April 2003

BY NADJI TEHRANI

In the February and March 2003 editorials of this publication, Rich Tehrani and I extensively addressed the case for reversal of the TOTALLY UNFAIR, DAMAGING, IMPRACTICAL and virtually unenforceable regulations known as the Telemarketing Sales Rule (TSR).

We presented our case with sound, factual implications of irreparable damages that these regulations will inflict on the vitally important call center and teleservices industry.

Here are some additional facts to be considered about the TSR regulations:

1. It is vitally important that the Federal Communications Commission (FCC) and Federal Trade Commission (FTC) understand that the passage of the TSR regulations accomplishes one and ONLY one thing: It will eliminate 3 to 5 million jobs by sending them offshore! We lose the 3 to 5 million jobs by cutting down the number of calls that are possible by eliminating a segment of the population through this unwarranted and government-funded do-not-call registry. Additionally, we lose jobs overseas due to the onerous technology requirements that make labor-saving devices no longer labor-saving, thereby encouraging companies to seek cheaper labor overseas.

2. Outbound Is Vital To All Aspects Of Every Business:
- Freedom of speech is no different than the freedom of calling.
- In business, if you don't stay in touch regularly, you will lose your customer, and the telephone is the most cost-effective way to stay in touch.
- The doctrine of "laissez faire" is violated! "Laissez faire" has been that vitally important "free trade" doctrine on which civilized and progressive business practice is based. The TSR ruling violates that!
- Discrimination between outsourcing and in-house call centers as called for in the TSR MUST be deemed illegal.
- Teleservices companies play a vital role not only for U.S. corporations, but also in creating and protecting about 1,400,000 jobs.
- The FTC should thank them, NOT handicap them! 

Having Said All That'If We All Resort To Conventional Wisdom, We Will All Come To The Conclusion That: Outsourcing Teleservices Plays A Most Vital Role In The Success Of Corporate America.

So why try to restrict it in an unfair or possibly illegal way?

The FTC and FCC need to understand that outsourcing is THE MOST VITAL PART OF DOING BUSINESS TODAY, not only for Corporate America, but also in Global Commerce. 

Companies have learned that survival in today's ultra challenging economy depends on focusing on the company's "core competency" and outsourcing what is not the company's "core competency."

20 Million Jobs Saved Since 1983
Corporate America has been outsourcing their customer services, customer relationship management (CRM), sales support, lead generation, etc., to teleservices companies in the last 20 years with great success.

1,400,000 Jobs Are On The Line Per Year
Moreover, teleservices companies are currently producing and protecting 1,400,000 jobs in America per year. At an average of one million jobs created and preserved every year, teleservices agencies have saved 20 million jobs since 1983! Ironically, teleservices companies are the focus of discrimination in the TSR regulations. I ask: Does that make sense? Do the so-called "regulators" know what they are doing?

The FTC's unfair TSR regulations not only discriminates against the teleservices industry, but also the predictive dialer restriction part of it may place undue hardship, thereby causing hundreds of thousands of layoffs! We believe this is unfair, discriminatory and utterly ridiculous! 

There Are Three Lawsuits Now Pending
To combat these regulations, three lawsuits are now before the courts. 

1) The ATA lawsuit. The lawsuit filed by the American Teleservices Association (ATA) is based on First Amendment rights as well as the reduction of restrictions on predictive dialers and a preliminary injunction is sought for the national do-not-call list.

2) The DMA lawsuit. The basis for the lawsuit brought by the Direct Marketing Association (DMA) is to request a preliminary injunction based on jurisdiction as well as to remove the predictive dialer restrictions in the TSR.

3) The charitable organization lawsuit. Two well-known charitable organizations filed a challenge to the new TSR which raises jurisdictional as well as First Amendment issues. Restrictions on fully protected speech are subject to strict scrutiny when restrictions are content-based. This higher standard of protection is not available to commercial speech activities. This means the case will bring a more intense level of review by the courts.

The TSR Will Increase The Cost Of Sales And Unemployment
Dean Brown, vice president of Sales and Marketing at TeleDirect International, told me the following:

"For some businesses, outbound telemarketing is a key to their survival. The implementation of a national do-not-call list will increase the cost of sales significantly for some businesses and that could potentially cost the consumer more in the end. We need to work together and find a rational way to balance the use of technology to benefit everyone concerned. In other words, we should be leveraging technology to better target prospects, reduce the cost of sales and avoid annoying the consumer with dead air when they answer our calls. The national do-not-call list as presented is designed to protect the consumer from unwanted calls, but when you take into consideration the calls that consumers have voiced the most concern over, such as political fundraising and long-distance services, the National Do Not Call registry does nothing to stop these calls.

"Traditionally, the FTC has always worked to represent the best interests of business and consumers. The Do-Not-Call law seems to be politically charged, and the FTC appears to have succumbed to the bidding of consumer advocacy groups as the concerns of business have not been given much consideration. It appears that the FTC has acted without understanding of the real impact of these regulations upon business and ultimately the consumer. In the end, costs will go up, jobs will be lost and, in short, business will be hurt, and the long-term question still remains; will consumers ever really benefit?"

The Solution For Intrusive Calls
We despise intrusive calls much more than anyone. We do not think that the concept of call centers for telesales was meant to be intrusive. In fact, on the contrary, this industry was meant for the useful purpose of helping businesses grow and keep their customers satisfied in a cost-effective manner. Intrusive calls have absolutely, positively no room in the call center industry. This publication, for one, will do anything in its power to eliminate such activities and help anyone report intrusive telephone communications to the proper authorities. 

We believe there is a right way to handle intrusive calls and there is a wrong way. The right way is to gather industry practitioners, industry leaders who understand every aspect of the industry and with their guidance, eliminate intrusive calls. The wrong way is to destroy, damage and shut down the entire call center industry, which at the moment protects three to five million jobs in America, for the sake of eliminating a small percentage of intrusive and abusive callers. Such action would be like the proverbial throwing out the baby with the bath water.

A Call For Unity
Given all of the above problems that are confronting our industry, we call for the development of a one hundred percent united front to combat this unfair, discriminatory and completely unacceptable FTC ruling. Not since the Great Depression has job creation and job protection been so vitally important to the U.S. economy. It seems to me that we need the TSR at this point in time like we need a hole in the head. I am positive that the people who created these regulations had great intentions in mind, i.e., consumer protection and job creation, but as we have convincingly indicated above and in editorials in the February and March issues of Customer Inter@ction Solutions^' magazine, these regulations will have precisely the opposite effect! We sincerely hope the FTC will have an open mind and reconsider the regulations.

What Can You Do To Help?
If you are interested in helping the injunctive relief actions that are the subject of the above three lawsuits, write or call the following asking how you can help.
1. Contact the ATA and ask for Tim Searcy, Executive Director, ATA Strategic Planning. Phone: 317-816-9336; e-mail: [email protected]. 

2. Contact the DMA and ask for Mike Faulkner, Senior Vice President, DMA Segments & Affiliates. Phone: 212-790-1598; e-mail: [email protected].

3. For the charitable organizations lawsuit, contact Errol Copilevitz, Atty., Copilevitz & Canter, LLC. Phone: 816-472-9000; e-mail: [email protected].

Join us at the Global Call Center Outsourcing Summit^TM in Reno, Nevada June 2-4 to discuss the above matters in person with more than 100 industry leaders and help jointly develop strategies for the future of our industry. For more information, see www.tmcnet.com/gccos/.

As always, I welcome your comments.

Sincerely,
Nadji Tehrani
TMC Chairman, CEO and
Executive Group Publisher
[email protected]

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Nadji:

I want to commend you, Rich and your entire team at TMC for your in-depth coverage of the regulatory issues affecting our industry. It is my opinion that no other industry publication has come even close to your commitment to the situation at hand.

Your open letter to Mr. Muris, Chairman of the Federal Trade Commission (FTC) is a critical part of the response our industry must take. The record clearly shows that numerous organizations presented compelling feedback to the FTC against further regulation as part of the public comment period during the FTC rulemaking deliberations. I'm sure that I am not alone in recalling several FTC staff members' comments at industry meetings over the past year that we were "over-reacting" and should "wait for the actual rules to be published" as we "will be pleased with the outcome." In stark contrast to what was said, we could not have been more shocked when the revised rules were announced right before Christmas last year. Not only were the changes more severe than we had ever anticipated, the actual restrictions on the technology we use to run our businesses, i.e., predictive dialers, are so onerous that it threatens to put millions of hard-working Americans out of work.

I think these very poor decisions are a direct result of the FTC's lack of experience in dealing with issues relating to the telecommunications industry. The Federal Communications Commission (FCC) on the other hand, has the direct statutory authority to act on these technological issues. The FCC, not the FTC, is the only regulatory body which has jurisdiction to regulate customer premise equipment (CPE). This authority rests exclusively with the FCC, a legal fact which has been well established.

Once again, I commend you for your leadership and encourage you to now also direct your attention to the FCC. 

Steve Brubaker
Sr. VP - Corporate Affairs
InfoCision Management Corp.

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I'd like to take this opportunity to extend heartfelt congratulations to all the honorees of the 2003 Top 50 Outbound Teleservices Agencies Rankings. 

I know how difficult it is to win this coveted award, especially in this difficult economy with growing offshore competition for the domestic agencies.

We recognize and appreciate you major contributions to the growth and prosperity of Corporate America. You have produced and saved more that 20 million jobs since 1983 and are currently producing and protecting more than 1,400,000 jobs in the United States per year. You are helping every aspect of businesses, from customer service, customer care and retention to sales support and credit and collections, to fundraising that helps build libraries and churches, to increasing blood supplies by setting up appointments for blood donors for the American Red Cross, and more. When I delivered a speech at the American Red Cross in Massachusetts, there were signs all over the conference area that read: "Telemarketing'The Link To Life." We all know how vital the above services are to our lives.

In my judgment, you are the cream of the crop and it is always a great pleasure to work with you, and I thank you for your support.

Sincerely,
Nadji Tehrani

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Come solve your greatest challenges and find new opportunities in an environment that is laser-focused on running a successful teleservices outsourcing business. Where? The Global Call Center Outsourcing Summit^TM (GCCOS) from June 2-4, 2003 at the spectacular Siena Hotel in Reno, Nevada. This is the only time this year when you can spend three days networking with other top executives in the call center outsourcing field. Come to exchange views with peers who have tackled similar challenges. Talk to other executives who have successfully implemented the latest technologies. Find partners and potential merger prospects.

Start off your stay in Reno with some fun, relaxation and networking on Monday, June 2. There will be a Networking Golf Tournament, an Opening Networking Reception for all attendees and a Welcome Dinner for all attendees. On Tuesday, it's time to get down to business and widen your intellectual horizons in the Conference Sessions. We'll start the day with opening remarks and new vital statistics from Nadji Tehrani, followed by sessions called "The Wall Street Perspective/Mergers & Acquisition Forecast for 2003 And Beyond" and "Web-Enabling Your Call Center," and ending the morning with a must-attend session called "Legislation Matters Part 1: Outbound Telemarketing: The Legal Case For Survival." This first part of the Legislation Matters session will provide an overview of the history of legislation in our industry and descriptions of pending regulations by representatives of the DMA, the ATA and the non-profit coalition. The day will conclude with two more important sessions: "Essential Technology For Teleservices Outsourcers" and "Outsourcing Offshore: The Ultimate Debate." You can then wind down at day's end by attending a reception, touring exhibits and then sitting down to the 18th Annual Top 50/MVP Quality Awards Reception and Dinner (all attendees cordially invited to attend).

Day 3 kicks off with a breakfast followed by sessions on "Building Your Inbound Business," and "The Make It Or Break It Verdict On CRM: First-Class Customer Saver Or Red-Faced Flop." The day concludes with the second part of: "Legislation Matters," and this time the ATA and the DMA will present their fight plans. In addition, there will be case studies/advocacy presentations by outbound customers and an open forum discussion.

I invite you all to attend. For more information, see www.tmcnet.com/gccos/.

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