Do not call regulations (FTC)

8/7/2019 Do not call regulations (FTC)

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Friday, July 25, 2003

Part II

Federal CommunicationsCommission 47 CFR Parts 64 and 68Rules and Regulations Implementing the

Telephone Consumer Protection Act (TCPA) of 1991; Final Rule

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44144 Federal Register / Vol. 68, No. 143 / Friday, July 25, 2003 / Rules and Regulations

FEDERAL COMMUNICATIONSCOMMISSION

47 CFR Parts 64 and 68

[CG Docket No. 02278, FCC 03153]

Rules and Regulations Implementingthe Telephone Consumer ProtectionAct (TCPA) of 1991

AGENCY : Federal CommunicationsCommission.ACTION : Final rule.

SUMMARY : In this document, we revisethe current Telephone ConsumerProtection Act of 1991 (TCPA) rules,and adopt new rules to provideconsumers with several options foravoiding unwanted telephonesolicitations. These new rules establisha national do-not-call registry, set amaximum rate on the number of abandoned calls, require telemarketersto transmit caller ID information, andmodify the Commissions unsolicitedfacsimile advertising requirements.DATES : Effective August 25, 2003, exceptfor 64.1200(c)(2), which contains thenational do-not-call rules, and will

become effective on October 1, 2003; 64.1200(a)(5) and (a)(6), which containthe call abandonment rules, and will

become effective on October 1, 2003; 64.1601(e), which contains the callerID rules, and will become effective on

January 29, 2004; and 64.1200(a)(3)(i), (d)(1), (d)(3), (d)(6),(f)(3), and (g)(1), which containinformation collection requirementsunder the Paperwork Reduction Act(PRA) that have not been approved bythe Office of Management and Budget.The Commission will publish adocument in the Federal Register announcing the effective date for thesesections. Written comments by thepublic on the new and modifiedinformation collections are dueSeptember 23, 2003.ADDRESSES : In addition to filingcomments with the Office of theSecretary, a copy of comments on theinformation collection(s) containedherein should be submitted to LeslieSmith, Federal CommunicationsCommission, Room 1A804, 445 12thStreet SW., Washington, DC 20554, orvia the Internet to [email protected] FURTHER INFORMATION CONTACT : Erica H. McMahon or Richard D. Smithat 2024182512, Consumer &Governmental Affairs Bureau. Foradditional information concerning theinformation collection(s) contained inthis document, contact Les Smith at2024180217 or via the Internet [email protected].

SUPPLEMENTARY INFORMATION : This is asummary of the Commissions Reportand Order (Order) in CG Docket No. 02278, FCC 03153, adopted on June 26,2003 and released July 3, 2003. The fulltext of this document is available at theCommissions Web site ( http:// www.fcc.gov ) on the ElectronicComment Filing System and for publicinspection and copying during regular

business hours in the FCC ReferenceCenter, Room CYA257, 445 12th Street,SW., Washington, DC 20554. Thecomplete text may be purchased fromthe Commissions copy contractor,Qualex International, 445 12th Street,SW., Room CYB402, Washington, DC20554. To request materials inaccessible formats for people withdisabilities (braille, large print,electronic files, audio format), send anemail to [email protected] or call theConsumer & Governmental AffairsBureau at (202) 4180531 (voice) or

(202) 4187365 (tty).Paperwork Reduction Act: The Reportand Order contains either new and/ormodified information collections. TheCommission, as part of its continuingeffort to reduce paperwork burdens,invites the general public to commenton the information collection(s)contained in this Report and Order asrequired by the PRA. Public and agencycomments are due September 23, 2003.Synopsis

1. We revise the TCPA rules andadopt new rules to provide consumerswith several options for avoidingunwanted telephone solicitations.Specifically, we establish with theFederal Trade Commission (FTC) anational do-not-call registry forconsumers who wish to avoid unwantedtelemarketing calls. The national do-not-call registry will supplement the currentcompany-specific do-not-call rules forthose consumers who wish to continuerequesting that particular companies notcall them. To address the moreprevalent use of predictive dialers, wehave determined that a telemarketermay abandon no more than threepercent of calls answered by a person

and must deliver a prerecordedidentification message whenabandoning a call. The new rules willalso require all companies conductingtelemarketing to transmit calleridentification (caller ID) information,when available, and prohibit them from

blocking such information. TheCommission has revised its earlierdetermination that an established

business relationship constitutesexpress invitation or permission toreceive an unsolicited fax, and we haveclarified when fax broadcasters are

liable for the transmission of unlawfulfacsimile advertisements.

National Do-Not-Call List

2. Section 227. The TCPA requires theCommission to protect residentialtelephone subscribers privacy rights toavoid receiving telephone solicitationsto which they object. In so doing, 47U.S.C. 227(c)(1) directs the Commissionto compare and evaluate alternativemethods and procedures including theuse of electronic databases and otheralternatives in protecting such privacyrights. Pursuant to 47 U.S.C. 227(c)(3),the Commission may require theestablishment and operation of a singlenational database to compile a list of telephone numbers of residentialsubscribers who object to receivingtelephone solicitations, and to make thatcompiled list and parts thereof availablefor purchase. If the Commissiondetermines that adoption of a national

database is warranted, 47 U.S.C.227(c)(3) enumerates a number of specific statutory requirements thatmust be satisfied. Additionally, 47U.S.C. 227(c)(4) requires theCommission to consider the differentneeds of telemarketers operating on alocal or regional basis and small

businesses. In addition to our generalauthority over interstatecommunications, section 2(b) of theCommunications Act specificallyprovides the Commission with theauthority to apply section 227 tointrastate communications.

3. We conclude that the recordcompiled in this proceeding supportsthe establishment of a single nationaldatabase of telephone numbers of residential subscribers who object toreceiving telephone solicitations.Consistent with the mandate of Congress in the Do-Not-CallImplementation Act (Do-Not-Call Act),the national do-not-call rules that weestablish in this order maximizeconsistency with those of the FTC. Therecord clearly demonstrates widespreadconsumer dissatisfaction with theeffectiveness of the current rules and

network technologies available toprotect consumers from unwantedtelephone solicitations. Indeed, manyconsumers believe that with the adventof such technologies as predictivedialers that the vices of telemarketinghave become inherent, while its virtuesremain accidental. We have comparedand evaluated alternative methods to anational do-not-call list for protectingconsumer privacy rights and concludethat these alternatives are costly and/orineffective for both telemarketers andconsumers. See 47 U.S.C. 227(c)(1)(A).



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44145Federal Register / Vol. 68, No. 143 / Friday, July 25, 2003 / Rules and Regulations

4. A national do-not-call registry thatis supplemented by the amendmentsmade to our existing rules will provideconsumers with a variety of options formanaging telemarketing calls.Consumers may now: (1) Place theirnumber on the national do-not-call list;(2) continue to make do-not-callrequests of individual companies on acase-by-case basis; and/or (3) register onthe national list, but provide specificcompanies with express permission tocall them. Telemarketers may continueto call individuals who do not placetheir numbers on a do-not-call list andconsumers with whom they have anestablished business relationship. We

believe this result is consistent withCongress directive in the TCPA that[i]ndividuals privacy rights, publicsafety interests, and commercialfreedoms of speech and trade must be

balanced in a way that protects theprivacy of individuals and permits

legitimate telemarketing practices. SeeTCPA , Section 2(9), reprinted in 7 FCCRcd at 2744.

5. We agree with Congress thatconsistency in the underlyingregulations and administration of thenational do-not-call registry is essentialto avoid consumer confusion andregulatory uncertainty in thetelemarketing industry. In so doing, weemphasize that there will be onecentralized national do-not-call databaseof telephone numbers. The FTC has setup and will maintain the nationaldatabase, while both agencies willcoordinate enforcement efforts pursuantto a forthcoming Memorandum of Understanding. The states will also playan important role in the enforcement of the do-not-call rules. The FTC hasreceived funding approval fromCongress to begin implementation of thenational do-not-call registry. Becausethe FTC lacks jurisdiction over certainentities, including common carriers,

banks, insurance companies, andairlines, those entities would be allowedto continue calling individuals on theFTCs list absent FCC action exercisingour broad authority given by Congressover telemarketers. In addition, the

FTCs jurisdiction does not extend tointrastate activities. Action by thisCommission to adopt a national do-not-call list, as permitted by the TCPA,requires all commercial telemarketers tocomply with the national do-not-callrequirements, thereby providing morecomprehensive protections toconsumers and consistent treatment of telemarketers.National Do-Not-Call Registry

6. Pursuant to our authority under 47U.S.C. 227(c), we adopt a national do-

not-call registry that will provideresidential consumers with a one-stepoption to prohibit unwanted telephonesolicitations. This registry will bemaintained by the FTC. Consistent withthe FTC s determination, the nationalregistry will become effective onOctober 1, 2003. Subject to certainexemptions, telemarketers will beprohibited from contacting thoseconsumers that register their telephonenumbers on the national list. In reachingthis conclusion, we agree with the vastmajority of consumers in thisproceeding and the FTC that a nationaldo-not-call registry is necessary toenhance the privacy interests of thoseconsumers that do not wish to receivetelephone solicitations. In response tothe widespread consumerdissatisfaction with telemarketingpractices, Congress has recentlyaffirmed its support of a national do-not-call registry in approving funding

for the FTC s national database. See H.R. J. Res. 2, 108th Congress at 96 (2003).See also H.R. REP. NO. 108 8 at 3(2003), reprinted in 2003 U.S.C.C.A.N.688, 670 ( [i]t is the strongly held viewof the Committee that a national do-not-call list is in the best interest of consumers, businesses and consumerprotection authorities. This legislation isan important step toward a one-stopsolution to reducing telemarketingabuses. ). In so doing, Congress hasindicated that this Commission shouldadopt rules that maximizeconsistency with those of the FTC. The

record in this proceeding is replete withexamples of consumers that receivenumerous unwanted calls on a daily

basis. The increase in the number of telemarketing calls over the last decadecombined with the widespread use of such technologies as predictive dialershas encroached significantly on theprivacy rights of consumers. Forexample, the effectiveness of theprotections afforded by the company-specific do-not-call rules have beenreduced significantly by dead air andhang-up calls that result from predictivedialers. In these situations, consumershave no opportunity to invoke their do-not-call rights and the Commissioncannot pursue enforcement actions.Such intrusions have led manyconsumers to disconnect their phonesduring portions of the day or avoidanswering their telephones altogether.The adoption of a national do-call-listwill be an important tool for consumersthat wish to exercise control over theincreasing number of unwantedtelephone solicitation calls.

7. Although some industrycommenters attempt to characterize

unwanted solicitation calls as pettyannoyances and suggest that consumerspurchase certain technologies to blockunwanted calls, the evidence in thisrecord leads us to believe thecumulative effect of these disruptions inthe lives of millions of Americans eachday is significant. As a result, weconclude that adoption of a national do-not-call list is now warranted. We

believe that consumers should, at aminimum, be given the opportunity todetermine for themselves whether or notthey wish to receive telephonesolicitation calls in their homes. Thenational do-not-call list will serve as anoption for those consumers who havefound the company-specific list andother network technologies ineffective.The telephone network is the primarymeans for many consumers to remain incontact with public safety organizationsand family members during times of illness or emergency. Consumer

frustration with telemarketing practiceshas reached a point in which manyconsumers no longer answer theirtelephones while others disconnecttheir phones during some hours of theday to maintain their privacy. We agreewith consumers that incessanttelephone solicitations are especially

burdensome for the elderly, disabled,and those that work non-traditionalhours. Persons with disabilities areoften unable to register do-not-callrequests on many company-specific lists

because many telemarketers lack theequipment necessary to receive that

request. Given the record evidence,along with Congress s recent affirmativesupport for a national do-not-callregistry, we adopt a national do-not-callregistry. We are mindful of the need to

balance the privacy concerns of consumers with the interests of legitimate telemarketing practices.Therefore, we have provided for certainexemptions to the national do-not-callregistry.

8. While we agree that concernsregarding the cost, accuracy, andprivacy of a national do-not-calldatabase remain relevant, we believe

that circumstances have changedsignificantly since the Commission firstreviewed this issue over a decade agosuch that they no longer impose asubstantial obstacle to theimplementation of a national registry.As several commenters in thisproceeding note, advances in computertechnology and software now make thecompilation and maintenance of anational database a more reasonableproposition. In addition, considerableexperience has been gained through theimplementation of many state do-not-



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call lists. In 1992, it was estimated bysome commenters that the cost of establishing such a list in the first yearcould be as high as $80 million.Congress has recently reviewed andapproved the FTC s request for $18.1million to fund the national do-not-calllist. We believe that the advent of moreefficient technologies and theexperience acquired in dealing withsimilar databases at the state level isresponsible for this substantialreduction in cost.

9. Similarly, we believe thattechnology has become more proficientin ensuring the accuracy of a nationaldatabase. The FTC indicates that toguard against the possibility of including disconnected or reassignedtelephone numbers, technology will beemployed on a monthly basis to checkall registered telephone numbers againstnational databases, and remove thosenumbers that have been disconnected or

reassigned. The length of time thatregistrations remain valid also directlyaffects the accuracy of the registry astelephone numbers change hands overtime. We conclude that the retentionperiod for both the national andcompany-specific do-not-call requestswill be five years. See FTC Order , 68 FR4580 at 4640 (January 29, 2003). Ourrules previously required a company-specific do-not-call request to behonored for ten years. See 47 CFR64.1200(e)(2)(vi). Five years isconsistent with the FTC s determinationand our own record that reveals that thecurrent ten-year retention period forcompany-specific requests is too longgiven changes in telephone numbers.Consumers must also register their do-not-call requests from either thetelephone number of the phone thatthey wish to register or via the Internet.The FTC will confirm the accuracy of such registrations through the use of automatic number identification (ANI)and other technologies. The term ANI refers to the delivery of the callingparty s billing number by a localexchange carrier to any interconnectingcarrier for billing or routing purposes,and to the subsequent delivery of such

number to end users. 47 CFR 64.1600(b).We believe that a five-year registrationperiod coupled with a monthly purgingof disconnected telephone numbersadequately balances the need tomaintain accuracy in the nationalregistry with any burden imposed onconsumers to re-register periodicallytheir telephone numbers.

10. We conclude that appropriateaction has been taken to ensure theprivacy of those registering on thenational list. Specifically, the onlyconsumer information telemarketers and

sellers will receive from the nationalregistry is the registrant s telephonenumber. This is the minimum amountof information that can be provided toimplement the national registry. Wenote that the majority of telephonenumbers are publicly available throughtelephone directories. To the extent thatconsumers have an unlisted number, theconsumer will have to make a choice asto whether they prefer to register on anational do-not-call list or maintaincomplete anonymity. We reiterate,however, that the only information thatwill be provided to the telemarketer isthe telephone number of the consumer.The seller and telemarketer may bethe same entity or separate entities.Each entity on whose behalf thetelephone call is being made mustpurchase access to the do-not-calldatabase. No corresponding name oraddress information will be provided.We believe that this approach reduces

the privacy concerns of such consumersto the greatest extent possible. As anadditional safeguard, we find thatrestrictions should be imposed on theuse of the national list. Consistent withthe FTC s determination and 47 U.S.C.227(c)(3)(K), we conclude that noperson or entity may sell, rent, lease,purchase, or use the national do-not-calldatabase for any purpose exceptcompliance with section 227 and anysuch state or federal law to preventtelephone solicitations to telephonenumbers on such list. See 47 U.S.C.227(c)(3)(K). See also 16 CFR310.4(b)(2). We conclude that thesesafeguards adequately protect theprivacy rights of those consumers whochoose to register on the national do-not-call list.

11. We conclude that the nationaldatabase should allow for theregistration of wireless telephonenumbers, and that such action will

better further the objectives of the TCPAand the Do-Not-Call Act. In so doing, weagree with the FTC and severalcommenters that wireless subscribersshould not be excluded from theprotections of the TCPA, particularlythe option to register on a national do-

not-call list. Congress has indicated itsintent to provide significant protectionsunder the TCPA to wireless users. 47U.S.C. 227(b)(1)(iii). Allowing wirelesssubscribers to register on a national do-not-call list furthers the objectives of theTCPA, including protection for wirelesssubscribers from unwanted telephonesolicitations for which they are charged.

12. Nextel Communications, Inc.(Nextel) argues, however, that, becausethe TCPA only authorizes theCommission to regulate solicitations toresidential telephone subscribers,

wireless subscribers may not participatein the do-not-call list. Nextel Commentsat 19. Nextel states we should defineresidential subscribers to meantelephone service used primarily forcommunications in the subscriber sresidence. However, Nextel sapplication would result in [a]t most,the Commission [having the] authorityto regulate solicitations to wirelesssubscribers in those circumstanceswhere wireless service actually hasdisplaced a residential land line, andfunctions as a consumer s primaryresidential telephone service. NextelComments at 21.

13. Nextel s definition of residentialsubscribers is far too restrictive andinconsistent with the intent of section227. Specifically, there is nothing insection 227 to suggest that only acustomer s primary residentialtelephone service was all that Congresssought to protect through the TCPA. In

addition, had Congress intended toexclude wireless subscribers from the benefits of the TCPA, it knew how toaddress wireless services or consumersexplicitly. For example, in section227(b)(1), Congress specificallyprohibited calls using automatictelephone dialing systems or artificial orprerecorded voice to telephone numbersassigned to paging service [or] cellulartelephone service * * *. Moreover,under Nextel s definition, evenconsumers who use their wirelesstelephone service in their homes tosupplement their residential wirelineservice, such as by using their wirelesstelephone service to make long distancephone calls to avoid wireline tollcharges, would be excluded from theprotections of the TCPA. Such aninterpretation is at odds even withNextel s own reasoning for itsdefinition that the TCPA s goal is tocurb the pervasive use of telemarketingto market goods and services to thehome . Nextel Comments at 20. It iswell established that wirelesssubscribers often use their wirelessphones in the same manner in whichthey use their residential wirelinephones. Indeed, as even Nextel

recognizes, there is a growing number of consumers who no longer maintainwireline phone service, and rely only ontheir wireless telephone service. Thus,we are not persuaded by Nextel sarguments.

14. Moreover, we believe it is moreconsistent with the overall intent of theTCPA to allow wireless subscribers to

benefit from the full range of TCPAprotections. Congress afforded wirelesssubscribers particular protections in thecontext of autodialers and prerecordedcalls. 47 U.S.C. 227(b)(1)(A)(iii). In



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1 Such calls may be prohibited if they serve as apretext to an otherwise prohibited advertisement ora means of establishing a business relationship.

Moreover, responding to such a survey does notconstitute express permission or establish a

business relationship exemption for purposes of asubsequent telephone solicitation. See H.R. Rep.No. 102 317 at 13 ( [T]he Committee does notintend the term telephone solicitation to includepublic opinion polling, consumer or marketsurveys, or other survey research conducted bytelephone. A call encouraging purchase, rental, orinvestment would fall within the definition,however, even though the caller purports to betaking a poll or conducting a survey. ).

addition, although Congress expressedconcern with residential privacy, it alsowas concerned with the nuisance,expense and burden that telephonesolicitations place on consumers.Therefore, we conclude that wirelesssubscribers may participate in thenational do-not-call list. As a practicalmatter, since determining whether anyparticular wireless subscriber is aresidential subscriber may be morefact-intensive than making the samedetermination for a wireline subscriber,we will presume wireless subscriberswho ask to be put on the national do-not-call list to be residentialsubscribers. This presumption is onlyfor the purposes of section 227 and isnot in any way indicative of any attemptto classify or regulate wireless carriersfor purposes of other parts of Title II.Such a presumption, however, mayrequire a complaining wirelesssubscriber to provide further proof of

the validity of that presumption shouldwe need to take enforcement action.15. We emphasize that it is not our

intent in adopting a national do-not-calllist to prohibit legitimate telemarketingpractices. We believe that industrycommenters present a false choice

between the continued viability of thetelemarketing industry and the adoptionof a national do-not-call list. We are notpersuaded that the adoption of anational do-not-call list will undulyinterfere with the ability of telemarketers to contact consumers.Many consumers will undoubtedly takeadvantage of the opportunity to registeron the national list. Several industrycommenters suggest, however, thatconsumers derive substantial benefitsfrom telephone solicitations. If so, manysuch consumers will choose not toregister on the national do-not-call listand will opt instead to make do-not-callrequests on a case-by-case basis or giveexpress permission to be contacted byspecific companies. In addition, wehave provided for certain exemptions tothe do-not-call registry in recognition of legitimate telemarketing businesspractices. For example, sellers of goodsor services via telemarketing maycontinue to contact consumers on thenational list with whom they have anestablished business relationship. Wealso note that calls that do not fallwithin the definition of telephonesolicitation as defined in section227(a)(3) will not be precluded by thenational do-not-call list. These mayinclude surveys, market research,political or religious speech calls. 1 The

national do-not-call rules will also notprohibit calls to businesses and personswith whom the marketer has a personalrelationship. Telemarketers maycontinue to contact all of theseconsumers despite the adoption of anational do-not-call list. Furthermore,we decline to adopt more restrictive do-not-call requirements on telemarketersas suggested by several commenters. Forexample, we decline to adopt an opt-in approach that would bantelemarketing to any consumer who hasnot expressly agreed to receivetelephone solicitations. We believe thatestablishing such an approach would beoverly restrictive on the telemarketingindustry. We also decline to extend thenational do-not-call requirements to tax-exempt nonprofit organizations orentities that telemarket on behalf of nonprofit organizations.

16. We agree with the FTC that a safeharbor should be established for

telemarketers that have made a goodfaith effort to comply with the nationaldo-not-call rules. A seller ortelemarketer acting on behalf of theseller that has made a good faith effortto provide consumers with anopportunity to exercise their do-not-callrights should not be liable for violationsthat result from an error. Consistentwith the FTC, we conclude that a selleror the entity telemarketing on behalf of the seller will not be liable for violatingthe national do-not-call rules if it candemonstrate that, as part of the seller sor telemarketer s routine businesspractice: (i) It has established andimplemented written procedures tocomply with the do-not-call rules; (ii) ithas trained its personnel, and any entityassisting in its compliance, in theprocedures established pursuant to thedo-not-call rules; (iii) the seller, ortelemarketer acting on behalf of theseller, has maintained and recorded alist of telephone numbers the seller maynot contact; (iv) the seller ortelemarketer uses a process to preventtelemarketing to any telephone numberon any list established pursuant to thedo-not-call rules employing a version of the do-not-call registry obtained from

the administrator of the registry no morethan three months prior to the date anycall is made, and maintains records

documenting this process; and (v) anysubsequent call otherwise violating thedo-not-call rules is the result of error.We acknowledge that the three-monthsafe harbor period for telemarketers mayprove to be too long to benefit someconsumers. The national do-not-call listhas the capability to process newregistrants virtually instantaneously andtelemarketers will have the capability todownload the list at any time at no extracost. The Commission intends tomonitor carefully the impact of thisrequirement pursuant to its annualreport to Congress and may consider ashorter time frame in the future.

17. As required by 47 U.S.C.227(c)(1)(A), we have compared andevaluated the advantages anddisadvantages of certain alternativemethods to protect consumer privacyincluding the use of networktechnologies, special directorymarkings, and company-specific lists inadopting a national do-not-call database.The effectiveness of the company-specific approach has significantlyeroded as a result of hang-up and deadair calls from predictive dialers.Consumers in these circumstances haveno opportunity to assert their do-not-call rights. We believe that, as a stand-alone option, the company-specificapproach no longer provides consumerswith sufficient privacy protections. Wealso conclude that the availability of certain network technologies to reducetelephone solicitations is oftenineffective and costly for consumers.

Although technology has improved toassist consumers in blocking unwantedcalls, it has also evolved in such a wayas to assist telemarketers in makinggreater numbers of calls and evencircumventing such blockingtechnologies. Millions of consumerscontinue to register on state do-not-calllists despite the availability of suchtechnologies. Several commenters notethat they continue to receive unwantedcalls despite paying for technologies toreduce telephone solicitations. Severalcommenters also note that telemarketersroutinely block transmission of caller

ID. In particular, we are concerned thatthe cost of technologies such as callerID, call blocking, and other such toolsin an effort to reduce telemarketing callsfall entirely on the consumer. We

believe that reliance on a solution thatplaces the cost of reducing the numberof unwanted solicitation calls entirelyon the consumer is inconsistent withCongress intent in the TCPA. For thereasons outlined in the 1992 TCPAOrder, we also decline to adopt specialarea codes or prefixes for telemarketers.We believe this option is costly for



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telemarketers that would be required tochange their telephone numbers andadministratively burdensome toimplement. We also decline to adoptspecial directory markings of area whitepage directories because it wouldrequire telemarketers to purchase andreview thousands of local telephonedirectories, at great cost to thetelemarketers. We also note thattelemarketers often compile solicitationlists from many sources other than localtelephone directories. In addition, suchdirectories do not include unlisted orunregistered telephone numbers and areoften updated infrequently. We alsonote that the record in this proceedingprovides little support for this option.

18. We now review the otherrequirements of 47 U.S.C. 227(c)(1). Asrequired by section 227(c)(1)(B), wehave evaluated AT&T GovernmentSolutions, the entity selected by the FTCto administer the national database, and

conclude that it has the capacity toestablish and administer the nationaldatabase. Congress has reviewed andapproved funding for theimplementation of that database. We

believe that it is unnecessary to evaluateany other such entities at this time. Wehave considered whether differentmethods and procedures should applyfor local telephone solicitations andsmall businesses as required by section227(c)(1)(C). We conclude that thenational do-not-call database takes intoconsideration the costs of thoseconducting telemarketing on a local orregional basis, including many small

businesses. In particular, we note thatthe national do-not-call database willpermit access to five or fewer area codesat no cost to the seller. Pursuant tosection 227(c)(1)(D), we have consideredwhether there is a need for additionalauthority to further restrict telephonesolicitations. We conclude that no suchauthority is required at this time.Pursuant to the Do-Not-Call Act, theCommission must report to Congress onan annual basis the effectiveness of thedo-not-call registry. Should theCommission determine that additionalauthority is required over telephone

solicitations as part of that analysis; theCommission will propose specificrestrictions pursuant to that report. Asrequired by section 227(c)(1)(E), wehave developed regulations toimplement the national do-not-calldatabase in the most effective andefficient manner to protect consumerprivacy needs while balancinglegitimate telemarketing interests.

19. The FTC s decision to adopt anational do-not-call list is currentlyunder review in federal district court.Because Congress has approved funding

for the administration of the nationallist only for the FTC, this Commissionwould be forced to stay implementationof any national list should the plaintiffsprevail in one of those proceedings.Exemptions

20. Established Business Relationship. We agree with the majority of industry

commenters that an exemption to thenational do-not-call list should becreated for calls to consumers withwhom the seller has an established

business relationship. We note that 47U.S.C. 227(a)(3) excludes from thedefinition of telephone solicitation callsmade to any person with whom thecaller has an established businessrelationship. We believe the ability of sellers to contact existing customers isan important aspect of their businessplan and often provides consumers withvaluable information regarding productsor services that they may havepurchased from the company. Forexample, magazines and newspapersmay want to contact customers whosesubscriptions have or soon will expireand offer new subscriptions. Thisconclusion is consistent with that of theFTC and the majority of states that haveadopted do-not-call requirements andconsidered this issue. We revise thedefinition of an established businessrelationship so that it is limited induration to eighteen (18) months fromany purchase or transaction and three(3) months from any inquiry orapplication.

21. To the extent that some consumersoppose this exemption, we find thatonce a consumer has asked to be placedon the seller s company-specific do-not-call list, the seller may not call theconsumer again regardless of whetherthe consumer continues to do businesswith the seller. We believe thisdetermination constitutes a reasonable

balance between the interests of consumers that may object to such callswith the interests of sellers in contactingtheir customers. This conclusion is alsoconsistent with that of the FTC.

22. Prior Express Permission. Inaddition to the established business

relationship exemption, we concludethat sellers may contact consumersregistered on a national do-not-call listif they have obtained the prior expresspermission of those consumers. We notethat section 227(a)(3) excludes from thedefinition of telephone solicitation callsto any person with that person s priorexpress invitation or permission. Consistent with the FTC sdetermination, we conclude that forpurposes of the national do-not-call listsuch express permission must beevidenced only by a signed, written

agreement between the consumer andthe seller which states that theconsumer agrees to be contacted by thisseller, including the telephone numberto which the calls may be placed. Forpurposes of this exemption, the termsigned shall include an electronic ordigital form of signature, to the extentthat such form of signature is recognizedas a valid signature under applicablefederal or state contract law. Consumersregistered on the national list may wishto have the option to be contacted byparticular entities. Therefore, weconclude that sellers may obtain theexpress written agreement to call suchconsumers. The express agreement

between the parties shall remain ineffect as long as the consumer has notasked to be placed on the seller scompany-specific do-not-call list. If theconsumer subsequently requests not to

be called, the seller must cease callingthe consumer regardless of whether the

consumer continues to do business withthe seller. We also note thattelemarketers may not call consumerson the national do-not-call list torequest their written permission to becalled unless they fall within someother exemption. We believe that toallow such calls would circumvent thepurpose of this exemption. Prior expresspermission must be obtained by someother means such as direct mailing.

23. Tax-Exempt Nonprofit Organizations. We agree with thosecommenters that contend that thenational do-not-call requirementsshould not be extended to tax-exemptnonprofit organizations or calls made byindependent telemarketers on behalf of tax-exempt nonprofit organizations. Wenote that 47 U.S.C. 227(a)(3) specificallyexcludes calls made by tax-exemptnonprofit organizations from thedefinition of telephone solicitation. Inso doing, we believe Congress clearlyintended to exclude tax-exemptnonprofit organizations fromprohibitions on telephone solicitationsunder the TCPA. The legislative historyindicates that commercial callsconstitute the bulk of all telemarketingcalls. A number of commenters and the

FTC agree with Congress conclusion asit relates to a national do-not-call list.For this reason, we decline to extend thenational do-not-call requirements to tax-exempt nonprofit organizations. A fewcommenters seek clarification thatrequests for blood donations will beexempt from the national do-not-calllist. When such requests are made bytax-exempt nonprofit organizations,they will fall within the exemption fortax-exempt nonprofit organizations.

24. Others. We decline to createspecific exemptions to the national do-



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not-call requirements for entities suchas newspapers, magazines, regionaltelemarketers, or small businesses. Wefind unpersuasive arguments thatapplication of the national do-not-calldatabase adopted herein will result insevere economic consequences for theseentities. In particular, we note theexemptions adopted for calls made toconsumers with whom the seller has anestablished business relationship andthose that have provided expressagreement to be called. As noted, manyconsumers may also determine not toregister on the national database.Telemarketers may continue to contactall of these consumers. We believe theseexemptions provide telemarketers witha reasonable opportunity to conducttheir business while balancingconsumer privacy interests. Althoughwe agree that newspapers and otherentities may often provide usefulinformation and services to the public,

given our conclusion that adoption of the national do-not-call list will notunduly interfere with the ability of telemarketers to reach consumers, we donot find this to be a compelling basis toexempt these entities.

25. We find that the national do-not-call rules do not apply to calls made topersons with whom the marketer has apersonal relationship. As discussedherein, a personal relationship refersto an individual personally known tothe telemarketer making the call. Insuch cases, we believe that calls tofamily members, friends and

acquaintances of the caller will be bothexpected by the recipient and limited innumber. In determining whether atelemarketer is considered a friend oracquaintance of a consumer, we willlook at, among other things, whether areasonable consumer would expect callsfrom such a person because they havea close or, at least, firsthandrelationship. If a complaining consumerwere to indicate that a relationship isnot sufficiently personal for theconsumer to have expected a call fromthe marketer, we would be much lesslikely to find that the personal

relationship exemption is applicable.While we do not adopt a specific cap onthe number of calls that a marketer maymake under this exemption, weunderscore that the limited nature of theexemption creates a strong presumptionagainst those marketers who make morethan a limited number of calls per day.Therefore, the two most commonsources of consumer frustrationassociated with telephonesolicitations high volume andunexpected solicitations are not likelypresent when such calls are limited to

persons with whom the marketer has apersonal relationship. Accordingly, wefind that these calls do not represent thetype of telephone solicitations towhich [telephone subscribers] object discussed in 47 U.S.C. 227(c)(1).Moreover, we conclude that theCommission also has authority torecognize this limited carve-outpursuant to 47 U.S.C. 227(c)(1)(E). Thissubsection provides the Commissionwith discretion in implementing rules toprotect consumer privacy to developproposed regulations to implement themethods and procedures that theCommission determines are the mosteffective and efficient to accomplish thepurpose of this section. 47 U.S.C.227(c)(1)(E). To the extent that anyconsumer objects to such calls, theconsumer may request to be placed onthe telemarketer s company s company-specific do-not-call list. We intend tomonitor these rules and caution that any

individual or entity relying on personalrelationships abusing this exemptionmay be subject to enforcement action.

26. In addition, we decline to extendthis approach beyond persons that havea personal relationship with themarketer. For example, Vector urges theCommission to adopt an exemption thatcovers face-to-face appointment callsto anyone known personally to thereferring source. We note that suchrelationships become increasinglytenuous as they extend to individualsnot personally known to the marketerand thus such calls are more likely to be

unexpected to the recipient and morevoluminous. Accordingly, referrals topersons that do not have a personalrelationship with the marketer will notfall within the category of callsdiscussed above.

27. We also decline to establish anexemption for calls made to set face-to-face appointments per se. We concludethat such calls are made for the purposeof encouraging the purchase of goodsand services and therefore fall withinthe statutory definition of telephonesolicitation. We find no reason toconclude that such calls are somehow

less intrusive to consumers than othercommercial telephone solicitations. TheFTC has reviewed this issue andreached the same conclusion. Inaddition, we decline to exempt entitiesthat make a de minimis number of commercial telemarketing calls. Incontrast to Congress rationale forexempting nonprofit organizations, we

believe that such commercial callscontinue to be unexpected to consumerseven if made in low numbers. We do not

believe the costs to access the nationaldatabase is unreasonable for any small

business or entity making a deminimis number of calls.

28. In response to the Rules and Regulations Implementing theTelephone Consumer Protection Act of 1991, Further Notice of ProposedRulemaking, CG Docket No. 02 278,FCC 0362 published at 68 FR 16250,April 3, 2003 (FNPRM) a fewcommenters contend that any new rulesthe Commission adopts would not applyto entities engaged in the business of insurance, because such rules wouldconflict with the McCarran-FergusonAct. The McCarran-Ferguson Actprovides that [t]he business of insurance * * * shall be subject to thelaws of the * * * States which relate tothe regulation * * * of such business. 15 U.S.C. 1012(a). The McCarran-Ferguson Act further provides that [n]oAct of Congress shall be construed toinvalidate, impair, or supersede any lawenacted by any State for the purpose of

regulating the business of insurance* * * unless such Act specificallyrelates to the business of insurance. 15U.S.C. 1012(b). American Council of Life Insurers (ACLI) explains thatinsurers marketing activities areextensively regulated at the state level.The Commission s proposal, ACLIargues, intrudes upon the insuranceregulatory framework established by thestates and, therefore, should not beapplicable to insurers under McCarran-Ferguson.

29. The McCarran-Ferguson Act doesnot operate to exempt insurancecompanies wholesale from liabilityunder the TCPA. It applies only whentheir activities constitute the businessof insurance, the state has enacted lawsfor the purpose of regulating the

business of insurance, and the TCPAwould impair, invalidate, orsupersede such state laws. See 15U.S.C. 1012(b). In the one case cited bycommenters as addressing the interplay

between McCarran-Ferguson and theTCPA, a federal district court dismisseda claim brought against two insurancecompanies under the TCPA for sendingunsolicited facsimile advertisements.The Chair King, Inc. v. Houston Cellular

Corp., 1995 WL 1760037 (S.D. Tex.1995), vacated for lack of subject matter jurisdiction 131 F.3d 507 (5th Cir. 1997).The Chair King court found that theTCPA conflicted with a Texas law thatprohibited untrue, deceptive, ormisleading advertising by insurers andtheir agents. In its analysis, the courtdetermined that insurance advertisingwas part of the business of insurance, and that the Texas law in question wasenacted for the purpose of regulating the

business of insurance. The court thenconcluded that because the TCPA



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prohibits unsolicited insuranceadvertising by facsimile while the Texas[laws] permit [such] advertising * * *so long as the advertisements aretruthful and not misleading, the TCPAconflicts with the Texas law and ispreempted under McCarran-Ferguson.See 47 U.S.C. 227(b)(1)(C) and (a)(4).

30. To the extent that any state lawregulates the business of insurance and the TCPA is found to invalidate,impair, or supersede such state law, itis possible that a particular activityinvolving the business of insurancewould not fall within the reach of theTCPA. Any determination about theapplicability of McCarran-Ferguson,however, requires an analysis of theparticular activity and State lawregulating it. In addition, McCarran-Ferguson applies only to federal statutesthat invalidate, impair, or supersede state insurance regulation. Courts haveheld that duplication of state law

prohibitions by a federal statute do notinvalidate, impair, or supersede statelaws regulating the business of insurance. Nor is the mere presence of a regulatory scheme enough to showthat a state statute is invalidated,impaired or superseded.

31. We believe that the TCPA, whichwas enacted to protect consumerprivacy interests, is compatible withstates regulatory interests. In fact, theTCPA permits States to enforce theprovisions of the TCPA on behalf of residents of their State. 47 U.S.C.227(f)(1). In addition, we believe thatuniform application of the national do-not-call registry to all entities that usethe telephone to advertise best servesthe goals of the TCPA. To exempt theinsurance industry from liability underthe TCPA would likely confuseconsumers and interfere with theprotections provided by Congressthrough the TCPA. Therefore, to theextent that the operation of McCarran-Ferguson on the TCPA is unclear, wewill raise this issue in our Report toCongress as required by the Do-Not-CallAct.

32. We conclude that the national do-not-call mechanism established by the

FTC and this Commission adequatelytakes into consideration the needs of small businesses and entities thattelemarket on a local or regional basis ingaining access to the national database.As required by 47 U.S.C. 227(c)(1)(C),we have considered whether differentprocedures should apply for localsolicitations and small businesses. Wedecline, however, to exempt suchentities from the national do-not-callrequirements. Given the large number of entities that solicit by telephone, andthe technological tools that allow even

small entities to make a significantnumber of solicitation calls, we believethat to do so would undermine theeffectiveness of the national do-not-callrules in protecting consumer privacyand create consumer confusion andfrustration. In so doing, we concludethat the approach adopted hereinsatisfies section 227(c)(4) s requirementthat the Commission, in developingprocedures for gaining access to thedatabase, consider the different needs of telemarketers conducting business on anational, regional, State, or local leveland develop a fee schedule forrecouping the cost of such database thatrecognizes such differences. Thenational database will be available forpurchase by sellers on an area-code-by-area-code basis. The cost to access thedatabase will vary depending on thenumber of area codes requested. Sellersneed only purchase those area codes inwhich the seller intends to telemarket.

In fact, sellers that request access to fiveor fewer area codes will be grantedaccess to those area codes at no cost. Wenote that thirty-three states currentlyhave five or fewer area codes. Thus,telemarketers or sellers operating on alocal or regional basis within one of these thirty-three states will have accessto all of that state s national do-not-callregistrants at no cost. In addition, thenational database will provide a singlenumber lookup feature whereby a smallnumber of telephone numbers can beentered on a web page to determinewhether any of those numbers areincluded on the national registry. We

believe this fee structure adequatelyreflects the needs of regionaltelemarketers, small business and thosemarketing on a de minimis level. Forthese reasons, we conclude that thisapproach will not place anyunreasonable costs on small businesses.47 U.S.C. 227(c)(4)(B)(iii).Section 227(c)(3) Requirements

33. We conclude that the national do-not-call database adopted jointly by thisCommission and the FTC satisfies eachof the statutory requirements outlined in47 U.S.C. 227(c)(3)(A) through (c)(3)(L).

We now discuss each such requirement.Section 227(c)(3)(A) requires theCommission to specify the method bywhich an entity to administer thenational database will be selected. OnAugust 2, 2002, the FTC issued aRequest for Quotes (RFQ) to selectedvendors on GSA schedules seekingproposals to develop, implement, andoperate the national registry. Afterevaluating those proposals, the FTCselected a competitive range of vendorsand issued an amended RFQ to thosevendors on November 25, 2002. After

further evaluation, the FTC selectedAT&T Government Solutions as thesuccessful vendor for the national do-not-call database on March 1, 2003.Congress has approved the necessaryfunding for implementation of thenational database.

34. Pursuant to sections 227(c)(3)(B)through (c)(3)(C), we require eachcommon carrier providing telephoneexchange service to inform subscribersfor telephone exchange service of theopportunity to provide notification thatsuch subscriber objects to receivingtelephone solicitations. Each telephonesubscriber shall be informed, by thecommon carrier that provides localexchange service to that subscriber, of (i) the subscriber s right to give orrevoke a notification of an objection toreceiving telephone solicitationspursuant to the national database and(ii) the methods by which such rightsmay be exercised by the subscriber.

Pursuant to section 227(c)(3)(C), weconclude that, beginning on January 1,2004, such common carriers shallprovide an annual notice, via an insertin the customer s bill, to inform theirsubscribers of the opportunity to registeror revoke registrations on the nationaldo-not-call database. Although we donot specify the exact description or formthat such notification should take, suchnotification must be clear andconspicuous. At a minimum, it mustinclude the toll-free telephone numberand Internet address established by theFTC to register or revoke registrationson the national do-not-call database.

35. Section 227(c)(3)(D) requires theCommission to specify the methods bywhich registrations shall be collectedand added to the database. Consumerswill be able to add their telephonenumbers to the national do-not-callregistry either through a toll-freetelephone call or over the Internet.Consumers who choose to register byphone will have to call the registrationnumber from the telephone line thatthey wish to register. Their calls will beanswered by an Interactive VoiceResponse (IVR) system. The consumerswill be asked to enter on their telephone

keypad the telephone number fromwhich the consumer is calling. Thisnumber will be checked against the ANIthat is transmitted with the call. If thenumber entered matches the ANI, thenthe consumer will be informed that thenumber has been registered. Consumerswho choose to register over the Internetwill go to a Web site dedicated to theregistration process where they will beasked to enter the telephone numberthey wish to register. We encourage theFTC to notify consumers in the IVRmessage that the national registry will



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prevent most, but not all, telemarketingcalls. Specifically, we believeconsumers should be informed that thedo-not-call registry does not apply totax-exempt nonprofit organizations andcompanies with whom consumers havean established business relationship.The effectiveness and value of thenational registry depends largely on aninformed public. Therefore, we alsointend to emphasize in our educationalmaterials and on our Web site thepurpose and scope of the new rules.

36. Section 227(c)(3)(E) prohibits anyresidential subscriber from beingcharged for giving or revokingnotification to be included on thenational do-not-call database.Consumers may register or revoke do-not-call requests either by a toll-freetelephone call or over the Internet. Nocharge will be imposed on theconsumer. Section 227(c)(3)(F) prohibitsany person from making or transmitting

a telephone solicitation to the telephonenumber of any subscriber included onthe national database. Subject to theexemptions, we adopt rules herein thatwill prohibit telephone solicitations tothose consumers that have registered onthe national database. See also 16 CFR310.4(b)(1)(iii)(B).

37. Section 227(c)(3)(G) requires theCommission to specify (i) the methods

by which any person deciding to maketelephone solicitations will obtainaccess to the database, by area code orlocal exchange prefix, and (ii) the coststo be recovered from such persons.Section 227(c)(3)(H) requires theCommission to specify the methods forrecovering, from the persons accessingthe database, the costs involved in theoperations of the database. To complywith the national do-not-call rules,telemarketers must gain access to thetelephone numbers in the nationaldatabase. Telemarketers will haveaccess to the national database by meansof a fully-automated, secure Web sitededicated to providing information tothese entities. The first time atelemarketer accesses the system, thecompany will be asked to providecertain limited identifying information,

such as name and address, contactperson, and contact person s telephonenumber and address. If a telemarketer isaccessing the registry on behalf of aclient seller, the telemarketer will alsoneed to identify that client. When atelemarketer first submits an applicationto access registry information, thecompany will be asked to specify thearea codes they want to access. Anannual fee will be assessed based uponthe number of area codes requested. TheFTC has proposed that sellers becharged $29 per area code with a

maximum annual fee of $7,250 foraccess to the entire national database.Sellers may request access to five or lessarea codes for free. Each entity onwhose behalf the telephone solicitationis being made must pay this fee viacredit card or electronic funds transfer.After payment is processed, thetelemarketer will be given an accountnumber and permitted to access theappropriate portions of the registry.Telemarketers will be permitted toaccess the registry as often as they wishfor no additional cost, once the annualfee is paid.

38. Section 227(c)(3)(I) requires theCommission to specify the frequencywith which the national database will

be updated and specify the method bywhich such updates will take effect forpurposes of compliance with the do-not-call regulations. Because the registrationprocess will be completely automated,updates will occur continuously.

Consumer registrations will be added tothe registry at the same time theyregister or at least within a few hoursafter they register. The safe harborprovision requires telemarketers toemploy a version of the registryobtained not more than three months

before any call is made. Thus,telemarketers will be required to updatetheir lists at least quarterly. Instead of making the list available on specificdates, the registry will be available fordownloading on a constant basis so thattelemarketers can access the registry atany time. As a result, eachtelemarketer s three-month period may

begin on different dates. Appropriatestate and federal regulators will becapable of verifying when thetelemarketer last accessed the list. Inaddition, the administrator will checkall telephone numbers in the do-not-callregistry each month against nationaldatabases, and those numbers that have

been disconnected or reassigned will beremoved from the registry. Weencourage parties that may have specificrecommendations on ways to improvethe overall accuracy of the database inremoving disconnected and reassignedtelephone numbers to submit such

proposals to our attention and to theFTC directly.39. Section 227(c)(3)(J) requires that

the Commission s regulations bedesigned to enable states to use thedatabase for purposes of administeringor enforcing state law. In fact, 47 U.S.C.227(e)(2) prohibits states from using anydatabase that does not include the partof the national database that relates tosuch state. Section 227(c)(3)(K)prohibits the use of the database for anypurpose other than compliance with thedo-not-call rules and any such state law

and requires the Commission to specifymethods for protection of the privacyrights of persons whose numbers areincluded in such database. Consistentwith the determination of the FTC, weconclude that any law enforcementagency that has responsibility to enforcefederal or state do-not-call rules orregulations will be permitted to accessthe appropriate information in thenational registry. This information will

be obtained through a secure InternetWeb site. Such law enforcement accessto data in the national registry is criticalto enable state Attorneys General, publicutility commissions or an official oragency designated by a state, and otherappropriate law enforcement officials togather evidence to support enforcementof the do-not-call rules under the stateand federal law. In addition, we haveimposed restrictions on the use of thenational list. Consistent with the FTC sdetermination, we have concluded that

no person or entity may sell, rent, lease,purchase, or use the national do-not-calldatabase for any purpose exceptcompliance with section 227 and anysuch state or federal law to preventtelephone solicitations to telephonenumbers on such list. We specificallyprohibit any entity from purchasing thislist from any entity other than thenational do-not-call administrator ordispensing the list to any entity that hasnot paid the required fee to theadministrator. The only information thatwill be made available to telemarketersis the telephone number of consumers

registered on the list. Given therestrictions imposed on the use of thenational database and the limitedamount of information provided, we

believe that adequate privacyprotections have been established forconsumers.

40. Section 227(c)(3)(L) requires eachcommon carrier providing services toany person for the purpose of makingtelephone solicitations to notify suchperson of the requirements of thenational do-not-call rules and theregulations thereunder. We thereforerequire common carriers, beginning

January 1, 2004, to make a one-timenotification to any person or entitymaking telephone solicitations that isserved by that carrier of the national do-not-call requirements. We do not specifythe exact description or form that suchnotification should take. At a minimum,it must include a citation to the relevantfederal do-not-call rules as set forth in47 CFR 64.1200 and 16 CFR part 310,respectively. Although we recognizethat carriers may not be capable of identifying every person or entityengaged in telephone solicitations



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served by that carrier, we requirecarriers to make reasonable efforts tocomply with this requirement. We notethat failure to give such notice by thecommon carrier to a telemarketer served

by that carrier will not excuse thetelemarketer from violations of theCommission s rules.

Constitutionality 41. We conclude that a national do-not-call registry is consistent with theFirst Amendment. We believe, like theFTC, that our regulations satisfy thecriteria set forth in Central Hudson Gas& Elec. v. Pub. Serv. Comm. of N.Y., inwhich the Supreme Court establishedthe applicable analytical framework fordetermining the constitutionality of aregulation of commercial speech.Central Hudson Gas & Elec. v. Pub.Serv. Comm. of N.Y., 447 U.S. 557(1980). See Kathryn Moser v. Federal Communications Commission, 46 F.3d970 (9th Cir. 1995) ( Moser ) cert. denied, 515 U.S. 1161 (1995) (upholding ban onprerecorded telephone calls); State of Missouri v. American Blast Fax, 323F.3d 649 (8th Cir. 2003) ( American Blast Fax ), pet. for rehearing pending (upholding ban on unsolicited faxadvertising) and Destination Ventures v.Federal Communications Commission, 46 F.3d 54 (9th Cir.1995) ( DestinationVentures ) (upholding ban on unsolicitedfax advertising). Our conclusion is alsoconsistent with every Court of Appealsdecision that has considered FirstAmendment challenges to the TCPA.

42. Under the framework establishedin Central Hudson, a regulation of commercial speech will be foundcompatible with the First Amendment if (1) there is a substantial governmentinterest; (2) the regulation directlyadvances the substantial governmentinterest; and (3) the proposedregulations are not more extensive thannecessary to serve that interest. Central Hudson, 447 U.S. at 566. Specifically,the Court found that [f]or commercialspeech to come within the FirstAmendment, it at least must concernlawful activity and not be misleading.Next, it must be determined whether the

asserted governmental interest to beserved by the restriction on commercialspeech is substantial. If both inquiriesyield positive answers, it must then bedecided whether the regulation directlyadvances the governmental interestasserted, and whether it is not moreextensive than is necessary to serve thatinterest. Id. at 557. Under the firstprong, we find that there is a substantialgovernmental interest in protectingresidential privacy. The Supreme Courthas repeatedly held that individualsare not required to welcome unwanted

speech into their homes and that thegovernment may protect this freedom. Frisby v. Schultz, 487 U.S. 474, 485. Seealso Federal CommunicationsCommission v. Pacifica Foundation, 438U.S. 726, 748 (1978) ( [I]n the privacyof the home, * * * the individual sright to be left alone plainly outweighsthe First Amendment rights of anintruder. ).

43. In particular, the government hasan interest in upholding the right of residents to bar unwanted speech fromtheir homes. In Rowan v. United StatesPost Office, the Supreme Court uphelda statute that permitted a person torequire that a mailer remove his namefrom its mailing lists and stop all futuremailings to the resident:

The Court has traditionally respected theright of a householder to bar, by order ornotice, solicitors, hawkers, and peddlers fromhis property. In this case the mailer s right tocommunicate is circumscribed only by an

affirmative act of the addressee giving noticethat he wishes no further mailings from thatmailer. * * * In effect, Congress has erecteda wall or more accurately permits a citizento erect a wall that no advertiser maypenetrate without his acquiescence.

Rowan v. United States Post Office, 397U.S. 728 at 737 738 (1970).

44. Here, the record supports that thegovernment has a substantial interest inregulating telemarketing calls. In 1991,Congress held numerous hearings ontelemarketing, finding, among otherthings, that [m]ore than 300,000solicitors call more than 18,000,000

Americans every day and[u]nrestricted telemarketing can be anintrusive invasion of privacy and, whenan emergency or medical assistancetelephone line is seized, a risk to publicsafety. Our record, like the FTC s,demonstrates that telemarketing callsare even more of an invasion of privacythan they were in 1991. The number of daily calls has increased five fold (to anestimated 104 million), due in part tothe use of new technologies, such aspredictive dialers. An overwhelmingnumber of consumers in theapproximately 6,500 commenters in this

proceeding support the adoption andimplementation of a national do-not-callregistry. In addition to citing concernsabout the numerous and ever-increasingnumber of calls, they complain aboutthe inadequacies of the company-specific approach, the burdens of suchcalls on the elderly and people withdisabilities, and the costs of acquiringtechnologies to reduce the number of unwanted calls. Accordingly, we believethat the record demonstrates thattelemarketing calls are a substantialinvasion of residential privacy, and

regulations that address this problemserve a substantial government interest.

45. Under Central Hudsons secondprong, we find that the Commission sregulations directly advance thesubstantial government interest. Underthis prong, the government mustdemonstrate that the harms it recitesare real and that its restriction will infact alleviate them to a material degree. Florida Bar v. Went For It, Inc., 515 U.S.618, 626 (1995) (citations omitted). Itmay justify the restrictions on speech based solely on history, consensus, andsimple common sense. Id. at 628(citation omitted). Creating andimplementing a national do-not-callregistry will directly advance thegovernment s interest in protectingresidential privacy from unwantedtelephone solicitations. Congress,consumers, state governments and theFTC have reached the same conclusion.The history of state administered do-

not-call lists demonstrates that such do-not-call programs have a positive impacton the ability of many consumers toprotect their privacy by reducing thenumber of unwanted telephonesolicitations that they receive each day.Congress has reviewed the FTC sdecision to establish a national do-not-call list and concluded that the do-not-call initiative will provide significant

benefits to consumers throughout theUnited States. We reject the argumentsthat because our do-not-call registryprovisions do not apply to tax-exemptnonprofit organizations, our regulationsdo not directly and materially advancethe government interest of protectingresidential privacy. Government [neednot] make progress on every front beforeit can make progress on any front. United States v. Edge Broadcasting Company, 509 U.S. 418, 434 (1993). Seealso Moser v. FCC, 46 F.3d at 975(Congress may reduce the volume of telemarketing calls without completelyeliminating the calls. ).

46. We believe that the facts here areeasily distinguishable from those inRubin v. Coors Brewing Company, 514U.S. 476 (1995) and City of Cincinnati v. Discovery Network, 507 U.S. 410

(1993). In Coors, the Court struck downa prohibition against disclosure of alcoholic content on labels or inadvertising that applied to beer but notto wine or distilled spirits, finding thatthe irrationality of this unique andpuzzling regulatory framework ensuresthat the labeling ban will fail to achieve[the Government s interest in combatingstrength wars.] In Discovery Network, the Court struck down an ordinancewhich banned 62 newsracks containingcommercial publications but did not

ban 1,500 2,000 newsracks containing



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and specifically prohibits preemption of state law in certain instances. States andconsumers note that state do-not-callregulations have been a successfulinitiative in protecting consumerprivacy rights. In addition, severalcommenters note the importance of federal and state cooperation inenforcing the national do-not-callregulations. The record also indicatesthat states have historically enforcedtheir own state statutes within, as wellas across state lines. The statute alsocontains a savings clause for stateproceedings to enforce civil or criminalstatutes, and at least one federal courthas found that the TCPA does notpreempt state regulation of autodialersthat are not in actual conflict with theTCPA. Van Bergen v. Minnesota, 59F.3d 1541, 1547 48 (8th Cir. 1995).

57. The main area of difference between the state and federal do-not-callprograms relates to the exemptions

created from the respective do-not-callregulations. Some state regulations areless restrictive by adopting exemptionsthat are not recognized under federallaw. For example, some states haveadopted exemptions for insuranceagents, newspapers, or small businesses.In addition, a few states have enactedlaws that are more restrictive than thefederal regulations by not recognizingfederal exemptions such as theestablished business relationship. Moststates, however, exempt nonprofitorganizations and companies withwhom the consumer has an established

business relationship in some mannerconsistent with federal regulations.

58. At the outset, we note that manystates have not adopted any do-not-callrules. The national do-not-call rules willgovern exclusively in these states for

both intrastate and interstate telephonesolicitations. Pursuant to 47 U.S.C.227(f)(1), all states have the ability toenforce violations of the TCPA,including do-not-call violations, infederal district court. Thus, we concludethat there is no basis for conflictregarding the application of do-not-callrules in those states that have notadopted do-not-call regulations.

59. For those states that have adopteddo-not-call regulations, we make thefollowing determinations. First, weconclude that, by operation of generalconflict preemption law, the federalrules constitute a floor, and thereforewould supersede all less restrictive statedo-not-call rules. We believe that anysuch rules would frustrate Congress purposes and objectives in promulgatingthe TCPA. Specifically, application of less restrictive state exemptions directlyconflicts with the federal objectives inprotecting consumer privacy rights

under the TCPA. Thus, telemarketersmust comply with the federal do-not-call rules even if the state in which theyare telemarketing has adopted anotherwise applicable exemption.Because the TCPA applies to bothintrastate and interstatecommunications, the minimumrequirements for compliance aretherefore uniform throughout thenation. We believe this resolves anypotential confusion for industry andconsumers regarding the application of less restrictive state do-not-call rules.

60. Second, pursuant to 47 U.S.C.227(e)(1), we recognize that states mayadopt more restrictive do-not-call lawsgoverning intrastate telemarketing. Withlimited exceptions, the TCPAspecifically prohibits the preemption of any state law that imposes morerestrictive intrastate requirements orregulations. Section 227(e)(1) furtherlimits the Commission s ability topreempt any state law that prohibitscertain telemarketing activities,including the making of telephonesolicitations. This provision isambiguous, however, as to whether thisprohibition applies both to intrastateand interstate calls, and is silent on theissue of whether state law that imposesmore restrictive regulations on interstatetelemarketing calls may be preempted.We caution that more restrictive stateefforts to regulate interstate callingwould almost certainly conflict with ourrules.

61. We recognize that states

traditionally have had jurisdiction overonly intrastate calls, while theCommission has had jurisdiction overinterstate calls. Here, Congress enactedsection 227 and amended section 2(b) togive the Commission jurisdiction over

both interstate and intrastatetelemarketing calls. Congress did so

based upon the concern that states lackjurisdiction over interstate calls.Although section 227(e) gives statesauthority to impose more restrictiveintrastate regulations, we believe that itwas the clear intent of Congressgenerally to promote a uniform

regulatory scheme under whichtelemarketers would not be subject tomultiple, conflicting regulations. Weconclude that inconsistent interstaterules frustrate the federal objective of creating uniform national rules, to avoid

burdensome compliance costs fortelemarketers and potential consumerconfusion. The record in thisproceeding supports the finding thatapplication of inconsistent rules forthose that telemarket on a nationwide ormulti-state basis creates a substantialcompliance burden for those entities.

62. We therefore believe that any stateregulation of interstate telemarketingcalls that differs from our rules almostcertainly would conflict with andfrustrate the federal scheme and almostcertainly would be preempted. We willconsider any alleged conflicts betweenstate and federal requirements and theneed for preemption on a case-by-case

basis. Accordingly, any party that believes a state law is inconsistent withsection 227 or our rules may seek adeclaratory ruling from the Commission.We reiterate the interest in uniformity as recognized by Congress andencourage states to avoid subjectingtelemarketers to inconsistent rules.

63. National Association of AttorneysGeneral (NAAG) contends that stateshave historically enforced telemarketinglaws, including do-not-call rules,within, as well as across, state linespursuant to long-arm statutes.According to NAAG, these state actionshave been met with no successfulchallenges from telemarketers. We notethat such long-arm statutes may beprotected under section 227(f)(6) whichprovides that nothing contained in thissubsection shall be construed toprohibit an authorized State officialfrom proceeding in State court on the

basis of an alleged violation of anygeneral civil or criminal statute of suchstate. 47 U.S.C. 227(f)(6). Nothing thatwe do in this order prohibits states fromenforcing state regulations that areconsistent with the TCPA and the rulesestablished under this order in state

court.Company Specific Do-Not-Call Lists

Efficacy of the Company-Specific Rules

64. We conclude that retention of thecompany-specific do-not-call rules willcomplement the national do-not-callregistry by providing consumers with anadditional option for managingtelemarketing calls. We believe thatproviding consumers with the ability totailor their requests not to be called,either on a case-by-case basis under thecompany do-not-call approach or more

broadly under the national registry, will best balance individual privacy rightsand legitimate telemarketing practices.As a result, those consumers that wishto prohibit telephone solicitations fromonly certain marketers will continue tohave the option to do so. In addition,consumers registered on the nationaldo-not-call registry will have theopportunity to request that they not becalled by entities that would otherwisefall within the established businessrelationship exemption by using theoption to be placed on the company-



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specific lists. This finding is consistentwith that of the FTC.

65. We agree with those commentersthat contend that the company-specificdo-not-call approach has not provenideal as a stand-alone method to protectconsumer privacy. In particular, theincrease in telemarketing calls over thelast decade now places an extraordinary

burden on consumers that do not wishto receive telephone solicitations. Theseconsumers must respond on a case-by-case basis to request that they not becalled. The record in this proceeding isreplete with examples of consumers thatreceive numerous unwantedtelemarketing calls each day. Inaddition, the widespread use of predictive dialers now results in manydead air or hang-up calls in whichconsumers do not even have theopportunity to make a do-not-callrequest. Such calls are particularly

burdensome for the elderly and disabled

consumers. We believe, however, thatthe measures adopted in this order willenhance the effectiveness of thecompany-specific list. For example, theadoption of a national do-not-callregistry alleviates the concerns of thoseconsumers, including elderly anddisabled consumers that may find acase-by-case do-not-call optionparticularly burdensome. In addition,restrictions on abandoned calls willreduce the number of dead air calls.Caller ID requirements will improve theability of consumers to identify andenforce do-not-call rights againsttelemarketers. We also note thatalthough many commenters questionthe effectiveness of the company-specific approach, there is little supportin the record to eliminate those rules

based on the adoption of the nationaldo-not-call list. We retain the option forconsumers to request on a case-by-case

basis whether they desire to receivetelephone solicitations.Amendments to the Company-SpecificRules

66. We agree with several industrycommenters that the retention period forrecords of those consumers requesting

not to be called should be reduced fromthe current ten-year requirement to fiveyears. As many commenters note,telephone numbers change hands overtime and a shorter retention period willhelp ensure that only those consumerswho have requested not to be called areretained on the list. Both telemarketersand consumers will benefit from a listthat more accurately reflects thoseconsumers who have requested not to becalled. The FTC has concluded andseveral commenters in this proceedingagree that five years is a more

reasonable period to retain consumerdo-not-call requests. We believe a five-year retention period reasonably

balances any administrative burdenimposed on consumers in requesting notto be called with the interests of telemarketers in contacting consumers.As noted, a shorter retention periodincreases the accuracy of the databasewhile the national do-not-call optionmitigates the burden on thoseconsumers who may believe morefrequent company-specific do-not-callrequests are overly burdensome. We

believe any shorter retention period, assuggested by a few industrycommenters, would unduly increase the

burdens on consumers who would beforced to make more frequent renewalsof their company-specific do-not-callrequests without substantiallyimproving the accuracy of the database.We therefore amend our rules to requirethat a do-not-call request be honored for

five years from the time the request ismade.67. We decline at this time to require

telemarketers to make available a toll-free number or Web site that wouldallow consumers to register company-specific do-not-call requests or verifythat such a request was made with themarketer. We also decline to requiretelemarketers to provide a means of confirmation so that consumers mayverify their requests have beenprocessed at a later date. Telemarketersshould, however, confirm that any suchrequest will be recorded at the time therequest is made by the consumer. Inaddition, consumers calling to registerdo-not-call requests in response toprerecorded messages should beprocessed in a timely manner without

being placed on hold for unreasonableperiods of time. Although we believethe additional measures discussedabove would improve the ability of consumers, including consumers withdisabilities, to register do-not-callrequests, we agree with thosecommenters that contend that suchrequirements would be unduly costly to

businesses. In particular, we areconcerned with the costs imposed on

small businesses. The Commission will,however, continue to monitorcompliance with our company-specificdo-not-call rules and take further actionas necessary.

68. We conclude that telemarketersmust honor a company-specific do-not-call request within a reasonable time of such request. We disagree, however,with commenters that suggest thatperiods of up to 90 days are a reasonabletime required to process do-not-callrequests. Although some administrativetime may be necessary to process such

requests, this process is now largelyautomated. As a result, such requestscan often be honored within a few daysor weeks. Taking into consideration

both the large databases of such requestsmaintained by some entities and thelimitations on certain small businesses,we conclude that a reasonable time tohonor such requests must not exceedthirty days from the date such a requestis made. Consistent with our existingrules, such request applies to alltelemarketing campaigns of the sellerand any affiliated entities that theconsumer reasonably would expect to

be included given the identification of the caller and the product beingadvertised. 47 CFR 64.1200(e)(2)(v). Wenote that the Commission s rules requirethat entities must record company-specific do-not-call requests and placethe subscriber s telephone number onthe do-not-call list at the time therequest is made. 47 CFR

64.1200(e)(2)(iii). Therefore,telemarketers with the capability tohonor such company-specific do-not-call requests in less than thirty daysmust do so. We believe thisdetermination adequately balances theprivacy interests of those consumersthat have requested not to be called withthe interests of the telemarketingindustry. Consumers expect theirrequests not to be called to be honoredin a timely manner, and thirty daysshould be the maximum administrativetime necessary for telemarketers toprocess that request.

69. In addition, we decline to extendthe company-specific do-not-call rulesto entities that solicit contributions on

behalf of tax-exempt nonprofitorganizations. The TCPA excludes callsor messages by tax-exempt nonprofitorganizations from the definition of telephone solicitation. See 47 U.S.C.227(a)(3)(C). The Commission hasclarified that telemarketers who soliciton behalf of tax-exempt nonprofitorganizations are not subject to the rulesgoverning telephone solicitations. In the2002 Notice, the Commission declinedto seek further comment on this issue.

We acknowledge that this determinationcreates an inconsistency with the FTC sconclusion to extend its company-specific requirements to entities thatsolicit contributions on behalf of tax-exempt nonprofit organizations. TheCommission, however, derives itsauthority to regulate telemarketing fromthe TCPA, which excludes tax-exemptnonprofit organizations from thedefinition of telephone solicitation. Wetherefore decline to extend thecompany-specific requirements toentities that solicit on behalf of tax-



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exempt nonprofit organizations. Wenote that some tax-exempt nonprofitorganizations have determined to honorvoluntarily specific do-not-call requests.Other organizations may find itadvantageous to follow this example.

70. Finally, to make clear ourdetermination that a company mustcease making telemarketing calls to acustomer with whom it has anestablished business relationship whenthat customer makes a do-not-callrequest, we amend the company-specific do-not-call rules to apply to anycall for telemarketing purposes. We alsoadopt a provision stating that aconsumer s do-not-call requestterminates the established businessrelationship for purposes of telemarketing calls even if the consumercontinues to do business with the seller.Interplay of Sections 222 and 227

71. We first note that the fact that atelecommunications carrier has currentCPNI about a particular consumerindicates that the consumer is acustomer of that carrier. In thatsituation, there exists an established

business relationship between thecustomer and the carrier. See 47 CFR64.1200(f)(4). The established businessrelationship is an exception to thenational do-not-call registry. However,

based on the evidence in the record andas supported by numerous commenters,we confirm our tentative conclusionthat if a customer places her name ona carrier s do-not-call list, that requestmust be honored even though thecustomer may also have providedconsent to use her CPNI under section222. By doing so, we maximize theprotections and choices available toconsumers, while giving maximumeffect to the language of both statutes. Atthe outset, the average consumer seemsrather unlikely to appreciate theinterrelationship of the Commission sCPNI and do-not-call rules. AllowingCPNI consent to trump a do-not-callrequest would, therefore, thwart mostconsumers reasonable expectationsabout how a company-specific do-not-call list functions. Equally important,

permitting a consumer s CPNI consentto supercede a consumer s express do-not call request might undermine thecarrier s do-not-call database as the firstsource of information about theconsumer s telemarketing preferences.

72. Because we retain the exemptionfor calls and messages to customers withwhom the carrier has an established

business relationship, the determinationthat a customer s CPNI approval doesnot trump her inclusion on a do-not-calllist should have no impact on carriers ability to communicate with their

customers via telemarketing. Carrierswill be able to contact customers withwhom they have an established businessrelationship via the telephone, unlessthe customer has placed her name onthe company s do-not-call list; whetherthe customer has consented to the useof her CPNI does not impact the carrier sability to contact the customer viatelemarketing.73. We are not persuaded by thearguments of those commenters whourge the Commission to find that CPNIconsent should trump a customer srequest to be placed on a do-not-call listor similarly, that CPNI consent equatesto permission to market withoutrestriction. We note that the ConcernedTelephone Companies assert that CPNIconsent equates to consent to marketwithout restriction based on[customers ] CPNI. ConcernedTelephone Companies Comments at 2(emphasis added). The Commission

finds no support for this assertion inany Commission order or statutoryprovision and, we specificallydetermine that CPNI approval does notequate to

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