[Federal Register Volume 73, Number 250 (Tuesday, December 30, 2008)]
[Notices]
[Pages 79881-79884]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-30881]


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

FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

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

ACTION: Notice.

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

SUMMARY: The information collection requirements described below will 
be submitted to the Office of Management and Budget (``OMB'') for 
review, as required by the Paperwork Reduction Act (``PRA''). The FTC 
is seeking public comments on its proposal to extend through April 30, 
2012 the current PRA clearance for information collection requirements 
contained in the Pay-Per-Call Rule (``Rule''). That clearance expires 
on April 30, 2009.

DATES: Comments must be submitted on or before March 2, 2009.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Pay-Per-
Call Rule: FTC File No. R611016'' to facilitate the organization of 
comments. Please note that comments will be placed on the public record 
of this proceeding--including on the publicly accessible FTC website, 
at (http://www.ftc.gov/os/publiccomments.shtm)--and therefore should 
not include any sensitive or confidential information. In particular, 
comments should not include any sensitive personal information, such as 
an individual's Social Security Number; date of birth; driver's license 
number or other state identification number, or foreign country 
equivalent; passport number; financial account number; or credit or 
debit card number. Comments also should not include any sensitive 
health information, such as medical records or other individually 
identifiable health information. In addition, comments should not 
include any ``[t]rade secrets and commercial or financial information 
obtained from a person and privileged or confidential. . . .,'' as 
provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which 
confidential treatment is requested must be filed in paper form, must 
be clearly labeled ``Confidential,'' and must comply with FTC Rule 
4.9(c).\1\
---------------------------------------------------------------------------

    \1\ FTC 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 FTC Rule 4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: https://secure.commentworks.com/ftc-PPCRulePRA(and following the instructions 
on the web-based form). To ensure that the Commission considers an 
electronic comment, you must file it on the web-based form at the 
weblink (https://secure.commentworks.com/ftc-PPCRulePRA). If this 
Notice appears at (http://www.regulations.gov/search/index.jsp), you 
may also file an electronic comment through that website. The 
Commission will consider all comments that regulations.gov forwards to 
it.
    A comment filed in paper form should include the ``Pay-Per-Call 
Rule: FTC File No. R611016'' 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,

[[Page 79882]]

Room H-135 (Annex J), 600 Pennsylvania Avenue, NW, Washington, DC 
20580. The FTC is requesting that any comment filed in paper form be 
sent by courier or overnight service, if possible, because U.S. postal 
mail in the Washington area and at the Commission is subject to delay 
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. The Commission will consider all timely and responsive 
public comments that it receives, whether filed in paper or electronic 
form. Comments received will be available to the public on the FTC 
website, to the extent practicable, at (http://www.ftc.gov/os/publiccomments.shtm). As a matter of discretion, the Commission 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 should be sent to Ruth 
Yodaiken, Attorney, Division of Marketing Practices, Bureau of Consumer 
Protection, Federal Trade Commission, 600 Pennsylvania Avenue, NW, 
Washington, DC 20580, (202) 326-2127.

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.\2\ The Rule, which 
implements Titles II and III of the Telephone Disclosure and Dispute 
Resolution Act (``TDDRA''), 15 U.S.C. 5711-14, 5721-24, requires the 
disclosure of cost and other information regarding 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 was explained in the NPRM, the Rule contains certain 
reporting and disclosure requirements that are subject to OMB review 
under the PRA, 44 U.S.C. 3501-3521.\3\ 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). Thereafter, the FTC obtained renewed 
clearance from OMB covering both the existing Rule and the proposed 
changes, with the most recent clearance set to expire April 30, 2009. 
The FTC is again seeking renewed 3-year clearance for the Rule, but now 
only regarding the existing Rule.
---------------------------------------------------------------------------

    \2\ 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.'' In this document it will be referred 
to as the ``Pay-Per-Call Rule.''
    \3\ The Rule contains no recordkeeping requirements that would 
be subject to the PRA.
---------------------------------------------------------------------------

    As required by the PRA, the FTC is providing this opportunity for 
public comment before requesting that OMB extend the existing paperwork 
clearance for the regulations noted herein. 44 U.S.C. 3506(c)(2)(A). 
All comments should be filed as prescribed in the ADDRESSES section 
above, and must be received on or before March 2, 2009.

    Brief description of the need for and proposed use of the 
information: The existing reporting and disclosure requirements are 
mandated by the TDDRA 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 and their estimated number: 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. Staff estimates that there are 13 
common carriers,\4\ approximately 13,350 vendors,\5\ and approximately 
1,250 possible billing entities.\6\ The FTC seeks public comment or 
data on these estimates as well as those additionally stated below.
---------------------------------------------------------------------------

    \4\ This estimate is based on the North American Numbering Plan 
Association Report, ``900-NXX Codes,'' (http://www.nanpa.com/nas/public/form900MasterReport.do?method=display900MasterReport MasterReport) 
(updated as of November 2008), and excluding Canadian entities and 
one carrier that recently withdrew from carrying 900 number service. 
See Federal Communications Commission, ``Section 63.71 Application 
of Sprint Communications Company L.P. for Authority to Discontinue 
Domestic Telecommunications Services,'' Order, WC Docket No. 08-116, 
DA 08-2557 (Wireline Competition Bureau Nov. 24, 2008) (``FCC Sprint 
Order'').
    \5\ This number or an estimate thereof is difficult to derive as 
there is no ready source of such statistics. For instant purposes, 
FTC staff has reduced its most recent prior (2006) PRA-related 
estimate of the number of vendors (approximately 15,000) by 11 
percent, reflecting a corresponding decrease in the allocation of 
900 numbers. It is noteworthy that one carrier which recently 
withdrew from carrying 900-number services stated that between 2004 
and 2007 claimed that it saw a 41.5 percent decrease in vendor use 
of such numbers. See FCC Sprint Order. However, erring 
conservatively, FTC staff instead is applying an 11 percent 
reduction in the number of vendors, tied to a comparison of the 
number of 900-NXX codes allocated per vendor, as reported annually 
by the North American Numbering Plan Administration (NANPA). In 
2004, it was 133; in 2007, it fell to 118.
    \6\ The Federal Communications Commission report on telephone 
statistics indicated that at the end of 2007 there were 
approximately 1,250 local telephone companies (local exchange 
carriers). See Local Telephone Competition: Status as of December 
31, 2007 (released 9/08) (tables 3 and 4), available at (http://www.fcc.gov/wcb/iatd/comp.html).

    Estimated annual reporting and disclosure burden: 2,468,412 hours; 
---------------------------------------------------------------------------
$133,705,222 in associated labor costs\7\

    \7\ Non-labor (e.g., capital/other 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 audiotext 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 annual burden 
hour and cost estimates provided below (where such costs are labor-
related), or are otherwise included in the ordinary cost of doing 
business (regarding non-labor costs).
---------------------------------------------------------------------------

    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 its total annual cost. The blended 
rate calculations are based on the following skill categories and 
average wage rates and/or labor costs: $250/hour for professional 
(attorney) services; $15/hour for skilled clerical workers; $35/hour 
for computer programmers; and $50/hour for management time. These 
figures are averages, based on the most currently available Bureau of 
Labor Statistics (``BLS'') cost figures posted online.\8\ FTC

[[Page 79883]]

staff calculated labor costs by applying appropriate hourly cost 
figures to the burden hours discussed further below.
---------------------------------------------------------------------------

    \8\ (http://www.bls.gov/ncs/ncswage2007.htm) (National 
Compensation Survey: Occupational Earnings in the United States 
2007, US Department of Labor, BLS, released August 2008, Bulletin 
2704, Table 3 (``Full-time civilian workers,'' mean and median 
hourly wages). Notwithstanding the referenced BLS data, estimated 
attorney costs are based on what staff believes may more closely 
reflect hourly attorney costs associated with Commission information 
collection activities.

---------------------------------------------------------------------------
    (1) Reporting burden:

    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 16 CFR 308.6. Staff 
believes that the resulting burden on this segment of the industry will 
be minimal, since OMB's definition of ``burden'' for PRA purposes 
excludes any business effort that would be expended regardless of a 
regulatory requirement. 5 CFR 1320.3(b)(2). Because this reporting 
requirement permits staff to seek information limited to that which is 
already maintained by the carriers, the only burden would be the time 
an entity expends to compile and provide the information to the 
Commission. Because of continued industry changes and the infrequency 
with which the Commission has relied on this requirement, staff is 
reducing by 40 percent (from 5 hours to 3 hours per entity) the 
estimated annual time burden per entity for this reporting requirement.
    In obtaining OMB clearance for this reporting requirement in 2006, 
staff estimated a total reporting burden of 70 hours, with an annual 
cost of $5,145. For the pending submission to OMB, staff has decreased 
its burden hour estimate to 39 hours, based on an average estimate of 3 
hours (rather than 5) expended by 13 common carriers. Using a $75 
blended wage rate (assuming for all labor calculations herein, $35/hour 
for computer programmers, $250/hour for attorneys, $15/hour for skilled 
clerical workers, and $50/hour for managers),\9\ the FTC now estimates 
an annual cost of $2,925.
---------------------------------------------------------------------------

    \9\ This blended wage rate is based upon an estimate of 30 
percent for computer programming, 20 percent for attorney services, 
30 percent for skilled clerical workers, and 20 percent for 
managerial time.

---------------------------------------------------------------------------
    (2) Disclosure burden:

    (a) Advertising. FTC staff estimates that the annual burden on the 
industry for the Rule's advertising disclosure requirements is 48,060 
hours. The estimate reflects the burden on approximately 13,350 vendors 
who must make cost disclosures for all pay-per-call services and 
additional disclosures if the advertisement is (a) directed to 
individuals under 18 or (b) for certain pay-per-call services.\10\ 
Because of continued industry changes and the infrequency with which 
the Commission has relied on this requirement, staff is reducing the 
estimated percentage of advertising both directed to individuals under 
18 and relating to certain other pay-per-call services to 20 percent of 
overall pay-per-call services. FTC staff estimated that each disclosure 
mandated by the Rule requires approximately one hour of compliance 
time.
---------------------------------------------------------------------------

    \10\ Based on an assumed three advertisements per vendor, or a 
total of 40,050 ads (for 13,350 vendors, as explained in note 5), 
plus an estimated total 20 percent of which would require such 
additional disclosures, or 8,010 advertisements. Staff estimates 
that it would require no more than one hour to draft each type of 
disclosure. Accordingly, at an estimated one hour each, vendors 
would require cumulatively 48,060 burden hours to comply with these 
requirements.
---------------------------------------------------------------------------

    The total estimated annual cost of these burden hours is $3,316,140 
applying a blended wage rate of $69/hour.\11\
---------------------------------------------------------------------------

    \11\ The blended rate is based upon 20 percent for attorney 
services, 60 percent for skilled clerical workers, and 20 percent 
for management time.
---------------------------------------------------------------------------

    (b) The Rule's preamble disclosure. To comply with the Act, the 
Pay-Per-Call Rule also requires that every pay-per-call service be 
preceded by a free preamble and that four different disclosures be made 
in each preamble. Additionally, preambles to sweepstakes pay-per-call 
services and services that offer information on federal programs must 
provide additional discloses. Each preamble need only be prepared one 
time, unless the cost or other information is changed. There is no 
additional burden on the vendor to make the disclosures for each 
telephone call, because the preambles are taped and play automatically 
when a caller dials the pay-per-call number.
    In its 2006 submission for renewed OMB clearance under the PRA, FTC 
staff estimated that there were approximately 45,864 pay-per-call 
services required to make disclosures in the preamble to the pay-per-
call service, at an average burden of 10 hours for each preamble, 
resulting in a total burden estimate of 458,640 hours. As noted above, 
staff now believes that the industry has had at least an 11 percent 
reduction in size since the FTC's immediately prior pursuit of renewed 
clearance. Accordingly, staff now estimates that there are no more than 
40,819 advertised pay-per-call services.
    As with advertising disclosures, preambles for certain pay-per-call 
services require additional preamble disclosures. Consistent with the 
estimates of advertised pay-per-call services discussed above, staff 
estimates that an additional 20 percent of all such pay-per-call 
services (8,164) relating to certain types of pay-per-call services 
would require such additional disclosures.\12\ On further reflection, 
staff now estimates that it would require no more than one hour to 
draft each type of disclosure because the disclosures applicable to the 
preamble closely approximate in content and volume the advertising 
disclosures discussed above. Accordingly, staff estimates a total of 
48,983 burden hours (40,819 + 8,164) to comply with these requirements. 
At one hour each, cumulative labor cost associated with these 
disclosures is $3,379,827, using a blended wage rate of $69/hour (i.e., 
similar to the blended rate used for advertising disclosures).
---------------------------------------------------------------------------

    \12\ See note 10.
---------------------------------------------------------------------------

    (c) Telephone-billed charges in billing statements. Section 
308.5(j) of the Rule, 16 CFR 308.5(j), requires that vendors ensure 
that certain disclosures appear on each billing statement that contains 
a charge for a call to a pay-per-call service. Because these 
disclosures appear on telephone bills already generated by the local 
telephone companies, and because the carriers are already subject to 
nearly identical requirements pursuant to the FCC's rules, FTC staff 
estimated that the burden to comply would be minimal. At most, the 
burden on the vendor would be limited to spot checking telephone bills 
to ensure that the charges are displayed in the manner required by the 
Rule.
    As it had in the 2006 PRA submission, FTC staff estimates that only 
10 percent of vendors (1,350) would monitor billing statements in this 
manner and that it would take 12 hours per year to conduct such checks. 
Using the total estimated number of vendors noted above, this results 
in a total of 16,020 burden hours. The total annual cost would be at 
most $997,245, using a blended rate of $62.25/hour.\13\
---------------------------------------------------------------------------

    \13\ The blended rate is 15 percent for attorney services, 40 
percent for skilled clerical workers, 25 percent for computer 
programming, and 20 percent for management time.
---------------------------------------------------------------------------

    (d) Dispute resolution procedures in billing statements. This 
disclosure requirement is set forth in 16 CFR 308.7(c). The blended 
rate being used for these disclosures is $53.5/hour.\14\

[[Page 79884]]

FTC staff previously estimated that the billing entities would spend 
approximately 5 hours each to review, revise, and provide the 
disclosures on an annual basis. The estimated hour burden for the 
annual notice component of this requirement is 6,250 burden hours 
(based on 1,250 possible billing entities each requiring 5 hours each), 
or a total cost of $334,375.
---------------------------------------------------------------------------

    \14\ The blended rate is 40 percent for computer programming, 10 
percent for attorney services, 30 percent for skilled clerical 
workers, and 20 percent for management time.
---------------------------------------------------------------------------

    (e) Further disclosures related to consumers reporting a billing 
error. As in the 2006 PRA submission for this Rule, FTC staff estimates 
that the incremental disclosure obligations related to consumers 
reporting a billing error under section 308.7(d) requires, on average, 
about one hour per each billing error. Previously, staff projected that 
approximately 5 percent of an estimated 49,980,000 calls made to pay-
per-call services each year involves such a billing error. The staff is 
now reducing its prior estimate of the number of those calls by 6 
percent\15\ (46,981,200 calls) to reflect recent changes in the amount 
of pay-per-call services and their billing. Assuming the same 
apportionment (5 percent) of overall calls to pay-per-call services, 
this amounts to 2,349,060 hours, cumulatively. Applying the $53.5/hour 
blended wage rate, the estimated annual cost is $125,674,710 annually.
---------------------------------------------------------------------------

    \15\ Six percent is determined by an approximate halving of the 
above-noted 11% reduction staff has applied to its prior estimate of 
the number of vendors (see note 5). As in past clearance requests 
for this Rule, it is halved on the assumption that pay-per-call 
services do not account for any more than half of all telephone-
billed purchases.

David C. Shonka
Acting General Counsel
[FR Doc. E8-30881 Filed 12-29-08: 8:45 am]
BILLING CODE 6750-01-S