Fixing the Do Not Call List–Do Not Exempt

Published December 1, 2003

After a week-long circus that left most Americans scratching their heads in confusion, the federal “do not call” list went into effect on October 1. It was the California recall of regulatory policy: The only thing missing was Gary Coleman. And the issue is far from over–the rules, intended to be enforced by the FTC, are now being enforced by the FCC and are still under a legal cloud. Adding to the confusion, a court has barred the FTC from handing over the actual list to its sister agency–leading FCC Chairman Michael Powell to plead with telemarketers to give him a copy, any copy, of the list.

Aside from lawyers, the big winners amidst all this turmoil have been America’s politicians. Few have missed the chance to show their solidarity with America’s beleaguered householders. Yet their resolve to defend dinnertime peace and quiet apparently doesn’t apply to politicians’ own telemarketing efforts, which are exempted from the rules. And it’s these exemptions, along with others, that now threaten the rules politicians tell us they are fighting to save.

The current do-not-call turmoil was triggered on September 23, when a federal court in Oklahoma ruled that the Federal Trade Commission was not authorized by law to enforce such regulation. Congress sprang into action almost overnight and passed legislation to fix that glitch. But before the congratulations started, a second federal court, in Colorado, found the rules illegal–this time on constitutional grounds. But that case was against the FTC only. The FCC promptly stepped in to take over the enforcement job. However, it will not be able to enforce the do-not-call regulation if the Colorado decision stands on appeal.

That decision, by District Court Judge Edward Nottingham, was surprisingly straight-forward. Judge Nottingham did not find a constitutional violation with the concept of a do-not-call rule itself. In a similar case 30 years ago involving a law allowing postal consumers to block unwanted mail, the Supreme Court found, sensibly, “a mailer’s right to communicate must stop at the mailbox of an unreceptive addressee.”

The postal rules allow recipients to block any mailer they find offensive. Not so the do-not-call rule. That rule applies only to telephone solicitations intended to make a sale for profit–excluding political and other non-profit fundraising. This is the fatal flaw, Nottingham found. Rather than allow consumers full freedom to decide for themselves, regulators had discriminated in favor of preferred types of calls. And, conveniently for politicians, those preferred calls included their own.

These exempted calls are a significant part of the telemarketing blizzard–some 40-60 percent of the total. And there is no reason to believe they are as a whole less annoying to consumers. A call at dinnertime from a congressman’s re-election committee or from the Police Benevolent Association can be just as unwanted as a commercial call.

But aren’t political and other non-profit messages more important to society than mere commercial calls? Maybe, but not necessarily so. The key point is that this decision can be made only by individuals themselves, not politicians acting for them.

The ultimate legal fate of the do-not-call list is uncertain, as Judge Nottingham’s decision is sure to be appealed. Even if the ruling is ultimately overturned, the process could take years. If there must be a government-run no-call database, members of Congress could swiftly minimize constitutional doubt by subjecting all telemarketers–including their own–to the rules. Will they do so? Judge Nottingham has placed the call. It may not be answered.

James Gattuso ([email protected]) is research fellow in regulatory policy for The Heritage Foundation.