Posted by Ronald London
The Federal Trade Commission today announced through a statement by Chairman Deborah Platt Majoras and in related testimony before Congress that it will not remove any telephone numbers from the National Do Not Call Registry (“NDNCR”) notwithstanding that it previously stated in adopting the NDNCR rules that such registrations are to last only five years. That decision was the result of deliberative consideration of constitutional and statutory imperatives not to unduly interfere with legitimate telemarketing, how long numbers remain registered on the various state do-not-call lists, and the fact that the telephone subscriber who places a number on this list may well move or otherwise change his or her number, leaving it to be “recycled” to a new subscriber who did not initially placed it on the NDNCR and may or may not want to be listed. Indeed, the record at the time reflected that 16% of all phone numbers change each year, and 20% of all Americans move each year. The FTC decided that, on balance, given the needs of legitimate telemarketing, the frequency with which telephone numbers are recycled, and the fact that not everyone would want their number on the NDNCR, five years was the appropriate duration for NDNCR listings. Consumers wishing their numbers to remain on the NDNCR would have to re-register before the five-year period lapsed.
Because the NDNCR went live in 2003, the first of the registrations will begin expiring next year. In the intervening period, more than 145 million numbers have been placed on the list, proving its popularity. Meanwhile, continued growth in cellular and other wireless phone services and the advent of number “portability” that allows subscribers to take their phone numbers with them when they change carriers – and even when they change from landline to wireless service or vice versa – has affected how frequently numbers are recycled. In the current term of Congress, bills are pending in the House and in the Senate to require that the FTC not allow any telephone numbers on the NDNCR to automatically come off the registry on the fifth anniversary of their being listed.
In response to political and popular sentiment, the FTC thus announced today through its Chairman’s statement that pending final Congressional or agency action regarding whether to make registrations permanent, it will not remove any numbers from the NDNCR or require anyone to re-register. It made the same commitment during the testimony of Lydia Parnes, the Director of its Bureau of Consumer Protection, to the House Subcommittee on Commerce, Trade, and Consumer Protection of the Energy and Commerce Committee.
The announcement is concerning for telemarketers because it raises the specter that they will be cut off – permanently – from calling telephone subscribers who receive “recycled” numbers that happen to be on the NDNCR (as are the vast majority of numbers today) even though the subscriber who receives the number never actively placed it on the NDNCR and may in fact be interested in the telemarketer’s offer. The FTC testimony on this issue indicates that the agency (through its contractor) utilizes a scrubbing program through which telephone numbers that have been disconnected and reassigned are purged from the NDNCR on a monthly basis. However, a footnote to the testimony states the contractor takes a conservative approach in purging numbers in that, rather than purging a number because it has been disconnected, it is purged only after being disconnected and reassigned, and there is really, at least at the moment, no way to confirm the efficacy of the purging process.
In addition, the FTC’s regulatory jurisdiction does not extend to several significant industry sectors, including banks, credit unions, savings and loans, common carriers engaged in common carrier activity, companies engaged in the business of insurance, and non-profit organizations. All but the last of these are subject to do-not-call restrictions only through the FCC’s rules that parallel the FTC’s Telemarketing Sales Rule (non-profits are not subject to NDNCR rules at all). However, unlike the FTC’s NDNCR do-not-call prohibition, which applies to numbers “on the registry” and thus will continue to apply to numbers more than five years old if the FTC does not purge them, the FCC’s rule NDNCR do-not-call prohibition expressly specifies that “such … registrations must be honored for a period of 5 years” only. This creates confusion whether entities subject to only the FCC rules but not the FTC rules can start calling numbers on the NDNCR after the five-year anniversary of their being registered, even if the numbers remain on the registry.
It appears passage of the do-not-call “improvement” legislation is all but a foregone conclusion given the popularity of the NDNCR and the political capital to be gained from playing to it, and now the FTC will give effect to the sentiment underlying the bills until they pass (or the FTC renders their passage moot by changing its rules to specify NDNCR registrations do not expire). This should not be a major problem provided that FTC efforts to purge reassigned numbers is dependable – though, to be sure, telemarketers would relish the opportunity to contact consumers on the NDNCR between the time their listings expire and they re-register – and the FCC and FTC ultimately wind up on the same page. Nonetheless, the change may have practical implications for telemarketers’ automated systems and bears watching for this and other reasons.