    [House Hearing, 112 Congress]
    [From the U.S. Government Publishing Office]

              H.R. 3035, THE MOBILE INFORMATIONAL CALL ACT OF 2011

    =======================================================================

                                    HEARING

                                   BEFORE THE

                 SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                   __________

                                NOVEMBER 4, 2011

                                   __________

                               Serial No. 112-103

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

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                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman

    JOE BARTON, Texas                    HENRY A. WAXMAN, California
      Chairman Emeritus                    Ranking Member
    CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
    ED WHITFIELD, Kentucky                 Chairman Emeritus
    JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
    JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
    MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
    GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
    LEE TERRY, Nebraska                  ANNA G. ESHOO, California
    MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
    SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
      Vice Chairman                      DIANA DeGETTE, Colorado
    JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
    TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
    MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
    MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
    BRIAN P. BILBRAY, California         JAY INSLEE, Washington
    CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
    PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
    STEVE SCALISE, Louisiana             JIM MATHESON, Utah
    ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
    CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
    GREGG HARPER, Mississippi            DORIS O. MATSUI, California
    LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin
    BILL CASSIDY, Louisiana              Islands
    BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
    PETE OLSON, Texas
    DAVID B. McKINLEY, West Virginia
    CORY GARDNER, Colorado
    MIKE POMPEO, Kansas
    ADAM KINZINGER, Illinois
    H. MORGAN GRIFFITH, Virginia

                                     _____

                 Subcommittee on Communications and Technology

                              GREG WALDEN, Oregon
                                     Chairman
    LEE TERRY, Nebraska                  ANNA G. ESHOO, California
      Vice Chairman                        Ranking Member
    CLIFF STEARNS, Florida               EDWARD J. MARKEY, Massachusetts
    JOHN SHIMKUS, Illinois               MICHAEL F. DOYLE, Pennsylvania
    MARY BONO MACK, California           DORIS O. MATSUI, California
    MIKE ROGERS, Michigan                JOHN BARROW, Georgia
    MARSHA BLACKBURN, Tennessee          DONNA M. CHRISTENSEN, Virgin
    BRIAN P. BILBRAY, California             Islands
    CHARLES F. BASS, New Hampshire       EDOLPHUS TOWNS, New York
    PHIL GINGREY, Georgia                FRANK PALLONE, Jr., New Jersey
    STEVE SCALISE, Louisiana             BOBBY L. RUSH, Illinois
    ROBERT E. LATTA, Ohio                DIANA DeGETTE, Colorado
    BRETT GUTHRIE, Kentucky              JOHN D. DINGELL, Michigan
    ADAM KINZINGER, Illinois             HENRY A. WAXMAN, California (ex
    JOE BARTON, Texas                        officio)
    FRED UPTON, Michigan (ex officio)

                                      (ii)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Greg Walden, a Representative in Congress from the State of
      Oregon, opening statement......................................     1
        Prepared statement...........................................     3
    Hon. Marsha Blackburn, a Representative in Congress from the
      State of Tennessee, opening statement..........................     6
    Hon. Anna G. Eshoo, a Representative in Congress from the State
      of California, opening statement...............................     6
    Hon. Michael F. Doyle, a Representative in Congress from the
      Commonwealth of Pennsylvania, opening statement................    14
    Hon. Lee Terry, a Representative in Congress from the State of
      Nebraska, opening statement....................................    14
    Hon. Joe Barton, a Representative in Congress from the State of
      Texas, opening statement.......................................    15
        Prepared statement...........................................    17
    Hon. Henry A. Waxman, a Representative in Congress from the State
      of California, opening statement...............................    19
        Prepared statement...........................................    21
    Hon. Edolphus Towns, a Representative in Congress from the State
      of New York, opening statement.................................    23
    Hon. John D. Dingell, a Representative in Congress from the State
      of Michigan, prepared statement................................   141

                                   Witnesses

    Faith Schwartz, Executive Director, Hope Now Alliance............    68
        Prepared statement...........................................    70
        Answers to submitted questions...............................   142
    Stephen A. Alterman, President, Cargo Airline Association........    80
        Prepared statement...........................................    82
        Answers to submitted questions...............................   143
    Delicia Reynolds Hand, Legislative Director, National Association
      of Consumer Advocates..........................................    87
        Prepared statement...........................................    89
        Answers to submitted questions...............................   144
    Gregory F. Zoeller, Attorney General, State of Indiana...........   104
        Prepared statement...........................................   106
        Answers to submitted questions...............................   147
    Michael Altschul, Senior Vice President and General Counsel,
      CTIA--The Wireless Association.................................   122
        Prepared statement...........................................   124
        Answers to submitted questions...............................   149

                               Submitted Material

    Letter, dated November 3, 2011, from Ioana Rusu, Regulatory
      Counsel, Consumers Union, to Mr. Walden and Ms. Eshoo,
      submitted by Ms. Eshoo.........................................     8
    Letter, dated October 27, 2011, from Americans for Financial
      Reform, et al., to Mr. Upton and Mr. Waxman, submitted by Ms.
      Eshoo..........................................................    11
    Letter, dated November 2, 2011, from Jane Thielen, Collections,
      Bethel University, to Mr. Walden and Ms. Eshoo, submitted by
      Mr. Terry......................................................    24
    Letter, dated November 3, 2011, from Judy Renschler, Perkins Loan
      Manager, Butler University, to Mr. Walden and Ms. Eshoo,
      submitted by Mr. Terry.........................................    25
    Letter, dated November 3, 2011, from Donna Chrestay, Assistant
      Director, Student Accounts, Carnegie Mellon University, to Mr.
      Walden and Ms. Eshoo, submitted by Mr. Terry...................    26
    Letter, dated November 3, 2011, from R. Bruce Josten, Executive
      Vice President, Government Affairs, Chamber of Commerce of the
      United States of America, to Mr. Walden and Ms. Eshoo,
      submitted by Mr. Terry.........................................    27
    Letter, dated November 2, 2011, from Marianne Riddle, Bursar,
      Georgetown University, to Mr. Walden and Ms. Eshoo, submitted
      by Mr. Terry...................................................    28
    Letter, dated November 3, 2011, from Floyd E. Stoner, Executive
      Vice President, Congressional Relations and Public Policy,
      American Bankers Association, to Mr. Walden and Ms. Eshoo,
      submitted by Mr. Terry.........................................    29
    Letter, dated November 3, 2011, from Tony Williams, Executive
      Director, Arkansas Student Loan Authority, to Mr. Upton and Mr.
      Waxman, submitted by Mr. Terry.................................    31
    Letter, dated November 2, 2011, from Erin Klarer, Vice President,
      Government Relations, Finance and Administration Cabinet,
      Kentucky Higher Education Assistance Authority, to Mr. Guthrie,
      submitted by Mr. Terry.........................................    33
    Letter, dated November 2, 2011, from David A. Feitz, Executive
      Director, Utah Higher Education Assistance Authority, to Mr.
      Upton and Mr. Waxman, submitted by Mr. Terry...................    35
    Letter, dated November 2, 2011, from Kimberley A. Kercheval,
      Executive Associate Bursar, Indiana University, to Mr. Walden
      and Ms. Eshoo, submitted by Mr. Terry..........................    36
    Letter, dated November 2, 2011, from Jean Schloemer, Federal
      Perkins Loan Coordinator, Wartburg College, to Mr. Walden and
      Ms. Eshoo, submitted by Mr. Terry..............................    37
    Letter, dated November 2, 2011, from Larry Rock, Director of
      Student Loan Repayment, Concordia College, to Mr. Walden and
      Ms. Eshoo, submitted by Mr. Terry..............................    38
    Letter, dated November 3, 2011, from William P. Killmer, Senior
      Vice President, Legislative and Political Affairs, Mortgage
      Bankers Association, to Mr. Upton, Mr. Waxman, Mr. Walden, and
      Ms. Eshoo, submitted by Mr. Terry..............................    39
    Letter, dated November 3, 2011, from Jonathan M. Weisgall, Vice
      President, Legislative and Regulatory Affairs, MidAmerican
      Energy Holdings Company, to Mr. Upton and Mr. Waxman, submitted
      by Mr. Terry...................................................    41
    Letter, dated September 23, 2011, from American Bankers
      Association, et al., to Mr. Upton and Mr. Waxman, submitted by
      Mr. Terry......................................................    45
    Letter, dated November 2, 2011, from Karla Sanderson, Loan
      Coordinator, Oberlin College and Conservatory, to Mr. Walden
      and Ms. Eshoo, submitted by Mr. Terry..........................    47
    Letter, dated November 3, 2011, from Suzanne Dominick, Accounts
      Receivable Supervisor, Seton Hill University, to Mr. Walden and
      Ms. Eshoo, submitted by Mr. Terry..............................    48
    Letter, dated November 2, 2011, from Sharie Palmer, Director of
      Collection/Planned Giving Coordinator, Valparaiso University,
      to Mr. Walden and Ms. Eshoo, submitted by Mr. Terry............    49
    Letter, dated November 3, 2011, from Thomas R. Kuhn, President,
      Edison Electric Institute, to Mr. Terry and Mr. Towns,
      submitted by Mr. Terry.........................................    50
    Letter, dated November 2, 2011, from Tony Bordeaux, Associate
      Director, Loans Receivable and Collections, The University of
      Alabama, to Mr. Walden and Ms. Eshoo, submitted by Mr. Terry...    52
    Letter, dated November 3, 2011, from Dennis J. DeSantis,
      Associate Vice Chancellor, Student Financial Services,
      University of Pittsburgh, to Mr. Doyle, submitted by Mr. Terry.    54
    Letter, dated November 2, 2011, from Susan Rose, Treasurer,
      University of St. Thomas, to Mr. Walden and Ms. Eshoo,
      submitted by Mr. Terry.........................................    56
    Letter, dated November 4, 2011, from Sharon Gardner, Office of
      Financial Services, Student Loan Collections, University of
      South Carolina, to Mr. Walden and Ms. Eshoo, submitted by Mr.
      Terry..........................................................    57
    Letter, dated November 2, 2011, from Vicky Degen, Otterbein
      University, to Mr. Walden and Ms. Eshoo, submitted by Mr. Terry    58
    Letter, dated November 2, 2011, from Belinda Higginbotham,
      Bursar, Western Kentucky University, to Mr. Walden and Ms.
      Eshoo, submitted by Mr. Terry..................................    59
    Letter, dated November 4, 2011, from Steve Bartlett, President
      and Chief Executive Officer, The Financial Services Roundtable,
      and John Dalton, President, The Housing Policy Council, to Mr.
      Walden and Ms. Eshoo, submitted by Mr. Terry...................    60
    Letter, dated November 3, 2011, from Dave McCurdy, President and
      Chief Executive Officer, American Gas Association, to Mr.
      Walden and Ms. Eshoo, submitted by Mr. Terry...................    61
    Letter, dated November 2, 2011, from Melanee Gallina, Educational
      Loan Specialist, Biola University, to Mr. Walden and Ms. Eshoo,
      submitted by Mr. Terry.........................................    62
    Statement, dated November 4, 2011, of Consumer Bankers
      Association, submitted by Mr. Terry............................    63
    Letter, dated November 3, 2011, from Robert A. Bergman, Vice
      President, Public Affairs, UPS, to Mr. Upton and Mr. Waxman,
      submitted by Mr. Terry.........................................    67

              H.R. 3035, THE MOBILE INFORMATIONAL CALL ACT OF 2011

                                  ----------

                            FRIDAY, NOVEMBER 4, 2011

                      House of Representatives,
         Subcommittee on Communications and Technology,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 9:01 a.m., in
    room 2123, Rayburn House Office Building, Hon. Greg Walden
    (chairman of the subcommittee) presiding.
        Members present: Representatives Walden, Terry, Stearns,
    Shimkus, Blackburn, Bilbray, Bass, Gingrey, Scalise, Latta,
    Guthrie, Barton, Eshoo, Markey, Doyle, Barrow, Towns, and
    Waxman (ex officio).
        Staff present: Ray Baum, Senior Policy Advisor/Director of
    Coalitions; Nicholas Degani, FCC Detailee; Neil Fried, Chief
    Counsel, Communications and Technology; Kirby Howard,
    Legislative Clerk; Debbee Keller, Press Secretary; David Redl,
    Counsel, Communications and Technology; Alex Yergin,
    Legislative Clerk; Shawn Chang, Minority Counsel; Jeff Cohen,
    Minority Counsel; Roger Sherman, Minority Counsel; and Will
    Wallace, Minority Policy Analyst.

      OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF OREGON

        Mr.Walden. I am going to call to order the Subcommittee on
    Communications and Technology, as we open this hearing on H.R.
    3035, the Mobile Informational Call Act of 2011.
        Today's hearing is an opportunity for our subcommittee to
    explore an age-old problem with legislation: How do we ensure
    the laws on the books makes sense, given new technologies and
    the evolving marketplace? I welcome that opportunity, and I
    want to thank our vice chairman of the committee, Lee Terry,
    and I want to thank Mr. Towns for bringing us their bipartisan
    legislation, the Mobile Informational Call Act of 2011.
        The bill would update the Telephone Consumer Protection
    Act, which aimed to protect telephone customers from intrusive
    telephone marketing while balancing those protections against
    the needs of business and nonprofits to communicate and inform
    consumers. It did so, among other ways, by restricting the
    ability of telemarketers to make telephone solicitations and by
    prohibiting all use of automatic-dialing equipment and
    prerecorded voice messages for calls to wireless phones.
        But it has been 20 years since Congress passed TCPA, and
    the world of telecommunications has changed. Back then, the
    only person with a cell phone was probably Gordon Gekko. Today,
    many Americans households have given up the landline and rely
    exclusively on wireless services. Back then, wireless customers
    paid higher per-minute rates to receive calls. Now, most
    customers have bucket of minutes so that receiving an
    additional call costs them nothing. Given these changes to the
    marketplace, now seems like a good time to revisit some of the
    rules the TCPA put in place.
        The thrust of the TCPA was to help protect consumers from
    unwanted telemarketing calls. The question now, however, is
    whether the TCPA is inadvertently preventing consumers from the
    convenience of getting other information that consumers do want
    and while they are on the go with their mobile phones. And if
    so, how can we address that? Does the TCPA prevent consumers
    from receiving informational calls from their banks, like fraud
    or low-balance alerts? Do the strictures of the TCPA and the
    FCC's implementation of it make it too difficult for businesses
    to engage their customers and provide them with valuable
    services? What is the proper role for States in protecting the
    privacy of telephone subscribers?
        Reasonable people can disagree on the answers to all of
    these questions, and I imagine we will, but I think we can all
    agree that any legislation should not subject consumers to
    unwanted telephone solicitations. Surely we can figure out a
    way to allow consumers to receive useful informational calls
    without unleashing the telemarketers. I think that is exactly
    the needle that this legislation is aiming to thread.
        We have before us several experts that will help us explore
    these issues, and I hope we will learn something about the
    consumer benefits of mobile informational calls, something
    about the concerns of consumer advocates and our States'
    attorney generals, and something about today's wireless
    marketplace.
        I think this can be a very productive discussion about ways
    to improve our country's laws for the benefit of all Americans,
    and I expect we will have some vigorous debate on how to do
    that. That is what hearings are all about.
        And I thank, again, our colleagues who have brought this
    legislation forward.
        And I would now yield to--well, we didn't start the clock,
    so I don't know how much time I have to yield. Looks like I
    have 89 minutes and 43 seconds. Since there was no objection
    from my--yes.
        I would yield to my colleague from Tennessee, Ms.
    Blackburn, the remaining 1 minute I apparently had.
        [The prepared statement of Mr. Walden follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF TENNESSEE

        Mrs.Blackburn. Thank you, Mr. Chairman, and that is about
    all I need.
        I do want to let you all know that I appreciate so much
    your work and Mr. Terry's work, the work of our staff, on the
    Mobile Informational Call Act. I am a cosponsor of this, and I
    think it does strike a reasonable balance that protects
    consumers while also allowing companies to provide beneficial
    information.
        An example of that, when FedEx, one of our Tennessee
    constituent companies, is able to provide automated
    informational calls to their customers using cell phones about
    future deliveries, they are able to increase their delivery
    rates on a first attempt by as much as 30 percent. That is a
    good thing because it reduces cost, helps the customers, and
    makes things more efficient. Under current law, FedEx is
    restricted in its ability to make automated calls about
    deliveries to customers, and we need a commonsense way to fix
    this.
        I appreciate your good work, and yield back.
        Mr.Walden. I thank the gentlelady.
        And all time has expired on our side. I turn now to my
    ranking member and friend, Ms. Eshoo from California, for 89-1/
    2 minutes.

     OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Ms.Eshoo. Thank you, Mr. Chairman.
        And good morning, everyone. Good morning to the witnesses,
    and thank you for being here.
        Today's hearing revisits legislation enacted by this
    committee 20 years ago. Much has changed, as the chairman said,
    since that time, particularly in the way Americans communicate
    with each other. An increasing number of U.S. consumers
    identify their wireless device as their primary means of
    communication, and many have eliminated the use of alandline
    phone altogether.
        And while I believe these changes in consumer behavior
    warrant our review of the Telephone Consumer Protection Act, I
    am concerned about the potential for misuse by modifying the
    act. In fact, my constituents have spoken very clearly. They
    don't like this bill. I have heard from many, many
    constituents, and, to a person, they don't like it. They have
    written to me since this legislation was introduced, and, as I
    said, they are opposed because they have a lot of concerns
    about it.
        We almost always have our wireless devices with us. And I
    agree that, with a consumer's consent, these devices can serve
    as an ideal method for communicating data breaches, fraud
    alerts, drug recalls, and other important information in a
    timely manner. But ``consent'' is a very important term. I am
    concerned that in redefining, quote, ``prior express consent,''
    as this legislation does, consumers will unknowingly be opening
    themselves up to future robocalls anytime they provide a
    business with their mobile number.
        Furthermore, unlike landline phones, there is still a cost
    associated with receiving an incoming call or text message on a
    wireless device. While it is true that many consumers subscribe
    to a monthly service plan, there is still a growing portion of
    the population, particularly many low-income Americans, who
    rely on prepaid service and pay on a per-minute or per-message
    basis.
        We see what happened with the banks and their debit card
    fees. And I think that there are going to be a lot of consumers
    in the country--if this bill were adopted in its present form,
    I think the Congress will hear from an awful lot of people on
    this.
        Why should a consumer be subjected to an unsolicited text
    message at a cost of 20 cents per message? Many consumers may
    wish to opt out of receiving these informational text messages,
    preferring instead to receive a phone call, an email, or other
    form of communication. So these options should be available to
    consumers, yet they are not considered by this legislation.
        So I think that there are some real questions that need to
    be answered about the legislation under consideration. I thank
    each one of the witnesses for being here with us today, and I
    look forward to their testimony.
        And, Mr. Chairman, I would like to ask unanimous consent to
    submit the following letters of opposition for the record.
        [The letters follow:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms.Eshoo. And I would like to yield the remaining time that
    I have to Mr. Doyle for the balance of the time.
        Mr.Walden. Without objection.
        Ms.Eshoo. Thank you.

    OPENING STATEMENT OF HON. MICHAEL F. DOYLE, A REPRESENTATIVE IN
             CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr.Doyle. I want to thank our ranking member and my good
    friend, Anna Eshoo, for giving me some time to speak.
        I want to thank our distinguished panel of witnesses for
    joining us today.
        Mr. Chairman, only 4 years ago, I remember the Energy and
    Commerce Committee's consideration of my bill to make the Do
    Not Call List permanent. That legislation, which was signed
    into law in 2008, allows people to opt out of receiving
    unwanted telemarketing calls once and for all. The bill before
    the subcommittee today presents a similar opportunity for us to
    weigh the potential benefits of a business' ability to contact
    its customers with the importance of consumer protections.
        As a growing number of people cut the cord in favor of
    wireless phone and text services, it is commendable that the
    subcommittee seeks to explore the effects of these changes on
    the conduct of commerce. However, my initial read of this
    legislation causes me to worry that its possible harmful impact
    on consumer welfare could overshadow its benevolent goals. I am
    concerned about the bill's potential consequences for
    individual privacy as well as its implication on consumers'
    pocketbooks.
        So I look forward to learning more from our witnesses about
    the legislation's impacts on consumers, in addition to
    businesses. I want to thank you again, to all the members of
    our panel, for taking the time to help explain these complex
    issues to the subcommittee.
        Mr. Chairman, I appreciate your patience, and I yield back.
        Mr.Walden. The gentleman yields back his time.
        I now recognize the vice chair of the committee, Mr. Terry.

       OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF NEBRASKA

        Mr.Terry. Thank you, Mr. Walden, for holding this hearing
    today.
        And this is a continuation of this committee's effort to
    look at older laws and see how they need to be changed to meet
    modern needs and technologies.
        Now, I will admit that, after reading some articles that
    have been written about this, that maybe there is a
    misperception, but also the misperception can be reality, in
    the sense that the essence of this bill is to ride the fine
    line between unwanted and wanted communications from people
    that choose to have the communication occur.
        So that is the fine line that we are trying to ride here. I
    make no pretense here that we have perfect language in finding
    that line. And that is why I am pleased that all of our
    panelists are here to help us refine the language today.
        So, under current law, if a consumer like me gives my cell
    phone number as my contact to an organization or business--so,
    let's say, schools--already current in law is I have consented
    because I physically gave them that phone number. I wrote it
    down on the line that says, ``How do we contact you?'' OK?
    Under the FCC, that is permission.
        The issue is whether the phone number is going to be
    physically dialed by somebody pushing 10 buttons or whether it
    is an automated, computer-based call. And we think that needs
    to be modernized. That is where the line should be drawn
    between weeding out or preventing--and this bill's intent is to
    never allow an unsolicited, unwanted call. That is the goal
    here.
        Now, you look at society today, and it is ubiquitous in our
    ability to communicate with each other. I give my school my
    cell phone number. I get texts when there is an emergency or
    some issue that they need to communicate with--last year, it
    was a certain virus that was going around the schools. We have
    snow days in Nebraska. I want to know about that. The cell
    phone is my only way to get that information.
        Another example with some of our financial institutions is
    their overdraft protection. You can sign up that they will
    notify you when you get to a certain point in your checking,
    let's say $20. You say, I want to be notified if I get down to
    $20 so I don't write a bad check. That is an automated call
    that comes out and says, your account is at $20. Under today's
    law, that is not lawful, but yet it is wanted.
        That is our goal here. We can go through dozens of examples
    where people give their phone number as a contact, that want
    the information, but it is unlawful. That is the fine line that
    we are riding here today.
        And I really look forward to Attorney General Zoeller. You
    are particularly vociferous. I appreciate that. We want your
    suggestions of how to define that line. Because I think all of
    us would say, if you signed up, you want that information, you
    should get it lawfully.
        So, with that, what I would like to do is yield my
    remaining minute, 15 to the chairman emeritus, Mr. Barton.
        Mr.Barton. I want to thank the sponsor of the bill, Mr.
    Terry, for yielding some time to me even though he knows that I
    am in opposition to his bill. That shows great statesmanship
    and tolerance on your part, and I appreciate it.
        Mr.Terry. Take it back.
        Mr.Walden. The gentleman's time is expired.
        Mr.Barton. Yes, that is way the game is played.

       OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        I hate to be the Republican that spoils the garden party,
    but the current system is in place for a reason, and that
    reason is that people do protect and want to protect their
    privacy.
        I have a cell phone also, and the only people that have my
    cell phone number are other Members of Congress, my family, my
    very close friends, and my senior staff. I know that if I get a
    phone call on my cell phone, it is from somebody that I know
    and that they need or want to talk to me.
        I have three landline phones in Texas. I know that if that
    phone rings, the odds are better than even that it is a
    commercial call that I don't really care to get. So about half
    the time I don't even answer it, unless I am expecting a call
    from somebody.
        I know what Mr. Terry and Mr. Towns are attempting to do,
    and I think it is noble, but I don't think you can draw that
    fine line, as Mr. Terry said. Once we open the door to
    automated dialing for cell phones for very reasonable reasons
    such as Mr. Terry suggested, I don't see how you prevent it
    being used for other, less reasonable reasons.
        So, for that reason, Mr. Chairman and Mr. Vice Chairman and
    Mr. Towns, I do respectfully oppose the bill. But I am glad
    that we are having a hearing to air the issues.
        With that, I yield back.
        [The prepared statement of Mr. Barton follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr.Walden. The gentleman yields back the balance of his
    time.
        I recognize the ranking member of the full committee, Mr.
    Waxman.

    OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr.Waxman. Thank you, Mr. Chairman. I appreciate your
    holding this hearing on the Mobile Informational Call Act of
    2011. You and Mrs. Eshoo have put together another balanced
    panel, and it is appreciated.
        The Telephone Consumer Protection Act, TCPA, was signed
    into law by President Bush in 1991. In the 20 years since its
    enactment, there have been dramatic changes in phone
    technology. Most notably, in 1991, less than 8 million
    Americans subscribed to mobile phone service. Today, there are
    well over 300 million wireless subscribers. And every day, more
    Americans are cutting the cord and relying on their mobile
    phones exclusively.
        Congress enacted the TCPA based on the bipartisan premise
    that residential telephone subscribers consider automated or
    prerecorded telephone calls, regardless of the content or the
    initiator of the message, to be a nuisance and an invasion of
    privacy. Although mobile phone usage has skyrocketed, I
    expected most Americans still have a high degree of concern
    about unwanted telephone calls, regardless of where they
    receive them. Indeed, congressional actions to protect
    Americans from unwanted phone solicitation have proven wildly
    popular.
        Fundamentally, we need to look at this issue from the
    perspective of the wireless consumer. By amending the law, as
    H.R. 3035 proposes, are we modifying consumer control over
    wireless phones? Are we changing expectations regarding
    privacy? Are we increasing costs?
        Although some consumers have unlimited texting and calling
    plans, millions do not. Will consumers have a clear ability to
    avoid unwanted calls and texts on their wireless phones when
    such communications increase their costs?
        Will consumers understand that, when they turn over their
    wireless phone number to the auto dealership, they are agreeing
    to receive future autodialed and prerecorded calls and texts
    about recalls, warranty updates, scheduled oil changes, or even
    from third-party bill collectors?
        We also need to understand whether existing law already
    allows consumers to receive calls on their wireless phones from
    businesses and others. Several experts have suggested that this
    is permissible under existing law. For example, if a school
    wants to use an automated dialer or prerecorded message to call
    parents' cell phones or send them text messages about a snow
    day, this is permissible under existing law with a parent's
    prior express consent. Similarly, autodialed and prerecorded
    updates from power companies, airlines, banks, and cable
    companies are all allowed with the prior express consent of
    their customers.
        Finally, H.R. 3035 appears to preempt a variety of existing
    State laws in a significant way. The bill would amend the TCPA
    to preempt all State laws about faxed advertisements,
    autodialers, and artificial or prerecorded voice messages. I
    know the preemption of State laws can sometimes be good for
    businesses, but it is not clear to me how preemption would help
    consumers or deter telemarketing abuses.
        I look forward to our hearing, and I wish to yield the
    balance of my time to Mr. Towns.
        [The prepared statement of Mr. Waxman follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

     OPENING STATEMENT OF HON. EDOLPHUS TOWNS, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF NEW YORK

        Mr.Towns. Thank you very much.
        You know, I am proud to stand with President Obama, who
    included this in his jobs proposal because of the opportunity
    it offers to assist with deficit reduction, something that we
    all are concerned about.
        I look forward to learning from the witnesses how this
    legislation can impact consumers' daily lives in a positive
    way. Again, I thank the subcommittee and my colleagues for
    holding this hearing. As we move forward in the legislative
    process, I will work with my colleagues to shape the bill to
    keep the important benefits the bill would provide to consumers
    while at the same time ensuring that it has strong consumer
    protection to prevent and punish abuse.
        Critics of the bill have said that the bill will open the
    door to nuisance and abusive calls that impose unacceptable
    costs to people's cell phone bills. While I don't think the
    incentives are there for this to happen to consumers, I look
    forward to learning and hearing from the witnesses to see in
    terms of how we can move forward and hoping that, as we move
    forward, some of the things that have been said, that we will
    be able to clear them up.
        And, on that note, I want to thank the ranking member of
    the full committee for yielding to me.
        And, on that note, I don't have anything to yield back, but
    I will yield back.
        Mr.Terry [presiding]. Thank you, Mr. Towns.
        And I ask unanimous consent to submit 29 letters in
    support, the majority of which are from universities so they
    can contact their students. So I will submit those for the
    record, without objection.
        [The letters follow:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr.Terry. So, at this time, we would like to hear from our
    witnesses. We will go from my left to right, with Ms. Schwartz.
        You may begin. And if I could say, limit your comments to 5
    minutes. And I will lightly tap at 5 minutes. So, it is not
    being rude, just kind of notice.
        Go ahead.

      STATEMENTS OF FAITH SCHWARTZ, EXECUTIVE DIRECTOR, HOPE NOW
        ALLIANCE; STEPHEN A. ALTERMAN, PRESIDENT, CARGO AIRLINE
       ASSOCIATION; DELICIA REYNOLDS HAND, LEGISLATIVE DIRECTOR,
    NATIONAL ASSOCIATION OF CONSUMER ADVOCATES; GREGORY F. ZOELLER,
     ATTORNEY GENERAL, STATE OF INDIANA; MICHAEL ALTSCHUL, SENIOR
                VICE PRESIDENT AND GENERAL COUNSEL, CTIA

                      STATEMENT OF FAITH SCHWARTZ

        Ms.Schwartz. Chairman Walden, Ranking Member Eshoo, Vice
    Chair Terry, and members of the subcommittee, thank you for the
    opportunity to testify today.
        My name is Faith Schwartz, and I am the executive director
    of the Hope Now Alliance, a nonprofit foreclosure-prevention
    effort. And I am the cofounder of Hope LoanPort, which is a
    nonprofit Web-based tool which is a public utility for
    borrowers and counselors to submit loan-workout packages to
    loan servicers for free.
        I have served in a leadership capacity at Hope Now since
    2007, during which time I worked closely with members and
    partners of the Alliance, including mortgage servicers,
    investors, nonprofit housing counseling partners, government
    agencies, and regulators to help homeowners avoid foreclosure.
    Before my time with Hope Now, I served in various capacities in
    the housing finance industry for 28 years.
        The comments I make today are my own and reflect my
    experience in the mortgage business and, in particular, working
    with servicers and counselors attempting to help at-risk
    homeowners. These comments do not necessarily reflect all the
    views of Hope Now.
        I am here today to speak to you specifically about our
    ongoing foreclosure-prevention efforts and the difficulties of
    reaching borrowers in financial distress.
        The financial services industry and its nonprofit and
    government partners remain committed to using all the tools
    that are available to assist homeowners. Since 2007, the
    mortgage industry has completed an estimated 5 million
    permanent loan modifications--and we know this because we
    measure it every month from that date--based on 37 million
    loans. In total, the industry has provided 14 million solutions
    for homeowners that include loan mods, short-term solutions
    such as repayment plans and forbearance, unemployment options
    such as short sales and deed in lieu, that provide alternatives
    to foreclosure.
        Hope Now has held 117 face-to-face events across the
    country since 2008. In fact, today we are in Houston, Texas,
    holding such an event with the United States Treasury, Making
    Home Affordable, and our nonprofit partner, NeighborWorks
    America. Without question, the outreach events have improved
    the experience of many customers trying to resolve their
    mortgage difficulties through face-to-face meeting with their
    loan servicer or counseling through a nonprofit agency. But our
    exit surveys continue to show that at least 30 percent of those
    attending had never had contact with their servicer before the
    meeting, despite multiple attempts from the servicer.
        The single greatest obstacle to keeping a delinquent
    borrower in their home is the inability to contact them and
    make aware the workout options that are available. The breadth
    and the complexity of options, both government programs and
    proprietary solutions--a full list of which I have included in
    my written testimony--makes it imperative that homeowners be in
    contact with their servicers. But we know from experience that
    often borrowers in financial distress do not open mail, they
    cancel their landline service, and increasingly rely on
    wireless phones as their primary or exclusive communications
    device.
        As we see these numbers ever increasing, with cell phones
    and text messaging becoming the primary means of communication,
    it has become clear that the current Telephone Consumer
    Protection Act, TCPA, is hindering effective communications
    between homeowners and loan servicers. H.R. 3035, the Mobile
    Informational Call Act of 2011, would modernize TCPA by
    eliminating restrictions on informational calls to mobile
    phones.
        For 20 years, the TCPA has permitted automated
    informational calls to be delivered to consumers' wireline
    phone numbers but not their wireless numbers. H.R. 3035 would
    allow automated commercial calls to mobile phone numbers as
    long as they do not include marketing messages.
        Currently, our primary means of contact ourlandlines and
    mailing invitations to foreclosure-prevention outreach events.
    It is difficult, if not impossible, to efficiently and
    effectively reach approximately 40 percent of consumers who
    rely on wireless phones as their primary communication vehicle.
        Consumers reap significant benefits when financial
    institutions are able to reach them quickly and efficiently.
    Using the autodialers or a prerecorded message, such as the
    bill allows, is not only a quicker, more cost-effective way, it
    would also free up loss-mitigation specialists to spend time
    working with individual borrowers rather than making repetitive
    manual calls.
        While this bill is not a panacea and it certainly will not
    end every foreclosure, it will, without a doubt, increase our
    contact rate. And the more people we contact, the more
    solutions we offer. The equation is very simple: If you
    increase the amount of customers you reach, you increase the
    number of workouts and you decrease the number of foreclosures.
        In conclusion, Mr. Chairman, in the area of foreclosure
    prevention, the Mobile Informational Call Act is a positive for
    consumers and for those working to keep them in their homes.
    Thank you.
        [The prepared statement of Ms. Schwartz follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr.Terry. Thank you, Ms. Schwartz.
        Mr. Alterman?

                    STATEMENT OF STEPHEN A. ALTERMAN

        Mr.Alterman. Thank you very much.
        Good morning, Chairman Walden, Ranking Member Eshoo, and
    members of the subcommittee. My is Steve Alterman, and I am
    president of the Cargo Airline Association. We appreciate the
    opportunity to testify today in support of the provisions of
    H.R. 3035, the Mobile Informational Call Act of 2011, and we
    request that our written testimony be made part of the record.
        The Cargo Airline Association is the nationwide trade
    organization representing the interests of the United States
    all-cargo air transportation industry. That is companies such
    as FedEx, UPS, DHL, and all those that deliver packages.
    Members of our association are in the business of picking up,
    transporting, and delivering packages throughout the world to
    meet our customers' needs.
        At times, our members may need to notify these package
    recipients of scheduled deliveries or failed attempts to
    deliver specific packages. Typically, such notifications
    involve shipments where a signature is required, notifications
    that shipments are being held for pickup at specified
    locations, and COD shipments. These calls merely provide
    customer service and do not contain any solicitation or product
    marketing.
        In today's world, with more and more individuals relying
    solely on mobile phones, it is becoming even more important to
    permit informational calls to mobile devices. Indeed, anecdotal
    evidence in our industry indicates that upwards of 50 percent
    of all contact numbers provided are, in fact, cell phone
    numbers. Faced with these facts, the Association and its member
    companies have a significant interest in the passage of H.R.
    3035.
        The Association supports the intent of the TCPA in that it
    aims to restrict unsolicited telemarketing calls to residential
    and cellular telephones. At the same time, we agree that the
    TCPA properly grants to the FCC the regulatory authority to
    enact limited exemptions from this general ban. It has done so
    to permit non-telemarketing informational calls to landline
    equipment. And the time has now come to expand that to cell
    phones.
        It is also important to point out that, in the case of
    customer service calls made by the Cargo Airline Association
    members, phone numbers are not randomly generated or
    sequentially generated but are given to the carriers by the
    package senders, who receive them from the purchasers,
    presumably so they or the intended recipient can be contacted
    in the event that they need to be called with information about
    the package delivery.
        By giving the shipper a contact number, the recipient
    should be found to have authorized calls that to number,
    whether by the shipper or any other member of the supply chain.
    For example, if a customer orders an item online and provides a
    mobile number as the contact number, the consumer obviously
    consents to the retail merchant contacting with regard to their
    order, as well as to other parties that facilitate the
    fulfillment and delivery of that order. This information
    exchange is purely transactional, and, from the carrier
    perspective, the consent significantly boosts the ability to
    deliver packages efficiently and effectively.
        Finally, we believe that it is important that any
    legislation recognize, to the extent possible, the advancing
    technology of the modern world. Therefore, to avoid any issues
    or questions in the future, we respectfully request that the
    proposed legislation be amended to specifically provide that
    text messages, in addition to phone calls, be included in the
    scope of the calls allowed to be made to mobile devices under
    the terms of H.R. 3035.
        In view of all these circumstances, the Association urges
    the enactment of H.R. 3035 to permit purely informational
    calls, including text messages, to mobile phones by automated-
    recording devices. Such action will retain the intended ban on
    so-called telemarketing calls while authorizing informational
    calls that are clearly in the public interest.
        Thank you very much. I would be happy to answer any
    questions.
        [The prepared statement of Mr. Alterman follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr.Terry. Thank you, Mr. Alterman.
        And Ms. Hand? Thank you.

                   STATEMENT OF DELICIA REYNOLDS HAND

        Ms.Hand. Thank you.
        Chairman Walden, Ranking Member Eshoo, Vice Chair Terry,
    and members of the subcommittee, thank you for inviting me to
    testify today on the subject of H.R. 3035, the Mobile
    Informational Call Act of 2011.
        I am the legislative director of the National Association
    of Consumer Advocates. NACA is a nonprofit association of
    consumer advocates and attorney members who represent hundreds
    of thousands of consumers victimized by fraudulent, abusive,
    and predatory business practices.
        My testimony today expresses the sentiments of the 12
    national consumer protection, civil rights, and privacy
    organizations who oppose the bill and recently submitted a
    letter opposing H.R. 3035 to this committee. This letter is
    included as an attachment to my written testimony.
        H.R. 3035 will allow entities to use the automatic
    telephone dialing system, unaffectionately known as
    ``robocalls,'' and automated messages on consumer cell phones
    under the guise of consent, even though the consumer could
    never have envisioned such use. Under this new bill, any
    transaction or relationship will constitute consent to
    repeatedly call the consumer's cell phone in perpetuity, even
    if the consumer does not give out her cell phone number and
    regardless of whether the consumer asks that she not be called.
        Imagine if, after you leave today's hearing, you stop by a
    local pharmacy on your way home. While at the counter making
    your payment, you absentmindedly hand over your phone number.
    This transaction alone would now suffice as consent to receive
    a robocall on your cell phone under H.R. 3035.
        You have forgotten about this transaction, and a few days
    later, while you are out at dinner with your family, you
    receive a call on your cell phone with a robotic voice at the
    other end thanking you for your recent purchase and verifying
    that the prescription you picked up is the one you actually
    wanted. You hang up the phone, but 2 minutes later, from a
    different number, the same robotic voice is on the line. You
    hang up again. Two minutes later, yet from a different number,
    the same voice is on the line. Two minutes later, again the
    same thing. You get the idea.
        This is the reality of thousands of Americans whose cell
    phone numbers have been entered into the smart-dialer
    technology that knows when you are likely to answer the phone
    due to estimating when you are most available.
        Currently, the largest debt collectors make more than a
    million calls in 1 day to consumer cell phones. If H.R. 3035
    becomes law in its present form, harassing robocalls on
    consumer cell phones will become the new norm.
        Today, we respectfully urge committee members to be wary of
    the bill proponents' motives for the following reasons.
        First, debt-collection agencies, creditors, airlines,
    utilities, and other businesses may already robodial any
    telephone number, including cellular phones, if the number was
    provided to them by the consumer.
        Second, robocalling is also permitted in case of
    emergencies such as hurricanes and other natural disasters. For
    example, recently, in the wake of Hurricane Irene, technologies
    to notify residents of emergency preparedness measures through
    mass-notification systems were used by municipalities up and
    down the east coast.
        Third, the proponents want to completely gut the important
    privacy and consumer protections found in the Telephone
    Consumer Protection Act. They want to strip consumers of any
    choice as to what phone numbers companies with which they do
    business may contact them. They want to remove all prohibitions
    against using robocalls by redefining automatic telephone
    dialing systems to include only antiquated technology that does
    not exist in the real world today.
        In fact, under the definition provided in H.R. 3035,
    telemarketers, the original target of the Telephone Consumer
    Protection Act, would now able to robocall consumer cell phones
    because most telemarketers do not use random or sequential
    dialers; they predictively dial cell phones. They want to
    prevent consumers from enforcing the demands that unwanted
    robocalls stop and to prevent State laws and attorneys general
    from further restricting and enforcing laws regarding these
    robotic calls.
        In conclusion, Mr. Chairman and Ranking Member, I urge this
    subcommittee not to open Pandora's box of the many unforeseen
    harmful consequences that will result if H.R. 3035 becomes law
    in its present form.
        Thank you.
        [The prepared statement of Ms. Hand follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr.Terry. Attorney General Zoeller?

                    STATEMENT OF GREGORY F. ZOELLER

        Mr.Zoeller. I thank you, Mr. Chairman and members.
        I appreciate Congressman Terry pointing me out as having
    spoken out on this in the newspaper. It recognizes that it is
    very important to the State of Indiana and the people I
    represent.
        I think particularly our focus of concern on H.R. 3035
    deals with the proposed areas that deal with preemption. And
    ``preemption'' is one of those words that gets the attention of
    attorneys general. Just in the last day, I have received
    contacts from the attorney general's office in Connecticut,
    Iowa, Illinois, Kentucky, North Carolina, North Dakota, Nevada,
    Oregon, and Tennessee, immediately upon learning that I was
    coming here. So I recommend to all the Members to please
    contact your attorneys general in your home States and kind of
    listen to the boots on the ground that have to represent the
    consumers of your State.
        Over the last 20 years, Indiana has had a very unique
    experience under our own sense of privacy among Hoosiers. We
    had an autodialer statute that prevented the use of the
    technology since 1988, well before it was seen as a problem. We
    had a do-not-call statute in 2001 that does not allow the
    exemption of prior business relationships. So, unlike the
    experience of the Congressman from Texas who says he won't
    answer the home phone, in Indiana you can still answer your
    phone because it will not be a telemarketer.
        We had a do-not-fax statute in 2006. In this past
    legislative session, we allowed for cell phones to be added
    specifically to our do-not-call list. We now have over 2
    million lines registered on our do-not-call statute. This past
    session, after the General Assembly allowed the cell phones, we
    had 189,000 immediately, within a very short period, sign up
    for the Do Not Call My Cell Phone.
        So, the autodialer law is particularly one where we have
    the biggest problem. In Indiana, if you get a robocall, it is a
    scam. And everybody knows it is a scam because it is
    prohibited. It is the one State where, if you ask the Members
    of Congress, your colleagues from Indiana, where they do not
    use robocalling even for the tele-townhalls.
        So it recognizes that in Indiana we have a certain
    appreciation for privacy that may not be common in all 50
    States. They are subject to the Federal do-not-call statute
    that allows for the exemption of the prior business
    relationship, which I think has desensitized a lot of people,
    or as your colleague from Texas just simply doesn't answer the
    phone.
        So, due to the success of our laws, the people of Indiana
    have been very sensitive to this. And, quite frankly, when I
    have toured the State talking about my trip out here, I heard
    very specifically some of their passion on this issue.
        Another point that I would make is that, in 2010,
    recognizing that there are questions about political free
    speech, I asked the three major parties in Indiana to a
    ``Treaty of 2010'' where they all agree not to use or encourage
    the use of telemarketing. And I can report that that treaty was
    not broken during the 2010 election cycle.
        If you look at the history of the Federal statute, starting
    in 1934, it was really meant to focus on the services and
    facilities and not really the use in the States. So one of the
    things that we are asking--and it is not that big an ask--
    having recently had a Federal court preempt the use of our own
    State statutes prohibiting autodialing, I would like to ask the
    committee to take a hard look at the use of the word
    ``intrastate,'' which was exactly what the court found allowed
    for the preemption of things that were interstate.
        So, again, having recognized the problems of this case that
    we submitted in our written testimony, I would ask your staff
    to take a good, hard look at that case where, 2 weeks ago,
    Indiana's robocall statute has now been preempted by the very
    act of Congress that I see again here in front of us.
        So I would grant back the 5 seconds that I have left.
        [The prepared statement of Mr. Zoeller follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr.Terry. That is appreciated.
        Mr. Altschul?

                     STATEMENT OF MICHAEL ALTSCHUL

        Mr.Altschul. Good morning. And thank you, Mr. Terry,
    Ranking Member Eshoo, and members of the subcommittee. On
    behalf of CTIA, I thank you for the opportunity to participate
    in this morning's hearing.
        CTIA was here and proud to support the original TCPA 20
    years ago, and we welcome the introduction of this bill, H.R.
    3035, as we believe it helps illustrate how profoundly the
    wireless industry has changed over the past 20 years.
        A number of you in your statements have talked about the
    phenomenal growth and acceptance of wireless. I thought for
    show-and-tell I would bring the state-of-the-art phone from
    1992. And 1 month after the TCPA was passed into law,
    Motorola's MicroTac Lite was introduced to the public in
    January. This claimed to be the first phone that you could fit
    into your pocket--it required quite a pocket--and cost as much
    as $2,500. And, by the way, service prices in 1992, on a
    permanent basis, were 10 times higher than they are today.
        So, obviously, over the past 20 years, there has been
    phenomenal change and growth in the industry and Americans'
    acceptance of wireless. We have gone, as you know, from 7
    million to over 300 million subscribers. And we are proud as an
    industry that America now leads the world in delivering next-
    generation wireless services at a lower price per minute of use
    than in any other country in the developed world.
        For the purposes of today's hearing, it is perhaps this
    point--how wireless has been adopted as the primary source of
    communications for millions of Americans--that may justify a
    fresh look at the TCPA restrictions on the delivery of
    informational calls to mobile devices and the challenge we all
    face in crafting a law that will permit wanted commercial
    communications while preventing unwanted communications.
        Others have noted how more than 25 percent of Americans
    have cut the cord. In some locations, the numbers are
    substantially higher, as high as 40 percent. Obviously, this
    shift creates challenges for companies and government agencies
    that want to provide informational calls to individuals who are
    not reachable in any other way and may value timely
    notifications of the kinds of alerts and information that
    others on the panel have described.
        I want to focus the remainder of my time on three issues of
    unique importance to the wireless industry.
        First--and it is a personal peeve of mine--along with
    customers, wireless carriers are victimized by violations of
    the TCPA by unscrupulous boiler-room operators seeking to sell
    extended car warranties and the like. In cases where they can
    locate and identify the source of these messages, wireless
    carriers have vigorously brought suit to shut down these scams.
    And we are proud that we have cooperated with State attorney
    generals and the Federal Trade Commission in investigating and
    prosecuting TCPA cases.
        Unfortunately, while we do all we can to identify and shut
    down TCPA violations, the FCC continues to catalog TCPA reports
    as wireless complaints. We believe it is unfair for the
    Commission to count these complaints, which originate outside
    the wireless network and have nothing to do with wireless
    carriers' conduct and behavior, as wireless complaints in their
    quarterly reports. And, for this reason, we urge the
    subcommittee to compel the FCC to disaggregate TCPA data from
    reporting of wireless complaints.
        Second, the FCC has an open proceeding in which it has
    sought comment on proposals to harmonize its TCPA rules with
    the FTC's telemarketing sales rules. In this proceeding, we are
    concerned that requiring wireless carriers to obtain their
    customers' express written consent to receive autodialed or
    prerecorded non-marketing calls could overturn the Commission's
    precedent permitting wireless carriers to send free-to-the-end-
    user calls and messages to their customers without additional
    consent.
        As you may know, the industry has recently committed to
    deliver usage notifications to wireless users when they near
    plan thresholds to prevent bill shock and overage or
    international roaming charges, and we don't want anything to
    interfere with our ability to do that.
        Third and finally, there have been a series of class-action
    lawsuits filed against Twitter; Facebook; banks, including
    Barclays and American Express, that threaten the industry's
    efforts to protect privacy and comply with the Mobile Marketing
    Association's consumer best practices. These suits allege that
    the best practice of sending a text message to confirm receipt
    and acceptance of a customer's request to quit or stop violates
    the TCPA. It is unreasonable, and it is another matter we would
    like this committee to look into.
        So thank you for your consideration of these suggestions.
        [The prepared statement of Mr. Altschul follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr.Terry. Thank you for your testimony, and all of you for
    your testimony.
        At this time, we are going to begin our questions.
        Attorney General Zoeller, I am going to start with you. And
    this is friendly. But I am concerned about State preemption,
    too. So what I would like to ask you is if you would help us
    work with language that would make States feel comfortable that
    we are not preempting your individual State laws.
        I want to point out the flip side and why we need to work
    together on this. One is, as I understand, one of the laws in
    Indiana specifically allows autodialed calls from schools.
    Well, the FCC, if that school is texting about a snow day,
    whether it is a university or just a public school, may be in
    violation with an autodialer, subject to, as Mr. Altschul said,
    a $500 fine per student. So we have to work that--I wanted to
    point that out.
        Would you be able to help us draft some language that would
    protect Indiana and States' laws, at the same time making sure
    that when they comply with the State law they are not in
    violation of Federal rules and regulations?
        Mr.Zoeller. Absolutely. No, we have no concerns about how
    the rest of the country and the Federal Government regulates.
    It is our experience, though--and I think if it sounds like I
    have reservations about the promises--that we were here
    representing the State of Indiana when the TCPA was enacted,
    and there were assurances that there would be no preemption.
    And, 2 weeks ago, a Federal court struck down an Indiana
    statute on preemption grounds.
        So we would be very willing to work with the committee----
        Mr.Terry. Good.
        Mr.Zoeller (continuing]. But recognize that we worked last
    time, and the same people who supported this bill have been
    attacking our statutes for the last decade until they finally
    preempted our statute.
        Mr.Terry. OK.
        Ms. Hand, you raise some concerns, and, frankly, just like
    Ranking Member Eshoo's constituent did and some reporters as
    well, that this is opening up the Pandora's box. And, in your
    comments, you said that our intent was to cause that. And I
    just want to place on the record, we worked with leg staff
    specifically saying, let's draft language that prohibits the
    unsolicited marketing, teleservices, random calls like you were
    talking about. We worked hard to make sure that wasn't true. So
    I got to tell you, I took a little offense when you said that
    was my intent in drafting this. It is completely the opposite.
        So you have a concern, Ms. Eshoo has a concern, I have
    heard concerns from people back home when they read about this
    bill about getting the unwanted telemarketing. Will you work
    with me to develop language so that we can have language that
    is clear that bans or continues to ban--I still think our
    language still bans those type of calls. Would you work with us
    on that?
        Ms.Hand. Certainly. We want to be a part of the
    conversation, and we want to work with you to ensure that
    consumers continue to be protected. So we appreciate you
    extending that.
        Mr.Terry. OK. We want to make sure that our intent here is
    that people, when they want information, are able to receive
    that without the sender being subject to lawsuits and fines,
    and continue to ban unwanted calls. So I appreciate your
    willingness to work with us on it.
        At this time, I am going to yield back my time and
    recognize the ranking member, Anna Eshoo.
        Ms.Eshoo. Thank you, Mr. Chairman.
        And thank you again to the panel. I think the collective
    testimony has been instructive, and I thank you for it.
        To Attorney General Zoeller, it is an honor to have an AG
    here. The TCPA sets a floor, and not a ceiling, allowing States
    to experiment and give consumers more protections, should they
    wish to do so. And I think that you have spoken very clearly
    about the wishes of your constituents and the actions that your
    State has taken, and I salute you for that.
        Now, by contrast, this bill would take away the States'
    ability to provide additional protections to your consumers by
    prohibiting any State laws addressing the subject matters
    regulated in the bill. Is that your view of it?
        Mr.Zoeller. Well, the particular concern is the use of the
    word ``intrastate,'' which is exactly how in the lawsuit----
        Ms.Eshoo. And you said that in your testimony. Uh-huh.
        Mr.Zoeller. So, the fact that it says ``intrastate'' has
    been read by the Federal courts to allow the argument that we
    are preempted on interstate. So, really, I heard the floor and
    not the ceiling, but when we are preempted, we are preempted.
    So it was the floor and the ceiling.
        Ms.Eshoo. Thank you.
        And to Ms. Hand, as currently written, I understand that
    this bill would narrow the TCPA's definition of an automatic
    telephone dialing system. And based on your reading of the
    bill, wouldn't this create a loophole that enables live
    telemarketing calls?
        Ms.Hand. Yes, this is correct. As currently defined in the
    bill, the bill proposes to define automatic telephone dialing
    systems as machines that randomly or sequentially generate
    telephone numbers. And so what this would do, in effect, is
    that the industry standard for dialers would not be included.
    It would exclude what is known as predictive dialers, which are
    predominantly used by telemarketers and debt collectors.
        So it would, in effect, reverse the original intent of the
    Cell Phone Consumer Protection Act, so it is very concerning.
        Ms.Eshoo. And I think that this is a closely held value
    that came out of the TCPA legislation. So I think that is where
    an awful lot of upset is coming from.
        Ms. Schwartz, thank you for your testimony. As I noted in
    my opening statement, prior express consent, those are really
    important words. They have an important meaning to consumers.
    If you have the express consent to reach a customer's mobile
    phone, what prevents you from delivering them these important
    informational messages today under existing law?
        Ms.Schwartz. I think you are right about the prior--pardon
    my voice; I woke up without one this morning.
        Nothing prevents you when you have prior consent. Sometimes
    there are new accounts and then people have changed behavior
    and they have closed down their landlines.
        So my whole focus is reaching people, sharing information
    that is pertinent to them keeping their homes, and engaging
    with them when they have been reluctant to do so or want to do
    so but have not been effective. So, on both sides----
        Ms.Eshoo. But what prevents you from doing that today under
    existing law, what you are describing, what you want to do
    with, you know, the work of your organization?
        Ms.Schwartz. Well, we go to landlines and we go to mail to
    get to borrowers, but we don't go to cell phones because we
    don't have that prior consent or have sought to violate it.
        Ms.Eshoo. I wanted to ask a question of the chairman. Is
    the Association of Credit and Collection Professionals
    supporting the bill? Does anyone know?
        Mr.Terry. I didn't look at the 29 letters there.
        Ms.Eshoo. OK.
        To Mr. Altschul from the Wireless Association, thank you.
    And I think that it is wonderful that you brought the old set
    and talked about the changes that have taken place. It is
    nothing short of stunning, the changes that have taken place in
    a short period of time.
        You noted that prices, on a permanent basis, were 10 times
    higher in 1991 than they are today. But text messaging is one
    feature that didn't exist 20 years ago. Would you agree that it
    is fairly common for consumers to pay on a per-message basis?
    And what is the average cost of receiving such a message today?
        Mr.Altschul. I don't know that information. I would be
    happy to provide it. I know that there was a hearing about 2
    years and a couple of our member carriers did provide
    information to Congress.
        The overwhelming majority, if I recall their testimony
    correctly, the overwhelming majority of customers do have some
    kind of bucket of texts. But there still are customers, like my
    mother, who don't and would have an a-la-carte charge for
    receiving a text message.
        Ms.Eshoo. Thank you, Mr. Chairman. I yield back.
        Mr.Terry. Thank you.
        Mr. Stearns, you are recognized.
        Mr.Stearns. Thank you, Mr. Chairman.
        I was the author of the Do Not Call List when I was
    chairman of the Commerce and Consumer Protection--at that
    point, it was Trade. And then, once we passed that, then we had
    to, the next session of Congress, pass another law to make sure
    to extend it. And I have found that it is the most popular bill
    that I have ever passed, and it is perhaps one of the most
    popular bills that has ever passed Congress because everybody
    was just lauding it.
        So I think, when we move into this, we have to understand
    some of the nuances between the land-based lines and the cell
    phone. So let me just go across the panel and ask this
    question, yes or no. I think many of us don't want to allow
    intrusive telemarketing calls to consumers any more than many
    of you do. And we just want to make sure that you don't have
    your cell phone being answered time and time again with a
    computerized call, telemarketing.
        Do you think there are ways we can clarify thatautodialers
    and prerecorded voice messages should not be used to make
    telemarketing calls to consumers?
        Ms. Schwartz?
        Ms.Schwartz. Yes, we support that clarification, that you
    should not be subjected to telemarketing calls.
        Mr.Stearns. So you think we can clarify and make that. OK.
        And Mr. Alterman?
        Mr.Alterman. Absolutely, I agree.
        Mr.Stearns. OK.
        Ms. Hand?
        Ms.Hand. Well, I think while there might be some
    clarifications that can be made, I would like to reiterate that
    current law currently allows contact with the consumer, and
    there is a very bright line here with respect to consent.
        Mr.Stearns. So, technically, you think between autodialers
    and prerecorded voice messages we can make a clarification so
    that these don't end up beingtelemarketing calls. Do you think
    we can do that?
        Ms.Hand. Yes, we can do that, but consumer consent should
    absolutely be preserved.
        Mr.Stearns. And how would we do that?
        Ms.Hand. Well, I am happy to continue working with staff to
    work out the technical languages. But we just want to make sure
    that consumers have an absolute ability to opt out of receiving
    any prerecorded or----
        Mr.Stearns. By calling the Federal Trade Commission on a
    toll-free number and saying----
        Ms.Hand. I am sorry?
        Mr.Stearns. They could call the Federal Trade Commission
    and ask them to make sure that my number is not included in
    that? Is that one suggestion?
        Ms.Hand. Potentially. I mean, we would have to think about
    it, and we would have to work with staff.
        Mr.Stearns. OK.
        Go ahead, Mr. Zoeller. Your comment?
        Mr.Zoeller. I think the key would be as long as States were
    allowed to have additional restrictions.
        Mr. Stearns. OK.
        Mr.Altschul. Prohibition on telemarketing calls has worked
    well and is broadly supported.
        Mr.Stearns. OK.
        Ms. Hand, your testimony suggests that current law empowers
    a consumer to demand that incessant calls stop and that the
    proposed legislation removes that protection.
        Can you point to me specifically to where that protection
    exists today for, say, landline calls and what provision
    specifically eliminates that protection?
        Ms.Hand. Well, it is actually what is not included in the
    bill. And so, I refer to an FCC ruling, a 2008 ruling by the
    FCC in January of 2008, where the FCC recognizes--and the
    specific language, if I may just point to it--the FCC
    recognizes the right of consumers to request calls to stop. And
    so, the FCC in the 2008 ruling said that, absent instructions
    to the company, persons who knowingly release their phone
    numbers have, in effect, given an invitation or a permission to
    be called. So, in other words, consumers have the right to ask
    to stop receiving calls.
        The bill doesn't address that, and so, in essence, there is
    no enforcement mechanism. If a consumer were to receive a
    robocall, they could ask to stop, but there currently would be
    no enforcement mechanism to stop those calls under the current
    language of H.R. 3035.
        Mr.Terry. Would the gentleman yield for one moment?
        Mr.Stearns. Sure, I would be glad to.
        Mr.Terry. Yes, that is a great point that you bring up and,
    Ms. Hand, you bring up, and Mr. Markey has brought it up. And
    that is one of the areas that we are willing to work on.
        Ms.Hand. Thank you.
        Mr.Stearns. Ms. Hand, another question. Do you agree that
    consumers benefit from the informational calls discussed by Ms.
    Schwartz and Mr. Alterman? And how can the proposed legislation
    be modified to allow such calls without opening the door to
    harassing--and I think you have touched on that.
        But, Mr. Alterman and Ms. Schwartz, do you agree with what
    Ms. Hand is saying in this area of changing the legislation?
        Ms.Schwartz. I think abusive and repetitive calls should
    not be permitted, just as they are already under protection on
    the FDCPA. But I think it is very important to be allowed, if
    you already have a business relationship, to alert people of
    opportunities to fix their loan before they go to foreclosure
    by a cell phone.
        Mr.Stearns. OK.
        Mr. Alterman?
        Mr.Alterman. Yes, let me make one thing perfectly clear: We
    do not want to make repetitive calls, and we would absolutely
    have no problem with language that would do that.
        I would like to make one comment, because a comment was
    made earlier that airlines already have the ability to notify
    people by this. And our industry, unfortunately, is one step
    removed. The phone numbers that are given are given to
    retailers, such as L.L.Bean. We get the phone numbers from them
    as part of the same transaction, but it is unclear--I could
    with a straight face argue that that constitutes consent, but
    it is unclear.
        And this bill would make it clear that--we would like this
    bill to make it clear that--that is all we want to do; we just
    want to tell someone there is a package ready.
        Mr.Stearns. Thank you, Mr. Chairman.
        Mr.Terry. Thank you.
        Mr. Doyle?
        Mr.Doyle. Thank you, Mr. Chairman.
        As I said in my opening remarks, I think the bill was well-
    intentioned, but obviously I think we have a lot of work to do
    here.
        As I read this bill, if a person provides their phone
    number as a means of contact at any point during a business
    relationship with a company, then that constitutes prior
    express consent.
        I just bought a washer and dryer 2 weeks ago at an
    appliance store, and they wanted to give me, like, a 40-minute
    notice before they were going to arrive at my house so that
    somebody would be there. And they asked me for my phone number,
    and I gave it to them.
        Now, I don't ever want to hear from that appliance store
    anymore if they have TVs on sale or computers or whatnot, and I
    certainly don't want to start getting text messages from that
    company.
        So I guess what I want to ask Ms. Schwartz and Mr. Alterman
    and Mr. Altschul is, why do you think the mere giving of a
    phone number in a business relationship, you know, like the
    example I have just cited, why do you think that should imply
    that I want to hear from those companies in the future?
        Ms.Schwartz. Well, sir, that is an interesting analogy. I
    look at this completely from the mortgage experience. When you
    take out a 30-year mortgage and have a relationship with your
    bank or loan servicer, you should figure out the effective ways
    to communicate with each other. And if you don't have a
    landline and you don't communicate, you will go to foreclosure
    if you are not making your payments and you don't have an
    opportunity to talk to your counterparty to understand all of
    the options available to avoid that.
        Mr.Doyle. But isn't it as simple as--you know, people want
    to know how can we do this. It is simple: Ask. I mean, why
    don't you just--I mean, right now, TCPA and FCC rules allow
    people to say upfront, ``I want you to be able to contact me.''
    And so it seems to me that, you know, your constituencies, you
    know, the mortgage business and whatever, you should just ask
    the consumer when you have that first contact with them, will
    you give us permission--or, do you give us permission to
    contact you if we have some information about our products or
    our services? And the person says, yes, I give you my
    permission. And I think that solves the problem. Just ask the
    consumer if they want to hear from people, and if the consumers
    say yes, case closed.
        But I have to tell you--and I especially worry about young
    people. Now, my kids, they can't afford these high bundled
    plans, Mr. Altschul, so they have these prepaid phones. And
    they don't talk on the phone anymore. If I want to talk to one
    of my kids, I have to text them or they don't answer me back,
    OK? I can't send emails or call their phone numbers; they just
    don't respond.
        But I know the plans. It is like you have so many texts you
    are allowed for one price, and then it goes--you know, because
    we end up paying every time they go over their text messages
    and they call crying to us that they don't have the money to
    pay their phone bill.
        The industry has already voluntarily said, you know, they
    are going to start notifying people when they are getting close
    to using up their plans so that they don't have the sticker
    shock, you know, when their bill comes. I mean, imagine----
        Mr.Altschul. We have done that on a free-to-the-end-user
    basis, by the way, so it won't generate usage calls----
        Mr.Doyle. Exactly. But imagine the calls you are going to
    start to get when these young kids start to get these text
    messages from these telemarketers that they don't want and it
    starts to run their bill up, either over their prepaid plan--
    and they are going to be calling your companies complaining,
    you know, that they owe all this money for calls that they
    don't want to accept.
        So, I mean, Lee, I think this is simple. I think we just
    ask consumers if they want to hear from these folks. And if
    they indicate they do--I know when I go online and order a
    product, there is always a box there that says, would you like
    to hear from us on any future sales our company has? And I get
    to check the box, and then I get emails from that company.
        But I am saying, to me, I think it is pretty
    straightforward. Just ask people if they want to hear from you,
    and if they say yes, then they want to hear from you. If they
    say no, they don't want to hear from you, and don't call them.
    And I think that would solve the problem.
        Mr.Terry. We would appreciate working with you.
        Ms.Schwartz. May I follow up with that, sir?
        Mr.Doyle. Yes, sure. I have 40 seconds.
        Ms.Schwartz. My only point is, when you buy a house 4 or 5
    years earlier and your life changes and you are not in
    contact--and there are millions of people who are not in
    contact on their home loan today who are in trouble. And so any
    effective tool to reach them and have an effective conversation
    and invite them to participate is a meaningful way to----
        Mr.Doyle. And I think if you would say to that consumer
    when they buy the house, if there is a situation where we could
    provide different options for you if you have financial
    trouble, would you like us to be able to tell you what those
    things are, people can make that choice.
        Thank you, Mr. Chairman.
        Mr.Terry. Mr. Chairman?
        Mr.Walden. Well, thank you, Mr. Chairman. I appreciate your
    chairing this hearing and bringing this issue to our attention.
    Obviously, there are a lot of views on how you might get this
    done. And I know it is not your intent to open the door to
    random telemarketing calls. That is not what this is about.
        Mr.Terry. No.
        Mr.Walden. I have found it interesting, though--and I have
    been in the back in some meetings but also trying to keep an
    ear to the testimony--that there does seem to be this
    persistent issue about the way technology has changed. There
    are now more cell phones than there are citizens of this
    country in use in this country. People are cutting their
    landlines, and there are some legacy rules here.
        Now, I don't want random text messages from companies just
    to market to me. I don't want random cell phone calls. But I
    did note when our colleague from Tennessee talked about just
    the nature of FedEx being able to automate the call that says,
    ``We are going to deliver the package to your house,'' I have
    encountered that where they call our landline but nobody is
    home, and so you get the call later and they couldn't leave the
    package, so now I have to call them, trace them down, figure
    out where to go get it and go through this drill. If there were
    a way that they could have just called my cell phone, then I
    would know, OK, I can run back to the house, or whatever is my
    home life.
        And so I am trying to figure out, is there a way to thread
    this needle that we don't open this door that I don't think
    anybody on this committee wants to open, on sort of random
    telemarketing calls to cell phones, but that allows that
    understanding of how technology has changed? Because if I
    understand this right, if there is a human dialing the number,
    that is OK. But if I pull it up on a computer screen and push a
    button, that is not OK.
        Now, I got to tell you--and I realize it is probably the
    race between gray and gone, the loss of memory, but I have
    trouble remembering people's phone numbers anymore because I
    pull out one of these devices and right here are my favorite
    phone numbers and my friends, family, or staff, and I just
    push, you know, ``Brian'' or ``Ray'' or whomever and it dials
    it automatically.
        Now, would that kind of a--is that an automatic dialer? It
    is not. Some of you say it is not; some say it is. Right? OK.
        Well somewhere, though, if I had to reach 30 people, I
    might have a system and basically say, call Bill, Ed, Ray,
    whoever is available, and I will talk to the first one you
    find. Is that the autodialer we are talking about here? So it
    is just--if they are all my friends or whatever. I don't know.
        So I think there is a way to get at modernizing the law
    without opening the door to unwanted solicitations and
    informational calls and all that stuff.
        So, anyway, I would yield to the chairman.
        Mr.Terry. All right, thank you. And I do think you hit on
    probably the ultimate point here. We focus on the technology
    change from wirelines to wireless, but the reality is the trap
    we are in is the technology of an operator dialing versus
    manually dialing versus clicking and having a computer program
    that would automatically dial, like, the school notices or all
    of that.
        So that is the technology that is hanging up the TCPA right
    now and is the good and the bad, and we have got to figure out
    how to draw that line. So I appreciate that.
        At this point, Mr. Barrow.
        Mr.Barrow. I yield my time to the gentleman from
    Massachusetts, Mr. Markey.
        Mr.Markey. I thank the gentleman very much.
        So I am the House author of the Telephone Consumer
    Protection Act of 1991, which is amended by this act. And I
    feel as strongly today as I did 20 years ago that consumers
    should not be subject to intrusive calls from telemarketers,
    whether they are at home or on their mobile phones.
        So we were looking, at that time, about people who were
    just ticked off that they were getting called just every night
    just around dinnertime. Just an amazing coincidence that they
    didn't call at 2:00 in the afternoon or 11:00 in the morning,
    but it was always just as people were sitting down to dinner,
    when parents were reading to their kids, when people were
    trying to unwind from a long day. And that is when everyone
    just started to call and the phone would just start ringing.
        So we banned autodialing and prerecorded calls to land
    lines and mobile phones, with certain exceptions. And we
    established the Do Not Call List, the law creating a zone of
    privacy that remains hugely popular with consumers to this day.
        So here is my question. Maybe, Ms. Hand or Attorney
    General, maybe you could help me with this. As we discuss this,
    let's just say Members of Congress get home late from wherever
    they go, OK, and they just start calling whatever their local
    takeout taxi is. And one day they are calling to have Italian
    food sent over; another day, Chinese, Ethiopian. Well, let's
    just say, by the end of the year they have called 20 different
    restaurants to have takeout taxi bring it over--you know,
    pizza, whatever.
        Now, under this proposed change, what would the
    relationship now be between those 20 restaurants and you at
    home, in terms of their ability to call you with the good news
    that the pu pu platter is now on sale or, you know, the new
    eggplant parmesan? Would that now make it possible for them to
    call you with all the great news that each one of the 20 have,
    even though you wanted a one-time relationship with them on the
    cheese pizza or, you know, the Chinese or other food?
        So help me with that. What happens under this proposed
    change in terms of my relationship with the restaurants in the
    greater Boston area?
        Ms.Hand. Well, Mr. Markey, you raise a really good point.
    Under the language of the bill as it currently is, this would
    now qualify as an established business relationship.
        Mr.Markey. That one-time call?
        Ms.Hand. That one time. You have called, you have made a
    purchase, and you have provided contact information. This would
    suffice to be an established business relationship for the
    purpose of receiving robocalls on your cell phone.
        Mr.Markey. Is that correct?
        Mr.Zoeller. Yes. And what I would like to point out is, in
    Indiana, we did not include a prior-business-relationship
    exception. So, in Indiana, you would not continue to get any
    other calls. They don't have a prior-business-relationship
    exemption so you don't get--when you are listed on our Do Not
    Call, you don't get calls.
        Mr.Markey. Would that be a nightmare situation for
    families, where every night they get a call in a different
    language letting them know that their favorite food----
        Mr.Zoeller. Well, I can tell you, in Indiana, if you would
    have not allowed for that prior-business-relationship exemption
    in the original act, you would have been much more popular than
    you are today.
        Mr.Markey. Yes. Yes.
        So if you give over your phone number--so now it is just
    your phone number, you know, is handed over to someone just to
    even get information. Now, under this proposed change, would
    just handing over your phone number now create a pre-existing
    business relationship for all purposes, even though you might
    not have even purchased something?
        Mr.Zoeller. Well, under the Federal statute. But, again, as
    long as we are not preempted, it would not create--because we
    don't have the exemption in Indiana. If you preempt us, though,
    and we have to follow the Federal model, Indiana would get the
    12, on average, calls per week that most people in the country
    do that have a Federal Do Not Call but not a tough law like we
    have in Indiana.
        Mr.Markey. So what is your answer to that, Ms. Schwartz?
    How do we protect it? You know, you want mortgage information
    because the individual's largest single, you know, investment
    in their lives could be at stake. But you hear all the other
    stuff that could now happen coming in under that exemption.
        So what would you do to protect against the tsunami of
    calls that would inundate people's cell phones? And people
    would have to pay for the right to have the text or have the
    phone call coming into them because it is on their bill.
        Ms.Schwartz. I am certainly not an expert on the breadth of
    the complex legal side of this, although it sounds like
    telemarketing to me. And I thought that was explicitly not--or
    that there was a protection against that in this bill. So I
    would thread the needle a little more closely to make sure that
    doesn't happen.
        Mr.Terry. Thank you, Mr. Markey.
        Mr.Markey. OK, that is great. Now, could I be recognized on
    my own time? I have been using----
        Mr.Shimkus. Reserving the right to object.
        Mr.Terry. Why don't we come back?
        Mr.Markey. All right, I will wait for my turn to come back.
        Mr.Terry. Mr. Shimkus?
        Mr.Shimkus. Thank you, Mr. Chairman. This has been a good
    panel and a great discussion because I think you can see where
    we are all trying to wrestle with this.
        Everyone has stories. I am from rural America. Propane is
    the heating fuel of choice. I have a constituent who dropped
    their landline. And the system was, with the propane industry,
    that when you would go low on propane, they would then dial you
    and say, hey, you are running low, you better fill up your
    propane. But since they dropped the landline, they couldn't get
    notified. And so, in the middle of the night, they ran out of
    propane, and, you know, that was not a good time to run out of
    propane, in the middle of the night in mid-December.
        So I think we are talking about making consent easier,
    where we understand the business relationship more defined so
    that, as Michael Doyle said--and I am glad he finally got a
    washer and a dryer. I have been hoping he would buy one for the
    last 10 years here. But, as he said, we want to make sure we
    establish a business relationship--if there is a business
    relationship and they opt in and say, ``We want to continue to
    have this communication,'' then we need to have this. And these
    constituents of mine want the propane company to be able to
    call them on their cell phone if their propane is running low.
    And so, that is what this is about.
        I have two questions, but I want to go to the attorney
    general first, because his story in answer to a question is
    really encompassing, kind of, our debate here in Washington.
        And maybe you want to restate it. You said you were pretty
    well promised that the State of Indiana would have been left
    alone in your ability to deal with this. However, the courts
    got involved; is that right? Can you explain that real quickly
    again?
        Mr.Zoeller. Well, the case of--I think the telemarketing
    companies had a client named the Patriotic Veterans
    Association, and they were wanting to blast out these robocalls
    to literally hundreds of thousands of people in Indiana because
    they had their numbers. They had given money to various
    charities over the years. They wanted to blast out these
    prerecorded phone calls.
        And the court, looking at the language of the TCPA,
    recognized that, just as this bill does, says that it is not to
    be preempted for intrastate. Therefore, since they did not
    mention interstate, if they choose to use robocalling equipment
    outside of our domestic robocallers in Indiana, they are free
    to do so because the Federal Government, although well-intended
    by Mr. Markey and others, had opened up the door to preemption.
        Mr.Shimkus. Right.
        Mr.Zoeller. So, after a decade of fighting us, they finally
    got a Federal judge to preempt our enforcement of our own
    statute.
        Mr.Shimkus. And that is a continuing debate we have here,
    about the unintended consequences. Going to the court and then
    changing the intent of the law, and then we have to come back
    and refine it. And that is a good thing to have on record on
    other issues that we debate here in Washington, D.C. And I
    enjoyed that--I will use that example in the future.
        Ms. Hand, Indiana's law allows autodialed calls from
    schools to parents and does not distinguish between calls to
    landlines and calls to cell phones. Do you think Indiana's law
    is unreasonable?
        Ms.Hand. Absolutely not. I think if the State legislature
    determines what is appropriate for its residents, that should
    hold and the State's law should not be preempted.
        Mr.Shimkus. Yes.
        And my time is running and we have votes, so, Mr. Alterman,
    talk about the benefit of text messaging. I have young kids
    still. Texting is the communication mode now. It was emails, it
    was phones, now it is texting. So talk about the importance of
    text messages.
        Mr.Alterman. I think that it is just--as things develop, as
    technology develops and the way our society develops, it is
    just becoming a more basic way of communicating. And some
    people like phones, some people like text messages. Text
    messages are a little less intrusive sometimes because nothing
    rings and you can answer them whenever. So it is becoming more
    of a way of contacting people.
        Mr.Shimkus. Although I think I woke up my son at 5:00 a.m.
    This morning because it vibrated. Kids sleep with their phones
    these days.
        So, anyway, thank you very much.
        I yield back, Mr. Chairman.
        Mr.Terry. Thank you, Mr. Shimkus.
        And we do have votes on the floor, which is--timing is
    perfect. Mr. Barrow, I--well, I recognize Mr. Markey.
        Mr.Markey. I thank the Chair.
        So I guess what we all want is, kind of, some commonsense
    rule here that doesn't have your phone ringing all night long,
    huh?
        Mr.Terry. Agreed.
        Mr.Markey. And if, you know, looking back 20 years at all
    the changes that have taken place, you know, we might want to
    tweak it here or there, that is one thing. But I think people
    love the peace and quiet of their home. And I also think that,
    when you are talking about people's new devices, since they
    have to pay for the right to have all of these communications--
    and it is a little bit of a safety zone for people right now.
    That is, the only people who know your cell phone number are
    the people you give it to. You know, it is not in the phone
    book, it is not for everyone to know. And you can walk around
    not thinking that you are back at home, that this phone is
    going off 40 or 50 times because it is just some kind of
    public, you know, phone booth.
        So I think if we can work together to accomplish, kind of,
    the limited goals that people might have but not to open this
    thing wide but still to preserve for the attorney general and
    others the right to be able to give Hoosiers a little bit of
    additional protection if they would want to do so because of
    the independent nature of that State, that they just might want
    to give a little bit more protection to their consumers. And
    that is----
        Mr.Terry. Those are all things we would agree with, I would
    agree with.
        Mr.Markey. Beautiful.
        Mr.Terry. So let's work together. Appreciate that, Mr.
    Markey.
        And, Mr. Barrow, do you have any questions?
        Mr.Barrow. No, sir. I gave my time to Mr. Markey.
        Mr.Terry. Yes, twice.
        So thank you all. I think it has been a very productive
    hearing and gives us a path forward, with your advice and
    counsel.
        So, at this time, we are now adjourned.
        [Whereupon, at 10:25 a.m., the subcommittee was adjourned.]
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