[Federal Register Volume 71, Number 146 (Monday, July 31, 2006)]
[Rules and Regulations]
[Pages 43048-43054]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-12252]


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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 section 310.8 (``the Final Amended 
Fee Rule'') of the FTC's Telemarketing Sales Rule (``TSR'') by revising 
the fees charged to entities accessing the National Do Not Call 
Registry (``the Registry'').

DATES: Effective Date: Revised section 310.8 will become effective 
September 1, 2006.

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. Copies of 
this Final Fee Rule are also available on the Internet at: http://www.ftc.gov/bcp/rulemaking/tsr/tsrrulemaking/index.htm.

FOR FURTHER INFORMATION CONTACT: John A. Krebs, (202) 326-3747, 
Division of Planning & Information, Bureau of Consumer Protection, 
Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 
20580.

SUPPLEMENTARY INFORMATION: The amended rule increases the annual fee 
for access to the Registry for each area code of data to $62 per area 
code, or $31 per area code of data during the second six months of an 
entity's annual subscription period. The maximum amount that would be 
charged to any single entity for accessing 280 area codes of data or 
more is increased to $17,050. In addition, the amended rule retains the 
provisions regarding free access by ``exempt'' organizations, as well 
as free access to the first five area codes of data by all entities.

Statement of Basis And Purpose

I. Background

    On December 18, 2002, the Commission issued final amendments to the 
Telemarketing Sales Rule, which, inter alia, established the National 
Do 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 (``Amended TSR'').\1\ Under the 
Amended TSR, most telemarketers are required to refrain from calling 
consumers who have placed their numbers on the Registry.\2\ 
Telemarketers must periodically access the Registry to remove from 
their telemarketing lists the telephone numbers of those consumers who 
have registered.\3\
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    \1\ 68 FR 4580 (Jan. 29, 2003).
    \2\ 16 CFR 310.4(b)(1)(iii)(B).
    \3\ 16 CFR 310.4(b)(3)(iv). The Amended TSR requires 
telemarketers to access the 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 (``the Implementation Act'').\4\ 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.''\5\
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    \4\ Pub. L. 108-10, 117 Stat. 557 (2003).
    \5\ Id.
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    On July 29, 2003, pursuant to the Implementation Act, Telemarketing 
Fraud and Abuse Prevention Act (``the Telemarketing Act''),\6\ and the 
Consolidated Appropriations Resolution, 2003,\7\ the Commission issued 
a Final Rule further amending the TSR to impose fees on entities 
accessing the National Do Not Call Registry (``the Original Fee 
Rule'').\8\ 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 
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 Registry, with the first five area 
codes of data provided at no cost.\9\ The maximum annual fee was capped 
at $7,375 for entities accessing 300 area codes of data or more.\10\
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    \6\ 15 U.S.C. 6101-08.
    \7\ Pub. L. 108-7, 117 Stat. 11 (2003).
    \8\ 68 FR 45134 (July 31, 2003).
    \9\ Once an entity requested access to area codes of data in the 
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. Obtaining 
additional data from the Registry during the first semi-annual, six 
month period required a payment of $25 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 was $15. These payments would provide the entity access 
to those additional area codes of data for the remainder of its 
annual period.
    \10\ 68 FR at 45141.
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    On July 30, 2004, pursuant to the Implementation Act, the 
Telemarketing Act, and the Consolidated Appropriations Act, 2004,\11\ 
the Commission issued a revised Final Rule further amending the TSR and 
increasing fees on entities accessing the National Do Not Call Registry 
(``the 2004 Fee Rule'').\12\ Those fees were based on the FTC's 
experience through June 1, 2004, its best estimate of the number of 
entities that would be required to pay for access to the Registry, and 
the need to raise $18 million in Fiscal Year 2004 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 continue to be based on the number of different 
area codes of data that an entity wished to access annually. The

[[Page 43049]]

2004 Fee Rule established an annual fee of $40 for each area code of 
data requested from the Registry, with the first five area codes of 
data provided at no cost.\13\ The maximum annual fee was capped at 
$11,000 for entities accessing 280 area codes of data or more.\14\
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    \11\ Pub. L. 108-199, 118 Stat. 3 (2004).
    \12\ 69 FR 45580 (July 30, 2004).
    \13\ Id. at 45584. The 2004 Fee Rule had the same fee structure 
as the Original Fee Rule. However, fees were increased from $25 to 
$40 per area code for the annual period and from $15 to $20 per area 
code for the second six-month period.
    \14\ Id.
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    On July 27, 2005, pursuant to the Implementation Act, the 
Telemarketing Act, and the Consolidated Appropriations Act, 2005,\15\ 
the Commission issued a revised Final Rule further amending the TSR and 
increasing fees on entities accessing the National Do Not Call Registry 
(``the 2005 Fee Rule'').\16\ These fees were based on the FTC's 
experience through June 1, 2005, its best estimate of the number of 
entities that would be required to pay for access to the Registry, and 
the need to raise $21.9 million in Fiscal Year 2005 to cover the costs 
associated with the implementation and enforcement of the ``do-not-
call'' provisions of the Amended TSR. The Commission again 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 2005 Fee 
Rule established an annual fee of $56 for each area code of data 
requested from the Registry, with the first five area codes of data 
provided at no cost.\17\ The maximum annual fee was capped at $15,400 
for entities accessing 280 area codes of data or more.\18\
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    \15\ Pub. L. 108-447, 118 Stat. 2809 (2004).
    \16\ 70 FR 43273 (July 27, 2005).
    \17\ Id. at 43275. The 2005 Fee Rule had the same fee structure 
as the 2004 Fee Rule, except that the fees were increased from $40 
to $56 per area code for the annual period and from $20 to $28 per 
area code for the second six-month period.
    \18\ Id.
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    In the Science, State, Justice, Commerce, and Related Agencies 
Appropriations Act, 2006 (``the 2006 Appropriations Act''),\19\ 
Congress directed the FTC to collect offsetting fees in the amount of 
$23 million in Fiscal Year 2006 to implement and enforce the Amended 
TSR.\20\ Pursuant to the 2006 Appropriations Act and the Implementation 
Act, as well as the Telemarketing Act, the FTC issued a Notice of 
Proposed Rulemaking to amend the fees charged to entities accessing the 
Registry (``the 2006 Fee Rule NPR'').\21\
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    \19\ Pub. L. 109-108, 119 Stat. 2290 (2005).
    \20\ Id. at 2330.
    \21\ 71 FR 25512 (May 1, 2006).
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    In the 2006 Fee Rule NPR, the Commission proposed revising the fees 
for access to the Registry in order to raise $23 million to offset 
costs the FTC 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 the end of February 2006, the Commission proposed 
revising the fees to $62 annually and $31 during the second six months 
of an entity's annual subscription period for each area code of data 
requested from the Registry, with the first five area codes of data 
provided at no cost. As a consequence of the increase in the per-area-
code charge, the maximum annual fee would increase to $17,050 for 
entities accessing 280 area codes of data or more.\22\
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    \22\ Id. at 25514.
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    In the 2006 Fee Rule NPR, the Commission sought comment on the 
following issues relating to the proposed amendment:
    (1) Whether entities accessing the Registry should continue to 
obtain the first five area codes of data for free;\23\
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    \23\ Id. at 25514-5.
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    (2) Whether ``exempt'' organizations should continue to be provided 
with free access to the Registry;\24\
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    \24\ Id. at 25515. The 2006 Fee Rule NPR, the 2005 Fee Rule, the 
2004 Fee Rule, and 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. See 71 FR at 25514; 70 FR 
at 43275; 69 FR at 45585-6; and 68 FR at 45144.
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    (3) The number and type of small businesses that may be subject to 
the revised fees;\25\ and
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    \25\ 71 FR at 25515.
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    (4) Whether there are any significant alternatives that would 
further minimize the impact of the rule on small entities, consistent 
with the objectives of the Telemarketing Act, the 2006 Appropriations 
Act, the Implementation Act, and the Regulatory Flexibility Act.\26\
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    \26\ Id.
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    In response to the 2006 Fee Rule NPR, the Commission received 
twelve comments.\27\ The amended rule, comments, and the basis for the 
Commission's decision on the various recommendations are analyzed in 
detail below.
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    \27\ 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 2006 Fee Rule NPR will be 
cited in this Notice as ``[Acronym of Commenter] at [page number].''
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II. The Amended Rule

    Based on the 2006 Appropriations Act, the Implementation Act, and 
the Telemarketing Act, as well as its review of the record in this 
proceeding, and on its law enforcement experience in this area, the 
Commission has decided to modify the fees required under the TSR Fee 
Rule. Under the amended rule provisions adopted herein, the annual fee 
for accessing the Registry will increase from $56 per area code to $62 
per area code, and from a maximum of $15,400 to $17,050 for access to 
280 area codes of data or more. The fee for accessing area codes during 
the second six months of an entity's annual subscription period also 
will increase, from $28 to $31. Further, the Commission has decided to 
continue to provide all organizations with free access to the first 
five area codes of data, and has decided to continue to provide 
``exempt'' organizations with free access to the Registry, as well.

III. Discussion of Comments

    The Commission received twelve comments in response to the 2006 Fee 
Rule NPR. Of the twelve comments received, one comment was from a 
consumer who wanted to be added to the Registry.\28\ Two comments were 
from consumers who supported the increase in fees.\29\ The remaining 
nine comments were submitted by a mix of business and industry 
commenters, all of whom were opposed to the increase in fees, but who 
were divided on whether the Commission should eliminate the number of 
free area codes provided. In addressing the specific issues posed by 
the Commission, the commenters submitted only limited data or 
information that differed from that submitted in connection with 
earlier fee rulemakings. Instead, the comments primarily relied on 
information provided by the FTC as part of its 2006 Fee Rule NPR, and/
or in previous rulemaking proceedings. Similarly, the primary arguments 
submitted in response to the 2006 Fee Rule NPR's proposal to raise fees 
have also been considered previously by the Commission.
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    \28\ See JJ at 1.
    \29\ See BAS at 1, and S at 1.
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    While most of the comments submitted represented views previously 
considered, some of the comments raised new points. For example, one 
commenter stated that the prohibition

[[Page 43050]]

against entities cooperating and sharing the expense of subscribing to 
the Registry creates a burden for small businesses.\30\ Still other 
commenters raised issues beyond the scope of this Notice, such as the 
impact of the ``do-not-call'' provisions of the Amended TSR on local 
economies, and criticism of the technical operation of the 
Registry.\31\
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    \30\ See AN at 1. The Commission addressed the issue of entities 
sharing the cost of accessing the Registry in the Original Fee Rule. 
68 FR at 45136-7. The Commission agreed with the FCC that allowing 
entities to share the information obtained from the Registry would 
threaten the financial support for maintaining the database. Id. at 
45136. Moreover, as noted below, the Commission believes that 
providing all entities with access to five free area codes of data 
limits the burden placed on small businesses.
    \31\ See SW at 1, DMA at 6. According to one commenter, 
telemarketers reported to the city of Branson, Missouri that because 
of the no-call lists fewer room nights and show tickets were 
purchased in 2005 than in 2002. SW at 1. On the technical front, 
another commenter stated that the Commission should remove telephone 
numbers from the Registry as soon as they are dropped or abandoned. 
DMA at 6. The commenter argued that when a telephone number is 
dropped or abandoned, it should be removed from the Registry 
promptly so that the new subscriber may receive telemarketing calls. 
Id. According to the commenter, this is the time when new 
subscribers are most interested in receiving calls regarding, for 
example, home alarm systems, home insurance, lawn care, and 
newspaper delivery. Id.
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    The major themes that emerged from the record are summarized below.

A. Five Free Area Codes of Data

    In the 2006 Fee Rule NPR, the Commission proposed, at least for the 
next annual period, to continue allowing all entities accessing the 
Registry to obtain the first five area codes of data for free.\32\ The 
Commission proposed to continue allowing such free access in the 
Original Fee Rule, the 2004 Fee Rule, and the 2005 Fee Rule, ``to limit 
the burden placed on small businesses that only require access to a 
small portion of the national registry.'' \33\ The Commission noted, as 
it has in the past, that such a fee structure was consistent with the 
mandate of the Regulatory Flexibility Act,\34\ 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 prior fee rules, ``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.'' \35\ In addition, requiring over 
57,800 entities to pay a small fee for access to five or fewer area 
codes of data from the Registry would place a significant burden on the 
Registry, requiring the expenditure of even more resources to handle 
properly that additional traffic.\36\
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    \32\ 71 FR at 25514.
    \33\ See 68 FR at 45140; 69 FR at 45582; and 70 FR at 43275.
    \34\ 5 U.S.C. 601.
    \35\ See 68 FR at 45141; 69 FR at 45584; and 70 FR at 43275-6.
    \36\ From May 2005 to June 2006, over 57,800 entities accessed 
five or fewer area codes of data.
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    The Commission received four comments that addressed the issue of 
five free area codes of data. Three of the commenters agreed that 
defining a small business as one that accesses five area codes or less 
of data excludes certain small businesses that either operate in a 
large metropolitan area or whose business is not limited to a small 
geographic market area.\37\ As one commenter put it:
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    \37\ NAR at 1-2, ATA at 6-7, and DMA at 5.

    [S]mall 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 calling region * * * It is 
common for these small businesses to find themselves forced to pay 
for access to a number of additional area codes in order to research 
a single phone number in each area code. At the same time, a large 
company who relies heavily on telemarketing, and makes thousands of 
calls to consumers but limits these calls to within the five-code 
area, does not have to pay a fee.\38\
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    \38\ NAR at 1-2.

Another commenter pointed out that a large, publicly traded home 
product retailer in Colorado may access ``the entire state of Colorado 
in preparation for a telemarketing campaign at no charge, while a truly 
small business operating in New York City may incur charges to access 
the fourteen area codes that comprise the State of New York, and this 
does not include the vicinal area codes of neighboring New Jersey and 
Connecticut.'' \39\
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    \39\ ATA at 7.
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    The commenters, however, differed on how to solve the problem. Two 
of the commenters supported continuing to allow all entities access to 
five area codes of data at no cost.\40\ DMA noted that the fact that 
small businesses are able to access up to five area codes of data at no 
cost encourages their compliance.\41\ NADA stated that removing the 
five area code exemption would disproportionally impact small 
businesses.\42\ The third commenter supported providing small 
businesses with free access to the entire Registry.\43\ The commenter 
cited information from the Small Business Administration's Office of 
Advocacy, which claimed that ``very small firms with fewer than 20 
employees spend 60 percent more per employee than larger firms to 
comply with federal regulations.'' \44\
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    \40\ See DMA at 5, NADA at 1.
    \41\ DMA at 5.
    \42\ NADA at 1.
    \43\ NAR at 2. NAR also opposes any reduction of the number of 
area codes provided at no cost.
    \44\ NAR at 2. See also SW at 1 (arguing that the fee increase 
penalizes small businesses). As stated in the 2006 Fee Rule NPR, 
this alternative would require entities seeking an exemption from 
the fees to submit information, such as their annual revenues, to 
demonstrate that they meet the statutory threshold to be classified 
a small business and exempt from the fees. 71 FR at 25516.
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    The fourth commenter proposed that the Commission impose a modest 
$200 flat fee on all entities that subscribe to five or fewer area 
codes of data in lieu of increasing the fees on all entities that 
access the Registry.\45\ The commenter argued that allowing entities to 
obtain the first five area codes of data from the Registry for free is 
inequitable, as it unfairly benefits those who place the greatest 
burden on the Registry.\46\ The commenter noted that while the number 
of entities that have accessed the Registry over the past two years has 
increased, the number of entities required to pay for access has 
decreased.\47\ According to the commenter, ``[t]his structure permits 
entities subscribing to five area codes to save $80 versus the $280 fee 
they would incur if they paid $56 per area code, thereby minimizing the 
effect of the regulation per the Regulatory Flexibility Act's 
mandate.'' \48\ Assuming that the same number of entities would access 
five or fewer area codes of data at no cost in Fiscal Year 2006, the 
commenter contends that by charging these entities a $200 flat fee, 
this alternative fee proposal will generate $11,660,000 in revenue from 
these entities alone.\49\
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    \45\ ATA at 5. The commenter also recommended that all entities 
pay $200 for the first five area codes of data that they access.
    \46\ Id. at 3.
    \47\ Id.
    \48\ Id. at 5 (emphasis in original).
    \49\ Id. at 6. The commenter further points out that by charging 
entities that access more than five area codes $200 for the first 
five area codes of data they access, the Commission can raise an 
additional $1,300,000.
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    After considering all of the comments submitted in this proceeding, 
the Commission has determined to retain the provision allowing entities 
to access up to five area codes of data at no cost. Although the 
Commission continues to recognize that only a small percentage of the 
total number of entities accessing the Registry pay for that access, 
these figures also illustrate the large number of businesses--many of 
them likely

[[Page 43051]]

small businesses--that likely would be adversely affected by a change 
in the number of area codes of data provided at no cost. In fact, over 
57,800 entities have accessed five or fewer area codes of data from the 
Registry. It is true that a large seller that operates solely within 
five area codes may access the Registry at no cost in preparation for a 
large telemarketing campaign.\50\ However, the Commission continues to 
believe, as observed in prior fee rules, that most entities accessing 
five or fewer area codes of data--realtors, car dealers, community-
based newspapers, and other small businesses--are precisely the types 
of businesses that the Regulatory Flexibility Act requires the FTC to 
consider when adopting regulations.\51\ Moreover, the Commission again 
finds significant the information submitted by commenters discussing 
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 retaining the five free area code 
provision at least for the next annual period is appropriate.
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    \50\ See ATA at 7.
    \51\ The comments submitted in response to the 2006 Fee Rule NPR 
do not offer any information or data to contradict this assertion. 
In fact, two of the commenters that represent these very entities 
support the provision allowing entities to access up to five area 
codes of data at no cost. See NAR at 1, and NADA at 1.
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    The Commission does not believe that the alternatives suggested 
would be as effective in minimizing the impact of the ``do-not-call'' 
regulations on small businesses, and that these proposed alternatives 
may create undue burdens that the current system does not impose. For 
example, the suggestion to eliminate the number of area codes of data 
provided at no cost would result in tens of thousands of entities--that 
are likely small businesses--having to pay to access the Registry. 
While, to some, such a fee might seem modest, it nonetheless would 
represent an increase in costs to more than 57,800 entities, most of 
whom already may be disproportionately impacted by other costs of 
complying with the ``do-not-call'' regulations. In contrast, the 
suggestion to charge a flat fee of $200 on all entities that subscribe 
to five or fewer area codes of data actually would result in tens of 
thousands of entities that access less than four area codes of data 
paying proportionally more per area code for access than other 
entities.\52\ Alternatively, the suggestion to base the fees on the 
actual size of the entity requesting access would, as noted in prior 
rulemakings, require all entities to submit sensitive data concerning 
annual income, number of employees, or other similar factors. It also 
would require the FTC 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.'' \53\ As a result, the Commission 
continues to believe that the most appropriate and effective method to 
minimize the impact of the Rule on small businesses is to provide 
access to a certain number of area codes of data at no cost.
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    \52\ The commenters offered no other alternative fee structures.
    \53\ See 70 FR 43277, 69 FR at 45583. See also 68 FR at 16243 
n.53.
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    The comments also do not provide any new information to support a 
change in the number of area codes provided at no cost. Thus, the 
Commission does not believe that any change in the current level of 
five free area codes is necessary or appropriate. The Commission 
continues to recognize 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, as noted previously, such a 
change also would likely result in increased costs to thousands of 
small businesses. On the other hand, the Commission is not persuaded 
that it should increase the number of area codes provided at no cost, 
although it continues to recognize that some small businesses located 
in large metropolitan areas or those whose businesses are not limited 
to small geographic areas may need to make calls to more than five area 
codes. Obviously, increasing the number of area codes provided at no 
cost would decrease the pool of paying entities, and further increase 
the fees these entities must pay. As a result, the Commission continues 
to believe that allowing all entities to gain access to the first five 
area codes of data from the Registry at no cost is appropriate.

B. Exempt Entity Access

    In the 2006 Fee Rule NPR, the Commission also proposed to continue 
allowing ``exempt'' organizations to obtain free access to the 
Registry.\54\ The Commission stated its belief that any exempt entity, 
voluntarily accessing the Registry to avoid calling consumers who do 
not wish to receive telemarketing calls, should not be charged for such 
access.\55\ Charging such entities access fees, when they are under no 
legal obligation to comply with the ``do-not-call'' requirements of the 
Amended TSR, may make them less likely to obtain access to the Registry 
in the future, resulting in an increase in unwanted calls to 
consumers.\56\
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    \54\ 71 FR at 25515.
    \55\ Id.
    \56\ Id.
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    No comments directly addressed this issue.\57\ Accordingly, the 
Commission continues to believe that if it charged exempt entities for 
access to the Registry, many, if not most, of those entities would no 
longer seek access. As a result, as noted in prior fee rules, 
registered consumers would receive an increase in the number of 
unwanted telephone calls. Exempt entities are, by definition, under no 
legal obligation to access the 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, therefore, 
continue to allow such exempt entities to access the Registry at no 
cost, after they have completed the required certification.
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    \57\ As part of its alternative fee proposal referenced above, 
ATA stated that it ``acknowledges the Commission's reluctance to 
impose access charges on exempt entities. Without commenting on the 
substance of this policy, ATA's proposal similarly avoids charging 
these entities for access to the [Registry]. However, future 
circumstances may dictate that these entities be charged at some 
point in time.'' ATA at 5 n. 17.
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C. Imposition of the Fees and Use of the Funds

    While the business and industry member commenters disagreed on 
whether access to five area codes of data should continue to be 
provided at no cost, they were unanimous in their opposition to the 
increase in fees for access to the National Do Not Call Registry.\58\
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    \58\ As noted above, two consumers supported the increase in 
fees. See BAS at 1, and S at 1.
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    Generally, these commenters argued that it would be unfair to 
continue raising fees given the fee increases over the last few 
years.\59\ One commenter noted that:
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    \59\ See TT at 1, NN at 1, AN at 1, ATA at 4-5, DMA at 2, and 
NAR at 1.

    The Commission initially indicated its belief that it would cost 
a few thousand dollars per telemarketer to obtain access to the 
national registry. By the time the Commission made the registry 
available, the cost for access had already increased to

[[Page 43052]]

$7,250. Less than a year later, the Commission increased fees 68% to 
$11,000. The following year, the Commission increased fees by 40% to 
$15,400. Now yet again, the Commission proposes an 11% increase to 
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$17,050.\60\

    \60\ See DMA at 2. See also AN at 1. Another commenter argued 
that the fees are already high enough given that areas are growing 
and adding new area codes. TT at 1.

The commenter noted that ``[o]ther than reflecting the increase in the 
annual congressional authorization from $21.9 million to $23 million, 
the Commission provides no justification for any increase in these 
fees.'' \61\
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    \61\ DMA at 2.
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    In the 2006 Fee Rule NPR, the Commission analyzed information 
available at that time, and issued a proposal that reflected both the 
amount that needed to be raised,\62\ along with the number of area 
codes that were projected to be purchased. As a result, the fees that 
were proposed in the 2006 Fee Rule NPR represented an increase over the 
fees adopted in the 2005 Fee Rule. The increase in the amount of 
funding required to cover the cost to implement and enforce the 
Registry, while a component of the fee increase, is not the only 
component. As in prior fee rule proceedings, another factor that 
influenced the increase proposed in the 2006 Fee Rule NPR was the 
number of area codes of data that were purchased the prior year by 
entities accessing the Registry. The fees that the Commission proposed 
in the 2006 Fee Rule NPR reflect both the amount of funds necessary to 
implement and enforce the Registry, as well as the number of area codes 
that the Commission assumes will be purchased by entities accessing the 
Registry, based on the Commission's current experience.
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    \62\ The Commission views the current Congressional 
authorization as an instruction regarding the fees to be collected.
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    In addition, two commenters further argued that there is no 
justification for the fee increase given the costs and economies of 
scale associated with operating the Registry.\63\ Another commenter was 
concerned ``that fees are being used for telemarketing enforcement 
based on fraud or other violations of the TSR, where there may also be 
incidental violation of the registry.'' \64\ The commenter further 
contended that ``[s]uch enforcement actions should not be funded by 
registry fees when they otherwise would have been funded from other 
enforcement budgets prior to the existence of the registry.'' \65\ The 
commenter also noted the Commission's statements regarding industry's 
high rate of compliance, and argued that it is unfair to continue 
increasing fees and imposing enforcement costs on the very 
organizations that are most compliant with the rules.\66\
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    \63\ See DMA at 2-3, and AN at 1. One commenter points out that 
the Commission's 2003 contract with AT&T to establish and administer 
the database was $3.5 million. DMA at 3.
    \64\ DMA at 3.
    \65\ Id.
    \66\ Id. at 4. DMA further stated their belief that ``it is 
inappropriate for entities that comply with the law to bear the 
enforcement costs of the FTC. If the do-not-call registry is as 
successful as the FTC indicates, the FTC itself or Congress should 
provide any additional necessary funding increases over the current 
fee structure.'' DMA at 4.
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    Consistent with the Implementation Act, and as stated in previous 
fee rules, the Commission has limited the amount of fees to be 
collected to those needed to implement and enforce the ``do-not-call'' 
provisions of the Amended TSR. The amount of fees collected pursuant to 
this revised rule is intended to offset costs in the following three 
areas: first, funds are required to operate the Registry. This 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.\67\ Second, funds are required for law enforcement 
efforts, including identifying targets, coordinating domestic and 
international initiatives, challenging alleged violators, and consumer 
and business education efforts, which are critical to securing 
compliance with the Amended TSR. 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 complete such investigations. Third, 
funds are required to cover ongoing 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.
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    \67\ From June 2005 to May 2006, over 43 million phone numbers 
were added to the Registry, with a total since inception of 
approximately 124 million registrations. Since inception, the 
registry has also handled many requests from organizations wishing 
to access the registry (e.g. telemarketers, states, and law 
enforcers), including hundreds of thousands of subscription 
requests, and millions of area code access requests (including 
downloads and interactive search requests).
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    In addition, one commenter expressed opposition to any increase in 
fees that might be attributable to the inclusion of wireless telephone 
numbers on the Registry, stating that:

    Telemarketing calls to wireless numbers without consent are 
prohibited under the FCC's rules implementing the Telephone Consumer 
Protection Act of 1991 (``TCPA''), 47 U.S.C. 227 et seq. Thus, as a 
legal matter, consumers receive no fewer telemarketing calls by 
placing their wireless numbers on the registry. Because such calls 
already are prohibited in the first instance, there is no basis for 
allowing such numbers to be placed on the registry.\68\
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    \68\ See DMA at 4-5.

    However, as noted in the 2005 Fee Rule, this commenter overstated 
the nature of the prohibition enacted by the Federal Communication 
Commission (``FCC''). The FCC's prohibitions on telemarketing calls 
placed to wireless telephone numbers proscribe the use of an 
``automatic telephone dialing system or an artificial or prerecorded 
message'' to place such calls.\69\ While the Commission recognizes that 
many telemarketers use automated dialers to contact consumers, not all 
telemarketers use such technology. In addition, the Amended TSR's 
prohibitions concerning fraudulent or abusive telemarketing acts or 
practices apply to both land line and wireless telephones, and the 
Registry has never differentiated between the two. At this point, the 
Commission sees no reason to make such a distinction.
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    \69\ See FCC Telemarketing and Telephone Solicitation Rules, 47 
CFR 64.1200 (2006).
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    Accordingly, the Commission concludes that an increase in fees is 
necessary.

IV. Calculation of the Revised Fees

    As previously stated, the Commission proposed in the 2006 Fee Rule 
NPR to increase the fees charged to access the National Do Not Call 
Registry to $62 annually for each area code of data requested, with the 
maximum annual fee capped at $17,050 for entities accessing 280 area 
codes of data or more. The Commission based this proposal on the total 
number of entities that accessed the Registry from March 1, 2005 
through February 28, 2006.\70\ 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 Amended Fee Rule.\71\
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    \70\ At that time, slightly less than 66,200 entities had 
accessed all or part of the information in the Registry. 
Approximately 1,300 of these entities were ``exempt'' and therefore 
had accessed the Registry at no charge. An additional 58,300 
entities had accessed five or fewer area codes of data, also at no 
charge. As a result, approximately 6,500 entities had paid for 
access to the Registry, with slightly less than 1,000 entities 
having paid for access to the entire Registry. 71 FR 25514.
    \71\ Id.

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[[Page 43053]]

    As of June 1, 2006, there have been no significant or material 
changes in the number of entities that have accessed the Registry since 
the Commission issued the 2006 Fee Rule NPR. Therefore, based on the 
figures contained in the 2006 Fee Rule NPR, and the need to raise $23 
million in 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 Registry as follows: the fee charged for each area code 
of data will be $62 per year, with the first five area codes provided 
to each entity at no cost. The fee charged to entities requesting 
access to additional area codes of data during the second six months of 
their annual period will be $31. ``Exempt'' organizations, as defined 
by the ``do-not-call'' regulations, will continue to be allowed access 
to the Registry at no cost. The maximum amount that will be charged any 
single entity will be $17,050, which will be charged to any entity 
accessing 280 area codes of data or more.
    The Commission establishes September 1, 2006, as the effective date 
for this rule change. Thus, the revised fees will be charged to all 
entities that renew their subscription account number after that date.

V. Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act,\72\ the Office of 
Management and Budget (``OMB'') approved the information collection 
requirements in the Amended TSR and assigned OMB Control Number 3084-
0097. The rule amendment, as discussed above, provides for an increase 
in the fees that are charged for accessing the National Do Not Call 
Registry. Therefore, the proposed rule amendment does not create any 
new recordkeeping, reporting, or third-party disclosure requirements 
that would be subject to review and approval by OMB pursuant to the 
Paperwork Reduction Act.
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    \72\ 44 U.S.C. 3501-3520.
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VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act \73\ requires the FTC 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 FTC certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
As explained in the 2006 Fee Rule NPR and this Statement, the 
Commission hereby certifies that it does not expect that its Final 
Amended Free Rule will have the threshold impact on small entities. As 
discussed above, this amended rule specifically charges no fee for 
access to one to five area codes of data included in the Registry. As a 
result, the Commission anticipates that many small businesses will be 
able to access the 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 revised fees. Nonetheless, the Commission 
published an IRFA with the 2006 Fee Rule NPR, and is also publishing a 
FRFA with this Final Amended Fee Rule below, in the interest of further 
explaining its determination, even though the Commission believes that 
it is not required to publish such analysis.
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    \73\ 5 U.S.C. 604(a).
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A. Reasons for Consideration of Agency Action

    The Final Amended Fee Rule has been considered and adopted pursuant 
to the requirements of the Implementation Act and the 2006 
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 Final Amended 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 2006 
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 $6.5 million or less in annual receipts 
qualify as small businesses.\74\ Similar standards, i.e., $6.5 million 
or less in annual receipts, apply for many retail businesses which may 
be ``sellers'' and subject to the proposed revised fee provisions set 
forth in this Final Amended Fee Rule. In addition, there may be other 
types of businesses, other than retail establishments, that would be 
``sellers'' subject to this rule.
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    \74\ See 13 CFR 121.201.
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    During the period June 1, 2005 to May 31, 2006, over 57,800 
entities have accessed five or fewer area codes of data from the 
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 
would be subject to this Final Amended Fee Rule. In any event, as 
explained elsewhere in this Statement, the Commission believes that, to 
the extent the Final Amended Fee Rule has an economic impact on small 
businesses, 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 the 2006 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 Final 
Amended Fee Rule consist principally of the requirement that firms, 
regardless of size, that access the 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 2004 Fee Rule Notice of Proposed 
Rule Making. 69 FR 23701, 23704 (April 30, 2004).
    As for compliance requirements, small and large entities subject to 
the revised fee rule will pay the same rates to obtain access to the 
National Do Not Call Registry in order to reconcile their calling lists 
with the phone numbers maintained in the 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 Federal Trade 
Commission amends part 310 of title 16 of the Code of Federal 
Regulations as follows:

[[Page 43054]]

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. 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 $62 per area 
code of data accessed, up to a maximum of $17,050; 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, 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 $62 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 $31 
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: This appendix will not appear in the Code of Federal 
Regulations.

Appendix--List of Acronyms for Commenters to the TSR 2006 Fee Rule 
Proposal

------------------------------------------------------------------------
                 Commenter                             Acronym
------------------------------------------------------------------------
1. AIMS....................................  AIMS
2. American Teleservices Association.......  ATA
3. Aplus.Net...............................  AN
4. Barb Sachau.............................  BAS
5. Direct Marketing Association, Inc.......  DMA
6. Judy Johnson............................  JJ
7. National Association of Realtors........  NAR
8. National Automobile Dealers Association.  NADA
9. Nelnet..................................  NN
10. Solberg................................  S
11. Summerwinds LLC........................  SW
12. Turnstyles Ticketing...................  TT
------------------------------------------------------------------------

 [FR Doc. E6-12252 Filed 7-28-06; 8:45 am]
BILLING CODE 6750-01-P