December 24, 2003

New "Do Not Call" Requirements Go Into Effect

Holland & Knight Newsletter
Peter M. Connolly

The national Do Not Call (DNC) requirements went into effect on October 17, 2003. These requirements apply to sellers of goods and services and to the telemarketers they employ. The Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) both have DNC requirements and similar, but not identical, DNC rules. However, since the FCC’s rules are more comprehensive, they will receive most of the attention in this article.

The term “telemarketing” is defined in the FCC’s regulations to mean: “the initiation of a telephone call or message for the purpose of encouraging the purchase, rental of, or investment in, property, goods or services, which is transmitted to a person.” A telephone call made for telemarketing purposes is referred to as a “telephone solicitation.” The new rules impose two types of requirements on sellers and telemarketers. First, the rules impose an obligation on those engaged in telemarketing not to call residential telephone subscribers who have registered their telephone numbers in the newly established national DNC “registry,” administered by the FTC. Second, the new rules establish new requirements for calling persons who have not entered their numbers in the national registry.

National Do Not Call Registry

The principle behind the national DNC registry is relatively simple. Pursuant to the Telephone Consumer Protection Act of 1991 (TCPA), the FCC and FTC have created a national DNC registry that provides residential consumers with a one-stop option to prohibit unwanted telephone commercial solicitations. As of October 17, 2003, such calls can no longer be made to persons who have entered their numbers on the register. However, this requirement does not apply to certain kinds of solicitations. The categories of “exempt” solicitation include opinion surveys, market research and political or religious solicitations, such as those urging persons to support a candidate for public office. The national DNC rules also do not prohibit calls to businesses and persons with whom the seller has a personal relationship, or an “established business relationship” (EBR). For these purposes, an EBR is defined as a prior transaction between the parties within the past 18 months or an “inquiry” within the past three months.

If the customer has placed his number on the national DNC registry, telemarketers and/or their clients must keep track of the duration of EBRs and must cease making calls when the exemption no longer applies. Sellers making telemarketing calls on their own behalf and/or any telemarketers they employ must also maintain “company specific” DNC lists. The FCC intends, by this requirement, to provide consumers with another tool for managing their interaction with telemarketers. The need to maintain a company specific list is important because not all registry exemptions and exceptions apply to company specific lists.

The states remain free to enact DNC regulations that are stricter than the national regulations. For example, some states, such as Indiana, have no EBR exception to the rules. Thus, companies wishing to obey telemarketing restrictions must be aware not only of the national requirements, but also the DNC laws in the state(s) in which they engage in telemarketing. Further complicating matters, state restrictions are only applicable to intrastate, as opposed to interstate, telemarketing calls. However, it may be wise to adhere to the more stringent state DNC requirements for all telemarketing calls, including interstate calls made from the state in question.

Registry Logistics

Essentially, sellers and telemarketers must go to the FTC’s Web site ( and create a “profile” that allows them to register and obtain “DNC” numbers, by area code, in the “numbering plan areas” where they plan to make telephone solicitations. Registrants must pay for access, which may be transmitted electronically. Registrants are also required to certify that their organization will comply with the requirements of the national registry and must obtain a subscription account number. Please contact us if you need to make use of telemarketing and are not sure if your company has been registered.

Seller and Telemarketer Compliance

Sellers and telemarketers will be required to update the numbers they have obtained from the national registry at least every three months. Carriers will not be liable for calling someone on the national registry if his or her number was listed on the registry fewer than three months prior to the time of the call. Telemarketers and sellers engaged in telemarketing on their own will also be required to carry out certain internal procedures if they wish to avoid liability for mistaken calls to persons on the national registry. These procedures are complex, involving training of personnel and record keeping. Again, we can be of assistance to clients setting up such procedures.

Restrictions on Telemarketing Calls

There are also substantial restrictions now applicable to permissible telemarketing calls.

No person or entity may initiate a telephone call (other than a call made for emergency purposes or made with the express prior consent of the called party) using an automatic dialing system, including a predictive dialer or an artificial or pre-recorded voice, to any emergency telephone line, including a “911” line; or to the telephone line of any hotel guest room, patient room in a hospital, health care facility, elderly home or similar establishment; or to any telephone number assigned to a wireless carrier or other service for which the called party is charged for the call. The last requirement will obviously become difficult to enforce in the era of wireless-to-wireless and wireline-to-wireless local number portability. Further, no person or entity may initiate a telephone call to a residential subscriber using an artificial or pre-recorded voice without the express and prior consent of the called party, unless the call is made for an emergency purpose; or is not made for a commercial purpose; or is made for a commercial purpose which does not include or introduce material constituting a telephone solicitation.

Telemarketers will be required under the new rules not to disconnect an unanswered telemarketing call for at least 15 seconds, or four rings of the called party’s phone. Further, telemarketers may not “abandon” more than three percent of all telemarketing calls answered “live” by the called party, measured over a 30-day period. A call is considered “abandoned” if it is not connected to a live sales representative of the telemarketer within two seconds of the called person’s “completed greeting.” Whenever a sales representative is not available to speak with the person answering the call, that person must receive, within two seconds after the called person has completed his “greeting” (i.e., says “hello”), a pre-recorded message identifying the name and telephone number of the business entity or individual on whose behalf the call has been made, and stating that the call has been made for “telemarketing purposes.”

Fax Machines

The new rules also impose new requirements on use of fax machines to send unsolicited advertisements. To begin with, it has been and remains a violation of law to use a telephone facsimile machine or other device to send an unsolicited advertisement to another telephone facsimile machine. However, a fax advertisement is not considered unsolicited if the recipient has granted the sender prior express permission to deliver the advertisement, as evidenced by a signed statement that includes the fax number to which any advertisement may be sent, and which clearly indicates the recipient’s consent to receive such fax advertisements from the sender.

The “signed statement” provision, which was adopted in July 2003, has proven to be very controversial and has been violently opposed by trade associations that like to send “blast faxes” to members and others on their mailing lists to advertise, for example, “for profit” conventions. In response to widespread protests, the FCC has stayed the effective date of this provision until January 1, 2005. Over the course of the next year, it is likely that trade associations will lobby very hard for its repeal. Thus, the ultimate fate of this regulation is uncertain.


The FCC has announced that Do Not Call enforcement will be a priority. The FCC’s enforcement weapons include forfeiture proceedings under Section 503(b) of the Communications Act, “cease and desist” proceedings under Section 312(c) of the Act, injunction actions under Section 401 of the Act and revocations of common carrier license proceedings pursuant to Section 214 of the Communications Act.

Under Section 1.80(b)(3) of the FCC’s rules, the maximum penalty for a single violation of the rules is $11,000 and that figure has been mentioned as the likely future amount for an erroneous telemarketing call to someone in the DNC database. In all likelihood, however, the FCC Enforcement Bureau will seek to determine if there is a pattern of violations by a seller or telemarketer before taking enforcement action, rather than pursuing isolated violations.

Telemarketers and any company that employs telemarketers must become aware of and comply with these requirements. Please contact us if we can be of assistance.

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