AAN has received a number of questions about new federal regulations that may affect the way members communicate with both sales prospects and current advertisers. The Federal Trade Commission ("FTC") and the Federal Communications Commission ("FCC") both regulate in this area. The FTC rules cover interstate calls only; the FCC rules cover intrastate and interstate calls. Here we attempt to answer the most immediate questions, and to remind you of pre-existing regulations restricting unauthorized commercial faxes.

DO NOT CALL RULE

The most important change is the FTC's new rule that will allow consumers to tell businesses never to call their telephone number, officially called the Telemarketing Sales Rule; unofficially, the "Do Not Call" rule. Though this is directed toward consumers, both business and residential telephone customers may register their telephone numbers on a national Do Not Call registry. By October 1, 2003, your newspaper will be required to match your sales-call list with this list of prohibited numbers for any sales calls made outside your state. (The FTC's rule does not apply to in-state calls. However, many states have Do Not Call laws now or will have in the near future. The FTC's Web site provides a chart of state Do Not Call laws.)

Under the "old rule" regulating unsolicited sales calls, the FCC required companies to remove consumers from their call lists on request and to impose a penalty if that did not occur. That law still applies.

What are newspapers required to do?

To comply, your newspaper must "subscribe" to the FTC's Do Not Call lists. These will be available on a fully automated FTC Web site after September 1. If you want access to lists for more than five area codes, the FTC will charge a fee -- reportedly starting at $25.00 for the sixth area code.

Once you've downloaded the lists you need, you must compare your internal sales-call lists to the registry and "scrub" all numbers registered to block sales calls. You cannot call residential numbers on the Do Not Call registry without risking hefty fines. (But see, "safe harbor" discussion below.) You will be required to repeat the scrub process every three months.

You should also be aware that you may not repeat a call to any person who asks you to remove their name and number from your company call list, even if they are not on the Do Not Call list.

Exceptions to the Do Not Call rule

There are several exceptions that allow you to call a phone number on the Do Not Call list without violating the rule:

• You can continue to place in-person calls to businesses to sell advertising even though it is possible to register a business telephone on the Do Not Call list. If the business that was called were to complain to the FTC, the rule could not be enforced against you. However, this raises the logistical issue of what to do about computer programs that "scrub" the list and eliminate registered numbers that actually belong to businesses.
• You can call customers with whom you have an existing business relationship, such as a current advertiser.
• You may also call an advertiser who placed an ad with your paper within the last 18 months.
• People who have given you written permission to call may also be contacted by telephone.
• You can call anyone to conduct a genuine survey or market study, so long as you're not trying to sell something during the call.
• Finally, you can call a potential client who has called the newspaper or made an inquiry within three months after their initial call.

The rule also expressly exempts from its coverage several types of calls, including:

• calls completed after a face-to-face sales presentation
• calls subject to regulation under other FTC rules (e.g., the Pay-Per-Call Rule, or the Franchise Rule)
• calls initiated by consumers that are not in response to any solicitation
• calls initiated by consumers in response to direct mail, provided certain disclosures are made
• calls initiated by consumers in response to advertisements in general media, such as newspapers or television.

Finally, catalog sales are also exempt, as are most business-to-business calls, except those involving the sale of non-durable office or cleaning supplies.

Persons soliciting political contributions, charitable contributions or taking bone fide telephone surveys are not covered by theses rules. Anyone soliciting charitable donations must immediately reveal that at the start of the call. And, if any person asks any such group to take his/her name off their call lists, they must comply.

More requirements

By January 29, 2004, your telemarketing equipment must transmit your telephone number and your newspaper's name to sales-call recipients who have Caller ID equipment. Earlier FCC rules, such as the requirement to stop making sales calls at nine o'clock in the evening, remain in place. Remember, FCC rules apply to intrastate calls, as well as interstate calls.

Enforcement

The FTC will designate violations of the Do Not Call rule "abusive telemarketing acts or practices" and will treat violations as an unfair or deceptive trade practice. Furthermore, citizens are given a private right of action to enforce the law.

Your newspaper may escape penalties under this rule if you meet detailed requirements that allow you to qualify for a "safe harbor." These rules require you to set up training, records and monitoring of compliance with the Do Not Call registry, to insure that if someone on the list is called, the call is inadvertent. However, if there are "too many" inadvertent calls to registered consumer numbers, the safe harbor may dry up, so to speak.

For more information

The Do Not Call regulations appear in the Code of Federal Regulations at 16 CFR §310.4. The FTC Web site has a fairly good explanation of the Do Not Call rule. At the home page, click on "Business."

"JUNK FAX" RESTRICTIONS

The FCC, under the Telephone Consumer Protection Act of 1991, 47 USC §227, has for years prohibited sending any unsolicited advertising to any telephone facsimile machine, business or residential. Unsolicited advertising is defined as "any material advertising the commercial availability or quality of any property, goods or services which is transmitted to any person without that person's prior express invitation or permission." On July 3, 2003, the FCC issued a Report and Order saying that a "prior business relationship" will not create implied permission to send an unsolicited advertisement; the agency will begin enforcing this new rule by August 25, 2003. (As we mentioned earlier, unlike this new FCC rule, a "prior business relationship" is recognized by the FTC as an exception to the Do Not Call Rule.)

Enforcement

The FCC may be revving up to enforce the "junk fax" law more stringently. For example, the agency brought an enforcement action against one company claiming that more than $5 million in fines were due. According to a statement issued with the enforcement action, "the FCC had taken enforcement action against at least five other companies for TCPA violations, with aggregate fines exceeding $1.5 million, and issued citations against more than 70 companies for sending junk faxes."

Just as with the FTC's Do Not Call Rule, the FCC law against unauthorized faxes also allows for citizens to bring a private cause of action against the offender to recover actual losses or $500 per call, whichever is greater. The federal law also allows enforcement of any state laws that apply to unsolicited advertising sent by fax.

The FCC's Web site, http://www.fcc.gov, isn't as helpful as the FTC's site, but Rules and Orders can be found by using the search engine and entering the topic you're looking for.

The FCC's rules have been tested in court repeatedly and usually held to be constitutional restraints on commercial speech (though not always). The FTC's Do Not Call rule is sufficiently similar to suggest that it's legal fate might be the same.

In the meantime, there's always the U.S. Post Office, and that All-American stand-by, the handbill.