BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking on the Commission's motion to establish an appropriate error rate for
connections made by automatic dialing devices pursuant to Section 2875.5 of the Public Utilities Code.
Comments of Private Citizen, Inc.
Submitted March 25, 2002
The California Public Utilities Commission (CPUC)
Private Citizen, Inc. (PCI) is an Illinois based, for-profit corporation established in 1988. Our mission is to limit the privacy abusive practices of the direct marketing industry. In that regard, we offer a service wherein residents and/or businesses may appoint PCI its agent to notify firms involved in telephone solicitation (as defined by PCI subscribers / members [members]) that PCI members are unwilling to freely accept such solicitation calls. Furthermore, PCI members offer the use of their private property (their telephone) to notified solicitors, on a for-hire basis of $500 per solicitation incident. More information is at privatecitizen.com.
Currently, PCI has more than 4,000 members, with over 490 in California.
The CPUC seeks comment on issues concerning AB870. They include the following:
1) The acceptable error rate in relation to the prohibition on automatic dialers making a connection for which no person, acting as an agent or telemarketer, is available for the person called. Such 'errors' being a violation of §2875.5 (a)The comments of Private Citizen, Inc. are presented below.
For the purposes of our comment we note that the term 'automatic dialer' as used by the state, is commonly know as a 'Predictive Dialer' (PD) within the telemarketing industry. While the term 'error rate' is commonly known as the Predictive Dialer's 'Abandonment Rate' (AR).
ACCEPTABLE ERROR RATE OF AUTOMATIC DIALERS
PREDICTIVE DIALERS OFFER A VARIETY OF BENEFITS TO TELEMARKETING FIRMS.
PDs enable such firms to operate more efficiently. Such benefits include -
1) automatically dialing telephone numbers.
2) (in theory) transferring live answered calls to available telemarketer.
3) filtering 'no-answer', busy and disconnected lines, and (in theory) answering machines.
4) presenting telemarketers with real-time on-screen data, pertinent to the called party.
5) connecting to the telephone network through trunk (or T1) lines that do not transmit Caller ID data (disguising such
calls as potential 'out-of-area' calls from the called party's associates, while hiding the identity of firms that make
6) They perform real-time calculations, based on real-time data, including the number of telemarketers on staff, the
average time length of a telemarketing call, the percentage of busy,
7) incorporated into an algorithm used by the PD that allows the PD's owner to effectively set its dialing speed and the
resulting idle time between calls, of its telemarketing staff.
THE ERROR RATE MUST BE ZERO.
To refer to hang-up calls resulting from solicitations via a PD, as an 'error rate' tends to mitigate the intentional action of the telemarketing entity using the PD, as such users intentionally program such 'error rates' (abandonment rates / ARs) into a PD.
Background: Generally, telemarketing firms set PD parameters that are critical to its resulting AR.
1) THE SETTING OF A PD'S DIALING SPEED.
PD users (telemarketing firms) set its dialing rate or speed. The dialing rate of a PD is directly related to its AR. Therefore, an AR cannot logically be referred to as an 'error rate', as it is intentionally set, with knowledge that a setting above '0' will result in hang-up calls.
Telemarketing firms that set a 'high' AR enables its staff to be kept busy with a steady stream of live-answered calls. A higher AR setting reduces a telemarketer's idle time between calls. It also (psychologically) encourages telemarketers to invest less time with reluctant called parties, knowing that another resident is immediately available, at the push of a button.
An AR set at a level of +0 creates telemarketing efficiencies by reducing idle time between 'pitches' and reducing talk time with evidently reluctant parties. Thus, more calls at a lower cost per call.
2) THE PD'S ANSWERING MACHINE DETECTION ALGORITHM.
Another function of a PD is to identify and react to answering machines. The industry term for this is 'call progress analysis'. This process of detection - disposition of calls to answering machines, takes anywhere from milliseconds to seconds, with that time period generally set by the user.
The less time the algorithm is set to run, the more likely the PD will mistake a 'live-answered' call for an answering machine, causing the PD to hang up on the person, or mistake an answering machine for a person, causing the answering machine to be transferred to a telemarketer.
By setting a longer time, the called party experiences a period of 'dead-air' from the time of answering, to when the PD determines the call to have been answered 'live', and switches it to an available telemarketer. This situation commonly results in the called party hanging up during the dead air; which, as far as the called party is concerned, is an abandoned / hang-up call, since the call is answered but the calling party does not speak within a reasonable time.
Historically, industry trade journals and on-line industry discussion groups commonly mention a resulting '10% error rate' in answering machine detection.
Thus, when a PDer's 'call progress analysis' time is set low, it will mistakenly transfer 5% of calls answered by answering machines, to a telemarketer, and hang up on 5% of calls answered live, mistakenly determining the live answer to be an answering machine. Furthermore, when the 'call progress analysis' time is set high enough minimize such 'mistakes', the called party likely hangs up, considering the silence while the PD's analysis is proceeding, to be a hang-up call.
In other words, an inherent problem with a PD, regardless of its abandonment rate, is that it's answering machine detection feature will, by nature, result in calls wherein the called party will answer and hang up believing no one is on the other end of the line. As such, these are virtual hang-up calls.
3) CALL CANCELLATION.
As well as hanging up on live-answered calls when no telemarketers are available, PD's may also cancel the ringing of a telephone after one, two or three rings when the PD recognizes, after dialing, that no telemarketer is available. As such, call cancellations are virtual hang-up calls.
HARM TO PRIVATE CITIZENS
Regardless of the intention of a call is to solicit sales, survey data, or donations, the calling entity knows, before dialing, that the call's most likely result will disturb those called to their home phone.
Most solicitors fail to effectuate the goal of their call. Indeed:
a) for all sales solicitation cold calls, a 1.5% sales rate is considered better than average.
79% generally regard live sales calls to homes as intrusions.
68% if given the option, would block phone-company telemarketing calls.
- "Privacy Concerns and Consumer Choice", Harris-Westin Survey Reports: 1998
b) for telemarketing-research, a survey firm will commonly call and speak with 50 people before one is found to fit the
psycho-demographic characteristics required of the survey.
Historically, +30% of those who meet such characteristics refuse to be surveyed.
Note: A telemarketing-research firm, intending to survey commuters who take a train to work on a daily basis, once
called me. When asked, the caller said that on average, 1 in 125 called, met the commute-by-train status. I later
asked an executive of that firm why they did not survey those on the train platform, or the morning train. His
response was, "it would be too expensive'.
c) for charitable calls, most of those solicited do not donate. If a person does donate, more commonly than not, the
calling firm will retain most of the funds generated. For example, the most ubiquitous type of 'charitable' call claims to support police/fire/sheriff organizations. Such firms commonly transmit less than 15% of generated funds to the
organizations on whose behalf they are ostensibly calling. See BBB Wise Giving Alliance at:
Considering that most telemarketing calls are more of a 'telenuisance', the added insult of that industry's practice of programming a device to intentionally hang up on a set of residents, or not speak to those they call, is an absurdity that is not tolerated under any other situation.
As president of Private Citizen, Inc., I commonly hear from folks concerning their 'telemarketing problems'. Since approximately 1994 PCI has received an ever-increasing level of calls from residents complaining of 'out-of-area' / hang-up calls. These residents are referred to us by telephone companies, the media, the Internet or other avenues. Their stories can be horrific, with some complaining of hang-up calls received at a rate of 3 to 8 per day. They include:
- Elderly, infirm residents or their adult children calling on their behalf.
- Individuals recently released from hospital, recuperating at home.
- Airline pilots, police officers, etc. working odd hours; sleeping during the day.
- Young mothers, caring for their sick infants.
- Single women, living alone, concerned that they are being stalked.
- Parents concerned that their families are being criminally stalked.
In one such case, a Wisconsin nurse, receiving hang-up calls daily over a period of months, quit her job and
installed home security equipment to protect her children from a perceived stalker. Upon investigating we found
the calls were from an Oregon telemarketer using a PD.
For a sense of the telemarketing industry's view of what 'it' considers appropriate PD hang-up levels, see:
"American Teleservices Association's (ATA) issues Position Statement on Ethical use of Technology", at:
http://www.ataconnect.org/htdocs/newsroom/past/032699.htm. Therein, it states:
"Users of Predictive Dialer Equipment Teleservices firms who use predictive auto dialing equipment to contact
consumers should: …
3. Not abandon the same telephone number more than twice during the same month of a marketing campaign."
With hundreds of telemarketing firms, each making anywhere from hundreds thousands to millions of PD calls per month, the ATA's idea of ethics may be fine for the industry, but devastating for residents.
Telemarketing industry PD usage began in earnest, in the early 1990s. Then, as now, the industry was profitable. Today, even with an AR set at '0' and its 'call progress analysis' (answering machine detection) turned off, a PD still affords the benefits of:
1. auto-dialing telephone numbers.
2. filtering out 'no-answer', busy and disconnected lines.
3. real-time on-screen data, pertinent to the called party.
4. use of T1 lines to hide the Caller ID identity of the telemarketer, from the called party.
5. performing real-time calculations, to assure that a telemarketer will be available.
Telemarketing will continue to flourish and bother the vast majority of those called. By limiting PDs to an AR of '0', the CPUC end the industry's most absurd practice of intentionally hanging up on folks.
TO ALLOW ANY LEVEL OF PD HANG-UP CALLS IS TO GRANT SEEMING SAFE HARBOR FOR ILLEGAL CALLS.
Specifically, in the case of 'cold' sales solicitation calls made to residential lines, such calls are governed by the Telephone Consumer Protection Act of 1991 (The TCPA [47 U.S.C §227 and collateral FCC regulation 47 C.F.R. §64.1200]). At 47 U.S.C. §227(c)(2), Congress mandated that the Federal Communications Commission prescribe regulations to implement the statute.
At 47 C.F.R. §64.1200(e)(2)(iv) a portion of that FCC regulation states (as truncated below):
(e) No person or entity shall initiate any telephone solicitation to a residential telephone subscriber:
(2) Unless such person or entity has instituted procedures for maintaining a list of persons who do not wish to receive telephone
solicitations made by or on behalf of that person or entity. The procedures instituted must meet the following minimum
(iv) Identification of telephone solicitor - A person or entity making a telephone solicitation must provide the called party with
the name of the individual caller, the name of the person or entity on whose behalf the call is being made, and a telephone
number or address at which the person or entity may be contacted. …
The term 'call' as defined by the Glossary of Telecommunication Terms (published by the General Services Information Technology Service Administration - Federal Standard 1037C), as:
"In communications, any demand to set up a connection."
Thus, a PD's demand for dial tone and dialing a number, is a "call"
At 47 C.F.R. §64.1200(f)(3) the regulation defines a 'telephone solicitation' (as truncated below):
(f) As used in this section:
(3) The term telephone solicitation means the initiation of a telephone call or message for the purpose of encouraging the
purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person, but such term does
not include a call or message:
(i) To any person with that person's prior express invitation or permission;
(ii) To any person with whom the caller has an established business relationship; or
(iii) By or on behalf of a tax-exempt nonprofit organization.
Thus generally, a telemarketing sales cold caller, ringing a residential line, must give the called party:
1) the name of the caller,
2) the name of the firm on whose behalf the call is made, and
3) either the address or phone number of that firm.
Granting a telemarketer any perceived right to violate federal law, by making telephone solicitation calls, without disclosing information required by the TCPA, is antithetical to good government.
Furthermore, making an 'allowance' for such hang-up calls (as AB870 contemplates) violates the U.S. Constitution's Supremacy Clause. (see article VI, §2). All federal, state, and local officials must take an oath to support the Constitution. This means that state governments and officials cannot take actions or pass laws that interfere with the Constitution, laws passed by Congress, or treaties. The Constitution was interpreted, in 1819, as giving the Supreme Court the power to invalidate any state actions that interfere with the Constitution and the laws and treaties passed pursuant to it. That power is not itself explicitly set out in the Constitution but was declared to exist by the Supreme Court in the decision of McCulloch v. Maryland, 17 U.S. 316 (1819)
Beyond 'legal' arguments against an AR or 'error rate' set above '0', PCI submits that if residents have a right to be left alone anywhere, free of noisome intrusions, that right must exist in our homes, or not at all. The people of this nation are born with that right. At this point, it is the responsibility of the CPUC to recognize that right and protect it on behalf of the people. The AR or error rate for PD must be set at '0' so that human rights are not diminished by under-regulated capitalism, in our homes.
RECORD KEEPING PROCEDURES
Background: As outlined above, a PD hang-up call to a residential telephone line, generated as a result of a 'cold' sales solicitation effort, is commonly a violation of the TCPA. The TCPA grants a Private Right of Action to those called twice, within 12-months, in violation of the TCPA
At 47 U.S.C. §227(c)(5) the statute states (in part):
(5) Private right of action - A person who has received more than one telephone call within any 12-month period by or on behalf of the
same entity in violation of the regulations prescribed under this subsection may, if otherwise permitted by the laws or rules of
court of a State bring in an appropriate court of that State -
(B) an action to recover for actual monetary loss from such a violation, or to receive up to $500 in damages for each such
violation, whichever is greater, …
Furthermore, the TCPA enables the California Attorney General to sue for each TCPA violation.
At 47 U.S.C. §227(f)(1) the statute states:
(1) Authority of States - Whenever the attorney general of a State, or an official or agency designated by a State, has reason to believe that any person has engaged or is engaging in a pattern or practice of telephone calls or other transmissions to residents of that State in violation of this section or the regulations prescribed under this section, the State may bring a civil action on behalf of its residents to enjoin such calls, an action to recover for actual monetary loss or receive $500 in damages for each violation, or both such actions. If the court finds the defendant willfully or knowingly violated such regulations, the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under the preceding sentence.
REQUIRING FIRMS TO REPORT THEIR OWN MISBEHAVIOR IS UNREALISTIC.
An honest reporting of hang-up calls will expose firms to damages in excess of its payroll expenses
A telemarketing firm, using a PD, can dial phone numbers at a phenomenal rate. The following calculation is used as a basis to illuminate the jeopardy of a telemarketing firm, using a PD to make 'cold' sales solicitation calls when its AR, set at 2.5%, must be reported, and become public record.
(The following data is from: http://www.sytelco.com/side/testdrive.htm )
Note: Though 'answering machine detection error' rates and 'short-ring - cancel' rates (both described earlier) add to the
virtual AR which results from the use of a PD, I shall not include those factors into the following calculations. The
calculated salary of telemarketing staffers is set at $12 per hour.
With a 35% live answer rate of 25,000 numbers called, we have 8,750 live answers.
a) An AR of 2.5% (as described above) gives us 219 calls answered live and abandon / hung-up on.
5 agents x $12 per hour x 46.5 hours = $2,790 total salary
20 agents x $12 per hour x 10.5 hours = $2,520 total salary
219 TCPA violations x $500 each (state Attorney General prosecution) = $109,500
b) An AR of .25% (1/10th the above rate) gives us 22 calls answered live and abandon / hung-up on.
(As a PD's AR is lowered, the hours to complete a calling program will increase dramatically.)
5 agents x $12 per hour x 46.5 hours = $2,790 total salary
20 agents x $12 per hour x 10.5 hours = $2,520 total salary
22 TCPA violations x $500 each (state Attorney General prosecution) = $11,000
The above example (an exposition of a common telemarketing program) shows that it will take less than 6 TCPA violations (abandon calls to residents without permission / business relationship) to more than double the amount a firm spends on the calling employees' salary.
Note that there are two ways to measure abandoned calls. An abandon rate may be based on a percentage of all call outcomes, or live calls only. For example, a .25% AR on total calls made (25,000 as expressed above) would be 62 calls answered live and abandoned / hung-up on.
The State cannot reasonably trust the telemarketing industry:
A November 16, 2000 article at http://www.the-dma.org/cgi/newsstandarchive (the Direct Marketing Association's [DMA] website). The article, written by Joan Mullen, the Legislative Cmte. Chair of the DMA's Teleservices Council is titled: The Problem with Predictive Dialing.
In part Ms. Mullen muses:
"Currently, the DMA is considering a revision of these guidelines to lower the permissible abandon rate to 3% or even lower. It
very likely could get to a point that predictive dialers must be operated in a way that negates the cost effectiveness they are
designed to generate. …"
"It is a strong possibility that those who misuse predictive dialers aren't even DMA member companies, and any revision in the
Guidelines would have zero impact. It is even possible that DMA members have paid lip service in support of the Guidelines but,
in reality, ignore them. We have to figure out a solution to this problem, because if we don't, one will be mandated for us."
If the telemarketing industry finds it difficult to comply with voluntary AR guidelines, where no monetary penalties are anticipated, it is unreasonable to expect an honest reporting of TCPA violations (hang-up sales calls), where substantial economic losses may result.
The telephone sales solicitation industry's history is one of making unwelcome residential intrusions. As such, its sense of accountability to socially appropriate behavior seems 'special'. To that end, I will relate my experience when, on July 24, 1991, I testified at U.S. Senate Subcommittee hearing, held in DC to consider telemarketing legislation. After my testimony, Richard Barton, chief lobbyist of the Direct Marketing Association (DMA) made his presentation. His testimony included the following claim; "We know of no empirical data demonstrating that American consumers are generally opposed to current 'live operator' telemarketing practices,…"
The DMA made that claim 4 months after the March 1991 issue of Telemarketing Magazine (an industry trade journal) published a survey which found that 70% considered live sales solicitation calls to be an 'Invasion of Privacy', while 69% considered them an 'Offensive Way to Sell Things'.
The industry commonly sees itself as 'against the wall'. It has attempted to mislead the public in general, and our legislators in particular, concerning industry practices. Worse yet, the telemarketing industry has ignored or dismissed clear and conspicuous indications of their violation of law.
The June 1998 issue of TeleProfessional Magazine included a commentary by its editor Bob Van Voorhis concerning the telemarketing industry's non-compliance with the TCPA. Titled, I'm Not Killing This Dog. I'm Trying To Save Its Life! Van Voorhis wrote, "In the face of some pretty damning evidence, we are extremely disturbed by what appears to be an industry response to legislation and regulation that is based more on slight of hand and evasion than compliance."
He was referring to a resident's attempt to obtain do-not-call policies from some of the nation's leading telemarketing firms, including prominent members of the American Teleservices Association, the Direct Marketing Association's Telephone Marketing Council and several of the founders of the TeleWatch program … a group claiming to adhere to a higher standard than required by law!
At 47 C.F.R. §64.1200(e)(2)(i) the TCPA mandates residential telesales soliciting firms as follows:
(e)(2)(i) Written policy. Persons or entities making telephone solicitations must have a written policy,
available upon demand, for maintaining a do-not-call list.
This was clarified and upheld in a June 11, 1996 letter to the office of Illinois Attorney General from Geraldine Matise, Chief of the FCC's Network Service Division. In that letter, the FCC states,
"Thus, even where a company does not solicit a particular consumer, we find nothing in our rules that
limits a company's duty to disclose its policy if it does engage in telephone solicitation. Additionally we
believe that failure to provide a do-not-call policy is a prohibited act under the TCPA."
Only 35% of firms contacted sent their policy for maintaining a do-not-call list. When this miserable record of industry compliance was published, many within the industry criticized Van Voorhis. One letter to the editor, from Mary Weyand, former president of the American Telemarketing (now Teleservices) Association, said the article was "unprofessional, accusatory and condescending." Yet, when a PCI member requested a copy the do-not-call policy from Mary Weyand's firm, TMW Marketing, it arrived about a month later (hardly 'upon demand', as the TCPA requires). Thus, it seems her firm violated the TCPA as well. Criticizing reports of industry noncompliance with federal law indicates the industry's blithe nature to hide its problems, rather than address them.
All this occurred 4 years after the Chairman of the US House Telecommunications and Finance Subcommittee requested the do-not-call policies of the 50 largest out-bound telemarketing firms. The response was so dismal that the majority staff report of the subcommittee gave the industry a grade of "F" in the area of compliance with properly reporting its do-not-call policy. It gave the industry a "C-" in general compliance with the TCPA.
A telemarketing firm's cost, in supplying its do-not-call policy on demand, is a stamp. A telemarketing firm's cost to accurately report its AR could potentially be in the tens of thousands of dollars. In the case of some larger telemarketing firms that use PDs to make over 200 millions calls per year, the exposure to federal statutory damages would be staggering.
The telemarketing industry's apparent disregard of law continues today.
First USA is one of the nation's largest credit card issuers and one that uses telemarketing. Earlier this month I called First USA (First USA Bank, N.A.). I asked to be placed on their do-not-call list, that they share my request with all affiliates and that they send me a written copy of their do-not-call policy.
In response, First USA sent a document titled "'DO-NOT-SOLICIT' STATEMENT", which includes the following sentence,
"The consumer should be notified that because of solicitations already in progress, it
could take up to 90 days before a name is completely removed from all solicitation lists."
The TCPA, at 47 C.F.R. §64.1200(e) states
(e) No person or entity shall initiate any telephone solicitation to a residential telephone subscriber:
(2) Unless such person or entity has instituted procedures for maintaining a list of persons who do not wish to receive
telephone solicitations made by or on behalf of that person or entity. The procedures instituted must meet the following
(i) Written policy. Persons or entities making telephone solicitations must have a written policy, available upon
demand, for maintaining a do-not-call list.
(iii) Recording, disclosure of do-not-call requests. If a person or entity making a telephone solicitation (or on whose
behalf a solicitation is made) receives a request from a residential telephone subscriber not to receive calls from
that person or entity, the person or entity must record the request and place the subscriber's name and telephone
number on the do-not-call list at the time the request is made. If such requests are recorded or maintained by a
party other than the person or entity on whose behalf the solicitation is made, the person or entity on whose behalf
the solicitation is made will be liable for any failures to honor the do-not-call request. In order to protect the
consumer's privacy, persons or entities must obtain a consumer's prior express consent to share or forward the
consumer's request not to be called to a party other than the person or entity on whose behalf a solicitation is made
or an affiliated entity.
Thus, the TCPA requires a residential sales soliciting firm to place a resident on its do-not-call list at the time the request is made. It also establishes that a firm failing to honor a do-not-call request will be liable for that failure. Comparing the TCPA's requirements to First USA's stated readiness to violate the TCPA (they may call for 90 days after request) should give the CPUC insight.
Remote monitoring of calls by the State at a state facility will assure accurate record keeping.
Given the problems concerning the telemarketing industry's compliance with law, the State must assure that data concerning the industry's violation of law does not depend on self-reporting, as it is
tantamount to self-regulation. A couple years ago, U.S. Senator Ernest Hollings, a lead proponent of the TCPA stated, "Where did self-regulation get us? Nowhere!" Reporting must be taken out of the telemarketer's hands, if it is to be depended upon.
Telemarketing firms that use PDs have the capacity to enable remote (off-sight) monitoring of calls. It is reasonable that, since such monitoring is possible, the State can place monitors at a State facility. Such monitors can determine, in real time, all calls placed by PDs that are answered live and hung-up on. Thus, the State can extrapolate reasonably overall patterns. Any reticence on the part of the industry, to agree with this monitoring procedure will foreshadow the failure of self-reporting.
The telemarketing industry is ostensibly blind the privacy debris it leaves in its wake.
The February 4, 2002 issue of DM News carried an article titled: FTC Mulls Predictive Dialer Ban, Catches Industry by Surprise. In that article, Sandy Pernick, president of S. Pernick & Assoc., a Chicago-based telemarketing consulting firm, was quoted as follows:
"The industry is allowing the public to see this as a nuisance issue, not as a commerce issue," Pernick said.
"I can't believe that getting a call during dinner is as dangerous for the country as losing 3 million jobs."
This hyperbole is an industry attempt to maintain its franchise to annoy. Telemarketers view their failure as, 'allowing' the public to be annoyed by junk-hang-up calls. Perhaps the industry believes it should 'allow' us to thank telemarketers for treating us like Pavlovian dogs, pointlessly responding to ringing bells at home. As for the 3 million jobs that Pernick alleges; in 1990 (before the PD onslaught) the telemarketing industry estimated generated revenues of $435. [See: Public Law 102-243 §2(4)]. The estimate for 2001 is $669 billion (see DMA 2000 Forecast). Assuming a 3% annual inflation rate, revenues grew $67 billion (9%) over the past 11 years.
The revenues sited above are total figures. The 2001 estimate includes $392 billion or 59% attributed to business-to-business (B-B) calls, where PD use is rare, and $277 billion or 41% to what is termed "consumer" calls. There are two basic types of "consumer" telemarketing. They are consumer-to-business (C-B) calls, where no PD calling occurs, and business-to-consumer (B-C) calls, where the bulk of PDs are used. Therefore, the $277 billion in "consumer" calls must be further divided to arrive at the instant regulatory impact on B-C / PD calls.
With the rapid growth of infomercials, and the addition of three toll-free (in-bound) area codes (888, 877, 866) since 1990, C-B calls are evidently an important component of the $277 billion "consumer" revenue. Add to that, the billions spent by pharmaceutical firms on TV prescription drug ads (not extant in 1990), likely most of the 9% growth is due to C-B "consumer" calls, and not affected by PD regulation. Also, as the drumbeat of B-C "consumer" calling accelerates, the pool of folks willing to listen to such pitches, decrease. In turn, this causes the junk call industry to ratchet its frenetic intrusion rate even higher, thus further lowering individual response rates.
Who clearly benefits? Telephone companies! Who is clearly looses? Your family! For example, SBC/Ameritech sells PDs to telemarketing firms, and Privacy Manager (a PD blocker) to residents.
This is not a victimless 'crime'. I conservatively estimate that the 10 largest telemarketing firms have the combined phone-firepower to call 560 residents per second (average 56 calls per second [cps], per firm). Assuming only 33% of that capacity is used, 672,000 residents will have their dinner hour interrupted in each time zone, every day of the year. Using these conservative figures, we arrive at 2,690,000 calls by just ten firms. Assuming a 2.5% AR, we have 67,250 people called to the phone by 10 firms with a telemarketing device programmed to hang-up on them.
To gain a fuller sense of the telemarketing industry's mindless intrusiveness, I submit the following.
The January 17, 2002 issue of DM News reported that the New York Consumer Protection Board sent letters to 20,800 businesses engaged in telemarketing, concerning the state's do-not-call list. Given the number of calls that 10 firms are capable of, let us now extrapolate that calling rate to include all firms using PDs. (The following calculation attempts to be conservative, to an extreme.)
Assuming that 3% of all telemarketing operations use a PD, we have (20,780 x 3%) 623 firms.
Assuming 1/8th the call rate capability for these 623 'smaller' firms we have (56 / 8) 7 cps.
Multiplying 623 x 7 cps = 4,361 total cps / 33% utilization = 1,453 actual cps or 5,233,000 calls/hour
Multiplying 5,233,000 x 2.5% AR = 130,825 x 4 time zones = 523,300
Add these 523,300 dinner hour hang-up calls due to 'smaller' firms to the 67,250 = 590,550.
By multiplying the 590,550 dinner hour hang-ups by 300 days/year (excluding Sunday/holiday calls) we arrive at the number of calls per year that interrupt family dinners hourly with a 'hang-up' machine.
American families are attacked by machines, programmed to call and hang up when answered during the dinner hour, 177,165,000 times a year. Yet telemarketing consultants such as Ms. Pernick attempt to couch the issue in terms of 'one dinnertime call vs. 3 million jobs'. Without the use of the industry's tele-logic, it is impossible to fathom how one hang-up call (or 177 million of them) can generate one cent, or maintain the employment of 3 million people.
If a foreign nation were to annually call and hang-up on U.S. residents 177 million times during dinner (or over one-half billion times throughout the day), our government would take swift action to stop it.
My hope is that California will take swift and effective action to protect its residents from an industry that is out of control, and barging into the final sanctuary of its citizens; their homes.
Robert Bulmash, President - Private Citizen, Inc.
Post Office Box 233 Naperville, IL 60566
Date: March 25, 2002