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Not Everyone Hates Those Computerized Phone Calls

SAN DIEGO COUNTY BUSINESS EDITOR

We’ve all received them, those annoying, unsolicited calls from computerized telephone dialing machines with recorded voices that offer to sell us bullion futures, houses, perfumes, tax returns, yard work and countless other unwanted investments, goods and services.

So, many people will cheer when a bill that was passed by Congress last week is signed into law by President Bush later this month. The law will flatly prohibit the use of “autodialing” telephone machines by telemarketing businesses to make unsolicited calls with prerecorded messages only. And the law will severely limit operations of telemarketers who use the machines in tandem with live operators.

But Ray Kolker, for one, isn’t at all happy. His company, Carlsbad-based Kolker Systems, is a leading manufacturer of the autodialing machines. Kolker said the bill is an infringement of his constitutional rights and an unfair abridgment of the public’s access to the telecommunications grid.

Of course, the bill also will put a severe damper on the market for Kolker’s $1,800 machines, which dial up to 1,500 numbers a day, play recorded sales messages and take messages from people who show an interest in the canned sales pitch.

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A recent guest on “Nightline” and CNN, Kolker has emerged as a national and somewhat lonely spokesman for autodialing and he insists that he has more than his own interests at heart. The bill will sound a death knell, he said, for thousands of small businessmen and women who use his autodialing machines for cheap advertising.

Due in part to its low cost relative to other forms of advertising, telemarketing has become a huge business, with over 30,000 firms actively telemarketing goods and services, according to a U.S. Senate data. Some 300,000 telephone solicitors, a substantial percentage of which use autodialing machines, make more than 18 million calls to Americans every day. Kolker said there are more than 70,000 autodialing machines in use in the United States.

“For most of the people who use these things, it’s the only way they have of advertising their products,” Kolker said. “The firms that buy our machines are usually small businesses trying to start their business, sustain their business or improve their business.”

“Say you’re a real estate sales person and you just started your business. You just plug (a Kolker machine) in and by the end of the day, you may have three or four leads of people who want to list their houses with you. So you can start up business immediately. You don’t have to pay for newspaper ads or get in the Yellow Pages.”

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“Once you’ve paid $1,800 for a machine, your advertising cost is no more than the cost of your phone bill,” he said.

Laws in California and other states prohibit the use of autodialing telemarketing machines, but Kolker says they largely not enforced, in part because of legal challenges brought by telemarketing firms. He continues to make 25% of his sales to firms within California, despite the laws.

Needless to say, U.S. Rep. Edward Markey (D-Mass.), chairman of the U.S. House Subcommittee on Telecommunications and Finance, doesn’t see it Kolker’s way. In a statement, Markey, whose committee co-drafted the bill, said the legislation will enable consumers to “put many junk calls in the trash can. That is what consumers want, because junk phone calls are uniquely intrusive, since they interrupt your life and occupy your phone.”

The bill’s co-sponsor, U.S. Senator Ernest F. Hollings (D-S.C.), chairman of the Senate Committee on Commerce, Science and Transportation, has received “an overwhelming number of consumer complaints saying people hate these calls,” a committee staffer said. “They regard them, and Senator Hollings regards them, as an invasion of privacy and a nuisance for these calls to be bombarding you in the privacy of your home.”

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The staffer said there also are documented cases of the families of heart attack victims unable to call 911 for help because “a computer had called their phone and would not release the line.”

Autodialing also inflicts unwanted costs on phone customers when they are used to send faxes and make calls to cellular phones, the staff member said.

As vigorously as proponents argue that the measure will purge the nation of a plague of nuisance calls, Kolker maintains that it infringes on the public’s access to public telecommunications.

“The definition of a telephone network is that it is public, not a private network. So, anybody can call you,” said Kolker, who won’t divulge the size of his company, his sales or even the number of his employees. He did say that he sells hundreds of the machines each month.

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The Senate committee staffer said described Kolker’s as “ridiculous . . . . Owning a phone does not give everyone in the world the right to call you,” he said.

As written, the bill will flatly prohibit companies from using autodialing machines to make unsolicited sales calls with only recorded messages. Nonprofit and civic organizations, such as a fire department using the machines to warn residents of a fire, would still be able to use the machines, however.

The law provides a little more slack for telemarketing firms that use the machines in operator-assisted systems called “power dialing” in which robotic dialing systems make the initial contact with a potential customer before turning calls over to a live operator. Telephone customers will be able to put their name on a list of numbers that “power dialing” telemarketers are banned from calling, however.

The state of Florida recently created a list of telephone customers who want to be shielded from unsolicited “power dialing” telemarketing calls and 8% of the state’s phone customers have signed up, said the Senate staffer, who asked not to be identified.

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Nuisance or no, some business say telemarketing, with the aid of Kolker’s machines, has kept them afloat. One is Lucky Leprechaun, a chimney sweeping service in Salem, Ore., whose owner, Kathy Moser, bought a Kolker Systems auto-dialer four years ago.

“I’d be completely out of business without it,” she said. “When we moved to Oregon a couple of years ago, we weren’t able to get in the phone book for eight months. The state has outlawed the machines but we are suing and we have been allowed to use it until the court case is settled. It still accounts for 50% to 60% of our business.”


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