[Federal Register Volume 73, Number 174 (Monday, September 8, 2008)]
[Notices]
[Pages 52049-52051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20775]



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FEDERAL TRADE COMMISSION


Information Collection Activities; Emergency Clearance Submission 
for Expedited OMB Review; Comment Request

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

ACTION: Notice.

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SUMMARY: The information collection requirements described below will 
be submitted to the Office of Management and Budget (``OMB'') for 
emergency processing and a request for a temporary, 180-day grant of 
clearance pursuant to OMB's regulations implementing the Paperwork 
Reduction Act (``PRA''). The Commission seeks public comments on the 
PRA burden analysis below for the final amendments to the FTC's 
Telemarketing Sales Rule (``TSR'' or ``Rule'').

DATES: Comments must be submitted on or before October 8, 2008.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``TSR Final Amendments, PRA Comment, FTC File 
No. R411001'' 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 to the following 
address: Federal Trade Commission, Office of the Secretary, Room H-135 
(Annex J), 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. 
Because paper mail in the Washington area and at the FTC is subject to 
delay, please consider submitting your comments in electronic form, as 
prescribed below. If, however, the comment contains any material for 
which confidential treatment is requested, the comment must be filed in 
paper form, and the first page of the document must be clearly labeled 
``Confidential.''\1\
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    \1\ 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).
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    Comments filed in electronic form should be submitted by following 
the instructions on the web-based form at: (https://secure.commentworks.com/ftc-TSRpra). To ensure that the Commission 
considers an electronic comment, you must file it on the web-based form 
at (https://secure.commentworks.com/ftc-TSRpra). You may also visit 
http://www.regulations.gov to read this notice, and may file an 
electronic comment through that website. The Commission will consider 
all comments that www.regulations.gov forwards to it.
    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 website, to the extent practicable, at 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 website. 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.shtm).

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed information requirements for the Franchise Rule 
should be addressed to Craig Tregillus, Staff Attorney, Division of 
Marketing Practices, Bureau of Consumer Protection, Federal Trade 
Commission, Room H-238, 600 Pennsylvania Ave., N.W., Washington, D.C. 
20580, (202) 326-2970.

SUPPLEMENTARY INFORMATION: 
    The current OMB approval--or ``clearance''-- for the information 
collection requirements in the TSR\2\ expires on July 31, 2009. The OMB 
clearance, issued in 2006, does not encompass the new information 
collection requirements of the recent amendments to the TSR.\3\ The 
Commission now seeks OMB review and approval and public comment 
regarding the PRA impact of those amendments.
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    \2\ OMB Control Number 3084-0097.
    \3\ 73 FR 51164 (August 29, 2008).
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    The Commission is requesting expedited OMB review and emergency 
clearance because the use of normal clearance procedures under 5 CFR 
1320.12 will likely disrupt the collection of information for the 
earlier of two PRA-related amendments to the TSR, for which compliance 
will be enforced beginning December 1, 2008. A grant of 180 days 
clearance will provide the FTC added time to: (a) publish for public 
comment a Federal Register notice stating FTC staff estimates of 
incremental PRA burden associated with the final Rule amendments; (b) 
pursue thereafter under 5 CFR 1320.12 normal clearance procedures for 
the revised Rule as a whole; (c) review of any public comments received 
for these respective notices; (d) prepare related supporting statements 
for OMB's review. The Commission requests OMB approval by October 31, 
2008.
    As previously proposed, the TSR amendments concerning prerecorded 
calls and calculation of call abandonment rates did not affect PRA 
burden.\4\ Accordingly, with no changes to staff's prior estimates of 
PRA burden at that time, no OMB review and approval for the proposed 
amendments was sought.
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    \4\ 71 FR 58716, 58730-58731 (Oct. 4, 2006).
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    The final amendments, however, contain requirements that arguably 
constitute a ``collection of information'' under the PRA.\5\ 
Specifically, the final prerecorded call amendment expressly authorizes 
sellers and telemarketers to place outbound prerecorded telemarketing 
calls to consumers if: (1) the seller has obtained written agreements 
from those consumers to receive prerecorded telemarketing calls after a 
clear and conspicuous disclosure of the purpose of the agreement; and 
(2) the call discloses an opt-out mechanism at the outset of the 
call.\6\ The amendment will apply not only to prerecorded calls that 
are answered by a consumer, but also to prerecorded messages left on 
consumers' answering machines or voicemail services.
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    \5\ Under the PRA, federal agencies must obtain approval from 
OMB for each collection of information they conduct or sponsor. 
``Collection of information'' means agency requests or requirements 
that members of the public submit reports, keep records, or provide 
information to a third party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c).
    \6\ When it takes effect, the prerecorded call amendment will 
provide the first ever explicit authorization in the TSR for sellers 
and telemarketers to place prerecorded telemarketing calls to 
consumers. The call abandonment prohibition of the TSR now 
implicitly prohibits such calls by requiring that all telemarketing 
calls be connected to a sales representative, rather than a 
recording, within two seconds of the completed greeting of the 
person who answers. 16 CFR 310.4(b)(1)(iv).
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    Staff continues to believe, however, that the amendment for 
calculating the call abandonment rate, which remains unchanged from the 
proposed rulemaking, will not affect the Rule's PRA burden. The 
amendment relaxes the present requirement that the abandonment rate be 
calculated on a ``per day per campaign'' basis by

[[Page 52050]]

permitting, but not requiring, its calculation over a 30-day period as 
requested by the industry. Sellers and telemarketers already have 
established automated recordkeeping systems to document their 
compliance with the current standard. The amendment likely will reduce 
their overall compliance burden because it relaxes the current 
requirement. The current ``per day'' requirement has forced 
telemarketers to turn off their predictive dialers on many occasions 
when unexpected spikes in call abandonment rates occur late in the day, 
and thereby has prevented realization of the cost savings that 
predictive dialers provide.
    The prerecorded call amendment will take effect in two stages. A 
requirement that prerecorded calls provide an automated interactive 
keypress or voice-activated opt-out mechanism will take effect December 
1, 2008, but the prohibition on placing calls that deliver prerecorded 
messages without the prior express written agreement of the recipient 
to receive such calls will not take effect until September 1, 2009.
    The written agreement requirement of the prerecorded call amendment 
will substitute the means of compliance under the Commission's 
forbearance policy\7\ and the recordkeeping requirements of the TSR--
which now require a record of an established business relationship 
(``EBR'')\8\--with a record of a consumer's agreement to receive 
prerecorded calls.\9\ This substitution should not materially change 
the TSR's recordkeeping burden. While there will be some initial burden 
in converting from EBR records to agreement records, the Commission has 
taken two additional steps designed to reduce that burden 
significantly. First, the Commission will accept agreements obtained 
pursuant to the Electronic Signatures In Global and National Commerce 
Act, Pub. L. No. 106-229, 114 Stat. 464 (2000) (codified at 15 U.S.C. 
7001 et seq.) (``E-SIGN Act''), including the use by consumers of a 
keypress on a telephone keypad. Second, the Commission has provided a 
phase-in that defers the written agreement requirement until September 
1, 2009, during which time sellers may continue to place low-cost 
prerecorded calls to their EBR customers that could include a request 
for agreement to receive prerecorded calls in the future with a simple 
keypress.
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    \7\ 69 FR 67287, 67288-62790 (Nov. 17, 2004). The enforcement 
forbearance policy has permitted such calls if they provide either: 
(1) a telephone keypad mechanism a consumer can use to opt-out of 
future calls from the seller, or (2) a toll-free telephone number a 
consumer can call to opt-out. In October 2006, when the Commission 
proposed to require a prior written agreement for prerecorded calls, 
it also proposed to terminate the forbearance policy as of January 
4, 2007, but was persuaded by several industry petitions to preserve 
the status quo until the conclusion of the amendment proceeding.
    \8\ 16 CFR 310.2(n) (defining an EBR); 16 CFR 310.5(a)(3) (EBR 
recordkeeping requirement).
    \9\ 16 CFR 310.5(a)(5) (written agreement recordkeeping 
requirement).
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    The FTC invites comments on: (1) whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses.

Estimated incremental annual hours burden: 82,865 hours

    When the FTC last sought renewed PRA clearance for the Rule, staff 
estimates were based on data from the FTC's Do-Not-Call Registry 
(``Registry''). The most recent full-year data then available was for 
the period from 3/1/05 - 2/28/06. In order to focus strictly on the 
incremental PRA burdens posed by the final Rule amendments, we use data 
for the same time period in this burden analysis.\10\ To obtain figures 
for sellers only, however (because only they, not telemarketers, will 
have new compliance obligations attributable to the final amendments), 
we have analyzed the 2006 data in greater detail.
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    \10\ We will update our population estimates in early 2009 when 
preparing our next PRA clearance request for the amended TSR as a 
whole.
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    In seeking the 2006 clearance, staff estimated that 15,000 
telemarketing entities (sellers and the telemarketers that serve them) 
were subject to the Rule.\11\ New Registry data for the period 3/1/05 - 
2/28/06 that we believe is more accurate shows that the total number of 
telemarketing entities subject to the TSR is 19,208.\12\ Of that total, 
there were 4,393 sellers and also 2,635 telemarketers with independent 
access to the Registry that downloaded telephone numbers from more than 
one state (to avoid TSR violations by automated ``scrubbing'' of the 
numbers on the Registry from their calling lists).\13\ The number of 
sellers subject to the TSR, therefore, is 16,573 (19,208 telemarketing 
entities - 2,635 telemarketers =16,573 sellers).
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    \11\ See 71 FR 28698 (May 17, 2006) and the associated May 2006 
supporting statement submitted to OMB for the details underlying 
this estimate.
    \12\ This figure, derived from data provided from the Registry's 
current contractor, is determined as follows: 65,768 total entities 
accessing the Registry - 933 exempt entities - 45,627 non-exempt 
entities that accessed telephone numbers solely intrastate (and thus 
not subject to the TSR) = 19,208. (This calculation employs the same 
methodology as was used in the 2006 clearance request.)
    \13\ Staff assumes that telemarketers that make prerecorded 
calls download telephone numbers listed on the Registry rather than 
conduct online searches as the latter may consume considerably more 
time. Other telemarketers not placing the high-volume of automated 
prerecorded calls may elect to search online, rather than to 
download.
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    Recordkeeping: Under the amendment, no prerecorded call may be 
placed by or on behalf of a seller unless the seller has obtained a 
written agreement from the person called to receive such calls. Thus, 
the recordkeeping obligations of the prerecorded call amendment fall on 
sellers rather than telemarketers.\14\
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    \14\ Although telemarketers that place prerecorded telemarketing 
calls on behalf of sellers must capture and transmit to the seller 
any requests they receive to place a consumer's telephone number on 
the seller's entity-specific do-not-call list, this de minimis 
obligation extends both to live and prerecorded telemarketing calls, 
and was accounted for in the 2006 estimates. Moreover, software that 
automates this process for prerecorded calls is widely available and 
in use.
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    In view of the phase-in and the amendment's clarification allowing 
written agreements to be created and maintained electronically pursuant 
to the E-SIGN Act, any initial burden caused by the transition from EBR 
records to written agreement records should not be material. Once the 
necessary systems and procedures are in place, any ongoing incremental 
burden to create and retain electronic records of agreements by new 
customers to receive prerecorded calls should be minimal.\15\
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    \15\ If it is not feasible to obtain a written agreement at the 
point of sale after the written agreement requirement takes effect, 
sellers could, for example, obtain a customer's email address and 
request an agreement via email to receive prerecorded calls.
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    Staff estimates that each of the 16,573 sellers subject to the 
prerecorded call amendment will require approximately 1 hour to prepare 
and maintain records required by the amendment; thus, 16,573 total 
recordkeeping hours. This reflects a one-time modification of existing 
customer databases to include an additional field to record consumer 
agreements.
    Disclosure: Staff estimates that the 16,573 sellers will require, 
on average, 4 hours each--66,292 hours cumulatively--to implement the 
incremental disclosure requirements posed by the final rule amendments.

[[Page 52051]]

This estimate is comprised of the following tasks: (1) one-time 
creation, recording, and implementation of a brief telephone script 
requesting a consumer's agreement via a telephone keypad response;\16\ 
(2) modify or create electronic forms or agreements for use in emails 
to consumers or on a website;\17\ (3) one-time revision of any existing 
paper forms (e.g., credit card or loyalty club forms, or printed 
consumer contracts) to include a request for the consumer's agreement 
to receive prerecorded calls;\18\ and (4) legal consultation, if 
needed, regarding compliance.
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    \16\ During the one-year phase-in before the written agreement 
requirement takes effect, the Commission will permit sellers to use 
prerecorded message calls made to existing customers to secure their 
agreements to receive prerecorded calls by pressing a key on their 
telephone keypad. Once a script is written and recorded, it can be 
used in all calls made by or on behalf of the seller to obtain the 
required agreements. Sellers will be able to include the request for 
the agreement in their regular prerecorded calls, thus making the 
time necessary to request the required agreements, and the cost of 
doing so, de minimis during the year-long phase-in that will overlap 
with the final year of the current PRA clearance.
    \17\ This figure includes both the minimal time required to 
create the electronic form and the time to encode it in HTML for the 
seller's website.
    \18\ As previously noted, the Commission has provided suggested 
language for this purpose that should minimize the time required to 
modify any paper disclosures.
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    Any remaining time needed to make the required opt-out disclosure 
for all prerecorded calls would pose no greater time increment, and 
arguably less, than a similar, pre-existing Federal Communications 
Commission disclosure provision that has been in effect since 1993.\19\ 
In any event, because this disclosure applies only to prerecorded 
calls, which are fully automated, no additional manpower hours would be 
expended in its delivery.
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    \19\ 47 CFR 64.1200(b)(2) (requiring disclosure of a telephone 
number ``[d]uring or after the message'' that consumers who receive 
a prerecorded message call can use to assert a company-specific do-
not-call request).
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    Other: The revised standard for measuring the three percent call 
abandonment rate will not impose any new or affect any existing 
reporting, recordkeeping or third-party disclosure requirements within 
the meaning of the PRA. The amendment relaxes the present requirement 
that the abandonment rate be calculated on a ``per day per campaign'' 
basis by permitting, but not requiring, its calculation over a 30-day 
period as requested by the industry. Sellers and telemarketers already 
have established automated recordkeeping systems to document their 
compliance with the current standard. The proposed amendment likely 
will reduce their overall compliance burden because it relaxes the 
current requirement. The current ``per day'' requirement has forced 
telemarketers to turn off their predictive dialers on many occasions 
when unexpected spikes in call abandonment rates occur late in the day, 
and thereby prevented realization of the cost savings that predictive 
dialers provide.

Estimated incremental labor cost burden: $3,488,000, rounded

    Recordkeeping: As indicated above, staff estimates that existing 
sellers making use of prerecorded calls will require 16,753 hours, 
cumulatively, to comply with the amendment's recordkeeping requirements 
during the final year of the current PRA clearance. Staff assumes that 
the aforementioned tasks will be performed by managerial and/or 
professional technical personnel, at an hourly rate of $38.93.\20\ 
Accordingly, incremental labor cost in the final year of the current 
clearance would be $652,194.
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    \20\ This cost is derived from the median hourly wage from the 
2006 National Occupational Employment and Wage Estimates by the 
Bureau of Labor Statistics for management occupations. See (http://www.bls.gov/oes/current/oes_nat.htm#b11-0000).
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    Disclosure: Staff estimates that approximately 75% of the 
disclosure-related tasks previously noted would be performed by 
managerial and/or professional technical personnel, again, at an hourly 
rate of $38.93, with 25% allocable to legal staff, at an hourly rate of 
$54.35.\21\
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    \21\ This cost is derived from the median hourly wage for 
lawyers from the ``National Compensation Survey: Occupational Wages 
in the United States, June 2006,'' Table 2. See (http://www.stats.bls.gov/ncs/ocs/sp/ncbl0910.pdf).
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    Thus, of the 66,292 total estimated disclosure burden hours, 49,719 
hours would be attributable to managerial and/or professional technical 
personnel, with the remaining 16,573 hours attributable to legal staff. 
This yields $1,935,561 and $900,743, respectively, in labor cost--in 
total, $2,836,304.
    Cumulatively, for recordkeeping and disclosure, labor cost would 
total $3,488,498 for the final year of the current clearance.
    Other than the initial recordkeeping costs, the amendment's written 
agreement requirement will impose de minimis costs, as discussed above. 
The one possible exception that might arise involves credit card or 
loyalty program agreements that retailers revise to request agreements 
from consumers to receive prerecorded calls. Retailers might have to 
replace any existing supplies of such agreements. Staff believes, 
however, that the one-year phase-in of the written agreement 
requirement will allow retailers to exhaust existing supplies of any 
such preprinted forms, so that no material additional cost would be 
incurred to print revised forms.
    Similarly, staff has no reason to believe that the amendment's 
requirement of an automated interactive opt-out mechanism will impose 
other than de minimis costs, for the reasons discussed above. The 
industry comments on the amendment uniformly support the view that 
automated interactive keypress technologies are now affordable, cost-
effective, and widely available.\22\ Moreover, most, if not all of the 
industry telemarketers who commented, including many small business 
telemarketers, said they are currently using interactive keypress 
mechanisms. Thus, it does not appear that this requirement will impose 
any material capital or other non-labor costs on telemarketers.
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    \22\ See, e.g., Comment by IAC/InterActiveCorp & HSN LLC 
(December 18,2006), at 3, available at (http://www.ftc.gov/os/comments/tsrrevisedcallabandon/525547-00600.pdf.)

David C. Shonka
Acting General Counsel
[FR Doc. E8-20775 Filed 9-8-08; 8:45 am]
BILLING CODE 6750-01-S