House subcommittee examines bills regulating telemarketers

Thursday, June 15, 2000

A House subcommittee held hearings earlier this week on two bills that seek to impose greater restrictions on telemarketers, thereby setting up another clash between privacy and free-speech interests.

The House Subcommittee on Telecommunications, Trade & Consumer Protection heard testimony June 13 on H.R. 3100, the Know Your Caller Act of 1999, and H.R. 3180, the Telemarketing Victims Protection Act.

The Know Your Caller Act would require telephone solicitors to use names and numbers that consumers with caller-identification services could use in asserting their right not to receive further calls from the company.

The Telemarketing Victims Protection Act would require telemarketers to notify consumers of their right to be placed on a “do-not-call list” maintained by the Direct Marketing Association or the consumer’s state. The measure would also prohibit telemarketers from contacting individuals between 5 p.m. and 7 p.m. Current federal regulations prohibit telemarketing calls after 9 p.m. and before 8 a.m.

“We shouldn’t be held hostage to those who continually violate our privacy with unwanted, unsolicited calls,” testified Rep. Matt Salmon, R-Ariz., sponsor of the Telemarketing Victims Protection Act.

However, the American Teleservices Association opposes both bills, saying they will infringe on legitimate business practices. Spokesman Steve Brubaker testified: “We are all well aware that there are several areas of constitutionally protected speech that use telemarketing to contact consumers, including nonprofits and political campaigns, and that this regulatory scheme will not apply to those type of calls.”

Brubaker said that allowing these calls but disallowing commercial telemarketing calls “will serve to frustrate the purpose of this legislation” and will “simply leave the field to the exempted groups.”

The most controversial aspect of the Telemarketing Victims Protection Act is the 5-7 p.m. restriction on telemarketing calls. Eileen Harrington, assistant director of marketing practices for the Federal Trade Commission, said the increased limitation on such calls “would benefit consumers who do not want to be called by telemarketers during the dinner hour.”

However, she also testified that the 5-7 p.m. ban would make it “more difficult for telemarketers to sell their goods and services if they are prevented from making calls during this particular two-hour period, a time when many consumers are likely to be at home.”

At least one free-speech expert, Rick Kaplar, editor of the Commercial Speech Digest, says the bills present free-speech problems. “One person’s privacy protection is another person’s censorship,” he said.

Kaplar emphasized that the time ban on telemarketing calls restricted more speech than necessary. “The 5 p.m.-to-7 p.m. restriction deals with the annoyance of receiving calls
during dinnertime,” he said. “But I see nothing inherently unfair or deceptive about calling at that time (even if the calls are annoying).

“Government cannot shield us from every annoyance, as the Supreme Court has told us regarding junk mail,” he said. “The situation takes on constitutional implications when the government’s good intentions would stifle significant amounts of commercial speech.

“The Supreme Court said last month in Playboy Entertainment that the least —
restrictive means of protecting against unwanted cable signals was a household-by-household approach,” Kaplar said. “I think the same principle can be applied to telemarketers — a person can use caller ID, an answering machine, or simply take the phone off the hook during dinner. A blanket two-hour ban imposed by government is clearly more restrictive than necessary as a means of achieving dinnertime privacy.”