In decisions issued in September and October 2004, the CRTC has, at least in the short term, weakened Canadian consumers’ ability to control and limit certain telemarketing activities. The two decisions are Telecom Decision CRTC 2004-63, Application by the Canadian Marketing Association to stay Decision 2004-35 (“the Stay Decision”), and Telecom Decision CRTC 2004-65, Infolink Communications Inc. v. Bell Canada – Voicecasting service (“the Infolink Decision”). This article briefly reviews the decisions and their privacy implications.

The Stay Decision (Decision 2004-63)

Before reviewing the Stay Decision, it is necessary to review the decision that is the subject of the Stay Decision, Telecom Decision CRTC 2004-35, Review of telemarketing rules (“the Telemarketing Rules Decision”). In the Telemarketing Rules Decision, the CRTC concluded the optimal means of addressing violations of its telemarketing rules was to impose fines against violators – the CRTC found the current enforcement mechanisms for dealing with improper or illegal telemarketing in the Telecommunications Act, namely ordering telecommunications service providers to suspend or terminate service to non-compliant telemarketers, criminal prosecutions, and mandatory orders, are best suited to flagrant and repeat offenders – and through the implementation of a single, national, do-not-call list.

Under the pre-existing do-not-call list rules, individual telemarketers must maintain their own list. This requires consumers to make requests for placement on a do-not-call list in respect of each telemarketer. However, the CRTC concluded it lacks authority under the Telecommunications Act to impose fines and to establish or fund such a framework. The CRTC instead determined to strengthen its pre-existing telemarketing rules in, amongst others, the following ways:

• by requiring telemarketers to provide consumers requesting to be placed on a do-not-call list with a unique registration number at the time of the request and to process such requests at the time of the request;
  
  
• by requiring telemarketers to identify themselves, and, where applicable, the party on whose behalf the telemarketing call is made at the outset of the call, and provide a toll-free number, staffed during business hours, where the telemarketer can be reached. (Fax telemarketers were required to provide their contact information on the first page of a fax solicitation);
  
  
• by establishing a five per cent maximum abandonment rate for telemarketing calls using predictive dialling devices, or PDDs (PDDs are devices which automatically initiate outgoing calls. A PDD dials the next call in advance so that the operator can speak to the next prospect as soon as the first call ends);
  
  
• by requiring telecom service providers to file more comprehensive telemarketing complaints statistics; and
  
  
• by requiring telecom service providers to educate the public about the telemarketing restrictions through billing inserts.
  
  

In an August 2004 application, the Canadian Marketing Association (CMA) requested the CRTC to review and vary certain aspects of the Telemarketing Rules Decision (under s.62 of the Telecommunications Act the CRTC may, on application or by its own motion, review and rescind or vary any decision or rehear any matter). The CMA also sought a stay of the decision pending the CRTC’s determination of the review and vary application. Likewise, the CMA sought review and variance of, among others, the following requirements in the Telemarketing Rules Decision:

• instead of requiring at the outset of the call telemarketers to identify themselves and organizations on whose behalf a call is made and provide a toll-free number for complaints, the telemarketer would first be permitted to establish contact with the individual called;
  
  
• the requirement for a live operator to staff the telemarketer’s complaints line during business hours and instead give telemarketers the option of using 24-hour interactive voice mail systems;
  
  
• the requirement to provide a unique registration number on being requested to place the called party on a do-not-call list; and
  
  
• the CRTC’s refusal to establish a national do-not-call list.

The Stay Decision grants the requested stay, in part. The aspect of the Telemarketing Rules Decision that was not stayed was the requirement that telecommunications service providers track and report complaint statistics. The new tracking and reporting requirements took effect on Jan. 1, 2005. In issuing the stay, the CRTC applied the stay test prescribed by the Supreme Court in Manitoba (Attorney General) v. Metropolitan Stores (MTS) Ltd. [1987] 1 S.C.R. 110, as modified by RJR-MacDonald Inc. v. Canada (Attorney General) [1994] 1 S.C.R. 311, and found the application raised a serious issue. Telemarketers seeking the stay would suffer irreparable harm (in the form of the non-recoverable costs of complying with the new rules) if the stay were not granted, and the balance of convenience, taking into account the public interest, favoured granting the stay.

As a result of the Stay Decision, the Canadian telemarketing industry essentially reverts back to the pre-existing CRTC telemarketing rules pending resolution of the CMA and three other review and vary applications. The current telemarketing rules are summarized in an Appendix to the Stay Decision. See http://www.crtc.gc.ca/archive/ENG/Decisions/2004/dt2004-63.htm.

Review and vary applications were also filed by the Association of Fundraising Professionals, Beautyrock Inc. and the Responsive Marketing Group Inc., Univision Marketing Group Inc., and Xentel DM Incorporated. See http://www.crtc.gc.ca/PartVII/eng/2004/8662/8662_04.htm.

It is noted that three petitions to the Governor-in-Council pursuant to s.12 of the Telecommunications Act to vary, rescind or refer the Telemarketing Rules decision have also been filed. The Canadian Marketing Association, the Canadian Bankers Association and Responsive Marketing Group Inc., Univision Marketing Group Inc. and Xentel DM Incorporated each filed cabinet petitions. See http://strategis.ic.gc.ca/epic/internet/insmt-gst.nsf/en/sf05456e.html. As of the date of this article, no decisions on these have yet been made.

The Infolink Decision

The Infolink Decision relates to "voicecasting," a messaging service enabling customers to send voice messages directly to a consumer recipient’s voice mailbox, without ringing the recipient’s telephone. Citing sections of its General Tariff prohibiting the use of automatic dialling announcement devices (ADADs) for solicitations, Bell Canada sought to terminate Infolink’s service. Bell Canada General Tariff Item 1800 defines an ADAD as:

"any automatic equipment incorporating the capability of storing or producing telephone numbers to be called, used alone or in conjunction with other equipment to convey a pre-recorded or synthesized voice message to the telephone number called."

The tariff defines solicitation as "the selling or promoting of a product or service, or the soliciting of money or money’s worth, whether directly or indirectly and whether on behalf of another party."

Infolink applied to the CRTC to prohibit Bell from terminating the service. The proceeding culminated in the Infolink Decision, in which the CRTC concluded the ADAD prohibition in Bell’s tariff does not apply to voicecasting.

Essentially, the CRTC applied the mischief rule and concluded that the public nuisance and inconvenience underlying its original ban against the use of ADADs had not been shown to arise in the case of voicecasting. The CRTC found there is no ringing of the consumer’s telephone line, no interruption in their activities, and the incoming voicecasting message does not tie up the subscriber’s telephone line. Moreover, the CRTC found Bell had not provided evidence of subscriber complaints indicating the degree of consumers’ subjective annoyance caused by voicecasting.

Section 41 of the Telecommunications Act, one of the sources of the CRTC’s jurisdiction to regulate telemarketing, provides that the CRTC "may by order, prohibit or regulate the use by any person of the telecommunications facilities of a Canadian carrier for the provision of unsolicited telecommunications to the extent the Commission considers it necessary to prevent undue inconvenience or nuisance, giving due regard to freedom of expression."

Interestingly, the CRTC never did state whether voicecasting service falls within the Bell tariff’s definition of an ADAD. The result of the Infolink Decision is that voicecasting by telemarketers continues to be permitted under the CRTC’s telemarketing rules.

Conclusion

These two telemarketing decisions are important Canadian privacy law developments to the extent the marketing activities at issue fall beyond oversight under the Personal Information Protection and Electronic Documents Act (PIPEDA).

For example, some of the telemarketing activity targeted in these CRTC decisions involves the use of individuals' telephone numbers that are listed in publicly available telephone directories. As a result, the collection, use, or disclosure of such information by telemarketers is exempt by regulation from PIPEDA’s prior consent requirements, under Regulations Specifying Publicly Available Information, S.O.R./2001-7, s.13. These regulations allow organizations to collect, use, or disclose personal information consisting of a subscriber's name, address and phone number where such information appears in a publicly available phone book, so long as the subscriber has the option of choosing an unlisted telephone number.

Thus, the oversight of the privacy commissioner and the courts in respect of such activity under PIPEDA is largely limited to consideration of whether the purposes for the collection, use, or disclosure of such information is such that a reasonable person would consider appropriate in the circumstances. Telecommunications lawyers and privacy practitioners continue to await the outcome of the review and vary applications and the petitions to the Governor in Council regarding the Telemarketing Rules Decision.

The author joined Bell Canada as Assistant General Counsel, Regulatory Law, effective Nov. 15, 2004.

For the full text of the article in PDF format, click here.

Noela Inions is Legal Counsel with the Office of the Information and Privacy Commissioner of Alberta.