[Federal Register Volume 77, Number 21 (Wednesday, February 1, 2012)]
[Notices]
[Pages 5017-5020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-2111]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

AGENCY: Federal Trade Commission.

ACTION: Notice.

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SUMMARY: The information collection requirements described below will 
be submitted to the Office of Management and Budget (OMB) for review, 
as required by the Paperwork Reduction Act (PRA). The FTC is seeking 
public comments on its proposal to extend through May 31, 2015, the 
current PRA clearance for information collection requirements contained 
in the Pay-Per-Call Rule (Rule). That clearance expires on May 31, 2012 
(OMB Control No. 3084-0102).

DATES: Comments must be submitted on or before April 2, 2012.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Pay-Per-Call Rule: FTC 
File No. R611016'' on your comment, and file your comment online at 
https://ftcpublic.commentworks.com/ftc/ppcrulepra, by following the 
instructions on the Web-based form. If you want to file your comment on 
paper, mail or deliver your comment to the following address: Federal 
Trade Commission, Office of the Secretary, Room H-113 (Annex J), 600 
Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed information requirements should be sent to Gary 
Ivens, Attorney, Division of Marketing Practices, Bureau of Consumer 
Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW., 
Washington, DC 20580, (202) 326-2330.

SUPPLEMENTARY INFORMATION: 

Proposed Information Collection Activities

    Under the PRA, 44 U.S.C. 3501-3521, Federal agencies must obtain 
approval from OMB for each collection of information they conduct or 
sponsor. ``Collection of information'' means agency requests or 
requirements that members of the public submit reports, keep records, 
or provide information to a third party. 44 U.S.C. 3502(3), 5 CFR 
1320.3(c). Because more than nine entities will be affected by the 
Commission's requests, the Commission plans to seek OMB clearance under 
the PRA. As required, the Commission is providing this opportunity for 
public comment before requesting that OMB extend the existing paperwork 
clearance for the information collection requirements pertaining to the 
Commission's Pay-Per-Call Rule, 16 CFR part 308 (OMB Control Number 
3084-0102). 44 U.S.C. 3506(c)(2)(A).
    The FTC is again seeking a 3-year clearance for the Rule as was 
done in 2009.\1\
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    \1\ On October 30, 1998, the Commission published a Notice of 
Proposed Rulemaking (``NPRM''), 63 FR 58524, to amend its Pay-Per-
Call Rule, 16 CFR part 308. The Rule, which implements Titles II and 
III of the Telephone Disclosure and Dispute Resolution Act 
(``TDDRA''), 15 U.S.C. 5711-14, 5721-24, requires the disclosure of 
cost and other information regarding pay-per-call services and 
establishes dispute resolution procedures for telephone-billed 
purchases (i.e., charges for pay-per-call services or other charges 
appearing on a telephone bill other than telecommunications 
charges). As was explained in the NPRM, the Rule contains certain 
reporting and disclosure requirements that are subject to OMB review 
under the PRA, 44 U.S.C. 3501-3521. Accordingly, the FTC submitted 
the Rule, with proposed amendments, to OMB (see 64 FR 70031, Dec. 
15, 1999) for its approval, which was granted until December 31, 
2002 (OMB control number 3084-0102). Thereafter, the FTC obtained 
renewed clearance from OMB covering both the existing Rule and the 
proposed changes up through April 30, 2009.
     The clearance that expires on May 31, 2012, did not include PRA 
approval relating to the proposed changes to the Rule. The proposed 
changes have not been adopted, and any final decision about them is 
too uncertain to merit inclusion in this request for clearance 
renewal. The Commission will seek PRA clearance separately for any 
proposed rule amendments if that becomes necessary at a future date.
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Request for Comments

    The FTC invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond. All comments should be filed as prescribed

[[Page 5018]]

in the ADDRESSES section above, and must be received on or before April 
2, 2012.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 2, 2012. 
Write ``Pay-Per-Call Rule: FTC File No. R611016'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to 
remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, don't 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential,'' as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, don't 
include competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c). Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/ppcrulepra, by following the instructions on the Web-based form. If 
this Notice appears at http://www.regulations.gov, you also may file a 
comment through that Web site.
    If you file your comment on paper, write ``Pay-Per-Call Rule: FTC 
File No. R611016'' on your comment and on the envelope, and mail or 
deliver it to the following address: Federal Trade Commission, Office 
of the Secretary, Room H-113 (Annex J), 600 Pennsylvania Avenue NW., 
Washington, DC 20580. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before April 2, 2012 . You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Brief Description of the Need for and Proposed Use of the Information

    The existing reporting and disclosure requirements are mandated by 
the TDDRA to help prevent unfair and deceptive acts and practices in 
the advertising and operation of pay-per-call services and in the 
collection of charges for telephone-billed purchases. The information 
obtained by the Commission pursuant to the reporting requirement is 
used for law enforcement purposes. The disclosure requirements ensure 
that consumers are told about the costs of using a pay-per-call 
service, that they will not be liable for unauthorized non-toll charges 
on their telephone bills, and how to deal with disputes about 
telephone-billed purchases.

Likely Respondents and Their Estimated Number

    Respondents are telecommunications common carriers (subject to the 
reporting requirement only, unless acting as a billing entity), 
information providers (vendors) offering one or more pay-per-call 
services or programs, and billing entities. Staff estimates that there 
are 7 common carriers,\2\ approximately 13,800 vendors,\3\ and 
approximately 1,560 possible billing entities.\4\ The FTC seeks public 
comment or data on these estimates and those stated below.
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    \2\ This estimate is based on the North American Numbering Plan 
Association Report, ``900-NXX Codes,'' http://www.nanpa.com/nas/public/form900MasterReport.do?method=display900MasterReport (updated 
as of 2011), and excluding Canadian entities and one carrier that 
withdrew from carrying 900 number service. See Federal 
Communications Commission, ``Section 63.71 Application of Sprint 
Communications Company L.P. for Authority to Discontinue Domestic 
Telecommunications Services,'' Order, WC Docket No. 08-116, DA 08-
2557 (Wireline Competition Bureau Nov. 24, 2008) (``FCC Sprint 
Order'').
    \3\ The number of vendors is difficult to estimate as there is 
no ready source of such statistics. FTC staff has reduced a 2006 
estimate of the number of vendors (approximately 15,000) by 8 
percent, reflecting a corresponding decrease in the allocation of 
900 numbers. One carrier which withdrew from carrying 900-number 
services stated that between 2004 and 2007 it saw a 41.5 percent 
decrease in vendor use of such numbers. See FCC Sprint Order. 
However, erring conservatively, FTC staff instead is applying an 8 
percent reduction in the number of vendors, tied to a comparison of 
the number of 900-NXX codes allocated per vendor, as reported 
annually by the North American Numbering Plan Administration 
(NANPA). In 2004, it was 133; in 2010, it fell to 123.
    \4\ The Federal Communications Commission report on telephone 
statistics indicated that at the end of 2010 there were 
approximately 1,560 local telephone companies (local exchange 
carriers). See Local Telephone Competition: Status as of December 
31, 2010 (released 10/11) (tables 3 and 4), available at http://www.fcc.gov/wcb/iatd/comp.html.
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    Estimated annual reporting and disclosure burden: 2,379,796 hours; 
$130,263,530 in associated labor costs.\5\
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    \5\ Non-labor (e.g., capital/other start-up) costs are generally 
subsumed in activities otherwise undertaken in the ordinary course 
of business (e.g., business records from which only existing 
information must be reported to the Commission, pay-per-call 
advertisements or audiotext to which cost or other disclosures are 
added, etc.). To the extent that entities incur operating or 
maintenance expenses, or purchase outside services to satisfy the 
Rule's requirements, staff believe those expenses are also included 
in (or, if contracted out, would be comparable to) the annual burden 
hour and cost estimates provided below (where such costs are labor-
related), or are otherwise included in the ordinary cost of doing 
business (regarding non-labor costs).
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    The burden hour estimate for each reporting and disclosure 
requirement has been multiplied by a ``blended'' wage rate (expressed 
in dollars per hour), based on the particular skill mix needed to carry 
out that requirement, to determine its total annual cost. The blended 
rate calculations are based on the following skill categories and 
average wage rates and/or labor costs: $250/hour for professional 
(attorney) services; $17/hour for skilled clerical workers; $35/hour 
for computer programmers; and $50/hour for management time. These 
figures are averages, based on the most currently available Bureau of 
Labor Statistics (``BLS'') cost figures posted online.\6\ FTC

[[Page 5019]]

staff calculated labor costs by applying appropriate hourly cost 
figures to the burden hours discussed further below.
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    \6\ http://www.bls.gov/ncs/ocs/sp/nctb1477.pdf (National 
Compensation Survey: Occupational Earnings in the United States, 
U.S. Department of Labor, BLS, released May 2011, Bulletin 2753, 
Table 3 (``Full-time civilian workers,'' mean and median hourly 
wages). Notwithstanding the referenced BLS data, estimated attorney 
costs are based on what staff believes may more closely reflect 
hourly attorney costs associated with Commission information 
collection activities under the Rule.
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    (1) Reporting burden (applies to common carriers):
    The Rule provides that common carriers must make available to the 
Commission, upon written request, any records and financial information 
maintained by such carrier relating to the arrangements between the 
carrier and any vendor or service bureau (other than for the provision 
of local exchange service). See 16 CFR 308.6. Staff believes that the 
resulting burden on this segment of the industry will be minimal, since 
OMB's definition of ``burden'' for PRA purposes excludes any business 
effort that would be expended regardless of a regulatory requirement. 5 
CFR 1320.3(b)(2). Because this reporting requirement permits staff to 
seek information limited to that which is already maintained by the 
carriers, the only burden would be the time an entity expends to 
compile and provide the information to the Commission. Because the 
Commission has seldom needed to rely on this requirement, staff 
estimates the annual time for reporting at 3 hours per entity.
    In obtaining OMB clearance for this reporting requirement in 2009, 
staff estimated a total reporting burden of 39 hours, with an annual 
cost of $2,925. Staff is now decreasing the total burden estimate to 21 
hours, based on an average estimate of 3 hours expended by 7 common 
carriers. Using a $76/hour blended wage rate (assuming for all labor 
calculations herein, $35/hour for computer programmers, $250/hour for 
attorneys, $17/hour for skilled clerical workers, and $50/hour for 
managers),\7\ the FTC now estimates an annual cost of $1600.
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    \7\ This blended wage rate is based upon an estimate of 30 
percent for computer programming, 20 percent for attorney services, 
30 percent for skilled clerical workers, and 20 percent for 
managerial time.
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    (2) Disclosure burden:
    (a) Advertising (applies to vendors). FTC staff estimates that the 
annual burden on the industry for the Rule's advertising disclosure 
requirements is 49,680 hours. The estimate reflects the burden on 
approximately 13,800 vendors who must make cost disclosures for all 
pay-per-call services and additional disclosures if the advertisement 
is (a) directed to individuals under 18 or (b) for certain pay-per-call 
services.\8\ Because of continued industry changes and the fact that 
the Commission has seldom needed to rely on this requirement, staff is 
retaining the estimated percentage of advertising both directed to 
individuals under 18 and relating to certain other pay-per-call 
services to 20 percent of overall pay-per-call services. FTC staff 
estimates that each disclosure mandated by the Rule requires 
approximately one hour of compliance time.
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    \8\ Based on an assumed three advertisements per vendor, or a 
total of 41,400 ads (for 13,800 vendors, as explained in note 4), 
plus an estimated total 20 percent of which would require such 
additional disclosures, or 8,280 advertisements. Staff estimates 
that it would require no more than one hour to draft each type of 
disclosure. Accordingly, at an estimated one hour each, vendors 
would require cumulatively 49,680 burden hours to comply with these 
requirements.
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    The total estimated annual cost of these burden hours is $3,477,600 
applying a blended wage rate of $70/hour.\9\
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    \9\ The blended rate is based upon 20 percent for attorney 
services, 60 percent for skilled clerical workers, and 20 percent 
for management time.
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    (b) The Rule's preamble disclosure (applies to every pay-per-call 
service). To comply with the Act, the Pay-Per-Call Rule also requires 
that every pay-per-call service be preceded by a free preamble and that 
four different disclosures be made in each preamble. Additionally, 
preambles to sweepstakes pay-per-call services and services that offer 
information on Federal programs must provide additional disclosures. 
Each preamble need only be prepared one time, unless the cost or other 
information is changed. There is no additional burden on the vendor to 
make the disclosures for each telephone call, because the preambles are 
taped and play automatically when a caller dials the pay-per-call 
number.
    As noted above (see footnote 4), staff now believes that the 
industry has had at least an 8 percent reduction in size since 2004 
(when there were an estimated 45,864 pay-per-call services). 
Accordingly, staff now estimates that there are no more than 42,195 
advertised pay-per-call services.
    As with advertising disclosures, preambles for certain pay-per-call 
services require additional preamble disclosures. Consistent with the 
estimates of advertised pay-per-call services discussed above, staff 
estimates that an additional 20 percent of all such pay-per-call 
services (8,440) relating to certain types of pay-per-call services 
would require such additional disclosures.\10\ Staff now estimates that 
it would require no more than one hour to draft each type of disclosure 
because the disclosures applicable to the preamble closely approximate 
in content and volume the advertising disclosures discussed above. 
Accordingly, staff estimates a total of 50,635 burden hours (42,195 + 
8,440) to comply with these requirements. At one hour each, cumulative 
labor cost associated with these disclosures is $3,544,450, using a 
blended wage rate of $70/hour (i.e., similar to the blended rate used 
for advertising disclosures).
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    \10\ See note 10.
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    (c) Telephone-billed charges in billing statements (applies to 
vendors; applies to common carriers if acting as billing entity). 
Section 308.5(j) of the Rule, 16 CFR 308.5(j), requires that vendors 
ensure that certain disclosures appear on each billing statement that 
contains a charge for a call to a pay-per-call service. Because these 
disclosures appear on telephone bills already generated by the local 
telephone companies, and because the carriers are already subject to 
nearly identical requirements pursuant to the FCC's rules, FTC staff 
estimated that the burden to comply would be minimal. At most, the 
burden on the vendor would be limited to spot checking telephone bills 
to ensure that the charges are displayed in the manner required by the 
Rule.
    As it had in the 2009 PRA submission, FTC staff estimates that only 
10 percent of vendors would monitor billing statements in this manner 
and that it would take 12 hours per year to conduct such checks. Using 
the total estimated number of vendors (1,380), this results in a total 
of 16,560 burden hours. The total annual cost would be at most 
$1,043,280, using a blended rate of $63/hour.\11\
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    \11\ The blended rate is 15 percent for attorney services, 40 
percent for skilled clerical workers, 25 percent for computer 
programming, and 20 percent for management time.
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    (d) Dispute resolution procedures in billing statements (applies to 
billing entities). This disclosure requirement is set forth in 16 CFR 
308.7(c). The blended rate being used for these disclosures is $53.50/
hour.\12\ FTC staff previously estimated that the billing entities 
would spend approximately 5 hours each to review, revise, and provide 
the disclosures on an annual basis. The estimated hour burden for the 
annual notice component of this requirement is 7,800 burden hours 
(based on 1,560 possible billing entities each requiring 5 hours), or a 
total cost of $421,200.
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    \12\ The blended rate is 40 percent for computer programming, 10 
percent for attorney services, 30 percent for skilled clerical 
workers, and 20 percent for management time.
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    (e) Further disclosures related to consumers reporting a billing 
error (applies to billing entities).
    As in the 2009 PRA submission for this Rule, FTC staff estimates 
that the

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incremental disclosure obligations related to consumers reporting a 
billing error under section 308.7(d) requires, on average, about one 
hour per each billing error. Previously, staff projected that 
approximately 5 percent of an estimated 46,981,200 calls made to pay-
per-call services each year involves such a billing error. The staff is 
now reducing its prior estimate of the number of those calls by 4 
percent \13\ (to 45,101,950 calls) to reflect recent changes in the 
amount of pay-per-call services and their billing. Assuming the same 
apportionment (5 percent) of overall calls to pay-per-call services, 
this amounts to 2,255,100 hours, cumulatively. Applying the $54/hour 
blended wage rate, the estimated annual cost is $121,775,400 annually.
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    \13\ Four percent is determined by an approximate halving of the 
above-noted 8 percent reduction staff has applied to its prior 
estimate of the number of vendors (see note 4). As in past clearance 
requests for this Rule, it is halved on the assumption that pay-per-
call services do not account for any more than half of all 
telephone-billed purchases.

Willard K. Tom,
General Counsel.
[FR Doc. 2012-2111 Filed 1-31-12; 8:45 am]
BILLING CODE 6750-01-P