September 30, 2003
By IAN AYRES

NEW HAVEN

The Federal Trade Commission's do-not-call registry, the
most popular consumer protection initiative in American
history, is in jeopardy. Although President Bush signed the
law authorizing the list yesterday, a federal judge last
week ruled that it violates the First Amendment because it
allows households to block commercial telemarketing calls
but not calls from charities, political parties, religious
groups or other nonprofit organizations.

Instead of fighting the court's decision, Congress should
seize this opportunity to improve the program, which 50
million Americans have already registered for. By allowing
households to decide what kind of telemarketing calls they
want to receive, Congress can resolve the constitutional
difficulty, protect charities, give families better control
of their privacy - and save jobs.

The Supreme Court has already made it clear that government
can give people the power to choose which solicitations
they allow into their homes. In 1970, the court upheld a
statute that allowed a household to block mail from any
sender simply by notifying the local postmaster.

Such a system of selective association can easily be
accommodated within the trade commission's proposed
do-not-call regulations. Under those rules, telemarketers
can still call people who have registered for do-not-call
status if they have given an express authorization to a
"specific seller." Congress could expand the concept of
express authorization to include intermediaries, like phone
companies, which would then connect the call.

This concept of "authorized intermediation" simplifies the
government's regulatory burden. The trade commission
doesn't have to decide what types of calls to connect; it
can simply leave it to the marketplace to offer the kind of
filters that families really want. Families would benefit
by having greater control of a scarce resource: their
privacy.

Some families would choose to block all calls. Others would
agree to accept calls from charities. And still others
would take commercial calls if the telemarketer agreed to
compensate them for their time.

As things stand, telemarketers are trying to take your time
without paying you for it. That's why they call so often.
Local phone companies could set up a kind of reverse "900"
number system where customers would get paid for each
minute they listen to a sales pitch - in fact, companies
have already offered long-distance service based on this
model (customers can earn free minutes by, for example,
listening to phone sales pitches).

By encouraging compensated calling, Congress could save the
jobs of tens of thousands of telemarketers. It would even
give telemarketers the opportunity to make new types of
calls that would be prohibited under the proposed rules. So
long as the sender meets the household's prerequisites, the
intermediary should be authorized to connect, say,
prerecorded calls or faxes.

Finally, allowing families to choose their telemarketers
could also serve the public interest. The current hang-up
mentality has wreaked havoc on polling organizations, which
now average response rates as low as 15 percent or 20
percent. Under this system, perhaps the response ratio will
improve, and we will have more reliable information about
public opinion.

With compensated calling, the telemarketing industry will
enable its reputable members to continue marketing. For
Congress, such a system offers a way out of a
constitutional dilemma. Instead of crippling the industry,
Congress should embrace a regulation that will rationalize
and redeem it.

Ian Ayres, professor at Yale Law School, is co-author of
``Why Not? How to Use Everyday Ingenuity to Solve Problems
Big and Small.''

http://www.nytimes.com/2003/09/30/opinion/30AYRE.html?ex=1065921081&ei=1&en=35c08af0e4c1b645