[Federal Register Volume 71, Number 35 (Wednesday, February 22, 2006)]
[Notices]
[Pages 9128-9131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-1649]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The FTC has submitted to the Office of Management and Budget 
(``OMB'') for review under the Paperwork Reduction Act, 44 U.S.C. 3501-
3520 (``PRA'') information collection requirements contained in its 
proposed revision of the Pay-Per-Call Rule (``Rule'').\1\ The FTC is 
seeking

[[Page 9129]]

public comments on the proposal to extend through December 31, 2009 the 
current PRA clearance. That clearance expires on February 28, 2006.
---------------------------------------------------------------------------

    \1\ The FTC is seeking an extension of approval for the Rule's 
existing requirements and for the proposed amendments in advance of 
their adoption.

---------------------------------------------------------------------------
DATES: Comments must be submitted on or before March 24, 2006.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Pay-Per-Call Rule: FTC File No. R611016'' to 
facilitate the organization of comments. A comment filed in paper form 
should include this reference both in the text and on the envelope and 
should be mailed or delivered, with two complete copies, to the 
following address: Federal Trade Commission, Room H 135 (Annex J), 600 
Pennsylvania Ave., NW., Washington, DC 20580. Because paper mail in the 
Washington area and at the Commission is subject to delay, please 
consider submitting your comments in electronic form, (in ASCII format, 
WordPerfect, or Microsoft Word) as part of or as an attachment to e-
mail messages directed to the following e-mail box: 
[email protected]. However, if the comment contains any material 
for which confidential treatment is requested, it must be filed in 
paper form, and the first page of the document must be clearly labeled 
``Confidential.'' \2\
---------------------------------------------------------------------------

    \2\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    All comments should additionally be submitted to: Office of 
Management and Budget, Attention: Desk Officer for the Federal Trade 
Commission. Comments should be submitted via facsimile to (202) 395-
6974 because U.S. Postal Mail is subject to lengthy delays due to 
heightened security precautions.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments will be 
considered by the Commission and will be available to the public on the 
FTC Web site, to the extent practicable, at http://www.ftc.gov. As a 
matter of discretion, the FTC makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC Web site. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed information requirements should be sent to 
Elizabeth Hone, Attorney, Division of Marketing Practices, Bureau of 
Consumer Protection, FTC, 600 Pennsylvania Avenue, NW., Washington, DC 
20580, (202) 326-3207.

SUPPLEMENTARY INFORMATION: On October 30, 1998, the Commission 
published a Notice of Proposed Rulemaking (``NPRM''), 63 FR 58524, to 
amend its Pay-Per-Call Rule 16 CFR part 308.\3\ The Rule, which 
implements Titles II and III of the Telephone Disclosure and Dispute 
Resolution Act, 15 U.S.C. 5711-14, 5721-24, requires the disclosure of 
cost and other information with regard to pay-per-call services and 
establishes dispute resolution procedures for telephone-billed 
purchases (i.e., charges for pay-per-call services or other charges 
appearing on a telephone bill other than telecommunications charges). 
As explained in the NPRM, the Rule contains certain reporting and 
disclosure requirements that are subject to OMB review under the 
PRA.\4\ Accordingly, the FTC submitted the Rule with proposed 
amendments to OMB (see 64 FR 70031, Dec. 15, 1999) for its approval, 
which was granted until December 31, 2002 (OMB control number 3084-
0102). Upon expiration of OMB's approval, the FTC again submitted these 
information collection requirements for an extension of the clearance 
(see 67 FR 77066, Dec. 16, 2002), including the proposed revisions of 
these requirements, which was granted through February 28, 2006. At 
this time, because the Commission has not yet adopted the proposed rule 
changes, the FTC is requesting an extension of the clearance for the 
Rule and the proposed rule changes through February 28, 2009.
---------------------------------------------------------------------------

    \3\ The Rule was originally promulgated as the ``Trade 
Regulation Rule Pursuant to the Telephone Disclosure and Dispute 
Resolution Act of 1992'' and was known as the ``900-Number Rule.'' 
In its NPRM, the Commission refers to the Rule as the ``Trade 
Regulation Rule Concerning Pay-Per-Call Services and Other 
Telephone-Billed Purchases'' and in this document it will be 
referred to as the ``Pay-Per-Call Rule.''
    \4\ Neither the Rule nor the proposed amendments contain any 
recordkeeping requirements that would be subject to the PRA.
---------------------------------------------------------------------------

    As required by the PRA, the Commission's NPRM, 63 FR at 58556-57, 
invited public comment on the Rule's information collection 
requirements and proposed amendments prior to submission to OMB. The 
Commission received no comments directly responding to the Commission's 
specific PRA questions. However, the Commission received one comment, 
from US West, Inc., stating that its current cost for making an annual 
disclosure of dispute resolution procedures under the Rule was $53,000 
and that this annual cost would increase to $819,000 if the disclosures 
were required with every billing cycle under a proposed amendment to 
Sec.  308.20(m)(1). The FTC staff is considering this comment and 
others (available on the FTC's Web site, http://www.ftc.gov) in 
determining whether to recommend the adoption of some or all of the 
proposed amendments.
    Pursuant to the OMB regulations that implement the PRA (5 CFR Part 
1320), the FTC is providing this opportunity for public comment while 
seeking OMB approval to extend the existing paperwork clearance for the 
Rule. All comments should be filed as prescribed in the ADDRESSES 
section above, and must be received on or before March 24, 2006.
    Brief description of the need for and proposed use of the 
information: The reporting and disclosure requirements are mandated by 
statute to help prevent unfair and deceptive acts and practices in the 
advertising and operation of pay-per-call services and in the 
collection of charges for telephone-billed purchases. The information 
obtained by the Commission pursuant to the reporting requirement is 
used for law enforcement purposes. The disclosure requirements ensure 
that consumers are adequately informed of the costs they can expect to 
incur in using a pay-per-call service, that they will not be liable for 
unauthorized non-toll charges on their telephone bills, and that they 
have certain dispute resolution rights and obligations with respect to 
such telephone-billed purchases.
    Likely respondents, including estimated number and proposed 
frequency of response: Respondents are: telecommunications common 
carriers (subject to the reporting requirement only, unless acting as a 
billing entity); information providers (vendors) offering one or more 
pay-per-call services or programs; and billing entities. In its 
submission in 2002, the FTC staff estimated that it would request 
information pursuant to the reporting requirement from no more than 
approximately 29 common carriers per year, and that the disclosure 
requirements would apply to 23,250 information vendors and 1646 billing 
entities. See 67 FR 77,066-68 (Dec. 16, 2002). In the present 
submission, the

[[Page 9130]]

FTC staff is decreasing its burden estimates to account for changes in 
the industry since 2002.\5\
---------------------------------------------------------------------------

    \5\ Since 2002, the number of registered 900 numbers has 
decreased by approximately 35%. Accordingly, the FTC staff reduced 
its estimate of the number of affected information vendors by 35%. 
The staff reduced its estimate of the number of affected billing 
entities by only 15%, however, because (1) billing statement 
disclosures are used for all telephone-billed purchases and not 
exclusively pay-per-call services and (2) because of a recent 
increase in the direct billing of such services. The staff reduced 
its estimate of affected common carriers by more than half because 
of the 35% decrease in pay-per-call services as well as the 
infrequency with which the FTC has sought the subject information 
from common carriers in the past. The FTC seeks public comment or 
data on these estimates.
---------------------------------------------------------------------------

    Estimated annual reporting and disclosure burden: The total 
estimated annual hours burden of the information collection 
requirements of the Rule, including the proposed amendments, is 
4,401,000 (rounded to the nearest thousand). This burden consists 
entirely of reporting and disclosure requirements; as explained earlier 
(n. 4), there are no recordkeeping requirements. As detailed below, the 
burden hour estimate for each reporting and disclosure requirement has 
been multiplied by a ``blended'' wage rate (expressed in dollars per 
hour), based on the particular skill mix needed to carry out that 
requirement, to determine the total annual cost of that requirement. 
The blended rate calculations are based on the following skill 
categories and average wage rates: $250/hour for professional 
(attorney) services; $20/hour for skilled clerical workers; $25/hour 
for computer programmers; and $50/hour for management time. Annual 
burden hour estimates (and the estimated total cost of those hours) 
have been provided below.
    The burden estimates do not contain a separate set of figures for 
other annual ``cost'' burdens, if any--i.e., (a) capital and start-up 
costs or (b) operation, maintenance and purchase of outside services 
not already reflected in the above burden hour estimates and associated 
annual costs. Capital or start-up costs are generally subsumed in 
activities otherwise undertaken in the ordinary course of business 
(e.g., business records from which only existing information must be 
reported to the Commission, pay-per-call advertisements or audiotexts 
to which cost or other disclosures are added, etc.). To the extent that 
entities incur operating or maintenance expenses, or purchase outside 
services to satisfy the Rule's requirements, staff believe those 
expenses are also included in (or, if contracted out, would be 
comparable to) the burden hours and estimated annual burden estimates 
provided below (where such expenses are labor-related), or are 
otherwise included in the ordinary cost of doing business (where the 
expenses are other than labor-related).
    Reporting requirement: The Rule provides that common carriers must 
make available to the Commission, upon written request, any records and 
financial information maintained by such carrier relating to the 
arrangements between the carrier and any vendor or service bureau. See 
proposed Sec.  308.19(a); current Sec.  308.6. FTC staff is reducing 
the estimated annual cost of this requirement by more than half because 
of the infrequency with which the Commission has sought the subject 
information from common carriers and because of a decrease in the use 
of pay-per-call services. Accordingly, the previous estimated hours 
burden for this reporting requirement (i.e., to provide certain 
information to the Commission upon request), 147 hours annually (based 
on 29 common carriers each spending 5 hours annually), is being reduced 
to 70 hours annually (based on 14 common carriers each spending 5 hours 
annually), at a blended wage rate of $73.50/hour (30 percent computer 
programming, 20 percent attorney services, 30 percent skilled clerical 
workers, 20 percent for management time) for a total annual cost of 
$5,145.
    Disclosure requirements: (1) Advertising. The advertising 
disclosure requirements of the current Rule would be consolidated into 
Sec. Sec.  308.3, 308.4 and 308.7 of the Rule, as amended. FTC staff 
estimates that the annual burden on the industry for these requirements 
is 84,084 hours. Due to a recent reduction in the use of pay-per-call 
services, this figure reflects a 35% reduction from the staff's 2002 
estimate of 129,360 burden hours. The estimate reflects the burden on 
approximately 15,571 vendors who must make additional disclosures if 
the advertisement is directed to individuals under 18 (50 percent of 
the ads) or relates to certain pay-per-call services (30 percent of the 
ads). The total estimated annual cost of these burden hours is 
$6,054,048 using a blended wage rate of $72/hour (20 percent attorney 
services, 60 percent skilled clerical workers, and 20 percent for 
management time).
    Two proposed amendments, Sec. Sec.  308.4(a)(1)(iii)(B) and 
308.6(b),\6\ would add 20,639 annual burden hours to the total, or a 
total annual cost of $1,486,008 using the $72/hour blended wage rate 
discussed above. The first of these amendments, requiring disclosures 
when a call is billed on a variable time rate basis, assumes that 20 
percent of the estimated 45,864 advertised pay-per-call services would 
need to contain such a disclosure, thereby accounting for 9,173 burden 
hours at an annual cost of $660,456. The burden associated with the 
second amendment, requiring an audio signal to indicate (i.e., 
disclose) the end of free time used to advertise certain pay-per-call 
services, is estimated at 11,466 burden hours, assuming this 
requirement applies to 25 percent of advertised pay-per-call services, 
or an annual cost of $825,552.
---------------------------------------------------------------------------

    \6\ The PRA discussion in the NPRM erroneously referred to this 
provision as ``308.7(b).'' See 63 FR at 58556.
---------------------------------------------------------------------------

    (2) Preamble. The Rule's existing preamble disclosure requirement, 
set forth in Sec.  308.9, imposes an estimated burden of 10 hours 
annually per service, for an annual burden of 458,640 burden hours 
based on 45,864 advertised pay-per-call services. The cost associated 
with these burden hours is $33,022,080, using a blended wage rate of 
$72/hour (i.e., similar to the blended rate used for advertising 
disclosures). As explained in the NPRM, the estimated burden of a 
proposed amendment requiring additional disclosures, Sec.  
308.9(a)(2)(iii)(B), is one additional hour for approximately 30 
percent of the advertised pay-per-call services, or an estimated 13,759 
burden hours at $72/hour, for a total annual cost of $990,648.
    (3) Telephone-billed charges in billing statements. This 
requirement is currently set forth in Sec.  308.5(j) of the Rule, which 
the Commission has proposed to redesignate and incorporate into Sec.  
308.18, as amended. The blended rate used to calculate the cost of 
these disclosures is $61.75/hour (15 percent attorney services, 40 
percent skilled clerical workers, 25 percent computer programming, and 
20 percent for management time). The estimated annual burden of this 
disclosure requirement is 23,990 hours (i.e., 10 percent of 19,992 
vendors making spot checks at 12 hours per spot check), with an annual 
cost of $1,481,382.50. As explained in the NPRM, no additional burden 
is anticipated from any proposed amendments of this requirement.
    (4) Dispute resolution procedures in billing statements. This 
disclosure requirement is currently set forth in Sec.  308.7(c), to be 
redesignated Sec.  308.20, as amended. The blended rate being used for 
these disclosures is $51/hour (40 percent computer programming, 10 
percent attorney services, 30 percent skilled clerical workers, and 20 
percent for management time). The estimated

[[Page 9131]]

hour burden for the annual notice component of this requirement is 
7,000 burden hours (based on 1,400 billing entities taking 5 hours to 
review, revise and provide disclosures annually), or a total cost of 
$357,000. An additional 2,499,000 burden hours would be associated with 
specific notices in those cases where a customer reports a billing 
error (i.e., 5 percent of approximately 49,980,000 calls), or 
$127,449,000 annually. The additional burden hours for proposed 
amendments to 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 
44,625 hours or an annual cost of $2,275,875 (44,625 audiotext services 
spending one burden hour each). The additional burden hours for 
proposed amendments to require certain new disclosures in connection 
with billing dispute resolution, Sec.  308.20(n)(2) and Sec.  
308.20(n)(4), would entail 1,249,500 hours for an annual cost of 
$63,724,500 (5 percent of approximately 49,980,000 calls require 
responses to billing errors; 30 minutes of time per call required to 
comply with both disclosure requirements).

William Blumenthal,
General Counsel.
[FR Doc. 06-1649 Filed 2-21-06; 8:45 am]
BILLING CODE 6750-01-P