Federal Trade Commission (“FTC” or “Commission”).
The FTC has submitted to the Office of Management and Budget (“OMB”) for review under the Paperwork Reduction Act, 44 U.S.C. 3501-3520 (“PRA”) information collection requirements contained in its proposed revision of the Pay-Per-Call Rule (“Rule”). The FTC is seeking Start Printed Page 9129public comments on the proposal to extend through December 31, 2009 the current PRA clearance. That clearance expires on February 28, 2006.
Comments must be submitted on or before March 24, 2006.
Interested parties are invited to submit written comments. Comments should refer to “Pay-Per-Call Rule: FTC File No. R611016” to facilitate the organization of comments. A comment filed in paper form should include this reference both in the text and on the envelope and should be mailed or delivered, with two complete copies, to the following address: Federal Trade Commission, Room H 135 (Annex J), 600 Pennsylvania Ave., NW., Washington, DC 20580. Because paper mail in the Washington area and at the Commission is subject to delay, please consider submitting your comments in electronic form, (in ASCII format, WordPerfect, or Microsoft Word) as part of or as an attachment to e-mail messages directed to the following e-mail box: firstname.lastname@example.org. However, if the comment contains any material for which confidential treatment is requested, it must be filed in paper form, and the first page of the document must be clearly labeled “Confidential.” 
All comments should additionally be submitted to: Office of Management and Budget, Attention: Desk Officer for the Federal Trade Commission. Comments should be submitted via facsimile to (202) 395-6974 because U.S. Postal Mail is subject to lengthy delays due to heightened security precautions.
FOR FURTHER INFORMATION CONTACT:
Requests for additional information or copies of the proposed information requirements should be sent to Elizabeth Hone, Attorney, Division of Marketing Practices, Bureau of Consumer Protection, FTC, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 326-3207.End Further Info End Preamble Start Supplemental Information
On October 30, 1998, the Commission published a Notice of Proposed Rulemaking (“NPRM”), 63 FR 58524, to amend its Pay-Per-Call Rule 16 CFR part 308. The Rule, which implements Titles II and III of the Telephone Disclosure and Dispute Resolution Act, 15 U.S.C. 5711-14, 5721-24, 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 NPRM, the Rule contains certain reporting and disclosure requirements that are subject to OMB review under the PRA. 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). Upon expiration of OMB's approval, the FTC again submitted these information collection requirements for an extension of the clearance (see 67 FR 77066, Dec. 16, 2002), including the proposed revisions of these requirements, which was granted through February 28, 2006. At this time, because the Commission has not yet adopted the proposed rule changes, the FTC is requesting an extension of the clearance for the Rule and the proposed rule changes through February 28, 2009.
As required by the PRA, the Commission's NPRM, 63 FR at 58556-57, invited public comment on the Rule's information collection requirements and proposed amendments prior to submission to OMB. The Commission received no comments directly responding to the Commission's specific PRA questions. However, the Commission received one comment, from US West, Inc., 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). The FTC staff is considering this comment and others (available on the FTC's Web site, http: //www.ftc.gov) in determining whether to recommend the adoption of some or all of the proposed amendments.
Pursuant to the OMB regulations that implement the PRA (5 CFR Part 1320), the FTC is providing this opportunity for public comment while seeking OMB approval to extend the existing paperwork clearance for the Rule. All comments should be filed as prescribed in the ADDRESSES section above, and must be received on or before March 24, 2006.
Brief description of the need for and proposed use of the information: The reporting and disclosure requirements are mandated by statute 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: telecommunications 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. In its submission in 2002, the FTC staff estimated that it would request information pursuant to the reporting requirement from no more than approximately 29 common carriers per year, and that the disclosure requirements would apply to 23,250 information vendors and 1646 billing entities. See 67 FR 77,066-68 (Dec. 16, 2002). In the present submission, the Start Printed Page 9130FTC staff is decreasing its burden estimates to account for changes in the industry since 2002.
Estimated annual reporting and disclosure burden: The total estimated annual hours burden of the information collection requirements of the Rule, including the proposed amendments, is 4,401,000 (rounded to the nearest thousand). This burden consists entirely of reporting and disclosure requirements; as explained earlier (n. 4), there are no recordkeeping requirements. As detailed below, the burden hour estimate for each reporting and disclosure requirement has been multiplied by a “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: $250/hour for professional (attorney) services; $20/hour for skilled clerical workers; $25/hour 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: The Rule provides that common carriers must make available to the Commission, upon written request, any records and financial information maintained by such carrier relating to the arrangements between the carrier and any vendor or service bureau. See proposed § 308.19(a); current § 308.6. FTC staff is reducing the estimated annual cost of this requirement by more than half because of the infrequency with which the Commission has sought the subject information from common carriers and because of a decrease in the use of pay-per-call services. Accordingly, the previous estimated hours burden for this reporting requirement (i.e., to provide certain information to the Commission upon request), 147 hours annually (based on 29 common carriers each spending 5 hours annually), is being reduced to 70 hours annually (based on 14 common carriers each spending 5 hours annually), at a blended wage rate of $73.50/hour (30 percent computer programming, 20 percent attorney services, 30 percent skilled clerical workers, 20 percent for management time) for a total annual cost of $5,145.
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. FTC staff estimates that the annual burden on the industry for these requirements is 84,084 hours. Due to a recent reduction in the use of pay-per-call services, this figure reflects a 35% reduction from the staff's 2002 estimate of 129,360 burden hours. The estimate reflects the burden on approximately 15,571 vendors who must make additional disclosures if the advertisement is directed to individuals under 18 (50 percent of the ads) or relates to certain pay-per-call services (30 percent of the ads). The total estimated annual cost of these burden hours is $6,054,048 using a blended wage rate of $72/hour (20 percent attorney services, 60 percent skilled clerical workers, and 20 percent for management time).
Two proposed amendments, §§ 308.4(a)(1)(iii)(B) and 308.6(b), would add 20,639 annual burden hours to the total, or a total annual cost of $1,486,008 using the $72/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 45,864 advertised pay-per-call services would need to contain such a disclosure, thereby accounting for 9,173 burden hours at an annual cost of $660,456. 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 11,466 burden hours, assuming this requirement applies to 25 percent of advertised pay-per-call services, or an annual cost of $825,552.
(2) Preamble. The Rule's existing preamble disclosure requirement, set forth in § 308.9, imposes an estimated burden of 10 hours annually per service, for an annual burden of 458,640 burden hours based on 45,864 advertised pay-per-call services. The cost associated with these burden hours is $33,022,080, using a blended wage rate of $72/hour (i.e., similar to the blended rate used for advertising disclosures). As explained in the NPRM, the estimated burden of a proposed amendment requiring additional disclosures, § 308.9(a)(2)(iii)(B), is one additional hour for approximately 30 percent of the advertised pay-per-call services, or an estimated 13,759 burden hours at $72/hour, for a total annual cost of $990,648.
(3) Telephone-billed charges in billing statements. This requirement is currently set forth in § 308.5(j) of the Rule, which the Commission has proposed to redesignate and incorporate into § 308.18, as amended. The blended rate used to calculate the cost of these disclosures is $61.75/hour (15 percent attorney services, 40 percent skilled clerical workers, 25 percent computer programming, and 20 percent for management time). The estimated annual burden of this disclosure requirement is 23,990 hours (i.e., 10 percent of 19,992 vendors making spot checks at 12 hours per spot check), with an annual cost of $1,481,382.50. As explained in the NPRM, no additional burden is anticipated from any proposed 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 $51/hour (40 percent computer programming, 10 percent attorney services, 30 percent skilled clerical workers, and 20 percent for management time). The estimated Start Printed Page 9131hour burden for the annual notice component of this requirement is 7,000 burden hours (based on 1,400 billing entities taking 5 hours to review, revise and provide disclosures annually), or a total cost of $357,000. An additional 2,499,000 burden hours would be associated with specific notices in those cases where a customer reports a billing error (i.e., 5 percent of approximately 49,980,000 calls), or $127,449,000 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 44,625 hours or an annual cost of $2,275,875 (44,625 audiotext services spending one burden hour each). The additional burden hours for proposed amendments to require certain new disclosures in connection with billing dispute resolution, § 308.20(n)(2) and § 308.20(n)(4), would entail 1,249,500 hours for an annual cost of $63,724,500 (5 percent of approximately 49,980,000 calls require responses to billing errors; 30 minutes of time per call required to comply with both disclosure requirements).Start Signature
1. The FTC is seeking an extension of approval for the Rule's existing requirements and for the proposed amendments in advance of their adoption.Back to Citation
2. Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission's General Counsel, consistent with applicable law and the public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).Back to Citation
3. 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.” In its NPRM, the Commission refers to the Rule as the “Trade Regulation Rule Concerning Pay-Per-Call Services and Other Telephone-Billed Purchases” and in this document it will be referred to as the “Pay-Per-Call Rule.”Back to Citation
4. Neither the Rule nor the proposed amendments contain any recordkeeping requirements that would be subject to the PRA.Back to Citation
5. Since 2002, the number of registered 900 numbers has decreased by approximately 35%. Accordingly, the FTC staff reduced its estimate of the number of affected information vendors by 35%. The staff reduced its estimate of the number of affected billing entities by only 15%, however, because (1) billing statement disclosures are used for all telephone-billed purchases and not exclusively pay-per-call services and (2) because of a recent increase in the direct billing of such services. The staff reduced its estimate of affected common carriers by more than half because of the 35% decrease in pay-per-call services as well as the infrequency with which the FTC has sought the subject information from common carriers in the past. The FTC seeks public comment or data on these estimates.Back to Citation
6. The PRA discussion in the NPRM erroneously referred to this provision as “308.7(b).” See 63 FR at 58556.Back to Citation
[FR Doc. 06-1649 Filed 2-21-06; 8:45 am]
BILLING CODE 6750-01-P