Subject: [NEXTEL-1] Telemarketers' Next Target: Cell Phones

From: [email-masked]
Date: Sat, 11 Oct 2003 18:19:47 -0400

Telemarketers' Next Target: Cell Phones
Tracking down wireless numbers
will soon be easier, and that means
the sales pitches will find you, wherever you are

Ben Swinburn, a resident of San Francisco, answered his phone 18 months ago
to hear a recorded ad for a casino outfit that operates in Las Vegas and
elsewhere. He hung up, but the casino hasn't taken the hint: It has been
leaving messages for Swinburn at least once a month ever since.

So what's the big deal? Well, it could become one: Instead of pestering
Swinburn at home, this telemarketer has been leaving messages on his cell
phone, turning the 4,350 monthly minutes that Swinburn's Verizon calling
plan provides into an anytime/anywhere pain in the neck.

ACCIDENTS WILL HAPPEN

For most of their brief history, telemarketers have stuck to landline
phones. But that could soon change, says Rene Link, vice-president for
marketing at wireless consultancy InCode Telecom in San Diego. Soon after
the Federal Communications Commission (FCC) implements its wireless number
portability rules on Nov. 24, it's expected that most phone customers will
also be able to keep the same number when they switch from regular landline
to wireless service. And as that happens, telemarketers almost certainly
will start reaching people via their mobile phones.

Theoretically, that trend could snowball. Within five years, 20% of U.S.
households, up from 5% today, might use a mobile device as their primary
phone, estimates Craig Mathias, who runs wireless consultancy Farpoint Group
in Ashland, Mass.

To start, at least, a fair number of telemarketing calls to wireless phones
will be accidental. Today, direct marketers have no way to determine that a
wireline number they've been calling has morphed into a cell-phone number.
The FCC, which regulates phone carriers, has yet to find a way to remedy
that -- and the solution will likely not present itself by Nov. 24, says Jim
Conway, vice-president for government relations of the Direct Marketing
Assn. (DMA), which has 4,700 members, many of them telemarketers.

PLENTY OF EXEMPTIONS

Even after the distinction becomes clearer, though, some telemarketers are
bound to target cell-phone numbers. They'll do so in an effort to offset the
effects of another new FCC initiative -- the national do-not-call registry.
Though it still faces court challenges, 51 million Americans have signed up.
And assuming it takes effect in its current form, telemarketers could face
an $11,000-per-violation fine for ignoring it.

Moreover, the don't-call rules will leave plenty of leeway for telemarketers
to track down wireless customers. Callers that are exempt from the rules
include charities, politicians, and businesses that have a relationship with
the person they're calling -- including banks, airlines, and phone-service
providers. And while the new rules prohibit the automated dialing and
leaving of recorded messages on anyone's cell phone, calls by live
salespeople to cell-phone customers who aren't on the do-not-call list
remain legal, says Al Gidari, an attorney with Perkins Coie in Seattle,
where many wireless companies are based.

Another law that is being implemented through 2005, called e911, will also
inadvertently make wireless numbers more useful to telemarketers. In the
past, it was hard for these companies to match up wireless subscribers'
numbers with their demographics and addresses -- information that direct
marketers use to decide who to call, says Lee Harward, president of ComTec
Teleservices in Denver, which makes 6 million calls a year on behalf of
various clients. E911, which is being implemented in stages between now and
2005, could change that.

JUST-IN-TIME COUPONS

Its purpose is to help 911 operators quickly determine the location of
callers. But it could also be used for targeted marketing if carriers decide
to act as middlemen between telemarketers and cell-phone customers in
forwarding coupons and ads to wireless phones. That would facilitate
just-in-time direct marketing. A telemarketer could beam a coupon for a can
of soup to the cell phone of a person the system has spotted outside a
grocery store.

Such messages would have to be passed along by the cell-service companies.
For now, the carriers swear they'll never allow random direct marketing.
However, Cingular, the No. 2 carrier in the U.S., would provide such a
service for customers who ask for it, says Faith Seiders, Cingular's
director of field operations. And consultant Mathias argues that some
revenue-desperate carriers might not take such a high road. "To opt out,
you'd need to write them [a letter] in Swedish," he jokes.

One way or another, wireless telemarketing could cause headaches for
cell-service providers. Already, Verizon Wireless reimburses customers who
complain of telemarketing calls, says a spokesperson. The next problem for
the carriers could be direct marketers who send short-text messages to their
subscribers. Experts say these will be one of the cheapest ways for
telemarketers to reach consumers -- especially since the recipient gets
charged for a text message. In Western Europe, an average cell-phone
subscriber already receives one text direct-marketing message a month, says
David Ferris, who runs Ferris Research in San Francisco.

For now, consumers' primary defense against wireless telemarketing will be
the restraint of direct marketers. "The level of annoyance and antagonism
[for wireless customers] would be extremely high, and our members realize
that it's really not a good marketing tool," says the DMA's Conway. How many
telemarketers agree, however, is an open question.

By Olga Kharif in Portland, Ore.

http://businessweek.com/technology/content/oct2003/tc20031010_0536_tc024.htm

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