Announced Actions for March 14, 2003

The Commission has received an application for approval of a proposed divestiture from ConocoPhillips, Inc. (ConocoPhillips), pursuant to a final decision and order with the FTC, announced on February 14, 2003, regarding Conoco's merger with Phillips Petroleum Company (Phillips). As detailed in the application, ConocoPhillips has requested Commission approval of the proposed divestiture of the Phillips Spokane Terminal (as that term is defined in the order) to Holly Corporation.

The Commission is accepting public comments on the proposed divestiture until April 16, 2003. Comments should be sent to: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. (FTC File No. 021-0040, Docket No. C-4058; staff contact is Daniel P. Ducore, Bureau of Competition, 202-326-2526; see press releases dated August 30 and September 20 and 24, 2002; and January 14, January 21, and February 21, 2003.)

The Commission has taken action regarding the revised Telemarketing Sales Rule (TSR), granting in part and denying in part two recent petitions from the Direct Marketing Association (DMA) and the American Teleservices Association (ATA). Through its petition to the FTC, dated February 27, 2003, the DMA requested that the Commission either "forebear from enforcing the requirements of Sec. 310.4(b)(1)(iv) . . . and Sec. 310.4(a)(6)(i) of the TSR or in the alternative, stay the effectiveness of these sections of the rule . . .". These are the provisions that, respectively, prohibit telemarketers from abandoning calls to consumers and that require telemarketers to tape the entire call in any transaction combining the use of preacquired account information and a free-to-pay conversion offer.

The ATA, through its petition to the FTC, also dated February 27, 2003, requested that the Commission stay the effective date of the Amended TSR pending the resolution of lawsuits initiated by the ATA and DMA that challenge the validity of the Amended Rule. The petition suggests that ATA seeks, in the alternative, postponement of the March 31, 2003, effective date of the Amended TSR until the Federal Communications Commission (FCC) has completed its review of its regulations under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. Sec. 227.

Through the action announced today, the Commission has granted the petitioners' request to extend the effective date of the TSR's provision that requires a recorded message as part of a "safe harbor" in the event a call is abandoned by the telemarketer after the called party answers the phone. The effective date of this provision has been extended from March 31 to October 1, 2003. Call abandonment - where consumers rush to answer the phone, only to find no one on the line - results from the use of predictive dialers, automatic equipment that increases telemarketers' efficiency but sometimes reaches consumers when there is no sales representative available to handle the calls.

The TSR call abandonment safe harbor provisions are intended to substantially reduce the number of abandoned calls that consumers receive, while allowing telemarketers to obtain the efficiencies of predictive dialers. The extension in the effective date of the recorded message requirement of the call abandonment safe harbor will ensure that telemarketers have the time to acquire and install the software or hardware necessary to comply with the provision. However, the Commission denied the petitioners' request to delay the effective date of other provisions of the amended TSR.

The Commission vote to grant in part and deny in part the petitions was 5-0. (FTC File No. R411001; staff contact is Katherine Harrington-McBride, Bureau of Consumer Protection, 202-326-2452; see press release dated December 18, 2002.)