Federal Register, Volume 75 Issue 240 (Wednesday, December 15, 2010)

[Federal Register Volume 75, Number 240 (Wednesday, December 15, 2010)]
[Proposed Rules]
[Pages 78179-78185]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31390]

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FEDERAL TRADE COMMISSION

16 CFR Part 310

RIN 3084-AB19

Telemarketing Sales Rule

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Advance notice of proposed rulemaking; request for public
comments.

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SUMMARY: The Commission requests public comment on provisions of the
FTC's Telemarketing Sales Rule concerning caller identification
services and disclosure of the identity of the seller or telemarketer
responsible for telemarketing calls.

DATES: Written comments must be received on or before January 28, 2011.

ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form, by

[[Page 78180]]

following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Comments in electronic form
should be submitted at https://ftcpublic.commentworks.com/ftc/tsrcalleridanprm (and following the instructions on the Web-based
form). Comments in paper form should be mailed or delivered to the
following address: Federal Trade Commission, Office of the Secretary,
Room H-113 (Annex Q), 600 Pennsylvania Avenue, NW., Washington, DC
20580, in the manner detailed in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below.

FOR FURTHER INFORMATION CONTACT: Michael Tankersley, (202) 326-2991,
Attorney, Division of Marketing Practices, Bureau of Consumer
Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW.,
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

Summary

When the Commission amended the Telemarketing Sales Rule (``TSR''
or ``Rule'') in 2003, it added a requirement that telemarketers
transmit identifying information to caller identification (``Caller
ID'') services.\1\ Most companies that offer basic telephone service
also offer services that will display to the recipient of the call the
telephone number and name for the calling party. Traditional Caller ID
services rely upon telecommunications signals that allow the caller's
local telephone exchange to send a telephone number of the calling
party, and a code that signals whether or not the caller wants its
number to be blocked. Enhanced Caller ID services--which, as the name
implies, go beyond basic display of the calling party's number--use
directories or databases to associate the calling party number with a
name. Thus, the ``Caller ID'' information provided to consumers may
include both a telephone number and name for the originator of an
incoming call.
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\1\ 68 FR 4579, 4672 (2003) (codified at 16 CFR 310.4(a)(7)).
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The use of Caller ID information, however, has changed with the
growing availability of technologies that allow callers to alter the
number that appears on the recipient's Caller ID display. Many
businesses now have access to technologies that allow them to transmit
Caller ID numbers that are not associated with their geographical
location, or that, when dialed, connect the caller to a voice mail
service. Users of these technologies also have the ability to cause the
recipient's Caller ID equipment to display a telephone number that is
not in service as the source of the call, or create the appearance that
the call is coming from someone who is not affiliated with the actual
caller.\2\ In addition, these advanced technologies also enable callers
to control and manipulate the name information displayed by Caller ID
services.\3\
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\2\ See S. Rept. 96, 111th Cong., 1st Sess. 1-2 (2009); Hearing
before the House Subcomm. on Telecomm. and the Internet, Truth in
Caller ID Act, 110th Cong., 1st Sess. Ser. No. 110-8, 9-10 (2007)
(test. of Kris Monteith); H. Sengar, D. Wijesekera, S. Jojodia,
Authentication and Integrity in Telecommunication Signaling Network,
Proceedings of the 12th IEEE Intern. Conf. and Workshops on the Eng.
of Computer-Based Systems (2005).
\3\ See Ed Norris and Harry Hetz, ``Caller ID Integrity
Attacks,'' The ISSA J. 6 (Jan. 2004).
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The Commission solicits comments on whether changes should be made
to the TSR to reflect the current use and capabilities of Caller ID
technologies. In particular, the Commission is interested in whether
the TSR should be amended to better achieve the objectives of the
Caller ID provisions--including namely, to enable consumers and law
enforcement to use Caller ID information to identify entities
responsible for illegal telemarketing practices. The Commission also
solicits comment on whether it should amend the TSR specifically to
regulate services that misrepresent, conceal, or obscure the identity
of telemarketers or sellers, or should expand the provisions of the TSR
that require oral disclosure of the identity of the seller or
charitable organization on whose behalf a call is being made to require
additional or more specific disclosures.\4\
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\4\ 16 CFR 310.4(d), (e).
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I. How Caller Identification Services Work

Caller identification services rely upon identifying information
transmitted with the signaling codes that accompany a telephone
transmission. Telephone calls on the public switch telephone network
are routed to their destinations by means of a specialized protocol
called ``signaling system seven,'' or ``SS7.'' SS7 includes a calling
party number (``CPN'') that is intended to identify the telephone
number of the caller, and a privacy code that indicates whether access
to this information should be restricted.\5\ Carriers using SS7 are
generally required to transmit the CPN associated with an interstate
call.\6\
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\5\ 47 CFR 64.1600(c), (d) (2009).
\6\ 47 CFR 64.1601(a), (d).
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The CPN is used in a number of services provided to consumers. If a
consumer subscribes to a Caller ID service and has Caller ID-capable
equipment, the telephone number identified as the source of the call
will be displayed with the incoming call.\7\ Telephone service
providers also use CPN to offer consumers call-return service. This
feature provides call recipients who press *69 after receiving a
telephone call either: (1) Information regarding the last incoming
call, and the option to dial the caller back, or (2) the ability to
return the last incoming call.\8\ Consumers can also purchase services
or equipment that selectively blocks incoming calls, or selectively
forwards calls based on the CPN transmitted with a call.\9\
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\7\ Rules and Regulations Regarding Calling Number
Identification Service--Caller ID, 10 FCC Rcd. 11700, 11705 ]9
(1994) (``Second Report'').
\8\ 68 FR at 44,166; Second Report, 10 FCC Rcd. at 11708-09]21.
\9\ Telephone service providers also offer call trace or
``customer-originated trace'' services that enable a subscriber to
initiate a trace of the last call received. The subscriber initiates
the trace by disconnecting the call and dialing a code that prompts
the service provider to capture information that may assist law
enforcement in tracing the origin of the call. The call trace may
involve the use of CPN and automatic number service information. See
47 CFR 64.1601(d)(4)(iii) (exempting legally authorized call tracing
or trapping procedures from restrictions on CPN delivery); 47 CFR
64.1602(a)(3)(iv) (allowing disclosure of information from automatic
number service or charge number service for the purpose of complying
with applicable law or legal process).
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Enhanced Caller ID services provide additional information by
associating the CPN with a caller name. The caller name is typically
obtained by the call recipient's service provider sending a query to a
centralized calling name (``CNAM'') database or directory that
associates telephone numbers with names of up to 15 characters. If the
database returns an associated name, the name, or both the name and the
number, are displayed by the call recipient's equipment while the call
is ringing, unless a privacy code indicates that access to the name is
blocked.\10\ The name information may come directly from telephone
carriers or from database compilers that are not carriers.\11\
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\10\ Second Report, 10 FCC Rcd. at 11708, 11746; Powers, Calling
Name Delivery, IEEEE International Conference on Communications,
1908 (Chicago, IL, 1992); R. Robrock, II, ``The Many Faces of the
LIDB Database,'' IEEE Intern. Conf. Comm., 1903, 1904 (Chicago, IL,
1992); see, e.g., Cisco Systems, Inc., Calling Name Delivery (CNAM)
(2007), available at http://www.cisco.or.at/en/US/docs/voice_ip_comm/pgw/9/feature/module/9.7_3_/cnam.pdf.
\11\ Telephony protocols other than SS7 may transmit caller name
information directly from the originator of the call, without
relying on a query to a separate database. See Session Initiation
Protocol, ] 6.2 (Internet Working Group 1999), available at http://www.ietf.org/rfc/rfc2543.txt (describing optional ``display-name''
parameter in Internet telephony protocol).

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[[Page 78181]]

It is important to note that the CPN is not the same as the calling
party's ``charge number'' or ``automatic number identification''
(``ANI'').\12\ ANI and its SS7-based equivalent, the charge number,
refer to the delivery of the calling party's billing number for billing
and routing purposes.\13\ Although the CPN and the ANI/charge number
for a given call may be the same, the CPN and ANI/charge number may
differ and often do differ in calls from business lines.\14\
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\12\ See Rules and Policies Regarding Caller Number
Identification Service, 9 FCC Rcd. 1764, 1772-73 (1994) (``First
Report''). ANI's original purpose was to enable carriers to bill
customers for calls.
\13\ Rules and Regulations Implementing the Telephone Consumer
Protection Act (TCPA) of 1991, 68 FR 44,144, 41,167 (2003).
\14\ Second Report, 10 FCC Rcd. at 11707 ] 17 & n.14.
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The CPN and ANI/charge number are also subject to different
regulatory restrictions. Federal Communications Commission (``FCC'')
regulations impose tighter restrictions on carriers' disclosure of the
ANI or charge number on interstate calls than the disclosure of CPN.
These regulations, with exceptions that are not applicable to consumers
receiving telemarketing calls, prohibit disclosure, reuse or sale of
the telephone number or billing information without first notifying the
originating telephone subscriber and obtaining affirmative consent of
the subscriber for such reuse or sale.\15\ By contrast, privacy
protection for the CPN depends upon a privacy indicator in the
signaling protocol that allows the calling party to prevent the CPN
from being revealed to the recipient of the call.\16\ FCC regulations
protect the ability of calling parties to use this parameter to conceal
CPN on a per-line or per-call basis. If the party originating a call
has requested that the CPN not be transmitted, these regulations
prohibit carriers from revealing the calling party's name or number,
and prohibit carriers from allowing the called party to automatically
return the call.\17\
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\15\ 47 CFR 64.1602.
\16\ 47 CFR 64.1601(b).
\17\ Second Report, 10 FCC Rcd. at 11705 ] 10. These regulations
require that carriers recognize *67 as a request for privacy when
CPN would otherwise be transmitted to the recipient of the call.
Dialing *67 before placing a call, referred to as ``per call
blocking,'' allows subscribers to block their numbers from
transmission to the public switched network. Telephone service
providers may also block the transmission of CPN for particular
lines, and carriers must recognize *82 as a request by the caller
that the CPN be transmitted on an otherwise blocked line. See 47 CFR
64.1601(b); Rules and Policies Regarding Calling Number
Identification Service--Caller ID, Third Report and Order,
Memorandum Opinion and Order on Further Reconsideration, and
Memorandum Opinion and Order on Reconsideration, FCC 97-103, CC
Docket No. 91-281, 12 FCC Rcd 3867, 3870 (1997); Second Report, 10
FCC Rcd. at 11719, 11728-34.
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II. Current Requirements Concerning Caller Identification

As amended in January 2003, the TSR provides that it is an abusive
telemarketing act or practice for any seller or telemarketer to engage
in ``[f]ailing to transmit or cause to be transmitted the telephone
number, and, when made available by the telemarketer's carrier, the
name of the telemarketer, to any Caller ID service in use by a
recipient of a telemarketing call.'' \18\ The Rule also permits the
substitution of ``the name of the seller or charitable organization on
behalf of which a telemarketing call is placed, and the seller's or
charitable organization's customer or donor service telephone number,
which is answered during regular business hours.'' \19\ ``Caller
identification service'' is defined as ``a service that allows a
telephone subscriber to have the telephone number, and, where
available, name of the calling party transmitted contemporaneously with
the telephone call, and displayed on a device in or connected to the
subscriber's telephone.'' \20\
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\18\ 16 CFR 310.4(a)(7).
\19\ Id.
\20\ 16 CFR 310.2(d).
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In the Statement of Basis and Purpose adopting the TSR, the
Commission explained that requiring telemarketers to transmit
information used by Caller ID services has three benefits. First,
requiring the transmission of Caller ID information promotes consumers'
privacy by allowing them to screen out unwanted calls and identify
companies that have contacted them so that they can place ``do-not-
call'' requests to those companies.\21\ Indeed, many consumers
subscribe to Caller ID to identify incoming calls from telemarketers
and screen out unwanted telemarketing calls.\22\
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\21\ 68 FR at 4624, 4626.
\22\ Id. at 4626 n.534.
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Second, eliminating anonymity in telemarketing benefits both
consumers and industry by promoting increased accountability.\23\
Caller ID information provides a record of identification that is
available to the consumer after the telemarketing call is complete.
Without such a record, consumers who have received unlawful
telemarketing calls--such as abandoned calls or prerecorded
solicitations--find it difficult, if not impossible, to ascribe these
calls to a particular telemarketer.\24\ Accurate Caller ID information
increases the ability of consumers to distinguish between businesses
that are responsible for deceptive and abusive telemarketing, and
businesses that adopt effective measures to prevent such calls.
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\23\ Id. at 4627 (citing statement of commenter DialAmerica
that, ``[d]elivery of Caller ID information, that will be displayed
on a consumer's Caller ID device or that can be accessed through
such services as *69, is essential to create accountability in the
outbound telemarketing industry.'').
\24\ Id.
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Finally, requiring the transmission of Caller ID information by
telemarketers benefits law enforcement. The transmission of
telemarketers' Caller ID information should help identify sellers and
telemarketers that fail to honor ``do-not-call'' requests by consumers
or abandon calls, and reduce fraud before it occurs by enabling
consumers to contact government agencies or the Better Business Bureau
to verify the legitimacy of a telemarketer or seller.\25\
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\25\ Id. In adopting its regulations concerning Caller ID
information, the FCC also noted that benefits of transmitting Caller
ID information are not limited to consumers who subscribe to caller
ID services:
Consumers can also use the *69 feature to obtain caller ID
information transmitted by a telemarketer. The *69 feature,
available through many subscribers' telephone service providers,
provides either: (1) Information regarding the last incoming call,
and the option to dial the caller back, or (2) the ability to return
the last incoming call. Call information, however, would not be
available for an incoming call, if the caller failed to transmit
caller ID information or blocked such information. Caller ID also
should increase accountability and provide an important resource for
the FCC and FTC in pursuing enforcement actions against TCPA and TSR
violators.
68 FR at 44166.
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In July 2003, six months after the Commission adopted these
requirements in the TSR, the FCC adopted regulations pursuant to the
Telephone Communications Privacy Act (``TCPA''), 47 U.S.C. 227, that
provide that any person or entity who engages in telemarketing must
transmit ``caller identification information.'' \26\ The text of the
FCC regulations is not identical, but is substantially similar to 16
CFR 310.4(a)(7). The FCC regulations specify that ``caller
identification information must include either CPN or ANI, and, when
made available by the telemarketer's carrier, the name of the
telemarketer.'' \27\ Like the TSR, the FCC's regulations also allow the
person or entity making the call to fulfill this obligation by
transmitting the ``name of the seller on behalf of which the
telemarketing call is placed and the seller's customer service
telephone number.'' Id. Furthermore, ``the telephone number so provided
must permit any individual to make a do-not-

[[Page 78182]]

call request during regular business hours.'' Id. Although the FCC's
regulations generally permit a caller to protect its anonymity by
blocking Caller ID information, Section 64.1601(e)(2) unequivocally
prohibits telemarketers from blocking the transmission of such
information. In adopting these requirements, the FCC explained:
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\26\ See 68 FR 44144, 44179 (2003) (codified at 47 CFR
64.1601(e)).
\27\ 47 CFR 64.1601(e)(i); see also 47 CFR 64.1600(c) (defining
CPN); id. 64.1600(b) (defining ANI).

Consistent with the FTC's rules, CPN can include any number
associated with the telemarketer or party on whose behalf the call
is made, that allows the consumer to identify the caller. This
includes a number assigned to the telemarketer by its carrier, the
specific number from which a sales representative placed a call, the
number for the party on whose behalf the telemarketer is making the
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call, or the seller's customer service number.

68 FR at 44167.
Many states have also adopted laws aimed at prohibiting the
transmission of deceptive Caller ID information or requiring
telemarketers to transmit specified information. These state
requirements include recently adopted statutes that specifically
prohibit the use of computers or Internet telephone equipment to insert
false information into Caller ID systems.\28\ While most state statutes
simply prohibit blocking or interfering with Caller ID services,
several state laws impose obligations on telemarketers to transmit
specific information, such as codes that identify the name of the
telemarketer, or a telephone number at which consumers can contact
personnel of the entity responsible for the telephone call.\29\
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\28\ See, e.g., Anti-Caller ID Spoofing Act, La. Rev. Stat. tit.
51, ch.19-C; Ok. Stat. Ann. Sec. Sec. 776.22, 776.23; Internet
Caller Identification Act, Ill. Comp. Stat. Sec. 517/10.
\29\ See La. Rev. Stat. Sec. 844.2.A.(1) (telemarketer must
have identification code that will correctly identify the name of
the telephone solicitor); Mont. Code Ann. Sec. 30-14-1412
(telemarketer may substitute ``name and number that accurately
identify the entity causing the call to be made and a working
telephone number at which the entity's personnel can be
contacted.''); N.H. Rev. Stat. Sec. 359-E:5-a (telemarketer may not
prevent ``caller identification information for telephone
solicitor's lines used to make telephone calls'' from being shown by
caller identification device); Tex. Bus. & Comm. Code Ann. Sec.
304.151(b)(2) (telemarketer may not fail to provide caller
identification information in a manner that is accessible by a
caller identification service if the telemarketer is capable of
providing the information in that manner); Ill. Comp. Stat. Ann.
Sec. 413/15(c) (live operator soliciting sale of goods or services
may not impede display of ``the solicitor's telephone number'');
2010 Tenn. Pub. Acts, Ch. 684 (requiring that automatic dial
announcing devices display the number utilized by the dialing
equipment, unless the device displays a telephone number that has an
area code within the state or a toll-free number that is answered
during regular business hours and the name of the person is
displayed along with the telephone number).
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Independent of the Caller ID provisions of the TSR, the Rule also
requires that telemarketers orally disclose the seller and purpose of
the call. Specifically, the TSR mandates that ``a telemarketer in an
outbound telephone call or internal or external upsell to induce the
purchase of goods or services'' disclose truthfully, promptly, and in a
clear and conspicuous manner: (1) The identity of the seller; (2) that
the purpose of the call is to sell goods or services; and (3) the
nature of the goods or services.\30\ In a call to solicit charitable
solicitations, the telemarketer must similarly disclose the charitable
organization on behalf of which the request is being made, and the
purpose of the telephone call.\31\
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\30\ 16 CFR 310.4(d)(1)-(3); see also 15 U.S.C. 6102(3)(C)
(statute directs Commission to adopt rules that include ``a
requirement that any person engaged in telemarketing for the sale of
goods or services shall promptly and clearly disclose to the person
receiving the call that the purpose of the call is to sell goods or
services and make such other disclosures as the Commission deems
appropriate, including the nature and price of the goods and
services.'').
If a prize promotion is offered, the telemarketer must also
disclose that no purchase or payment is necessary to be able to win
a prize or participate in a prize promotion and that any purchase or
payment will not increase the person's chances of winning. Id. 16
CFR 310.4(d)(4). FCC regulations also require verbal disclosure of
the identity of the caller in addition to the transmission of Caller
ID information. See 47 CFR 64.1200(e)(iv) (2009); 68 FR at 44,167
(``Provision of Caller ID information does not obviate the
requirement for a caller to verbally supply identification
information during a call.'').
\31\ 16 CFR 310.4(e); see also 15 U.S.C. 6102(3)(D) (statute
directs Commission to adopt rules that include ``a requirement that
any person engaged in telemarketing for the solicitation of
charitable contributions, donations, or gifts of money or any other
thing of value, shall promptly and clearly disclose to the person
receiving the call that the purpose of the call is to solicit
charitable contributions, donations, or gifts, and make such other
disclosures as the Commission considers appropriate, including the
name and mailing address of the charitable organization on behalf of
which the solicitation is made.'').
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When the Commission adopted these provisions in 2003, it rejected
proposals that it add the telephone number of the seller or charitable
organization to this list of introductory oral disclosures, in part,
because it believed that the requirement to transmit Caller ID
information would help mitigate the problems identified by those who
advocated requiring oral disclosure of the seller's telephone number at
the outset of an outbound telephone call.\32\ By contrast, while FCC
regulations adopted pursuant to the Telephone Communications Privacy
Act also require that a person making a telemarketing call disclose
``the name of the person or entity on whose behalf the call is being
made,'' they further require disclosure of ``a telephone number or
address at which the person or entity may be contacted.''\33\
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\32\ 68 FR at 4648.
\33\ 47 CFR 64.1200(d)(4).
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The Commission also has addressed the manipulation of Caller ID
information in the context of debt collection. The Federal Debt
Collection Practices Act provides that debt collectors may not, in
connection with the collection of a debt, place telephone calls
``without meaningful disclosure of the caller's identity.''\34\ Courts
have affirmed that this obligation applies to the information
transmitted to Caller ID services when a debt collector places such
calls.\35\ In 2008, the Commission charged that a debt collector
violated this provision of the statute by making collection calls that
did not display the debt collector's name, and manipulating the calling
party number so that it would display a telephone number with the
borrower's local area code.\36\
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\34\ 15 U.S.C. 1692d(6).
\35\ Knoll v. Allied Interstate, Inc., 502 F. Supp. 2d 943, 946
(D. Minn. 2007) (allegation that debt collector arranged for false
caller name ``Jennifer Smith'' to be displayed on caller
identification device stated a claim for violation of 15 U.S.C.
1692d(6)).
\36\ FTC v. EMC Mortgage Comp., C.A. No. 4:08-cv-338, Complaint
(E.D. Tex. Sept. 9, 2008). The defendants, EMC Mortgage Corporation
and The Bear Stearns Companies LLC, agreed to the entry of a
stipulated judgment that settled this claim and other claims in the
complaint without admission or adjudication of liability. Id.,
Stipulated Final Judgment and Order (filed Sept. 9, 2008).
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III. Caller Identification Spoofing and Abuse

Current telecommunications technologies make it possible for
telemarketers to select the numbers that are transmitted to Caller ID
services. Telemarketers also can make arrangements to control the
calling names in databases used by Caller ID services. These
technologies can be used to serve legitimate interests of
telemarketers, sellers, and charitable organizations in altering the
caller number and name displayed by Caller ID services.\37\
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\37\ H. Rep. 461, Truth in Caller ID Act of 2010, 111th Cong.,
2d Sess. 7 (2010) (describing legitimate reasons for manipulation of
Caller ID information in business and non-business calls).
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The increasingly common manipulation of Caller ID information,
however, also has undermined the ability of consumers and law
enforcement to identify the entities responsible for illegal
telemarketing practices.\38\ When telemarketers that

[[Page 78183]]

make improper robocalls or repeatedly call persons who have made do-
not-call requests use ``spoofed'' calling party numbers, consumers
cannot identify the source of the calls and, therefore, cannot take
effective action to stop them. Moreover, false or misleading Caller ID
information frustrates law enforcement investigations seeking to hold
telemarketers responsible for illegal conduct, and harms the reputation
of telemarketers and sellers who are not responsible for the unlawful
telephone calls.
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\38\ For example, the Commission has received tens of thousands
of complaints concerning telemarketing calls to telephone numbers
listed on the National Do Not Call Registry for which the calling
numbers transmitted with calls are not valid telephone numbers but,
rather, a string of digits that does not correspond to any operating
telephone number (e.g., 000-000-0000). Commission enforcement
actions also have uncovered evidence that telemarketers engaged in
abusive and deceptive practices have transmitted valid telephone
numbers that are not associated with the telemarketer or seller
responsible for the calls. Since 2005, the Commission has brought or
referred to the Department of Justice ten enforcement actions that
included charges that a telemarketer had violated the TSR by failing
to transmit appropriate caller identification information. See
United States v. Srikanth Venkataraman, Civ. No. 3:06-cv-01928-MLC-
JJH (D. N.J. filed Apr. 26, 2006); United States v. Civic
Development Group, LLC, Civ. No. 2:07-cv-04593-FSH-PS (D.N.J. filed
Sept. 25, 2007); United States v. Global Mortgage Funding, Inc.,
Civ. No. 8:07-cv-1275 (C.D. Cal. filed Oct. 30, 2007); United States
v. Guardian Communications, Inc., Civ. No. 4:07-cv-04070-MMM-JAG
(C.D. Ill. filed Nov. 6, 2007); FTC v. MCS Programs, LLC, Civ. No.
09-cv-5380-RJB (W.D. Wash. filed June 25, 2009); FTC v. JPM
Accelerated Services, Inc., Civ. No. 6:09-CV-2021-ORL-28-KRS (M.D.
Fla. filed Nov. 30, 2009); FTC v. 2145183 Ontario, Inc., Civ. No. 1
09-CV-3307 (N.D. Ill. filed Nov. 30, 2009); FTC v. Economic Relief
Technologies, LLC, Civ. No. 09C-7423 (N.D. Ga. filed Nov. 30, 2009);
FTC v. Transcontinental Warranty, Inc., Civ. No. 09CV2927 (N.D.
Ill., filed May 13, 2009); FTC v. Voice Touch, LLC, Civ. No.
09CV2929 (N.D. Ill. filed May 13, 2009).
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In addition to allowing telemarketers to ``spoof'' the names and
numbers transmitted to Caller ID services, these technologies also have
been used to manipulate Caller ID in other ways that frustrate the
purpose of the TSR's requirements regarding Caller ID. For example,
telemarketers have transmitted calling party numbers that are valid
telephone numbers but have only an attenuated connection to the
telemarketer or seller and cannot readily be used by consumers to
identify the source of a call.\39\ The telephone numbers transmitted in
telemarketing campaigns often are not associated with the telemarketer
or the seller in any publicly available directory, or even in carrier
databases that identify the subscriber to whom the telephone number is
assigned. Similarly, telemarketers have arranged for the transmission
of caller name information that does not identify the telemarketer or
seller by name, and provides consumers with only cryptic abbreviations
or generic terms, such as ``Warranty Alert,'' that do not allow the
consumer to identify the telemarketer or seller.\40\ In another
example, consumers who attempt to identify the entity responsible for a
call by telephoning the telephone numbers transmitted to a Caller ID
service have been unable to do so because their calls are not connected
to a live representative of the telemarketer or seller. Instead, calls
to the number displayed by the Caller ID service are answered by a
recording that offers to accept a do-not-call request but does not
identify the telemarketer or the seller that initiated the telephone
call.
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\39\ Complaint ] 17, United States v. Srikanth Venkataraman (d/
b/a/Scorpio Systems), Civ. No. 3:06-cv-01928-MLC-JJH (D. N.J. filed
Apr. 26, 2006) (defendant transmitted phony caller identification
number 234-567-8923).
\40\ Arkansas v. SVM, Inc., Civ. No. 4:09-cv-00456-BSM (E.D.
Ark. filed Dec. 22, 2009); see also Complaint ] 22, United States v.
Guardian Communications, Inc., Civ. No. 4:07-cv-04070-MMM-JAG, (C.D.
Ill. filed Nov. 6, 2007) (defendant caused ``Cust Service,''
``Services, Inc.,'' ``Card Services,'' ``DWC,'' or ``LTR'' to be
transmitted as the name of the caller).
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The Commission anticipates that the manipulation of Caller ID
information may become more prevalent as advanced telecommunications
and networking technologies become more ubiquitous and continue to
develop. In the past, manipulating Caller ID information required
special phone connections and expensive equipment. The barriers to
manipulating Caller ID, however, have been reduced by advances in
technology and the increasing availability of services such as Voice
over Internet Protocol, or Internet protocol-enabled (``IP-enabled'')
voice services. Moreover, telemarketers can obtain access to the
telephone network through service providers who offer the ability to
spoof Caller ID numbers or names.
At the same time, the Commission recognizes that advances in
communications technologies may afford consumers more control over
whether and how they receive telephone calls, including calls from
telemarketers. Effective regulation of Caller ID may promote the
development of technologies that increase consumers' ability to prevent
or minimize the harms from abusive telemarketing practices.

IV. Request for Comment

The Commission requests comments on whether it is possible to amend
the Caller ID provisions of the TSR to promote the delivery of more
reliable or specific Caller ID information. The Commission seeks
information on how Caller ID is being used by consumers and regulated
parties, and how telemarketers and their service providers may use
Caller ID technologies in ways that are benign or abusive. The
Commission is particularly interested in information concerning
recently introduced or soon to be introduced technologies that affect
the ability of consumers and law enforcement to use Caller ID
information. Commenters should provide detailed, factual information to
support their observations or proposals.
The Commission solicits comments on the following specific
questions:
(1) What services exist to assist consumers in identifying the
source of deceptive or abusive calls in which the telemarketer does not
truthfully disclose the name of the telemarketer, seller, or charitable
organization at the outset of the call or abandons a call without
identifying the source of the call? Are these services dependent on
reliable transmission of CPN or equivalent information? How much does
it cost consumers to use these services?
(2) How widespread is consumer use of Caller ID services to screen
unwanted calls? Do consumers use other services that rely on
transmission of CPN, such as call-blocking equipment, to avoid or block
unwelcome telemarketing calls?
(3) Would changes to the TSR improve the ability of Caller ID
services to accurately disclose to consumers the source of
telemarketing calls, or improve the ability of service providers to
block calls in which information on the source of the call is not
available or has been spoofed? If so, what specific amendments should
be made to the TSR?
(4) Should the Commission amend the Caller ID provisions of the TSR
to recognize or anticipate specific developments in telecommunications
technologies relating to the transmission and use of Caller ID
information? If so, what specific amendments should the Commission
make?
(5) What role do telephone service providers (including those that
are not common carriers) play in providing services, equipment or
software that allows telemarketers, sellers and charitable
organizations to manipulate the caller number and name information in
telemarketing calls? The TSR provides that it is a violation of the
Rule for a person to provide substantial assistance or support to any
seller or telemarketer when that person knows or consciously avoids
knowing that the seller or telemarketer is engaged in any act or
practice that violates enumerated provisions of the Rule. Is this
provision adequate to regulate service providers that assist
telemarketers and sellers in manipulating caller number and name
information?
(6) When the Commission adopted the Caller ID provisions of the TSR
in 2003,

[[Page 78184]]

it acknowledged the possibility that a small number of telemarketers
may not have access to telecommunications systems capable of
transmitting calling number information.\41\ Do all telemarketers now
have access to technology that allows them to transmit or arrange for
the transmission of such information? Should the Commission amend the
Caller ID provisions of the TSR to specify that telemarketers, sellers,
and charitable organizations must use technology that causes the CPN to
be transmitted with all telemarketing calls? Commenters should address
whether there are currently areas that are served only by telephone
companies that are not capable of transmitting Caller ID information
or, more specifically, not capable of transmitting CPN. If services
that transmit CPN are available to a telemarketer, is there any
justification for giving such a telemarketer the option of using
technology that does not transmit CPN, but transmits ANI or some other
identifier? Specifically, is it more expensive to use a service that
transmits CPN than one that does not? If so, how much more expensive?
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\41\ The Commission observed that ``[a] very small number of
telemarketers may be located in areas of the country that are served
only by telephone companies that are not capable of transmitting
Caller ID information or assigning a telephone number to the
telemarketer that can be transmitted to a called consumer.'' 68 FR
at 4626. In July 2003, the FCC made similar observations concerning
the feasibility of telemarketers transmitting caller ID information
and stated that a telemarketer could transmit ANI as an alternative
to CPN. 68 FR at 44,167.
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(7) Should the Commission amend the Caller ID provisions of the TSR
to require, without qualification, that telemarketers use technologies
or subscribe to services that provide caller name identification to
recipients who use enhanced Caller ID services? Are there any
telemarketers that do not have access to services that cause caller
name information to be transmitted to Caller ID services? What portion
of consumers receive caller name information through Caller ID
services? Would requiring telemarketers to use technologies or services
that provide caller name information increase telemarketers' costs? If
so, how much does it cost to use these technologies or services?
(8) Should the Commission amend the Caller ID provisions of the TSR
to further harmonize the TSR with the regulations promulgated by the
FCC pursuant to the TCPA? Have differences in the language in 16 CFR
310.4(a)(7) and 47 CFR 64.1601(e) caused problems in industry
compliance?\42\
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\42\ In adopting 16 CFR 310.4(a)(7), the Commission observed
that this regulation is not inconsistent with the FCC's regulations
concerning Caller ID blocking to protect privacy because those
regulations are designed to address specific calling situations
where protecting the caller's anonymity is warranted, such as
undercover law enforcement operations and calls placed from battered
women's shelters. 68 FR at 4627. No such privacy justification
applies to telemarketing calls. Id.; accord 68 FR at 44,167 (FCC
concludes that ``the caller ID requirements for commercial telephone
solicitation calls do not implicate the privacy concerns associated
with blocking capability for individuals'' and that it ``has
determined to prohibit any request by a telemarketer to block caller
ID information or ANI.''). The Commission does not anticipate
proposing any changes to the TSR that would be inconsistent with the
FCC regulations which, since 2004, have expressly prohibited any
person or entity engaged in telemarketing, other than a tax-exempt
nonprofit organization, from blocking the transmission of Caller ID
information. 47 CFR 64.1601(e)(2).
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(9) Should the Commission amend the Caller ID provisions of the TSR
to further specify the characteristics of the telephone number
transmitted to any Caller ID service? For example, should the TSR
require that the telephone number transmitted be:
(a) a number that is listed in publicly available directories as
the telephone number of the telemarketer, seller, or charitable
organization?
(b) a number with an area code and prefix that are associated with
the physical location or principal place of business of the
telemarketer or the seller?\43\
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\43\ See North American Numbering Plan, Geographic NPAs In
Service Sorted by Number, available at http://www.nanpa.com/nas/public/npasInServiceByNumberReport.do?method=displayNpasInServiceByNumberReport.
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(c) a number that is answered by live representatives or automated
services that identify the telemarketer, seller, or charitable
organization by name?
(d) a number that provides for prompt and easy communication with
the live representatives of the telemarketer, seller, or charitable
organization?\44\ or
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\44\ Cf. Organization for Economic Cooperation and Development,
Guidelines for Consumer Protection in the Context of Electronic
Commerce, Part III.A (1999), available at http://www.oecd.org/document/51/0,2340,en_2649_34267_1824435_1_1_1_1,00.html
(businesses engaged in electronic commerce should provide accurate,
clear and easily accessible information about themselves sufficient
to allow, at a minimum, ``prompt, easy and effective consumer
communication with the business'').
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(e) a number that is the same as the telephone number that is
listed in direct mail solicitations or other advertising (such as
Internet or broadcast media) as the telephone number for the
telemarketer, seller, or charitable organization?
(10) Should the Commission amend the Caller ID provisions of the
TSR to permit a seller or telemarketer to use trade names or product
names, rather than the actual name of the seller or telemarketer, in
the caller name provided to Caller ID services? Should the Commission
allow the use of acronyms or abbreviations? If so, are there
circumstances in which the use of an acronym, abbreviation, trade name
or product name should be prohibited?
(11) Do consumers benefit from provisions in the TSR that give
calling parties the option of substituting the number and name of the
seller or charitable organization for the number and name of the
telemarketer? Should the Commission amend the Caller ID provisions of
the TSR to require that the name provided to Caller ID services be the
name of the seller or charitable organization on behalf of which a
telemarketing call is placed? Should the Commission amend the TSR to
allow telemarketers to cause Caller ID services to display the number
of the telemarketer, but display the name of the seller?
(12) In general, what benefits has the Rule provided to consumers,
telemarketers, sellers, and charitable organizations? What evidence
supports the asserted benefits?
(13) Could the benefits that the Rule has provided to consumers,
telemarketers, sellers, and charitable organizations be achieved
through less burdensome or less restrictive means?
(14) In considering amendments to 16 CFR 310.4(a)(7), should the
Commission also consider amendments to 16 CFR 310.4(d) and (e), which
describe the oral disclosures that must be made to identify the seller
or charitable organization at the outset of an outbound telephone call
or upsell?
Interested parties are invited to submit written comments
electronically or in paper form. Comments should state ``Advance Notice
of Proposed Rulemaking Concerning Caller Identification, Matter
P104405'' both in the text and on the envelope. Please note that your
comment--including your name and your state--will be placed on the
public record of this proceeding, including on the publicly accessible
FTC Web site, at http://www.ftc.gov/os/publiccomments.shtm.
Because comments will be made public, they should not include any
sensitive personal information, such as an individual's Social Security
number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. Comments also
should not include any sensitive health information, such as medical
records or other individually identifiable health information. In
addition, comments should not include any ``[t]rade secret or any
commercial or financial information which is obtained

[[Page 78185]]

from any person and which is privileged or confidential,'' as provided
in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which
confidential treatment is requested must be filed in paper form and
clearly labeled ``Confidential.'' \45\
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\45\ The comment must also be accompanied by an explicit request
for confidential treatment, including the factual and legal basis
for the request, and must identify the specific portions of the
comment to be withheld from the public record. The request will be
granted or denied by the Commission's General Counsel, consistent
with applicable law and the public interest. See Commission Rule
4.9(c), 16 CFR 4.9(c).
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Because mail delivered to the FTC by the United States Postal
Service is subject to delay due to heightened security screening,
please consider submitting your comments in electronic form. Comments
filed in electronic form should be submitted by using the following
weblink: https://ftcpublic.commentworks.com/ftc/tsrcalleridanprm (and
following the instructions on the web-based form). To ensure that the
Commission considers an electronic comment, you must file it on the
web-based form at the weblink https://ftcpublic.commentworks.com/ftc/tsrcalleridanprm. If this Notice appears at http://www.regulations.gov/search/index.jsp, you may also file an electronic comment through that
Web site. The Commission will consider all comments that
regulations.gov forwards to it. You may also visit the FTC Web site at
http://www.ftc.gov to read the Notice and the news release describing
it.
A comment filed in paper form should reference the ``Advance Notice
of Proposed Rulemaking Concerning Caller Identification, Matter
P104405'' both in the text and on the envelope, and should be mailed or
delivered to the following address: Federal Trade Commission/Office of
the Secretary, Room H-113 (Annex Q), 600 Pennsylvania Avenue, NW.,
Washington, DC 20580. The FTC requests that any comment filed in paper
form be sent by courier or overnight service, if possible, because U.S.
postal mail in the Washington area and at the Commission is subject to
delay due to heightened security precautions.
The Federal Trade Commission Act (``FTC Act'') and other laws the
Commission administers permit the collection of public comments to
consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments that it receives,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC Web site, to the extent practicable,
at http://www.ftc.gov/os/publiccomments.shtm. As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC Web site. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy, at http://www.ftc.gov/ftc/privacy.shtm.

By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2010-31390 Filed 12-14-10; 8:45 am]
BILLING CODE 6750-01-P