Leave me alone! The delicate balance of privacy and commercial speech in the evolving do-not-call registry.

AuthorSullivant, Andrew L.
  1. INTRODUCTION II. THE BEGINNING OF THE NATIONAL DO-NOT-CALL REGISTRY A. Telephone Consumer Protection Act B. Telemarketing Consumer Fraud and Abuse Prevention Act C Telemarketing Sales Rule and the Do-Not-Call Implementation Act III. FIRST AMENDMENT PROTECTION OF THE DO-NOT=CALL REGISTRY: MAINSTREAM MARKETING SERVICES K FTC IV. THE 2008 AMENDMENT TO THE Do-NOT-CALL REGISTRY A. The Do-Not-Call Registry and Its Subsequent Amendment B. Constitutional Analysis of the 2008 Amendment 1. Changes in the Marketplace 2. Legal Landscape 3. Success of the Process of Purging Obsolete Numbers 4. Popularity of the Registry V. CONCLUSION I. INTRODUCTION

    Before the do-not-call list was established, the average consumer could expect an unsolicited sales call every two to three days. (1) To give consumers a way to avoid this problem, in 2003 the national do-not-call registry went into effect, prohibiting telemarketers from contacting any consumer who chose to register his or her telephone number on the list. Registering for the list can be done over the phone or on the Internet, literally taking less than one minute. This gave consumers the opportunity to "opt-out" of receiving telemarketing phone calls on the condition that they re-register their phone numbers every five years. The five-year requirement would ensure that the number is still accurate and also that the consumer wanted to remain on the list. Consumers nationwide did not hesitate to jump at such an opportunity. By 2004, more than fifty million phone numbers had been registered, (2) with that number nearly tripling by 2007. (3) Despite, or more likely because of, the registry's popularity, telemarketing firms across the country challenged its validity on the grounds that it was an unconstitutional regulation of commercial speech. (4) The Tenth Circuit has addressed the issue, holding that the regulation adequately satisfied the narrow tailoring requirement in order to remain within the bounds of the Constitution, and ultimately "[upheld] the do-not-call list in its entirety," (5) resulting in millions of Americans cheering for their privacy.

    Fast forward to 2007; about the time fifty million Americans should be thinking about re-registering their numbers on the list. The Federal Trade Commission (FTC) released a statement pledging that it would no longer require consumers to re-register their numbers every five years. (6) The bill was subsequently signed by the President and went into effect on February 15, 2008. (7) On its face, this does not seem like a big deal, and most people would not think twice about the potential constitutional implications of the decision. However, when attempting to strike the delicate balance between a consumer's right to privacy and the First Amendment's protection of commercial speech, a seemingly trivial change such as this has serious constitutional repercussions.

    Section II of this Note explores the origins of the national do-not-call registry--dating back to 1991--and examines each step of the process that brought about the registry. Section III takes a close look at the Tenth Circuit case of Mainstream Marketing Services v. Federal Trade Commission, (8) with an eye toward the test used to determine the constitutionality of commercial speech regulations that was elucidated in Central Hudson Gas & Electric Corp. v. Public Service Commission. (9) Section IV looks at the FTC's proposal to abolish the five-year reregistration requirement and reexamines the constitutional analysis of the do-not-call registry in light of Congress's decision to let numbers permanently remain. This Note concludes by explaining that if the FTC fails to offer more information justifying its decision to remove the reregistration requirement, the do-not-call registry should not pass another constitutional challenge.


    1. Telephone Consumer Protection Act

      In 1991, Congress adopted the Telephone Consumer Protection Act (TCPA). (10) The TCPA was created to adopt "reasonable restrictions on automated or prerecorded calls to businesses as well as to the home, consistent with the constitutional protections of free speech." (11) It prohibited any person within the U.S. from: (1) making a call using any automated telephone dialing system or an artificial or prerecorded voice to an emergency line, hospital room (or other similar establishment), or any number for which the called party is charged for the call; (12) (2) calling any residential telephone line using an artificial or prerecorded voice without the prior express consent of the called party, (13) (3) sending any unsolicited advertisement to a telephone facsimile machine; (14) or (4) simultaneously engaging two or more telephone lines of a multi-line business with the help of an automatic telephone dialing system. (15)

      The TCPA charged the Federal Communications Commission (FCC) with prescribing regulations to implement these requirements. (16) The TCPA also authorized the FCC to establish and operate, if necessary, a "single national database to compile a list of telephone numbers of residential subscribers who object to receiving telephone solicitations." (17) The FCC, however, did not find a national do-not-call list necessary at that time. Rather, the FCC felt that maintaining company-specific do-not-call lists was "the most effective and efficient means to permit telephone subscribers to avoid unwanted telephone solicitations." (18) The company-specific method required a company to keep a list of individuals who have requested not to be contacted for ten years. While other companies remain free to contact the individual, the company that received the request is prohibited from calling.

    2. Telemarketing Consumer Fraud and Abuse Prevention Act

      After recognizing that consumers and others lose an estimated $40 billion a year due to telemarketing fraud in addition to the countless other forms of telemarketing deception and abuse, Congress decided to enact legislation that would offer consumers protection from such fraud, deception, and abuse. (19) In 1994, Congress passed the Telemarketing Consumer Fraud and Abuse Prevention Act (TCFAP). (20) The TCFAP directed the FTC, which was created to prevent unfair competition in commerce, (21) to define "deceptive telemarketing acts or practices," (22) and then to prescribe rules prohibiting deceptive and other abusive telemarketing acts or practices. (23)

      Congress granted the FTC broad authority pursuant to the TCFAP but recommended four components for inclusion in the rules. First, telemarketers should be prohibited from undertaking a pattern of unsolicited telephone calls which the consumer would consider coercive or abusive. (24) Second, unsolicited telephone calls should be restricted to certain hours of the day and night. (25) Third, telemarketers for the sale of goods or services must "promptly and clearly" disclose to the consumer the nature and purpose of the call. (26) Finally, any telemarketer soliciting charitable contributions or donations should also "promptly and clearly" disclose the nature and purpose of the call. (27) Additionally, Congress suggested that the FTC consider recordkeeping requirements. (28)

      C Telemarketing Sales Rule and the Do-Not-Call Implementation Act

      In 1995, pursuant to the TCFAP, the FTC adopted the Telemarketing Sales Rule (TSR). (29) The salient portions of the TSR requires telemarketers to clearly disclose: (1) the costs of the subject of the sales offer; (2) all material restrictions, limitations, or conditions of the sales offer; (3) the seller's refund, cancellation, and exchange policy; (4) the details of any prize promotion, including the odds of winning, that no purchase is necessary, how to participate without making a purchase, and any costs or conditions necessary to receive a prize. (30) Telemarketers were also prohibited from misrepresenting costs, restrictions, or performance of the goods or services being offered. (31) The TSR listed a number of abusive acts or practices that were also prohibited, including violating a company-specific do-not-call list. (32) Finally, the TSR restricted the hours during which telemarketers may call consumers to 8:00 a.m. to 9:00 p.m. local time at the called person's location. (33)

      By 2002, both the FCC and FTC were unhappy with the rules implemented in the 1990s. (34) The FCC, noting that telemarketing practices had changed significantly since 1992, (35) proposed to amend the rules made pursuant to the TCPA. (36) Less than a year later, the FCC adopted new rules establishing the national do-not-call registry to be maintained by the FTC, set a maximum rate on the number of abandoned calls, required telemarketers to transmit caller ID information, and modified the facsimile advertising requirements. (37) Similarly, the FTC adopted amendments to the TSR which supplemented the company-specific do-not-call provision with a national do-not-call list maintained by the FTC. (38) While Congress had not yet authorized the FTC to maintain a national do-not-call list, Congress granted that authority immediately after the FTC's authority was challenged in court. (39) Consumers who previously had registered on the do-not-call list could still receive calls from any specific seller by granting express written permission. (40) Likewise, an exception was carved out for a telemarketer who was calling on behalf of a seller who had an "established business relationship" with the consumer. (41) Members would remain on the list for five years, at which time the number would have to be re-registered to ensure both that the individual still owned the line and that he or she wished to remain on the list.


    By its nature, the do-not-call registry restricts only commercial sales calls, and thus is a regulation of commercial speech. (42) First...

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