F I L E D

United States Court of Appeals

Tenth Circuit

FEB 17 2004

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

MAINSTREAM MARKETING

SERVICES, INC., a Colorado

corporation; TMG MARKETING,

INC., a Colorado corporation;

AMERICAN TELESERVICES

ASSOCIATION,

Plaintiffs-Appellees,

v.

FEDERAL TRADE COMMISSION,

Defendant-Appellant,

and

TIMOTHY J. MURIS, Chairman of

the Federal Trade Commission;

SHEILA F. ANTHONY,

Commissioner, Federal Trade

Commission; MOZELLE W.

THOMPSON, Commissioner, Federal

Trade Commission; ORSON

SWINDLE, Commissioner, Federal

Trade Commission; THOMAS B.

LEARY, Commissioner, Federal Trade

Commission; J. HOWARD BEALES,

III, Director, Bureau of Consumer

Protection, in their official capacities,

Defendants.

No. 03-1429
- 2 -

UNITED STATES OF AMERICA, 

Intervenor,

ALABAMA, ALASKA, ARIZONA,

ARKANSAS, CALIFORNIA,

COLORADO, CONNECTICUT,

DELAWARE, DISTRICT OF

COLUMBIA, FLORIDA, GEORGIA,

HAWAII, IDAHO, ILLINOIS, IOWA,

KANSAS, KENTUCKY,

LOUISIANA, MAINE, MARYLAND,

MASSACHUSETTS, MICHIGAN,

MINNESOTA, MISSISSIPPI,

MISSOURI, MONTANA, NEVADA,

NEW HAMPSHIRE, NEW JERSEY,

NEW MEXICO, NEW YORK,

NORTH CAROLINA, OHIO,

OKLAHOMA, OREGON,

PENNSYLVANIA, PUERTO RICO,

RHODE ISLAND, SOUTH

CAROLINA, SOUTH DAKOTA,

TENNESSEE, TEXAS, UTAH,

VERMONT, VIRGINIA,

WASHINGTON, WEST VIRGINIA

AND WYOMING; AARP; W.J.

“BILLY” TAUZI, JOHN D.

DINGELL, and certain other members

of the House of Representatives of the

United States; ACA

INTERNATIONAL; UNDERSIGNED

MEMBERS OF THE UNITED

STATES SENATE COMMITTEE ON

COMMERCE, SCIENCE, AND

TRANSPORTATION; THE COUNCIL

OF AMERICAN SURVEY

RESEARCH ORGANIZATIONS, THE 
- 3 -

AMERICAN ASSOCIATION FOR

PUBLIC OPINION RESEARCH, THE

COUNCIL FOR MARKETING AND

OPINION RESEARCH,

 Amici Curiae.

U.S. SECURITY, an Oklahoma

corporation; CHARTERED BENEFIT

SERVICES, INC., an Illinois

corporation, GLOBAL CONTACT

SERVICES, INC., a Delaware

corporation; INFOCISION

MANAGEMENT CORPORATION,

a Delaware corporation; DIRECT

MARKETING ASSOCIATION, INC.,

a New York non-profit association,

Plaintiffs-Appellees,

v.

FEDERAL TRADE COMMISSION,

Defendant-Appellant.

ALABAMA, ALASKA, ARIZONA,

ARKANSAS, CALIFORNIA,

COLORADO, CONNECTICUT,

DELAWARE, DISTRICT OF

COLUMBIA, FLORIDA, GEORGIA,

HAWAII, IDAHO, ILLINOIS, IOWA,

KANSAS, KENTUCKY,

LOUISIANA, MAINE, MARYLAND,

MASSACHUSETTS, MICHIGAN,

MINNESOTA, MISSISSIPPI,

MISSOURI, MONTANA, NEVADA,

No. 03-6258
- 4 -

NEW HAMPSHIRE, NEW JERSEY,

NEW MEXICO, NEW YORK,

NORTH CAROLINA, OHIO,

OKLAHOMA, OREGON, 

PENNSYLVANIA, PUERTO RICO,

RHODE ISLAND, SOUTH

CAROLINA, SOUTH DAKOTA,

TENNESSEE, TEXAS, UTAH,

VERMONT, VIRGINIA,

WASHINGTON, WEST VIRGINIA

AND WYOMING; ACA

INTERNATIONAL; THE COUNCIL

OF AMERICAN SURVEY

RESEARCH ORGANIZATIONS, THE

AMERICAN ASSOCIATION FOR

PUBLIC OPINION RESEARCH, THE

COUNCIL FOR MARKETING AND

OPINION RESEARCH,

Amici Curiae.

MAINSTEAM MARKETING

SERVICES, INC., a Colorado

corporation; TMG MARKETING,

INC., a Colorado corporation;

AMERICAN TELESERVICES

ASSOCIATION,

 Petitioners,

v.

FEDERAL COMMUNICATIONS

COMMISSION; UNITED STATES

OF AMERICA,

 Respondents.

03-9571
- 5 -

ALABAMA, ALASKA, ARIZONA,

ARKANSAS, CALIFORNIA, 

COLORADO, CONNECTICUT,

DELAWARE, DISTRICT OF

COLUMBIA, FLORIDA, GEORGIA,

HAWAII, IDAHO, ILLINOIS, IOWA,

KANSAS, KENTUCKY,

LOUISIANA, MAINE, MARYLAND,

MASSACHUSETTS, MICHIGAN,

MINNESOTA, MISSISSIPPI,

MISSOURI, MONTANA, NEVADA,

NEW HAMPSHIRE, NEW JERSEY,

NEW MEXICO, NEW YORK,

NORTH CAROLINA, OHIO,

OKLAHOMA, OREGON,

PENNSYLVANIA, PUERTO RICO,

RHODE ISLAND, SOUTH

CAROLINA, SOUTH DAKOTA,

TENNESSEE, TEXAS, UTAH,

VERMONT, VIRGINIA,

WASHINGTON, WEST VIRGINIA

AND WYOMING; ACA

INTERNATIONAL; THE COUNCIL

OF AMERICAN SURVEY

RESEARCH ORGANIZATIONS, THE

AMERICAN ASSOCIATION FOR

PUBLIC OPINION RESEARCH, THE

COUNCIL FOR MARKETING AND

OPINION RESEARCH,

Amici Curiae.
- 6 -

COMPETITIVE

TELECOMMUNICATIONS

ASSOCIATION

 Petitioner,

v.

FEDERAL COMMUNICATIONS

COMMISSION; UNITED STATES

OF AMERICA,

Respondents.

THE COUNCIL OF AMERICAN

SURVEY RESEARCH

ORGANIZATIONS, THE

AMERICAN ASSOCIATION FOR

PUBLIC OPINION RESEARCH, THE

COUNCIL FOR MARKETING AND

OPINION RESEARCH,

 Amici Curiae.

03-9594

No. 03-1429

Appeal from the United States District Court

for the District of Colorado

(D.C. No. 03-N-184 (MJW))

No. 03-6258

Appeal from the United States District Court

for the Western District of Oklahoma

(D.C. No. 03-CV-122-W)
- 7 -

Nos. 03-9571, 03-9594

Petitions for Review of an Order of the 

Federal Communications Commission

(FCC No. 03-153)

Peter D. Keisler, Assistant Attorney General, Washington, D.C.; Lawrence

DeMille-Wagman, Attorney, Federal Trade Commission, Washington, D.C., for

Defendant-Appellant Federal Trade Commission; Jacob M. Lewis, Associate

General Counsel, Federal Communications Commission, Washington, D.C., for

Respondent Federal Communications Commission; (John A. Rogovin, General

Counsel, Susan L. Launer, Deputy Associate General Counsel, Laurence N.

Bourne, Rodger D. Citron, Federal Communications Commission, Washington,

D.C.; William E. Kovacic, General Counsel, John D. Graubert, Principal Deputy

General Counsel; John F. Daly, Deputy General Counsel for Litigation, Federal

Trade Commission, Washington, D.C.; John W. Suthers, United States Attorney,

Robert G. McCampbell, United States Attorney; Mark B. Stern, Appellate

Litigation Counsel; Alisa B. Klein, U.S. Department of Justice, Washington, D.C.,

Civil Division, with them on the briefs).

Robert Corn-Revere, Davis Wright Tremaine, LLP, Washington, D.C., for

Plaintiffs-Appellees and Petitioners Mainstream Marketing Services, Inc., TMG

Marketing, Inc., and American Teleservices Association; Thomas F. O’Neill, III,

Piper Rudnick, Washington, D.C., for Plaintiffs-Appellees U.S. Security,

Chartered Benefit Services, Inc., Global Contract Services, Inc., Infocision

Management Corporation, and Direct Marketing Association, Inc. (Ronald G.

London, Davis Wright Tremaine, LLP, Washington, D.C.; Sean R. Gallagher,

Marianne N. Hallinan, Hogan & Hartson, LLP, Denver, Colorado; Douglas H.

Green, John L. Moore, Jr., Emilio W. Cividanes, Piper Rudnick, Washington,

D.C.; James Nesland, Jeffrey Smith, Cooley Godward LLP, Broomfield,

Colorado, with them on the briefs).

Ian Heath Gershengorn, Jenner & Block, LLC, Washington, D.C., for Petitioner

Competitive Telecommunications Association (Jonathan Lee, Vice President,

Regulatory Affairs, Competitive Telecommunications Association, with him on

the briefs.)
1

 The telemarketers also marshal attacks on the fees they must pay to

access the national do-not-call registry and to the regulations’ exception for

commercial callers who have an established business relationship with the

consumer. We address those alternative arguments in parts IV(A) and IV(B)

below. Finally, in part IV(C), we discuss the FTC’s statutory authority to enact

its national do-not-call regulations.

- 8 -

Before SEYMOUR, EBEL and HENRY, Circuit Judges.

EBEL, Circuit Judge.

The four cases consolidated in this appeal involve challenges to the

national do-not-call registry, which allows individuals to register their phone

numbers on a national “do-not-call list” and prohibits most commercial

telemarketers from calling the numbers on that list. The primary issue in this case

is whether the First Amendment prevents the government from establishing an

opt-in telemarketing regulation that provides a mechanism for consumers to

restrict commercial sales calls but does not provide a similar mechanism to limit

charitable or political calls.1

 We hold that the do-not-call registry is a valid

commercial speech regulation because it directly advances the government’s

important interests in safeguarding personal privacy and reducing the danger of

telemarketing abuse without burdening an excessive amount of speech. In other

words, there is a reasonable fit between the do-not-call regulations and the

government’s reasons for enacting them.
2

 We express no opinion as to whether the do-not-call registry would be

constitutional if it applied to political and charitable callers.

- 9 -

As we discuss below in greater detail, four key aspects of the do-not-call

registry convince us that it is consistent with First Amendment requirements. 

First, the list restricts only core commercial speech – i.e., commercial sales calls.2

Second, the do-not-call registry targets speech that invades the privacy of the

home, a personal sanctuary that enjoys a unique status in our constitutional

jurisprudence. See Frisby v. Schultz, 487 U.S. 474, 484 (1988). Third, the donot-call registry is an opt-in program that puts the choice of whether or not to

restrict commercial calls entirely in the hands of consumers. Fourth, the do-notcall registry materially furthers the government’s interests in combating the

danger of abusive telemarketing and preventing the invasion of consumer privacy,

blocking a significant number of the calls that cause these problems. Under these

circumstances, we conclude that the requirements of the First Amendment are

satisfied.

A number of additional features of the national do-not-call registry,

although not dispositive, further demonstrate that the list is consistent with the

First Amendment rights of commercial speakers. The challenged regulations do

not hinder any business’ ability to contact consumers by other means, such as

through direct mailings or other forms of advertising. Moreover, they give

consumers a number of different options to avoid calls they do not want to
3

 The company-specific do-not-call regulations require that a company

must respect a consumer’s request not to receive calls from or on behalf of that

particular business. See 16 C.F.R. § 310.4(b)(1)(iii)(A); 47 C.F.R.

§ 64.1200(d)(3).

- 10 -

receive. Namely, consumers who wish to restrict some but not all commercial

sales calls can do so by using company-specific do-not-call lists or by granting

some businesses express permission to call.3 In addition, the government chose to

offer consumers broader options to restrict commercial sales calls than charitable

and political calls after finding that commercial calls were more intrusive and

posed a greater danger of consumer abuse. The government also had evidence

that the less restrictive company-specific do-not-call list did not solve the

problems caused by commercial telemarketing, but it had no comparable evidence

with respect to charitable and political fundraising.

The national do-not-call registry offers consumers a tool with which they

can protect their homes against intrusions that Congress has determined to be

particularly invasive. Just as a consumer can avoid door-to-door peddlers by

placing a “No Solicitation” sign in his or her front yard, the do-not-call registry

lets consumers avoid unwanted sales pitches that invade the home via telephone,

if they choose to do so. We are convinced that the First Amendment does not

prevent the government from giving consumers this option.
4

 Congress has directed the FCC to coordinate its efforts with the FTC in

order to maximize consistency between the agencies’ do-not-call regulations. DoNot-Call Implementation Act, Pub. L. No. 108-10, 117 Stat. 557 (2003). 

Although the FTC and FCC rules are consistent in most respects, there are some

situations in which a telemarketer could be subject to do-not-call restrictions

under one agency’s rule but exempt under the other’s. See Federal Trade

Commission, Report to Congress Pursuant to the Do Not Call Implementation Act

on Regulatory Coordination in Federal Telemarketing Laws (2003); Federal

Communications Commission, Report on Regulatory Coordination (2003). In the

interest of simplicity, and because any inconsistencies between the two rules do

not affect our constitutional analysis, we generally refer to both agencies’ do-notcall provisions as a single regulatory measure (the do-not-call registry). When we

mean to discuss the FTC rule or the FCC rule in particular, we do so explicitly.

5

 Consumers can register their personal phone numbers for the do-not-call

list either by phone or online. 

- 11 -

I. BACKGROUND

In 2003, two federal agencies – the Federal Trade Commission (FTC) and

the Federal Communications Commission (FCC) – promulgated rules that together

created the national do-not-call registry. See 16 C.F.R. § 310.4(b)(1)(iii)(B)

(FTC rule); 47 C.F.R. § 64.1200(c)(2) (FCC rule).4 The national do-not-call

registry is a list containing the personal telephone numbers of telephone

subscribers who have voluntarily indicated that they do not wish to receive

unsolicited calls from commercial telemarketers.5 Commercial telemarketers are

generally prohibited from calling phone numbers that have been placed on the donot-call registry, and they must pay an annual fee to access the numbers on the

registry so that they can delete those numbers from their telephone solicitation
6

 There has been some confusion throughout this litigation with respect to

how to define the term “telemarketing.” Compare Telemarketing and Consumer

Fraud and Abuse Prevention Act of 1994, Pub. L. No. 103-297, 108 Stat. 1545 at

§§ 7 (1994) (“Telemarketing Act”) (defining “telemarketing” as calls “conducted

to induce purchases of goods or services”) with Mainstream Mktg. Servs., Inc. v.

FTC, 283 F.Supp. 2d 1151, 1154 (D. Colo. 2003) (describing “telemarketing” as

the practice of “soliciting sales and donations” conducted by businesses, charities,

political organizations, and others). Unless otherwise indicated, we use the term

“telemarketing” to refer to commercial sales calls made to induce purchases of

goods or services (not charitable or political fundraising) consistent with

Congress’ definition in the Telemarketing Act.

7

 The “established business relationship” exception allows businesses to

call customers with whom they have conducted a financial transaction or to whom

they have sold, rented, or leased goods or services within 18 months of the

telephone call. 47 C.F.R. § 64.1200(f)(3); Telemarketing Sales Rule, Statement

of Basis and Purpose, 68 Fed. Reg. 4580, 4591 (Jan. 29, 2003). Additionally,

sellers can call consumers on the national do-not-call registry within three months

after the consumer makes an inquiry or application. 47 C.F.R § 64.1200(f)(3). A

(continued...)

- 12 -

lists. So far, consumers have registered more than 50 million phone numbers on

the national do-not-call registry.

The national do-not-call registry’s restrictions apply only to telemarketing

calls made by or on behalf of sellers of goods or services, and not to charitable or

political fundraising calls. 16 C.F.R. §§ 310.4(b)(1)(iii)(B), 310.6(a); 47 C.F.R.

§§ 64.1200(c)(2), 64.1200(f)(9).6

 Additionally, a seller may call consumers who

have signed up for the national registry if it has an established business

relationship with the consumer or if the consumer has given that seller express

written permission to call. 16 C.F.R. § 310.4(b)(1)(iii)(B)(i-ii); 47 C.F.R.

§ 64.1200(f)(9)(i-ii).7

 Telemarketers generally have three months from the date
7

(...continued)

seller who has an established business relationship with a consumer is still bound

to comply with the company-specific rules if the consumer requests not to be

called. Id. at § 64.1200(f)(3)(i).

- 13 -

on which a consumer signs up for the registry to remove the consumer’s phone

number from their call lists. 16 C.F.R. § 310.4(b)(3)(iv); 47 C.F.R.

§ 64.1200(c)(2)(i)(D). Consumer registrations remain valid for five years, and

phone numbers that are disconnected or reassigned will be periodically removed

from the registry. 47 C.F.R § 1200(c)(2); Telemarketing Sales Rule, Statement of

Basis and Purpose, 68 Fed. Reg. 4580, 4640 (Jan. 29, 2003).

The national do-not-call registry is the product of a regulatory effort dating

back to 1991 aimed at protecting the privacy rights of consumers and curbing the

risk of telemarketing abuse. See generally FTC v. Mainstream Mktg. Servs., Inc.,

345 F.3d 850, 857-58 (10th Cir. 2003). In the Telephone Consumer Protection

Act of 1991 (“TCPA”) – under which the FCC enacted its do-not-call rules –

Congress found that for many consumers telemarketing sales calls constitute an

intrusive invasion of privacy. See Pub. L. No. 102-243, 105 Stat. 2394 at § 2

(1991). Moreover, the TCPA’s legislative history cited statistical data indicating

that “most unwanted telephone solicitations are commercial in nature” and that

“unwanted commercial calls are a far bigger problem than unsolicited calls from

political or charitable organizations.” H.R. Rep. No. 102-317 at 16 (1991). The
8

 The TCPA defines a “telephone solicitation” as a “telephone call or

message for the purpose of encouraging the purchase or rental of, or investment

in, property, goods, or services,” excluding, inter alia, calls from tax exempt

nonprofit organizations. Pub. L. No. 103-297, 108 Stat. 1545 at § 3.

- 14 -

TCPA therefore authorized the FCC to establish a national database of consumers

who object to receiving “telephone solicitations,” which the act defined as

commercial sales calls. Pub. L. No. 102-243, 105 Stat. 2394 at § 3.8 

Furthermore, in the Telemarketing and Consumer Fraud and Abuse

Prevention Act of 1994 (“Telemarketing Act”) – under which the FTC enacted its

do-not-call rules – Congress found that consumers lose an estimated $40 billion

each year due to telemarketing fraud. See Pub. L. No. 103-297, 108 Stat. 1545 at

§ 2 (1994). Therefore, Congress authorized the FTC to prohibit sales calls that a

reasonable consumer would consider coercive or abusive of his or her right to

privacy. Id. at § 3.

The FCC and FTC initially sought to accomplish the goals of the TCPA and

the Telemarketing Act by adopting company-specific do-not-call lists, requiring

sellers to maintain lists of consumers who have requested not to be called by that

particular solicitor, and requiring telemarketers to honor those requests. See

Rules and Regulations Implementing the Telephone Consumer Protection Act of

1991, Report and Order, 7 FCC Rcd. 8752 at ¶ 23-24 (Sept. 17, 1992);

Telemarketing Sales Rule, Statement of Basis and Purpose, 60 Fed. Reg. 43842,

43854-55 (Aug. 23, 1995). Yet in enacting the national do-not-call registry, the
9

 Case No. 03-1429 reaches us on appeal from the District of Colorado,

which held that the FTC’s do-not-call rules were unconstitutional on First

Amendment grounds. In that case, the district court enjoined the FTC from

implementing the do-not-call registry. We stayed that injunction, pending our

review on the merits, in FTC v. Mainstream Mktg. Servs., Inc., 345 F.3d 850

(10th Cir. 2003). Case No. 03-6258 reaches us on appeal from the Western

District of Oklahoma, which held that the FTC lacked the statutory authority to

enact its do-not-call rules. In that case, the court also approved certain unrelated

aspects of the Telemarketing Sales Rule, and the portions of its decision

addressing those issues are not before us on appeal. In cases No. 03-9571 and

No. 03-9594, we review the FCC order directly pursuant to 47 U.S.C. § 402(a)

and 28 U.S.C. § 2342.

- 15 -

agencies concluded that the company-specific lists had failed to achieve

Congress’ objectives. See Telemarketing Sales Rule, Statement of Basis and

Purpose, 68 Fed Reg. 4580, 4629, 4631 (Jan. 29, 2003); Rules and Regulations

Implementing the Telephone Consumer Protection Act (TCPA) of 1991, 68 Fed.

Reg. 44144, 44144-45 (July 25, 2003). Among other shortfalls, the agencies

explained that the large number of possible telephone solicitors made it

burdensome for consumers to assert their rights under the company-specific rules,

and that commercial telemarketers often ignored consumers’ requests not to be

called. 68 Fed. Reg. at 4629. Accordingly, the agencies decided to keep the

company-specific rules as an option available to consumers, but to supplement

them with the national do-not-call registry. Id.; 68 Fed. Reg. at 44144.

In this appeal we have consolidated four cases challenging various aspects

of the national do-not-call registry.9 Cases Nos. 03-1429, 03-6258 and 03-9571

involve First Amendment attacks on the do-not-call list and its registry fees. We
- 16 -

address these issues in parts III and IV(A) respectively. Case No. 03-9594

involves a challenge to the FCC rule’s established business relationship exception

on administrative law grounds. We address this issue in part IV(B). Finally, in

part IV(C), we address the alternative argument that the FTC lacked statutory

authority to enact its do-not-call regulations, an argument that the district court

relied upon in case No. 03-6258. We conclude that all of the telemarketers’

challenges lack merit and we uphold the do-not-call list in its entirety.

II. STANDARD OF REVIEW

The constitutionality of the national do-not-call registry and its fees under

the First Amendment are questions of law we review de novo. See Phelan v.

Laramie County Cmty. Coll. Bd. of Trs., 235 F.3d 1243, 1246 (10th Cir. 2000). 

We review whether the FCC’s decision to include an established business

relationship exception violated the Administrative Procedure Act under the

arbitrary and capricious standard. See Friends of the Bow v. Thompson, 124 F.3d

1210, 1215 (10th Cir. 1997). Finally, we review de novo a district court’s

decision that an agency lacked authority under the controlling statute to act,

keeping in mind that the courts owe deference to a federal agency’s interpretation

of a statute it administers. See Southern Utah Wilderness Alliance v. Dabney,
- 17 -

222 F.3d 819, 824 (10th Cir. 2000) (citing Chevron U.S.A., Inc. v. Natural Res.

Def. Council, Inc., 467 U.S. 837, 842-43 (1984)).

III. FIRST AMENDMENT ANALYSIS

The national do-not-call registry’s telemarketing restrictions apply only to

commercial speech. Like most commercial speech regulations, the do-not-call

rules draw a line between commercial and non-commercial speech on the basis of

content. See Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 504 n.11

(1981) (“If commercial speech is to be distinguished, it must be distinguished by

its content.”); Bates v. State Bar of Ariz., 433 U.S. 350, 363 (1977) (same). In

reviewing commercial speech regulations, we apply the Central Hudson test. 

Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557,

566 (1980); see also City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410,

416, 429-30 (1993) (noting that the challenged law drew content-based

distinctions between commercial and non-commercial speech and applying more

lenient scrutiny under Central Hudson); Florida Bar v. Went For It, Inc., 515 U.S.

618, 634-35 (1995) (“This case ... concerns pure commercial advertising, for

which we have always reserved a lesser degree of protection under the First

Amendment.”); Lanphere & Urbaniak v. Colorado, 21 F.3d 1508, 1513 (10th Cir.
- 18 -

1994) (content-based regulations disadvantaging commercial speech are reviewed

pursuant to the lesser degree of First Amendment protection provided in Central

Hudson).

Central Hudson established a three-part test governing First Amendment

challenges to regulations restricting non-misleading commercial speech that

relates to lawful activity. First, the government must assert a substantial interest

to be achieved by the regulation. Central Hudson, 447 U.S. at 564. Second, the

regulation must directly advance that governmental interest, meaning that it must

do more than provide “only ineffective or remote support for the government’s

purpose.” Id. Third, although the regulation need not be the least restrictive

measure available, it must be narrowly tailored not to restrict more speech than

necessary. See id.; Board of Trs. of the State Univ. of N.Y. v. Fox, 492 U.S. 469,

480 (1989). Together, these final two factors require that there be a reasonable fit

between the government’s objectives and the means it chooses to accomplish

those ends. United States v. Edge Broad. Co., 509 U.S. 418, 427-28 (1993).

The government bears the burden of asserting one or more substantial

governmental interests and demonstrating a reasonable fit between those interests

and the challenged regulation. Utah Licensed Beverage Ass’n v. Leavitt, 256

F.3d 1061, 1069 (10th Cir. 2001). The government is not limited in the evidence

it may use to meet its burden. For example, a commercial speech regulation may
- 19 -

be justified by anecdotes, history, consensus, or simple common sense. Went For

It, 515 U.S. at 628. Yet we may not take it upon ourselves to supplant the

interests put forward by the state with our own ideas of what goals the challenged

laws might serve. Edenfield v. Fane, 507 U.S. 761, 768 (1993).

A. Governmental Interests

The government asserts that the do-not-call regulations are justified by its

interests in 1) protecting the privacy of individuals in their homes, and 2)

protecting consumers against the risk of fraudulent and abusive solicitation. See

68 Fed. Reg. 44144; 68 Fed. Reg. at 4635. Both of these justifications are

undisputedly substantial governmental interests.

In Rowan v. United States Post Office Dep’t, the Supreme Court upheld the

right of a homeowner to restrict material that could be mailed to his or her house. 

397 U.S. 728 (1970). The Court emphasized the importance of individual

privacy, particularly in the context of the home, stating that “the ancient concept

that ‘a man’s home is his castle’ into which ‘not even the king may enter’ has lost

none of its vitality.” Id. at 737. In Frisby v. Schultz, the Court again stressed the

unique nature of the home and recognized that “the State’s interest in protecting

the well-being, tranquility, and privacy of the home is certainly of the highest
- 20 -

order in a free and civilized society.” 487 U.S. 474, 484 (1988) (quoting Carey v.

Brown, 447 U.S. 455, 471 (1980)). As the Court held in Frisby:

One important aspect of residential privacy is protection of the unwilling

listener. ... [A] special benefit of the privacy all citizens enjoy within their

own walls, which the State may legislate to protect, is an ability to avoid

intrusions. Thus, we have repeatedly held that individuals are not required

to welcome unwanted speech into their own homes and that the government

may protect this freedom.

Id. at 484-85 (citations omitted). Likewise, in Hill v. Colorado, the Court called

the unwilling listener’s interest in avoiding unwanted communication part of the

broader right to be let alone that Justice Brandeis described as “the right most

valued by civilized men.” 530 U.S. 703, 716-17 (2000) (quoting Olmstead v.

United States, 277 U.S. 438, 478 (1928) (Brandeis, J., dissenting)). The Court

added that the right to avoid unwanted speech has special force in the context of

the home. Id.; see also FCC v. Pacifica Found., 438 U.S. 726, 748 (1978) (“[I]n

the privacy of the home ... the individual’s right to be left alone plainly outweighs

the First Amendment rights of an intruder.”).

Additionally, the Supreme Court has recognized that the government has a

substantial interest in preventing abusive and coercive sales practices. Edenfield

v. Fane, 507 U.S. 761, 768-69 (1993) (“[T]he First Amendment ... does not

prohibit the State from insuring that the stream of commercial information flow[s]

cleanly as well as freely.”) (quoting Virginia State Bd. of Pharmacy v. Virginia

Citizens Consumer Council, Inc., 425 U.S. 748, 771-72 (1976)).
- 21 -

B. Reasonable Fit

A reasonable fit exists between the do-not-call rules and the government’s

privacy and consumer protection interests if the regulation directly advances those

interests and is narrowly tailored. See Central Hudson, 447 U.S. at 564-65. In

this context, the “narrowly tailored” standard does not require that the

government’s response to protect substantial interests be the least restrictive

measure available. All that is required is a proportional response. Board of Trs.

of State Univ. of N.Y. v. Fox, 492 U.S. 469, 480 (1989).

In other words, the national do-not-call registry is valid if it is designed to

provide effective support for the government’s purposes and if the government

did not suppress an excessive amount of speech when substantially narrower

restrictions would have worked just as well. See Central Hudson, 447 U.S. at

564-65. These criteria are plainly established in this case. The do-not-call

registry directly advances the government’s interests by effectively blocking a

significant number of the calls that cause the problems the government sought to

redress. It is narrowly tailored because its opt-in character ensures that it does

not inhibit any speech directed at the home of a willing listener.
- 22 -

1. Effectiveness

The telemarketers assert that the do-not-call registry is unconstitutionally

underinclusive because it does not apply to charitable and political callers. First

Amendment challenges based on underinclusiveness face an uphill battle in the

commercial speech context. As a general rule, the First Amendment does not

require that the government regulate all aspects of a problem before it can make

progress on any front. United States v. Edge Broad. Co., 509 U.S. 418, 434

(1993). “Within the bounds of the general protection provided by the

Constitution to commercial speech, we allow room for legislative judgments.” Id.

The underinclusiveness of a commercial speech regulation is relevant only if it

renders the regulatory framework so irrational that it fails materially to advance

the aims that it was purportedly designed to further. See Rubin v. Coors Brewing

Co., 514 U.S. 476, 489 (1995); see also Central Hudson, 447 U.S. at 564 (“If a

regulation “provides only ineffective or remote support for the government’s

purpose” it cannot be said to bear a reasonable fit with that purported objective). 

Cf. City of Ladue v. Gilleo, 512 U.S. 43, 51 (1994) (underinclusiveness provides

a basis for a First Amendment claim when it constitutes an “attempt to give one

side of a debatable public question an advantage in expressing its views to the

people”).
- 23 -

In Rubin, for example, the Supreme Court struck down a law prohibiting

brewers from putting the alcohol content of their product on beer labels,

purportedly in an effort to discourage “strength wars.” 514 U.S. at 478. 

However, the law allowed advertisements disclosing the alcohol content of beers,

allowed sellers of wines and spirits to disclose alcohol content on labels (and

even required such disclosure for certain wines), and allowed brewers to signal

high alcohol content by using the term “malt liquor.” Id. at 488-89. Under these

circumstances, the Court concluded that there was little chance that the beer label

rule would materially deter strength wars in light of the “irrationality of this

unique and puzzling regulatory framework.” Id. at 489.

Likewise, in City of Cincinnati v. Discovery Network, the Court struck

down a law prohibiting commercial newsracks on public property, purportedly in

order to promote the safety and attractive appearance of its streets and sidewalks. 

507 U.S. 410, 412 (1993). However, the ban applied to only 62 of the 1,500 to

2,000 newsracks in the city, thus addressing only a “minute” and “paltry” share of

the problem. Id. at 417-18. Moreover, the challenged ordinance was not enacted

in an effort to address problems posed by newsracks, but was actually an

“outdated prohibition against the distribution of any commercial handbills on

public property ... enacted long before any concern about newsracks developed.” 
10 In the North Carolina counties Edge served, its broadcasts accounted for

about 11 percent of all radio listening. Edge Broad., 509 U.S. at 431-32.

- 24 -

Id. For these reasons, the Court held in part II of that opinion that “the city did

not establish the reasonable fit we require.” Id. at 417-18.

Yet so long as a commercial speech regulation materially furthers its

objectives, underinclusiveness is not fatal under Central Hudson. For example, in

Edge Broadcasting the Supreme Court approved a regulation that prohibited

broadcasters in North Carolina (which did not permit lotteries) from broadcasting

lottery advertisements on the radio, even as applied to a broadcaster located near

the border of Virginia (where lotteries were legal) whose audience consisted of

92.2 percent Virginians. 509 U.S. 418, 423-24, 431-33 (1993). The Court found

it determinative that the regulation prevented lottery ads from reaching about

127,000 North Carolina residents (7.8 percent of Edge’s listeners):10

It could hardly be denied ... that these facts, standing alone, would clearly

show that applying the statutory restriction to Edge would directly serve the

statutory purpose of supporting North Carolina’s antigambling policy....

[T]his result could hardly be called either “ineffective,” “remote,” or

“conditional.” Nor could it be called only “limited incremental support”

for the Government interest.

Id. at 432 (citations omitted). The Court rejected Edge’s argument that the

regulations banning lottery advertising by in-state radio failed materially to

advance the government’s interests because North Carolina residents were already

inundated with lottery advertising from other sources, such as Virginia radio and
- 25 -

television programs. Id. at 434-35. “[T]he Government may be said to advance

its purpose by substantially reducing lottery advertising, even where it is not

wholly eradicated.” Id. at 434; see also Metromedia, Inc. v. City of San Diego,

453 U.S. 490, 511 (1981) (“[P]rohibition of offsite advertising is directly related

to the stated objectives of traffic safety and esthetics. This is not altered by the

fact that the ordinance is underinclusive because it permits onsite advertising.”).

As discussed above, the national do-not-call registry is designed to reduce

intrusions into personal privacy and the risk of telemarketing fraud and abuse that

accompany unwanted telephone solicitation. The registry directly advances those

goals. So far, more than 50 million telephone numbers have been registered on

the do-not-call list, and the do-not-call regulations protect these households from

receiving most unwanted telemarketing calls. According to the telemarketers’

own estimate, 2.64 telemarketing calls per week – or more than 137 calls annually

– were directed at an average consumer before the do-not-call list came into

effect. Cf. 68 Fed. Reg. at 44152 (discussing the five-fold increase in the total

number of telemarketing calls between 1991 and 2003). Accordingly, absent the

do-not-call registry, telemarketers would call those consumers who have already

signed up for the registry an estimated total of 6.85 billion times each year. 

To be sure, the do-not-call list will not block all of these calls. 

Nevertheless, it will prohibit a substantial number of them, making it difficult to
11 It is unclear from the record exactly how many telemarketing calls will

be blocked by the do-not-call regulations. Most significantly, we have not been

provided with data as to how many of these unsolicited sales calls would be

permissible under the established business relationship exception. In applying

Central Hudson, however, we are entitled to rely on anecdotal evidence and make

the common sense observation that the do-not-call list will apply to a substantial

number of telemarketing calls. See Went For It, 515 U.S. at 628; cf. 68 Fed. Reg.

at 44153-54 (suggesting that the volume of calls exempted under the established

business relationship exception most likely will be relatively low compared to the

volume of calls subject to the do-not-call restrictions); 68 Fed. Reg. at 4631

(noting that telemarketers expect to lay off up to half of their employees in

response to the do-not-call regulations).

- 26 -

fathom how the registry could be called an “ineffective” means of stopping

invasive or abusive calls, or a regulation that “furnish[es] only speculative or

marginal support” for the government’s interests. See also id. (noting the

effectiveness of state do-not-call lists in reducing unwanted telemarketing calls).11

Furthermore, the do-not-call list prohibits not only a significant number of

commercial sales calls, but also a significant percentage of all calls causing the

problems that Congress sought to address (whether commercial, charitable or

political). The record demonstrates that a substantial share of all solicitation calls

will be governed by the do-not-call rules. See H.R. Rep. No. 102-317, at 16

(1991) (“[M]ost unwanted telephone solicitations are commercial in nature.”); 68

Fed. Reg. at 44153-54 (the high volume and unexpected nature of commercial

calls subject to the national do-not-call registry makes those calls more

problematic than nonprofit calls and solicitations based on established business

relationships).
- 27 -

The telemarketers asserted before the FTC that they might have to lay off

up to 50 percent of their employees if the national do-not-call registry came into

effect. See 68 Fed. Reg. at 4631. It is reasonable to conclude that the

telemarketers’ planned reduction in force corresponds to a decrease in the amount

of calls they will make. Significantly, the percentage of unwanted calls that will

be prohibited will be even higher than the percentage of all unsolicited calls

blocked by the list. The individuals on the do-not-call list have declared that they

do not wish to receive unsolicited commercial telemarketing calls, whereas those

who do want to continue receiving such calls will not register. Cf. 68 Fed. Reg.

at 4632 (under the national do-not-call regulations, “telemarketers would reduce

time spent calling consumers who do not want to receive telemarketing calls and

would be able to focus their calls only on those who do not object”).

Finally, the type of unsolicited calls that the do-not-call list does prohibit –

commercial sales calls – is the type that Congress, the FTC and the FCC have all

determined to be most to blame for the problems the government is seeking to

redress. According to the legislative history accompanying the TCPA,

“[c]omplaint statistics show that unwanted commercial calls are a far bigger

problem than unsolicited calls from political or charitable organizations.” H.R.

Rep. No. 102-317, at 16 (1991) (noting that non-commercial calls were less

intrusive to consumers’ privacy because they are more expected and because there
- 28 -

is a lower volume of such calls); see also 68 Fed. Reg. at 44153. Similarly, the

FCC determined that calls from solicitors with an established business

relationship with the recipient are less problematic than other commercial calls. 

68 Fed. Reg. at 44154 (“Consumers are more likely to anticipate contacts from

companies with whom they have an existing relationship and the volume of such

calls will most likely be lower.”).

Additionally, the FTC has found that commercial callers are more likely

than non-commercial callers to engage in deceptive and abusive practices. 68

Fed. Reg. at 4637 (“When a pure commercial transaction is at stake, callers have

an incentive to engage in all the things that telemarketers are hated for. But noncommercial speech is a different matter.”). Specifically, the FTC concluded that

in charitable and political calls, a significant purpose of the call is to sell a cause,

not merely to receive a donation, and that non-commercial callers thus have

stronger incentives not to alienate the people they call or to engage in abusive and

deceptive practices. Id.; cf. Village of Schaumburg v. Citizens for a Better Env’t,

444 U.S. 620, 632 (1980) (“[B]ecause charitable solicitation does more than

inform private economic decisions and is not primarily concerned with providing

information about the characteristics and costs of goods and services, it is not

dealt with as a variety of purely commercial speech.”). The speech regulated by

the do-not-call list is therefore the speech most likely to cause the problems the
- 29 -

government sought to alleviate in enacting that list, further demonstrating that the

regulation directly advances the government’s interests.

In sum, the do-not-call list directly advances the government’s interests –

reducing intrusions upon consumer privacy and the risk of fraud or abuse – by

restricting a substantial number (and also a substantial percentage) of the calls

that cause these problems. Unlike the regulations struck down in Rubin and

Discovery Network, the do-not-call list is not so underinclusive that it fails

materially to advance the government’s goals.

2. Narrow Tailoring

Although the least restrictive means test is not the test to be used in the

commercial speech context, commercial speech regulations do at least have to be

“narrowly tailored” and provide a “reasonable fit” between the problem and the

solution. Whether or not there are “numerous and obvious less-burdensome

alternatives” is a relevant consideration in our narrow tailoring analysis. Went

For It, 515 U.S. at 632. A law is narrowly tailored if it “promotes a substantial

government interest that would be achieved less effectively absent the

regulation.” Ward v. Rock Against Racism, 491 U.S. 781, 799 (1989). 

Accordingly, we consider whether there are numerous and obvious alternatives

that would restrict less speech and would serve the government’s interest as
- 30 -

effectively as the challenged law. See Central Hudson, 447 U.S. at 565; Edge

Broad., 509 U.S. at 430.

We hold that the national do-not-call registry is narrowly tailored because it

does not over-regulate protected speech; rather, it restricts only calls that are

targeted at unwilling recipients. Cf. Frisby v. Schultz, 487 U.S. 474, 485 (1988)

(“There simply is no right to force speech into the home of an unwilling

listener.”); Rowan v. United States Post Office Dep’t, 397 U.S. 728, 738 (1970)

(“We therefore categorically reject the argument that a vendor has a right under

the Constitution or otherwise to send unwanted material into the home of

another.”). The do-not-call registry prohibits only telemarketing calls aimed at

consumers who have affirmatively indicated that they do not want to receive such

calls and for whom such calls would constitute an invasion of privacy. See Hill v.

Colorado, 530 U.S. 703, 716-17 (2000) (the right of privacy includes an unwilling

listener’s interest in avoiding unwanted communication).

The Supreme Court has repeatedly held that speech restrictions based on

private choice (i.e. – an opt-in feature) are less restrictive than laws that prohibit

speech directly. In Rowan, for example, the Court approved a law under which an

individual could require a mailer to stop all future mailings if he or she received

advertisements that he or she believed to be erotically arousing or sexually

provocative. 397 U.S. at 729-30, 738. Although it was the government that
12 The Court in Martin suggested that one kind of regulation of home

solicitation that would pass constitutional muster would be a regulation “which

would make it an offense for any person to ring the bell of a householder who has

appropriately indicated that he is unwilling to be disturbed.” 319 U.S. at 148.

- 31 -

empowered individuals to avoid materials they considered provocative, the Court

emphasized that the mailer’s right to communicate was circumscribed only by an

affirmative act of a householder. Id. at 738. “Congress has erected a wall – or

more accurately permits a citizen to erect a wall – that no advertiser may

penetrate without his acquiescence. ... The asserted right of a mailer, we repeat,

stops at the outer boundary of every person’s domain.” Id.

Likewise, in rejecting direct prohibitions of speech (even fully protected

speech), the Supreme Court has often reasoned that an opt-in regulation would

have been a less restrictive alternative. In Martin v. City of Struthers, the Court

struck down a city ordinance prohibiting door-to-door canvassing, noting that the

government’s interest could have been achieved in a less restrictive manner by

giving householders the choice of whether or not to receive visitors. 319 U.S.

141, 147-49 (1943) (“[T]he decision as to whether distributers of literature may

lawfully call at a home ... belongs ... with the homeowner himself. A city can

punish those who call at a home in defiance of the previously expressed will of

the occupant.”).12 More recently, in Watchtower Bible & Tract Soc’y of N.Y.,

Inc. v. Village of Stratton, the Court struck down a permit requirement for doorto-door advocacy, while noting that another section of the ordinance allowing
- 32 -

residents to post “No Solicitation” signs provided ample protection for the

unwilling listener. 536 U.S. 150, 153, 168-69 (2002); see also Village of

Schaumburg v. Citizens for a Better Env’t, 444 U.S. 620, 639 (1980) (“[T]he

provision permitting homeowners to bar solicitors from their property by posting

signs reading ‘No Solicitors or Peddlers Invited’ suggests the availability of less

intrusive and more effective measures to protect privacy.”) (citations omitted). 

The idea that an opt-in regulation is less restrictive than a direct prohibition

of speech applies not only to traditional door-to-door solicitation, but also to

regulations seeking to protect the privacy of the home from unwanted intrusions

via telephone, television, or the Internet. See United States v. Playboy Entm’t

Group, Inc., 529 U.S. 803, 815 (2000) (opt-in targeted blocking of offensive

television programming “enables the Government to support parental authority

without affecting the First Amendment interests of speakers and willing

listeners.... Simply put, targeted blocking is less restrictive than banning....”); cf.

Reno v. ACLU, 521 U.S. 844, 860, 879 (1997) (striking down an absolute

prohibition against making certain sexually explicit material available to minors

on the Internet on the grounds that it curtailed the speech of adults, contrasting

that regulation with the alternative of facilitating parental control of such

material).
- 33 -

Like the do-not-mail regulation approved in Rowan, the national do-notcall registry does not itself prohibit any speech. Instead, it merely “permits a

citizen to erect a wall ... that no advertiser may penetrate without his

acquiescence.” See Rowan, 397 U.S. at 738. Almost by definition, the do-notcall regulations only block calls that would constitute unwanted intrusions into

the privacy of consumers who have signed up for the list. Moreover, it allows

consumers who feel susceptible to telephone fraud or abuse to ensure that most

commercial callers will not have an opportunity to victimize them. Under the

circumstances we address in this case, we conclude that the do-not-call registry’s

opt-in feature renders it a narrowly tailored commercial speech regulation. 

The do-not-call registry’s narrow tailoring is further demonstrated by the

fact that it presents both sellers and consumers with a number of options to make

and receive sales offers. From the seller’s perspective, the do-not-call registry

restricts only one avenue by which solicitors can communicate with consumers

who have registered for the list. In particular, the do-not-call regulations do not

prevent businesses from corresponding with potential customers by mail or by

means of advertising through other media. Cf. Florida Bar v. Went For It, Inc.,

515 U.S. 618, 633-34 (1995) (holding a 30-day post-accident ban on attorney

solicitations narrowly tailored, finding it relevant that ample alternative channels

for advertising legal services were available). 
- 34 -

From the consumer’s perspective, the do-not-call rules provide a number of

different options allowing consumers to dictate what telemarketing calls they wish

to receive and what calls they wish to avoid. Consumers who would like to

receive some commercial sales calls but not others can sign up for the national

do-not-call registry but give written permission to call to those businesses from

whom they wish to receive offers. See 16 C.F.R. § 310.4(b)(1)(iii)(B)(i); 47

C.F.R. § 64.1200(f)(9)(i). Alternatively, they may decline to sign up on the

national registry but make company-specific do-not-call requests with those

particular businesses from whom they do not wish to receive calls. See 16 C.F.R.

§ 310.4(b)(1)(iii)(A); 47 C.F.R. § 64.1200(d)(3). Therefore, under the current

regulations, consumers choose between two default rules – either that

telemarketers may call or that they may not. Then, consumers may make

company-specific modifications to either of these default rules as they see fit,

either granting particular sellers permission to call or blocking calls from certain

sellers.

Finally, none of the telemarketers’ proposed alternatives would serve the

government’s interests as effectively as the national do-not-call list. Primarily,

the telemarketers suggest that company-specific rules effectively protected

consumers. Yet as the FTC found, “[t]he record in this matter overwhelmingly

shows the contrary ... it shows that the company-specific approach is seriously
- 35 -

inadequate to protect consumers’ privacy from an abusive pattern of calls placed

by a seller or telemarketer.” 68 Fed. Reg. at 4631. 

First, the company-specific approach proved to be extremely burdensome to

consumers, who had to repeat their do-not-call requests to every solicitor who

called. Id. at 4629. In effect, this system gave solicitors one free chance to call

each consumer, although many consumers find even an initial unsolicited sales

call abusive and invasive of privacy. Id. at 4629-30; cf. FCC v. Pacifica Found.,

438 U.S. 726, 748-49 (1978) (“To say that one may avoid further offense by

turning off the radio when he hears indecent language is like saying that the

remedy for an assault is to run away after the first blow. One may hang up on an

indecent phone call, but that option does not ... avoid a harm that has already

taken place.”). Second, the government’s experience under the company-specific

rules demonstrated that commercial solicitors often ignored consumers’ requests

to be placed on their company-specific lists. 68 Fed. Reg. at 4629. Third,

consumers have no way to verify whether their numbers have been removed from

a solicitor’s calling list in response to a company-specific do-not-call request. Id.

Finally, company-specific rules are difficult to enforce because they require

consumers to bear the evidentiary burden of keeping lists detailing which

telemarketers have called them and what do-not-call requests they have made. Id.
- 36 -

The telemarketers’ objection that the company-specific approach should

have been more vigorously marketed to consumers is unavailing because the flaws

the FTC identified are inherent in the company-specific rule. More consumer

education simply could not have cured the ineffectiveness of the former system. 

Similarly, even if we were to agree with the telemarketers’ argument that

violations of the company-specific list were not adequately enforced, the national

do-not-call program improves upon failures of the company-specific approach that

were not caused by any lack of enforcement. Unlike the national registry, the

company-specific approach gave a vast number of potential solicitors one shot at

each unwilling consumer and was significantly more difficult for consumers to

use. Moreover, the national do-not-call registry will be easier to enforce than the

company-specific rules because there will generally be no dispute as to whether a

certain telemarketer is prohibited from calling a particular number.

Finally, the telemarketers argue that it would have been less restrictive to

let consumers rely on technological alternatives – such as caller ID, call rejection

services, and electronic devices designed to block unwanted calls. Each of these

alternatives puts the cost of avoiding unwanted telemarketing calls on consumers. 

Furthermore, as the FCC found, “[a]lthough technology has improved to assist

consumers in blocking unwanted calls, it has also evolved in such a way as to

assist telemarketers in making greater numbers of calls and even circumventing
- 37 -

such blocking technologies.” 68 Fed. Reg. at 44147. Forcing consumers to

compete in a technological arms race with the telemarketing industry is not an

equally effective alternative to the do-not-call registry.

In sum, the do-not-call registry is narrowly tailored to restrict only speech

that contributes to the problems the government seeks to redress, namely the

intrusion into personal privacy and the risk of fraud and abuse caused by

telephone calls that consumers do not welcome into their homes. No calls are

restricted unless the recipient has affirmatively declared that he or she does not

wish to receive them. Moreover, telemarketers still have the ability to contact

consumers in other ways, and consumers have a number of different options in

determining what telemarketing calls they will receive. Finally, there are not

numerous and obvious less-burdensome alternatives that would restrict less

speech while accomplishing the government’s objectives equally as well.

C. Discovery Network

As should be clear from the foregoing discussion, the telemarketers’

reliance on Discovery Network is misplaced. In Discovery Network, the Supreme

Court applied Central Hudson to strike down a municipal policy directly

prohibiting freestanding commercial newsracks on public property. 507 U.S. at

412, 416. It concluded that the regulation – which did not similarly restrict non-
- 38 -

commercial newsracks – did not bear a reasonable fit to the city’s interests in

promoting safety and the attractive appearance of the city’s public areas. Id. at

412, 417. In particular, the Court emphasized that 1) the regulation applied to

only a “minute” and “paltry” share of the total number of newsracks in the city,

id. at 418, and 2) the regulation’s distinction between commercial and noncommercial speech bore “no relationship whatsoever to the particular interests

that the city has asserted.” Id. at 424 (emphasis in original). 

The trifling number of newsracks regulated in Discovery Network

suggested that the policy did not materially advance the city’s interests, and this

aspect of the regulation was not justified by evidence demonstrating that despite

their small numbers the commercial newsracks disproportionately caused the

problems the city sought to remedy. The Court held, in essence, that a regulation

that has only a minimal impact on the identified problem cannot be saved simply

because it targets only commercial speech, which occupies a lower place in our

First Amendment jurisprudence. The Court concluded that the “low value” of

commercial speech was “an insufficient justification for the discrimination

against respondents’ use of newsracks that are no more harmful than the permitted

newsracks, and have only a minimal impact on the overall number of newsracks

on the city’s sidewalks.” Id. at 418 (emphasis added). Under a straight-forward
- 39 -

application of Central Hudson, the Court struck down the city’s newsrack

ordinance because it failed directly to advance the city’s interests.

Both of the factors the Court emphasized in Discovery Network are absent

in our case. First, while the regulation in Discovery Network applied only to a

minute and paltry number of newsracks, the do-not-call registry blocks a

substantial amount of unwanted telemarketing calls. See supra part III(B)(1). 

Second, while the distinction between commercial and non-commercial speech in

Discovery Network bore no relationship whatsoever to the city’s asserted

interests, the do-not-call registry’s commercial/non-commercial distinction was

based on findings that commercial telephone solicitation was significantly more

problematic than charitable or political fundraising calls. Id.; see also FTC v.

Mainstream Mktg Servs., Inc., 345 F.3d 850, 856-60 (10th Cir. 2003).

Additionally, the government had evidence that other alternatives (companyspecific restrictions) failed in the commercial context, but had no comparable

experience involving the failure of company-specific restrictions with respect to

charitable or political callers. See supra part III(B)(2); 68 Fed. Reg. at 4637.

D. Summary

For the reasons discussed above, the government has asserted substantial

interests to be served by the do-not-call registry (privacy and consumer
13 Our conclusion is consistent with other circuits’ decisions approving

similar telecommunications regulations. See Missouri v. American Blast Fax,

Inc., 323 F.3d 649 (8th Cir. 2003) (upholding TCPA regulation prohibiting

unsolicited commercial fax advertising); Destination Ventures, Ltd., v. FCC, 46

F.3d 54 (9th Cir. 1995) (same); Moser v. FCC, 46 F.3d 970, 972-75 (9th Cir.

1995) (upholding ban on prerecorded commercial telemarketing).

14 The telemarketers’ challenge to the do-not-call registry fees was raised

below in case No. 03-1429, although the district court did not reach this issue. 

(continued...)

- 40 -

protection), the do-not-call registry will directly advance those interests by

banning a substantial amount of unwanted telemarketing calls, and the regulation

is narrowly tailored because its opt-in feature ensures that it does not restrict any

speech directed at a willing listener. In other words, the do-not-call registry bears

a reasonable fit with the purposes the government sought to advance. Therefore,

it is consistent with the limits the First Amendment imposes on laws restricting

commercial speech.13

IV. OTHER ISSUES

The telemarketers also challenge various other aspects of the do-not-call

registry. In turn, we consider 1) whether the fees telemarketers must pay to

access the registry are constitutional, 2) whether it was arbitrary and capricious

for the FCC to approve the established business relationship exception, and 3)

whether the FTC had statutory authority to enact its do-not-call rules.14
14(...continued)

The challenge to the FCC’s established business relationship exception has been

raised only in case No. 03-9594, in which we review the FCC action directly. The

telemarketers’ challenge to the FTC’s statutory authority to enact its do-not-call

regulations was raised below in case Nos. 03-1429 and 03-6258. In case No. 03-

1429, the district court declined to reach this issue; in case No. 03-6258, the

district court held that the FTC lacked statutory authority.

- 41 -

A. The Do-Not-Call Registry Fees

To obtain the phone numbers of consumers who have signed up for the

national do-not-call registry, telemarketers must pay a modest annual access fee

determined by the FTC. Currently, the fee is $25 per area code of data, except

that the first five area codes are provided free of charge and the maximum annual

fee is capped at $7,375. 16 C.F.R. § 310.8(c). The telemarketers argue that this

fee unconstitutionally imposes a revenue tax on protected speech. We disagree.

It is well-established that the First Amendment protects against the

imposition of charges, such as a license taxes, for the enjoyment of free speech

rights. Murdock v. Pennsylvania, 319 U.S. 105, 113-14 (1943). Nevertheless, the

government is permitted to exact a fee in order to defray the cost of legitimate

regulations, even though such a fee incidentally burdens speech. See id. at 114

n.8. In Murdock, for example, the Court struck down an ordinance that required

Jehovah’s Witnesses to pay licensing fees in order to distribute religious materials

door-to-door, explaining that the regulation was “not a nominal fee imposed as a

regulatory measure to defray the expenses of policing the activities in question.” 
- 42 -

Id. at 106, 113-14. The Court employed the same reasoning in Cox v. New

Hampshire, upholding license fees of up to $300 to take part in a parade or

procession because the fee was held “to be not a revenue tax, but one to meet the

expense incident to the administration of the act and to the maintenance of public

order in the matter licensed.” 312 U.S. 569, 570-71, 576-77 (1941).

Accordingly, we recently approved the Utah Charitable Solicitations Act –

which requires charitable fundraisers to register with the state and pay $250 for a

permit – because that fee offsets increased regulatory costs associated with the

act. American Target Adver., Inc. v. Giani, 199 F.3d 1241, 1246, 1248-49 (10th

Cir. 2000). We held that “a regulatory fee may be constitutional only if it serves

a ‘legitimate state interest’” and that defraying the costs of a regulation aimed at

protecting citizens from fraud is legitimate. Id. at 1248-49. Such fees may be

imposed to defray both administrative expenses (such as processing and licensing

costs) and the cost of enforcing the regulations. National Awareness Found. v.

Abrams, 50 F.3d 1159, 1166 (2d Cir. 1995) (“[E]nforcement power is necessary

to ensure that the purposes of [the regulations] are served.”).

The Do-Not-Call Implementation Act authorized the FTC to collect fees for

fiscal years 2003 to 2007, requiring that “[s]uch amounts shall be available for

expenditure only to offset the costs of activities and services related to the

implementation and enforcement of the Telemarketing Sales Rule, and other
- 43 -

activities resulting from such implementation and enforcement.” Pub. L No. 108-

10, 117 Stat. 557 at § 2 (2003). In enacting the fees regulation, the FTC stated it

was authorized only “to assess fees sufficient to cover the costs of implementing

and enforcing the do-not-call provisions of the Amended TSR.” Telemarketing

Sales Rule Fees, 68 Fed. Reg. 45134, 45141 (July 31, 2003). The FTC estimated

the costs of implementing and enforcing the national do-not-call registry at $18.1

million for fiscal year 2003. Id.

The record conclusively demonstrates that the do-not-call registry fees are

to be used only to pay for expenses incident to the administration of the do-notcall registry, as required by Murdock and Giani. The FTC explained that the costs

of the do-not-call registry fall into three major categories. First are the actual

costs of developing and operating the national registry, such as the costs of

handling consumer registration and complaints, transferring information from

state lists to the registry, ensuring telemarketer access to the registry, and

managing law enforcement access to appropriate information. Id. Second are the

costs of enforcement efforts, such as domestic and international law enforcement

initiatives to identify and challenge alleged violators, and consumer and business

education efforts. Id. Third are the increased costs of agency infrastructure and

administration, including changes in information technology structural support

necessary to handle anticipated increases in consumer complaints and requests
15 First, the FTC estimated that about 10,000 telemarketing firms would

seek access to the list, and that the average telemarketer would pay to obtain

about 73 area codes of data. 68 Fed. Reg. at 45141. Under those estimates, the

expenses incident to the list would amount to about $25 per area code provided,

excluding those that would be provided free of charge. Recognizing that its fee

schedule is based on estimated figures, the FTC also emphasized that these fees

would need to be reexamined periodically and adjusted to reflect the FTC’s actual

experience in operating the registry. Id. at 45141-42.

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from law enforcement agencies for access to such complaints. Id. The FTC

decided upon the $25 per area code fee in order to ensure that it would collect the

amount necessary to defray these costs.15

Therefore, we hold that the registry fees are a permissible regulatory

measure designed to offset projected expenses incident to the administration and

enforcement of the national do-not-call list, not an unconstitutional revenue tax.

B. The Established Business Relationship Exception

The telemarketers next argue that the FCC’s established business

relationship exception is arbitrary and capricious in violation of the

Administrative Procedure Act. See 5 U.S.C. § 706. In particular, they contend

that the FCC failed to give appropriate consideration to the anti-competitive

effect that this exception may have on telecommunications markets. We conclude

that the FCC did in fact address this concern, and that the FCC’s exception for

established business relationships is not arbitrary and capricious under the APA.
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The arbitrary and capricious standard of review is a narrow one, and we are

not empowered to substitute our own judgment for that of the administrative

agency. City of Albuquerque v. Browner, 97 F.3d 415, 424 (10th Cir. 1996). 

“Generally, an agency decision will be considered arbitrary and capricious if ‘the

agency had relied on factors which Congress had not intended it to consider,

entirely failed to consider an important aspect of the problem, offered an

explanation for its decision that runs counter to the evidence before the agency, or

is so implausible that it could not be ascribed to a difference in view or the

product of agency expertise.’” Friends of the Bow v. Thompson, 124 F.3d 1210,

1215 (10th Cir. 1997) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut.

Auto Ins. Co., 463 U.S. 29, 43 (1983)).

 The Telecommunications Act of 1996, 47 U.S.C. § 251 et. seq., required

local telephone monopolies to make their facilities and services available to

competitors for negotiated or arbitrated prices, and directed the FCC to establish

regulations to advance local competition. The FCC enacted its do-not-call rules

under different statutory authority, the TCPA, which specifically authorized the

FCC to establish a national database of residential telephone subscribers who

object to receiving telephone solicitations. See 47 U.S.C. § 227(c)(3). 

When an agency is charged to enforce overlapping and at times inconsistent

policies, it cannot act single-mindedly in furtherance of one of those policies
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while wholly ignoring the other. Southern S.S. Co. v. NLRB, 316 U.S. 31, 46-47

(1942); McLean Trucking Co. v. United States, 321 U.S. 67, 80 (1944).

The FCC rule sufficiently addresses the telemarketers’ concerns about the

established business relationship exception. In its notice of rulemaking, the FCC

asked for comments on the anti-competitive effect this exception might have on

the telecommunications industry. See 68 Fed. Reg. at 44159. The FCC received

responses indicating that such an exception would favor incumbent telephone

service providers who would be able to market new services to their larger

customer base. Id. at 44159-60. Also, the FCC noted some respondents’

concerns that this anti-competitive effect would be particularly strong because

telephone solicitations are currently the primary mechanism for selling

telecommunications services. Id. at 44159. The FCC then considered several

proposed ways in which such an anti-competitive effect could be mitigated,

rejecting each of them. 

First, the FCC considered a proposal to narrow the established business

relationship exemption so that no telecommunications company could call its

customers to advertise different services. Id. at 44160. However, the FCC cited

comments in its administrative record emphasizing the importance of “flexibility

in communicating with ... customers not only about their current services, but also

to discuss available alternative services or products.” Id. Accordingly, the FCC
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concluded that limiting telecommunications companies’ ability to market new

goods or services to existing customers would not be in the public interest. Id.

Second, the FCC considered a proposal that the Commission revise the

definition of established business relationship so that all providers of

telecommunications services would be deemed to have such a relationship with all

consumers, even if they had not in fact had any preexisting business connections.

Id. Third, it considered an alternative proposal that the definition of established

business relationship be revised to exclude companies who have historically been

dominant or monopoly service providers, at least until such time as the new

entrants to the telecommunications industry sufficiently penetrated the market. 

Id. The FCC concluded that these proposals would not adequately fulfill

Congress’ mandate to protect residential telephone subscribers’ privacy rights to

avoid telemarketing calls to which they object: “To permit common carriers to

call consumers with whom they have no existing relationships and who have

expressed a desire not to be called by registering with the national do-not-call list,

would likely confuse consumers and interfere with their ability to manage and

monitor the telemarketing calls they receive.” Id.

The FCC then explained the factors it believed would limit the established

business relationship exception’s anti-competitive effect. First, it noted that all

providers of telecommunications services – incumbent carriers and new
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competitors alike – may contact competitors’ customers who have not signed up

for the national do-not-call registry. Id. Second, consumers who have signed up

for the do-not-call registry still have the ability to place their carrier on a

company-specific do-not-call list, thereby overriding the established business

relationship exception. Id. Finally, the FCC emphasized that telecommunications

providers are still free to use other means of marketing their products to

consumers, such as direct mailings. Id.

The FCC’s rule demonstrates that the agency did not simply ignore the

potential anti-competitive effect of the established business relationship exception

or its duties under the Telecommunications Act. Rather, the FCC analyzed the

possible effects that this exception may have on the telecommunications industry

and explained why it believed its rule would minimize any adverse consequences. 

When an agency has made a reasoned policy decision, “we are not empowered to

substitute our judgment for that of the [agency]” under the arbitrary and

capricious standard of review. Browner, 97 F.3d at 424. The FCC did not act in

an arbitrary and capricious manner in adopting the established business

relationship exception, and we decline the telemarketers’ invitation to displace the

FCC’s policy judgment.
16 In reviewing an agency’s construction of a statute it administers, we first

ask whether Congress has directly spoken to the precise question at issue. If so,

that is the end of the matter and Congress’ intent controls. If the statute is silent

or ambiguous with respect to this issue, our inquiry is limited to whether the

agency’s interpretation is a permissible construction of the statute. Chevron, 467

U.S. at 842-43. 

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C. The FTC’s Statutory Authority

In case No. 03-6258, the district court held that the FTC lacked statutory

authority to enact the do-not-call registry. In the Telemarketing Act, Congress

authorized the FTC to “prescribe rules prohibiting deceptive telemarketing acts or

practices and other abusive telemarketing acts or practices.” Pub. L. 103-297,

108 Stat. 1545 at § 3. More specifically, Congress directed the FTC to 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.” Id. The FTC’s conclusion that this

language authorized it to enact the national do-not-call registry is entitled to

deference under the familiar test outlined in Chevron, U.S.A., Inc. v. Natural

Resources Defense Council. 467 U.S. 837, 842-43 (1984).16 In light of this

deference, we conclude that the FTC did have statutory authority to promulgate

its do-not-call regulations because the agency’s view that the Telemarketing Act

authorized it to enact those rules is at least a permissible construction of that

statute.
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Moreover, even if some doubt once existed, Congress erased it through

subsequent legislation. See North Haven Bd. of Educ. v. Bell, 456 U.S. 512, 535

(1982) (“Where an agency’s statutory construction has been fully brought to the

attention of the public and the Congress, and the latter has not sought to alter that

interpretation although it has amended the statute in other respects, then

presumably the legislative intent has been correctly discerned.”); Schism v.

United States, 316 F.3d 1259, 1289 (Fed. Cir. 2002) (“Congress may ratify agency

conduct ‘giving the force of law to official action unauthorized when taken.’”)

(citing Swayne & Hoyt v. United States, 300 U.S. 297, 302 (1937)). In the DoNot-Call Implementation Act, Congress directed the FCC and FTC to maximize

consistency between their respective do-not-call rules and authorized the FTC to

collect do-not-call registry fees to offset the administrative costs of the

regulations. Pub. L. 108-10, 117 Stat. 557 at §§ 2-3. Furthermore, in response to

the district court’s decision in case No. 03-6258, Congress expressly ratified the

FTC’s do-not-call regulations. An Act to Ratify the Authority of the Federal

Trade Commission to Establish a Do-Not-Call Registry, Pub. L. 108-82, 117 Stat

1006 (2003). The FTC’s statutory authority is now unmistakably clear.
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V. CONCLUSION

We hold that 1) the do-not-call list is a valid commercial speech regulation

under Central Hudson because it directly advances substantial governmental

interests and is narrowly tailored; 2) the registry fees telemarketers must pay to

access the list are a permissible measure designed to defray the cost of legitimate

government regulation; 3) it was not arbitrary and capricious for the FCC to adopt

the established business relationship exception; and 4) the FTC has statutory

authority to establish and implement the national do-not-call registry. 

The judgments below in cases 03-1429 and 03-6258 are REVERSED with

respect to the questions presented in this appeal, and the petitions for review in

cases 03-9571 and 03-9594 are DENIED.