[Federal Register Volume 64, Number 240 (Wednesday, December 15, 1999)]
[Notices]
[Pages 70031-70033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32448]


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FEDERAL TRADE COMMISSION


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

AGENCY: Federal Trade Commission (FTC).

ACTION: Notice.

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SUMMARY: The FTC is submitting the information collection requirements 
of its Pay-Per-Call Rule, including certain proposed amendments, to the 
Office of

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Management and Budget (OMB) for review and clearance under the 
Paperwork Reduction Act.

DATES: Comments must be submitted on or before January 14, 2000.

ADDRESSES: Send comments regarding the burden estimate, or any other 
aspect of the information collection, including suggestions for 
reducing the burden, to Edward Clarke, Senior Economist, Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
New Executive Office Building, Room 10202, Washington, DC 20503 and 
also to the Secretary, Federal Trade Commission, room H-159, 600 
Pennsylvania Avenue, NW, Washington, DC 20580. All submissions should 
be captioned ``Pay-Per-Call Rule'' and be identified as responding to 
this notice.

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 Adam Cohn, (202) 326-3411, or Marianne Schwanke, (202) 326-
3165, Attorneys, Division of Marketing Practices, Bureau of Consumer 
Protection, FTC, 600 Pennsylvania Avenue, NW, Washington, DC 20580. 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, 
www.ftc.gov.

SUPPLEMENTARY INFORMATION: On October 30, 1998, 63 FR 58524, the 
Commission published a notice of proposed rulemaking 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 common carrier toll charges). 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\ OMB earlier approved the current information collection 
requirements under control number 3084-0102, which expires December 31, 
1999. Pursuant to the PRA, the Commission is seeking renewed OMB 
approval for these requirements, including approval of the proposed 
amendments, until December 31, 2002.
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    \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.''
    \2\ Neither the Rule nor the proposed amendments contain any 
recordkeeping requirements that would be subject to the PRA.
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    As required by the PRA, the Commission's notice of proposed 
rulemaking, 63 FR at 58556-57, invited public comment on the rule's 
information collection requirements and proposed amendments before 
their submission to OMB for approval. 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 Sec. 308.20(m)(1). 
This comment and others (available on the FTC's web site, 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 amendments being submitted 
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), information providers (vendors) offering 
one or more pay-per-call services or programs, and billing entities. 
The Commission has 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. As explained in its notice of proposed rulemaking, the 
Commission, in estimating burden hours, increased its estimates by 12 
percent in order to account for industry growth in information vendors 
and/or pay-per-call services since OMB last approved the Rule's 
information collection requirements.
    Estimated annual reporting and recordkeeping burden: The total 
estimated annual hours burden is 3,630,060 hours for the current 
information collection requirements of the Rule and 1,500,400 
additional burden hours for the proposed amendments,\3\ or a total of 
5,130,460 burden hours. This burden consists entirely of reporting and 
disclosure requirements; the Rule does not impose any independent 
recordkeeping requirements. As noted above, the burden figures for the 
Rule's information collection requirements reflect an estimated 12 
percent industry growth since OMB's previous approval of the 
requirements. The burden hour estimate for each requirement (i.e., 
reporting or disclosure) was then 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

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calculations were based on the following skill categories and average 
wage rates: $65/hour for professional (attorney) services; $15/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.
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    \3\ This figure was erroneously stated as ``1,499,200'' in the 
Commission's notice of proposed rulemaking.
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    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 Sec. 308.6 of the Rule, 
to be amended and redesignated Sec. 308.19(a). The estimated hours 
burden for this reporting requirement (i.e., to provide certain 
information to the Commission upon request) is 140 hours annually 
(based on 25 common carriers each spending 5 hours annually plus 12 
percent) at an average wage rate of $65/hour (100 percent of each hour 
for attorney services) or a total annual cost of $9100.

Disclosure Requirements

    (1) Advertising. The advertising disclosure requirements of the 
current Rule would be consolidated into Secs. 308.3, 308.4 and 308.7 of 
the Rule, as amended. The current estimated annual burden on the 
industry is 123,200 hours. As explained in the Commission's notice of 
proposed rulemaking, 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, which was rounded up to 110,000 and then 
increased to 123,200 hours to reflect 12 percent estimated industry 
growth. The total estimated annual cost of these burden hours is 
$4,743,200, using a blended wage rate of $38.50/hour (40 percent 
attorney services, 50 percent skilled clerical workers, and 10 percent 
for management time).
    Two proposed amendments, Secs. 308.4(a)(1)(iii)(B) and 308.6(b), 
would add 30,240 annual burden hours to the total, or a total annual 
cost of $1,164,240, using the blended wage rate of $38.50/hour 
explained 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 67,200 advertised pay-per-call services (i.e., 
after the 12 percent increase) would need to contain such a disclosure, 
thereby accounting for 13,440 burden hours,\4\ at an annual cost of 
$517,440. 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, was estimated at 16,800 burden 
hours, assuming this requirement applies to 25 percent of advertised 
pay-per-call services, or an annual cost of $646,800.
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    \4\ This figure was erroneously stated as ``12,240'' in the 
Commission's notice of proposed rulemaking.
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    (2) Preamble. The Rule's existing preamble disclosure requirement, 
set forth in Sec. 308.9, imposes an estimated burden of 10 hours 
annually, for an annual burden of 672,000 burden hours based on 67,200 
advertised pay-per-call services. The cost associated with these burden 
hours is $25,872,000, using a blended wage rate of $38.50/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, 
Sec. 308.4(a)(2)(iii)(B), is one additional hour for approximately 30 
percent of the advertised pay-per-call services, or an estimated 20,160 
hours, for a total annual cost of $776,160.
    (3) Telephone-billed charges in billing statements. This 
requirement is currently set forth in Sec. 308.5(j) of the Rule, which 
the Commission proposes to redesignate and incorporate into 
Sec. 308.18, as amended. The blended rate used to calculate the cost of 
these disclosures was $45.50/hour (50 percent attorney services, 20 
percent skilled clerical workers, 20 percent computer programming, and 
10 percent for management time). The estimated annual burden of this 
disclosure requirement was 26,880 hours (i.e., 10 percent of 20,000 
vendors making spot checks at 12 hours per spot check, or 24,000 burden 
hours, plus 12 percent), so the annual cost would be $1,223,040 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 Sec. 308.7(c), to be 
redesignated Sec. 308.20, as amended. The blended rate used for these 
disclosures was $32.50/hour (40 percent computer programming, 20 
percent attorney services, 30 percent skilled clerical workers, and 10 
percent for management time). As explained in the notice of proposed 
rulemaking, the estimated hour burden for the annual notice component 
of this requirement is 7,840 burden hours (based on 1,400 billing 
entities taking 4 hours to review, revise and provide disclosures 
annually, plus 12 percent), or a total cost of $254,800. An additional 
2,800,000 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 12 percent, requiring one hour 
per billing error), or $91,000,000 annually. The additional burden 
hours for proposed amendments to Sec. 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 50,000 hours or an annual cost of $1,625,000. The 
additional burden hours for proposed amendments to require certain new 
disclosures in connection with billing dispute resolution, 
Sec. 308.18(n)(2) and Sec. 308.18(n)(4), would entail 1,400,000 hours 
for an annual cost of $45,500,000.
Debra A. Valentine,
General Counsel.
[FR Doc. 99-32448 Filed 12-14-99; 8:45 am]
BILLING CODE 6705-01-M