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The shifting tide of automated voice communications.

Successful legislative initiatives aimed at the Telephone Consumer Protection Act of 1991 and subsequent FCC regulations implementing the Act will allow rural electric systems to continue to use voice automated communications as part of their daily contact with members. While the Act is designed to protect the privacy rights of telephone users, it provides for the use of this technology for legitimate business activities. This article provides readers with a clear understanding of the Act and subsequent regulations, as well as outlining four case studies as to how automated voice communications benefits member communication and service.

"High Tech Communication: Making Waves or Calming the Sea?" appeared in the Winter 1990-91 issue of Management Quarterly. This article focused on the communications technology revolution, specifically automated voice communications and its impact on the managerial environment.

Since this 1990-91 article was written. Congress enacted and the President signed the Telephone Consumer Protection Act of 1991, shifting the tide for the use of automated voice communications. In this follow-up article we will take a look at:

The Past: Summary of previous article on high tech communications

The Present: The Telephone Consumer Protection Act of 1991 and its impact on automated voice communication

* Statement by the President

* Purpose of this legislation

* Federal Communications Commission's (FCC) proposed exemptions to the Act

* Spotlight on four rural electric systems who provided comments to the FCC concerning the Notice of Proposed Rulemaking

The Future: Commission establishes rules to implement the Telephone Consumer Protection Act of 1991 (CC Docket No. 92-90). Final ruling on the Telephone Consumer Protection Act of 1991 provides for full exemption to rural electric systems.

Summary: Automated Voice Communications--Providing a Public Service to Rural Electric Members

The Past

Summary of previous article on high tech communications

"One common goal of all businesses described in this article was that of providing quality service to their consumer/members. Communication is a very important part of achieving that goal. It is essential that managers gain a better understanding of the role of high tech communication in business and how they can use these technologies to increase their competitive edge.

This article demonstrated how the industry was using high tech communications, specifically automated voice communications, to serve their consumer/members more efficiently. The type of information provided through the use of this system can be general in nature or more specifically related to the individual consumer or community as a whole.

Consumer/members are far more receptive to a message which is:

* from someone they recognize as having a significant role in their lives such as a school system, police department, or rural electric system.

* provided for their benefit rather than a solicitation.

* important in nature and of personal interest to him/her.

The benefits of using an automated voice communication system may include reduced costs to the company and consumer, increased productivity, and better utilization of employee talents. But a far greater benefit is realized when the quality of service to consumer/members is enhanced. General Manager Michael Sims put it best when he said, "In a customer-oriented business, such as an electric cooperative, it is the intangibles that pay a return."

Communication technology itself cannot make you a better manager. But what you do with it can. How well you learn to use the tools for handling this information will have a major consequence upon your managerial effectiveness and the productivity of your organization."|1~

The Present

The Telephone Consumer Protection Act of 1991 and its impact on automated voice communication

Just one year after encouraging managers to look at the role high tech communications can play in gaining the competitive edge, the tide shifted.

President's Statement. On December 23, 1991, the President stated, "Today I have signed into law S. 1462, The Telephone Consumer Protection Act of 1991. This legislation is designed for the laudable purpose of protecting the privacy rights of telephone users. However, the Act could also lead to unnecessary regulation or curtailment of legitimate business activities. That is why the Administration opposed it when it was pending before the Congress ...

"I have signed the bill because it gives the Federal Communications Commission (FCC) ample authority to preserve legitimate business practices. These include automated calls to consumers with whom a business has pre-existing business relationships ... I fully expect that the Commission will use these authorities to ensure that the requirements of the Act are met at the least possible cost to the economy."|2~

Purpose of the Legislation. Although the law was intended to protect consumers from unrestricted and intrusive telemarketing techniques, concerns arose early as to whether the broad scope of the law would inadvertently have an adverse effect on rural electric systems utilizing NRECA's Phone Notification System or similar automated notification systems."|3~ NRECA was reassured when both the House and Senate floor managers of this bill stated at passage that they expect the FCC to provide an exemption for certain uses of automated telephone by rural electric cooperatives.

FCC's Proposed Exemptions. NRECA's executive vice president, Bob Bergland, Senior Legislative Representative Rich Larochelle and myself worked closely with the FCC as the proposed rule was being crafted to ensure that rural electric systems received exemptions for certain uses of automated dialers.

In releasing the proposed ruling in mid-April, the FCC acknowledged that there were many valuable uses of auto dialer messaging that do not fall within the intended scope of the law's prohibitions. In fact, since the law authorizes the FCC to propose exemptions to the prohibitions, the agency has, accordingly, proposed the following be exempt from the act:

1. Non-commercial messages that do not transmit advertising.

2. Non-profit institutions.

3. Situations where the called party has or had a voluntary business relationship with the caller.

4. Calls made for emergency purposes, with the term emergency interpreted to include situations which convey information to consumers concerning health or safety, including power outages, power interruptions for load management purposes and other similar situations.

Each of these exemptions, individually and discretely, enables rural electric systems to successfully continue utilization of NRECA's Phone Notification System as has been the case.|5~

Spotlight on Rural Electric Systems

In May, NRECA and several rural electric systems submitted written comments to the FCC in support of its proposed rule making. Below are spotlighted four of those systems who clearly defined their use of automated voice communication.

United Electric Cooperative, Inc. (Unilec), DuBois, Pennsylvania Donald A. Widder, General Manager

Theme: Communication

Statistics: Provides electric service to nearly 16,000 members; power lines extend into 10 counties in north central Pennsylvania; average density of 5 consumers per mile of line.

Communication was the theme of Don's written comments to the FCC. He stated that "communication in a rural setting is a special challenge for a consumer-owned business/organization. We inform our members through member publications, special meetings and programs, as well as telephone communication. To cover the vast distances we try to make use of modern communication tools. We do so with the understanding that we need to use the appropriate technology for a given communication task.

We were the first rural electric cooperative in the United States to acquire and implement a telephone notification system. In 1987 the equipment, software, planning and "message development" for the Unilec Notifier were assigned to Unilec's communication department. We could have assigned it to our data processing section or our marketing programs ... We did not.

We believe strongly that the Notifier is a communication function. We also believe that automated messages to our members must provide a valuable service. The last thing we want is to have the system become a nuisance. After all, the recipients of these messages are our members who own, operate and control our cooperative--nine of them constitute our board of directors.

The Unilec Notifier has worked well. We provide messages on past due bills and on planned construction work. In both of these situations interruption of service is likely and we want our members to know about it. While we also employ other methods of notification via mail and publications many members have come to depend on the automated notification. We have made nearly 10,000 automated notifications since 1987 with virtually no complaints from the recipients of these messages.

In addition, we notify our members of consumer meetings and other "need to know" information. We do not use the system for marketing projects. We do not believe that the medium is appropriate to the marketing task.

We believe that the Notice of Proposed Rulemaking will allow beneficial uses of automatic telephone dialing for notification systems to continue. This is fully consistent with the intent of the Telephone Consumer Protection Act which was intended to prevent intrusive telephone solicitation that attacks the privacy rights of individuals.|6~

Pioneer Electric Cooperative, Ulysses, Kansas

David Jesse, General Manager

Theme: Improved Member Services

Statistics: 10,860 meter sites in 10 counties of southwest Kansas; approximately 3 consumers per mile of line

Improved member service was the theme of David's comments to the FCC. He stated that "Pioneer started using the automated phone notification system three years ago to contact consumers about delinquent bills. In this age of both husband and wife working outside the home, telephone contact during our working hours is nearly impossible. Many of our rural consumers do not sit in their homes from 8:00 to 5:00 p.m. Monday through Friday. Rather than have three employees spend approximately twelve personhours attempting to make telephone contact during normal business hours or have the same three people work at overtime rates to make telephone contacts between 6:00 and 9:00 p.m., the automatic telephone dialing system contacts the consumers in the early evening hours."

Three immediate benefits have resulted:

* More of our consumers have been contacted about their delinquency than was possible using the business-day contact. Some customers have even told us that they appreciated the call as a reminder.

* The twelve personhours have been more effectively used within the workplace to maintain better consumer relations.

* Pioneer isn't paying overtime wages and associated fringes, which has saved our consumers additional dollars.

As Pioneer Electric moves into the next level of computer operations, using the automatic telephone dialing system will be of more importance. Planned outages for maintenance and/or repair can create bad feelings within the electricity-dependent consumers. Notification of consumers at least twenty-four hours in advance of the planned outage can help them plan their work day. Less frustration and better consumer relations with Pioneer Electric can result.|7~

Butler Rural Electric Cooperative, Inc., Hamilton, Ohio

Michael L. Sims, General Manager; Greg Phillips, Systems Analyst

Theme: Improved Member Service

Statistics: 8,000 members in 4 counties in southwestern Ohio, approximately 9 consumers per mile of line

Improved member service was also the theme of Butler's comments to the FCC. Greg stated that "Butler Rural Electric Cooperative (BREC) began using a single line automated telephone dialing system in 1988. Since 1989, Butler has used a multiple line system. Our automated telephone dialing system is an avenue by which Butler can better serve its members and surrounding communities." BREC presently uses the system in the following areas:

Meter Readings: Butler is a consumer read cooperative where the consumer submits a meter reading each month to generate their next bill. In the event the consumer does not submit a meter reading, the system calls as a reminder. This saves the consumer an estimated bill plus a possible meter reading charge.

Peak Alert: When peak alert is issued for the state of Ohio the system calls our members, informs them of the current situation, and suggests possible steps to take to avoid reaching a new peak demand which would ultimately result in higher power costs. This is also vital to the success of our demand-side management programs.

Other uses include contacting members whenever possible prior to scheduled outages, a 24-hour call-in bulletin board system with over 65 informational messages, and a courtesy reminder for debt collection.|8~

Pierce-Pepin Electric Cooperative, Ellsworth, Wisconsin

Steven J. Healy, General Manager

Theme: Better Consumer Service

Statistics: 5,000 members located in 4 counties; average of 6 consumers per mile of line

Better Consumer Service was the theme of Steve's comments to the FCC. Steve stated that "Pierce-Pepin Electric Cooperative has been using an automatic telephone dialing system for the past four years. We strongly believe that the automatic telephone dialing system allows us to better serve our consumers."

Uses for this automatic telephone system are:

* to contact members for planned outages due to construction and maintenance line work

* to contact members for cooperative meetings and functions

* to contact directors reminding them of cooperative meetings

* to contact members when an error is detected on their energy account.|9~

Each of these managers believed that the Notice of Proposed Rulemaking and the exemptions therein would allow beneficial uses of automatic telephone dialing systems to continue. But would their efforts and those of NRECA and other rural electric systems be enough to convince the FCC to provide for a full exemption?

The Future

Final ruling on The Telephone Consumer Protection Act of 1991 provides for full exemption to rural electric systems

On September 17, 1992, the FCC established the rules to implement The Telephone Consumer Protection Act of 1991 (CC docket no. 92-90). The FCC clearly recognized, as Congress did, that the use of the automated phone system by rural electric cooperatives provides a public service to rural electric members. The FCC's exemptions to the prohibition paves the way for the continued use of NRECA's Phone Notification System and similar automated voice communication systems. These exemptions include:

1. Non-commercial calls

2. Commercial calls not transmitting an unsolicited advertisement and that do not adversely affect consumer privacy rights

3. Tax-exempt non-profit organizations

4. Situations where the called party has an established business relationship with the caller

Debt collection calls fall under two exemptions from the prohibition on pre-recorded message calls to residences:

1. Such calls are exempt as calls to panics with whom the caller, a creditor, has an established business relationship with the called party, a debtor.

2. Such calls are also exempt from the prohibition as commercial calls that do not include an unsolicited advertisement and do not adversely affect the privacy rights that the Telephone Consumer Protection Act intended to protect.|10~

Summary

Automated voice communications--providing a public service to rural electric members

The use of high tech communications, specifically automated voice communications, can play a significant role in gaining the competitive edge. The service industry is using this type of system to serve their consumer/members more efficiently.

The passing of The Telephone Consumer Protection Act of 1991 brought with it a shifting tide for automated voice communications. However, the President, Congress and the FCC clearly recognized that certain uses of automated voice communications cult and do provide a valuable, public service to consumer/members.

The FCC established rules to implement the Act which will take effect on December 20, 1992. The FCC provided exemptions to the prohibition which pave the way for the continued use of automated voice communications by rural electric systems.

Communication technology itself cannot make you a better manager. But what you do with it can. How well you learn to use the tools for handling this information will have a major consequence upon your managerial effectiveness and the productivity of your organization.(1) I encourage managers to continue to examine the role communications can play in gaining that competitive edge. NRECA's phone notification system is one such communications tool. Rural electrics and the FCC both recognize the valuable public service this communications tool allows systems to provide to their members.

* Brenda Ulman is an independent consultant to the Management Services Department at NRECA. She provides specialized marketing services to both the conferences and consulting divisions of Management Services. Additionally, she has managed NRECA's Phone Notification System for the past four years. She was an employee with NRECA for nine years prior to starting her own conference development and marketing services firm. She earned her bachelor's degree in business management from the University of Maryland.

References

1 Ulman, Brenda R. "High Tech Communications, Making Waves or Calming the Sea?" Management Quarterly, Winter 1990-91, V31/No. 4; p. 36. 38.

2 Statement by President George Bush, The White House, Office of the Press Secretary, December 20, 1991.

3 Bergland, Bob. "FCC Proposed Regs on Telephone Auto Dialing Systems." Current Activities, April 24, 1992.

4 Bergland, Bob. "Automated Telephones." Current Activities, January 10, 1992.

5 Bergland, Bob. "FCC Proposed Regs on Telephone Auto Dialing Systems." Current Activities, April 24, 1992.

6 Letter to the FCC from Donald A. Wider, General Manager, United Electric Cooperative, Inc., DuBois, PA, May 22. 1992.

7 Letter to the FCC from David Jesse, General Manager, Pioneer Electric Cooperative, Ulysses, KS, May 22, 1992.

8 Letter to the FCC from Greg Phillips, Systems 'Analyst, Butler Rural Electric Cooperative, Inc., Hamilton, OH, May 22, 1992.

9 Letter to the FCC from Steven J. Healy, General Manager, Pierce-Pepin Electric Cooperative, Ellsworth, WI, May 22, 1992.

10 Action in Docket Case "Commission Establishes Rules to Implement the Telephone Consumer Protection Act of 19981 (CC Docket No. 92-90)." News, Federal Communications Commission, September 17, 1992.
COPYRIGHT 1992 National Rural Electric Cooperative Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Ulman, Brenda
Publication:Management Quarterly
Date:Sep 22, 1992
Words:2873
Previous Article:Working effectively as a team: the board of directors and manager.
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