July 29, 2003 2:30 PM PDT

Spam foes wary of do-not-call suits

Even as the idea of a national do-not-spam registry gains traction among e-mail users and on Capitol Hill, a lawsuit against the proposed federal do-not-call list could nip the idea in the bud, legal experts warn.

The National Do Not Call Registry was a hit with the public when it launched last month, and the site that takes phone numbers for the plan staggered under heavy demand. As of Monday, 28.7 million numbers were registered with the list.

The do-not-call plan's popularity has fueled demand for a similar registry for unsolicited commercial e-mail. Perhaps the most consequential proposal has surfaced on Capitol Hill, in the form of New York Democrat Sen. Charles Schumer's antispam bill. A recent survey conducted by a company that sells antispam software appeared to confirm the popularity of the idea, showing that about three-fourths of Americans support the creation of such a list.

Now the do-not-call project is on the defensive as the telemarketing industry wages a legal assault that claims the list is a violation of the U.S. Constitution's guarantee of free expression. That offensive began in January with the filing of a suit against the Federal Trade Commission in federal court in Colorado and was stepped up this week with a new suit that seeks judicial review of the Federal Communications Commission's adoption this month of a "mirror" do-not-call system.

"This truly is a case of regulatory overkill," Tim Searcy, executive director of the American Teleservices Association (ATA), said in a statement. "Unfortunately, the FCC ignored its obligations under the federal law and the Constitution to carefully balance the privacy interests of consumers with the First Amendment rights of legitimate telemarketers. The law directed the FCC to avoid solutions that had an adverse economic impact, yet the agency consistently opted for the most restrictive approaches while ignoring less burdensome regulations."

The ATA estimates that the do-not-call list will cost as many as 2 million U.S. telemarketing jobs, wiping out almost a third of its industry.

A ruling in favor of the telemarketing industry that ratified its free-speech claims would bode poorly for a potential spam opt-out list, legal experts agreed.

But those same lawyers also said telemarketers are fighting an uphill constitutional battle, particularly in the wake of recent decisions that uphold laws that regulate the sending of unsolicited faxes.

These include a March decision by the U.S. District Court for the 8th Circuit that held antifax laws to be constitutional regulations of commercial speech--a decision widely viewed as a shot in the arm for spam foes--and a decision in Kaufman v. ACS Systems and Amkraut v. Fax.com this month by the California court of appeals for the second appellate district ruling, in part, that the fax law is constitutional.

"I don't view (the telemarketers) as going very far," said Jim Kaminski, an attorney with Arent Fox Kintner Plotkin & Kahn in Washington, D.C. "It seems to me that the do-not-call lists have congressional and popular support. And that seems like a very difficult bar to overcome, since the courts view commercial speech differently than speech by individuals. It's not given the same protections under the Constitution. The recent Nike case at the Supreme Court reiterated that view."

In allowing a false advertising suit to proceed against Nike this past term, the U.S. Supreme Court ruled that the company's press releases and other publicity materials were commercial speech and therefore were not entitled to the same protection as an individual's speech.

One attorney, whose clients include Internet marketers, criticized the legal trend of allowing increasing restrictions on commercial speech in more and more different media, arguing that advertisers were getting boxed into a corner.

"The do-not-call precedent would be highly relevant (to Internet marketers) despite the differences in the technology," said Cheryl Falvey, attorney with Akin Gump Strauss Hauer & Feld in Virginia. "But how many ways can you restrict the advertising? You've got the fax, the phone, direct mail, then e-mail--you're really going to get to the point where you're so overregulating the various means to reach your customers that you really have restricted commercial speech excessively."

Even if the courts clear the constitutional way for it, a do-not-spam registry still faces significant hurdles, as critics warn that such a list is more vulnerable and valuable to hackers in search of spam targets.

 

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