[Federal Register Volume 66, Number 30 (Tuesday, February 13, 2001)]
[Notices]
[Pages 10011-10013]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3609]


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FEDERAL TRADE COMMISSION

DEPARTMENT OF COMMERCE

National Telecommunications and Information Administration


Request for Comment and Notice of Public Workshop: Electronic 
Signatures in Global and National Commerce Act

AGENCIES: Federal Trade Commission, and the National Telecommunications 
and Information Administration, Department of Commerce.

ACTION: Notice requesting public comment and academic papers and 
announcing public workshop.

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SUMMARY: Section 105(b) of the Electronic Signatures in Global and 
National Commerce Act (``ESIGN'' or ``the Act''), Public Law 106-229, 
114 Stat. 464 (2000), requires the Federal Trade Commission (``FTC'' or 
``the Commission'') and the Secretary of Commerce to study and report 
to Congress on the benefits and burdens of requiring consumer consent 
to receive information electronically pursuant to 
Sec. 101(c)(1)(C)(ii). In connection with preparing this report, the 
FTC and the National Telecommunications and Information Administration 
(``NTIA'') seek public comment and academic papers and plan to hold a 
public workshop to inform this study.

DATES: Written comments and papers are requested to be submitted on or 
before March 16, 2001. The workshop will be held on April 3, 2001, from 
8:30 a.m. until 5:00 p.m., at the Federal Trade Commission, 600 
Pennsylvania Avenue, NW., Washington, DC 20580.

ADDRESSES: Six hard copies of each written comment or paper should be 
submitted to: Secretary, Federal Trade Commission, Room H-159, 600 
Pennsylvania Ave., NW., Washington, DC 20580. An additional copy of 
written comments should be sent to: Sallianne Fortunato, National 
Telecommunications and Information Administration, Room 4716, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230. 
Alternatively, comments and papers may be submitted to the following 
email addresses: ``[email protected]'' and ``[email protected].'' The content of any comments or papers submitted 
by email should be organized in sequentially numbered paragraphs. All 
submissions should be captioned ``ESIGN Study-Comment P004102.''
    To enable prompt review and accessibility to the public, written 
comments and papers also should be submitted to the FTC, if possible, 
in electronic form, on a 3\1/2\ inch computer disk, with a label 
stating the name of the person or entity submitting the comment and the 
name and version of the word processing program used to create the 
document. Programs based on DOS or Windows are preferred. Files from 
other operating systems should be submitted in ASCII text format. 
Individual members of the public filing comments need not submit 
multiple copies or comments in electronic form.
    Written comments and papers will be available for public inspection 
in accordance with the Freedom of Information Act, 5 U.S.C. 552, and 
Commission regulations, 16 CFR 4.9, on normal business days between the 
hours of 8:30 a.m. and 5:00 p.m. at Room 130, Federal Trade Commission, 
600 Pennsylvania Avenue, NW., Washington, DC 20580. The Commission will 
make this notice and, to the extent possible, all comments or papers 
received in electronic form in response to this notice available to the 
public through the Internet at the following addresses: http://www.ftc.gov and http://www.ntia.doc.gov.

FOR FURTHER INFORMATION: For questions about this request for comment 
and academic papers and notice of public workshop, contact: April 
Major, Attorney, Division of Marketing Practices, Bureau of Consumer 
Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, telephone 202-326-2972; Marianne Schwanke, 
Attorney, Division of Marketing Practices, Bureau of Consumer 
Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, telephone 202-326-3165; or Sallianne Fortunato, 
Telecom Policy Analyst, Office of Policy Analysis and Development, 
National Telecommunications and Information Administration (NTIA), Room 
4716, U.S. Department of Commerce, 14th Street and Constitution Avenue, 
NW., Washington, DC 20230, telephone 202-482-1880.

SUPPLEMENTARY INFORMATION:

I. Background: Electronic Signatures in Global and National 
Commerce Act

    On June 30, 2000, Congress enacted ESIGN to facilitate the use of 
electronic records and signatures in interstate or foreign commerce and 
to remove uncertainty about the validity of contracts entered into 
electronically. Under the Act, businesses that are required to provide 
or make available information to consumers in writing may provide 
consumers with that information using electronic records only if the 
consumer affirmatively consents in a manner that reasonably 
demonstrates the consumer's ability to access the electronic record. 
The Act requires the Secretary of Commerce and the Federal Trade 
Commission to study the burdens and benefits of this specific consent 
requirement on consumers and electronic commerce and submit a report to 
Congress by June 30, 2001.

II. Statutory Language Requiring a Report to Congress

    The statutory language requiring the Secretary of Commerce and the 
Federal Trade Commission to submit a report to Congress regarding the 
benefits and burdens of requiring consumer consent to electronic 
transactions is found in Sec. 105 (b) of ESIGN and is set forth below.

Sec. 105. Studies

* * * * *
    (b) Study of Electronic Consent.--Within 12 months after the 
date of the enactment of this Act, the Secretary of Commerce and the 
Federal Trade Commission shall submit a report to the Congress 
evaluating any benefits provided to consumers by the procedure 
required by section 101(c)(1)(C)(ii); any burdens imposed on 
electronic commerce by that provision; whether the benefits outweigh 
the burdens; whether the absence of the procedure required by 
section 101(c)(1)(C)(ii) would increase the incidence of fraud 
directed against consumers; and suggesting any revisions to the 
provision deemed appropriate by the Secretary and the Commission. In 
conducting this evaluation, the Secretary and the Commission shall 
solicit comment from the general public, consumer representatives, 
and electronic commerce businesses.

    The language of Sec. 105(b) specifically limits its scope to 
Sec. 101(c)(1)(C)(ii) which reads:

Sec. 101(c)  Consumer Disclosures

    (1) Consent to Electronic Records.--Notwithstanding subsection 
(a), if a statute, regulation, or other rule of law requires that 
information relating to a transaction or transactions in or 
affecting interstate or foreign commerce be provided or made 
available to a consumer in writing, the use of an electronic record 
to provide or make available (whichever is required) such 
information satisfies the requirement that such information be in 
writing if:
* * * * *
    (C) the consumer--
* * * * *

[[Page 10012]]

    (ii) consents electronically, or confirms his or her consent 
electronically, in a manner that reasonably demonstrates that the 
consumer can access information in the electronic form that will be 
used to provide the information that is the subject of the consent.
* * * * *

    In summary, if a statute, regulation, or other rule of law requires 
information relating to a transaction to be provided or made available 
to a consumer in writing, Sec. 101(c) allows this information to be 
provided or made available electronically only if certain consumer 
protection conditions are met. Section 101(c)(1)(C)(ii) is one such 
condition and provides that the consumer must consent electronically or 
confirm his or her consent electronically, in a manner that reasonably 
demonstrates the consumer's ability to access the information.
    Under Sec. 105(b), the Federal Trade Commission and the Secretary 
of Commerce are tasked with submitting to Congress a report that 
evaluates five aspects of Sec. 101(c)(1)(C)(ii). First, we must assess 
the benefits to consumers of the procedures required by 
Sec. 101(c)(1)(C)(ii). Second, we are to identify any burdens imposed 
by these procedures. Third, we must balance the benefits and burdens 
and discuss whether the benefits outweigh the burdens. Fourth, we are 
to consider whether the absence of the consent procedure would increase 
consumer fraud. Finally, we are to suggest improvements or changes to 
the statutory language that we deem appropriate.

III. Invitation To Comment

    The FTC and NTIA request that interested parties, including 
industry members, electronic commerce businesses, consumer 
representatives, law enforcement, regulatory agencies, and academics, 
submit written comments on any issue of fact, law, or policy that may 
inform the study of the procedure required by Sec. 101(c)(1)(C)(ii). We 
invite comment on ESIGN generally to inform our examination of the 
narrower issues associated with the consumer consent procedure found in 
Sec. 101(c)(1)(C)(ii). Please provide copies of any studies, surveys, 
research, or other empirical data referenced in responses. The 
questions set forth below are intended only as examples of the issues 
relevant to our examination. Commenters are invited to discuss any 
relevant issue, regardless of whether it is identified below.

General Issues

    1. How does the requirement of section 101(c)(1)(C)(ii) of the 
ESIGN Act, that businesses allow consumers an opportunity to provide 
consumer consent or confirmation of consent electronically prior to 
providing consumers electronic versions of information, affect 
electronic commerce? How will electronic commerce be affected in the 
future by this requirement?
    2. What statutory changes, if any, should be made to the ESIGN Act 
to assist businesses and consumers in domestic and/or international 
business markets in implementing and adapting to the consumer consent 
and consent confirmation provisions under section 101(c)(1)(C)(ii) of 
the Act?
    3. What, if any, are the benefits and burdens to consumers and 
electronic commerce resulting from the affirmative consent provisions 
in the statute? Do any such benefits outweigh any burdens?
    4. What, if any, improvements or changes should Congress make to 
the statutory language of section 101(c)(1)(C)(ii)?
    5. Are there any additional issues that should be considered during 
this study?

Business Issues

    6. If your business provides information electronically to 
consumers that is required by law to be in writing, do you request that 
consumers provide electronic consent or confirm their consent before 
the electronic information is transmitted?
    7. Describe in detail the method used to obtain electronic consumer 
consent.
    8. If you allow consumers to provide electronic consent to receive 
legally-required information electronically, please explain whether the 
electronic consent practice of your business is a result of section 
101(c)(1)(C)(ii) of the ESIGN Act. Explain any other legal basis for 
this practice.
    9. For what types of transactions do you seek electronic consumer 
consent or confirmation prior to sending information electronically 
that is required by law to be sent to consumers in writing?
    10. Provide an estimate of the percentage of business transactions 
you conduct per month that requires the production of legally-required 
information to consumers in written form.
    11. Does your business incur additional costs directly related to 
providing customers with the option of electronically consenting to or 
confirming the consent to receive information electronically, whether 
or not you provide the information pursuant to section 
101(c)(1)(C)(ii)?
    12. Are there burdens associated with providing information 
electronically to consumers that is required by law to be provided to 
them in written form? Are there burdens associated with allowing 
consumers to provide electronic consent or confirmation of consent 
prior to receiving the electronic information from your business 
pursuant to section 101(c)(1)(C)(ii)?
    13. Explain any economies or benefits to your business resulting 
from the distribution of information electronically to consumers (e.g. 
storage, administrative processing), whether or not the information is 
provided pursuant to section 101(c)(1)(C)(ii). Are there economies or 
benefits related to allowing customers to provide electronic consent or 
confirmation of consent prior to receiving electronic information as 
required by ESIGN?
    14. Do the benefits of providing electronic versions of information 
that is legally required to be provided in writing outweigh the burdens 
of allowing consumers an opportunity to provide electronic consent or 
confirmation of consent in order to receive the information?
    15. Describe any feedback you have received from consumers or 
employees regarding the electronic consumer consent or confirmation 
procedures your business employs, also specifying whether the 
procedures are those required by ESIGN or were in place prior to ESIGN.
    16. Describe the methods your business uses to verify:
    A. That a consumer's consent or confirmation demonstrates the 
consumer's ability to access the requested information; and
    B. That the electronic consents and confirmations are provided by 
the customers entitled to and intended to receive the electronic 
information.
    17. What method, if any, in addition to the consent procedure in 
section 101(c)(1)(C)(ii) of the ESIGN Act could be employed to prevent 
consumer fraud? Would consumer fraud increase in the absence of the 
consent procedure of section 101(c)(1)(C)(ii)?
    18. With regard to international business transactions, explain 
whether your company requests electronic consumer consent or consent 
confirmation prior to sending information electronically that is 
required to be provided to the consumer in written form. If so, explain 
if the method has had positive or negative consequences in 
international commerce.

[[Page 10013]]

    19. If your business does not provide consumers the opportunity to 
receive information electronically by sending an electronic consent or 
consent confirmation, explain why your business does not provide this 
opportunity. Discuss any implementation problems.

Consumer Issues

    20. As a consumer, how often do you conduct electronic transactions 
in which you request information electronically or agree to receive 
legally-required information electronically?
    21. Have you obtained information electronically that was required 
by law to be provided to you in writing? If so, did the company or 
business provide an opportunity for you to provide electronic consent 
or confirm your consent before sending an electronic version of the 
information to you?
    22. For an electronic transaction that provided an opportunity for 
you to submit electronic consent or consent confirmation before you 
received the information electronically, describe the effect of the 
process on you as a consumer. Were you made aware of any legal 
requirements regarding your options to receive the information in a 
different manner, such as on paper? If so, were you made aware of the 
legal requirements before you consented or confirmed your consent to 
receive the information in an electronic format?
    23. As a consumer, what are the benefits, if any, of receiving 
electronic versions of information required by law to be provided in 
written form?
    24. Explain whether the benefits of receiving electronic versions 
of information outweigh any burdens associated with providing 
electronic consent or consent confirmation prior to receiving the 
information.

Technology Issues

    25. Are software programs that enable consumers to provide 
electronic consent or consent confirmation to companies readily 
available? Describe.
    26. What technology or methods are available that would enable 
companies to verify that electronic consent or consent confirmation is 
transmitted by the specific persons entitled to receive electronic 
information?
    27. Please explain whether additional technology is necessary to 
accomplish either the electronic consumer consent or company 
verification methods discussed in Questions 25 and 26, above.
    28. Does the development of newer technologies impact the 
implementation of the consumer consent and consent confirmation 
provisions of section 101(c)(1)(C)(ii) of the ESIGN Act? If so, how.

IV. Public Workshop

    Staff of the FTC and NTIA will conduct a public workshop to discuss 
issues raised by the comments received in response to this notice. 
Notification of interest in participating in the public workshop should 
be submitted in writing, separately from comments, to April Major, 
Division of Marketing Practices, Federal Trade Commission, 600 
Pennsylvania Avenue, NW., Washington, DC 20580, or to Sallianne 
Fortunato, Telecom Policy Analyst, Office of Policy Analysis and 
Development, National Telecommunications and Information Administration 
(NTIA), Room 4716, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230. We will select a 
limited number of parties from among those who submit comments to 
represent the significant interests affected by the issues raised in 
the notice. These parties will participate in an open discussion of the 
issues, including asking and answering questions based on their 
respective comments. In addition, the workshop will be open to the 
general public. The discussion will be transcribed and the 
transcription placed on the public record. The FTC and NTIA will 
consider the views and suggestions made during the workshop, in 
conjunction with the written and email comments, in formulating its 
report to Congress.
    Parties will be selected on the basis of the following criteria:
    1. The party submits a comment during the comment period.
    2. During the comment period the party notifies FTC or NTIA of its 
interest in participating in the workshop.
    3. The party's participation would promote a balance of interests 
being represented at the workshop.
    4. The party's participation would promote the consideration and 
discussion of a variety of issues raised in this notice.
    5. The party has expertise in activities affected by the issues 
raised in this notice.
    6. The number of parties selected will not be so large as to 
inhibit effective discussion among them.
    7. The party agrees to review the comments of all of the other 
workshop participants prior to the workshop.
    The workshop will be held on April 3, 2001, from 8:30 a.m. until 
5:00 p.m., at the FTC, 600 Pennsylvania Ave, NW., Washington, DC. Prior 
to that date, parties selected will be provided with copies of the 
comments from all other participants selected to participate in the 
workshop.

Public Participation

    The workshop will be open to the public and is physically 
accessible to people with disabilities. To facilitate entry to the 
Federal Trade Commission building, please have a photo identification 
available and/or a U.S. Government building pass, if applicable. Any 
member of the public wishing to attend and requiring special services, 
such as sign language interpretation or other ancillary aids, should 
contact Sallianne Fortunato at least three (3) days prior to the 
meeting via the contact information provided above.

Donald S. Clark,
Secretary, Federal Trade Commission.

Kathy D. Smith,
Chief Counsel, National Telecommunications and Information 
Administration.
[FR Doc. 01-3609 Filed 2-12-01; 8:45 am]
BILLING CODE 6750-01-U