FTC Proposes Fee Amendment to the Telemarketing Sales Rule

The Federal Trade Commission today announced that it will issue a revised Notice of Proposed Rulemaking (NPRM) to amend its Telemarketing Sales Rule (TSR), adding a new section that would impose fees on entities accessing the national "do not call" registry. The amendments, if adopted, would among other things: require only sellers to pay the annual fee for access to the national registry; propose an annual fee of $29 per area code, with a maximum annual fee of $7,250; allow access to up to five area codes for free; and, set October 1, 2003 as the effective date for the "do not call" provisions of the Amended TSR.

Additional revisions to the Amended TSR would allow more entities to access the "do not call" registry. Limiting access only to telemarketers, as currently defined by the Rule, would prevent those entities that are exempt from the FTC's jurisdiction from obtaining the information necessary to scrub their lists, should they wish to do so for customer-service reasons. Such limited access also may prevent sellers from engaging in thorough Rule compliance, and may unnecessarily hinder the services provided to the telemarketing industry by list brokers and others. However, the FTC emphasizes strongly that the information in the national registry may be used for no purpose other than to stop unwanted telemarketing calls.

Once a seller pays the required fee, the FTC will provide it with a unique account number that can be used to gain direct access to the national registry. The seller can then provide this account number to any telemarketer or list broker with which it does business. Additionally, telemarketers who engage in telemarketing only on behalf of others - i.e., telemarketers who are not also sellers - would not be required to pay a separate fee for their access to the registry. The only consumer information that companies will receive from the national registry is each registrant's telephone number.

The FTC recognizes that some telemarketers conduct regional calling campaigns and, therefore, will want access to only a portion of the database. To accommodate these companies, the FTC proposes providing access to the national registry based on the number of area codes sought, at $29 per area code.

Consistent with recent legislation, the implementation costs of the "do not call" provisions of the Amended TSR are estimated at $18.1 million for fiscal year 2003. The FTC seeks comments on a broad range of issues, including its estimate of the number of entities that will access the registry and the number of area codes the average entity will purchase.

To come into compliance with the Amended TSR's "do not call" provisions by the effective date of October 1, 2003, all covered sellers would be required to access the registry for the first time between September 1 and September 30, 2003.

The FTC vote to publish the Federal Register notice was 5-0. A revised notice of proposed rulemaking will be published in the Federal Register shortly. Public comments will be accepted until May 1, 2003, after which the Commission will decide whether to make the proposed changes final. The FTC encourages comments to be submitted electronically to feerule@ftc.gov . Commenters may also submit an original plus two paper copies of their comments to the Office of the Secretary, Room 159, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

(FTC FILE NO. P994414)