[Federal Register Volume 69, Number 146 (Friday, July 30, 2004)]
[Rules and Regulations]
[Pages 45580-45586]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17330]


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FEDERAL TRADE COMMISSION

16 CFR Part 310

RIN 3084-0098


Telemarketing Sales Rule Fees

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (the ``Commission'' or ``FTC'') 
is issuing this final rule to amend the FTC's Telemarketing Sales Rule 
(``TSR'') by revising the fees charged to entities accessing the 
National Do Not Call Registry.

EFFECTIVE DATE: This rule will become effective September 1, 2004.

ADDRESSES: Requests for copies of this Final Fee Rule should be sent 
to: Public Reference Branch, Federal Trade Commission, Room 130, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. The complete public 
record of this proceeding is also available at that address, and on the 
Internet at: http://www.ftc.gov/bcp/rulemaking/tsr/tsrrulemaking/index.htm.

FOR FURTHER INFORMATION CONTACT: David M. Torok, Staff Attorney, (202) 
326-3075, Division of Marketing Practices, Bureau of Consumer 
Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Background

    On December 18, 2002, the Commission issued final amendments to the 
Telemarketing Sales Rule, which, inter alia, established the National 
Do

[[Page 45581]]

Not Call Registry, permitting consumers to register, via either a toll-
free telephone number or the Internet, their preference not to receive 
certain telemarketing calls. 68 FR 4580 (Jan. 29, 2003) (``Amended 
TSR''). Under the Amended TSR, most telemarketers are required to 
refrain from calling consumers who have placed their numbers on the 
registry. 16 CFR 310.4(b)(1)(iii)(B). Telemarketers must periodically 
access the registry to remove from their telemarketing lists the 
telephone numbers of those consumers who have registered. 16 CFR 
310.4(b)(3)(iv).\1\
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    \1\ The Commission recently amended the TSR to require 
telemarketers to access the national registry at least once every 31 
days, effective January 1, 2005. See 69 FR 16368 (Mar. 29, 2004).
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    Shortly after issuance of the Amended TSR, Congress passed The Do-
Not-Call Implementation Act, Pub. L. No. 108-10 (2003) (``the 
Implementation Act''). The Implementation Act gave the Commission the 
specific authority to ``promulgate regulations establishing fees 
sufficient to implement and enforce the provisions relating to the 
``do-not-call'' registry of the [TSR] * * * No amounts shall be 
collected as fees pursuant to this section for such fiscal years except 
to the extent provided in advance in appropriations Acts. Such amounts 
shall be available * * * to offset the costs of activities and services 
related to the implementation and enforcement of the [TSR], and other 
activities resulting from such implementation and enforcement.'' Id. at 
Sec.  2.
    On July 29, 2003, pursuant to the Implementation Act and the 
Consolidated Appropriations Resolution of 2003, Pub. L. No. 108-7 
(2003), the Commission issued a Final Rule further amending the TSR to 
impose fees on entities accessing the National Do Not Call Registry. 68 
FR 45134 (July 31, 2003) (``the Original Fee Rule''). Those fees were 
based on the FTC's best estimate of the number of entities that would 
be required to pay for access to the national registry, and the need to 
raise $18.1 million in Fiscal Year 2003 to cover the costs associated 
with the implementation and enforcement of the ``do-not-call'' 
provisions of the Amended TSR. The Commission determined that the fee 
structure would be based on the number of different area codes of data 
that an entity wished to access annually. The Original Fee Rule 
established an annual fee of $25 for each area code of data requested 
from the national registry, with the first five area codes of data 
provided at no cost. The maximum annual fee was capped at $7,375 for 
entities accessing 300 area codes of data or more. Id. at 45141.
    In the Consolidated Appropriations Act of 2004, Pub. L. No. 108-199 
(Jan. 23, 2004) (``the 2004 Appropriations Act''), Congress permitted 
the FTC to collect offsetting fees in Fiscal Year 2004 to implement and 
enforce the TSR. Id. at Division B, Title V. Pursuant to the 2004 
Appropriations Act and the Implementation Act, as well as the 
Telemarketing Fraud and Abuse Prevention Act, 15 U.S.C. 6101-08 (``the 
Telemarketing Act''), the FTC issued a Notice of Proposed Rulemaking to 
amend the fees charged to entities accessing the National Do Not Call 
Registry, 69 FR 23701 (April 30, 2004) (``the Revised Fee NPRM'').
    In the Revised Fee NPRM, the Commission proposed revising the fees 
for access to the national registry in order to raise $18 million to 
offset costs the agency expects to incur in this Fiscal Year for 
purposes related to implementing and enforcing the ``do-not-call'' 
provisions of the Amended TSR. Based on the number of entities that had 
accessed the registry through early March 2004, the Commission proposed 
revising the fees to charge $45 annually for each area code of data 
requested from the national registry, with the first five area codes of 
data provided at no cost.\2\ The maximum annual fee would have been 
capped at $12,375 for entities accessing 280 area codes of data or 
more. Id. at 23703.
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    \2\ Once an entity requested access to area codes of data in the 
national registry, it could access those area codes as often as it 
deemed appropriate for one year (defined as its ``annual period''). 
If, during the course of its annual period, an entity needed to 
access data from more area codes than those initially selected, it 
would be required to pay for access to those additional area codes. 
For purposes of these additional payments, the annual period was 
divided into two semi-annual periods of six months each. Under the 
proposed rule, obtaining additional data from the registry during 
the first semi-annual, six month period would have required a 
payment of $45 for each new area code. During the second semi-
annual, six month period, the charge for obtaining data from each 
new area code requested during that six-month period would have been 
$25. These payments for additional data would provide the entity 
access to those additional area codes of data for the remainder of 
its annual term.
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    The Commission received 25 comments in response to the Revised Fee 
NPRM.\3\ Based on its review of the record in this proceeding, and on 
its law enforcement experience in this area, the Commission hereby 
promulgates this Final Rule revising the fees for entities accessing 
the National Do Not Call Registry.
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    \3\ A list of the commenters in this proceeding, and the 
acronyms used to identify each, is attached hereto as an appendix. 
Comments submitted in response to the Revised Fee NPRM will be cited 
in this Notice as ``[Acronym of Commenter] at [page number].''
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II. Imposition of the Fees and Use of the Funds

    A number of commenters disapprove of raising the fees charged for 
access to the National Do Not Call Registry. Generally, these 
commenters state that the proposed increase in fees will be 
``economically devastating'' to the teleservices industry and will 
``inevitably lead to the loss of telemarketing jobs.''\4\ ATA claims 
that the proposed fee increase ``serves only to underscore and 
exacerbate constitutional and systematic failings in the DNCR fee 
structure.''\5\ On the other hand, other commenters cite the registry 
as being for ``the greater good of all consumers'' whose costs are 
appropriately borne by the telemarketing industry.\6\
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    \4\ DMA at 2; MPA at 1. See also TCIM at 2; ATA at 1-3; IMC at 
1-2; AIA at 1.
    \5\ ATA at 1-3. See also IMC at 1-2. ATA raised similar 
arguments regarding the constitutionality of the imposition of fees 
on entities accessing the national registry in its litigation 
against the FTC, and the Tenth Circuit rejected those arguments. ATA 
is seeking review of the Tenth Circuit's decision before the Supreme 
Court. Mainstream Mktg. Servs., Inc., et al. v. FTC, 358 F.3d 1228 
(10th Cir. 2004), petition for cert. filed, 72 U.S.L.W. 3726 (U.S. 
May 14, 2004) (No. 03-1552). Any response to those arguments is most 
appropriately left to that forum.
    \6\ See, e.g., RH at 1; DF at 1.
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    Some of the commenters that disapprove of the proposed increase in 
fees state that, prior to any fee increase, ``the FTC must investigate 
whether there are entities that should be paying for access but fail to 
do so.''\7\ Since the opening of the national registry, the agency has 
monitored industry payment for access. We have found no evidence of 
widespread noncompliance with the Original Fee Rule. Moreover, no 
commenter has provided any concrete information about such alleged 
noncompliance, only speculation.\8\ As

[[Page 45582]]

part of our law enforcement activities, we welcome any specific 
information that can be provided in this regard. The FTC is conducting 
non-public investigations of consumer complaints for violations of the 
fee provision as well as violations of the do-not-call provisions of 
the TSR, and will file law enforcement actions addressing such 
violations when appropriate.\9\
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    \7\ ATA at 5. See also MRS at 1; TB at 1; MM at 1; NMHC at 2.
    \8\ For example, according to NMHC, an FTC press release 
indicates that through March 2004, 52,000 entities accessed all or 
part of the registry, but as of December 2003, the agency received 
``do-not-call'' complaints about 55,000 specific companies. NMHC 
suggests this showed ``widespread noncompliance'' with the existing 
regulations. NMHC at 2. Such speculation is based on a 
misunderstanding of the FTC statistics cited. Complaining consumers 
are reporting company names in a multitude of variations. As a 
hypothetical example, one complaint may be against a company called 
``Calls 2 You,'' while another complaint may be against the same 
company but with the name entered as ``Calls To You.'' Thus, each 
specific name may not represent a different company engaged in 
telemarketing. Moreover, not all entities about which consumers 
complained are non-compliant. For example, companies calling only 
consumers with whom they have an established business relationship 
or entities exempt from the TSR are not required to pay for access.
    \9\ See, e.g., FTC v. National Consumer Council, et al., No. 
SACV04-0474 CJC (JXJx) (C.D. Cal., filed Apr. 23, 2004); FTC v. Debt 
Mgmt. Found. Servs., Inc., No. 8:04CV-1674-T-17NSS (N.D. Fla., filed 
July 20, 2004).
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    Other commenters suggest that the FTC should use fines obtained 
from enforcement actions to offset some of the fee increase.\10\ They 
correctly note that the FTC can obtain civil penalties for violations 
of the TSR, including violations of the ``do-not-call'' provisions, of 
up to $11,000 per violation.\11\ By statute, however, the FTC cannot 
keep any civil penalties it obtains in such law enforcement actions. 
Instead, all such civil penalties are deposited into the General Fund 
of the United States Treasury.\12\ Accordingly, by law, any fines 
obtained from enforcement actions cannot be used to offset fees.
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    \10\ See, e.g., IMC at 4; MH at 3; ARDA at 4.
    \11\ See 16 CFR 1.98.
    \12\ See Miscellaneous Receipts Act, 31 U.S.C. 3302.
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    A few commenters assert that the FTC has provided insufficient 
information about how funds have been expended to date.\13\ MPA 
inquires why enforcement costs should be so high, given the 
``exceptional compliance'' by the industry with the ``do-not-call'' 
rules.\14\ DMA claims that the fees should be used only to cover the 
costs to operate the registry. ``Combating fraud should be funded from 
the FTC appropriation just as it is for other consumer protection 
programs.''\15\ ATA argues that ``the fees are not used solely to 
maintain and enforce the [do-not-call] rules.''\16\
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    \13\ See, e.g., NAR at 4-5; ARDA at 2; MPA at 1.
    \14\ MPA at 1.
    \15\ DMA at 3.
    \16\ ATA at 3.
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    Contrary to these commenters' assertions, the Commission has 
provided significant information about the basis for the fees it has 
raised to date, and has consistently and specifically limited the 
amount of fees to be collected to those needed to implement and enforce 
the ``do-not-call'' provisions of the Amended TSR. As stated in the 
Revised Fee NPRM, the amount of fees collected pursuant to this revised 
rule is intended to offset costs in the following three areas. First, 
funds are collected to operate the national registry. This operation 
includes items such as handling consumer registration and complaints, 
telemarketer access to the registry, state access to the registry, and 
the management and operation of law enforcement access to appropriate 
information. Second, funds are collected for law enforcement efforts, 
including identifying targets, coordinating domestic and international 
initiatives, challenging alleged violators, and consumer and business 
education efforts. These law enforcement efforts are a significant 
component of the total costs, given the large number of ongoing 
investigations currently being conducted by the agency, and the 
substantial effort necessary to thoroughly complete such 
investigations. Third, funds are collected to cover agency 
infrastructure and administration costs associated with the operation 
and enforcement of the registry, including information technology 
structural supports and distributed mission overhead support costs for 
staff and non-personnel expenses such as office space, utilities, and 
supplies.\17\ ATA correctly notes that some of the costs set forth 
above will be used for improvements to the Consumer Sentinel system, 
which is a repository for all fraud-related complaints received by the 
FTC, and includes ``do-not-call'' related complaints. However, ATA and 
DMA are incorrect in stating that the fees raised are used to fund the 
FTC's fraud-related program.\18\ To the contrary, the fees raised from 
entities accessing the national registry have been and will be used for 
enhancements to the agency's information technology infrastructure, 
enhancements that are essential to enable Consumer Sentinel to 
accommodate the ``do-not-call'' program. These enhancements include 
sorting, maintaining, and providing sufficient capacity for law 
enforcement agents from across the country to access the over 400,000 
``do-not-call'' complaints received to date, as well as the more than 
62 million registered telephone numbers and the tens of thousands of 
records regarding companies that access the registry.\19\
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    \17\ NAR claims that much of the agency's current costs exceed 
the agency's statutory authority, since they are related to 
``maintenance'' of the registry and not ``implementation.'' NAR at 
4. This semantic argument fails to take into account that the 
generally understood definition of ``implementation''--to carry out 
or accomplish a mission--includes maintenance.
    \18\ See ATA at 3; DMA at 3.
    \19\ See ``National Do Not Call Registry Celebrates One Year 
Anniversary,'' FTC Press Release dated June 24, 2004 (http://www.ftc.gov/opa/2004/06/dncanny.htm). In contrast, in 2003, the 
Consumer Sentinel system received over 500,000 complaints related to 
the FTC's entire mission, including complaints related to Identity 
Theft. See ``FTC Releases Top Ten Consumer Complaint Categories in 
2003,'' FTC Press Release dated January 22, 2004 (http://www.ftc.gov/opa/2004/01/top10.htm).
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    In conclusion, the Commission adheres to its statutory authority in 
raising fees that are necessary to implement and enforce the ``do-not-
call'' provisions of the Amended TSR. In an effort to raise the $18 
million to offset costs the agency expects to incur in this Fiscal Year 
for those purposes, the Commission concludes that an increase in fees 
is necessary, as discussed below.

III. Small Business and Exempt Entity Access

    In the Revised Fee NPRM, the Commission proposed to continue 
allowing all entities accessing the national registry to obtain the 
first five area codes of data for free. The Commission proposed 
allowing such free access ``to limit the burden placed on small 
businesses that only require access to a small portion of the national 
registry.'' 69 FR at 23703. The Commission noted that such a fee 
structure was consistent with the mandate of the Regulatory Flexibility 
Act, 5 U.S.C. 601, which requires that to the extent, if any, a rule is 
expected to have a significant economic impact on a substantial number 
of small entities, agencies should consider regulatory alternatives to 
minimize such impact. As stated in the Revised Fee NPRM, ``the 
Commission continues to believe that providing access to five area 
codes of data for free is an appropriate compromise between the goals 
of equitably and adequately funding the national registry, on one hand, 
and providing appropriate relief for small businesses, on the other.'' 
Id. In addition, the Commission noted that requiring a large number of 
entities to pay a small fee for access to five or fewer area codes from 
the national registry would place a significant burden on the registry, 
requiring the expenditure of even more resources to handle properly the 
additional payment transactions. Id.
    A number of commenters oppose providing the first five area codes 
of data at no charge. Many noted that only 11 percent of all entities 
accessing the national registry currently pay the entire cost of the 
registry.\20\ They maintain that

[[Page 45583]]

larger companies should not be ``obligated to subsidize'' the operation 
of smaller companies or exempt organizations.\21\ ``These [smaller] 
organizations derive benefit from access to the National Do-Not-Call 
Registry. They should be obligated either to pay the full access fee or 
some portion of the fee.'' \22\ According to TCIM, those entities that 
do not pay ``place an unfair burden on the 6,000 who do pay for access. 
We believe that everyone who makes outbound telemarketing calls ought 
to pay their fair share of the registry's costs.'' \23\ Others state 
that a nominal charge for five area codes is not overly burdensome to 
any business, regardless of size. ``The fact that there will be 
additional resources required on the part of the Registry to process 
additional payments, does not outweigh the need for equitable 
distribution of cost across all entities.'' \24\
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    \20\ See, e.g., Comerica at 1; ATA at 4.
    \21\ See, e.g., SLIC at 1; Comerica at 1; Cendant at 3-4; ATA at 
4; TCIM at 2.
    \22\ SLIC at 1.
    \23\ TCIM at 2.
    \24\ Comerica at 1.
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    In order to address what they consider to be the inequitable 
treatment of the current fee structure, some commenters suggest 
reducing the number of area codes provided for free. For example, IMC 
suggests reducing the number of free area codes from five to three. 
This would ``reduce the unfair impact of the current fee structure'' 
while not causing ``a financial hardship for the majority of companies 
whose costs would increase by less than $100 per year.'' \25\ Others 
suggest that there should be a ``modest $100 flat fee on all entities 
who desire to subscribe to five area codes or fewer.'' \26\ Finally, 
Cendant suggests that small businesses should pay some nominal fee, 
established under a sliding scale formula.\27\
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    \25\ IMC at 4. See also MH at 1 (reduce the number of free area 
codes to four); ARDA at 3 (reduce the number of free area codes to 2 
or 1).
    \26\ ATA at 5. See also ARDA at 3. ATA maintains that this would 
give a $25 ``savings'' to those accessing five area codes.
    \27\ Cendant at 3-4. ``In establishing the fee formula, the 
Commission should consider financial factors of the entity such as 
income or average annual receipts, or the Commission could consider 
the average number of employees per business unit accessing the DNC 
list. * * * The sliding fee scale used by the Commission should be 
designed so that a business will not have to pay more than 2% of 
their income for access.'' Id.
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    On the other hand, many commenters support providing the first five 
area codes of data at no charge. They suggest that this will help 
``encourage entrepreneurship in America.'' \28\ NADA states: ``Removing 
the exemption would have a significant impact on our members and many 
other small and medium size businesses. * * * These businesses already 
have assumed significant training, systems and other compliance costs 
associated with the National DNC rules. * * * Imposing a fee for 
accessing the first five area codes would impose a disproportionate 
burden on small entities that already are struggling to comply with the 
ever-expanding list of federal requirements affecting their 
businesses.'' \29\ Similarly, NAR cites information from the Small 
Business Administration's Office of Advocacy which shows that ``very 
small firms with fewer than 20 employees * * * spend 60 percent more 
per employee than larger firms to comply with federal regulations.'' 
\30\
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    \28\ RH at 1. See also ACB at 1-2; NMHC at 1-2; NNA at 1-2; NADA 
at 1-2.
    \29\ NADA at 1-2. See also NNA at 1-2; CAR at 1.
    \30\ NAR at 4.
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    Further, a number of commenters suggest that the Commission should 
do more to protect small businesses. CAR maintains that the fee 
increase will detrimentally affect small businesses located in highly 
populated areas ``with more than five area codes within a one hundred 
mile radius of one another.''\31\ NNA suggests that the FTC should 
consider expanding the small business exemption, especially to cover 
small businesses that do business nationwide, such as niche 
publications, by allowing free access to any entity that meets the 
``general definitions for small businesses codified under the Small 
Business Act and implemented by the Small Business Administration 
through its Office of Size Standards.''\32\
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    \31\ CAR at 1 (citing New York City, New Jersey, Los Angeles, 
San Francisco, Pennsylvania, Washington, DC).
    \32\ NNA at 2. See also NAR at 1-2 (``many small businesses * * 
* often have the need to call a limited number of consumers who 
reside in a variety of states and/or area codes beyond their primary 
five area code local calling region'').
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    After considering all of the comments submitted in this proceeding, 
the Commission still believes it is important to provide small 
businesses with some relief from the burdens of complying with the 
``do-not-call'' provisions of the Amended TSR. While the Commission 
recognizes that only a small percentage of the total number of entities 
accessing the national registry pay for that access, these figures also 
illustrate the large number of small businesses that would be adversely 
affected by a change in the number of area codes provided at no cost. 
In fact, over 57,000 entities have accessed five or fewer area codes of 
the national registry. Most of these entities--realtors, car dealers, 
community-based newspapers, and other small businesses--are precisely 
the types of businesses which the Regulatory Flexibility Act requires 
the agency to consider when adopting regulations. Moreover, the 
Commission finds significant the information submitted by commenters 
showing the disproportionate impact compliance with the ``do-not-call'' 
regulations may have on small businesses. In order to lessen that 
impact, the Commission believes that relief to such businesses is 
appropriate.
    The Commission does not believe that the suggested alternatives for 
providing such relief would provide the same level of assistance to 
small businesses without imposing undue burdens that the current system 
does not impose. For example, the suggestion to charge a flat $100 fee 
on all entities accessing five area codes or less would result in tens 
of thousands of entities that access from one to two area codes of data 
to be required to pay more than the per area code amount paid by all 
other entities. In effect, this proposal would have an even greater 
disproportionate impact on those entities than if they were charged for 
each area code accessed. The suggestion to base the fees on the actual 
size of the entity requesting access would require all entities to 
submit sensitive data concerning annual income, number of employees, or 
other similar factors. It also would require the agency to develop an 
entirely new system to gather that information, maintain it in a proper 
manner, and investigate those claims to ensure proper compliance. As 
the Commission has previously stated, such a system ``would present 
greater administrative, technical, and legal costs and complexities 
than the Commission's current exemptive proposal, which does not 
require any proof or verification of that status.''\33\ As a result, 
the Commission continues to believe that the most appropriate and 
effective method to provide relief to small businesses is to provide 
access to a certain number of area codes at no charge.
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    \33\ 68 FR 16238, 16243 n.53.
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    As for the exact number of area codes to provide at no charge, the 
comments presented have failed to persuade the Commission that any 
change in the current level of five free area codes is necessary or 
appropriate. The Commission recognizes that reducing the number of free 
area codes would result in slightly lower fees charged to the entities 
that must pay for access. At the same time, however, that would also 
result in increased costs to thousands of small businesses. On the 
other hand, the Commission also recognizes that some small businesses 
located in large

[[Page 45584]]

metropolitan areas may need to make calls to more than five area codes. 
However, increasing the number of area codes provided at no charge 
would decrease the pool of paying entities, and further increase the 
fees paid by those entities. As a result, the Commission believes it 
has struck the appropriate balance, in an effort to relieve some of the 
burden faced by small businesses while still achieving the goal of 
covering the necessary costs to implement and enforce the ``do-not-
call'' provisions of the Amended TSR, in allowing all entities to gain 
access to the first five area codes of data from the national registry 
at no cost.
    In the Revised Fee NPRM, the Commission also proposed to continue 
allowing ``exempt'' organizations to obtain free access to the national 
registry.\34\ The Commission stated its belief that any exempt entity, 
voluntarily accessing the national registry to avoid calling consumers 
who do not wish to receive telemarketing calls, should not be charged 
for such access. Charging such entities access fees, when they are 
under no legal obligation to comply with the ``do-not-call'' 
requirements of the TSR, may make them less likely to obtain access to 
the national registry in the future, resulting in an increase in 
unwanted calls to consumers. 69 FR at 23703.
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    \34\ The Original Fee Rule stated that ``there shall be no 
charge to any person engaging in or causing others to engage in 
outbound telephone calls to consumers and who is accessing the 
National Do Not Call Registry without being required to under this 
Rule, 47 CFR 64.1200, or any other federal law.'' 16 CFR 310.8(c). 
Such ``exempt'' organizations include entities that engage in 
outbound telephone calls to consumers to induce charitable 
contributions, for political fund raising, or to conduct surveys. 
They also include entities engaged solely in calls to persons with 
whom they have an established business relationship or from whom 
they have obtained express written agreement to call, pursuant to 16 
CFR 310.4(b)(1)(iii)(B)(i) or (ii), and who do not access the 
national registry for any other purpose.
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    A number of commenters support continuing allowing ``exempt'' 
entities to access the national registry at no charge, for the reasons 
set forth in the Revised Fee NPRM.\35\ Others oppose the provision, 
claiming that such free access exacerbates the inequities in the 
system.\36\ In fact, ATA claims that ``the costs of a regulation that 
seeks to address a problem should be paid by all entities that advance 
its objectives.''\37\
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    \35\ See, e.g., Comerica at 1; MH at 1-2; ACB at 2.
    \36\ See, e.g., SLIC at 1.
    \37\ ATA at 6-7.
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    The Commission continues to believe that if it charged exempt 
entities for access to the national registry, many if not most of those 
entities would no longer seek access. As a result, registered consumers 
would receive an increase in the number of unwanted telephone 
solicitations. Exempt entities are, by definition, under no legal 
obligation to access the national registry. Many are outside the 
jurisdiction of the FTC. They are voluntarily accessing the registry in 
order to avoid calling consumers whose telephone numbers are 
registered. They should be encouraged to continue doing so, rather than 
be charged a fee for their efforts. The Commission will continue to 
allow all such exempt entities to access the national registry at no 
charge, after they have completed the required certification.

IV. Calculation of the Revised Fees

    As previously stated, the Commission proposed in the Revised Fee 
NPRM to increase the fees charged to access the National Do Not Call 
Registry to $45 annually for each area code of data requested, with the 
maximum annual fee capped at $12,375 for entities accessing 280 area 
codes of data or more.\38\ The Commission based this proposal on the 
total number of entities that accessed the registry from its opening 
through early March, 2004.\39\ The Commission noted, however, that it 
would adjust the final revised fee to reflect the actual number of 
entities that had accessed the registry at the time of issuance of the 
Final Rule.\40\
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    \38\ The Commission proposed reducing the maximum number of area 
codes for which an entity would be charged from 300 to 280 to more 
closely correlate the charges for access to the registry with the 
number of active area codes in use in the country today. As the 
Commission stated in the Revised Fee NPRM, there are approximately 
317 available area codes in the nation, virtually all of which 
include registered telephone numbers. However, approximately 35 of 
those area codes are not currently in active service, but are 
reserved for use in the future. (Telephone numbers from those area 
codes that have been added to the national registry include numbers 
to be activated in the future and numbers that are currently active 
for billing or other purposes.) As a result, there are currently 
approximately 280 active area codes, with additional area codes 
scheduled to become active in the future. See 69 FR at 23703 n.6. 
The Commission received no comments on this revision, and continues 
to believe that this change is appropriate.
    \39\ At that time, over 52,000 entities had accessed all or part 
of the information in the registry. More than 45,500 of those 
entities had accessed five or fewer area codes of data at no charge. 
Approximately 900 ``exempt'' entities had accessed the registry, 
also at no charge. As a result, approximately 6,000 entities had 
paid for access to the registry, with slightly over 1,100 entities 
paying for access to the entire registry. See 69 FR at 23702.
    \40\ Id. at 23703 n.5.
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    From early March through June 1, 2004, a significant number of 
entities accessed the national registry for the first time. As of June 
1, 2004, over 65,000 entities had accessed the national registry. More 
than 57,000 of those entities had accessed five or fewer area codes of 
data at no charge, and 1,100 ``exempt'' entities also accessed the 
registry at no charge. Thus, more than 7,100 entities have paid for 
access to the registry, with over 1,200 entities paying for access to 
the entire registry.
    Based on these revised figures, and the need to raise $18 million 
of fees to offset costs it expects to incur in this Fiscal Year for 
implementing and enforcing the ``do-not-call'' provisions of the 
Amended TSR, the Commission is revising the fees to be charged for 
access to the national registry as follows. The fee charged for each 
area code of data will be $40 per year, with the first five area codes 
provided to each entity at no charge. ``Exempt'' organizations, as 
described in footnote 33, above, will continue to be allowed access to 
the national registry at no charge. The maximum amount that will be 
charged any single entity will be $11,000, which will be charged to any 
entity accessing 280 area codes of data or more. The fee charged to 
entities requesting access to additional area codes of data during the 
second six months of their annual period will be $20.
    MPA suggests that to ``lessen the negative impact on the 
telemarketing industry, the Commission should consider phasing in any 
increase in fees over a period of time.'' \41\ In order to raise the 
appropriate fees to cover costs that are incurred in Fiscal Year 2004, 
which ends September 30, 2004, this suggestion is not possible. As a 
result, the Commission establishes September 1, 2004, as the effective 
date for this rule change, which is approximately one year following 
the opening of the national registry to entities engaged in 
telemarketing. Thus, the revised fees will be charged to all entities 
that renew their subscription account number after their first year's 
subscription has expired.
---------------------------------------------------------------------------

    \41\ MPA at 1.
---------------------------------------------------------------------------

    Beginning in August 2004, organizations accessing their accounts 
and the National Do Not Call Registry data at 
www.telemarketing.donotcall.gov will find additional information on the 
web site regarding the new fees and the expiration of their 
subscriptions. The web site will display the actual expiration date of 
an account upon login and will begin accepting subscription renewals on 
September 1, 2004. However, an organization may not renew its 
subscription any sooner than 30 days prior to its expiration. If an 
organization does not access the web site until after its subscription 
has

[[Page 45585]]

expired, it will be prompted to renew the subscription at that time.

V. Paperwork Reduction Act

    The proposed revised fee provision does not create any new 
recordkeeping, reporting, or third-party disclosure requirements. 
However, the Commission now has data based on the operation of the 
National Do Not Call Registry indicating that an estimated 65,000 
entities will access the registry each year. The Commission's staff has 
increased its estimate of the total paperwork burden accordingly, and 
has notified the Office of Management and Budget (``OMB'') of the 
resulting minor change in burden hours to the existing clearance, OMB 
Control No. 3084-0097.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601 et seq., 
requires the agency to provide an Initial Regulatory Flexibility 
Analysis (``IRFA'') with its proposed rule, and a Final Regulatory 
Flexibility Analysis (``FRFA'') with its final rule, unless the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities. As explained in the Revised Fee 
NPRM and this Statement, the Commission does not expect that its Final 
Amended Fee Rule will have the threshold impact on small entities. As 
discussed above, this Amended Rule specifically charges no fee for 
access to data included in the registry from one to five area codes. As 
a result, the Commission anticipates that many small businesses will be 
able to access the national registry without having to pay any annual 
fee. Thus, it is unlikely that there will be a significant burden on 
small businesses resulting from the adoption of the proposed revised 
fees. Nonetheless, the Commission published an IRFA with the Revised 
Fee NPRM, and is also publishing a FRFA with its Final Amended Fee Rule 
below, in the interest of further explaining its determination, even 
though the Commission continues to believe that it is not required to 
publish such analyses.

A. Reasons for Consideration of Agency Action

    The Amended Final Fee Rule has been considered and adopted pursuant 
to the requirements of the Implementation Act and the 2004 
Appropriations Act, which authorize the Commission to collect fees 
sufficient to implement and enforce the ``do-not-call'' provisions of 
the Amended TSR.

B. Statement of Objectives and Legal Basis

    As explained above, the objective of the Amended Final Fee Rule is 
to collect sufficient fees from entities that must access the National 
Do Not Call Registry. The legal authority for this Rule is the 2004 
Appropriations Act, the Implementation Act, and the Telemarketing Act.

C. Description of Small Entities to Which the Rule Will Apply

    The Small Business Administration has determined that 
``telemarketing bureaus'' with $6 million or less in annual receipts 
qualify as small businesses.\42\ Similar standards, i.e., $6 million or 
less in annual receipts, apply for many retail businesses that may be 
``sellers'' and subject to the revised fee provisions set forth in this 
Amended Final Rule. In addition, there may be other types of 
businesses, other than retail establishments, that would be ``sellers'' 
subject to this rule.
---------------------------------------------------------------------------

    \42\ See 13 CFR 121.201.
---------------------------------------------------------------------------

    As described in Section IV, above, to date more than 57,000 
entities have accessed five or fewer area codes of data from the 
national registry at no charge. While not all of these entities may 
qualify as small businesses, and some small businesses may be required 
to purchase access to more than five area codes of data, the Commission 
believes that this is the best estimate of the number of small entities 
that will be subject to this Amended Final Rule. In any event, as 
explained elsewhere in this Statement, the Commission believes that, to 
the extent the Amended Final Fee Rule has an economic impact on small 
business, the Commission has adopted an approach that minimizes that 
impact to ensure that it is not substantial, while fulfilling the legal 
mandate of the Implementation Act and 2004 Appropriations Act to ensure 
that the telemarketing industry supports the cost of the National Do 
Not Call Registry.

D. Projected Reporting, Recordkeeping and Other Compliance Requirements

    The information collection activities at issue in this Amended 
Final Rule consist principally of the requirement that firms, 
regardless of size, that access the national registry submit minimal 
identifying and payment information, which is necessary for the agency 
to collect the required fees. The cost impact of that requirement and 
the labor or professional expertise required for compliance with that 
requirement were discussed in Section V of the Revised Fee NPRM.\43\
---------------------------------------------------------------------------

    \43\ See 69 FR at 23704.
---------------------------------------------------------------------------

    As for compliance requirements, small and large entities subject to 
the Amended Fee Rule will pay the same fees to obtain access to the 
National Do Not Call Registry in order to reconcile their calling lists 
with the phone numbers maintained in the national registry. As noted 
earlier, however, compliance costs for small entities are not 
anticipated to have a significant impact on small entities, to the 
extent the Commission believes that compliance costs for those entities 
will be largely minimized by their ability to obtain data for up to 
five area codes at no charge.

E. Duplication With Other Federal Rules

    None.

F. Discussion of Significant Alternatives

    The Commission discussed the proposed alternatives in Section III, 
above.

List of Subjects in 16 CFR Part 310

    Telemarketing, Trade practices.

VII. Final Rule

0
Accordingly, for the reasons set forth above, the Commission hereby 
amends part 310 of title 16 of the Code of Federal Regulations as 
follows:

PART 310--TELEMARKETING SALES RULE

0
1. The authority citation for part 310 continues to read as follows:

    Authority: 15 U.S.C. 6101-6108.

0
2. Revise Sec.  310.8(c) and (d) to read as follows:


Sec.  310.8  Fee for access to the National Do Not Call Registry.

* * * * *
    (c) The annual fee, which must be paid by any person prior to 
obtaining access to the National Do Not Call Registry, is $40 per area 
code of data accessed, up to a maximum of $11,000; provided, however, 
that there shall be no charge for the first five area codes of data 
accessed by any person, and provided further, that there shall be no 
charge to any person engaging in or causing others to engage in 
outbound telephone calls to consumers and who is accessing the National 
Do Not Call Registry without being required under this Rule, 47 CFR 
64.1200, or any other federal law. Any person accessing the National Do 
Not Call Registry may not participate in any arrangement to share the 
cost of accessing the registry,

[[Page 45586]]

including any arrangement with any telemarketer or service provider to 
divide the costs to access the registry among various clients of that 
telemarketer or service provider.
    (d) After a person, either directly or through another person, pays 
the fees set forth in Sec.  310.8(c), the person will be provided a 
unique account number which will allow that person to access the 
registry data for the selected area codes at any time for twelve months 
following the first day of the month in which the person paid the fee 
(``the annual period''). To obtain access to additional area codes of 
data during the first six months of the annual period, the person must 
first pay $40 for each additional area code of data not initially 
selected. To obtain access to additional area codes of data during the 
second six months of the annual period, the person must first pay $20 
for each additional area code of data not initially selected. The 
payment of the additional fee will permit the person to access the 
additional area codes of data for the remainder of the annual period.
* * * * *

    By direction of the Commission.
Donald S. Clark,
Secretary.

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

Appendix--List of Acronyms for Commenters to the TSR Revised Fee Rule 
Proposal

------------------------------------------------------------------------
                 Commenter                             Acronym
------------------------------------------------------------------------
American Insurance Association.............  AIA
American Resort Development Association....  ARDA
American Teleservices Association..........  ATA
America's Community Bankers................  ACB
Bernard, Ted...............................  TB
California Association of Realtors.........  CAR
Cendant Corporation........................  Cendant
Comerica Inc...............................  Comerica
Direct Marketing Association, Inc..........  DMA
Fried, Dorigen.............................  DF
Hedke, Reasha..............................  RH
Heinemann, Mike............................  MH
Hughes, Roberta............................  RH2
Infocision Management Corporation, Inc.....  IMC
Magazine Publishers of America.............  MPA
Marrou, Marianne...........................  MM
Midwest Readers Service....................  MRS
National Association of Realtors...........  NAR
National Automobile Dealers Association....  NADA
National Multi Housing Council.............  NMHC
National Newspaper Association.............  NNA
ORC ProTel.................................  OPT
RELO.......................................  RELO
Stonebridge Life Insurance Company.........  SLIC
TCIM Services..............................  TCIM
------------------------------------------------------------------------

[FR Doc. 04-17330 Filed 7-29-04; 8:45 am]
BILLING CODE 6750-01-P