Seattle Passes Yellow Pages Opt-Out Bill

As expected the Seattle City Council overwhelmingly passed the first piece of big city print Yellow Pages opt-out legislation in the country. The vote was 8-1, and the implications for the Yellow Pages industry may be far reaching.

Leading up to passage of the bill, leaders of the two industry associations (Association of Directory Publishers and the Yellow Pages Association) warned that if passed, the bill may act as a catalyst for other cities to adopt similar legislation.

On a recent webinar touting the industry’s plan to upgrade its opt-out clearinghouse, ADP President Larry Angove was particularly blunt in describing the stakes for directory publishers. “If what is going on in Seattle hasn’t scared the daylights out of you, then you are in denial,” Angove said. “The best and only way to avoid [further legislative action] is self-regulation.”

At last week’s ADP conference in Denver, Angove told his membership that the council member that pushed the measure through (O’Brien) has vowed publicly to call peers in Portland, Oregon, and San Francisco once the legislation passes to encourage them to pursue legislation modeled after Seattle’s ordinance.

Angove called the Seattle effort a “tax on commercial speech” and noted that the industry is prepared to challenge any such measure. Speaking at BIA/Kelsey’s Directional Media Strategies conference in September, YPA President Neg Norton also made it clear that the industry had concerns about the legality of singling out Yellow Pages over other print media.

In a media statement issued today, Norton hinted strongly at a legal challenge.

“We believe the ordinance, as passed, will not hold up under legal challenge. As an industry, we are committed to reducing the number of unwanted yellow pages directories. We must, however, ensure that our members’ rights are respected and oppose any attempts to single out the yellow pages industry with disparate regulatory and financial treatment, including discriminatory license fees and advance recovery fees not applied to competing media and non-media sources of paper. The industry also opposes any provisions that compel our members to promote a duplicative, city-run program through mandatory notices on the covers of their directories.”

Reached by e-mail today, Norton said he could not comment further on any specific plans now that the legislation has passed. “Suffice to say we’re considering our options,” he said.

The Seattle legislation does several things designed to ensure that consumers who don’t want phone books don’t get them, and that the city recovers the costs it incurs in the process of disposing of old and unwanted phone books. These include establishing a city-run online opt-out registry; assessing “advance recovery” fees on phone book publishers to pay for the Web site and the cost of disposal (14 cents per book plus $148 a ton); requiring lifetime opt-out recognition (the associations say three years is more reasonable); and requiring prominent display of opt-out information on directory covers. In addition, substantial fines will be assessed for violations.

Dex One, the company most affected by the ordinance, issued a statement today that called the ordinance unnecessary given existing efforts by Dex and the industry to self-regulate. Dex is particularly proud of its “Select Your Dex” opt-out site, which was built in large part to stave off measures like the Seattle ordinance.

Here is Dex One’s statement in full:

While we share the council’s commitment to protecting our environment and to making sure phone directories are distributed to only those consumers who want and use them, we disagree with today’s decision.

This new Seattle ordinance is a redundant, unnecessary action. For the past two years, we’ve proactively implemented and maintained a successful consumer choice program, Select Your Dex, where Seattle residents can customize their delivery order. It works. It’s available today at www.selectyourdex.com. It lets consumers choose how to work with us.

Further, as an alternative to the city run web site, we, along with the other leading companies serving Seattle, have committed to participate in an industry supported national one-stop consumer directory delivery site.

Today’s decision negatively impacts local Seattle businesses. Dex Yellow Pages are a proven, cost-efficient search solution for local businesses to attract ready-to-buy consumers. This ordinance will make it even more difficult for businesses to grow in an already difficult economy.

Our view has long been that legislated opt-out in some form was an inevitability, and the industry would be wise to embrace it rather than fight it. There are many in the industry who also advocated this view, and the YPA has been pursuing a thoughtful and until now successful strategy of balancing self-regulation with firm opposition to opt-out legislation. Perhaps the outcome in Seattle will finally make all those with a stake in Yellow Pages understand that they have two choices: Either publishers collectively impose change on themselves, or they have more onerous change thrust upon them. And after Seattle, it isn’t clear that the former option is still available.