From a telemarketer’s perspective, Congress just reaffirmed the truth of the old adage: "No man’s life, liberty or property are safe while the Legislature is in session."1 Congress’ fiscal 2004 appropriations bill contains a provision that requires the Federal Trade Commission ("FTC") to amend the Telemarketing Sales Rule (16 C.F.R., Part 310) to require "telemarketers subject to the Telemarketing Sales Rule to obtain from the Federal Trade Commission the list of telephone numbers on the ‘do-not-call’ registry once a month."2 The FTC must amend its rule by March 23, 2004—60 days after the appropriations bill was signed into law. At the current time, telemarketers must obtain updates from the national Do-Not-Call ("DNC") list only every three months.3

The FTC adopted its quarterly update requirement, rather than the monthly update requirement it had initially proposed, because it was persuaded that the "costs of requiring monthly updating outweigh any additional benefits that might accrue to consumers from such a provision."4 Also, the FTC found that a 90-day period was consistent with most state telemarketing rules.5 .

The Federal Communications Commission ("FCC") concurred in the FTC’s selection of a quarterly update requirement.6 However, the FCC also pressed its concern that a 90-day period:

may prove to be too long to benefit some consumers. The national do-not-call list has the capability to process new registrants virtually instantaneously and telemarketers will have the capability to download the list at any time at no extra cost. The Commission intends to carefully monitor the impact of this requirement pursuant to its annual report to Congress and may consider a shorter time frame in the future.7

Pursuant to the requirements of Section 553 of the Administrative Procedure Act, the FTC must provide notice of the proposed rule change to the public and accept and consider any comments that are tendered by members of the public, including those from marketing companies. However, considering the specific direction from Congress to the FTC, the shorter period for mandatory downloading of telephone numbers on the national DNC list will certainly be adopted by the FTC. The only real issue for debate will likely be the effective date for the tighter restriction. Will the 30-day period take place immediately upon publication of the amended rule in the Federal Register; or will telemarketers be given some additional transition time?

Additionally, it is likely that the FCC will amend its telemarketing rule to require monthly updates. Clients should, therefore, begin preparations to implement this new rule as soon as late March 2004.

Caller ID Restrictions Effective as of January 29, 2004

Beginning Thursday, January 29, 2004, every person making a telemarketing call must transmit and not block Caller ID information that identifies the calling party’s telephone number and, sometimes, name.8 Specifically, the FCC requires telemarketers to transmit either Automatic Number Identification ("ANI") information or Calling Party Number ("CPN") information on each call.

ANI is the billing number of the calling party, which is transmitted from the caller’s local telephone company through the telephone network to the called party’s local telephone company. The telephone network does not permit ANI information to be blocked. ANI information is transmitted to end-user customers only when they purchase special network connections or services.9 For example, an inbound telemarketer would normally subscribe to an ANI access service in order to determine the identity of customers’ telephone numbers and to match those numbers with its customer records.

CPN is the telephone number of the calling party, which is transmitted over the telephone company signaling network, along with a "presentation indicator." That indicator informs the terminating end office switch whether to transmit the caller’s CPN to the called party. If CPN is transmitted to a caller who subscribes to Caller ID service, the caller’s CPN is revealed. On the other hand, if the presentation indicator informs the terminating end office switch not to transmit CPN (i.e., the calling party has blocked transmission of his or her CPN), the called party does not receive the telephone number of the calling party.10

Many telemarketers have either not transmitted Caller ID information (i.e., CPN) or blocked it, causing frustration for many consumers. As of January 29, 2004, these practices are unlawful and could ultimately result in the imposition of civil penalties in an amount not to exceed $11,000 for each telemarketing call where Caller ID information is not transmitted or is blocked.

Reed Smith, a leading global law firm with nearly 1,000 lawyers located in 16 U.S. and two U.K. cities, represents Fortune 100 as well as mid-market and emerging companies. Clients include technology companies and entrepreneurs, financial services firms, life sciences companies and health care providers and insurers, communications companies, manufacturers, universities, non-profit organizations, real estate developers, and municipalities throughout the United States and in 40 countries. For more information, please visit reedsmith.com.

1. In re the Estate of A.B., 1 Tucker 247, 249 (N.Y. Sur. 1866).

2. Omnibus Appropriations Act of 2004, Pub. L. 108-199, Title V (2004).

3. 16 C.F.R. §310.4(b)(3)(iv).

4. Telemarketing Sales Rule, Final Amended Rule, 68 Fed. Reg. 4580, 4647 (2003).

5. Id.

6. 47 C.F.R. §64.1200(c)(2)(i)(D). See also, Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Report & Order, 29 Com. Reg. (P&F), at ¶38 (2003).

7. Id.

8. 16 C.F.R. §310.4(a)(7) (FTC rule); 47 C.F.R. §64.1601(e) (FCC rule).

9. See generally, Harry Newton, Newton’s Telecom Dictionary, 15th Ed.,54 (1999).

10. Id., at 142.

This article is presented for informational purposes only and is not intended to constitute legal advice.