Congress Caps Faxes, Phone-Sales
WHEN home telephones ring these days, the caller is often not a friend but a stranger who is pitching everything from new credit cards to aluminum siding.Polls suggest that consumer irritation - particularly with computerized calls delivering recorded sales messages - is running high. "If it's a robot, I hang up immediately," notes one Manhattan resident. "If it's people, sometimes I talk sassy right back to them." Hearing the message, Congress last week passed a bill to put many of those unwanted sales calls on hold. The legislation, a compromise version of bills passed earlier in each house, bans the use of automatic dialing devices with recorded sales messages to most homes and emergency lines. Such calls, placed at random and dialed sequentially to include even unlisted numbers, are already sharply limited in many states. Unsolicited ads sent to home or office facsimile machines - sometimes called junk faxes - would also be banned under the new federal law. The bill also asks the Federal Communications Commission (FCC) to oversee development of a national "do not call" list or require companies to develop their own lists. The aim is to block live sales calls to those who don't want them. Damages of up to $500 a call for any violations could be sought. "We're drowning in an ocean of solicitations," insists Mark Cooper, research director of the Consumer Federation of America. "You ought to be able to get off people's [phone] lists and stay off them. Your phone number shouldn't be passed around willy-nilly by everybody." Still, businesses find telemarketing increasingly economical and effective. Sales of goods and services by phone generated $435 billion in revenue in 1990. By congressional estimates, some 18 million sales calls are made by phone each day. Congress's bill allows those firms that sell through automatic dialing devices to call only other businesses. These companies say the bill violates their freedom of speech and could shut them down. They also argue that consumer impatience is not a fit yardstick for whether or not further government regulation is appropriate. The White House Office of Management and Budget has said that the bill would lead to unnecessary commercial regulation and could hamper technological innovation. Yet some businesses support at least part of the legislation. The Direct Marketing Association (DMA), which has 3,600 member companies that specifically target calls to those most likely to buy their products, favors some limits on both unsolicited faxes and autodialing. "Our members don't use computer calls," insists DMA spokesman Chester Dalzell. He says DMA has long maintained two "preference" lists of individuals who don't want to receive ads by mail or telephone. Though these do not affect computerized or local calls, Mr. Dalzell says DMA lists are effective for national firms making targeted calls. It is good business, he says, for firms to concentrate on their best prospects. Yet Mr. Cooper says businesses have made such moves toward self-regulation only because "they see the handwriting on the wall." If their policing efforts were really effective, he says, congressional action would not be needed. "People don't like these calls, yet companies keep right on making them," Cooper observes. "The notion that the industry will voluntarily curb the abuses is useless." "The problem with both those [DMA] lists is that adherence is purely voluntary," confirms a staff aide to Rep. Edward Markey (D) of Mass., chief sponsor of the House bill. "Basically we wanted a listing mechanism that has some real teeth to it.... There are other ways to reach customers, such as TV and newspaper ads." Still, if the FCC takes on the job of building a national electronic data base of phone subscribers who want no sales calls, experts say the move will be costly and very challenging to keep up to date. FCC officials say it could cost $70 million to build such a system and $20 million a year to run it. "We don't believe that the FCC really wants to get involved in setting up a new bureaucratic program," says Dalzell. "I don't think government wants to take on that burden."