. Brubaker. Telemarketing, whether it is a commercial 
sale or whether it is requesting donations for a nonprofit 
organization; they are two different things.
    Mr. Green. So you don't have the same guidelines for 
commercial sale----
    Mr. Brubaker. Not completely, no.
    Mr. Green. If you are calling for a time share or resort 
property, or if you called me for the Republican National 
Committee or the National Republican Congressional Campaign, 
the guidelines would not be used for the Republican 
congressional campaigns.
    Mr. Brubaker. Those are two separate campaigns. The 
Telephone Preference Service--and I am speaking of that 
particular guideline, the Telephone Preference Service, meaning 
the do-not-call list, would be used for commercial 
solicitation.
    Mr. Green. Okay. So you do have two separate guidelines 
between nonprofit and political calls and commercial calls?
    Mr. Brubaker. Correct.
    Mr. Green. Although when we cut away everything, you are 
still trying to receive money from somebody you are calling; is 
that correct?
    Mr. Brubaker. Well, I think you have to look at the 
campaign and what the client is asking for at that point: Are 
we building a relationship and asking for a donation?
    Mr. Green. You are considering what the client is asking 
for and not necessarily what--because if you call a doctor or a 
lawyer or someone--what I am saying is that the whole point is 
to receive an amount of money from that person you are calling, 
whether it be a doctor, lawyer, school teacher, or anything 
else, and whether it is to sell a product, a time-share and a 
condo, or a telephone service, or to solicit money from a 
nonprofit.
    I guess my concern is that I don't want to infringe on free 
speech, but I think that as a telephone consumer, when someone 
calls from a commercial telemarketer, they ought to be required 
to identify what they are doing, because their goal is to 
separate me from my money, one way or the other, whether it is 
a donation or whatever.
    You don't think we ought to have the same guidelines?
    Mr. Brubaker. No, there are two different types of calls 
being made there.
    Mr. Green. Well, I think the person receiving those calls 
might think that they are the same type of call, because the 
goal is to buy a product or separate them from their money 
whether it is $125 or $2,500.
    Mr. Tauzin. The time of the gentleman has expired.
    The Chair recognizes the gentleman from Illinois, Mr. Rush, 
for a round of questions.
    Mr. Rush. Thank you, Mr. Chairman. Mr. Chairman, my 
understanding is that we are here to talk about telemarketing 
abuses; and I believe that--in light of your comments earlier, 
Mr. Chairman, I believe that Mr. Brubaker's testimony would be 
within the scope of this discussion.
    Mr. Tauzin. If the gentleman would yield, you are permitted 
to ask him any questions you want. The subject of this hearing 
has to do with two bills filed by members of this body, each of 
which deals with commercial sales and telemarketing on 
telephones.
    And let me say it again: This is not an O&I hearing, not a 
hearing about the practices of either one of the two political 
parties in soliciting funds. Both use telemarketing 
extensively; both, I assume, use all kinds of practices in 
trying to separate people from their money for political 
purposes. I assume that would make a great hearing at some 
other committee, but this is not the one for it.
    I would urge the gentleman to direct his questions to the 
subject of the two bills before the committee.
    The gentleman is recognized for 5 minutes.
    Mr. Rush. Mr. Chairman, I just want to state that both 
bills that we are addressing here contain exemptions for 
political action committees, and it would seem that that would 
make it within the purview and within the scope of this 
discussion to engage in the line of questioning that we have 
embarked upon earlier.
    Mr. Tauzin. If the gentleman is inquiring again, the Chair 
is going to give the gentleman as much leeway as I gave other 
members to ask as many questions as he wants to ask these 5 
minutes. I would simply admonish my friend, as I admonished all 
members of the committee, to keep to the subject of the hearing 
which is the two bills before us.
    The gentleman is recognized for 5 minutes.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Brubaker, are you a member of two different 
telemarketing associations?
    Mr. Brubaker. We are members of the ATA, the American 
Teleservices Association, as well as the DMA, the Direct 
Marketing Association. The Direct Marketing Association covers 
various types of direct marketing mediums; telemarketing is one 
of those.
    Mr. Rush. And you are here representing the----
    Mr. Brubaker. I am representing the ATA, as well as my 
company, yes.
    Mr. Rush. And does the Direct Marketing Association have a 
code of ethics?
    Mr. Brubaker. Yes, they do.
    Mr. Rush. And what about the ATA?
    Mr. Brubaker. Yes, the ATA does as well, yes.
    Mr. Rush. Can you give us some provisions of that code of 
ethics of both, and how would they differ?
    Mr. Brubaker. Well, I don't know that they are much 
different. The organizations have similar goals, but the ATA, 
one of the major concerns is educating our members on how to 
comply with the telemarketing sales rule and the Telephone 
Consumer Protection Act. So the focus of that is on making 
calls for commercial campaigns involving the sale of a product, 
and we include in the code of ethics compliance guidelines for 
the telemarketing sales rule and the TCPA as well.
    Mr. Rush. And does any of the code of ethics for the Direct 
Marketing Association, and also the American Teleservices 
Association--do they address abuses at all?
    Mr. Brubaker. Well, certainly.
    Mr. Rush. And do they have any provisions for taking any 
corrective action or any punitive action against any member who 
engages in abusive practices?
    Mr. Brubaker. I don't know exactly how that process would 
work. I would have to talk to the board of directors.
    Mr. Rush. You don't know whether or not----
    Mr. Brubaker. I don't know if a trade association has that 
ability or not.
    Mr. Rush. There is no way to, in order to deal with anyone 
who breached the code of ethics in terms of your association--
--
    Mr. Brubaker. That would be something I think we would have 
do leave to the board of directors of that association.
    Mr. Rush. To your knowledge, has that ever happened?
    Mr. Brubaker. I do not know.
    Mr. Rush. Do you have any information regarding--if someone 
were found to have breached the code of ethics, do you have any 
information about what would happen to them?
    Mr. Brubaker. I am sorry, I do not have any information on 
that.
    Mr. Rush. What about self-policing in terms of either 
association? Is there any component--is there any ethical----
    Mr. Brubaker. The TPA is an educational association, and 
their focus is to educate not only their members, but consumers 
and the public at large as to what the laws are that are in 
place and how companies can comply with those laws. So the main 
effort of the ATA is to educate members and educate consumers. 
Beyond that, I am not familiar with the additional things that 
they do.
    Mr. Rush. Now, these two bills that we are discussing 
today, both deal with abuses.
    Mr. Brubaker. The tone of the bills, as I read them, is to 
focus on fraud, but as I go through the bill, there is very 
little that would actually stop fraud. We are very much 
concerned about fraud, the scamming of senior citizens, or 
anyone that is using the telephone to perpetrate a crime. We 
believe that law enforcement should take every action possible 
to stop that.
    But we don't believe that these bills will, in fact, 
eliminate fraud; it will simply put additional burden on 
legitimate business.
    Mr. Rush. It is my understanding that we are also dealing 
with abuses of the industry, the telemarketing industry, 
particularly as it relates to not identifying itself, or the 
companies not identifying themselves when they place a call to 
a consumer; is that right?
    Mr. Brubaker. Companies like ours and other members that I 
am familiar with in the association have never intentionally 
chosen not to provide information to consumers on who they are, 
or to display Caller ID information in any way like that. The 
intent is to never to block Caller ID, as I said.
    The issue is that we have not had the technology to this 
point to be able to do that. Again, we would be happy to work 
with telecommunications providers, common carriers, to work 
that kind of thing out. But to this point, we haven't been able 
to.
    Mr. Rush. Well, there is--again, I want to refer back to 
both The Washington Post article and also to the Roll Call 
article, because there is almost a full page of documentation 
and comments, by both members of your company and also by 
consumers that receive calls from your company, where the 
members of your company have not identified themselves and what 
the purpose of their call is.
    Mr. Brubaker. Again, I haven't read the article; I have 
been paying attention to the hearing. However, everything that 
I read in the paper I don't take as fact either.
    Mr. Rush. Mr. Chairman, I want to ask unanimous consent of 
the committee, Bart Gordon, one of our colleagues, will not be 
present, but he has asked me to introduce into the record a 
letter from the Tennessee Regulatory Authority, and I would 
like to ask unanimous consent that this be included in the 
record.
    Mr. Tauzin. Without objection, the letter is admitted into 
the record.
    [The letter follows:]

                             Tennessee Regulatory Authority
                                                       May 24, 2000
The Honorable Bart Gordon
United State Congress
2201 Rayburn House Office Bldg.
Washington, DC 20515-4206
    Dear Representative Gordon: We are writing you requesting your 
support for House Bill 3100. This Bill, captioned as the ``Know Your 
Caller Act of 2000,'' was introduced by Congressman Frelinghuysen and 
is designed to allow consumers to better control telemarketing calls to 
their homes. Senator Frist introduced the companion Senate Bill.
    All of us have heard the stories from consumers receiving an 
annoying telemarketing call during the middle of their family meal. 
Many times these consumers call the Tennessee Regulatory Authority 
(``TRA'') and ask us to do something to stop these intrusive calls. 
Many Tennessee consumers feel that telemarketing calls are an intrusion 
on their privacy and have taken steps to control these calls. The 
Tennessee General Assembly recognized the importance of this issue last 
session when it passed the Do Not Call statute. This statute, among 
other things, requires the TRA to initiate and maintain a state do not 
call register. As of May 22, 2000, over 340,000 Tennesseans have signed 
up to be put on the register.
    Another indication of the importance of this issue is the number of 
Tennesseans subscribing to the telephone service Caller ID. Over 1.1 
million Tennessee homes and businesses have signed up for this service. 
Caller ID allows a consumer to see who is calling and grants the option 
of rejecting the call. But, Caller ID can only be used as a screening 
device to avoid unwanted telemarketing calls if the caller's name and 
number is transmitted. Many telemarketers have discovered ways to use 
technology to block their name and number from appearing on caller ID 
devices thereby diminishing the effectiveness of the service. House 
Bill 3100 addresses this problem by prohibiting telemarketers from 
actively blocking their name and number from appearing on caller ID 
devices.
    We believe House Bill 3100 compliments and reinforces the actions 
the State's General Assembly has taken to place Tennesseans in more 
control of the telemarketing calls they receive. We encourage your 
consideration and support of this Bill. Please call us if you wish to 
discuss this matter or any issue that you feel we could provide 
assistance.
            Respectfully submitted,
                                             Melvine Malone
                                                           Chairman
                                                 Lynn Greer
                                                           Director
                                                  Sara Kyle
                                                           Director

    Mr. Tauzin. The gentleman's time has expired.
    The Chair will entertain a short second round before we 
wrap up. I understand the gentleman, Mr. Sawyer, has a few 
questions. Mr. Sawyer is recognized.
    Mr. Sawyer. Thank you, Mr. Chairman.
    Mr. Brubaker, welcome to the subcommittee.
    Mr. Brubaker. Well, we are happy to be here.
    Mr. Sawyer. You may have been happier to be at other places 
at other times, but I appreciate your response.
    We have been talking about DMA and ATA guidelines. Could 
you tell us what, under either or both of those guidelines, 
what ``identify'' means.
    Let me be very direct with you. I am trying to get at what 
would misidentify or misrepresent mean?
    Mr. Brubaker. ``Identify'' would, in my understanding, mean 
representing whatever purpose the call was made for.
    Mr. Sawyer. As a matter of general policy, would you feel 
compelled, in working for a commercial entity, to identify that 
commercial entity, rather than simply to say that you are 
InfoCision.
    Mr. Brubaker. Absolutely.
    Mr. Sawyer. Would you feel the same obligation with regard 
to nonprofit to identify the nonprofit?
    Mr. Brubaker. Well, when a call is made for a nonprofit, 
the issue is to determine what specifically that call is in 
reference to. There may be----
    Mr. Sawyer. Should I, as the recipient receiving the call--
if I ask who you are calling on behalf of, should I have the 
right to know that?
    Mr. Brubaker. Sure, when asked, absolutely.
    Mr. Sawyer. And I assume the same thing would apply for 
virtually any client that you would----
    Mr. Brubaker. Any client.
    Mr. Sawyer. So let me ask you if failure to disclose, when 
asked, would constitute a misrepresentation or a 
misidentification; is that correct?
    Mr. Brubaker. Depending on the situation, I would have to 
look at that.
    Mr. Sawyer. Oh.
    I am trying to ask these as directly as I can, and at some 
point I would hope that you could give me a direct answer.
    Mr. Tauzin. Well, if my friend will yield, we have had 
problems in this town understanding the meaning of the word 
``is'' from time to time. I would suggest that the gentleman is 
trying to answer your question as honestly as he can.
    The gentleman may proceed.
    Mr. Sawyer. That was wonderful testimony, Mr. Chairman. 
Thank you.
    Mr. Tauzin. You are welcome.
    Mr. Sawyer. Frankly, Mr. Brubaker, I am concerned that the 
law does not go far enough in asking you to identify who you 
are working on behalf of. But I will also tell you that I don't 
get the sense from what the Roll Call article says that you 
failed to obey the law, if this article is accurate. And I am 
not asking you to comment on it, because you can't.
    What I am really interested in, as much as anything, is to 
give InfoCision the opportunity to characterize--and perhaps 
you will have to do this in a subsequent response--to 
characterize the circumstances that surround the two articles, 
and to tell us what you think is the appropriate response on 
behalf of DMA, the ATA and the condition of the law with regard 
to identifying not only who is making the call, but on whose 
behalf the call is being made.
    I am troubled that Infocision's soliciting participation in 
the Physicians Advisory Board and asking for a donation of 
$300,000 to $500,000, in return for which a physician would get 
a certificate to hang on his wall and participation in a New 
York Times full page ad, that that becomes a thing of value for 
which a payment is being asked. And that, I suspect, is walking 
a fine line.
    I am not suggesting at this point that you have crossed 
that line, but it is a very close approach to a commercial 
transaction and one that I hope that in your subsequent 
response to these questions you will feel comfortable in 
characterizing for me.
    Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Tauzin. I thank the gentleman.
    Mr. Rush.
    Mr. Rush. Mr. Chairman, I have one additional question.
    Mr. Brubaker, you have indicated that--and I heard 
testimony from the other panelists, and you have indicated in 
response to my previous question about the fraud, particularly 
as it relates to senior citizens.
    I am somewhat concerned about what has been reported in the 
two articles in that a caller called a consumer, got a 
secretary on the line, and indicated to that secretary that 
this particular individual had been recommended for a national 
award. And then--and this person was given a 1-800 number to 
call back. And in this instance, the physician called back, and 
then at this point in time, he was told that he would get the 
award, but only if he was able to pay a certain monetary 
amount, and then he would get that award.
    Now, in my estimation--and I can see a senior citizen, and 
they, in my experience, have certainly--I have become aware of 
the senior citizens who would be used in the same kind of 
process by unsavory sales persons, telemarketers, some seniors 
who have given up titles, deeds to their homes, savings 
accounts and very--just other things, with the same kind of 
technique being utilized. It seems to me that that is a serious 
ethical concern.
    My question, still, to you is, do you find that that type 
of practice is the subject of any of the code of ethics of 
either organization that you belong to?
    Mr. Brubaker. I feel strongly that any calls that we have 
made at InfoCision are ethical.
    Mr. Rush. Even if--if any other company would make those 
types of calls, would something be wrong with that?
    Mr. Brubaker. I would have to review that campaign 
thoroughly to make sure that I understood it before I passed 
judgment on it.
    Mr. Rush. So you have no opinion, based on the information 
I have given you and----
    Mr. Brubaker. I really don't have any opinion at this point 
because we are talking theoretically, and I would like to look 
at something factual.
    Mr. Rush. Well, here is an article.
    Mr. Tauzin. Well, I thank my friend. Has the gentleman 
concluded?
    Mr. Rush. Yes, I have.
    Mr. Tauzin. Let me just point out, there were some fine 
articles printed in the press for years about phone calls made 
from the White House and fine distinctions about whether the 
phone solicitation occurred at one end or the other. There are 
some interesting articles about Buddhist temples. There have 
been all kinds of suggestions of improper political practices 
and solicitations by both political parties.
    This is not a hearing about that issue. I suggest that if 
we were to have a hearing about that issue, we would have an 
exceptionally well-balanced panel of miscreants from all over 
the country who have performed all kinds of improper 
solicitations to sneak money away from people for political 
purposes.
    This is not about that, and the gentleman and my colleagues 
again are admonished that this hearing is about two very 
serious bills dealing with commercial practices, and there are 
some very serious issues dealing with political practices that 
both parties need to address at some point, and I suspect that 
we are going to continue to address them in the political 
context. This is not about that today.
    I want to thank the witnesses for--I want to thank the 
witnesses for appearing today, and I thank you for your 
contributions.
    If the gentleman has nothing for the good of the order, the 
Chair will recognize him; otherwise, this hearing will stand 
adjourned.
    Mr. Sawyer. Well, I hope I do. I hope that the Chair will 
note that I have taken great care not to mention any political 
organizations.
    Mr. Tauzin. The Chair would acknowledge that, and I wish to 
thank the gentleman from Ohio. I wish that his colleagues had 
been so careful.
    This hearing stands adjourned.
    [Whereupon, at 1:30 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]

                         Direct Marketing Association, Inc.
                                                      June 13, 2000
The Honorable W.J. ``Billy'' Tauzin, Chair
Subcommittee on Telecommunications, Trade and Consumer Protection
Committee on Commerce
United States House of Representatives
Washington, D.C. 20515
    Dear Chairman Tauzin: The Direct Marketing Association (The DMA) 
would like to go on record as opposing the two bills on which the 
Telecommunications, Trade and Consumer Protection is holding a hearing 
on Tuesday, June 13, 2000. The bills are H.R. 3180, titled the 
``Telemarketing Victims Protection Act,'' sponsored by Representative 
Salmon, and H.R. 3100, sponsored by Representative Frelinghuysen.
    Of particular concern is H.R. 3180. The bill directs the Federal 
Trade Commission to promulgate regulations that would:

1. Require telephone marketers to notify consumers when called of their 
        right to be placed on The DMA's ``do-not-call list'' (known as 
        the Telephone Preference Service (TPS)) or the appropriate 
        state list. If the consumer asks to be placed on the lists, the 
        telephone marketer must then inform The DMA or the appropriate 
        state;
2. Require that all telephone marketers subscribe to The DMA's 
        Telephone Preference Service;
3. Ban telephone marketing calls between 5:00 p.m. and 7:00 p.m.; and,
4. Forbid telephone marketers from blocking the identity of the 
        telephone from which they are calling.
    The DMA is very proud of its TPS and adheres to the principle 
underlying H.R. 3180 that consumers have a right not to be called if 
they so desire. However, the bill makes such major changes to the 
service and potentially adds such great costs to the administration of 
the list that it could jeopardize its very existence.
    First, the TPS does not accept names from a third party, such as a 
telephone marketing company. The reason is simple. We want to be 
assured that the consumer actually wants to be taken off of telephone 
lists. We cannot be assured of that if the list comes from a third 
party. Acceptance of third party lists could open to TPS to many 
abuses, which could be detrimental to both the consumer and to the 
telephone marketer.
    Second, a requirement that all telephone marketers use the lists 
could potentially cost The Direct Marketing Association millions of 
dollars. The service is run as a free service and telephone marketers 
pay a minimal amount to participate, and there is no provision in the 
legislation for reimbursement of expenses. Also, it is unclear whether 
telephone marketers who are calling existing customers must also use 
the lists. The DMA's own guidelines do not require that existing 
customers' names be removed from any telemarketing lists. Clearly, this 
provision of the bill should be reconsidered.
    Third, the bill could require The DMA to take on considerable legal 
liability, again with no reimbursement or legal protection for 
conducting what would in essence become a government service.
    Fourth, we believe that the ban on calling between 5:00 p.m. and 
7:00 p.m. is both arbitrary and unreasonable. It is arbitrary because 
it apparently attempts to define America's dinner hour, a very 
questionable endeavor, to say the least. It is unreasonable because it 
would prohibit calls when it is most likely that people would be home. 
It would not be unlike requiring stores to close during the hours that 
customers would be most likely to patronize them. The DMA strongly 
supported the Telephone Consumer Protection Act that limits calls to 
between 8:00 a.m. and 9:00 p.m. We believe those to be reasonable 
restrictions.
    Fifth, we agree that telephone marketers should not specifically 
block the transmission of their caller identification numbers. However, 
current technology does not allow the numbers to be transmitted in some 
cases. As long as the restriction applies only to specific attempts to 
block transmission of the numbers, we have no objection. (See comments 
below on H.R. 3100.)
    With respect to H.R. 3100, The DMA is also deeply troubled by its 
language, which also appears to impose requirements that, to the best 
of The DMA's present understanding, exceed the limits of current 
technology, and therefore, would place unreasonable burdens on 
marketers.
    Specifically, the bill would prohibit anyone from interfering with 
or circumventing ``the ability of a caller identification service to 
access or provide to the recipient of the call the information about 
the call . . . that such service is capable of providing.'' Moreover, 
the regulations to be promulgated under the legislation would have to 
require that telephone solicitations be made ``in a manner such that a 
recipient of the solicitation having caller identification service 
capable of providing such information will be provided by such service 
with'' prescribed information including the name of the person or 
entity on whose behalf the solicitation is being made and a telephone 
number consumers may contact to make a ``do-not-call request.''
    The DMA is concerned that the bill as drafted could be interpreted 
not merely to prohibit interference with the display of caller 
identification data when the solicitor's telecommunications services, 
facilities, or equipment are capable of permitting the display of such 
information, but go much farther and require that telephone marketers 
upgrade to or otherwise obtain telecommunications services or 
facilities that will ensure the display of such information anytime a 
consumer has subscribed to a caller identification service. It is our 
understanding that, based on technological constraints, neither local 
nor long distance telephone common carriers presently make transmission 
of originating line information-the calling party's number--available 
for certain types of telecommunications services or facilities, such as 
the trunk lines that telephone marketers and other large-volume 
communications users frequently use. Thus, The DMA must oppose the bill 
because it seemingly ignores not only current limits on the technology 
available to telephone marketers, but also the potential costs and 
burdens they could face in obtaining or providing such technology.
    Finally, I would urge you to consider the economic importance of 
the teleservices industry to the overall national economy. In 1999, the 
teleservices industry was responsible for more than $538 billion worth 
of sales and employed more than 5.4 million people. These bills could 
impose significant new restrictions that could have far-reaching, 
unintended economic consequences. Thank you for the opportunity to 
present our views on H.R. 3100 and H.R. 3180. We would be happy to 
supply any further information regarding telephone marketers that you 
might find useful in your deliberations.
            Sincerely,
                                          Richard A. Barton
                     Senior Vice President, Congressional Relations
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