Thomas Jefferson advised: When angry, count to 10 before speaking. Mark Twain, added: When very angry, swear. Few things make some people angrier than unwanted telemarketing calls. So the Federal Trade Commission is considering doing what 31 states have done by creating a federal “do not call” list.
Consumers who do not want telemarketing calls could place their names on the list (though they can already do this with a list run by the Direct Marketing Association). Could consumers come to regret this proposed regulation? The answer is, we should at least count to 10 before passing the new rules.
There’s a good case that we’re all better off having the freedom to call up others without the formality of a previous introduction.
Let’s start with the most obvious societywide benefits. Telemarketing is an important route for appeals from charities and is also an important part of the political process. The FTC cannot regulate nonprofits, including political groups. But the new regulations would hamper the activities of the professional telemarketers nonprofits rely on, probably forcing nonprofits to move their fund-raising operations in-house. Few are equipped to do so.
The need to exempt political groups and charities, which most people seem to accept, raises a key question. Is nonprofit access to citizens more beneficial than business access to consumers? Telemarketing can enhance competition by introducing consumers to new products. One strong example comes from long-distance telephone service. After Ma Bell was broken up in 1984, consumers had a choice of long-distance companies for the first time.
But few consumers understood the options. Many switched to MCI or Sprint only in response to telemarketing calls. The resulting competition between phone companies saved consumers millions of dollars. Telemarketing has also been important to struggling daily newspapers.
For those of us with too short a fuse for any kind of telemarketing, whatever its benefits overall, there’s an array of private-sector solutions such as the TeleZapper, Privacy Manager, or the Phone Butler, not to mention Caller ID. These devices help consumers control which calls get through. Contrary to what some have said, there’s absolutely no sign of market failure here — ironically, federal regulations could put the private solutions out of business.
Ultimately, private inventors will offer consumers more flexible and efficient solutions than a one-size-fits-all federal regulation. The private devices compete against one another for price, options and quality; the FTC competes against no one. There’s a substantial list of calls the FTC cannot legally regulate; the devices cover everything.
Yes, consumers do have to pay up-front for these devices. But it’s a mistake to think any federal regulation is free. We all pay the hidden tax of regulation, the extra burden of more lawyers on the economy.
Telemarketing is one of the annoyances of a free economy, just as calls from pollsters are one of the annoyances of democracy. But telemarketing calls from legitimate businesses do no real harm and have substantial benefits. Besides, without telemarketing calls, what would we have to complain about? There’s always graver issues — from traffic to terrorism.
It’s hard to imagine Thomas Jefferson or Mark Twain calling in the feds to protect us from the ringing of a telephone, even during dinner.