July 15, 2003

Do not bother

By: AF Editors

The federal “Do Not Call” list is unlikely to put an end to the irritating marketing tactics of Optima Dog Food, Allstate Insurance, or Disney Cruise Lines. These telemarketing pests are now moving to “phase two” of their operations, and will continue to hassle the disinterested general public despite, or perhaps delighted by, the pariah-like status that recent regulatory activity has secured for them.

Next time you contact a company with an automated phone system, expect sales pitch reels from their “affiliates” over Muzak. Junk mail — always something to look forward to after a week out of town–is still an option. But the over 23 million people that have signed on to the Federal Trade Commission’s “Do Not Call” list–and the rest of us–will first notice the strategy shift in our email boxes. After all, interrupting households at dinnertime is just as tacky as peddling “herbal Viagra.”

Not to worry, FTC Chairman Timothy Muris has already proposed a “Do Not Spam” registry as a complement to the dubious success of “Do Not Call.” It’s just too darn difficult to delete unwanted e-mail, or to create a folder in your box exclusive for address book contacts, just like it’s too difficult to hang up the phone when unwanted callers reach you.

Every government regulation has an indirect cost, but some costs are more visible than others. “Do Not Call” proponents ignore the indirect costs of this regulation, and incorrectly identify telemarketing calls as a negative externality. But how did the market fail under this rubric, as it has provided TeleZapper, Phone Butler, and EZ Hang-up? Also, many phone companies like SBC, Sprint, and Qwest offer screening services that intercept unidentified callers and ask solicitors to hang up. These solutions may not be fail-safe and they may not be free, but neither is the “Do Not Call” registry. “Can it really cost us all less to solve a problem by getting lawyers involved?” asks the Competitive Enterprise Institute’s Solveig Singleton

Without the list, TeleZapper and Phone Butler would be cheaper and more effective in the long run because these are competitive, market-produced goods. However, the “Do No Call” list has no competition. In the long run, its regulatory scope can only grow larger, imposing even more indirect costs.

The “Do Not Call” list is only the latest in a series of regulatory actions against telemarketers, but it is the most highly publicized. Rather than promoting the Direct Marketing Association’s voluntarily-implemented list, or even determining its relative effectiveness, the FTC is expecting each of us to be, like Jonah Goldberg writes, a “baby crying for the nanny state to give it food or change its diaper.”

But according to FTC spokesman Cathy MacFarlane, the “Do Not Call” list is more like a back massage and pot of rooibos tea. “The bills come, and the kids get sick and the mother-in-law comes for a visit. People feel like they have so little control out there with what happens to them–and this is one way they can actually have some say,” she says.

If telemarketing was not a profit-making enterprise, the practice wouldn’t exist. Obviously some people are buying goods and services over the phone. The DMA provides on its website ( www.dmaconsumers.org,) a list to remove your information not only from telemarketers, but e-mail and snail mail lists. All DMA members (80% of all telemarketers) are required to purchase the list, in addition to some non-members. It’s not worth their time to pitch to the disinterested, and these companies have their reputations to protect. Understanding the overwhelming unpopularity of telemarketing, Qwest cut phone pitch operations by 30%. Others companies inside the “Do Not Call” list’s loopholes can be expected to follow suit.

Yes, “Do Not Call” has its loopholes, and some are gaping. Telemarketers that work only within one state are free to disregard it, as can long-distance phone companies, airlines, banks and credit unions, insurance companies, charities and non-profit organizations, telephone surveyors, and (surprise, surprise) political organizations. That’s funny because the only telemarketing calls I ever receive come from phone companies, airlines, banks and credit unions, insurance companies, charities, telephone surveyors, and political organizations. Perhaps ten years down the road an inevitable bureaucratic blunder will let some of them benefit from this list that so conveniently links phone numbers to email addresses

Worst of all the exemptions is that companies with which you have an “existing business relationship” are still free to contact you. Buy a pound of dog food tomorrow and expect a call from Optima–or one of its dozen affiliates–tonight.

Perhaps the biggest misconception about the “Do Not Call” list is that it is no different from a “No Solicitations” sign on your front door. The distinction between private property and free speech is not neatly cut in this case. Yes, you own your telephone. It is a simple device you choose to connect to a worldwide telephone network. But the telephone network is not your property. The phone on the other line placing a call to you is not your property. Telephones have barely changed in the past century. Until the Feds stepped in, upgrading your phone’s intelligence with products like TeleZapper seemed like a no-brainer.

Granted, nationwide telephone lines are virtually the government’s property. Telecommunications is one of the most heavily regulated industries, and that is why we should not let a new regulation divert our attention from their prior missteps. The “Do Not Call” list discretely affirms the government’s authority over an industry too complex and unwieldy to be tamed by public policy.

Even some enthusiasts of the “Do Not Call” list doubt its benefits will sustain. “It’s a hassle for us to break off an important conversation, only to find that the beeping line lead me to hear a prerecorded ‘Hi, this is Susie from blank travel’ message,” says Zoe Mitchell, a partner at the public relations firm, Mintwood Media Collective. Mitchell’s office receives about two telemarketing calls per line a day, but she is suspicious of the effectiveness of the “Do Not Call” list. “If it’s a bad regulation, it will remain in place indefinitely. If it’s a good regulation, it’s bound to be ‘reformed’ to the point of oblivion.”

The FTC expects almost a third of all residential phone numbers will be added to this list in its first year. Therein lies a strong message that the greater American public is tired of unwanted calls. Yet, a much stronger message would have come from the sales of products designed to eliminate this hassle. Ironically, TeleZapper’s sales may increase in the long run because although the “Do Not Call” list highly publicized the telemarketing problem, it will fail to eliminate it entirely.

Telemarketing is a nuisance, but if it were unbearably so, we would have voluntarily sought out solutions. Nothing is “free” or “easy” if it is provided by the government. The cost of this regulation will be large, and unfortunately, indirect and unseen. The “Do Not Call” list on its face looks like a harmless way to control the problem, but its effectiveness is unlikely. There are a number of substituting marketing practices like spam and junk mail that are just are undesirable. There are also far too many loopholes. The federal government isn’t our nanny. Problems we can solve ourselves, are better and more effectively resolved that way.

Joanne McNeil is freelance technology writer living in Washington, DC.