However, Congress  directed FTC to amend its regulation to require telemarketers to access  information at least once a month. Fees Collected for the National Registry Did Not Cover Costs in Fiscal Year 2003 But Did in Fiscal Year 2004

FTC collected about $5.2 million in fees in fiscal year 2003 and incurred  costs of about $14.6 million to implement, operate, and enforce the  national registry. This is a shortfall of about $9.4 million. FTC uses funds  from its salaries and expenses account to cover costs of implementing,  operating, and enforcing the national registry and is required to reduce its  general fund appropriations by the amount of fees collected. In fiscal year 2004,  FTC collected about $14 million in fees. First are the actual contract costs  along with associated agency costs to develop and operate the national  registry. FTC Reported Three Objectives to Measure Whether the National Registry Was Successful

According to FTC staff, the commission had three objectives to measure  whether the national registry was successful. These were to (1) have the  system up and running during calendar year 2003, (2) to ensure that the  system could enroll about 60 million telephone numbers in the national  registry in the first year of operation, and (3) reduce unwanted calls to  consumers who sign up for the national registry, approximating Missouri’s  experience of reducing telemarketing calls by about 80 percent. FTC began receiving consumer registration of telephone  numbers in June 2003, and, as of June 2004, 62 million telephone numbers  had been registered on the national registry. As an  alternative, FTC has cited polls taken by Harris Interactive® and the  Customer Care Alliance as evidence that the national registry has resulted  in a reduction of unwanted telemarketing calls. Specifically, in January  2004, Harris Interactive® found that about 90 percent of those who signed  up for the national registry had fewer telemarketing calls, and 25 percent  of those registered indicated they had received no telemarketing calls  since signing up. The two surveys may provide indications of the  national registry’s overall performance; however, we are uncertain about  how representative the results of each actually are of the opinions and  experiences of adults nationwide because, for example, the Harris survey  did not use a probability sample that can be projected nationwide and the  Customer Care survey had a low response rate, among other things. The Implementation Act required FTC and FCC to each provide an annual  written report for fiscal years 2003 through 2007 on the national registry to  include (1) an analysis of the effectiveness of the national registry; (2) the  number of consumers who have placed their telephone numbers on the  national registry; (3) the number of persons paying fees for access to the  national registry and the amount of such fees; (4) an analysis of the  progress of coordinating the operation and enforcement of the national  registry with similar registries established and maintained by the various  states; (5) an analysis of the progress of coordinating operation and  enforcement of the national registry with the enforcement activities of the  FCC pursuant to the Telephone Consumer Protection Act; and (6) a review  of the enforcement proceedings under the Telemarketing Sales Rule in the  case of FTC and Telephone Consumer Protection Act in the case of FCC. FTC and FCC agreed with the contents of our report and  provided informal technical comments on the draft, which we have  incorporated where appropriate. Appendix I: FTC Lawsuits and FCC Enforcement Actions Related to the National Do-Not-Call Registry

The Federal Trade Commission (FTC) identified ten lawsuits related to the  National Do-Not-Call Registry (the national registry) since enforcement of  the national registry became effective October 1, 2004.
Why GAO Did This Study

In response to consumer frustration and dissatisfaction with unwanted telemarketing calls, Congress has passed several statutes directing the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) to regulate intrusive and deceptive telemarketing practices, authorizing both agencies to establish the National Do-Not-Call Registry (the national registry), and authorizing FTC to collect fees to fund this national registry. The objective of the national registry is to limit the numbers of unwanted telemarketing calls that registered consumers receive. The Conference Report for the Consolidated Appropriations Act, 2004, mandated that GAO evaluate the implementation of the national registry. Specifically, this report addresses (1) how FTC and FCC have implemented and operated the national registry, (2) fees collected to cover costs to operate the national registry, and (3) how FTC has measured the success of the national registry.

What GAO Found

FTC and FCC have done several things to implement the national registry, including issuing regulations and coordinating with each other on the development of regulations and enforcement efforts. FTC has contracted out management of the operational aspects of the registry. Fees for the national registry were less than costs incurred in fiscal year 2003 but covered costs in fiscal year 2004, the first full year of operation. Fees collected by FTC in fiscal year 2003 fell short of actual costs incurred by about $9.4 million. However, fees collected in fiscal year 2004 covered FTC's $14 million in costs incurred. FTC uses appropriated funds to cover costs associated with the national registry and, as required, reduces its appropriations by the amount of fees collected. FCC uses appropriated funds to cover its costs associated with the national registry. FTC established three objectives to measure whether the national registry was successful--(1) having the system operational in calendar year 2003, (2) having the system capable of enrolling about 60 million telephone numbers within the first 12 months of operation, and (3) reducing by 80 percent unwanted calls to consumers who sign up for the registry. The national registry was operational in calendar year 2003, and 62 million telephone numbers had been registered by consumers as of June 2004, within 12 months after registration opened. FTC cannot measure how much unwanted calls have been reduced because it does not know how many calls were being received before the establishment of the registry. However, as an alternative, FTC relied upon two surveys. The results of one survey showed that respondents had an 80 percent reduction in unwanted telemarketing calls since registering on the national registry. However, this result is questionable because, among other problems, the survey relied on respondents' recall of the number of telemarketing calls received at least three months prior. The two surveys found that about 90 percent and 87 percent of registered consumers surveyed reported receiving fewer calls. The surveys may provide indications of the national registry's overall performance; however, GAO is uncertain how representative the results are because, for example, one survey did not use a probability sample that can be projected nationwide. FTC and FCC provided informal technical comments to our report, which we incorporated where appropriate. According to FTC, there is no evidence that the national registry is not working.