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FEDERAL TRADE COMMISSION through the Internet at the following compliance with the do-not-call address: http://www.ftc.gov. provisions of the Amended TSR is 16 CFR Part 310 Comments on proposed revisions required, on October 1, 2003, bearing on the Paperwork Reduction Act telemarketers will be required to refrain Telemarketing Sales Rule Fees should additionally be submitted to: from calling consumers who have AGENCY: Federal Trade Commission. Office of Information and Regulatory placed their numbers on this registry. 16 Affairs, Office of Management and CFR 310.4(b)(1)(iii)(B). To ensure ACTION: Revised notice of proposed Budget, New Executive Office Building, compliance with this requirement, rulemaking and request for public Room 10102, Washington, DC 20503, telemarketers will be required to access comment. ATTN.: Desk Officer for the Federal the national registry at least once every Trade Commission, as well as to the three months in order to remove from SUMMARY: The Federal Trade FTC Secretary at the address above. their telemarketing lists those Commission (the ‘‘Commission’’ or consumers who have placed their ‘‘FTC’’) is issuing a Revised Notice of FOR FURTHER INFORMATION CONTACT: telephone numbers on the national Proposed Rulemaking (‘‘Revised Fee David M. Torok, (202) 326–3075, registry. 16 CFR 310.4(b)(3)(iv). When it NPRM’’) to amend the FTC’s Division of Marketing Practices, Bureau issued the Amended TSR, the Telemarketing Sales Rule (‘‘TSR’’) by of Consumer Protection, Federal Trade Commission reserved its decision on the adding a new section that would impose Commission, 600 Pennsylvania Avenue, issues raised in the User Fee NPRM, fees on entities accessing the national NW, Washington, DC 20580. stating that it would issue a revised do-not-call registry. This Revised Fee SUPPLEMENTARY INFORMATION: Notice of Proposed Rulemaking to seek NPRM invites written comments on the Background further comment on the issues raised in issues raised by the proposed changes, that proceeding. See 68 FR 4580, 4640 and seeks answers to the specific On January 30, 2002, the FTC n. 716. questions set forth in Section X. published a Notice of Proposed On February 20, 2003, the President The Commission is also announcing Rulemaking to amend the FTC’s TSR signed into law the Consolidated that full compliance with and to request public comment on the Appropriations Resolution of 2003, § 310.4(b)(1)(iii)(B), the ‘‘do-not-call’’ proposed changes. 67 FR 4492 (Jan. 30, Public Law 108–7 (2003) (‘‘the registry provision of the Amended TSR, 2002) (‘‘the Rule NPRM’’). Among other Appropriations Act’’), which will be required on October 1, 2003. provisions, the Rule NPRM proposed to establish a national do-not-call registry, appropriated funds for the operation of DATES: Written comments will be to be maintained by the FTC, that would the FTC during fiscal year 2003. In the accepted until May 1, 2003. Time is of permit consumers who prefer not to same Act, Congress also authorized the the essence to promulgate the proposed receive telemarketing calls to contact agency to collect fees sufficient to fees. Thus, the Commission does not one centralized registry to effectuate this implement and enforce the do-not-call anticipate providing any extension to preference. On May 29, 2002, the FTC provisions of the TSR. Congress further this comment period. published another Notice of Proposed estimated the costs for fiscal year 2003 ADDRESSES: The Commission Rulemaking to further amend the TSR at $18,100,000. Id. at Division B, Title encourages comments to be submitted by imposing user fees on sellers and II. See also The Do-Not-Call electronically to the following e-mail telemarketers for their access to the Implementation Act, Public Law 108–10 address: [email protected]. Alternatively, proposed national do-not-call registry. (2003) (‘‘the Implementation Act’’) at commenters may submit an original 67 FR 37362 (May 29, 2002) (‘‘the User section 2. Pursuant to the plus two paper copies of their Fee NPRM’’). In issuing the User Fee Appropriations Act and the comments to the Office of the Secretary, NPRM, the Commission was guided by Implementation Act, as well as the Room 159, Federal Trade Commission, the Independent Offices Appropriations Telemarketing Fraud and Abuse 600 Pennsylvania Avenue, NW, Act of 1952, 31 U.S.C. 9701, and the Prevention Act, 15 U.S.C. 6101–08 (‘‘the Washington, DC 20580. To encourage Office of Management and Budget Telemarketing Act’’), the FTC is issuing prompt and efficient review and Circular No. A–25. The Commission this Revised Fee NPRM.2 dissemination of the comments to the received 34 comments submitted in public, all paper comments should also response to the User Fee NPRM.1 2 Many commenters to the User Fee NPRM be submitted, if possible, in electronic The Commission issued final claimed that the FTC lacked the authority to impose a user fee based on the Independent Offices form, on a 31⁄2 inch computer disk, with amendments to the TSR on December Appropriations Act of 1952. See, e.g., ABA-User Fee a label on the disk stating the name of 18, 2002. 68 FR 4580 (Jan. 29, 2003). at 1–3; Ameriquest-User Fee at 1–5; Discover-User the commenter and the name and Among the changes made to the TSR, Fee at 1–4; DMA-User Fee at 1–7 (‘‘If the FTC wants version of the word processing program the Commission adopted the proposal to to collect fees for its regulation of non-deceptive used to create the document. (Programs and non-abusive telemarketing, it must obtain establish a national do-not-call registry, approval from Congress to do so’’). DMA’s should be submitted in ASCII text permitting consumers to register, via comments were supported by ERA, PMA, and MPA. format to be accepted.) Individual either a toll-free telephone number or Other commenters suggested that consumers should members of the public filing comments the Internet, their preference not to be charged the fee necessary to implement the need not submit multiple copies or national registry. See, e.g., ARDA-User Fee at 1–4; receive telemarketing calls. When full ATA-User Fee at 3–6; Idaho Realtors-User Fee at 1– comments in electronic form. 2; Infocision-User Fee at 4; ITC-User Fee at 3–5; All comments and any electronic 1 A list of commenters to the User Fee NPRM and MBNA-User Fee at 3; NEMA-User Fee at 2–3; SBC- versions (i.e., computer disks) should be the Rule NPRM, and the acronyms used to identify User Fee at 2–5. But see NASUCA-User Fee at 2; those entities, was included in Attachment B to the NCL-User Fee at 1; TRA-User Fee at 3. Still other identified as ‘‘Telemarketing Statement of Basis and Purpose for the commenters suggested that the User Fee NPRM was Rulemaking—Revised Fee NPRM Amendments to the TSR, 68 FR 4677–78 (Jan. 29, premature, and that they had insufficient Comment. FTC File No. R411001.’’ The 2003) (‘‘TSR SBP’’). Comments submitted in information available to properly comment on the Commission will make this NPRM and, response to the User Fee NPRM will be cited in this proposal. See, e.g., CBA-User Fee at 1; Household- Notice as ‘‘[Name of Commenter]-User Fee at [page User Fee at 3; MasterCard-User Fee at 1–3. With the to the extent possible, all comments number].’’ Comments submitted in response to the passage of the Appropriations Act, the received in electronic form in response Rule NPRM will be cited as ‘‘[Name of commenter]- Implementation Act, and the Amended TSR, these to this NPRM, available to the public Rule NPRM at [page number].’’ comments are moot.

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II. Access to the Do-Not-Call Registry by list brokers and others. At the same purchase access to the national registry time, the Commission agrees with the many times over.12 As one commenter A. Entities That Are Allowed Access comment of NASUCA that the stated, a ‘‘seller who uses only one In the User Fee NPRM, the information in the national registry telemarketer all year for nationwide Commission proposed limiting access to should be used for no other purpose telemarketing campaigns should not be the national do-not-call registry to than to stop unwanted telemarketing more favorably treated than another telemarketers in order to maintain the calls.8 As a result, the Commission now who uses several telemarketers to security of the information included in proposes, at Section 310.8(e), to allow conduct similar campaigns.’’13 Other the registry.3 In addition, because the access to the national registry by commenters maintained that proposed amendments to the TSR telemarketers, sellers, others engaged in telemarketers calling on behalf of prohibited the use of information in the or causing others to engage in telephone multiple clients ‘‘should pay only one national registry for any purpose other calls for commercial purposes, and user fee and not a fee for every client on than compliance with the do-not-call service providers acting on behalf of whose behalf they perform this provisions of the Proposed Rule, the such persons.9 Prior to gaining such service.’’14 On the other hand, NCL Commission believed that only access, a person would be required to commented that if list brokers are telemarketers would need to access that certify, under penalty of law, that the allowed access to the registry, their information. person is accessing the registry solely to payments should be based upon the A number of commenters stated that comply with the provisions of this Rule number of clients they represent. broader access to the national registry is or to otherwise prevent calls to ‘‘Charging them only for the total necessary. In particular, some telephone numbers on the registry. number of area codes they obtain would commenters suggested that sellers 4 B. Entities That Are Required To Pay the be unfair to telemarketers that do not should be allowed to gain access to use list brokers and would undermine evaluate telemarketing campaigns run Fee the economic viability of the registry.’’15 on their behalf and to evaluate The User Fee NPRM proposed 5 The Commission does not intend to telemarketers’ Rule compliance. Others requiring telemarketers who gained charge the same company multiple suggested that ‘‘outside compliance access to the national do-not-call times for access to the national registry, firms’’ and ‘‘list scrubbers’’ should be registry to pay for that access. In and has gained much relevant and given access, since they provide a addition, the User Fee NPRM proposed important information from comments valuable service for telemarketers.6 Still requiring telemarketers who engage in on its original proposal. At the same others stated that telemarketers and telemarketing on behalf of sellers or time, the Commission is now guided by sellers who are exempt from the FTC’s other telemarketers, or who use the congressional authority permitting it to jurisdiction would have no access to the information included in the registry to cover the costs of implementing and list even if they want to voluntarily remove telephone numbers from the enforcing the do-not-call provisions of suppress calls. These commenters telemarketing lists of sellers and other the Amended TSR, estimated at $18.1 suggested that the FTC make the registry telemarketers, to pay a fee for each such million this fiscal year. The Commission available to any entity provided that the seller or telemarketer.10 seeks to raise those funds as equitably information in the registry is used solely A number of commenters criticized for the purpose of preventing telephone this provision, claiming that it would as possible, to ensure that the burden of calls to numbers on that list.7 result in sellers, telemarketers, and list the fees is fairly divided among the The Commission agrees that broader brokers paying the proposed user fee entire business community that benefits access to the national do-not-call multiple times for the same from the making of outbound telephone registry may be necessary to effectuate information.11 Some commenters calls. To avoid billing entities twice for the more fully the primary purpose of the pointed out that many sellers use more same information, and to divide the fees do-not-call regulations; namely, to than one telemarketer in any given year, among the industry in an equitable enable consumers to stop unwanted and such sellers would be required to telemarketing calls. Limiting access only manner, the Commission is now to telemarketers, as defined by the 8 See NASUCA–User Fee at 7–8. proposing that each seller must pay, on Amended TSR, would prevent those 9 Proposed Section 310.8(e) also permits access to an annual basis, the appropriate fee for entities that are exempt from the FTC’s the national registry by any government agency that accessing the national registry prior to jurisdiction, but that want to scrub their has the authority to enforce a federal or state do- initiating, or causing a telemarketer to not-call statute or regulation. Such agencies will initiate, an outbound telephone call.16 calling lists as a matter of customer access information in the national registry through service, from obtaining the information a dedicated, secure website available only to them. 12 necessary to do so. Such limited access 10 User Fee NPRM at 37363 and proposed See, e.g., MasterCard-User Fee at 5; CBA-User § 310.9(a). Fee at 4; Discover-User Fee at 4; Household-User also may prevent sellers from engaging Fee at 6; VISA-User Fee at 2. 11 DMA also maintained that the payment 13 in thorough Rule compliance, and may structure proposed in the User Fee NPRM may CBA-User Fee at 4. See also ITC-User Fee at 6 unnecessarily hinder the services violate the Paperwork Reduction Act, 44 U.S.C. (‘‘Service bureaus like our company typically provided to the telemarketing industry 3506 et seq. (‘‘PRA’’), which prohibits federal represent multiple clients. It is also typical for our agencies from restricting or regulating the use, clients to use multiple telemarketing companies as resale, or re-dissemination of public information by vendors. Therefore, several telemarketing 3 User Fee NPRM at 37365 and proposed the public, and Section 105 of the Copyright Act, companies would end up paying the fee several § 310.9(c). 17 U.S.C. 105, which expressly bars the federal times for the same seller.’’) 4 The Amended TSR defines a ‘‘seller’’ as ‘‘any government from copyrighting its own works. The 14 MBNA-User Fee at 3–4. See also ABA-User Fee person who, in connection with a telemarketing Commission disagrees with the DMA’s at 3–4 (separate fees for both sellers and transaction, provides, offers to provide, or arranges interpretations of these laws. First, the registry list telemarketers unnecessarily complicates the for others to provide goods or services to the of telephone numbers of consumers who express a payment schedule); ARDA-User Fee at 4 (there is customer in exchange for consideration.’’ 16 CFR preference not to be called by telemarketers is not ‘‘no legitimate reason for each seller that uses a 310.2(z). ‘‘public information,’’ as that term is used in the single telemarketer to pay the same fee for 5 See CBA–User Fee at 4; Discover-User Fee at 4– PRA. In fact, dissemination of the list to the public scrubbing against the same list’’). 5; MasterCard-User Fee at 5. is a violation of the Amended TSR. See 16 CFR 15 NCL-User Fee at 1. 6 See ARDA–User Fee at 5; NEMA-User Fee at 4. 310.4(b)(2). Second, the Commission is in no way 16 The TSR defines an ‘‘outbound telephone call’’ 7 See Discover-User Fee at 4–5; Household-User attempting to copyright the information contained as ‘‘a telephone call initiated by a telemarketer to Fee at 5–6; MBNA–User Fee at 3. in the national registry. Continued

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After paying the appropriate fee each Charging such ‘‘pure’’ telemarketers for directly liable for initiating an outbound annual period,17 the seller will be access in effect would cause their seller- telephone call on behalf of a seller provided with a unique account clients to pay twice for access to the without first ensuring that their seller- number, and can use that number to national registry. Instead, under the clients have paid for up-to-date access gain direct access to the national instant proposal, such telemarketers to the national do-not-call registry. The registry at any time during its annual would be required to ensure that their Commission proposes to impose this period. In addition, the seller can seller-clients have paid for access to the liability under the authority of the provide its account number to any national do-not-call registry prior to Appropriations Act and the telemarketer or list broker with which it initiating outbound telephone calls on Implementation Act, in addition to the does business, which in turn will permit their behalf. Telemarketers would gain Telemarketing Act, which provides the that telemarketer or list broker to gain this assurance by obtaining and using authority for the other portions of the access to the information to which the the seller’s unique account number to Amended TSR. The Commission seller has subscribed.18 The the national registry. believes such direct liability on sellers Commission proposes that such a As previously stated, the Commission and telemarketers is necessary to revised fee structure is more appropriate seeks to spread the fee burden equitably effectuate fairly the mandate of the than its original proposal. Under this across all entities that engage in Appropriations Act and the revised fee structure, each seller would telemarketing. Sellers are the ultimate Implementation Act, which authorize be charged only one time annually for beneficiaries of telemarketing the Commission to collect fees sufficient access to the information included in campaigns, and all covered sellers must to cover the costs of implementing and the national registry, and would be access the national registry to remain in enforcing the do-not-call provisions of allowed to transfer its ability to access compliance with the do-not-call the Amended TSR. Without such direct the national registry to whatever provisions of the Amended TSR. As a liability, the Commission is concerned telemarketers or list brokers it wishes to result, all sellers should pay an that not all entities that obtain employ on its behalf. appropriate fee for that access, but information from the national registry In a further effort to avoid requiring should pay that fee only one time will pay their fair share of the fees for an entity to pay twice for access to the during each annual period. The that registry, resulting in increased fees same information, the Commission now Commission does not agree with those for those entities that do pay. As a result proposes that telemarketers who are not commenters that suggested the agency of the proposed imposition of this direct also sellers—i.e., entities that engage in should charge only telemarketers, and liability, the failure of a seller to pay the telemarketing only on behalf of others— not their clients, for access to the appropriate fee prior to initiating or should not have to pay a separate fee for national registry.20 By only charging causing another entity to initiate an their access to the national registry.19 telemarketers for access to the national outbound telephone call, and the failure registry, and charging them only once of a telemarketer to ensure that a seller induce the purchase of goods or services or to for their access on behalf of multiple has paid the appropriate fee prior to solicit a charitable contribution.’’ 16 CFR 310.2(u). A ‘‘telemarketer,’’ in turn, is ‘‘any person who, in clients, the fee structure would unfairly initiating an outbound telephone call on connection with telemarketing, initiates or receives benefit those sellers that employ a its behalf, would be a violation of the telephone calls to or from a customer or donor.’’ 16 telemarketer with multiple clients, since Amended TSR, subject to all remedies CFR 310.2(bb). Finally, ‘‘telemarketing’’ is defined those sellers would pay less of a fee for available for such violations. as a ‘‘plan, program, or campaign which is access to the same information than conducted to induce the purchase of goods or C. Corporate Divisions, Subsidiaries, sellers that engage in their own services or a charitable contribution, by use of one and Affiliates or more telephones, and which involves more than telemarketing without hiring a one interstate telephone call.’’ 16 CFR 310.2(cc). telemarketer. Thus, the Commission is In the User Fee NPRM, the Thus, sellers engaging in a plan, program, or Commission proposed following the campaign involving only intrastate telemarketing proposing to charge sellers and not calls would not be required to pay a fee or access telemarketers or list brokers for access to compliance guide for the original TSR the national registry pursuant to the TSR. In the national registry.21 by requiring that distinct corporate addition, solicitations to induce charitable Proposed § 310.8(a) of the Rule would divisions of a single corporation be contributions via outbound telephone calls are not considered separate sellers for the covered by the do-not-call requirements of the TSR. make sellers directly liable for initiating, 16 CFR 310.6(a). As a result, sellers involved only or causing a telemarketer to initiate, an purposes of payment of the annual fees. in such solicitations similarly would not be outbound telephone call without first Factors used to determine if corporate required to pay a fee or access the national registry. paying the appropriate fee for access to divisions would be treated as separate Of course, entities engaged in conducting surveys sellers would include whether there is are not seeking to induce the purchase of goods or the national registry. Proposed Section services and therefore are not engaged in 310.8(b) would make telemarketers substantial diversity between the ‘‘telemarketing’’ nor subject to the TSR. Similarly, operational structure of the divisions, political fund raising is not ‘‘telemarketing’’ and is 20 See, e.g., ABA-User Fee at 3–4; MBNA-User Fee and whether the goods or services sold not covered. at 3–4; ITC-User Fee at 6. by the divisions are substantially 17 The fee that would be charged for access to the 21 ABA stated that a single fee to telemarketers national registry is discussed in Section III.D, different from each other. would enhance the privacy and security of the In response to this proposal, some below. A seller’s ‘‘annual period’’ is discussed in national registry by discouraging seller-clients from Section IV, below. accessing the national registry individually in order commenters suggested that the 18 VISA suggested a similar type of pricing to scrub their calling lists. Instead, sellers would Commission treat divisions of the same structure, in which the FTC could ‘‘license’’ the allow their telemarketers to access the registry on corporation as one seller and allow the registry to individual sellers, which in turn could their behalf. ABA-User Fee at 3–4. As stated above, sharing of the registry among them.22 employ a telemarketer to use the registry, if they the Commission believes that charging only desire, subject to confidentiality and use telemarketers would be inequitable. The Another suggested the same treatment restrictions. VISA-User Fee at 2. Commission also believes that the certification for a ‘‘family’’ of affiliated companies.23 19 Similarly, list brokers who develop and/or required of sellers who access the national registry, Wells Fargo stated that this treatment scrub the calling lists for their seller-clients would as discussed in Section II.A, above, will help to would allow a company to purchase a not have to pay for their individual access to the address the security and privacy concerns raised by national registry. Instead, they also would have to ABA. Moreover, telemarketers would still be certify that their seller-clients have paid for access allowed to access the registry on behalf of their 22 See, e.g., ARDA-User Fee at 5; CBA-User Fee to the national registry prior to gaining access to the seller-clients under the current proposal, using their at 4. national registry. seller-clients’ account number. 23 Household-User Fee at 2.

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single copy of the list to maintain ‘‘a that access state do-not-call registries. assumptions, including company- centralized scrub service that would be At that time, the most telemarketing specific information and data that could available to its affiliates. While this may firms that accessed any individual state help the agency to refine its estimates of reduce revenues somewhat, it would registry was 2,932. Thus, in order to the number of firms that will need to greatly increase compliance. 24 propose a realistic fee structure that access the national registry. The Commission is concerned that would ensure sufficient funds would be Since scrubbing against the do-not- any such treatment of corporate collected to cover the costs of a national call registry is only required on divisions, subsidiaries, or affiliates registry, the Commission estimated in outbound calls made to consumers,30 could greatly diminish the number of the User Fee NPRM that 3,000 entities the Commission begins its calculation entities that will pay for access to the would pay for access to the information with the assumption that DialAmerica national registry, provide an unfair in the national registry.26 The has 700 clients for which it makes these advantage to larger, multi-divisional Commission sought comment and types of calls. According to the corporations, and potentially increase evidence to determine whether this Winterberry Group, DialAmerica has the fees required to be paid by smaller, estimate was realistic and appropriate. revenues of $300 million per year, and less complex corporate entities. As a Only one of the 34 comments received outbound calls account for 90 percent of result, the Commission proposes to treat in response to the User Fee NPRM its call volume.31 Assuming that each separate division, subsidiary, or provided any information relevant to DialAmerica’s revenues per call are the 27 affiliate of a corporation as a separate this inquiry. That commenter, same for inbound and outbound calls, seller for purposes of § 310.8. The DialAmerica Marketing, Inc. its revenues from outbound calls would Commission notes that such treatment (‘‘DialAmerica’’), stated that it has 700 total $270 million (90 percent of $300 will not diminish the effectiveness of clients for which it would have to million). corporate ‘‘centralized scrub services.’’ obtain access to the entire national do- 28 According to Customer Inter@ction In effect, such centralized services can not-call registry. In other words, Solutions, 85 percent of DialAmerica’s still be performed, provided that each DialAmerica’s client base would business involves sales to consumers.32 corporate division, subsidiary, or comprise over 23 percent of all entities If the Commission assumes that the 85 affiliate has paid the appropriate fee for that the Commission estimated would percent of DialAmerica’s business that access to the national registry. It should be required to access the national 29 involves sales to consumers is 90 be noted that divisions, subsidiaries, or registry. This information casts doubt percent outbound, consumer outbound affiliates of a seller that must pay for on the original estimate. The sales calls would account for $229.5 access to the national registry need not Commission is therefore proposing a million in revenue (85 percent of $270 individually download the information new estimate of the number of firms that million). If DialAmerica receives $229.5 in the registry on their own behalf. They will access the national registry, million in revenue from its 700 clients need to pay only for the requisite access, developed through a calculation using for whom it does outbound calling to and would be able to provide their the limited information provided in the consumers, this implies that the average unique account number to another comments, combined with relevant revenue per client is about $328,000 division, subsidiary, or affiliate to industry-wide data that the Commission ($229.5 million/700). has been able to identify. This perform the actual downloading of According to the Winterberry Group, calculation makes a number of information and corporate list total expenditures on teleservices were significant assumptions based on the scrubbing. See section IV, below, for $147.7 billion in 2000. Of this, 48.1 best information available to the agency further discussion of the proposed percent was spent on outbound calling, at this time. In Section X, below, the operation of the fee collection system. and 49.6 percent was spent on sales Commission asks specific questions calls to consumers.33 Assuming that the III. Calculation of Fees about each of these assumptions, same percentage of expenditures on seeking information as to their A. Number of Entities Accessing the calls to businesses and calls to reliability. The Commission asks National Registry consumers are for outbound calls would commenters to provide any information imply that just under 24 percent of the To establish the appropriate fees to they can about any and all of these charge entities that access consumer total spent on teleservices is spent on

telephone numbers included in the 26 outbound calls to consumers (48.1 The Commission previously had estimated, in × national registry, the Commission must the notice of amended application to the OMB percent 49.6 percent = 23.9 percent). first estimate the number of such under the Paperwork Reduction Act, 44 U.S.C. Also, according to the Winterberry entities that would be required to pay 3501, et seq., that there were 40,000 telemarketing Group, total expenditures on third-party industry members affected by the TSR in the United the proposed fee. As stated in the User States. See the Rule NPRM, 67 FR at 4534. As teleservices providers amounted to Fee NPRM, this step is among the most explained in the User Fee NPRM, the Commission $19.2 billion—13 percent of the $147.7 difficult, given the dearth of information does not believe that prior estimate is representative billion total expenditures on such about the number of sellers currently in in the instant context. See User Fee NPRM at 37364, services—in 2000.34 If the Commission n. 7. the marketplace who make outbound 27 The Commission also received some company- 25 telemarketing calls to consumers. In specific information from another commenter in 30 See 16 CFR §§ 310.4(b)(1)(iii)(B); 310.6(b)(7). the User Fee NPRM, the Commission response to the Rule NPRM. CDI-Rule NPRM at 1. 31 Winterberry Group, Industry Map: Teleservice determined, after examining relevant 28 DialAmerica-User Fee at 2. According to Industry—Multi-Channel Marketing Drives Universal Call Centers 16 (January industry literature and the record in this Customer Inter@ction Solutions, a monthly magazine of the teleservices industry, DialAmerica 2001)(‘‘Winterberry Group’’). The Winterberry and past TSR rulemaking proceedings, is the second-largest outbound teleservices agency Group is a consulting firm that works with the that the most pertinent information for in the United States. See http://www.tmcnet.com/ direct marketing industry. See http:// determining the number of firms that cis/0302/0302top50a.htm (visited 4 February, www.winterberrygroup.com (visited 25 March 2003). would be required to pay the proposed 2003). 29 Moreover, DialAmerica stated that its annual 32 Customer Inter@ction Solutions: Outsourcing, user fee would be the number of firms fees for obtaining access on behalf of all of its http://www.tmcnet.com/cis/0302/0302top50a.htm clients would result in that company alone paying (visited 4 February, 2003). 24 Wells Fargo-User Fee at 2. for 70 percent of the total amount that was to be 33 Winterberry Group at 2, 8, 9. 25 See User Fee NPRM at 37363–64. raised by the User Fee NPRM. 34 Id. at 9.

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assumes that, as with overall their own resources to make calls are for many telemarketers and sellers engage expenditures on teleservices, roughly 24 outbound calling to consumers, total in regional rather than nationwide percent of expenditures on third-party expenditures on these services would be calling campaigns, and therefore would providers was for outbound calling to $30.71 billion (23.9 percent of $128.5 not need consumer registration data for consumers, expenditures on third-party billion). These firms are probably larger the entire nation. outbound calls to consumers would on average—and probably do more A number of commenters that total $4.59 billion (23.9 percent of $19.2 telemarketing—than the firms that use billion). third-party service providers. If the addressed this issue supported using If the Commission assumes that the Commission assumes that they spend, area codes as a basis for assessing the 39 DialAmerica figure of $328,000 in on average, five times as much as firms fee. In fact, SBA noted that the revenues per client is representative of that use third-party telemarketers, they flexibility inherent in allowing entities third-party providers of outbound calls would be spending $4.92 million per to access the national registry by area to consumers in general, this would firm ($984,000 × 5). This would suggest code ‘‘would be beneficial to small imply that there are approximately that there are another 6,250 firms who businesses.’’ 40 On the other hand, other 14,000 such telemarketer-client do their own telemarketing ($30.71 commenters suggested that imposing relationships ($4.59 billion/$328,000 = billion/$4.92 million = 6,242 firms). fees based on the number of area codes 13,994).35 In total, this would suggest that there accessed, rather than imposing a flat fee, If the Commission assumes that the are some 10,900 firms doing outbound would create ‘‘unnecessary average firm that uses third-party calling to consumers—4,650 firms using administrative complications.’’ 41 service providers uses three different third-party telemarketers, plus 6,250 However, the Commission has providers for different campaigns over doing their own calling. Of course, some determined that it is not overly the course of a year, there would only of these firms would not be required to complex, from a system implementation be about 4,650 firms using such third- scrub against the FTC list because they prospective, to provide access to and party providers (13,965 firms/3 = 4,655), are either engaged in charitable collect fees for the national registry by and the average firm that uses third- solicitations or are calling on behalf of area code. In fact, providing the entire party telemarketers would spend an an industry that is exempt from FTC average of $984,000 per year on regulation. Other firms that make only national registry to every entity that outbound telemarketing to consumers intrastate calls would likewise not need seeks access, even if that entity will not ($328,000 × 3). to obtain the list. The firms that only need all of that information, would put None of these figures accounts for make intrastate calls are likely to be the a significantly larger strain on the firms that do their calling using their smaller firms that tend to use third- resources necessary to deliver that own staff and their own in-house party providers to make their calls. information, resulting in an unnecessary equipment, which account for $128.5 If the Commission assumes that 40 increase in system costs. Another billion—87 percent of total percent of firms that use third-party commenter stated that the ‘‘management expenditures—spent on teleservices.36 providers and 25 percent of firms that of tracking user fees for area codes that Again assuming that roughly 24 percent do their own telemarketing are exempt each individual client calls for a sales of expenditures by companies using from coverage,37 approximately 2,800 campaign would be an extremely firms that use third party providers (60 burdensome task for larger 35 The only other comment providing any percent of 4,655 = 2,793) and 4,700 telemarketers.’’ 42 The Commission information of assistance in determining the firms that do their own telemarketing number of entities that would pay a fee to access acknowledges that charging for access to the national registry came from CDI. CDI stated that (75 percent of 6,231 = 4,682) would be the national registry by area code may it specializes in outbound calling for daily and required to access the national do-not- entail some complexity for large weekly newspapers ranging in size from 5,000 call registry. Thus, the total number of telemarketers. On balance, however, the subscribers to over 1 million subscribers, makes firms accessing the registry would be Commission believes that the calls on behalf of 140 different clients each month, 7,500. and employs over 400 people. CDI-Rule NPRM at countervailing benefits of allowing 1. Unlike DialAmerica, however, the Commission B. Amount of Information for Which an access to the registry by area code was unable to discover any information about CDI’s revenues, making its company-specific information Entity Would Be Charged outweigh any potential costs. As a less useful in formulating assumptions regarding In the User Fee NPRM, the result, the Commission continues to the number of industry members. owever, by propose providing access to the national comparing CDI’s 400 employees to the 11,000 Commission proposed a fee structure people employed by DialAmerica (approximately based on the number of different area registry based on the number of area 3.6 percent of the size of DialAmerica), and codes of data that an entity wished to codes of information sought.43 assuming that sales per employee are the same for use annually.38 The Commission the two firms, one might estimate CDI’s revenues 39 See ARDA-User Fee at 4; NCL-User Fee at 1; are around $11 million (approximately 3.6 percent proposed charging for access to the AARP-User Fee at 2. of DialAmerica’s $300 million in annual revenue). registry per area code because that 40 If CDI has revenues around $11 million and calls charge most closely approximated the SBA-User Fee at 4. 41 on behalf of 140 clients during the entire year, their cost of operating the national registry. ABA-User Fee at 3. Accord Household-User Fee per-client revenues would be only about $78,500 at 4; ITC-User Fee at 6; MBNA-User Fee at 2; TRA- per year. (Of course, the fact that CDI calls on behalf The Commission also determined that User Fee at 3. of 140 clients each month does not mean that they 42 DialAmerica-User Fee at 2. have only 140 clients during the entire year. They 37 Firms that are exempt from coverage include 43 One commenter requested clarification that if may have different clients each month, which those engaged only in intrastate telemarketing or in access to the entire registry is requested, the would make the revenue per client even lower.) If making solicitations to induce charitable requestor will not have to input a list of all area the figures for CDI are representative of a significant contributions. See footnote 16, above. In addition, codes. Household at 6. That is correct. An entity share of the telemarketing industry and if, as a firms outside of the FTC’s jurisdiction that make seeking access to the entire national registry will result, the average revenue per firm is significantly their own telemarketing calls, such as common simply have to check a box indicating that lower than what DialAmerica realizes, the carriers, banks, savings and loans, as well as preference, without having to list any area codes. estimated number of telemarketer-client companies that engage in the business of insurance, In addition, the registry will offer the same access relationships would increase proportionally. This are also exempt from coverage and not included in capabilities for the area codes within each state, so NPRM is specifically seeking information and our estimate of the number of firms that will have that entities will be able to select all area codes comment about these figures from the industry. to access the national registry. within a certain state simply by requesting access 36 See Winterbery Group at 2. 38 See User Fee NPRM at 37364. to information for that state.

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C. Small Business Access area code and the number of area codes on a large scale. It would be a violation In the User Fee NPRM, the within a state, creating inconsistencies of the proposed fee rule for a Commission proposed providing free in the amount of data for which a telemarketer, or a seller to cause a 51 registry access to any firm wishing to telemarketer will be paying. telemarketer, to initiate outbound obtain data from only one to five area After evaluating these comments, the telephone calls in an area of the country codes.44 The Commission proposed Commission still believes that it is for which it did not pay for access to the such free access to limit the burden appropriate to provide access to a small national registry. Thus, distinct placed on small businesses that only portion of the data in the national corporate divisions of the same require access to a small portion of the registry for free. The Commission agrees company that acquire only five area national registry. The Commission with the comments that stated the codes of data could not make outbound noted that its proposal was consistent imposition of fees may be unduly telephone calls outside of those five area with the mandate of the Regulatory burdensome, and could have a codes without violating the proposed disproportionate impact, on small rule. As a practical matter, it is unlikely Flexibility Act, 5 U.S.C. 601, which 52 requires that to the extent, if any, a rule businesses. The Commission is that any company would organize its is expected to have a significant attempting to alleviate that burden to divisions by limiting each division’s economic impact on a substantial the greatest extent possible, while still telemarketing to five area codes, just to number of small entities, agencies collecting the necessary fees in as avoid the proposed fee. The should consider regulatory alternatives equitable manner as possible. By Commission believes that the costs to minimize such impact.45 providing free access to a small portion associated with trying to ‘‘game’’ the A number of commenters supported of the national registry, the Commission system in such a manner would be this small business exemption.46 Others is attempting to alleviate some of the much larger than the benefits of opposed it for various reasons. disproportionally heavier burdens faced avoiding the proposed fees. Household stated that any fee should be by small businesses. The Commission While the Proposed Rule provides assessed to all entities obtaining access recognizes that not all small businesses free access to a small portion of the to the national registry because there is will be able to enjoy the benefits of this national registry, the Commission no rational basis to do otherwise, and proposal, since some small businesses continues to seek comment on other ‘‘telemarketers and sellers should not may engage in telemarketing in a alternatives that would balance the have to subsidize the telemarketing geographic area larger than five area burdens faced by small businesses with activities of other telemarketers or codes. However, the Commission the need to raise appropriate fees to sellers, regardless of their size.’’47 ITC believes that most entities that will fund the registry in an equitable stated that the number of area codes benefit from this proposal will be small manner. purchased is a poor indicator of the businesses. Moreover, providing this As for the appropriate level of free free access does not significantly access, the Commission continues to extent of actual use, and a structure 54 without exemptions is simpler and increase the complexity of seek comment on this issue as well. 53 easier to administer.48 TRA stated that implementing the national registry. Absent evidence to the contrary, the ‘‘the area or population served by five The Commission also believes its Commission believes that five area or fewer area codes could be proposal will prevent companies from codes is an appropriate compromise enormous,’’ and that all telemarketers ‘‘gaming’’ the system to gain free access between the goals of equitably and should be required to help defray the adequately funding the national registry, 51 cost of the national registry.49 SBSC NASUCA-User Fee at 3–6. on the one hand, and providing 52 See ICTA-User Fee at 1–2; Ameriquest-User Fee maintained that the five area code appropriate relief for small businesses, at 6; Celebrity Prime Foods-User Fee at 1. on the other. While the Commission exemption does not provide sufficient 53 In the Commission’s view, an alternative understands that five area codes could protections for small businesses, since approach that would provide small business with many small businesses are located in exemptive relief more directly tied to size status provide free access to a significant would not balance the private and public interests geographic area, the Commission also is geographic areas with many area codes, at stake any more equitably or reasonably than the and some small businesses may actually attempting to address those small approach currently proposed by the Commission. businesses that work in large be national in scope.50 Finally, For example, an across-the-board exemption from metropolitan areas, which often have NASUCA expressed concern that all fees for small businesses, no matter how many area codes they access, would shift the entire cost multiple area codes within a relatively telemarketers may ‘‘game’’ the system to of the registry to larger businesses and require small geographic area. Furthermore, avoid paying for access—especially by assessing them even higher access fees, while giving while the Commission is mindful of the treating ‘‘distinct corporate divisions of the small business community access to the registry possible variations in the number of a single corporation’’ as separate without any cost-sharing responsibility whatsoever. Compared to the Commission’s current proposal, telephone numbers included in each entities, thus allowing each division to which requires small businesses that telemarket area code, the Commission believes the gather five area codes and pool the beyond five area codes to pay access fees, a only more equitable way to divide numbers among themselves. NASUCA categorical small-business exemption would not be access to the national registry, other also stated that there can be variations as consistent with the general legislative mandate that the Commission recover the registry’s costs than by area code, might be by in the number of customers within an from those telemarketing entities obtaining access individual telephone number. Such a to the registry. Alternatively, it might be argued that fine gradation, assuming its feasibility, 44 See User Fee NPRM at 37364. allowing small businesses to pay reduced rates 45 But see section IX, below, where the across the entire fee schedule could achieve 54 Commission determines that the instant proposed substantially the same level and balance of SBA commented that it had insufficient Rule would not have a significant economic impact exemptive relief and cost recoupment as the current information to determine whether five area codes is on a substantial number of small entities. proposal to provide free access to five area codes an appropriate level of free access, and or fewer. A reduced fee schedule based on small recommended that the FTC contact small 46 See, e.g., NCL-User Fee at 1; SBA-User Fee at business size, however, would still ultimately telemarketers to inquire how many area codes they 1, 4; AARP-User Fee at 2. require a certification and determination of that commonly access in a given year during the course 47 Household-User Fee at 3–4. status to implement and enforce, and thus would of business. SBA-User Fee at 4. ICTA suggested that 48 ITC-User Fee at 6. present greater administrative, technical, and legal the number of area codes of data that could be 49 TRA-User Fee at 6. costs and complexities than the Commission’s acquired without paying a fee be increased from 50 Small Business Survival Committee (‘‘SBSC’’)- current exemptive proposal, which does not require five to ten, but provided no rationale for this User Fee at 2. any proof or verification of that status. suggestion. ICTA-User Fee at 1–2.

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would significantly increase the data accessed.55 There would be no fee numbers will be sorted and available by complexity of the system, both in terms charged for access to five or fewer area area code. Companies will be able to of accessing and delivering the data. codes of data. In addition, the access as many area codes as desired, by The Commission believes the increase Commission continues to propose selecting, for example, all area codes in the complexity weighs against such placing a cap on the maximum annual within a certain state. Of course, an approach. Thus, the Commission fee that would be charged an entity that companies will also be able to access continues to propose that access to five wants access to the entire national the entire national registry, if desired. In or fewer area codes of data in the database. That maximum fee would be addition, after providing the required national registry be provided for free. $7,250, which would be charged for identifying information and paying the using 250 area codes of data or more. As appropriate fee, if any, companies will D. Fees for Access a result of this revised proposed fee be allowed to check, via interactive schedule, there would be no charge for Internet pages, a small number of As previously discussed, both the obtaining only five area codes of data; telephone numbers (less than ten) at a Appropriations Act and the six area codes of data would cost $174; time to permit small volume callers to Implementation Act authorize the twenty-five area codes would cost $725; observe the do-not-call requirements of Commission to raise fees sufficient to two hundred area codes would cost the TSR without having to download a cover the costs of implementing and $5,800; and access to the data from all potentially large list of all telephone enforcing the do-not-call provisions of area codes would be capped at $7,250 numbers within a particular area. the Amended TSR, estimated at $18.1 annually. When a seller first submits an million for fiscal year 2003. The As stated above, these proposed fees application to access registry Commission anticipates that it will need are based on certain assumptions and information, the company will be asked to raise the entire estimated $18.1 estimates.56 The Commission to specify the area codes that it wants million authorized to cover the costs anticipates that whatever fees may be to access. As discussed above, each associated with those efforts in this adopted would be reexamined seller accessing the registry data will be fiscal year. Costs fall primarily in three periodically and would likely need to be required to pay an annual fee for that broad categories. First are the actual adjusted, in future rulemaking access, based on the number of area estimated contract costs along with proceedings, to reflect actual experience codes of data the seller accesses. Fees associated agency costs to develop and with operating the registry. will be payable via credit card (which operate the do-not-call registry. These IV. Operation of the National Registry will permit the real-time transfer of cover things like the registration for the Telemarketing Industry data) or electronic funds transfer (which procedures and handling of complaints, will require the seller to wait The Commission is developing a approximately one day for the funds to the transfer of registration information fully-automated, secure Web site from state lists to the registry, clear before data access will be dedicated to providing members of the provided). A seller must pay these fees telemarketer access to the registration telemarketing industry with access to information, and the management and prior to gaining access to the registry. the registry’s list of telephone numbers, Sellers will be able to access data as operation of law enforcement access to sorted by area code. The first time a appropriate information. The second often as they like during the course of company accesses the system, it will be one year (defined as their ‘‘annual category of costs relates to enforcement asked to provide certain limited efforts. These costs will include law period’’) for those area codes that are identifying information, such as selected with the payment of the related enforcement initiatives, both domestic company name and address, company 58 and international, to identify targets and annual fee. If, during the course of the contact person, and the contact person’s year, sellers need to access data from challenge alleged violators. Enforcement telephone number and e-mail address. If more area codes than those initially costs also include consumer and an entity is accessing the registry on selected, they would be required to pay business education, which are critical behalf of a client-seller, the entity will for access to those additional area codes. complements to enforcement in also need to identify that client. For purposes of these additional securing compliance with the do-not- The only consumer information that payments, the annual period is divided companies will receive from the call provisions. The third category of into two semi-annual periods of six- national registry is a registrant’s costs covers agency infrastructure and months each. Obtaining additional data telephone number.57 Those telephone administration costs, including from the registry during the first semi- information technology structural annual, six-month period will require a supports. In particular, the Consumer 55 Only two commenters responded to questions in the User Fee NPRM as to whether an annual or payment of $29 for each new area code. Sentinel system (the agency’s repository a monthly fee would be a more preferable, efficient, During the second semi-annual, for all consumer fraud-related and appropriate method of fee collection. Both six-month period, the charge of complaints) and its attendant supported the use of an annual fee, as opposed to obtaining data from each new area code monthly one. See Household-User Fee at 4; MBNA- infrastructure must be upgraded to requested during that six-month period handle the anticipated increased User Fee at 4. 56 In addition to the assumptions set forth in is $15. These payments for additional demand from state law enforcers for Section III.A, above, concerning the number of data would provide sellers access to access to do-not-call complaints. firms that will access the national registry, the those additional areas of data for the Further, the Consumer Sentinel system Commission continues to assume that, on average, sellers will pay to obtain information from 83 area remainder of their initial annual term. will require substantial changes so that codes in the national registry. See User Fee NPRM After payment is processed, the seller it may handle the significant additional at 37368, question 5. will be given a unique account number volume of complaints that are expected. 57 In fact, that is the only personal identifying and permitted access to the appropriate information submitted by consumers that will be portions of the registry. That account In order to raise $18.1 million this maintained in the national registry. The registry fiscal year, and assuming that 7,500 will also maintain other information about the number will be used in future visits to firms will pay for that access, the registration for law enforcement purposes, such as 58 Commission proposes charging an the date and method of registration, but that To protect system integrity, a company will be information will not be available to companies permitted to download the entire national registry annual fee of $29 for each area code of accessing the registry. only once in any 24-hour period.

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the Web site, to shorten the time needed covered sellers or entities working on NPRM. However, the Commission has to gain access. On subsequent visits to their behalf must download the portions raised its estimate of the number of the Web site, sellers will be able to of the national registry for those areas of firms subject to this collection of download either an entire updated list the country in which they will either information, which increases of numbers from their selected area initiate an outbound telephone call or accordingly the cumulative paperwork codes, or a more limited list, consisting cause a telemarketer to initiate an burden presented by this proposed only of additions to or deletions from outbound telephone call on their behalf. revision. The Commission informed the the registry that have occurred since the VI. Invitation to Comment Office of Management and Budget about company’s last download. This would this proposed burden increase. limit the amount of data that a company All persons are hereby given notice of The Commission continues to propose needs to download during each visit. the opportunity to submit written data, requiring those firms that access the Telemarketers, list brokers, and other views, facts, and arguments concerning national do-not-call registry to submit entities working on behalf of sellers will these proposed changes to the minimal identifying information that need to submit their client-seller’s Commission’s Telemarketing Sales Rule. the operator of the registry deems account number to gain access to the The Commission invites written necessary to collect the proposed fee, as national registry. The extent of their comments to assist it in ascertaining the outlined in section IV, above. The access will be limited by the area codes facts necessary to reach a determination information to be collected from those requested and paid for by their client- as to whether to adopt as final the firms, and the frequency of that sellers. They also will be permitted to proposed changes to the Rule. The collection, has not changed from the access the registry as often as they wish Commission encourages comments to be User Fee NPRM.61 The Commission for no additional cost, once the annual submitted electronically to the estimated, in the User Fee NPRM, that fee has been paid by their client- following e-mail address: it should take no longer than two sellers.59 As indicated in the Rule [email protected]. Alternatively, minutes for each firm to submit this NPRM discussion of section commenters may submit an original basic information, and that each firm 310.4(b)(3)(iv), however, the Rule plus two paper copies of their would have to submit the information requires a seller or telemarketer to comments to the Office of the Secretary, annually.62 Given current estimates that employ a version of the do-not-call Room 159, Federal Trade Commission, there are approximately 7,500 firms that registry obtained from the Commission 600 Pennsylvania Avenue, NW., will have to access the information in no more than three months prior to the Washington, DC 20580. All comments the national registry, the Commission date any telemarketing call is made. must be submitted on or before May 1, estimates that this revised proposal will V. Date By Which Full Compliance 2003. Time is of the essence to result in 250 burden hours (7,500 firms With the Do-Not-Call Provisions of the promulgate these proposed fees. Thus, x 2 minutes per firm = 15,000 minutes, Amended TSR Will Be Required the Commission does not anticipate or 250 hours). In addition, the providing any extension to this Commission continues to estimate that In the Statement of Basis and Purpose comment period. to the Amended TSR, the Commission possibly one-half of those firms may Comments submitted will be available need, during the course of their annual stated that it would announce at a future for public inspection in accordance with time the date by which full compliance period, to submit their identifying the Freedom of Information Act, 5 information more than once in order to with § 310.4(b)(1)(iii)(B), the do-not-call U.S.C. 552, and Commission Rules of registry provision, would be required.60 obtain additional area codes of data. Practice, on normal business days This would result in an additional 125 At that time, the Commission between the hours of 9 a.m. and 5 p.m. anticipated that full compliance with burden hours (3,750 telemarketers x 2 at the Public Reference Section, Room minutes per telemarketer = 7,500 the do-not-call provision would be 130, Federal Trade Commission, 600 required approximately seven months minutes, or 125 hours). Thus, the Pennsylvania Avenue, NW., Commission estimates that the revised from the date a contract is awarded to Washington, DC 20580. The create the national registry. fee provision will impose a total Commission will make this NPRM and, paperwork burden of approximately 375 On March 1, 2003, the Commission to the extent possible, all comments awarded the contract to create the hours per year. received in response to this NPRM, The Commission anticipates that national do-not-call registry to AT&T available to the public through the Government Solutions, Inc. clerical employees (or other low-level Internet at the following address: administrative personnel) of affected Accordingly, the Commission is now http://www.ftc.gov. announcing that full compliance with entities will fulfill the function of § 310.4(b)(1)(iii)(B), the ‘‘do-not-call’’ VII. Communications by Outside supplying company-identifying registry provision of the Amended TSR, Parties to Commissioners or Their information to the registry contractor. will be required on October 1, 2003. Advisors Assuming a clerical hourly wage of $10 Companies will be able to begin Written communications and per hour, the cumulative annual labor accessing the national do-not-call summaries or transcripts of oral cost to respondents to provide the registry on September 1, 2003. As a communications respecting the merits requisite information is $3,750 (375 result, to remain in compliance with the of this proceeding from any outside hours x $10 per hour). do-not-call provisions of the Amended party to any Commissioner or TSR, all covered sellers will be required Commissioner’s advisor will be placed 61 See User Fee NPRM at 37365–66. 62 to access the national registry for the on the public record. See 16 CFR Id. at 37366. As stated in the User Fee NPRM, first time between September 1–30, this estimate is likely to be conservative for PRA 1.26(b)(5). purposes. The OMB regulation defining 2003. During that same time frame, all ‘‘information’’ generally excludes disclosures that VIII. Paperwork Reduction Act require persons to provide facts necessary simply to 59 Telemarketers, list brokers, and other entities This Revised Fee NPRM does not identify themselves, e.g., the respondent, the working on behalf of sellers will also be limited to respondent’s address, and a description of the downloading the entire national registry only once involve any new collection of information the respondent seeks in detail in any 24-hour period. information requirements that were not sufficient to facilitate the request. See 5 CFR 60 See 68 FR at 4664. already proposed in the User Fee 1320.3(h)(1).

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The Commission once again invites Rule NPRM, and the requirements of the Appropriations Act, and comment that will enable it to: User Fee Statute. Implementation Act. 1. Evaluate whether the proposed In response to this request for comment, SBA commended the FTC on X. Questions for Comment on the collections of information are necessary Proposed Rule for the proper performance of the its regulatory flexibility analysis and functions of the Commission, including supported permitting small firms to The Commission seeks comment on whether the information will have access a limited number of area codes the various aspects of the proposed practical utility; per year without a charge, but noted that revisions to the TSR set forth in this overlapping federal and state do-not-call NPRM. Without limiting the scope of 2. Evaluate the accuracy of the registries may create undue burdens for issues on which it seeks comment, the Commission’s estimates of the burdens small businesses.64 SBA included a Commission is particularly interested in of the proposed collections of number of suggestions to minimize the receiving comments on the questions information, including the validity of impact of multiple do-not-call registries that follow. In responding to these the methodology and assumptions used; on small businesses.65 As indicated in questions, include detailed, factual 3. Enhance the quality, utility, and the TSR SBP, the Commission is supporting information whenever validity of the information to be working with the states to develop a possible. collected; and single, national do-not-call registry—a 1. This Revised Fee NPRM estimates 4. Minimize the burden of the ‘‘one-stop shop’’ for consumers to that there are 7,500 firms that will collections of information on those who register their preference not to receive access the national do-not-call registry. are to respond, including through the telemarketing calls, and for sellers and Is that estimate realistic and use of appropriate automated, telemarketers to gain access to that appropriate? What evidence, if any, do electronic, mechanical or other registration information.66 To further you have concerning the number of technological collection techniques or those goals, the Commission will allow sellers that either directly engage in, or other forms of information technology. all states, and the DMA if it so desires, hire telemarketers to engage in, to download into the national registry— ‘‘outbound telephone calls’’ to IX. Regulatory Flexibility Act at no cost to the states or the DMA—the consumers? The Regulatory Flexibility Act telephone numbers of consumers who 2. In estimating the number of firms (‘‘RFA’’), 5 U.S.C. 604(a), requires an have registered with them their that will access the national do-not-call agency either to provide an Initial preference not to receive telemarketing registry, the Commission made a Regulatory Flexibility Analysis calls. Telemarketers and sellers will be number of assumptions, including the (‘‘IRFA’’) with a proposed rule, or allowed to access that data through the following: certify that the proposed rule will not national registry as the information is a. The average revenue per client for have a significant economic impact on received. Such harmonization will telemarketers making outbound a substantial number of small entities. decrease significantly any burdens telemarketing calls to consumers is The FTC does not expect that the final imposed by the multiple do-not-call about $328,000; b. It is reasonable to estimate the level rule concerning fees will have the registries that currently exist. of expenditures on outbound calls to threshold impact on small entities. As The Commission continues to consumers by taking the product of discussed in section III.C, above, this welcome comment on any significant published figures on the percentage of NPRM specifically proposes charging no alternatives to those proposed in the total telemarketing expenditures that fee for access to data included in the instant NPRM that would further involve outbound calls—including both registry from one to five area codes. As minimize the impact on small entities, calls to consumers and to businesses— a result, the Commission anticipates consistent with the objectives stated herein and with the Amended TSR, the and published figures on the percentage that many small businesses will be able of expenditures that are for calls to to access the national registry without 64 See SBA-User Fee at 1. See also Section III.C, consumers—including both inbound having to pay any annual fee. Thus, it above, for a discussion of other comments the and outbound calling. This figure, is unlikely that there will be a Commission received on its approach to approximately 24 percent, can then be significant burden on small businesses minimizing the impact of this rulemaking on small used to estimate the level of outbound resulting from the adoption of the businesses. 65 Id. at 5–6. SBA also responded to our request calling to consumers both by (1) firms proposed fees. for information concerning the number of small that use third-party telemarketers to do The Commission reached a similar businesses that might be subject to the proposed their calling and (2) those firms that do conclusion in the User Fee NPRM.63 User Fee Rule by provided information from the North American Industry Classification System their own calling; Nonetheless, the Commission (‘‘NAICS’’). According to the NAICS, there are 2,305 c. Sellers that use third-party determined that it was appropriate to firms identified as ‘‘Telemarketing Bureaus’’ telemarketers on average employ three publish an IRFA in the User Fee NPRM, (NAICS Code 561422), 1,279 of which qualify as a small business (one with annual receipts of $5 different telemarketers to make in order to inquire into the impact on million or less). SBA also noted ‘‘that 1,127 outbound calls to consumers over the small entities of both the amendments telecommunications firms have receipts under $1 course of a year; to the TSR proposed in the User Fee million, which makes them particularly small and d. Sellers using their own resources to NPRM, as well as the proposed vulnerable to burdensome costs of Federal regulations.’’ Id. at 3. The FTC appreciates this make telemarketing calls spend, on amendments to the TSR set forth in the information. However, as discussed in Section II.B, average, five times as much on Rule NPRM. The Commission above, ‘‘telemarketing bureaus’’ no longer would be telemarketing as do firms that use third- welcomed comment on any significant required to pay a fee to access the national registry. party telemarketers; alternatives that would further Instead, sellers would be required to pay the fee. Therefore, to determine the number of small e. Approximately 40 percent of sellers minimize the impact on small entities, businesses affected by the instant NPRM, the that use third-party telemarketers and consistent with the objectives of the Commission is seeking information on the number 25 percent of sellers that engage in their Telemarketing Act, the proposed of small business sellers that engage in outbound own telemarketing will not be required amendments to the TSR set forth in the telemarketing and that are subject to the FTC’s jurisdiction. Unfortunately, the NAICS does not to access the national do-not-call provide this level of detailed industry classification. registry, either because they are engaged 63 See User Fee NPRM at 37366–67. 66 See TSR SBP at 4641. in charitable solicitations, are making

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only intrastate calls, or are calling on seller first has paid the annual fee, By direction of the Commission. behalf of an industry that is exempt required by § 310.8(c), for access to the Donald S. Clark, from FTC jurisdiction. telephone numbers within that area Secretary. Are these estimates, and others used code that are included in the national [FR Doc. 03–7932 Filed 4–2–03; 8:45 am] in arriving at a figure for the number of do-not-call registry. BILLING CODE 6750–01–P firms that will be required to access to (c) The annual fee, which must be the national do-not-call registry, paid prior to obtaining access to the realistic and appropriate? What do-not-call registry, is $29 per area code evidence can you provide to support the DEPARTMENT OF DEFENSE of data accessed, up to a maximum of view that these estimates are reasonable $7,250; provided, however, that if a Office of the Secretary or that they should be different? seller obtains no more than five (5) area 3. How many area codes of data will the average firm accessing the national codes of data annually, there shall be no 32 CFR Part 199 charge for this information. do-not-call registry purchase? How RIN 0720–AA76 many firms will require access to 250 of (d) After a seller pays the fees set forth more area codes of data? How many will in § 310.8(a), the seller will be provided TRICARE Program; Inclusion of need access to 5 or fewer area codes? a unique account number which will Anesthesiologist’s Assistants as 4. Is it appropriate to require each allow that seller, or an entity designated Authorized Providers; Coverage of separate corporate division, subsidiary, by that seller, to access the registry data Cardiac Rehabilitation in Freestanding and affiliate that engages in outbound for the selected area codes at any time Cardiac Rehabilitation Facilities telemarketing to pay a separate fee to for twelve months following the first access the national registry? Why or day of the month in which the seller AGENCY: Office of the Secretary, why not? If a separate fee is not paid the fee (‘‘the annual period’’). To Department of Defense. appropriate, what is a better way to obtain access to additional area codes of ACTION: Proposed rule. differentiate between large and small data during the first six months of the enterprises? Would that alternative annual period, the seller must first pay SUMMARY: This proposed rule method maintain the fairness of the fee $29 for each additional area code of data establishes a new category of provider collection system while not significantly not initially selected. To obtain access as an authorized TRICARE provider, decreasing the number of entities that to additional area codes of data during and it increases the settings where will pay for access to the national the second six months of the annual cardiac rehabilitation can be covered as registry? period, the seller must first pay $15 for a TRICARE benefit. It recognizes anesthesiologist’s assistants as List of Subjects in 16 CFR Part 310 each additional area code of data not initially selected. The payment of the authorized providers under certain Telemarketing, Trade practices. additional fee will permit the seller or circumstances. It also authorizes cardiac rehabilitation services, which are XI. Proposed Rule the seller’s designee to access the additional area codes of data for the already a covered TRICARE benefit Accordingly, for the reasons set forth remainder of the annual period. when provided by hospitals, to be in the preamble, the Commission provided in freestanding cardiac proposes to amend part 310 of title 16 (e) Access to the do-not-call registry is rehabilitation facilities. limited to telemarketers, sellers, others of the Code of Federal Regulations as DATES: Public comments must be engaged in or causing others to engage follows: received by June 2, 2003. in telephone calls for commercial PART 310—TELEMARKETING SALES purposes, service providers acting on ADDRESSES: Forward comments to: RULE behalf of such persons, and any TRICARE Management Activity (TMA), government agency that has the Medical Benefits and Reimbursements 1. The authority citation for part 310 authority to enforce a federal or state do- Systems, 16401 East Centretech continues to read as follows: not-call statute or regulation. Prior to Parkway, Aurora, CO 80011–9043. Authority: 15 U.S.C. 6101–6108. accessing the do-not-call registry, a FOR FURTHER INFORMATION CONTACT: Stephen E. Isaacson, Medical Benefits 2. Add § 310.8 to read as follows: person must provide the identifying information required by the operator of and Reimbursement Systems, TMA, § 310.8 Fee for access to do-not-call the registry to collect the fee, and must (303) 676–3572. registry. certify, under penalty of law, that the SUPPLEMENTARY INFORMATION: (a) It is a violation of this Rule for any person is accessing the registry solely to A. Inclusion of Anesthesiologist’s seller to initiate, or cause any comply with the provisions of this Rule Assistants as Authorized Providers telemarketer to initiate, an outbound or to otherwise prevent telephone calls telephone call to any person whose to telephone numbers on the registry. If At present only two types of telephone number is within a given area the person is accessing the registry on anesthesia providers may provide code unless such seller first has paid the behalf of other sellers, that person also services to TRICARE beneficiaries— annual fee, required by § 310.8(c), for must identify each of the other sellers anesthesiologists and certified registered access to telephone numbers within that on whose behalf it is accessing the nurse anesthetists (CRNAs). In some area code that are included in the registry, must provide each seller’s areas of the country, anesthesiologist’s national do-not-call registry maintained unique account number for access to the assistants, after completing the specified by the Commission under national registry, and must certify, training, being accredited, and being § 310.4(b)(1)(iii)(B). under penalty of law, that the other licensed by the state also provide (b) It is a violation of this Rule for any sellers will be using the information anesthesia services. The Centers for telemarketer, on behalf of any seller, to gathered from the registry solely to Medicare and Medicaid Services (CMS) initiate an outbound telephone call to comply with the provisions of this Rule already recognizes anesthesiologist’s any person whose telephone number is or otherwise to prevent telephone calls assistants as authorized providers (42 within a given area code unless that to telephone numbers on the registry. CFR 410.69).

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