'DO NOT CALL' LAW UPHELD AS CONSTITUTIONAL

Appeals Court Finds Telemarketer Rules Not an Excessive Burden

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WASHINGTON (AdAge.com) -- The federal do-not-call registry, which allows consumers to block calls by telemarketers, was unanimously upheld today by an appeals court, which ruled that the
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registry "is a valid commercial speech regulation ... without burdening an excessive amount of speech."

The opinion handed down by the U.S. Court of Appeals for the 10th Circuit in Denver had been anxiously awaited by consumers, marketers and marketing groups.

$100 billion in revenues
Two major marketing trade groups, the Direct Marketing Association and the American Teleservices Association, challenged the registry's legality. The two marketing groups warned that the registry would eliminate 2 million jobs and cut in half the $100.2 billion a year generated from outbound calls to consumers. Both groups today said they are reviewing the case and may appeal it to the Supreme Court.

The do-not-call list is run by the Federal Trade Commission and the Federal Communications Commission.

In four court cases that got consolidated at the appellate level, the marketing groups argued that the registry took away their rights to First Amendment-protected speech and that it was excessive and poorly drafted, with competitive marketers forced to abide by different rules. They also said the FTC and the FCC could have found other means by which to limit bothersome calls without barring all telemarketing calls.

Not a ban
The FTC, FCC and a number of states, however, said the registry does not represent a ban because consumers chose to opt-out of receiving sales calls. More than 55 million phone numbers are registered on the do-not-call list.

The appellate court said today that because the registry doesn't affect political or charitable calls and because there is a danger of abusive telemarketing and invasion of consumer privacy from telemarketers, the government has a right to regulate telemarketing.

"We hold [that] the registry is narrowly tailored because it does not over-regulate protected speech," Judge David M. Ebel wrote for on behalf of the court. "The registry prohibits only telemarketing calls aimed at consumers who have affirmatively indicated that they do not want to receive such calls and for whom such calls would constitute an invasion of privacy."

Other forms of advertising
The regulations "do not hinder any business' ability to contact consumers by other means such as through direct mailings or other forms of advertising," Judge Ebel said. He added that company-specific call-blocking lists that marketers had requested are difficult to enforce.

FTC Chairman Tim Muris and FCC Chairman Michael Powell today were quick to praise the ruling, referring to it as a "victory" and "triumph" for American consumers.

Direct marketing groups, meanwhile, noted that one of the lower court rulings being appealed had initially overturned the rule, suggesting that there may be further legal action ahead.

Supreme Court
"We are disappointed but not discouraged," said Tim Searcy, executive director of the American Teleservices Association. "It's always a complicated case because of the First Amendment. It may have to be resolved in the Supreme Court."

The DMA said it is considering its options and again called on the FTC and FCC to resolve some flaws in the registry.

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