All Commentary
Thursday, April 17, 2003

Telemarketing and Individual Rights

Do Americans have a right not to be called on the telephone? According to new rules laid down by the Federal Trade Commission (FTC), they do. And as in all cases where the government manufactures “rights” seemingly out of thin air, this latest plan to forcefully interject itself into the middle of people’s relationships is destined to be as morally and practically flawed as the rest.

The furor over telemarketing has been building for years. In response, at least 27 states have created, or are considering creating, “do-not-call” lists, which telemarketing firms are required by law to respect. Now, the federal government has decided to weigh in with the FTC’s own nationwide list designed to shield consumers from unwelcome telephone sales. Even the White House joined the fray, releasing a statement saying, “Time with family is a precious commodity, and families should be given the tools they need to help prevent unwanted calls from telemarketers.”1

Under the new guidelines, consumers who do not want to receive such calls would be able to place their names and telephone numbers on the national registry using the Internet or a toll-free number. They would have to renew every five years. Telemarketing firms that continue to call people once they’ve been put on the list would face a fine of up to $11,000 per violation.

Industry spokesmen claim the new rules will destroy their businesses and are actually contrary to what many consumers want. Some, like Direct Marketing Association president and chief executive Robert Wientzen, even argue against this new constraint on the grounds that it comes at “the substantial cost of restricting firms’ protected speech under the First Amendment.” Either way, according to a report in the Washington Times last December, “Telemarketers say . . . they are bracing for the worst.” “It’s extremely scary,” said Tom Rocca, chairman of the American Teleservices Association, which represents 2,200 telemarketers. “The more people on that list, the more it will affect jobs and revenue.” To make matters worse, the Federal Communications Commission (FCC) is contemplating its own “do-not-call” list under the 1991 Telephone Consumer Protection Act.2

The reaction from consumers is understandably mixed. “It’s very annoying,” one Chicago woman said about telephone solicitation. “You’re like a prisoner in your own house not knowing whether to answer your phone or not.”3 This statement most assuredly reflects the sentiments of millions of people in this country. Still, the success of telemarketing as a sales tool also cannot be ignored. Telemarketers closed 185 million deals with consumers in 2001, to the tune of $296 billion, and sales to businesses raised even more revenue. This clearly shows that quite a few people indeed welcome the opportunity to be solicited by phone.

Yet the important question is not about which competing interest deserves to prevail. Telemarketers argue from the position that the necessity of protecting their industry justifies the continued use of this sales technique, or at least that they have a “right” of their own deserving protection. On the other hand, privacy and consumer-protection advocates refer to telemarketing as an intrusion, and speak almost as if the calls were a physical invasion. FTC chairman Timothy Muris seemed to liken the plight of consumers to a besieged populace. “Help is on the way,” he said, referring to the coming “do-not-call” list.4

Despite all the arguments for and against this new regulation, the real issue at stake is not privacy, economic survival, or even free speech, but property rights. Somehow over the last century people have come to think of themselves as the owners of the telephone lines coming into their homes. They aren’t. The payment made to a local telephoneservice provider is for rental, not ownership, of the line. The phone company is the actual owner. Like cable TV or electricity, individual Americans trade with the suppliers of these highly coveted commodities under a contractual relationship of fee for service, not as purchasers of power, telephone, or cable lines.

The Right to Ask

When people invoke their “right” to not be interrupted by sales calls, they fail to realize that their complaint is not one to be handled by the government, but by, if anyone, the telephone company. No one has the right to demand that government regulators compel Burger King to take ketchup off the Whopper. They merely have the right to ask this for themselves. In a free, market-based society, businesses make money by serving their customers, and in that sense, the customer reigns. The extent of consumers’ actual claim over business products, though, is determined by the terms of the contract negotiated between the parties concerned. It’s highly doubtful that any consumer of telephone service has received a guaranty from his local phone company that sales calls will not be forthcoming.

How, then, could customers protect themselves from telemarketers? First, it should be understood that when someone gets a telephone, like a television, he is opening a portal to the outside world. The wonderful convenience represented by that oftenoverlooked fact is taken for granted today. Without a telephone it would take a healthy set of lungs to summon an ambulance. A telephone can also mean the sound of a loved one’s voice from thousands of miles away at the touch of a few buttons. Simply put, without the telephone, an unbelievable number of the riches and pleasures of our creative society would be literally out of reach for most people. It is presumptuous for someone to enjoy the immeasurable advantages of a culture built around this and other inventions, while assuming that he should be able to exercise a line-item veto over any perceived drawbacks.

Even so, the marketplace will ultimately provide the kind of protection that people want from untimely telephone interruptions, and to some extent it already does so. The Direct Marketing Association began a private “do-not-call” list in 1985 for use by the telemarketing industry; it has 7.5 million subscribers. Another private firm, Illinoisbased Private Citizen, Inc., assists consumers in removing their names from telemarketing lists.

For those who want to take more immediate action, Baby Bells are now offering “Privacy Manager,” a service (for a small monthly fee) in which the phone company’s computer intercepts any call that provides no caller ID data, requests identification, and then relays the information to the resident, who has the option of refusing the call, accepting it, or sending a computer message instructing that the telemarketer not call again.

Also available is the Telezapper, a tiny computer that hooks up to your phone and automatically “zaps” your number from the computer database of any caller using an auto-dialing system (popular among telemarketing firms).

Of course, caller ID allows us to know who is calling before we even pick up the phone, and answering machines permit calls to be screened. Most telephones now have a ringer-off or volume switch, which can be used during mealtime, rest time, or family time. As a last resort, one can just refrain from answering the phone — if it’s important, they’ll call back later.

Competition may also play an important role in the future of telephone solicitations. If the federal and state governments stay out of the way long enough, alternative telephone companies will begin to take root and provide real choices in local service. Service innovations would require that telephone companies enjoy absolute, unrestricted ownership of their respective lines. Regulations like the “do-not-call” list currently being implemented by the FTC only disrupt market signals that would transmit the need for innovations and hinder their evolution.

1. “Government plans nationwide ‘do-not-call’ list,” Associated Press, St. Petersburg Times Online, December 19, 2002.
2. William Glanz, “Consumers to get help avoiding sales calls,” Washington Times, December 18, 2002.
3. “Government plans nationwide ‘do-not-call’ list.”
4. Ibid.

  • Scott McPherson is a policy adviser at the Future of Freedom Foundation, and author of Freedom and Security: The Second Amendment and the Right to Keep and Bear Arms. An advocate of the Free State Project, he lives in Portsmouth, New Hampshire.