Cable Carves Out Calling Rights

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In a concession to the cable industry, the federal government has decided to include a business-relationship exemption in sweeping new rules designed to give consumers relief from excessive telemarketing calls to their homes, fax machines and cell phones.

The cable industry, led by the National Cable & Telecommunications Association and Cablevision Systems Corp., was concerned that legitimate attempts to retain or win back customers could be frustrated if the government went too far in its effort to protect consumers from annoying telemarketers.

Within limits

Both urged the Federal Communications Commission to make allowances for companies with current or recent business relationships with consumers.

Although the FCC agreed, it decided to limit the period during which a cable company may call a former customer.

Telemarketers, using sophisticated new technologies that help take in about $600 billion a year in sales, are responsible for generating 104 million calls a day to homes and businesses, an onslaught that forced Congress to back an FCC and Federal Trade Commission campaign to curb it.

To stanch the flow of calls, the FTC established a do-not-call database on the Internet (at www.donotcall.gov.), where consumers may register their phone numbers for five years.

In general, effective Oct. 1, 2003, most telemarketers are prohibited from calling a number that has been placed in the do-not-call registry. As of June 27, 20 million phone numbers have been registered, and the FTC expects up to 60 million numbers to sign up within the first year.

The FCC — adopting a recommendation from Cablevision — ruled in a July 3 order that cable companies in some circumstances can continue to call customers that have joined the do-not-call list.

The FCC endorsed what it called an "established business relationship" exemption. Under it, a cable company may contact a former subscriber in the do-not-call registry for up to 18 months.

The cable company would be entitled to call the customer to encourage him or her to sign up for cable service once again, or to consider subscribing to high-speed data or telephone service.

"If you provide cable service, you can call them up about cable-modem service or telephone service," said Frank Lloyd, an attorney with Mintz Levin Cohn Ferris Glovsky and Popeo, who filed comments at the FCC for Cablevision. "If you left Cablevision to go to DBS, Cablevision can still go after you for 18 months."

Opt-out clause

But the cable company must stop calling the customer if the customer asks the company to do so, the FCC said.

The FCC also said that a company that has received an inquiry or application would have a three-month window to contact the person. But, again, the company is obligated to stop calling at the customer's request.

In the order, the FCC said the exemptions were intended to allow businesses to communicate with customers who would likely be receptive to the calls.

"It appears that consumers have come to expect calls from companies with whom they have such a relationship, and that, under certain circumstances, they may be willing to accept these calls," the FCC said.

NCTA spokesman Brian Dietz said the FCC struck "a balance between consumer privacy and a company's need to communicate with its customers."

The do-not-call rules, which include fines of up to $11,000 per violation, exempt political organizations, charities, surveys, and insurance companies. The rules do not apply to business phone numbers.

FTC spokeswoman Cathy MacFarlane said the agency expects the do-not-call rules to reduce telemarketing calls to consumers by 80%.

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