SF Passes YP Opt-In Law, Lawsuit Coming

As expected, interim San Francisco Mayor Ed Lee signed into law the city council resolution requiring “opt-in” permission from residents before delivering print YP directories. The yellow pages trade groups, the LSA and ADP, issued a press release condemning the move, warning of negative social and economic impacts and promising to sue:

City leaders ignored the hundreds of small businesses that rely on print Yellow Pages who expressed their strong opposition to the ban via in-person meetings, letters, e-mails, petitions, video testimonials, and a rally in front of City Hall.  The ban was justified by city leaders as an act of environmental stewardship and a source of cost reduction, but publishers say those arguments relied on questionable data and a highly flawed economic study designed only to support the ban.

Publishers will seek to overturn the law as an unconstitutional violation of the First Amendment, which guarantees the right to free speech, and also will seek to have the city pay attorney fees.

The contention is that selected ethic and demographic groups will be adversely impacted and jobs lost. Because it’s the most dramatic municipal restriction in the US on the distribution of print directories the lawsuit will be very closely watched.

If the litigation succeeds it will discourage potential similar “opt-in” efforts that may be brewing (so far there’s no evidence of that). If it fails, it will open the door to other opt-in ordinances almost certainly, in major metros at least.

There is no specific evidence that the industry’s own earlier push for “opt-in” white pages led directly to the SF ordinance. However I argued at the time, and would continue to argue, that the industry itself set the table for San Francisco with that push. As I wrote in late 2009, “Opt-In White Pages Will Lead to Same for YP.”

The SF City Council believes it “crafted” the opt-in ordinance to withstand litigation. The thrust of the industry’s argument will be about free speech rights of publishers and unequal treatment (vs. other print media). We’ll see how far the litigation goes. You may recall that it was piece of yellow pages litigation (Feist) that is indirectly responsible for the proliferation of local data and other content on the internet today.

In Seattle, where a less restrictive opt-out measure went into effect, the industry failed in its effort to obtain a restraining order to block the law. Litigation is pending.

No one should celebrate the demise of print yellow pages. While environmental concerns are valid with print directory distribution, the industry has done a good job with its easy-to-use national opt-out site.

Print still represents 75% to 85% of publisher revenues in the US and yellow pages remain a critical part of the “local search ecosystem.”

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10 Responses to “SF Passes YP Opt-In Law, Lawsuit Coming”

  1. Ken Clark says at

    In addition to the lawsuits, I am suggesting the industry boycott the city: http://bit.ly/ijapkL. No conventions there, no vacation travel, no doing business with companies based in the city. This is a serious fight that anyone who derives their income from this industry needs to get engaged in…

  2. Greg Sterling says at

    Boycotting SF may be satisfying emotionally but it’s not a practical response to this. Other municipalities are unlikely to be swayed by boycotts.

  3. Ken Clark says at

    Granted it would have a minimal economic impact. But boycott would allow the industry another opportunity to keep telling its story. We are losing the PR war. I’m all ears if you have something better..

  4. Greg Sterling says at

    The industry needs to coordinate its efforts with a “feel good” campaign that links YP the brand (including print) to local communities and small business.

  5. Kyle Alm says at

    Interesting that Seattle passed the opt-out when the industry already has an opt-out program. That is pretty typical of Seattle City groupthink.

    Personally, I think print directories should be opt-in. I think most advertising should be. The difference between Groupon and ValPak is that I signed up for Groupon and can leave any time. It’s just better. 

    Full disclosure, I live in Tacoma & work as a Search Marketer for a couple of former owners of a yellow page directory. 

    I’m slightly partial.

  6. Kyle Alm says at

    Greg,

    Yellow Pages are Spam. If you didn’t sign up for it what else can it be?

  7. Kyle Alm says at

    Spam, per the historical Monty Python sketch, is unwanted solicitation in bulk.

    So yes, door hangers & direct mail both fit that definition nicely. I feel very strongly that direct mail is spamming.

    TV & Radio ads aren’t exactly opt-in, but that is part of the deal with commercial TV or radio. So it’s a

    Phone books are spam. No one wants them any more. They just sit in the lobby and have to be thrown out eventually. No business owner wants to fork out multiple thousands of dollars to be in multiple books to have the privilege of being next to your competitors.

    Dave, I don’t know where you got the idea that Yellow Pages are “free.” They are not. A lot of times they aren’t even published by the phone company but a separate company.

  8. Pashmina says at

    I don’t get it. Why did SF opt (no pun intended) for an opt-in instead of an opt-out policy like Seattle? The opt-out seems like a more balanced approach. This allows YP to continue their practice of leaving unsolicited materials, but also allows those businesses and individuals who don’t want the YP directories an opportunity to opt out.

  9. Kyle Alm says at

    People can already “opt-out” using the link http://www.yellowpagesoptout.com/

    Having people opt-in is better in terms of enforcement, there is no question whether or not someone wanted to receive the phone book.

    Plus circulation is one of the yellow page business directories main selling points. “We have X number of distributed phone books.” So their incentive is to push that number up, even if it is excessive.

    Yellow pages never updated their business model, their online product is pretty poor comparatively, and they are going to need to create a better incentive their distribution.

    I think that it is pretty damning that if only people who wanted a yellow pages directory got one they would be out of business. The industry seems to have a tacit acknowledgement of that fact in their reaction to this new law.

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