Telemarketing takes a beating

Andy Sullivan and Judith Crosson

WASHINGTON/DENVER: Telemarketers may not dial the 51 million phone numbers on the national "do-not-call" list while a U.S. appeals court decides whether their free-speech rights are being violated, the court said.

The decision clears the way for the Federal Trade Commission to enforce the popular anti-telemarketing program, which had been thrown into legal limbo by a lower court decision, days before it was to take effect.

President George W. Bush welcomed the decision as a "victory for Americans who want to reduce the nuisance of unwanted telephone solicitations."

The legal status of the list is still not resolved as the U.S. Court of Appeals in Denver, must determine whether it unconstitutionally discriminates between commercial and charitable calls, which are not subject to the no-call rule.

But until then, the FTC will be able to fine telemarketers up to $11,000 for each time they call numbers on the list. Consumers will be able to sign up if they have not yet done so, and thousands of telemarketing companies that still do not have the list will be able to purchase a copy.

In its decision, a three-judge panel said the privacy interests of millions of Americans outweigh the economic harm that telemarketers would likely suffer.

"We conclude that the public does have strong privacy and expectation interests that weigh in favor of granting this stay pending review of the merits," the judges said.

The decision should bring some clarity to what has been a confusing legal situation.

After U.S. District Court Judge Edward Nottingham said the FTC could not implement the list, another agency, the Federal Communications Commission, said it would handle enforcement.

But Nottingham's order prevented the FTC from giving the list to the FCC, or to telemarketers who did not yet have a copy.

The two agencies will now be able to enforce the list together.

"This is an important victory for American consumers," FTC Chairman Timothy Muris said in a statement. "We will now proceed to implement and enforce the Do Not Call Registry."

"This means better protection from unwanted calls for the tens of millions of Americans who asked not to be bothered," FCC Chairman, Michael Powell said.

The FTC will likely need several days to get the list up and running again, as it took several days to shut it down after Nottingham's decision.

The appeals court had earlier declined a request by telemarketers to stop the FCC as well, and on Tuesday combined the two cases into one. Oral arguments are set for November 10 in Tulsa, Oklahoma.

The court said the FTC stands a good chance of winning its case.

"We conclude there is a substantial likelihood that the FTC will be able to show ... that the list directly advances the government's substantial interest and is narrowly tailored," the judges said.

The American Teleservices Association, which initiated the suit, said it told its members to comply with the list, and said it was encouraged that the case would be heard so soon.

Several lawmakers welcomed the decision, with both Louisiana Republican Rep. Billy Tauzin and North Dakota Democratic Sen. Byron Dorgan characterizing it as "common sense."

© Reuters