[Federal Register Volume 67, Number 241 (Monday, December 16, 2002)]
[Notices]
[Pages 77066-77068]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-31586]


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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 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 
[email protected]), and also to the Secretary, Federal Trade 
Commission, Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 
20580 (or [email protected], 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

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copying 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).

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.

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.
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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 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 Sec.  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\
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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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    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/

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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: This requirement is currently set forth in 
Sec.  308.6 of the Rule, to be amended and redesignated Sec.  
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 
Sec. Sec.  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, Sec. Sec.  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.
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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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    (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 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, 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 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 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 $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 Sec.  308.7(c), to be 
redesignated Sec.  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 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 
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, Sec.  308.18(n)(2) and Sec.  308.18(n)(4), would entail 
1,470,000 hours for an annual cost of $52,920,000.

    Dated: December 10, 2002.
William E. Kovacic,
General Counsel.
[FR Doc. 02-31586 Filed 12-13-02; 8:45 am]
BILLING CODE 6750-01-P