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'Do-Not-Call' Wires Still Crossed

carousel, S.C. Gov. Mark Sanford smiles as he is joined by his wife, Jenny
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The national do-not-call list, hampered by a weeklong legal struggle, went into effect Wednesday, with government officials still predicting a large decline in telemarketing calls to millions of registered phone numbers.

The seemingly simple service is at the center of a perplexing saga involving every branch of government. In the latest twist, federal officials scrambled a day before enforcement was to start to rework a system that handles complaints about telemarketers.

CBS News Correspondent Peter Maer reports 29 states have their own do-not-call rules, and was told by North Carolina Attorney General Roy Cooper his state's new law is not affected by federal court rulings against the government list.

"We will be enforcing our state do-not-call law in North Carolina, based on the federal registry," Cooper said.

The list contains more than 50 million home and cell phone numbers. Companies could face thousands of dollars in fines each time they call a registered number.

"The main thrust came from the elderly who are home during the daytime and continually got badgered," North Carolina state representative Harold Brubaker, who sponsored the legislation, told Maer.

For now, federal officials are directing consumers who registered phone numbers on the list to send complaints to the Federal Communications Commission by visiting its Web site or calling a toll-free line.

Redirecting all complaints to the FCC was a last-minute change. The potential for more confusion remained, since outdated instructions for filing complaints were still on government phone messages and Web sites late Tuesday.

"From a purely legal perspective, there's mass confusion about what will happen next and what ought to happen next," said CBSNews.com Legal Analyst Andrew Cohen. "As a technical matter, neither the FCC nor the FTC should be able to enforce the rules, given the judge's order last week that those rules violate the free speech rights of telemarketers.

"But there is so much political pressure to do something that we may see some sort of enforcement and that might in turn create a new wave of court fights," Cohen added.

"It will just be a more cumbersome and difficult system than the system we designed," Federal Trade Commission Chairman Timothy Muris told reporters Tuesday after testifying to a Senate committee. "This doesn't mean that consumers will be without protection."

Muris said the FTC is moving to stop accepting new numbers while a court fight with telemarketers plays out. Despite the legal wrangling, many of the largest telemarketers say they will abide by the list.

Consumers can expect a significant decrease in calls, "assuming telemarketers comply," Muris said. The FTC was blocked from operating and enforcing the list last week by a federal judge who said the program violates the free speech rights of telemarketers. Muris said the legal fight could stretch into next year.

The list was intended to block about 80 percent of telemarketing calls. Exemptions include calls from charities and pollsters and on behalf of politicians. A company also may call a person on the no-call list if that person has bought, leased or rented from the company within the past 18 months or has inquired about or applied for something during the past three months.

Recent legal challenges and the government's makeshift fixes to keep the list in business have left other holes in the registry's protections.

The do-not-call list requires telemarketers to pay for a copy of the list so they can know whom to avoid calling. Many telemarketers have the list, but some do not and cannot obtain it since the FTC shut down that aspect of the program on Sunday in response to the court rulings.

The FCC can only penalize those who have the list.

Some telemarketers say the legal confusion has their industry in turmoil, with many unsure about which numbers can and can't be called and what actions will result in penalties.

U.S. District Judge Edward W. Nottingham in Denver on Monday denied a request to suspend his decision blocking the FTC from running the list. He also warned the agency could face more legal action for using the FCC to skirt the order.

"You simply can't continue to enforce law that any federal judge in the country has ruled unconstitutional," said Cohen.

On Tuesday, the FTC asked the Denver-based 10th U.S. Circuit Court of Appeals to suspend Nottingham's ruling that blocked the agency from operating the list. Officials from 45 states, the District of Columbia and Puerto Rico filed a brief with the court supporting the FTC.