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Notice

Agency Information Collection Activities; Submission for OMB Review; Comment Request

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Information about this document as published in the Federal Register.

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AGENCY:

Federal Trade Commission (FTC).

ACTION:

Notice.

SUMMARY:

The FTC is submitting the information collection requirements of its proposed revision of the Pay-Per-Call Rule to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act.

DATES:

Comments must be submitted on or before January 15, 2003.

ADDRESSES:

Send comments regarding the burden estimate or any other aspect of the information collection, including suggestions for reducing the burden, to the Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10202, Washington, DC 20503, ATTN.: Desk Officer for the Federal Trade Commission (comments in electronic form should be sent to oira-docket@omb.eop.gov), and also to the Secretary, Federal Trade Commission, Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 20580 (or PPC-PRA@ftc.gov, except as noted below). All submissions should be captioned “Pay-Per-Call Rule” and be identified as responding to this notice.

If a comment contains nonpublic information, it must be filed in paper form, and the first page of the document must be clearly labeled “confidential.” Comments that do not contain any nonpublic information may be filed in electronic form (in ASCII format, WordPerfect, or Microsoft Word) as part of or as an attachment to e-mail messages directed to the electronic mailboxes noted earlier. Such comments will be considered by the Commission and will be available for inspection and Start Printed Page 77067copying at its principal office in accordance with section 4.9(b)(6)(ii) of the Commission's Rules of Practice, 16 CFR 4.9(b)(6)(ii).

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FOR FURTHER INFORMATION CONTACT:

Alex Tang, Office of the General Counsel, FTC, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-2447. For information regarding the Pay-Per-Call rulemaking, contact Elizabeth Hone, Attorney, Division of Marketing Practices, Bureau of Consumer Protection, FTC, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-3207. A separate Supporting Statement that the Commission is also submitting to OMB will be made available on the Commission's public record of the Pay-Per-Call rulemaking proceeding and on the FTC's Web site, http://www.ftc.gov.

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SUPPLEMENTARY INFORMATION:

On October 30, 1998, the Commission published a notice of proposed rulemaking (63 FR 58524) to amend its Pay-Per-Call Rule 16 CFR part 308.[1] The Rule, which implements Titles II and III of the Telephone Disclosure and Dispute Resolution Act, 15 U.S.C. 5711 et seq., requires the disclosure of cost and other information with regard to pay-per-call services and establishes dispute resolution procedures for telephone-billed purchases (i.e., charges for pay-per-call services or other charges appearing on a telephone bill other than telecommunications charges). As explained in the notice of proposed rulemaking, the Rule contains certain reporting and disclosure requirements that are subject to OMB review under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3520.[2] Accordingly, the FTC submitted the Rule with proposed amendments to OMB (see 64 FR 70031, Dec. 15, 1999) for its approval, which was granted until December 31, 2002 (OMB control number 3084-0102). Because that approval is expiring and the Commission has not yet adopted the proposed amendments in final form, the Commission is submitting the Rule with proposed amendments for approval again under the same control number through December 31, 2005.

As required by the PRA, the Commission's NPRM, 63 FR 58556-57, invited public comment on the Rule's information collection requirements and proposed amendments before their submission to OMB. Although the Commission received no comments directly responding to the Commission's specific PRA questions, the Commission received one comment, from U.S. West, stating that its current cost for making an annual disclosure of dispute resolution procedures under the Rule was $53,000 and that this annual cost would increase to $819,000 if the disclosures were required with every billing cycle under a proposed amendment to § 308.20(m)(1). This comment and others (available on the FTC's Web site, http://www.ftc.gov) are being considered by the staff to determine whether to recommend that the Commission not adopt that proposed amendment so as to minimize the Rule's compliance burden.

Pursuant to 44 U.S.C. 3507(a)(1)(D) and 5 CFR 1320.5(a)(1)(iv)(B), the Commission publishes the following additional information, and invites any further public comment to OMB and the Commission, regarding the information collection requirements and proposed amendments being submitted again to OMB.

Title: Trade Regulation Rule Concerning Pay-Per-Call Services and Other Telephone-Billed Purchases (“Pay-Per-Call Rule”).

Summary of the collection of information: Reporting and disclosure requirements to implement Titles II and III of the Telephone Disclosure and Dispute Resolution Act of 1992, as amended, 15 U.S.C. 5711 et seq., which requires the disclosure of cost and other information with regard to pay-per-call services and establishes dispute resolution procedures for telephone-billed purchases.

Brief description of the need for and proposed use of the information: The reporting and disclosure requirements are mandated by statute and are necessary to help prevent unfair and deceptive acts and practices in the advertising and operation of pay-per-call services and in the collection of charges for telephone-billed purchases. The information obtained by the Commission pursuant to the reporting requirement is used for law enforcement purposes. The disclosure requirements ensure that consumers are adequately informed of the costs they can expect to incur in using a pay-per-call service, that they will not be liable for unauthorized non-toll charges on their telephone bills, and that they have certain dispute resolution rights and obligations with respect to such telephone-billed purchases.

Likely respondents, including estimated number and proposed frequency of response: Respondents are common carriers (subject to the reporting requirement only, unless acting as a billing entity), information providers (vendors) offering one or more pay-per-call services or programs, and billing entities. The Commission, to obtain OMB approval of the Rule, had previously estimated that it would request information pursuant to the reporting requirement from no more than approximately 25 common carriers per year, and that the disclosure requirements would apply to 20,000 information vendors and 1400 billing entities. See 61 FR 43764, 43767-78 (Aug. 26, 1996). In October 1998, when the Commission issued its NPRM, and in December 1999, when the Commission first submitted its proposal to OMB for approval, the Commission increased its prior burden estimates by 12% to account for industry growth in information vendors and/or pay-per-call services since the prior estimates. See 63 FR 58556-57 (NPRM); 64 FR 70031 (submission to OMB). In submitting the Rule and proposed amendments for OMB approval again, the Commission is increasing the burden estimate this time by 5% to account for additional growth, if any, in the industry since the agency's December 1999 submission.[3]

Estimated annual reporting and recordkeeping burden: The total estimated annual hours burden of the information collection requirements of the Rule, including the proposed amendments, is 5,386,983 (or 5,387,000 rounded). This burden consists entirely of reporting and disclosure requirements; as explained earlier (n. 2), there are no recordkeeping requirements. The burden hour estimate for each reporting or disclosure requirement has been multiplied by a special “blended” wage rate (expressed in dollars per hour), based on the particular skill mix needed to carry out that requirement, to determine the total annual cost of that requirement. The blended rate calculations are based on the following skill categories and average wage rates: $75/hour for professional (attorney) services; $20/hour for skilled clerical workers; $25/Start Printed Page 77068hour for computer programmers; and $50/hour for management time. Annual burden hour estimates (and the estimated total cost of those hours) have been provided below.

The burden estimates do not contain a separate set of figures for other annual “cost” burdens, if any—i.e., (a) capital and start-up costs or (b) operation, maintenance and purchase of outside services not already reflected in the above burden hour estimates and associated annual costs. Capital or start-up costs are generally subsumed in activities otherwise undertaken in the ordinary course of business (e.g., business records from which only existing information must be reported to the Commission, pay-per-call advertisements or audiotexts to which cost or other disclosures are added, etc.). To the extent that entities incur operating or maintenance expenses, or purchase outside services to satisfy the Rule's requirements, staff believe those expenses are also included in (or, if contracted out, would be comparable to) the burden hours and estimated annual burden estimates provided below (where such expenses are labor-related), or are otherwise included in the ordinary cost of doing business (where the expenses are other than labor-related).

Reporting requirement: This requirement is currently set forth in § 308.6 of the Rule, to be amended and redesignated § 308.19(a). The previous estimated hours burden for this reporting requirement (i.e., to provide certain information to the Commission upon request) was 140 hours annually (based on 25 common carriers each spending 5 hours annually plus a 12% increase), which is being increased by 5% to 147 hours annually, at an average revised wage rate of $75/hour (100 percent of each hour for attorney services) or a total annual cost of $11,025.

Disclosure requirements: (1) Advertising. The advertising disclosure requirements of the current Rule would be consolidated into §§ 308.3, 308.4 and 308.7 of the Rule, as amended. The current estimated annual burden on the industry is 129,360 hours. This figure reflects the Commission's original estimate of 20,000 vendors each making certain basic cost disclosures (one hour per disclosure) in three advertisements for pay-per-call services (60,000 burden hours total) plus one hour for an additional disclosure in each of the estimated 50 percent of ads that are directed to individuals under 18 (30,000 burden hours) and each of the estimated 30 percent of all pay-per-call ads relating to sweepstakes or information on federal programs (18,000 burden hours), or a total of 108,000 burden hours (rounded to 110,000), which was increased in the 1999 submission to OMB by 12% for industry growth to 123,200, and has been increased again in this submission by 5% to 129,360 hours. The total estimated annual cost of these burden hours is $5,821,200 using a blended wage rate of $45/hour (40 percent attorney services, 50 percent skilled clerical workers, and 10 percent for management time).

Two proposed amendments, §§ 308.4(a)(1)(iii)(B) and 308.6(b),[4] would add 31,752 annual burden hours to the total, or a total annual cost of $1,428,840 using the $45/hour blended wage rate discussed above. The first of these amendments, requiring disclosures when a call is billed on a variable time rate basis, assumes that 20 percent of the estimated 70,560 advertised pay-per-call services (i.e., after the 5 and 12 percent increases) would need to contain such a disclosure, thereby accounting for 14,112 burden hours, at an annual cost of $635,040. The burden associated with the second amendment, requiring an audio signal to indicate (i.e., disclose) the end of free time used to advertise certain pay-per-call services, is estimated at 17,640 burden hours, assuming this requirement applies to 25 percent of advertised pay-per-call services, or an annual cost of $793,800.

(2) Preamble. The Rule's existing preamble disclosure requirement, set forth in § 308.9, imposes an estimated burden of 10 hours annually, for an annual burden of 705,600 burden hours based on 70,560 advertised pay-per-call services. The cost associated with these burden hours is $31,752,000, using a blended wage rate of $45/hour (i.e., similar to the blended rate used for advertising disclosures). As explained in the notice of proposed rulemaking, the estimated burden of a proposed amendment of the preamble disclosure requirement, § 308.4(a)(2)(iii)(B), is one additional hour for approximately 30 percent of the advertised pay-per-call services, or an estimated 21,168 hours, for a total annual cost of $952,560.

(3) Telephone-billed charges in billing statements. This requirement is currently set forth in § 308.5(j) of the Rule, which the Commission proposes to redesignate and incorporate into § 308.18, as amended. The blended rate used to calculate the cost of these disclosures was $51.50/hour (50 percent attorney services, 20 percent skilled technical workers, 20 percent computer programming, and 10 percent for management time). The estimated annual burden of this disclosure requirement was 28,224 hours (i.e., 10 percent of 20,000 vendors making spot checks at 12 hours per spot check, or 24,000 burden hours, plus 5 and 12 percent), so the annual cost would be $1,453,536. As explained in the notice of proposed rulemaking, no additional burden is anticipated from any amendments of this requirement.

(4) Dispute resolution procedures in billing statements. This disclosure requirement is currently set forth in § 308.7(c), to be redesignated § 308.20, as amended. The blended rate being used for these disclosures is $36/hour (40 percent computer programming, 20 percent attorney services, 30 percent skilled clerical workers, and 10 percent for management time). The estimated hour burden for the annual notice component of this requirement is 8,232 burden hours (based on 1,400 billing entities taking 5 hours to review, revise and provide disclosures annually, as explained in the NPRM, plus 5 and 12 percent), or a total cost of $296,352. An additional 2,940,000 burden hours would be associated with specific notices in those cases where a customer reports a billing error (i.e., 5 percent of an estimated 50 million calls plus 5 and 12 percent, requiring one hour per billing error), or $105,840,000 annually. The additional burden hours for proposed amendments to § 308.2(i) and (j), requiring new disclosures of certain information regarding personal identification numbers issued to customers for access and billing purposes, have been estimated at 52,500 hours (i.e., 5% over the 1999 estimate) or an annual cost of $1,890,000. The additional burden hours for proposed amendments to require certain new disclosures in connection with billing dispute resolution, § 308.18(n)(2) and § 308.18(n)(4), would entail 1,470,000 hours for an annual cost of $52,920,000.

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Dated: December 10, 2002.

William E. Kovacic,

General Counsel.

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Footnotes

1.  The Rule was originally promulgated as the “Trade Regulation Rule Pursuant to the Telephone Disclosure and Dispute Resolution Act of 1992” and was known as the “900-Number Rule.” It will be renamed the “Trade Regulation Rule Concerning Pay-Per-Call Services and Other Telephone-Billed Purchases” and is referred to in the Commission's notice of proposed rulemaking and in this document as the “Pay-Per-Call Rule.”

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2.  Neither the Rule nor the proposed amendments contain any recordkeeping requirements that would be subject to the PRA.

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3.  This increase is roughly equivalent to the current annual rate of inflation (1.51% based on the Consumer Price Index published through Sept. 2002), multiplied by three to represent the three-year period since the last OMB submission. Absent other applicable data from the record of this proceeding, the Commission recognizes that this 5% estimate may or may not reflect the actual growth in the relevant industry in the three-year period since the FTC's last burden estimate. The agency seeks public comment or data that might help refine the estimate.

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4.  The PRA discussion in the NPRM erroneously referred to this provision as “308.7(b).” See 63 FR 58556.

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[FR Doc. 02-31586 Filed 12-13-02; 8:45 am]

BILLING CODE 6750-01-P