(FORTUNE Small Business) – Telemarketers hold a special place in our national consciousness, somewhere between ambulance-chasing lawyers and Bernie Ebbers. That's why most of us are celebrating the upcoming introduction of the federal Do Not Call (DNC) registry, which will punish telemarketers that call anyone on the list. But think, for one moment, about the poor telemarketers themselves, companies--often small ones--whose lifeblood depends on their ability to annoy you during dinner. The DNC registry threatens to force many of these firms out of business, sooner rather than later.

"We've been in business for 23 years, but I doubt we'll be in business for another 23 the way things are going," says Cathy Van Holton, business manager for Tele-Sales Systems in Phoenix, a company that telemarkets local newspaper subscriptions.

The DNC is expected to shrink the pool of prospective customers to such a degree (some people estimate that more than half of U.S. households will sign up) that clients will turn to direct mail and e-mail. What's more, there's the cost of subscribing to the DNC registry (up to $7,250 a year for a national subscription) and continually checking call lists against it. The main trade group for telemarketers, the American Teleservices Association, estimates that about 70% of its 3,000 members are small businesses and that most of them will be seriously hurt by the new requirements. "There's the potential to lose millions of jobs, and that happens within 12 months of the law going into effect, not ten years," says Tim Searcy, ATA's executive director.

"This stuff is devastating to us--we're out here fighting for everything we can get, and this makes it much more difficult to compete," says Ben Harris, the president of Unicall International, a 75-person telemarketing firm based in Fairlawn, Ohio. Harris estimates that the new regulations will cost him a total of $150,000 a year, a substantial portion of his firm's $2 million in annual revenues.

The ATA is mounting a legal challenge to the new rules on behalf of its members, on the grounds that it violates the right of free speech. Other trade groups such as the Direct Marketing Association have filed their own suits with the FTC as well.

"What I'm really concerned about is some of our employees, some of whom by nature or by choice are just not presentable to the public," says Greg Klein, director of operations for Tele-Sales Systems. "If you have a guy that has tons of tattoos, if he's a good salesperson, telemarketing is perfect for him."