[Federal Register Volume 76, Number 4 (Thursday, January 6, 2011)]
[Rules and Regulations]
[Pages 1038-1058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32704]



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Part IV





Federal Trade Commission





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16 CFR Part 305



Disclosures Regarding Energy Consumption and Water Use of Certain Home 
Appliances and Other Products Required Under the Energy Policy and 
Conservation Act (Appliance Labeling Rule); Final Rule

  Federal Register / Vol. 76 , No. 4 / Thursday, January 6, 2011 / 
Rules and Regulations  

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FEDERAL TRADE COMMISSION

16 CFR Part 305

RIN 3084-AB15


Disclosures Regarding Energy Consumption and Water Use of Certain 
Home Appliances and Other Products Required Under the Energy Policy and 
Conservation Act (Appliance Labeling Rule)

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (FTC or Commission) is adopting 
final amendments to its Appliance Labeling Rule, to implement section 
325 of the Energy Independence and Security Act of 2007. The amendments 
establish labeling requirements for televisions.

DATES: The amendments published in this document will become effective 
on May 10, 2011, with the exception of the amendments to Sec.  305.20, 
which will become effective on July 11, 2011. The incorporation by 
reference of certain publications listed in the regulations is approved 
by the Director of the Federal Register as of May 10, 2011.

ADDRESSES: Requests for copies of this document should be sent to: 
Public Reference Branch, Room 130, Federal Trade Commission, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. The complete record of 
this proceeding is also available at that address. Relevant portions of 
the proceeding, including this document, are available at http://www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, (202) 326-2889, 
Attorney, or Maura Dundon, (202) 326-3311, Attorney, Division of 
Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 
Room M-8102B, 600 Pennsylvania Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Introduction

    Section 325 of the Energy Independence and Security Act of 2007 
(EISA), Public Law 110-140, which amends the Energy Policy and 
Conservation Act (EPCA), 42 U.S.C. 6291 et seq., authorizes the 
Commission to require energy cost disclosures for televisions and 
certain other consumer electronics, including personal computers, cable 
or satellite set-top boxes, stand-alone digital video recorder boxes, 
and personal computer monitors. Pursuant to this authority, the 
Commission issued a Notice of Proposed Rulemaking (NPRM) seeking 
comment on proposed energy labels for televisions.\1\ Although the NPRM 
did not propose requirements for other consumer electronics, it 
requested comment on whether such disclosures would assist consumers. 
On April 16, 2010, the Commission held a public meeting to augment the 
written comments.
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    \1\ 75 FR 11483 (Mar. 11, 2010).
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    Having reviewed the written and oral comments, the Commission now 
publishes the final amendments to the Appliance Labeling Rule, 16 CFR 
part 305.\2\ The amendments require manufacturers to affix an 
EnergyGuide label to televisions. The label will disclose the unit's 
estimated annual energy cost and a comparison of energy costs to 
similar units. The amendments also require paper catalogs and Web sites 
to disclose the energy information for the televisions they offer for 
sale. These new requirements will help consumers who want to purchase 
energy efficient televisions.
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    \2\ The Appliance Labeling Rule's full title is ``Rule 
Concerning Disclosures Regarding Energy Consumption and Water Use of 
Certain Home Appliances and Other Products Required Under the Energy 
Policy and Conservation Act.''
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    This Notice provides background on the Commission's statutory 
authority, discusses the public comments received in response to the 
NPRM and at the public hearing, describes the amendments to the 
Appliance Labeling Rule and the Commission's reasons for promulgating 
the amendments, and analyzes the impact of those amendments pursuant to 
the Paperwork Reduction and Regulatory Flexibility Acts.

II. Background

    The current Appliance Labeling Rule requires energy disclosures for 
a variety of home appliances (``covered products''), such as 
refrigerators and dishwashers. The Rule requires manufacturers to affix 
a distinctive yellow and black EnergyGuide label to most covered 
products. For most covered products, the EnergyGuide labels disclose 
the products' estimated annual energy cost based on Department of 
Energy (DOE) test procedures, as well as an energy cost comparison to 
similar products. Energy cost disclosures must also appear in paper 
catalogs and on Internet sites offering the products for sale. The Rule 
allows manufacturers to place the U.S. Government ENERGY STAR logo on 
labels for products that qualify for that program.\3\
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    \3\ ENERGY STAR is a voluntary government labeling program that 
identifies high-efficiency products. The Environmental Protection 
Agency (EPA) administers the ENERGY STAR program. See http://www.energystar.gov.
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    Televisions are covered products under EPCA. However, in 1979, the 
Commission determined not to require labeling because there was little 
variation in energy use between models and energy costs per model were 
generally low.\4\ In 2007, the Commission revisited labeling 
televisions as part of a broad review of the EnergyGuide label's 
effectiveness.\5\ Commenters urged the Commission to require television 
labels because many modern televisions use as much, or more, 
electricity than products labeled under the current Rule, and energy 
use varies significantly between similarly sized models. The Commission 
therefore concluded that energy labeling for televisions likely would 
assist consumers in purchasing decisions, but noted that DOE test 
procedures dating from the 1970s were outdated and inapplicable to most 
modern televisions.\6\ Absent an applicable DOE test procedure, the 
Commission had no authority to require an alternate procedure.
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    \4\ The NPRM discusses the statutory and administrative 
background of television labeling in greater detail. 75 FR at 11483-
84.
    \5\ 72 FR 49948, 49962 (Aug. 29, 2007); 72 FR 6836, 6857-58 
(Feb. 13, 2007).
    \6\ Id. Until October 2009, DOE's regulations contained a test 
procedure created for analog cathode-ray tube (CRT) products and 
relied on a black and white static test pattern. DOE repealed that 
television test procedure. 74 FR 53640 (Oct. 20, 2009).
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    In late 2007, Congress amended EPCA, giving the Commission 
discretion to require energy disclosures for televisions and four other 
consumer electronic products \7\ even if DOE has not published its own 
test procedures.\8\ Specifically, the Commission may require 
disclosures if it identifies adequate non-DOE test procedures and finds 
that disclosures will likely assist consumers to make purchasing 
decisions.\9\ However, the Commission cannot require disclosures if it 
finds they would not be technically or economically feasible.\10\ The 
amended law also empowers the Commission to consider alternatives to 
traditional product labels for these consumer electronics.\1\\1\ 
Finally, the amendments

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provide the Commission with authority to require labeling or other 
disclosures for any other consumer product not specifically listed in 
the statute if the FTC determines such labeling is likely to assist 
consumers in making purchasing decisions.\12\
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    \7\ The four products are personal computers, cable or satellite 
set-top boxes, stand-alone digital video recorder boxes, and 
personal computer monitors. 42 U.S.C. 6294(a)(2)(I)(i).
    \8\ Id. Sec.   6294(a)(2)(I)(ii). If DOE publishes applicable 
test procedures for the specified consumer electronics, the labeling 
requirements are no longer discretionary: the Commission must issue 
disclosure requirements using the DOE procedures within 18 months of 
their publication. Id. Sec.  6294(a)(2)(I)(i).
    \9\ Id. Sec.  6294(a)(2)(I)(ii).
    \10\ Id. Sec.  6294(a)(2)(I)(iv).
    \11\ Specifically, EPCA empowers the Commission to ``prescribe 
labeling or other disclosure requirements for the energy use of'' 
the covered consumer electronic products. Id. Sec.  6294(a)(2)(I) 
(emphasis added). EPCA also allows discretionary application of the 
label content required for other covered products (e.g., energy cost 
comparison ranges). Id. Sec.  6294(c)(9).
    \12\ Under EPCA, a ``consumer product'' means any article which 
consumes energy and is distributed in commerce for personal use or 
consumption by individuals. Id. Sec.   6291(1).
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    In response to the EPCA amendments, on March 16, 2009, the 
Commission published an Advance Notice of Proposed Rulemaking (ANPR) 
seeking comment on the need for television energy disclosures.\13\ 
Given the lack of an applicable DOE test procedure, the ANPR proposed 
requiring a recently developed test procedure adopted by the ENERGY 
STAR program. The ANPR also sought comment on the format of the 
television disclosures and the need for disclosures for other consumer 
electronics.
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    \13\ 74 FR 11045 (Mar. 16, 2009). The comments received in 
response to the ANPR can be found at http://www.ftc.gov/os/comments/tvenergylabels/index.shtm.
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III. Notice of Proposed Rulemaking

    After reviewing the ANPR comments, the Commission published an NPRM 
on March 11, 2010, which proposed a label with energy disclosures 
derived from the ENERGY STAR test.\14\ The label would disclose the 
television's annual energy cost in dollars, its annual energy use in 
kilowatt hours, and an energy cost comparison with televisions of 
similar screen sizes. The proposed label would employ a black-on-yellow 
design, similar to EnergyGuide labels currently in use for other 
products. Manufacturers would affix the labels to the front of 
televisions, so that they are visible to consumers looking at models 
displayed in retail stores. The NPRM provided three choices for the 
label shape and attachment: a rectangular horizontal adhesive label 
affixed to the bezel (the rim bordering the screen); a vertical 
rectangular label essentially identical to the horizontal label; and a 
triangular static cling label affixed to the bottom right-hand corner 
of the screen. The NPRM sought comment on whether the bezel labels 
should be affixed in a consistent location, whether some televisions 
were too small for the proposed labels, and whether the label 
disclosures should appear on television packaging.
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    \14\ 75 FR 11483.
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    In addition, the NPRM proposed requiring paper catalogs and Web 
sites selling televisions to include either a copy of the EnergyGuide 
label or a text statement of the product's annual energy cost. Paper 
catalogs and Web sites choosing the latter option would not have to 
include the energy cost comparison.
    Finally, the NPRM sought comments on labeling other consumer 
electronics, but did not propose requiring labels for those products.

IV. Public Comments and Final Rule

    Twenty-three commenters responded to the NPRM, and the Commission 
received further public comment during an April 16, 2010, public 
meeting.\15\ The Commission's responses to those comments are detailed 
below.
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    \15\ The written comments and a transcript of the April 16 
public meeting are online at: http://www.ftc.gov/os/comments/tvenergylabelsnprm/index.shtm. Unless otherwise stated, the 
citations for comments in this Notice are: American Council for an 
Energy-Efficient Economy (ACEEE), 547194-00030; Adamo, 
547194-00005; Bang & Olufsen, 547194-00012; 
People's Republic of China (China), 547194-00031; 
Consortium for Energy Efficiency (CEE), 547194-00026; 
Consumer Electronics Association (CEA), 547194-00021; 
Consumer Electronics Retailers Coalition (CERC), 547194-
00015; Consumers Union, 547194-00013; Dabney, 
547194-00004; Earthjustice, 547194-00020, 
547194-00022, 547194-00023, 547194-00024, 
547194-00025; Edison Electric Institute, 547194-
00017; Heizer, Mark, 547194-00003; Jarvis, Eric, 
547194-00002; Miles, Christopher, 547194-00006; 
Mitsubishi Digital Electronics America (Mitsubishi), 
547194-00019; National Cable & Telecommunications 
Association, 547194-00018; Natural Resources Defense 
Council (NRDC), 547194-00011; Northeast Energy Efficiency 
Partnerships (NEEP), 547194-00014; Pacific Gas and Electric 
Company, Sacramento Municipal Utility District, Northwest Efficiency 
Alliance (PG&E), 547194-00027; Panasonic Corporation of 
North America (Panasonic), 547194-00029; Rollins, Matthew, 
547194-00009; Sharp Laboratories of America (Sharp), 
547194-00028; Sony Electronics Inc. (Sony), 
547194-00016. Citations to the Commission's public meeting 
are to the transcript page number (Meeting Tr. at x).
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A. The Need for Television Disclosures

    In its NPRM, the Commission explained that television labels are 
likely to assist consumers in their purchasing decisions because 
televisions consume large amounts of electricity, energy use varies 
considerably among competing models, and consumers are likely to use 
energy information in their purchasing decisions.\16\ No commenter 
challenged these facts or opposed a disclosure requirement. Indeed, 
although there were disagreements on implementation details, commenters 
from all sectors supported disclosure, including manufacturers, 
retailers, private individuals, utilities, consumer groups, and 
environmental groups.\17\ In light of these comments and the reasons 
given in the NPRM, the Commission reaffirms its determination that 
television energy disclosures are likely to assist consumers in making 
purchasing decisions.
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    \16\ 75 FR at 11484-11485.
    \17\ See, e.g., Mitsubishi; CERC; Miles, Christopher; Rollins, 
Matthew; PG&E Consumers Union; and Earthjustice.
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B. Test Procedure for Determining Energy Usage

    As discussed below, the final amendments adopt the NPRM's proposal 
to use the EPA's ENERGY STAR test procedure to provide data for the 
disclosure.
    Background: Where no ``applicable'' DOE test exists, EPCA 
authorizes the Commission to use ``adequate non-Department of Energy 
test procedures'' to obtain information for energy disclosures.\18\ DOE 
does not currently have a test procedure for televisions.\19\ 
Accordingly, the NPRM proposed using the EPA's ENERGY STAR test 
procedure, which is based on the International Electrotechnical 
Commission (IEC) procedure.\20\
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    \18\ 42 U.S.C. 6294(a)(2)(I)(ii).
    \19\ 74 FR at 53641 (DOE notice repealing its obsolete standard 
and stating that ``DOE will soon begin a rulemaking process to 
establish a new Federal test procedure * * *'').
    \20\ 74 FR at 11485 (``[T]he ENERGY STAR tests seek to reflect 
the manner in which consumers are likely to use the product in their 
homes.'').
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    The NPRM noted two additional issues related to test procedures. 
First, DOE was planning to develop a test procedure and energy 
efficiency standards for televisions. Second, CEA was developing its 
own test procedure, although it was unclear if CEA had finalized its 
protocol. Accordingly, the Commission sought comments on whether it 
should wait to finalize disclosure rules until DOE, CEA, or both, 
completed their work.\21\
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    \21\ Id.
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    Comments: No commenters identified any inadequacy with the ENERGY 
STAR test procedure. However, CEA urged the use of its own standard, 
CEA-2037, which it published in March 2010.\22\ According to CEA, this 
standard covers all necessary measurements and is also fully consistent 
with ENERGY STAR's testing criteria.
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    \22\ CEA submitted a copy of CEA-2037, which is copyright 
protected, as a confidential attachment to its comment. The full 
procedure is available for purchase on CEA's Web siteWeb site at 
http://www.ce.org/Standards/browseByCommittee_7559.asp.
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    Sharp, Sony, and Mitsubishi also supported using CEA-2037. Sharp 
characterized CEA-2037 as the ``clearest,

[[Page 1040]]

least ambiguous measurement method'' and ``harmonious'' with the ENERGY 
STAR program. Sony noted that CEA-2037 was developed by CEA's standards 
committee with industry input and is consistent with IEC and ENERGY 
STAR test procedures. Sony also stated that CEA-2037 will provide 
``additional details to assure that measurements are consistent and 
repeatable.'' Mitsubishi noted that the recent version of the ENERGY 
STAR test references CEA-2037 for some measurement procedures.
    Two commenters, NRDC and NEEP, urged the Commission to use the 
ENERGY STAR test.\23\ NRDC noted that manufacturers already use the IEC 
procedures incorporated into ENERGY STAR and, thus, should be able to 
adapt quickly within the proposed six month effective date. Moreover, 
NRDC viewed the CEA standard as ``overly restrictive'' because it does 
not let the tester use any mode other than the home (standard) mode. 
Similarly, PG&E commented that the procedure adopted should be able to 
adapt to new television features, such as Internet connectivity, as 
they emerge.
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    \23\ While NEEP did not specifically address the energy test 
procedure, it incorporated NRDC's positions. See NEEP at 1 (``[W]e 
would like to express our explicit support for the comments 
submitted by * * * Natural Resources Defense Counsel.'').
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    NRDC also raised concerns that the development process for CEA-2037 
lacked transparency and did not include all stakeholders.\24\ CEA 
disagreed, stating that ``the claim that somehow the CEA standard was 
not done in an open and transparent way is simply untrue.'' \25\
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    \24\ NRDC; Meeting Tr. at 22, 33.
    \25\ Meeting Tr. at 23-24, 40-41.
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    Finally, without commenting on the relative merits of CEA-2037, 
ACEEE and Earthjustice urged the Commission to adopt the ENERGY STAR 
standard rather than delaying rulemaking for the DOE standard.
    Discussion: The final amendments require manufacturers to use the 
test procedure in the ENERGY STAR program requirements (Version 
4.2).\26\ For the reasons stated in the NPRM, the ENERGY STAR test 
procedure is adequate to test televisions as they are typically used by 
consumers, fulfilling EPCA's requirement that the Commission select an 
adequate non-DOE test.\27\ Moreover, using the ENERGY STAR procedure 
would provide uniformity across the U.S. government, allowing 
manufacturers to use a single test for ENERGY STAR and the EnergyGuide 
label. In light of the unchallenged adequacy of the ENERGY STAR test 
and the uniformity it would provide, the Commission sees no compelling 
reason to depart from its proposal.
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    \26\ The test procedure comprises the ENERGY STAR Program 
Requirements, Product Specification for Televisions, Eligibility 
Criteria Version 4.2 (Adopted April 30, 2010); the Test Method 
(Revised Aug, 2010); and the CEA Procedure for DAM Testing: For TVs, 
Revision 0.3 (Sept. 8, 2010).
    \27\ 75 FR at 11485. Although some commenters argued in favor of 
the CEA-2037 test, neither they nor other commenters suggested that 
the ENERGY STAR procedure is inadequate. The Commission does not 
make any conclusions about the adequacy of CEA-2037 or the 
transparency of its development.
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    When DOE completes its own rulemaking to develop a television test 
procedure for use in that agency's efficiency standards program, the 
Commission will issue conforming amendments consistent with EPCA's 
requirement that the labels use information from DOE test procedures 
when such procedures are available.\28\
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    \28\  See 42 U.S.C. 6293(c) and 6294(a)(2)(I)(i). The switch to 
the DOE test procedure will trigger EPCA's requirement that 
television manufacturers submit annual energy reports to the 
Commission derived from DOE test procedures. 42 U.S.C. 6296(b)(4); 
16 CFR 305.8. At that time, the Commission will set an annual 
reporting date for television manufacturers. However, both before 
and after the switch to the DOE test, manufacturers must retain 
their test data until at least two years after production of the 
model has terminated. 16 CFR 305.21(a). The Commission may request 
this data with 30 days notice. Id. Sec.  305.21(b).
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C. Content

    The final amendments require two primary label disclosures: (1) The 
television's product-specific estimated annual energy cost, calculated 
using a standard electricity rate and an estimate of daily hours of 
television use; and (2) a comparison with the annual energy cost of 
other televisions with similar screen sizes.
1. Product-Specific Estimated Annual Energy Cost
    Background: Under EPCA, the Commission may require the energy 
disclosure to include estimated annual energy cost or another useful 
measure of energy consumption.\29\ In its NPRM, the Commission proposed 
that the label list the television's estimated annual energy cost in 
dollars and its annual energy use in kWh.
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    \29\ 42 U.S.C. 6294(c)(1). EPCA gives the Commission discretion 
to choose the content of television disclosures. 42 U.S.C. 
6294(a)(2)(I)(ii), (c)(9).
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    To calculate these disclosures using the ENERGY STAR test, the NPRM 
proposed a standard electricity cost and a standard ``duty cycle'' (an 
estimate of the hours the television is on and in standby mode per 
day). Specifically, the NPRM proposed a standard rate of 11 cents per 
kWh, which incorporates 2009 DOE cost data rounded to the nearest cent, 
and a duty cycle of 5 hours on and 19 hours standby per day (``the 5/19 
duty cycle'').\30\ The NPRM proposed the 5/19 duty cycle because the 
ENERGY STAR program uses that duty cycle to provide annual energy use 
estimates.\31\ The NPRM further reasoned that regardless of actual 
average usage, the 5/19 duty cycle would establish consistent energy 
use and cost figures, allowing consumers to compare products.
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    \30\ 5 FR at 11488 (citing DOE energy data published at 74 FR 
26675 (June 3, 2009)).
    \31\ The NPRM also reasoned that the 5/19 duty cycle was within 
the range of usage provided by ANPR commenters.
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    The NPRM did not propose that the amount of energy consumed by 
integrated functions, such as a built-in DVD player or Internet 
connectivity, be included in the annual energy use and cost disclosed 
on the label. However, the NPRM requested comment on whether the label 
should inform consumers that the annual energy cost does not include 
the operation of integrated functions.
    Comments: Multiple commenters supported the proposal to calculate 
annual energy cost and use based on the assumptions of 11 cents per kWh 
and a 5/19 duty cycle.\32\ Consumers Union, however, suggested using an 
8/16 duty cycle, arguing that 5 hours underestimates total on-time. 
Consumers Union also asked the Commission to investigate usage patterns 
for smaller televisions, which consumers may use for less time because 
they are placed in secondary locations, like kitchens. Similarly, EEI 
proposed using a 2/22 or 3/21 duty cycle for televisions smaller than 
27'' because consumers use them less than larger televisions.
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    \32\ See, e.g., Mitsubishi and Panasonic.
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    With the exception of China, no commenter argued that the label's 
energy use and costs calculations should include the energy consumed by 
integrated functions. Commenters had varying views, however, regarding 
whether the label should disclose that it does not include the energy 
use of those integrated functions. CEE recommended that the label state 
that integrated functions are not included. On the other hand, 
Consumers Union opposed such a disclosure, reasoning that integrated 
functions do not significantly add to energy consumption. It added, 
however, that the Commission should revisit this issue if new 
integrated functions increase energy usage.\33\ Mitsubishi took

[[Page 1041]]

no position on the disclosure, but asked that any such requirement only 
apply to models with an integrated function.
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    \33\ Consumer Union also noted that while 20% of televisions 
sold in the United States in 2010 are forecasted to include Internet 
connectivity, it is too early to determine if consumers will use 
this function in a way that significantly increases energy use. 
However, China commented that Internet Protocol Television 
(``IPTV'') has substantially different energy consumption and usage 
patterns from other televisions. Therefore, China recommended either 
exempting IPTVs from the labeling rule, including a disclosure about 
IPTVs on the proposed label, or creating a separate label for such 
televisions.
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    Finally, Consumers Union raised an issue about which there was no 
specific proposal in the NPRM. Specifically, it voiced concern about 
retesting a television model's energy use, arguing that manufacturers 
should be required to retest their models whenever ``a product design 
is changed'' in order to determine whether the energy information on 
the label is still accurate.
    Discussion: The final amendments adopt the NPRM's proposal to use 
11 cents per kWh and a 5/19 duty cycle to calculate annual estimated 
energy cost and use.\34\ No commenters objected to the 11 cents per kWh 
energy rate.\35\
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    \34\ The final amendments also adopt the NPRM's proposal to 
include additional information on the label consistent with other 
EnergyGuide labels, including manufacturer name, model number, and 
the ENERGY STAR logo (where applicable). The label excludes other 
information, such as the model's screen size or type, because 
manufacturers routinely provide this information elsewhere and its 
inclusion would clutter the label.
    \35\ China requested that the Commission provide a formula to 
determine the annual energy cost. The ENERGY STAR test and amended 
Rule sections 305.5(d) and 305.17(f) provide the information 
necessary to calculate the annual energy cost. The Commission will 
provide further written guidance to business as necessary to help 
them comply with the Rule, and Commission staff are also available 
to discuss compliance directly with manufacturers.
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    As some commenters noted, consumers may use their televisions for 
more or less than five hours per day, but the 5/19 duty cycle provides 
uniformity between the EnergyGuide and ENERGY STAR's publicly available 
use estimates, reducing potential consumer confusion. Moreover, the 
uniform 5/19 duty cycle allows consumers to compare costs between 
products even if the estimate over or underestimates actual usage. 
Finally, using different duty cycles based on screen size as suggested 
by EEI and Consumers Union would prevent consumers from easily 
comparing the energy use of larger televisions to smaller ones. The 
Commission, therefore, declines to use a different duty cycle.
    The final amendments do not require the label's annual energy 
calculations to include the energy consumed by integrated functions, 
nor do they require a disclosure that the integrated functions' energy 
use is not included. Neither including the energy consumed by 
integrated functions nor disclosing that those functions' energy use is 
excluded is likely to assist consumers because the functions currently 
consume little additional electricity. Moreover, an additional 
disclosure about the exclusion of integrated functions' energy use 
would crowd the label. If evidence indicates that integrated functions, 
especially Internet connectivity, implicate significant new energy use, 
the Commission may consider amending the Rule.\36\
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    \36\ The Commission is not exempting or treating IPTVs 
differently at this time. There is insufficient information on the 
record concerning how consumers use IPTV and whether it differs from 
their use of other televisions.
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    Lastly, the amended Rule does not specify when manufacturers must 
retest their models to determine whether the energy information on the 
label remains accurate. Manufacturers are in the best position to 
determine when a design change could alter energy consumption, and 
therefore, when retesting is needed. Manufacturers whose labels do not 
contain accurate energy information because of design changes will 
violate 16 CFR 305.4.
2. Comparative Information
    Background: Under EPCA, the Commission may require disclosure of 
comparative energy consumption information for similar products.\37\ 
The NPRM, therefore, proposed requiring a scale on the label comparing 
televisions of similar diagonal screen sizes in categories of 10'' 
increments. The categories would not separate products by display 
technology (e.g., they would not compare plasma screens only to other 
plasma screens). The endpoints of each scale would represent the 
highest and lowest energy consumption of models on the market in that 
category, using ENERGY STAR energy data.\38\ This data appeared to 
cover most products on the market, providing ranges that reasonably 
reflect the energy use of currently available models.\39\
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    \37\ 42 U.S.C. 6294(c)(1), (c)(9).
    \38\ The data were submitted voluntarily by manufacturers to 
qualify their models for ENERGY STAR certification under ENERGY STAR 
3.0.
    \39\ See, e.g., Steven Castle, Stricter Energy Star Standards 
for TVs Coming--Again, Electronic House, May 28, 2009, http://www.electronichouse.com/article/stricter_energy_star_standards-for-tvs-coming-again/ (``Most TVs on the market can meet the [ENERGY 
STAR 3.0] spec.'').
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    Comments: Commenters generally favored including comparative 
information on the label, and agreed that screen size, rather than 
display technology or other factors, should be the basis of 
comparison.\40\ However, many commenters (ACEEE, CEA, CEE, CERC, 
Consumers Union, Mitsubishi, NRDC, PG&E, Sharp, and Sony) noted that 
the NPRM's proposed 10'' increments were too large because each 
proposed category would include several common screen sizes.\41\ 
Mitsubishi and a Natural Resources Canada representative explained that 
consumers tend to shop by screen size, so the Commission's categories 
would prevent them from easily comparing the products they were 
considering.\42\
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    \40\ See e.g., ACEEE, CEA, CEE, CERC, Consumers Union, 
Mitsubishi, NRDC, PG&E, Sharp and Sony.
    \41\ The majority of sales tend to cluster around fixed screen 
sizes: 19, 22, 26, 32, 
37, 40, 42, 46, 
55, and 65. See CEA and PG&E. An analysis of 
the data submitted by commenters also shows a cluster of sales 
around the 15 screen size. The NPRM's proposal would have 
grouped two or three of these screen sizes into most categories.
    \42\ Mitsubishi; Meeting Tr. at 67-68. The Canadian regulators 
also are engaged in a process to require energy labels for 
televisions.
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    Many commenters, including CEA, Consumers Union, NRDC, Panasonic, 
PG&E, and Sony, presented specific proposals for grouping televisions 
into smaller categories of approximately 4-5 
increments, which place only one or two commonly sold screen sizes in 
each category.\43\ NRDC additionally cautioned that the ranges should 
not allow manufacturers to game the system by slightly increasing their 
screen size to get into the next higher category, thus appearing more 
energy efficient in comparison to larger screens. CEE, however, voiced 
concern that the smaller proposed categories would be ``too granular'' 
and would prevent consumers from realizing that they could save energy 
costs by choosing a smaller screen size.
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    \43\ The commenters offered slightly different proposals for 
each category size. The one significant difference among the 
proposals, however, involved smaller televisions. CEA, Panasonic, 
Sony, and PG&E proposed keeping televisions from 0-20 in 
one cagtegory, whereas NRDC proposed dividing these televisions into 
three categories.
---------------------------------------------------------------------------

    Discussion: The final amendments require the labels to compare 
televisions of similar screen sizes. The Commission agrees that the 
comparison categories should facilitate consumers' easy comparison of 
similar products, which reflects how they shop in practice. 
Accordingly, the final amendments adopt the commenters' proposals to 
reduce the size of the categories to 4-5 in order to place 
only one or two commonly sold screen sizes in each category.\44\ Most 
of the common screen sizes fall towards the beginning or middle of each 
category, which should reduce any incentive for ``gaming'' the

[[Page 1042]]

system by slightly increasing screen size in order to move up into the 
next category.
---------------------------------------------------------------------------

    \44\ The amended Rule includes a table with the ranges at 16 CFR 
305.17(f)(5). The final amendments divide smaller televisions into 
separate categories, thereby keeping the commonly sold screen sizes 
of 19 and 15 in their own categories. Given 
the apparent paucity of smaller television models covered by the 
amended Rule, the 15 category covers models from 0-
16.
---------------------------------------------------------------------------

    CEE's concern that smaller screen size increments will prevent 
consumers from comparing smaller screens to larger screens is not 
persuasive. Because consumers tend to shop by screen sizes, categories 
allowing them to easily compare energy costs for the same screen sizes 
should help them choose among the models that interest them. Moreover, 
the estimated annual energy cost, which is the label's primary 
disclosure, allows for easy comparisons across all categories for those 
consumers who wish to compare different screen sizes.
    The comparison ranges are derived from ENERGY STAR data, as 
proposed in the NPRM. If a model's energy cost falls outside the high 
or low end of the comparability range, manufacturers must place the 
product on the very end of the scale (the high or low end as 
appropriate).\45\
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    \45\ NRDC reasserted its preference for a one through five star 
ranking system, stating that ranking systems in other countries have 
motivated manufacturers to produce efficient models. The 
Commission's prior studies of the EnergyGuide and light bulb labels, 
however, suggested that the five-star rating system was more likely 
to cause confusion with ENERGY STAR than other methods of 
communicating energy use. See 74 FR 57950, 57956 (Nov. 10, 2009); 72 
FR 6836, 6844-46 (Feb. 13, 2007). The final amendments, therefore, 
do not employ such a rating system.
---------------------------------------------------------------------------

D. Coverage

    As detailed below, the final amendments: (1) Require a label 
visible from the front of all televisions, except for battery-powered 
models; and (2) do not require labels on boxes.
    1. Labels Visible From the Front of All Televisions; Battery 
Powered Excluded
    Background and Comments: The NPRM proposed that all televisions 
bear the EnergyGuide label on the screen or bezel.\46\ The Commission 
reasoned that these labels would be easily visible to consumers and 
would assist them in comparing energy consumption. Bang & Olufsen 
argued that ``label[ing] every single product is inappropriate'' 
because many of the labels will not be visible to consumers before they 
purchase the item. Instead, it argued that only televisions used in 
displays should have a label. Sony likewise commented that only display 
models should bear physical labels because labeling all televisions 
would be ``very labor intensive and costly.'' However, at the 
Commission's public meeting, CERC indicated that manufacturers do not 
designate certain televisions as display models.\47\
---------------------------------------------------------------------------

    \46\ EPCA gives the Commission discretion to chose the location 
of television disclosures. 42 U.S.C. 6294(a)(2)(I)(ii), (c)(3), 
(c)(9).
    \47\ Meeting Tr. at 126.
---------------------------------------------------------------------------

    CEA and Sharp argued that the Commission should exempt battery-
powered televisions. CEA explained that battery-powered televisions are 
unlike standard televisions in design, energy consumption, and consumer 
use. Unlike standard televisions, battery-powered models are mobile, 
can operate on battery power without being connected to the local mains 
(i.e., into the wall socket), and consume little electricity in order 
to extend battery life and facilitate mobility. CEA also explained that 
unlike standard televisions, consumers routinely consider battery life 
when purchasing a battery-powered television.
    Discussion: The final amendments require that all televisions bear 
a label, not just display models. In practice, retailers do not receive 
units designated for display by manufacturers. Therefore, limiting the 
labeling requirements to only certain display models would necessitate 
the development of a separate regulatory scheme to, among other things, 
ensure that manufacturers label a sufficient number of models and send 
those models to retailers, and that retailers display only those 
particular models. Further, labeling each model provides useful energy 
consumption information to consumers after they purchase the 
televisions. Given the need to develop numerous regulations for display 
models and the benefits that labeling each model provides to consumers, 
the Commission has determined to require the labeling of all covered 
units.
    The final amendments do not cover battery-powered televisions. This 
rulemaking has focused on standard televisions, which are designed to 
be powered exclusively by being plugged directly into a wall outlet. 
Battery-powered televisions differ significantly from standard 
televisions: they may be powered by a rechargeable, built-in battery; a 
supplementary external power supply connected directly to a wall outlet 
(e.g., an AC adapter); or disposable inserted batteries (e.g., AA 
alkaline batteries). Although adequate tests may exist to measure these 
factors, no commenters identified which tests would provide useful 
energy information to consumers.\48\ Accordingly, the Commission 
declines to cover battery-powered televisions at this time.
---------------------------------------------------------------------------

    \48\ The ENERGY STAR television test covers battery-powered 
models, but it specifies that the unit must be ``connected to a 
mains power source'' during the test (i.e., plugged into the wall 
outlet, rather than using the battery). ENERGY STAR Program 
Requirements, Product Specification for Televisions, Eligibility 
Criteria Version 4.2 (Adopted April 30, 2010), supra note 26, ]] 
2.1.1 and 1.G.1. That test does not measure the energy required to 
recharge the battery itself, nor can it account for the use of 
disposable alkaline batteries. The commenters did not address 
whether other tests exist to measure these factors. In addition, any 
label for a battery-powered television would need to avoid the 
possibility of consumers misinterpreting cost disclosures as 
representations about battery life or the cost of disposable 
batteries.
---------------------------------------------------------------------------

2. Boxes Not Labeled
    Background and Comments: The NPRM sought comment on whether 
manufacturers should be required to label product packaging, as well as 
the televisions themselves, because some retailers place boxes in 
showrooms. Five commenters (Consumers Union, Earthjustice, ACEEE, CEE, 
and NEEP) advocated labeling boxes, arguing that box labels provide a 
back-up source of information in case the label is not visible on the 
product itself.\49\ Earthjustice argued that labeling boxes would help 
consumers ensure that the model they purchased matched the energy 
efficiency of the model displayed. It also suggested that retailers may 
display boxes in addition to or rather than unboxed display models. 
Similarly, ACEEE stated that retailers may display boxes in a different 
location from the display models.
---------------------------------------------------------------------------

    \49\ CEE, however, stated that the Commission should require box 
labeling only if costs are not unduly burdensome.
---------------------------------------------------------------------------

    Several commenters disagreed, asserting that labeling boxes would 
not provide useful information. CEA, Mitsubishi, and Sharp argued that 
the box label would be duplicative. They observed that retailers 
usually display a television out-of-the-box, and consumers would 
usually examine a labeled display model or online model before 
purchase. Sony, Mitsubishi, and Panasonic added that many consumers 
never see the box prior to purchase, or may never see the box at all if 
the television is delivered and assembled for them.\50\ Additionally, 
five commenters (CEA, Mitsubishi, Panasonic, Sharp, and Sony) explained 
that manufacturers print boxes many months before obtaining final test 
results of the model's energy consumption. Given this practice, a box 
labeling requirement, in their view, would likely force manufacturers 
to affix adhesive labels to the boxes after they are printed, rather 
than printing the disclosure on the box directly.

[[Page 1043]]

According to commenters, this would be labor and cost intensive.
---------------------------------------------------------------------------

    \50\ CERC commented that labeling both the television and the 
box may cause ``inconsistent or erroneous messaging,'' but did not 
elaborate on the nature of the problem.
---------------------------------------------------------------------------

    Discussion: The final amendments do not require box labels. 
Although retailers may in some cases display boxes to consumers pre-
purchase, the comments indicate that consumers typically examine a 
display model before purchase. Rather than impose additional cost, 
substantial in the manufacturers' opinions, to label boxes, the amended 
Rule relies on labeled models to convey energy cost information. Should 
this approach prove inadequate, the Commission may revisit the 
requirement.\51\
---------------------------------------------------------------------------

    \51\ As discussed below in section IV.E.2, manufacturers have 
the option of labeling the boxes of televisions smaller than 9''.
---------------------------------------------------------------------------

E. Label Format

    The final amendments require that all covered televisions bear a 
physical EnergyGuide label that is visible from the front of the 
product. Additionally, as detailed below, the final amendments increase 
the size of the comparison scale and require a black-on-yellow color 
scheme; require a uniform label size; allow a choice between three 
label formats, including rectangular labels, triangular labels, and an 
alternate format not affixed directly to the front of the television; 
do not allow an electronic label in lieu of a physical label; and 
provide guidance on the label's location to promote uniformity.
1. Size of Comparison Scale and Color Scheme
    Background and Comments: The NPRM proposed presenting comparative 
energy cost information via a scale similar to that used on appliance 
labels. While commenters generally supported this approach, ACEEE, 
Consumers Union, Earthjustice, NEEP, NRDC, and PG&E voiced concern 
about the scale's visibility. Two commenters (Earthjustice and NRDC) 
noted that televisions are routinely displayed high on showroom walls, 
and that consumers could not read the comparative information on the 
proposed labels at that distance. Consumers Union added that larger 
font sizes would also assist consumers who may have poor eyesight.
    Discussion: In response to these concerns, the Commission has for 
all three label formats increased the comparison information's size and 
changed its design to improve visibility. The overall size of the 
labels will not increase significantly.\52\ Figure 1 below compares the 
proposed label on the left and the new label on the right:
---------------------------------------------------------------------------

    \52\ The triangular label's legs increase from 4.2'' to 4.5''. 
The horizontal label's width increases from 4.7'' to 5.23''. The 
vertical label's height increases from 4.7'' to 5.5''.
[GRAPHIC] [TIFF OMITTED] TR06JA11.085

    Sharp and CEA proposed yellow type on black background, which 
reverses the standard EnergyGuide scheme. They argued that such an 
approach would interfere less with the aesthetics of the screen while 
retaining visibility. The final Rule, however, continues to require the 
familiar black-on-yellow EnergyGuide design. This uniform color scheme 
is likely to help consumers already familiar with EnergyGuide

[[Page 1044]]

labels better recognize and use the label's information.
2. Uniform Label Size
    Background and Comments: The NPRM proposed one size for the 
rectangular labels and one for the triangular label. The Commission 
requested comment on whether some models were too small for the 
proposed label. In response, the Commission received varying comments. 
Four commenters (NRDC, NEEP, CEA, and Sony) proposed scaling the label 
size to screen size. Specifically, NRDC proposed that screens larger 
than 32'' (measured diagonally) should have larger labels than those 
proposed in the NPRM, and CEA stated that televisions smaller than 22'' 
should have smaller labels than those proposed. Additionally, the 
government of China recommended exempting televisions smaller than the 
label, and CERC stated that ``[i]t would not be practical'' to require 
screen labels for televisions smaller than 9.'' CERC noted that such 
units are usually sold in boxes carried by the consumer to the counter, 
and thus should be labeled on the box rather than the screen.
    Discussion: The final amendments maintain uniform label size 
regardless of television size. The label need not be enlarged because 
the graphic component of the redesigned cost comparison scale will be 
visible even on larger televisions displayed on walls, and a larger 
label might unnecessarily interfere with the consumer's view of the 
television screen. The label cannot be reduced for smaller televisions 
without compromising visibility. However, in light of China's concerns 
about small televisions and CERC's comment that televisions smaller 
than 9'' are usually sold in boxes carried by consumers to a register, 
manufacturers may chose to label the boxes of these products, rather 
than the televisions themselves.\53\
---------------------------------------------------------------------------

    \53\ Because most televisions smaller than 9 are 
battery-powered and thus not covered by the final amendments, the 
Commission anticipates that few televisions boxes will be labeled.
---------------------------------------------------------------------------

3. Label Format
    Background: Under EPCA, the Commission may prescribe the manner in 
which the label is displayed.\54\ The NPRM proposed two formats for 
television labels: A small rectangular adhesive label affixed either 
vertically or horizontally on the product's bezel, or a triangular 
static cling label affixed to the bottom right-hand corner of the 
screen. Manufacturers would have the flexibility to chose which label 
to use, as well as the exact placement of the rectangular adhesive, 
which would allow them to take into consideration the configuration of 
their particular products. The NPRM also noted that some manufacturers 
already provide descriptive information (e.g., screen resolution, sound 
features, and high definition capability) through similar labels on the 
bezel or screen. The NPRM proposed prohibiting hang tags because they 
can easily fall off.
---------------------------------------------------------------------------

    \54\ 42 U.S.C. 6294(c)(3), (c)(9).
---------------------------------------------------------------------------

    Comments: Several commenters observed that many newer models, which 
have narrow or no bezels, would have to use the on-screen cling labels 
under the proposed Rule. Sony, Panasonic, Mitsubishi, and Bang & 
Olufsen, however, voiced concern that cling labels could damage 
television screens, especially newer technologies with delicate optical 
coatings, or that consumers would damage the screen trying to remove 
the labels.\55\ In contrast, ACEEE expressed support for the labels, 
stating that 3M, an adhesive manufacturer, concluded that labels could 
be made safe for use on television screens. Finally, CEA favored both 
the adhesive and cling label options, but noted manufacturers' and 
retailers' concerns about damage.
---------------------------------------------------------------------------

    \55\ At the Commission's public meeting, CEE stated that one 
retailer in a voluntary television labeling project reported that 
cling labels damaged screens. Meeting Tr. at 50-52. However, a 
representative from the Collaborative Labeling and Appliance 
Standards Program (CLASP) clarified that the damage in that case was 
due to defective labels. Meeting Tr. at 52-53.
---------------------------------------------------------------------------

    In light of these concerns, four commenters (Sony, Mitsubishi, 
Sharp, and CEA) urged the Commission to give manufacturers the 
flexibility to display the label in a way that does not require them to 
affix the label directly to the screen or bezel. At the public meeting, 
Sharp demonstrated a design currently used in Canada which attaches to 
the back of the television and folds over the television, so that the 
information is visible from the front of the screen.\56\
---------------------------------------------------------------------------

    \56\ Id. at 62-63.
---------------------------------------------------------------------------

    Commenters largely supported prohibiting hang tags. CERC, NRDC, and 
Sony (in its capacity as a retailer) agreed that hang tags should not 
be permitted because they may become dislodged or twisted.\57\ However, 
CEA stated that the Commission had not presented any evidence about why 
hang tags are unacceptable, and Consumers Union suggested that hang 
tags could be used on televisions too small to be labeled.
---------------------------------------------------------------------------

    \57\ CERC discussed hang tags at the public meeting. Id. at 11. 
The other commenters discussed the matter in their written 
submissions.
---------------------------------------------------------------------------

    Discussion: In response to commenter concerns about screen damage, 
the final amendments allow manufacturers to affix the label anywhere on 
the television, as long as the label itself is visible to someone 
viewing the front of the television. Accordingly, the final amendments 
give manufacturers the choice of using either a rectangular adhesive 
label adhered to the horizontal or vertical bezel; a triangular cling 
label affixed to the lower right-hand corner of the screen; or a 
rectangular or triangular label affixed using an alternate method 
anywhere on the television. Whichever format is used, manufacturers 
must ensure that the label is fully and prominently visible to 
consumers from the front of the television, will not become dislodged 
during normal handling throughout the distribution chain, and will not 
become obscured or dislodged under normal retail conditions. The 
amended Rule does not permit hang tags, defined as a label affixed 
``using string or similar material,'' \58\ because they may become 
dislodged.\59\
---------------------------------------------------------------------------

    \58\ 16 CFR 305.11(d)(2).
    \59\ The restriction is consistent with the Commission's current 
prohibition against exterior hang tags on other covered appliances. 
See 72 FR at 49960-61 (discussing the Association of Home Appliance 
Manufacturers comment stating that hang tags can become dislodged). 
The Commission currently allows interior hang tags for some products 
with interiors often examined by consumers, such as refrigerators. 
Because interior hang tags are obviously inappropriate for 
televisions, the Commission prohibits hang tags entirely here.
---------------------------------------------------------------------------

    Thus, the final amendments require an effective disclosure, but 
give manufacturers the flexibility to affix the label in a way that 
avoids any potential damage to the product and works for products with 
different configurations. The final amendments also accommodate 
evolving technology if televisions' physical shape and screen 
composition change over time.
4. Electronic Labeling Not Allowed To Satisfy the Amended Rule
    Background and Comments: Sony, Panasonic and Sharp proposed an 
electronic or virtual label programmed to appear on the screen in the 
television's ``retail mode.'' \60\ In their view, the electronic label 
would reduce the costs of printing and affixing physical labels. Sony 
added that an electronic label would also reduce the risk of 
mislabeling.
---------------------------------------------------------------------------

    \60\ The NPRM did not propose an electronic label. Commenters 
first proposed the electronic label at the April 16, 2010 public 
meeting, followed by written comments in support.
---------------------------------------------------------------------------

    ACEEE and NEEP, however, opposed the electronic label. They noted 
that Australian regulators rejected a similar proposal for several 
reasons. First, the regulators were concerned that continuously 
displaying the electronic

[[Page 1045]]

disclosure could damage the screen, and therefore the label would only 
be intermittently displayed. Second, Australian regulators worried that 
retail staff would turn off the retail mode to display an unobstructed 
image to customers. Finally, they expressed concern that the electronic 
label would require retailers to operate showroom models continuously, 
which would waste energy.
    CEA suggested further study of the electronic label, but cautioned 
that too many technological issues (such as font, access, layout, and 
rendering) remain unexplored for a timely decision. CEA urged that 
consideration of the electronic label not delay the present rulemaking.
    Discussion: The amended Rule does not permit electronic labels to 
satisfy its requirements. As CEA noted, the method for implementing an 
electronic label is unclear. Furthermore, the concerns noted by the 
Australian regulators suggest significant pitfalls, including the fact 
that the electronic image might appear only periodically. These 
potential problems could significantly reduce the labels' ability to 
assist consumers in their purchasing decisions. Moreover, although an 
electronic label would save the costs associated with the physical 
label, the television would have to be on continuously to display the 
label, which may offset those savings. Given these uncertainties, the 
Commission declines to allow electronic labels at this time.
5. Location
    Background: The Commission's NPRM proposed requiring manufacturers 
to affix the labels directly to the front of the screen. The triangular 
label would appear on the lower right-hand corner of the screen, and 
the rectangular label would be placed on the horizontal or vertical 
bezel. The Commission sought comment on whether manufacturers should be 
given discretion on the precise placement of the rectangular label on 
the bezel.
    Comments: Sony and Panasonic argued that a physical label affixed 
to the screen will interfere with customers' view of the screen. As 
discussed above, they proposed providing the information in an 
electronic label. Panasonic suggested labeling the television's side or 
back in addition to the electronic label, and Sony suggested labeling a 
non-viewing surface, such as the television stand. China likewise 
commented that the label should be placed on the side or back in order 
not to interfere with ``normal use,'' especially for smaller screens. 
In contrast, five commenters (ACEEE, CEE, NEEP, NRDC and PG&E) 
advocated a physical label on the front of the television so consumers 
can see the label while shopping. With respect to the rectangular 
label's precise location on the bezel, CEE and Consumers Union favored 
requiring a uniform location for easy comparison.
    Discussion: The final amendments require that all labels be visible 
from the front of the television so that consumers can easily see them 
on display models. Consumers are not likely to see a label attached to 
the side or back, and as discussed above, the Commission rejected the 
proposal to display an electronic label. The labels are small enough 
not to interfere with consumers' view, which should assuage commenters' 
concern that the label will block the screen.
    The final amendments specify the label's location on the television 
because a uniform location will help consumers to more easily find the 
label. However, given that televisions have varying configurations, the 
Rule provides manufacturers flexibility in placement of the rectangular 
and alternative labels. The rectangular label should be located on a 
bezel in the bottom right-hand corner of the television. Specifically, 
the horizontal rectangular label shall be located on the far right of 
the bottom bezel and the vertical rectangular label shall be located on 
the bottom of the right-hand bezel. However, if the television's 
configuration prevents such placement (e.g., if the model has buttons 
on the bottom right-hand bezel), manufacturers may adhere the 
rectangular label to another location on the bezel. Similarly, the 
alternative label should be visible from the front of the television, 
near the bottom right-hand corner. However, manufacturers may use 
another prominent location visible from the front of the television if 
the product's configuration or the alternative label's design prevents 
such placement.\61\
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    \61\ The alternative label presented at the Commission's public 
meeting was designed to hang over the top of the television. Meeting 
Tr. at 62-63. If this label meets the rest of the Rule's 
requirements, its location would be in compliance with the amended 
Rule because its design requires it to appear at the top of the 
television rather than the bottom.
---------------------------------------------------------------------------

    The final amendments do not give flexibility in the location of the 
triangular cling label, which must be placed on the lower right-hand 
corner of the screen. There is no indication that varying 
configurations require flexibility for the labels placed directly on 
the screen.

F. Catalog Disclosures

    The final amendments require catalogs (i.e., publications, 
including those on the Internet, from which a consumer can order 
merchandise) to display EnergyGuide information for televisions offered 
for sale. The amendments specify different disclosures for paper and 
online catalogs. Additionally, to facilitate compliance, the amendments 
require manufacturers to provide copies of the EnergyGuide labels 
online.
    Background: The NPRM proposed requiring catalogs that sell 
televisions to either: (1) Display an image of the full EnergyGuide 
label for each product; or (2) state the product's annual energy cost 
derived from the label, along with a generic disclosure that energy 
costs will vary with utility rates and use. Sellers choosing the latter 
option would not need to publish the comparative information found on 
the label. This proposal is consistent with current Commission 
requirements for covered appliances sold through catalogs.\62\ The NPRM 
did not distinguish between paper and online catalogs.
---------------------------------------------------------------------------

    \62\ 16 CFR 305.20. This provision implements EPCA's requirement 
that a ``catalog'' must ``contain all information required to be 
displayed on the label, except as otherwise provided by the rule of 
the Commission.'' 42 U.S.C. 6296(a). The current Rule defines 
``catalog'' as any ``printed material, including material 
disseminated over the Internet, which contains the terms of sale, 
retail price, and instructions for ordering, from which a retail 
consumer can order a covered product'' 16 CFR 305.2(h).
---------------------------------------------------------------------------

    Comments: Some commenters sought clarification concerning the scope 
of the disclosure requirements. Specifically, CERC asked the Commission 
to clarify that ``circulars and flyers'' are not subject to the 
disclosure requirements, and that manufacturers must provide the labels 
to retailers for use in their catalogs. NRDC asked the Commission to 
clarify that Web sites of brick-and-mortar stores must meet the catalog 
disclosure requirement, and that the Rule does not apply only to 
retailers that sell exclusively online.
    The commenters also discussed the proposed disclosures for both 
paper and online catalogs. Two commenters specifically addressed paper 
catalog disclosures. Earthjustice objected to the Commission's proposal 
to allow paper catalog sellers the option of disclosing the 
television's annual energy cost without the comparative information. It 
argued there is no legal or rational basis to allow catalog sellers to 
disclose less information than what appears on the label. Earthjustice 
contended that consumers cannot be expected to collect cost information 
for each television and

[[Page 1046]]

conduct a comparison of those energy costs themselves. It also argued 
that there is no evidence that printing a full label in a paper catalog 
would be burdensome.
    CERC, however, argued that print space is at a premium in paper 
catalogs and that ``there is also an environmental issue associated 
with the additional print space needed for every disclosure 
requirement.'' CERC, therefore, supported retaining the option of 
disclosing only the annual energy cost. CERC also recommended 
permitting paper catalogs to display a smaller version of the label 
than what appears in stores. For paper catalogs disclosing only the 
annual energy cost, CERC recommended allowing them to: (1) Provide the 
disclosure in the same font size used for the products' other 
descriptive information; and (2) print the generic information that 
accompanies the cost disclosure one time on a page, rather than 
multiple times with each individual product.
    With respect to catalogs on the Internet, several commenters 
(ACEEE, CEA, CEE, Earthjustice, NEEP, NRDC, and PG&E) supported 
requiring sellers to include an image of the entire EnergyGuide label 
for each advertised television. For example, Earthjustice stated that, 
as with paper catalogs, consumers need the full label information and 
there is no evidence that displaying a full label in a Web site would 
be burdensome. CERC, however, argued that space is also at a premium on 
the Internet and, as with paper catalogs, suggested that sellers have 
the option to display a smaller EnergyGuide label or make energy cost 
disclosures with one explanatory statement per page.
    The commenters also made various proposals about how sellers should 
display labels on the Internet. For example, Earthjustice argued that 
the label should appear on each webpage displaying the covered product 
and adjacent to the first image of the product. It further stated that 
sellers should not use a hyperlink to lead to the label because 
consumers may not find the link or understand it leads to energy 
information. NRDC, however, suggested using an icon that hyperlinks to 
the label. It proposed placing the icon on the first product screen in 
close proximity to the product's price and stated that consumers should 
not have to scroll down or switch to another tab or page to see the 
icon. CEA similarly suggested either posting the full label or a link 
to the label on the ``product description page.''
    Discussion: The final amendments require energy disclosures in 
catalogs that offer televisions for sale. Specifically, the amended 
Rule applies to all publications that contain ``the terms of sale, 
retail price, and instructions for ordering, from which a retail 
consumer can order a covered product.'' \63\ Flyers and circulars 
meeting this definition must contain the required disclosures. Further, 
the definition makes no distinction between brick-and-mortar stores 
selling online and online-only retailers.
---------------------------------------------------------------------------

    \63\ 16 CFR 305.2(h).
---------------------------------------------------------------------------

    The final amendments depart in several respects from the NPRM 
proposal and the Rule's catalog disclosures for covered appliances 
because the amendments require different disclosures for paper and 
online catalogs. For paper catalogs, the final amendments allow sellers 
to either display the full EnergyGuide label, or a statement of the 
television's annual energy cost and a generic explanation that energy 
costs will depend on utility rates and use. Catalogs that display the 
text statement do not need to include the comparison scale. EPCA does 
not require the Commission to include comparative information on the 
label; rather, it gives the Commission discretion to decide the 
disclosure's content.\64\ Print catalogs have space constraints and 
formats which may make it difficult to display the full label or the 
comparison scale. The Commission, therefore, exercises its discretion 
to give paper catalogs the option of stating the annual energy cost and 
not including the comparison scale.
---------------------------------------------------------------------------

    \64\ 42 U.S.C. 6296(a) (The catalog disclosure ``shall contain 
all information required to be displayed on the label, except as 
otherwise provided by rule of the Commission.'').
---------------------------------------------------------------------------

    Regardless of whether the paper catalog displays the full label or 
states the product's annual energy cost, the disclosure must appear 
clearly and conspicuously on each page displaying a television and its 
price, in close proximity to the price. These requirements should help 
ensure that consumers can find the energy information. The amendments 
do not require the use of a specific font size, however, given paper 
catalogs' differing formats. The amendments also state that if paper 
catalogs display more than one television model on a page, the seller 
can state that energy costs will vary once on that page rather than 
repeating the information for each advertised television. This 
information, however, must be clear and conspicuous.
    Although paper catalog sellers have a choice regarding how to 
disclose energy information, the final amendments require Internet 
sellers to display the full EnergyGuide label. Based on the comments, 
the Commission now finds that the reasons for allowing a space saving 
text-only disclosure for paper catalogs do not apply to the Internet. 
Online catalogs have fewer space constraints than paper catalogs and 
can more easily include the full EnergyGuide label, and information can 
be condensed by linking to the label. Any such hyperlink, however, must 
be in the form of a distinctive icon with the EnergyGuide logo in black 
and yellow.\65\
---------------------------------------------------------------------------

    \65\ Sample 13 in Appendix L displays the required icon. The 
icon does not include the explanatory ``Click Here for EnergyGuide 
Text'' suggested by NRDC. The meaning of the link should be clear 
without this text because the icon consists of the EnergyGuide logo.
---------------------------------------------------------------------------

    The final amendments require the label or icon to appear clearly 
and conspicuously and in close proximity to the product price. These 
requirements should assist consumers by ensuring that the energy 
information is easy to find on the Web site and visible. Thus, 
consumers will not have to scroll down unreasonably or click on a tab 
or other link to view the label or icon. Internet sellers may scale the 
label and icon appropriately to accommodate their layout as long they 
remain readable and recognizable. In further recognition of varying 
layouts, the amended Rule does not require that the label or icon 
appear alongside every image of a television on the site. For example, 
if summary pages list multiple television models and consumers must 
click on a link to obtain more information about a particular model, 
the EnergyGuide label or icon does not need to appear next to each 
model on that webpage. Instead, the label or icon must appear clearly 
and conspicuously on the television's main page, where a detailed 
description of the television and its price appear.\66\
---------------------------------------------------------------------------

    \66\ The Commission may consider extending the Web site 
disclosure requirements to all appliances covered under the Rule in 
the future.
---------------------------------------------------------------------------

    Finally, to facilitate catalog seller compliance with the Rule, 
manufacturers must make images of their labels available on a Web site 
for linking and downloading by both paper catalog and Internet sellers. 
The labels must remain available online for two years after the model 
ceases to be manufactured. This requirement is based on EPCA's mandate 
that manufacturers ``provide'' a label, which extends to providing the 
label online to catalog sellers so that those sellers may comply with 
the Rule's disclosure requirements.\67\
---------------------------------------------------------------------------

    \67\ 42 U.S.C. 6296(a). Catalog sellers may create their own 
versions of the labels rather than using the images provided by the 
manufacturers, as long as the labels conform to all the 
specifications in the amended Rule.

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

[[Page 1047]]

G. Retailer Responsibility

    The final amendments forbid retailers from removing or rendering 
EnergyGuide labels illegible.
    Background: The NPRM proposed that manufacturers and private 
labelers bear the responsibility for affixing labels to televisions. 
Retailers would be prohibited from removing or rendering the labels 
illegible, consistent with the Rule's requirements for other covered 
products,\68\ but would not have additional responsibilities to label 
the televisions themselves.
---------------------------------------------------------------------------

    \68\ 16 CFR 305.4(a)(2).
---------------------------------------------------------------------------

    Comments: In response to the NPRM, Earthjustice argued that EPCA's 
``express statutory mandate'' requires the Commission to ``hold 
retailers accountable for ensuring that the products they display and 
sell are properly labeled.'' Earthjustice focused on EPCA's requirement 
that the labeling rule must ``require that each covered product * * * 
bear a label'' \69\ which is ``displayed in a manner * * * likely to 
assist consumers.'' \70\ In Earthjustice's view, this can only be 
accomplished if retailers have an affirmative duty to ensure the 
televisions are properly labeled in stores.
---------------------------------------------------------------------------

    \69\ 42 U.S.C. 6294(c)(1). Earthjustice also cites an additional 
similar provision of EPCA requiring that the Commission's rule apply 
to ``all covered products.'' 42 U.S.C. 6294(a)(1).
    \70\ 42 U.S.C. 6294(c)(3).
---------------------------------------------------------------------------

    Earthjustice also argued that the Commission's failure to impose 
retailer obligations would be arbitrary and capricious.\71\ Citing a 
2007 Government Accountability Office (GAO) report finding that many 
covered products lacked a visible label in retail stores,\72\ 
Earthjustice argued that the Commission ``cannot rationally find its 
rules require labels to be displayed `in a manner * * * likely to 
assist consumers in making purchasing decisions' when those rules in 
fact allow the person selling the product to the consumer to display no 
label at all, or a label that is illegible or located where it cannot 
be viewed by the consumer.''
---------------------------------------------------------------------------

    \71\ In addition to arguing that EPCA expressly mandates the 
Commission to impose additional duties on retailers, Earthjustice 
argued that EPCA gives the Commission the authority to impose 
additional retailer duties.
    \72\ United States Government Accountability Office, Energy 
Efficiency--Opportunities Exist for Federal Agencies to Better 
Inform Household Consumers, GAO-07-1162, Sept. 2007, at 6.
---------------------------------------------------------------------------

    In contrast, CERC, the retailers' trade association, argued that 
requiring retailers to affix or reaffix missing labels would cause 
``chaos.'' In CERC's view, the retailer would not be able to quickly or 
easily determine the product to which the label belongs, and as a 
consequence may attach the label to the incorrect product.\73\
---------------------------------------------------------------------------

    \73\ Meeting Tr. at 45-46; see also CERC's written comment.
---------------------------------------------------------------------------

    Discussion: The final amendments adopt the NPRM's proposal to 
require only manufacturers and private labelers to affix the labels. 
The amendments prohibit both manufacturers and retailers from removing 
the label or rendering it illegible.
    EPCA does not require the Commission to impose additional 
responsibility on retailers, as Earthjustice argues. The EPCA 
provisions Earthjustice cites (the labeling rule must be ``applicable 
to all covered products'' \74\ and ``require that each covered product 
* * * bear a label'' \75\ which is ``displayed in a manner * * * likely 
to assist consumers'' \76\) do not direct the Commission to require 
retailers to label products. Instead, these broadly worded passages 
address labeling generally, with no specific reference to retailers.
---------------------------------------------------------------------------

    \74\ 42 U.S.C. 6294(a)(1).
    \75\ 42 U.S.C. 6294(c)(1).
    \76\ 42 U.S.C. 6294(c)(3).
---------------------------------------------------------------------------

    The final amendments reasonably implement EPCA, in conformance with 
the statutory provisions Earthjustice cites. They are applicable to all 
covered products and require that each covered product bear a label 
displayed in a manner likely to assist consumers.\77\ The final 
amendments create a network of measures intended to keep the label on 
the television to allow consumers to see it on a display model in the 
store. First, the manufacturers or private labelers must affix an 
adhesive or cling label to all televisions, or choose an alternate 
method of attachment. They must affix the label so that it will not 
become dislodged in the distribution chain and will remain attached and 
visible in the showroom under normal retail conditions. Second, the 
final amendments prohibit hang tags, which the Commission has 
previously determined often became dislodged if attached to the 
exterior of appliances.\78\ Hang tags were likely a major contributing 
factor to the problems identified in the GAO report.\79\ Third, 
retailers may not remove the label or render it illegible. Retailers 
cannot, for example, display a television intended for examination by 
consumers in a way that obscures the label. The final amendments thus 
fulfill EPCA and are reasonably calculated to ensure that the labeling 
problems detected by the GAO do not occur with television labels.
---------------------------------------------------------------------------

    \77\ See 42 U.S.C. 6294(a)(1), 6294(c)(1) and (c)(3).
    \78\ 72 FR at 49960-61. In their comments to this NPRM, CERC, 
NRDC, and Sony also identified hang tags as problematic.
    \79\ In addition, televisions may be less likely to suffer the 
missing label problems identified by the GAO report, regardless of 
the mode of labeling. As discussed above in section IV.E.1, several 
commenters observed that televisions are routinely displayed high on 
retail store walls. Unlike the appliances at issue in the GAO 
report, which are displayed on the showroom floor, television labels 
will be often out of reach and therefore less likely to be removed 
by consumers viewing the products.
---------------------------------------------------------------------------

    The Commission anticipates that the labeling system created by the 
final amendments will result in consumers receiving energy information 
while avoiding the imposition of costs on retailers and the possibility 
that retailers will attach labels to incorrect products. If experience 
with implementing the final amendments suggests that improvements are 
necessary, the Commission can revisit the requirements at a later date.

H. Timing

    Background and Comments: Under EPCA, any FTC labeling requirements 
for consumer electronics shall be effective ``not later than'' 18 
months after promulgation.\80\ In the NPRM, the Commission sought 
comment on a six-month effective date.
---------------------------------------------------------------------------

    \80\ 42 U.S.C. 6294(a)(2)(I)(iii).
---------------------------------------------------------------------------

    The commenters had different views on this proposal. Several 
commenters (ACEEE, CEE, Earthjustice, NRDC) supported a six-month 
effective date, stating that it would ensure consumers receive the 
benefit of the labels as soon as possible. CERC, however, proposed nine 
months, stating that catalog sellers need additional time to change 
their designs. Sony asked for a January 2012 effective date, while both 
Bang & Olufsen and China recommended a twelve-month effective date.
    Many manufacturers were more concerned with setting the effective 
date at the beginning of the industry's production cycle than with the 
length of the compliance period. For example, Panasonic and Mitsubishi 
believed that six months provided sufficient lead time as long as the 
effective date coincided with the production cycle. The manufacturers, 
however, disagreed about the precise start of the production cycle. 
CEA, Mitsubishi, and Sharp suggested an effective date in early summer, 
but Panasonic suggested that March 2011 would allowed continuity with 
the production cycle.
    Discussion: The final amendments provide two different effective 
dates: May 10, 2011 for physical labels; and July 11, 2011 for catalog 
disclosures. The six-month effective date balances the goals of 
providing manufacturers with the necessary time to comply with the new 
requirements and expeditiously providing consumers the benefit of the

[[Page 1048]]

labels. This effective date also should address most manufacturers' 
concerns about interrupting their production cycles because it occurs 
prior to the summer start date of most cycles. The catalog disclosure 
requirements become effective in eight months because catalog sellers 
(both online and paper) will likely require additional time to receive 
label information from manufacturers and redesign their catalogs. Under 
EPCA, the final amendments do not apply to any products manufactured 
before the six-month effective date.\81\
---------------------------------------------------------------------------

    \81\ 42 U.S.C. 6294(d).
---------------------------------------------------------------------------

V. Other Consumer Electronics

    The NPRM sought further comment about labeling cable and satellite 
set-top boxes, stand-alone digital video recorder boxes, personal 
computers, personal computer monitors, and other consumer electronics, 
but did not propose any labeling requirements for those products, 
choosing instead to focus on televisions. The Commission received 
several comments in response. In order not to delay implementation of 
television labeling, the Commission will review these comments and 
consider whether to propose labeling requirements for other consumer 
electronics at a future date.

VI. Section by Section Description of Final Amendments

    Definition of Television (section 305.3): The amendments add a 
definition of televisions that is consistent with the definition used 
by the ENERGY STAR Specification.\82\
---------------------------------------------------------------------------

    \82\ The Rule's definition excludes battery-powered televisions 
as well as a sentence in the ENERGY STAR definition that states: 
``Cathode-ray tube (CRT), liquid crystal display (LCD), and plasma 
display panel (PDP) are examples of common display technologies.'' 
Such a list of examples is not necessary in a regulatory definition.
---------------------------------------------------------------------------

    Testing Requirements (section 305.5): The amendments require 
manufacturers to follow the test procedures required by the ENERGY STAR 
Specification.
    Minor Conforming Changes (sections 305.8 and 305.10): The 
amendments make minor, conforming changes to sections 305.8 (data 
submission) and 305.10 (ranges of comparability) to clarify that these 
sections do not apply to televisions.
    Product Labeling (section 305.17): The amendments require 
manufacturers to affix EnergyGuide labels to televisions on the 
product's bezel in the form of a small rectangular adhesive label, on 
the screen in the form of a small triangular cling label, or using an 
alternate method of attachment that permits the label to be clearly 
visible from the front of the television. The primary disclosure on the 
label is the product's estimated annual energy cost.
    Catalog Requirements (section 305.20): The amendments require 
catalogs to include energy disclosures for the televisions they offer 
for sale. Internet sellers must display the full EnergyGuide label, but 
may use a distinctive icon to hyperlink to the label. Paper catalogs 
must include either the full label or a text summary of only the annual 
cost information.

VII. Paperwork Reduction Act

    The current Rule contains recordkeeping, disclosure, and testing 
requirements that constitute ``information collection requirements'' as 
defined by 5 CFR 1320.3(c) under the regulations that implement the 
Paperwork Reduction Act (PRA).\83\ OMB has approved the Rule's existing 
information collection requirements through May 31, 2011 (OMB Control 
No. 3084-0069). The amendments require television manufacturers to test 
and label their products with energy information and to maintain 
records for two years after a model is discontinued. They also require 
paper and Internet catalog sellers of televisions to provide energy 
information. Accordingly, the Commission has submitted a related 
clearance request to OMB for review under the PRA.
---------------------------------------------------------------------------

    \83\ 44 U.S.C. 3501-3521.
---------------------------------------------------------------------------

    The following burden estimates for the final amendments 
(cumulatively, 58,867 hours for recordkeeping, testing, and disclosure 
at an associated labor cost of $874,179) are based on data submitted by 
manufacturers to the FTC under current requirements and FTC staff's 
general knowledge of manufacturing practices. The NPRM sought comment 
on these estimates, but the Commission received no comments in 
response. Accordingly, the final amendments adopt the NPRM's estimates. 
The Commission has made minor adjustments to the final burden as a 
result of changes implemented in the final Rule as noted below.
    Testing: Manufacturers need not test each basic model annually; 
they must retest only if the product design changes in such a way as to 
affect energy consumption. Staff believes that the frequency with which 
models will be tested every year ranges roughly between 10% and 50%. It 
is likely that only a small portion of the tests conducted will be 
attributable to the Rule's requirements. Nonetheless, given the lack of 
specific data on this point, the Commission conservatively assumes that 
all of the tests conducted would be attributable to the Rule's 
requirements and will apply to that assumption the high-end of the 
range noted above for frequency of testing. Staff estimates that there 
are approximately 2,000 basic models, that manufacturers will test two 
units per model, and that testing would require one hour per unit 
tested. Given these estimates and the above-noted assumption that 50% 
of these basic models would be tested annually, testing would require 
2,000 hours per year. Assuming further that this testing will be 
implemented by electrical engineers, and applying an associated hourly 
wage rate of $39.72 per hour,\84\ labor costs for testing would total 
$79,440.
---------------------------------------------------------------------------

    \84\ See Bureau of Labor Statistics, U.S. Department of Labor, 
National Compensation Survey: Occupational Earnings in the United 
States, 2009, Bulletin 2738, Table 3, at 3-4 (Aug. 2010), available 
at http://www.bls.gov/ncs/ocs/sp/nctb1346.pdf (National Compensation 
Survey).
---------------------------------------------------------------------------

    Recordkeeping: Pursuant to section 305.21 of the amended Rule, 
manufacturers must keep test data on file for a period of two years 
after the production of a covered product model has been terminated. 
Assuming one minute per model and 2,000 basic models, the recordkeeping 
burden would total 33 hours. Assuming further that these filing 
requirements will be implemented by data entry workers at an hourly 
wage rate of $13.73 per hour,\85\ the associated labor cost for 
recordkeeping would be approximately $450 per year.
---------------------------------------------------------------------------

    \85\ See id. at 3-24.
---------------------------------------------------------------------------

    Disclosures (Product Labeling): The final amendments required 
manufacturers to create and affix labels on televisions. The amendments 
specify the content, format, and specifications of the required labels. 
Manufacturers would add only the energy consumption figures derived 
from testing and other product-specific information. Consistent with 
past assumptions regarding appliances, FTC staff estimates that it will 
take approximately six seconds per unit to affix labels. Staff also 
estimates that there are 33,000,000 television units distributed in the 
U.S. per year.\86\ Accordingly, the total disclosure burden for 
televisions would be 55,000 hours (33,000,000 x 6 seconds). Assuming 
that product labels will be affixed by electronic equipment assemblers 
at an hourly wage of $13.66 per hour,\87\

[[Page 1049]]

cumulative associated labor cost would total $751,300 per year.
---------------------------------------------------------------------------

    \86\ See ENERGY STAR Unit Shipment and Market Penetration Report 
Calendar Year 2008 Summary, http://www.energystar.gov/ia/partners/downloads/2008_USD_Summary.pdf, at 5 (approximately 26 million 
television units shipped in 2008, constituting 79% of televisions 
sold; 26,000,000 / 0.79 = 33,000,000).
    \87\ See National Compensation Survey, supra note 84 at 3-30.
---------------------------------------------------------------------------

    Catalog Disclosures: The final amendments would require sellers 
offering covered products through catalogs (both online and print) to 
disclose energy use for each television model offered for sale. Because 
this information is supplied by the product manufacturers, the burden 
on the retailer consists of incorporating the information into the 
catalog presentation.
    FTC staff estimates that there are 200 online and paper catalogs 
for televisions that would be subject to the Rule's catalog disclosure 
requirements.\88\ Staff additionally estimates that the average catalog 
contains approximately 500 televisions and that entry of the required 
information takes one minute per covered product. The cumulative 
disclosure burden for catalog sellers is thus 1,667 hours (200 retailer 
catalogs x 500 televisions per catalog x 1 minute each per television 
shown). In addition, the final Rule requires manufacturers to post 
images of their EnergyGuide labels on their Web sites. Given 
approximately 2,000 total models at five minutes per model, the staff 
estimates that this requirement will entail a burden of 167 hours, for 
a total of 1,834 hours associated with the catalog requirement.\89\ 
Assuming that the additional disclosure requirement will be implemented 
by graphic designers at an hourly wage rate of $23.44 per hour,\90\ 
associated labor cost would approximate $42,989 per year.
---------------------------------------------------------------------------

    \88\ The number of catalog dealers has increased from the 
estimate in the NPRM due to revised staff estimates of online 
sellers.
    \89\ Unlike retail Web sites that already have established Web 
pages for the products they offer, some manufacturers may have to 
create new Web pages for posting these requirements. Accordingly, 
the burden estimate for manufacturers is higher (five minutes per 
model) than that for catalog sellers (one minute per model).
    \90\ See National Compensation Survey, supra note 84 at 3-12.
---------------------------------------------------------------------------

    Estimated annual non-labor cost burden: Manufacturers are not 
likely to require any significant capital costs to comply with the 
final amendments. Industry members, however, will incur the cost of 
printing labels for each covered unit. The estimated label cost, based 
on estimates of 33,000,000 units and $.03 per label, is $990,000 
(33,000,000 x $.03).

VIII. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires 
that the Commission provide an Initial Regulatory Flexibility Analysis 
(IRFA) with a Proposed Rule, and a Final Regulatory Flexibility 
Analysis (FRFA) with the final Rule, unless the Commission certifies 
that the Rule will not have a significant economic impact on a 
substantial number of small entities.\91\
---------------------------------------------------------------------------

    \91\ 5 U.S.C. 603-605.
---------------------------------------------------------------------------

    The Commission does not anticipate that the final amendments will 
have a significant economic impact on a substantial number of small 
entities. The Commission recognizes that many affected entities may 
qualify as small businesses under the relevant thresholds. The 
Commission does not expect, however, that the economic impact of 
implementing the label design will be significant. The Commission plans 
to provide businesses with ample time to implement the requirements. 
The Commission estimates that these new requirements will apply to 
about 30 product manufacturers and an additional 200 online and paper 
catalog sellers of covered products. Out of these companies, the 
Commission expects that approximately 150 catalog sellers qualify as 
small businesses. In addition, the Commission does not expect that the 
requirements specified in the final amendments will have a significant 
impact on these entities.
    Although the Commission certified under the RFA that the amendments 
would not, if promulgated, have a significant impact on a substantial 
number of small entities, the Commission has determined, nonetheless, 
that it is appropriate to publish an FRFA in order to explain the 
impact of the amendments on small entities as follows:

A. Description of the Reasons That Action by the Agency Is Being Taken

    The Commission is adopting these amendments to the Appliance 
Labeling Rule in order to establish labeling requirements for 
televisions, pursuant to the Commission's rulemaking authority under 
the Energy Independence and Security Act of 2007.

B. Issues Raised by Comments in Response to the IRFA

    The Commission did not receive any comments specifically related to 
the impact of the final amendments on small businesses. The Commission 
received comments from CERC regarding the impacts of potential retailer 
requirements on small businesses. However, as discussed in section IV.F 
of this notice, the final amendments do not adopt those requirements. 
The Commission also received comments on required disclosures for 
catalog sellers and the effective date of the final amendments, which 
are issues that could affect small retail businesses. These issues are 
discussed in sections IV.F and IV.H of this notice.

C. Estimate of Number of Small Entities to Which the Amendments Will 
Apply

    Under the Small Business Size Standards issued by the Small 
Business Administration, television manufacturers qualify as small 
businesses if they have fewer than 1,000 employees (for other household 
appliances the figure is 500 employees) or if their sales are less than 
$8.0 million annually. The threshold for television retailers is $9.0 
million. The Commission estimates that fewer than 150 retailer entities 
subject to the final amendments qualify as small businesses.

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    The Commission recognizes that the final Rule will involve some 
increased costs related to testing, drafting labels, affixing labels to 
products, and maintaining test records. All of these burdens and the 
skills required to comply are discussed in the previous section of this 
document, regarding the Paperwork Reduction Act, and there should be no 
difference in that burden as applied to small businesses. As explained 
earlier, the Commission estimates that there are about 150 catalog 
sellers under the final amendments that would qualify as such entities.

E. Duplicative, Overlapping, or Conflicting Federal Rules

    The Commission has not identified any other federal statutes, 
rules, or policies that would duplicate, overlap, or conflict with the 
final amendments.

F. Alternatives

    The Commission sought comment and information on the need, if any, 
for alternative compliance methods that would reduce the economic 
impact of the Rule on such small entities. In particular, the 
Commission sought comments on whether it should delay the Rule's 
effective date to provide additional time for small business compliance 
and whether to reduce the amount of information catalog sellers must 
provide. After considering the comments, the Commission has set the 
Rule's effective date at six months after publication of this notice in 
the Federal Register, which should coincide with the beginning of the 
annual production cycle for televisions. This should reduce the impacts 
on manufacturers in response. In addition, the Commission

[[Page 1050]]

has set the effective date for the catalog disclosure requirements two 
months after the labeling requirement for manufacturers. This will 
provide catalog sellers (which are likely to include small businesses) 
with additional time to ensure their compliance with the Rule. Finally, 
the amendments also require manufacturers to post label images online 
to make it easier for online retailers to post labels for the products 
they sell.

IX. Final Rule

List of Subjects in 16 CFR Part 305

    Advertising, Energy conservation, Household appliances, 
Incorporation by reference, Labeling, Reporting and recordkeeping 
requirements.

0
For the reasons discussed above, the Commission amends part 305 of 
title 16, Code of Federal Regulations, as follows:

PART 305--RULE CONCERNING DISCLOSURES REGARDING ENERGY CONSUMPTION 
AND WATER USE OF CERTAIN HOME APPLIANCES AND OTHER PRODUCTS 
REQUIRED UNDER THE ENERGY POLICY AND CONSERVATION ACT (``APPLIANCE 
LABELING RULE'')

0
1. The authority citation for Part 305 continues to read as follows:

    Authority:  42 U.S.C. 6294.


0
2. In Sec.  305.3, add paragraph (u) to read as follows:


Sec.  305.3  Description of covered products.

* * * * *
    (u) Television (TV) means a commercially available electronic 
product designed primarily for the display and reception of audiovisual 
signals from terrestrial, cable, satellite, Internet Protocol TV 
(IPTV), or other transmission of analog and/or digital signals, 
consisting of a tuner/receiver and a display encased in a single 
housing. This definition does not cover models that are designed to 
operate on built-in rechargeable batteries or inserted batteries.

0
3. In Sec.  305.4, add paragraph (e)(4) to read as follows:


Sec.  305.4  Prohibited acts.

* * * * *
    (e) * * *
    (4) Televisions manufactured before May 10, 2011.
* * * * *

0
4. In Sec.  305.5, add paragraph (d) to read as follows:

Testing


Sec.  305.5  Determinations of estimated annual energy consumption, 
estimated annual operating cost, and energy efficiency rating, and of 
water use rate.

* * * * *
    (d) Determinations of estimated annual energy consumption and the 
estimated annual operating (energy) costs of televisions must be based 
on the procedures contained in the EnergyStar Version 4.2 test, which 
is comprised of the ENERGY STAR Program Requirements, Product 
Specification for Televisions, Eligibility Criteria Version 4.2 
(Adopted April 30, 2010); the Test Method (Revised Aug-2010); and the 
CEA Procedure for DAM Testing: For TVs, Revision 0.3 (Sept. 8, 2010). 
Annual energy consumption and cost estimates must be derived assuming 5 
hours in on mode and 19 hours in sleep (standby) mode per day. These 
ENERGY STAR requirements are incorporated by reference into this 
section. The Director of the Federal Register has approved these 
incorporations by reference in accordance with 5 U.S.C. 552(a) and 1 
CFR part 51. Copies of the test procedure may be inspected or obtained 
at the United States Environmental Protection Agency, ENERGY STAR 
Hotline (6202J), 1200 Pennsylvania Avenue, NW., Washington, DC 20460, 
or at http://www.energystar.gov/ia/partners/product_specs/program_reqs/Televisions_Program_Requirements.pdf [Telephone: ENERGY STAR 
Hotline: 1-888-782-7937]; at the Federal Trade Commission, Consumer 
Response Center, Room 130, 600 Pennsylvania Avenue, NW., Washington, DC 
20580 [Telephone: 1-202-326-2830]; and at the National Archives and 
Records Administration, at http://www.archives.gov/federal-register/cfr/ibr-locations.html [Telephone: 1-202-741-6030].


Sec.  305.8  [Amended]

0
5. Amend Sec.  305.8(a)(1) in the first sentence by adding the word 
``televisions,'' after the term ``urinals,''.


Sec.  305.10  [Amended]

0
6. Amend Sec.  305.10(a) in the first sentence by removing the words 
``or ceiling fans'' and adding, in their place, the words ``ceiling 
fans, or televisions''.

0
7. Add Sec.  305.17 to read as follows:


Sec.  305.17  Television labeling.

    (a) Layout. All energy labels for televisions shall use one of 
three shapes: a vertical rectangle, a horizontal rectangle, and a 
triangle as detailed in Prototype Labels 8, 9, and 10 in Appendix L. 
All label size, positioning, spacing, type sizes, positioning of 
headline, copy, and line widths must be consistent with the prototype 
and sample labels in Appendix L. The minimum label size for the 
vertical rectangle label is 1.5'' x 5.5''. The minimum size for the 
horizontal rectangle label is 1.5'' x 5.23''. The minimum size for the 
triangle label is 4.5'' x 4.5'' (right angle sides).
    (b) Type style and setting. The Arial series typeface or equivalent 
shall be used exclusively on the label. Prototype Labels 8, 9, and 10 
in Appendix L contain specific directions for type style and setting 
and indicate the specific sizes, leading, faces, positioning, and 
spacing to be used. No hyphenations should be used in setting headline 
or copy text.
    (c) Colors. The basic colors of all labels and icons covered by 
this section shall be process yellow or equivalent and process black. 
The label shall be printed full bleed process yellow. All type and 
graphics shall be printed process black.
    (d) Label types. The labels must be affixed to the product in the 
form of either an adhesive label, cling label, or alternative label as 
follows:
    (1) Adhesive label. All adhesive labels shall be applied so they 
can be easily removed without the use of tools or liquids, other than 
water, but shall be applied with an adhesive with an adhesion capacity 
sufficient to prevent their dislodgment during normal handling 
throughout the chain of distribution to the retailer and consumer. The 
paper stock for pressure-sensitive or other adhesive labels shall have 
a basic weight of not less than 58 pounds per 500 sheets (25 x 38) or 
equivalent, exclusive of the release liner and adhesive. A minimum peel 
adhesion capacity for the adhesive of 12 ounces per square inch is 
suggested, but not required if the adhesive can otherwise meet the 
above standard.
    (2) Cling label. Labels may be affixed, using the screen's static 
charge, to the product in the form of a cling label. The cling label 
shall be affixed in a manner that prevents dislodgment during normal 
handling throughout the chain of distribution to the retailer and 
consumer.
    (3) Alternative label. In lieu of an adhesive or cling label, 
labels may be affixed using an alternative method to secure the label 
to the product as long as the method will prevent dislodgment during 
normal handling throughout the chain of distribution to the retailer 
and consumer. The label may not be affixed using a hang tag as 
described in Sec.  305.11(d)(2). The label shall consist of paper stock 
having a basic weight of not

[[Page 1051]]

less than 110 pounds per 500 sheets (25 \1/2\''; x 30 \1/2\'') or other 
material of equivalent durability.
    (e) Placement--(1) In general. All labels must be clear and 
conspicuous to consumers viewing the television screen from the front.
    (2) Adhesive label. The adhesive label shall be in the shape of a 
horizontal or vertical rectangle and shall be located on the bezel in 
the bottom right-hand corner of the television. The horizontal 
rectangular label shall be located on the far right of the bottom bezel 
and the vertical rectangular label shall be located on the bottom of 
the right-hand bezel. Another location on the bezel may be used if the 
television's configuration prevents such placement.
    (3) Cling label. The cling label shall be in the shape of a 
triangle and shall be located in the bottom right-hand corner of the 
screen.
    (4) Alternative label. The alternative label shall be in the shape 
of either a horizontal rectangle, vertical rectangle, or triangle. It 
shall be visible from the front of the television and located in the 
bottom right-hand corner of the television. Another prominent location 
visible from the front of the television may be used if the 
television's configuration or the mechanism to secure the alternative 
label prevents such placement.
    (f) Label content. The television label shall contain the following 
information:
    (1) Headlines, texts, and statements as illustrated in the 
prototype and sample labels in Appendix L to this part.
    (2) Name of manufacturer or private labeler. This requirement 
shall, in the case of a corporation, be satisfied only by the actual 
corporate name, which may be preceded or followed by the name of a 
particular division of the corporation. In the case of an individual, 
partnership, or association, the name under which the business is 
conducted shall be used.
    (3) Model number(s) as designated by the manufacturer or private 
labeler.
    (4) Estimated annual energy costs determined in accordance with 
Sec.  305.5 of this part and based on a usage rate of 5 hours in on 
mode and 19 hours in standby (sleep) mode per day, and an electricity 
cost rate of 11 cents per kWh.
    (5) The applicable ranges of comparability for estimated annual 
energy costs based on the labeled product's diagonal screen size, 
according to the following table:

------------------------------------------------------------------------
                                                          Annual energy
                                                         cost ranges for
                Screen size (diagonal)                     televisions
                                                       -----------------
                                                          Low      High
------------------------------------------------------------------------
0-16'' (0 to 16.49'').................................      $ 3      $ 6
17-20'' (16.5 to 20.49'').............................        4       11
21-23'' (20.5 to 23.49'').............................        4       13
24-29'' (23.5 to 29.49'').............................        9       19
30-34'' (29.5 to 34.49'').............................       11       25
35-39'' (34.5 to 39.49'').............................       17       31
40-44'' (39.5 to 44.49'').............................       15       43
45-49'' (44.5 to 49.49'').............................       18       51
50-54'' (49.5 to 54.49'').............................       21       67
55-59'' (54.5 to 59.49'').............................       24       73
60-64'' (59.5 to 64.49'').............................       31       79
65-69'' (64.5 to 69.49'').............................       35       83
69.5'' or greater.....................................       39       90
------------------------------------------------------------------------

    (6) Placement of the labeled product on the scale proportionate to 
the lowest and highest estimated annual energy costs as illustrated in 
Prototype Labels 8, 9, and 10 and Sample Labels 10, 11, and 12 in 
Appendix L. When the estimated annual energy cost of a given television 
model falls outside the limits of the current range for that product, 
the manufacturer shall place the product at the end of the range 
closest to the model's energy cost.
    (7) The model's estimated annual energy consumption as determined 
in accordance with Sec.  305.5 and based on a usage rate of 5 hours in 
on mode and 19 hours in sleep (standby) mode per day.
    (8) No marks or information other than that specified in this part 
shall appear on or directly adjoining this label except that:
    (i) A manufacturer may include a part or publication number 
identification on the label, as long as it appears in the lower right-
hand corner of the label and is set in 6-point type or smaller.
    (ii) The manufacturer may include the ENERGY STAR logo on the label 
as illustrated in Sample Labels 10, 11, and 12 in Appendix L. The logo 
must be 0.375'' wide. Only manufacturers that have signed a Memorandum 
of Understanding with the Department of Energy or the Environmental 
Protection Agency covering the televisions to be labeled may add the 
ENERGY STAR logo to those labels.
    (g) Distribution of labels. For each television model that a 
manufacturer distributes in commerce, the manufacturer must make a copy 
of the label available on a publicly accessible Web site in a manner 
that allows catalog sellers to hyperlink to the label or download it 
for use in catalogs that advertise televisions. The labels must remain 
on the Web site for two years after the manufacturer ceases the model's 
production.

0
8. In Sec.  305.20, add paragraphs (g) and (h) to read as follows:


Sec.  305.20  Paper catalogs and Web sites.

* * * * *
    (g) Televisions offered for sale on the Internet. Any manufacturer, 
distributor, retailer, or private labeler that advertises televisions 
on the Internet in a manner that qualifies as a catalog under this Part 
shall disclose energy information as follows:
    (1) Content. For each covered television, the Internet seller must 
display the EnergyGuide label prepared in accordance with Sec.  305.17. 
The seller may hyperlink to the label as long as it leads directly to 
the label and the hyperlink is an icon in the form of Sample Icon 13 in 
Appendix L.
    (2) Format. The EnergyGuide label or the icon must appear clearly 
and conspicuously, and in close proximity to the television's price, on 
each webpage that contains a detailed description of the television and 
its price. The scale size of the icon and/or the label prototypes in 
Appendix L may be altered to accommodate the webpage's design, as long 
as the icon and/or label remain clear and conspicuous to consumers 
viewing the page.
    (h) Televisions offered for sale in paper catalogs. Any 
manufacturer, distributor, retailer, or private labeler that advertises 
televisions in a paper publication that qualifies as a catalog under 
this Part shall disclose energy information as follows:
    (1) Content. For each covered television, the paper catalog must 
either:
    (i) Display the EnergyGuide label prepared in accordance with Sec.  
305.17, or
    (ii) (A) State the estimated annual energy cost determined in 
accordance with Sec.  305.5, and
    (B) State the following: ``Your energy cost depends on your utility 
rates and use. The estimated cost is based on 11 cents per kWh and 5 
hours of use per day. For more information, visit http://www.ftc.gov/
energy.''
    (2) Format. The required disclosure must appear clearly and 
conspicuously, and in close proximity to the television's price, on 
each page that displays the television and its price. If a catalog 
displays the EnergyGuide label pursuant to paragraph (h)(1)(i) of this 
section, the size of the label may be altered to accommodate the paper 
catalog's design, as long as the label remains clear and conspicuous to 
consumers. If a catalog includes the statements in paragraph (h)(1)(ii) 
of this section, the statements must be clear and conspicuous to 
consumers. If a catalog displays multiple covered televisions on a 
page, the statement in paragraph (h)(1)(ii)(B) of this section

[[Page 1052]]

may be displayed only once per page as long as it is clear and 
conspicuous.

0
9. Amend Appendix L by adding Prototype Labels 8, 9, and 10, Sample 
Labels 10, 11, and 12, and Sample Icon 13:

Appendix L to Part 305--Sample Labels

* * * * *
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    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2010-32704 Filed 1-5-11; 8:45 am]
BILLING CODE 6750-01-C