19–008

108TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 1st Session 108–8

DO-NOT-CALL IMPLEMENTATION ACT

FEBRUARY 11, 2003.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. TAUZIN, from the Committee on Energy and Commerce, 

submitted the following 

R E P O R T 

[To accompany H.R. 395] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 395) to authorize the Federal Trade Commission to 

collect fees for the implementation and enforcement of a ‘‘do-notcall’’ registry, and for other purposes, having considered the same, 

report favorably thereon without amendment and recommend that 

the bill do pass.

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 1

Background and Need for Legislation .................................................................... 2

Hearings ................................................................................................................... 5

Committee Consideration ........................................................................................ 5

Committee Votes ...................................................................................................... 5

Committee Oversight Findings ............................................................................... 5

Statement of General Performance Goals and Objectives .................................... 5

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 5

Committee Cost Estimate ....................................................................................... 6

Congressional Budget Office Estimate ................................................................... 6

Federal Mandates Statement ................................................................................. 8

Advisory Committee Statement .............................................................................. 8

Constitutional Authority Statement ...................................................................... 8

Applicability to Legislative Branch ........................................................................ 8

Section-by-Section Analysis of the Legislation ...................................................... 8

Changes in Existing Law Made by the Bill, as Reported ..................................... 10

PURPOSE AND SUMMARY

The purpose of H.R. 395 is to authorize the Federal Trade Commission (FTC or Commission) to collect fees from telemarkers to 

2

1This study was commissioned by the Direct Marketing Association. 

2While all members of the Direct Marketing Association are required to participate in the 

Telephone Preference Service, the Association may apply sanctions only against its members. 

fund the implementation and enforcement of the Commission’s national do-not-call registry, and for other purposes. 

BACKGROUND AND NEED FOR LEGISLATION

Telemarketing has been, and continues to be, a controversial 

marketing practice. Telemarketing can provide many benefits for 

consumers, such as introducing them to new opportunities or products. According to a DRI–WEFA Group study,1 Economic Impact, 

U.S. Direct and Interactive Marketing Today, 2002 Forecast, in 

2001, consumer outbound telephone marketing generated $274.2 

billion in sales, accounting for 27.3 percent of all consumer direct 

marketing sales. In fact, outbound telemarketing alone generated 

almost four percent of all U.S. consumer sales in 2001. In 2001, the 

telemarketing industry that markets to consumers was estimated 

to employ 4.1 million workers. 

Unfortunately, certain telemarketing practices can be an intrusive nuisance for consumers, an invasion of privacy, and a source 

of consumer confusion. In some instances, unscrupulous telemarketers have taken advantage of this confusion and committed 

fraud against consumers. Indeed, the FTC receives thousands of 

complaints annually regarding a variety of telemarketing practices. 

According to the FTC, consumer complaints regarding unwanted 

telemarketing calls increased over one-thousand percent between 

1998 and 2002. 

In order to assist consumers in dealing with telemarketing, Congress provided authority to the FTC and the Federal Communications Commission (FCC) to limit these intrusions into their homes. 

Under the Telemarketing and Consumer Fraud and Abuse Prevention Act (15 U.S.C. §§ 6101–08) enacted by Congress in 1994, the 

FTC implemented the Telemarketing Sales Rule (TSR). The TSR 

requires telemarketers to make certain disclosures and prohibits 

certain misrepresentations. These rules required company-specific 

do-not-call lists, required callers to identify the seller, their purpose 

and the nature of what is being sold, limited commercial telephone 

solicitations to between 8:00 a.m. and 9:00 p.m., and gave state law 

enforcement officers the authority to prosecute fraudulent telemarketers who operate across state lines. 

Congress also enacted the Telephone Consumer Protection Act 

(TCPA) of 1991 (47 U.S.C. § 227). Regulated by the FCC, the TCPA, 

among other things, requires telemarketers to abide by do-not-call 

requests from consumers, restricts telemarketing calling hours to 

8:00 a.m.–9:00 p.m., mandates that telemarketers provide the 

name of the solicitor, name of the entity calling, and the telephone 

number or address where that person may be contacted, and includes a private right of action. Exemptions exist for established 

business relationships and tax-exempt non-profit organizations, 

such as those of a charitable or political nature. 

In addition to the FTC and FCC regulations, many states also 

maintain some form of a do-not-call list, and the Direct Marketing 

Association also maintains a self-regulated do-not-call list, called 

the Telephone Preference Service, used by its members.2 Despite 

3

The Direct Marketing Association has approximately 5,000 members. There are approximately 

4 million consumers who have subscribed to the Telephone Preference Service. 3 Alabama, Alaska, Arkansas, California (effective April 1, 2003), Colorado, Connecticut, Florida, Georgia, Idaho, Illinois (effective July 1, 2003), Indiana, Kansas, Louisiana, Massachusetts 

(effective April 1, 2003), Maine, Minnesota, Missouri, New York, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Vermont, Wisconsin and Wyoming. 

these restrictions, telemarketing complaints continue to rise and 

there is an increasing need to provide consumers with the ability 

to opt-out of telemarketing calls. 

To address the consumer demand, pursuant to its authority 

under the Telemarketing and Consumer Fraud and Abuse Prevention Act, the FTC initiated a rulemaking in January 2002 to create 

a national do-not-call registry and announced the adoption of its 

do-not-call amendments on December 18, 2002. The Commission’s 

do-not-call registry allows consumers who prefer not to receive telemarketing calls to contact the FTC to be placed on its do-not-call 

list. Telemarketers would be required to subscribe to the national 

do-not-call registry and to refrain from calling consumers who have 

placed their telephone numbers on this registry. 

The FTC provided telemarketing exemptions in the TSR for companies with an ‘‘established business relationship’’ with a consumer 

lasting up to 18 months after the last purchase or delivery, or the 

last payment, unless the company is asked not to call again. The 

TSR also exempts telemarketers calling to solicit charitable contributions, although calls made by for-profits on behalf of non-profits are required to maintain an organization-specific do-not-call list. 

In order to implement the do-not-call registry, the Commission 

needs Congressional authorization to collect fees from the telemarketing industry. It is anticipated that fees collected will offset 

the appropriation that, in FY 2003, is estimated at $16 million. On 

May 29, 2002, the FTC issued a Request for Public Comment asking for guidance on the collection of fees. Under the new authority 

provided by H.R. 395, the Commission intends to initiate a notice 

of proposed rulemaking on how the fee collection process will operate once authorization and funding are acquired. 

It is the strongly held view of the Committee that a national donot-call list is in the best interests of consumers, businesses and 

consumer protection authorities. This legislation is an important 

step toward a one-stop solution to reducing telemarketing abuses. 

The FTC’s rule, however, is only one piece of a multi-jurisdictional 

puzzle. Of primary concern to the Committee is the possibility for 

conflicting regulations. In addition to the FTC’s national do-not-call 

registry, twenty-seven states 3 maintain some form of a do-not-call 

program, and the FCC requires businesses to maintain companyspecific do-not-call lists. How these different regulatory regimes can 

compliment each other and work as one national program is still 

unclear. 

The Commission’s do-not-call registry, standing alone, will not 

stop all telemarketing calls. Due to the limited jurisdiction of the 

FTC, there are telemarketing calls that cannot be covered by the 

FTC’s do-not-call rule. The Commission does not have jurisdiction 

over common carriers (such as telephone companies and airlines), 

insurance companies, banks, credit unions, political solicitations, or 

intrastate telemarketing calls. Under the Commission’s do-not-call 

rule, if one of these non-covered entities contracts with a thirdparty telemarketing company to place a call, that call would be covVerDate Jan 31 2003 05:20 Feb 12, 2003 Jkt 019008 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR008.XXX HR008
4

ered by the FTC’s rule. However, if one of these non-covered entities makes the same telemarketing call in-house, that call would 

not be covered by the FTC’s do-not-call rule. 

The FCC’s do-not-call rules were created under the TCPA. That 

statute explicitly gives the FCC the authority to set up a national 

do-not-call database. In 1992, the FCC undertook a rulemaking, 

and after reviewing comments, determined that a national do-notcall list was too costly and burdensome at that time. The FCC instead opted to require telemarketers to maintain company-specific 

do-not-call lists. On September 12, 2002, the FCC issued a notice 

of proposed rulemaking to review and possibly revise its do-not-call 

rules. The comment period closed on January 31, 2003, and the 

FCC’s Chief of Consumer and Governmental Affairs Bureau announced that the FCC’s goal is to avoid regulatory duplication by 

working closely with the FTC and fashioning rules that benefit consumers and the telemarketing industry. 

As the FCC undertakes the process of revising its do-not-call regulations, there is the potential for inconsistencies between the FTC 

and FCC do-not-call rules. To address this issue, H.R. 395 directs 

the FCC to complete its rulemaking within 180 days of enactment 

and further requires the FCC to consult and coordinate with the 

FTC to maximize consistency between the two regulations. However, because the FCC is bound by the TCPA, it is impossible for 

the FCC to adopt rules identical to the FTC’s TSR. 

There are areas in which the FTC do-not-call rule is in conflict 

with the TCPA, such as the FTC’s rule providing for a safe harbor 

from the call ‘‘abandonment’’ requirements if a telemarketer, 

among other things, leaves a recorded message. Under the TCPA, 

however, Congress by statute prohibited telemarketers from leaving recorded messages. In order to remedy these types of inconsistencies, either the FTC or FCC must address them administratively, 

or Congress must address them legislatively. We encourage the 

FTC and the FCC to take the necessary steps to make their rules 

as consistent and compatible as possible. 

Similarly, some members of the Committee raised concerns about 

how the FTC do-not-call rule will work in conjunction with the existing twenty-seven state do-not-call laws. The Commission’s donot-call rules do not preempt the state lists, although the FTC has 

committed to ‘‘harmonizing’’ the Commission’s rule with the state 

laws. We are encouraged with the FTC’s commitment and efforts 

to work with the states to ensure a harmonized approach, although 

some remain concerned that consumers and businesses could continue to face conflicting and confusing regulatory approaches. In 

light of the fact that many states have unique laws with protections for local industries or exemptions for certain products, for example, at least 12 states have developed specific provisions for local 

newspapers, we encourage the FTC to work diligently to persuade 

states to adopt the FTC’s rule. The Committee cannot understate 

the importance of the FTC working aggressively to seek such harmonization, and we will continue to follow the FTC’s progress on 

this issue. The Committee takes no position on the issue of state 

preemption in H.R. 395. 

While this bill focuses on the necessary authority to establish the 

do-not-call registry, the Committee maintains a great deal of interest in the entire TSR produced by the FTC. Taken as a whole, the 

5

amended TSR is a positive development that will help consumers. 

The Committee is interested in working with the FTC to better understand some of the implementation details of the rule that could 

raise some practical problems that could affect employment and 

small business. As the registry becomes available, we encourage 

the FTC to implement aggressive education efforts, including national awareness campaigns and a toll-free number with strong 

consumer recall. 

The Committee is committed to holding hearings during the 

108th Congress to better understand how these different do-not-call 

regulatory regimes can best be coordinated to protect consumers in 

a manner that is fair and balanced to industry participants. 

HEARINGS

The Committee on Energy and Commerce did not hold hearings 

on H.R. 395. The Full Committee did hold a briefing on January 

8, 2003 where FTC Chairman Muris testified. 

COMMITTEE CONSIDERATION

On Wednesday, January 29, 2002, the Full Committee on Energy 

and Commerce met in open markup session and ordered H.R. 395, 

favorably reported to the House, without amendment, by a voice 

vote, a quorum being present. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. There were no 

record votes taken in connection with ordering H.R. 395 reported. 

A motion by Mr. Tauzin to order H.R. 395 reported to the House 

was agreed to by a voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has not held oversight or legislative hearings on this legislation. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

The goal of this legislation is to authorize the FTC to collect fees 

from the telemarketing industry to fund the operation and enforcement of the do-not-call registry. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee finds that H.R. 395, the 

‘‘Do-Not-Call Implementation Act,’’ would result in no new or increased budget authority, entitlement authority, or tax expenditures or revenues. 

6

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974:

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, February 4, 2003. 

Hon. W.J. ‘‘BILLY’’ TAUZIN, 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DERA MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 395, the Do-Not-Call Implementation Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Ken Johnson (for federal costs), Victoria Heid Hall (for the state and local impact), and 

Jean Talarico (for the private-sector impact). 

Sincerely, 

BARRY B. ANDERSON, 

Acting Director. 

Enclosure.

H.R. 395—Do-Not-Call Implementation Act 

Summary: H.R. 395 would authorize the Federal Trade Commission (FTC) to collect and spend new fees during the 2003–2007 period for the purpose of creating a national ‘‘do-not-call’’ registry. 

The ‘‘do-not-call’’ registry is a list of consumers whom telemarketers would be prohibited from calling because the consumers 

do not wish to receive such calls. 

Based on information from the FTC, CBO estimates that the 

agency would collect and spend a total of about $73 million in fees 

over the 2003–2008 period to implement H.R. 395, assuming appropriation of the necessary amounts. Over the six-year period, the 

total net effect on the federal budget would be insignificant. Enacting H.R. 395 would not affect direct spending or revenues. 

H.R. 395 contains no intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA) and would impose no 

costs on state, local, or tribal governments. By authorizing the FTC 

to collect fees from telemarketing firms, H.R. 395 would impose a 

private-sector mandate as defined by UMRA. CBO expects that the 

cost of that mandate would fall well below the annual threshold for 

the private sector established by UMRA ($117 million in 2003, adjusted annually for inflation). 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 395 is shown in the following table. The costs 

of this legislation fall within budget function 370 (commerce and 

housing credit).

7

By fiscal year, in millions of dollars—

2003 2004 2005 2006 2007 2008

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 1

Gross FTC Spending for the Do-Not-Call Registry: 

Estimated Authorization Level ............................................. 16 18 13 13 13 0

Estimated Outlays ............................................................... 3 26 16 13 13 2

Offsetting Collections from Telemarketers: 

Estimated Authorization Level ............................................. ¥16 ¥18 ¥13 ¥13 ¥13 0

Estimated Outlays ............................................................... ¥16 ¥18 ¥13 ¥13 ¥13 0

Net Changes to FTC Spending for the Do-Not-Call Registry: 

Estimated Authorization Level ............................................. 0 0 0 0 0 0

Estimated Outlays ............................................................... ¥13 8 3 0 0 2

1 A full-year appropriation for 2003 for the FTC has not yet been enacted. In 2002, the agency received a gross appropriation of $156 million. 

Basis of estimate: H.R. 395 would authorize the FTC to collect 

fees sufficient to create and operate a ‘‘do-not-call’’ registry, contingent upon the approval of the fees in appropriation acts. For this 

estimate, CBO assumes that H.R. 395 and the necessary appropriation provisions will be enacted by the middle of this fiscal year. 

Based on information from the FTC, CBO expects that the agency 

would start collecting fees from telemarketers in 2003, in amounts 

equal to the full estimated cost of the registry. 

The costs of operating the ‘‘do-not-call’’ registry would have four 

main components: purchasing new computer systems, designing 

and maintaining those systems, hiring personnel to manage the 

registry and investigate violations, and advertising the new system 

to consumers. Based on information from the FTC, CBO estimates 

that the initial costs of purchasing the computer system would 

amount to about $1 million in 2003, $8 million in 2004, and $4 million in 2005. We expect that these costs would decline to between 

$1 million and $2 million a year during the 2006–2008 period. CBO 

estimates that designing and maintaining these computer systems 

would cost about $45 million over the 2003–2008 period. Finally, 

staff salaries and advertising expenses would together amount to 

an estimated $2 million each year.

In sum, CBO estimates that the FTC would implement H.R. 395 

by collecting and spending a total of about $73 million in fees over 

the 2003–2008 period, assuming the necessary appropriations action. Over this six-year old period, CBO estimates that the total net 

effect of the bill on the federal budget would be insignificant. 

If the FTC continued to operate the ‘‘do-not-call’’ registry beyond 

2007, CBO estimates annual operating costs would be about $13 

million a year, assuming appropriation of the necessary amounts. 

H.R. 395 would authorize the collection of fees to offset those costs 

through 2007. 

Estimated impacts on direct spending and revenues: None. 

Estimated impact on state, local, and tribal governments: H.R. 

395 contains no intergovernmental mandates as defined in UMRA 

and would impose no costs on state, local, or tribal governments. 

Estimated impact on the private sector: The final rule that provides for a national ‘‘do-not-call’’ registry was published on January 

29, 2003, in the Federal Register. Under that rule, telemarketing 

firms will be required to search the national registry at least four 

times a year and drop from their call lists the telephone numbers 

of consumers who have registered. The FTC anticipates that full 

8

compliance with the ‘‘do-not-call’’ provision will be required within 

a few months after funding has been approved. 

In order to implement the national ‘‘do-not-call’’ registry, and 

subject to approval in appropriation acts, H.R. 395 would authorize 

the FTC to collect fees from telemarketing firms and certain businesses associated with those firms that sell goods and services. The 

duty to pay those fees would be considered a private-sector mandate under UMRA. Assuming the necessary appropriation action, 

CBO estimates that the fees would amount to no more than $18 

million annually over the next five years. Consequently, the cost of 

the mandate would fall well below the annual threshold for private-sector mandates established by UMRA ($117 million in 2003, 

adjusted annually for inflation).

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional authority for this legislation is provided in Article I, section 8, clause 

3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 establishes the short title as the ‘‘Do-Not-Call Implementation Act.’’ 

Section 2. Telemarketing Sales Rule; do-not-call registry fees 

Section 2 authorizes the FTC to promulgate regulations to collect 

offsetting fees sufficient to implement and enforce the national donot-call registry. The authorization is effective between fiscal years 

2003–2007. The FTC may only collect the amounts as provided for 

in advance in appropriations Acts. The funds collected shall only be 

used to offset the costs of activities and services related to the implementation and enforcement of the Telemarketing Sales Rule, 

and other activities resulting from such implementation and enforcement. 

In its forthcoming rulemaking to establish fees, the FTC should 

ensure that the fees are commercially reasonable and do not exceed 

9

the amounts necessary to effectively establish, maintain, and enforce the do-not-call rules. 

No section of this Act should be construed by the FTC to confer 

any additional authority to regulate common carriers, or any other 

industries, outside of the Commission’s statutory jurisdiction under 

the Federal Trade Commission Act (15 U.S.C. § 1 et seq). 

Section 3. Federal Communications Commission do-not-call regulations 

Section 3 directs the FCC, within 180 days of enactment, to issue 

a final do-not-call rule pursuant to the rulemaking proceeding initiated on September 18, 2002, under the TCPA. The FCC is directed 

to consult and coordinate with the FTC to maximize consistency 

with the do-not-call rule promulgated by the FTC. 

In enacting section 3, it is not the intent of the Committee to dictate the outcome of the FCC’s pending rulemaking proceeding. At 

the same time, however, it does endeavor to prevent situations in 

which legitimate users of telephone marketing are subject to conflicting regulatory requirements. The purpose of the consultation 

and coordination requirements of section 3 and the reporting requirements of section 4 are intended to prevent this possibility 

from becoming reality. The Committee further recognizes that the 

TCPA requires the FCC to consider a variety of factors in structuring a national do-not-call list. It is not the Committee’s intent 

to foreclose consideration of those factors by enacting this legislation. 

Section 4. Reporting requirements 

Section 4(a) requires the FTC and the FCC to each, within 45 

days of the FCC completing a final do-not-call rule, to report to the 

Committee on Energy and Commerce in the House of Representatives and the Committee on Commerce, Science, and Transportation in the Senate on the following: (1) an analysis of the telemarketing rules created by the FTC and FCC; (2) any inconsistencies between the two rules and the effect of any such inconsistencies on consumers and purchasers of the do-not-call registry; and 

(3) proposals to remedy any inconsistencies. 

Section 4(b) contains an annual reporting requirement that mandates the FTC and FCC to report to the Committee on Energy and 

Commerce in the House of Representatives and the Committee on 

Commerce, Science, and Transportation in the Senate on the following: (1) an analysis of the effectiveness of the do-not-call registry as a national registry; (2) number of consumers placed on the 

registry; (3) the number of persons paying for access to the registry; (4) an analysis of the progress of coordinating the operation 

and enforcement of the do-not-call registry with other similar state 

registries; (5) an analysis of the progress of coordinating the operation and enforcement of the do-not-call registry with the enforcement activities of the FCC; and (6) a review of the enforcement activities of the FTC under the Telemarketing Sales Rule and of the 

FCC under the TCPA. The annual reporting requirement is applicable to fiscal years 2003–2007. 

10

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

* * * * * * *

Æ