UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

WASHINGTON, D.C. 20580

PREPARED STATEMENT OF

THE FEDERAL TRADE COMMISSION ON

PROPOSED AMENDMENT OF THE TELEMARKETING SALES RULE

TO ESTABLISH A NATIONAL "DO-NOT-CALL" REGISTRY

Before the

JUDICIARY COMMITTEE

SENATE OF THE COMMONWEALTH OF KENTUCKY

Frankfort, Kentucky

February 6, 2002

Mr. Chairman, my name is Eileen Harrington, and I am the Associate Director for Marketing 

Practices in the Federal Trade Commission's Bureau of Consumer Protection. I am pleased to 

provide the Commission's views on its recently announced proposal to amend its Telemarketing 

Sales Rule ("TSR" or "Rule").(1) A key element of that proposal is to establish a national 

centralized "do-not-call" registry. 

Background: The Telemarketing Act and the TSR

The Rule was adopted in August 1995 under the Telemarketing Consumer Fraud and Abuse 

Prevention Act ("Telemarketing Act"). In that Act, Congress directed the Commission to adopt a 

rule to define and prohibit deceptive and abusive telemarketing practices. With respect to abusive 

telemarketing practices, the Act, among other things, directed that the Rule include "a requirement 

that telemarketers may not undertake a pattern of unsolicited telephone calls which the

reasonable consumer would consider coercive or abusive of such consumer's right to privacy." 

Accordingly, the TSR includes a "do-not-call" provision, prohibiting a seller or telemarketer from 

calling a person who has previously asked not to be called by or on behalf of the seller whose 

goods or services were being offered.

The "do-not-call" provision of the current Rule is company-specific: after a consumer requests not 

to receive calls from a particular company, that company may not call that consumer again. Other 

companies, however, may lawfully call that same consumer until he or she requests each of them 

not to call. The effect of this provision is to permit consumers to choose those companies, if any, 

from which they do not wish to receive telemarketing calls. Each company must maintain its own 

"do-not-call" list of consumers who have stated that they do not wish to receive telephone calls by 

or on behalf of that seller. This seller-specific approach tracks the approach that the FCC adopted 

pursuant to its mandate under the Telephone Consumer Protection Act ("TCPA").(2)

Regulatory Review of the TSR

The FTC subjects its trade regulation rules to periodic regulatory review to determine whether 

each rule continues to serve the public interest, and whether it could be modified to increase 

benefits to consumers without unduly burdening industry, or to reduce compliance costs without 

sacrificing important protections for consumers. In accordance with the Commission's overall 
policy of regulatory review, and as mandated by the Telemarketing Act,(3) the Commission 

commenced a review of the TSR in November 1999.

As part of the regulatory review of the TSR, the Commission in January 2000 conducted a public 

workshop forum on the TSR's "do-not-call" provision. Evidence emerged during the workshop, and 

in written comments submitted in subsequent stages of the regulatory review, indicating that, 

despite the TSR's "do-not-call" provision, there is widespread consumer frustration over unwanted 

telephone solicitations. Many states have responded to this frustration by enacting or considering 

legislation to establish statewide "do-not-call" lists. As of January 2002 twenty (20) States had 

passed "do-not-call" statutes.

Consumers also have demonstrated great interest in being placed on "do-not-call" lists. For 

example, more than 1 million New York households had signed up for the state "do-not-call" list by 

the time it took effect on April 1, 2001. More than 332,000 phone lines were listed on Missouri's 

"do-not-call" list within a short time of its passage. And nearly one-third of Connecticut's 

households are on that state's "do-not-call" list. Similarly, in June 2001 the Direct Marketing 

Association ("DMA") reported that the number of names registered with the "Telephone 

Preference Service," a "do-not-call" program maintained by the DMA for its members, has grown 

to 4 million, up 1 million since June of 2000.(4)

Additional evidence emerged during the TSR regulatory review indicating that the existing 

company-specific approach is inadequate to enable consumers to control telemarketing calls 

received in their homes. Consumers and consumer groups who contributed their views during the 

Rule review stated that the primary problem with the current federal company-specific "do-not-call" 

approach is that it is burdensome to the consumer. Every company gets "one bite of the apple" 

with the consumer, who must repeat the "do-not-call" request to each company whose 

telemarketers call him or her. 

Industry participants in the TSR regulatory review process generally supported the Rule's current 

company-specific approach, stating that it provides consumer choice and satisfies the consumer 

protection mandate of the Telemarketing Act while not imposing an undue burden on industry. 

They expressed skepticism about the need to strengthen the "do-not-call" provisions of the Rule. 

Industry participants argued that, although many consumers may broadly express the view that 

they would prefer not to receive any telemarketing calls, when it comes down to particulars, their 

true wishes may be somewhat different. They expressed the view that the same consumers who 

say they would like to stop receiving telemarketing calls may actually welcome certain types of 

telemarketing calls - for example, special sale price offers from companies with which they have 

previously transacted business.

The Proposal for a National Centralized "Do-Not-Call" Registry

Taking all the record evidence into account, the Commission has proposed to modify the TSR, 

among other things, by establishing a national centralized "do-not-call" registry that would enable 

consumers to stop most telemarketing calls by making just one phone call to the FTC.(5)

Telemarketers would be required to "scrub" their lists, removing all consumers who have placed 

themselves on the FTC's centralized registry.

Included in the proposal is a provision that would enable consumers who have placed themselves 

on the FTC's national "do-not-call" registry to receive some telemarketing calls. Under that 

provision, consumers would be able to receive calls from or on behalf of specific sellers, or on 

behalf of specific charitable organizations, by providing express verifiable authorization to the 

seller, or telemarketer making calls for or on behalf of a seller or charitable organization, that the 

consumer agrees to accept calls from that seller or telemarketer.(6) This feature of the proposal 

addresses industry's suggestion that consumers may not desire an all-or-nothing approach to 
telemarketing calls. The proposed Rule would provide consumers with a wider range of choices 

than the current Rule provides: 

• they could opt to use the FTC's centralized registry to eliminate all telemarketing calls 

from all sellers and telemarketers covered by the TSR; 

• they could eliminate all telemarketing calls from all sellers and telemarketers covered by 

the TSR by placing themselves on the central registry, but subsequently agree to accept 

telemarketing calls only from or on behalf of specific sellers, or on behalf of specific 

charitable organizations, with respect to which they have provided express verifiable 

authorization; or 

• they could opt to eliminate telemarketing calls only from specific sellers, or telemarketers 

on behalf of those sellers, or on behalf of charitable organizations, by using the companyspecific approach in the current Rule provision and the current FCC regulations. 

In addition, the Commission specifically seeks comment on whether consumers should be able to 

select other options such as restrictions on the days or hours of the day that calls may be 

received.(7)

Interplay Between the Proposed National "Do-Not-Call" Registry and State "Do-Not-Call" 

Laws

The Commission recognizes that the interplay between the proposed national "do-not-call" registry 

and state "do-not-call" laws is very important. The Commission's notice of proposed rulemaking, 

published in the Federal Register on January 30, 2001, and also available on the FTC's website at 

www.FTC.GOV, is neutral on the issue of preemption. It seeks comment on this issue and does 

not advance any particular view on how the national "do-not-call" registry should interface with 

existing state "do-not-call" requirements. There are a number of possible scenarios, including 

sharing of state and FTC "do-not-call" databases. 

In addition, the Commission is seeking specific comment regarding the states' experience with 

various approaches to funding a centralized "do-not-call" registry. The Commission recognizes 

that the proposed national "do-not-call" list will entail costs. In its request for public comment on 

the proposal, the Commission notes that some states charge telemarketers for access to the state 

"do-not-call" list, and some charge consumers a fee for including their names or phone numbers 

on the state "do-not-call" list. The Commission asks about the effectiveness of these approaches 

and any problems that have arisen with them.(8)

In considering how a national registry might interface with state "do-not-call" registries, an 

important factor to remember, however, is that if the proposed national "do-not-call" registry is 

adopted, all of the states, regardless of whether they have a centralized "do-not-call" registry, will 

continue to have the authority, conferred by the Telemarketing Act, to enforce all provisions of the 

TSR, including any amended "do-not-call" provision, through actions in federal district court. 

Preliminary and permanent injunctive relief will continue to be available to the states for all TSR 

violations, including violations of the "do-not-call" provision, as will recovery of damages on behalf 

of state residents.

Conclusion

On behalf of the Federal Trade Commission I wish to express appreciation for the opportunity to 

come here and share with the Committee the Commission's views on its proposal to amend the 

TSR. I would be happy to answer any questions.

Endnotes:
1. The views expressed in this statement represent the views of the Commission. My responses to any questions you may have 

are my own. 

2. P.L. 102-243, 105 Stat. 2394, codified at 47 U.S.C. § 227. The FCC's regulations are set out at 47 C.F.R. § 64.1200. 

3. 15 U.S.C.§ 6108. 

4. The Telephone Preference Service ("TPS") is a list of consumers who do not wish to receive outbound telemarketing calls. 

Although not advertised, it was established in 1985 and has been administered by DMA, which subsidizes the cost. DMA charges 

consumers $5 to register online, but does not charge for registration in writing through conventional mail. At this time, DMA does 

not allow consumers to put themselves on the TPS by telephone. DMA requires its members to adhere to the list; the penalty for 

non-compliance is expulsion from the association. Sellers and telemarketers that are not members of DMA may purchase the TPS 

for a fee. 

5. Not all calls would be stopped because certain entities are specifically exempt from coverage under the Telemarketing Act and 

the FTC Act. 15 U.S.C. §§ 45(a)(2) & 6105. Exempt entities include banks, credit unions, savings and loans, companies engaged 

in common carrier activity, non-profit organizations, and companies engaged in the business of insurance. With regard to the 

exemption of non-profit organizations, the USA PATRIOT Act of 2001, Pub. L. 107-56 (Oct. 25, 2001) amends the Telemarketing 

Act to extend the coverage of the TSR to reach not just telemarketing to induce the purchase of goods or services, but also 

charitable fund raising conducted by for-profit telemarketers for or on behalf of charitable organizations. The Commission has also 

determined that the USA PATRIOT Act is inapplicable to political contributions, including contributions to political parties and 

candidates. In addition, the Telemarketing Act exempts from the Rule's coverage a number of entities and individuals associated 

with them that sell investments and are subject to the jurisdiction of the Securities and Exchange Commission or the Commodity 

Futures Trading Commission. 15 U.S.C. §§ 6102(d)(2)(A) & 6102(e)(1). 

6. The proposed Rule lists two specific means of obtaining the express verifiable authorization of a consumer to receive 

telemarketing calls despite their inclusion on the national "do-not-call" list: written authorization including the consumer's signature; 

and oral authorization that is recorded and authenticated by the telemarketer as being made from the telephone number to which 

the consumer is authorizing access. The Commission expects that written authorization will be necessary in most instances 

because once on the national "do-not-call" list, a consumer could not be contacted by an outbound call to request oral authorization 

of future calls. Oral authorization could be obtained, however, if the consumer were to place an inbound call, and were asked by 

the sales representative during that call whether he or she would consent to further telemarketing solicitations from the party called. 

7. The Commission is also soliciting comment on whether the proposed "do-not-call" registry should be structured to treat requests 

not to be called by telemarketers selling goods or services separately from requests not to be called by telemarketers soliciting 

charitable contributions. 

8. 67 Fed. Reg. 4539 (Jan. 30, 2002) Question # 5. j. addresses this issue.