TSR SS for final amendments_mtd

Supporting Statement for
Information Collection Provisions in Final Amendments to the
Telemarketing Sales Rule
16 C.F.R. Part 310
(OMB Control No. 3084-0097)
The current OMB approval for the information collection requirements in the FTC’s
Telemarketing Sales Rule (“TSR” or “Rule”) expires on July 31, 2009. That clearance, issued in
2006, does not encompass the new information collection requirements presented by two recent
amendments to the TSR.1
As previously proposed, the TSR amendments concerning prerecorded calls and
calculation of call abandonment rates did not affect PRA burden.2 Accordingly, with no changes
to staff’s prior estimates of PRA burden at that time, no OMB review and approval for the
proposed amendments was sought.
The final amendment regarding prerecorded calls, however, adds certain information
collection requirements not covered by the current clearance. Specifically, the amendment
expressly authorizes sellers and telemarketers to place outbound prerecorded telemarketing calls
to consumers if: (1) the seller has obtained written agreements from those consumers to receive
prerecorded telemarketing calls after a clear and conspicuous disclosure of the purpose of the
agreement; and (2) the call discloses an automated telephone keypress or voice-activated opt-out
mechanism at the outset of the call.3 The amendment will apply not only to prerecorded calls
that are answered by a consumer, but also to prerecorded messages left on consumers’ answering
machines or voicemail services.
Given modifications to those proposed amendments at the final rule stage, we are
submitting for OMB review and inviting public comment on the PRA burden analysis regarding
the two final amendments. We seek expedited emergency processing and request a temporary,
180-day grant of clearance. Consistent with OMB’s recent guidance to FTC staff, we will
prepare in early 2009 for public comment and OMB review staff’s burden analysis for the
revised TSR, as a whole, in connection with our seeking renewed 3-year clearance for this Rule.

1

73 Fed. Reg. 51,164 (August 29, 2008).

2

71 Fed. Reg. 58,716, 58,730-58731 (Oct. 4, 2006).

3

When it takes effect, the prerecorded call amendment will provide the first ever explicit authorization in the
TSR for sellers and telemarketers to place prerecorded telemarketing calls to consumers. The call
abandonment prohibition of the TSR now implicitly prohibits such calls by requiring that all telemarketing
calls be connected to a sales representative, rather than a recording, within two seconds of the completed
greeting of the person who answers. 16 C.F.R. § 310.4(b)(1)(iv).

(1)

Necessity for Collecting the Information

The amendments to the TSR covered by this clearance request were adopted pursuant to the
Telemarketing and Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”).4 The
Telemarketing Act authorizes the Commission to prescribe rules prohibiting deceptive and
abusive telemarketing acts or practices, and includes a requirement specifically directing the
Commission to include in the TSR “a requirement that telemarketers may not undertake a pattern
of unsolicited telephone calls which the reasonable consumer would consider coercive or
abusive of such consumer’s right to privacy.”5

Amendments to the TSR adopted by the Commission in 2003 accordingly included
several provisions designed to protect consumer privacy, including a prohibition against
abandoning calls answered in person by a consumer.6 Because the prohibition specifies that a
call is “abandoned” if a telemarketer does not pick up the call within two seconds after it is
answered by a consumer, it implicitly prohibited all prerecorded calls.
The call abandonment prohibition is coupled with a safe harbor7 designed to permit the
use of predictive dialers that increase the efficiency and reduce the cost of live telemarketing
calls by placing calls in anticipation that a sales agent will be available to take the call if it is
answered. Because predictive dialers rely on projections based on statistical sampling of the
percentage of calls actually answered by a consumer, their use results in the abandonment of
some calls. In response, the safe harbor adopted in 2003 specified that the abandonment rate
could not exceed “3 percent per day” to protect consumers from abandoned calls.8
In order to protect consumers’ privacy from the excesses of prerecorded calls, as directed
by the Telemarketing Act, the prerecorded call amendment makes the implicit prohibition of
such calls explicit, unless: (a) the seller on whose behalf a prerecorded call is made has first
obtained the written agreement of the person called to receive prerecorded messages; and (b)
each message includes an automated interactive telephone keypress or voice-activated opt-out
mechanism that is disclosed at the outset of the call. The amendment to the method for
calculating the call abandonment rate relaxes the “3 percent per day” requirement to a “per 30day” requirement, because the record shows that the “per day” requirement had the unanticipated
effect of preventing the use of predictive dialers with small calling lists, thereby making the
efficiencies and cost savings they provide unavailable to small businesses.

4

15 U.S.C. 6101 et seq.

5

15 U.S.C. 6102(a)(3)(A).

6

16 C.F.R. § 310.4(b)(1)(iv) (the call abandonment prohibition); see generally, 16 C.F.R. § 310.4(b).

7

16 C.F.R. § 310.4(b)(4).

8

16 C.F.R. § 310.4(b)(4)(i).

2

(2)

Use of the Information
(a) Recordkeeping

The written agreement requirement of the prerecorded call amendment will substitute the
means of compliance under the Commission’s forbearance policy9 and the recordkeeping
requirements of the TSR – which now require a record of an established business relationship
(“EBR”)10 – with a record of a consumer’s agreement to receive prerecorded calls.11
(b) Disclosures
For the first of two prerecorded call disclosures, the Commission has set out acceptable,
optional language that sellers may use to obtain consumers’ agreements to receive prerecorded
calls, while emphasizing that the required agreements may be obtained electronically pursuant to
the Electronic Signatures In Global and National Commerce Act (“E-SIGN Act” or “E-SIGN”).12
The Commission will also permit sellers, during a one-year phase-in period before the written
agreement requirement takes effect, to obtain the required agreement by means of a keypress on
a telephone keypad in response to a prerecorded message disclosure and request. Compliance
will thereby require only a one-time recording of such a message and/or a one-time revision of
any existing credit card or other printed forms, or of any web page or email forms that sellers
may wish to use for the required disclosure and agreement.
The second disclosure incorporates a requirement of the enforcement forbearance policy
that has permitted prerecorded calls during the pendency of the amendment proceeding.13 The
Federal Communications Commission (“FCC”) has required a similar disclosure for all
prerecorded calls to consumers since 1993.14 The amendment will require that prerecorded calls

9

69 Fed. Reg. 67,287, 67,288-62,790 (Nov. 17, 2004). The enforcement forbearance policy has since
permitted such calls if they provide either: (1) a telephone keypad mechanism a consumer can use to opt-out
of future calls from the seller, or (2) a toll-free telephone number a consumer can call to opt-out. In October
2006, when the Commission proposed to require a prior written agreement for prerecorded calls, it also
proposed to terminate the forbearance policy as of January 4, 2007, but was persuaded by several industry
petitions to preserve the status quo until the conclusion of the amendment proceeding.
10

16 C.F.R. § 310.2(n) (defining an EBR); 16 C.F.R. § 310.5(a)(3) (EBR recordkeeping requirement).

11

16 C.F.R. § 310.5(a)(5) (written agreement recordkeeping requirement).

12

Pub. L. No. 106-229, 114 Stat. 464 (2000) (codified at 15 U.S.C. § 7001 et seq.).

13

69 Fed. Reg. at 67,290; 71 Fed. Reg. 77,634, at 77,635 (Dec. 27, 2006) (extending the policy pending
completion of this proceeding). The enforcement forbearance policy will terminate, and be replaced by the
final amendment’s disclosure requirement, on December 1, 2008.

14

47 C.F.R. § 64.1200(b)(2) (requiring disclosure of a telephone number “[d]uring or after the message” that
consumers who receive a prerecorded message call can use to assert a company-specific do-not-call request).

3

answered by a consumer disclose at the outset the required interactive means by which the
consumer can place his or her number on the seller’s do-not-call list (e.g., “Press 1 to opt-out”),
or if the prerecorded message is left on an answering machine, a toll-free number to call to optout.15 Any incremental burden from substituting the amendment’s disclosure requirement for the
current one will be de minimis.
(3)

Consideration of Using Improved Information Technology to Reduce Burden

The TSR’s recordkeeping provisions permit sellers and telemarketers to keep records in
whatever form, manner, format, or location they choose. Accordingly, the TSR’s recordkeeping
provisions are consistent with the requirements of the Government Paperwork Elimination Act,
Pub. L. No. 105-277, Title XVII, 112 Stat. 2681-749 (“GPEA”). Neither of the two amendments
alters the TSR’s existing recordkeeping requirements, and both are designed to encourage the
use of electronic means of compliance.
(4)

Efforts to Identify Duplication

The TSR requires sellers and telemarketers to keep records demonstrating compliance
with the Rule. The information collection requirements covered by this request affect only the
prerecorded call amendment requirement that sellers retain copies of consumers’ written
agreements to receive such calls, and the scripts used in such calls.16 Staff is not aware of any
other federal or state requirement that may entail the retention of any records required by the
amendments, except for FCC requirements mandating the disclosure in prerecorded messages of
a telephone number for opt-out requests,17 and FCC and some state law requirements for the
calculation of call abandonment rates.18 To the extent that the recordkeeping requirements of the
amendments may duplicate the information collection requirements of other federal or state
government agencies, the Rule does not require that a duplicate set of records be maintained.
Staff knows of no instance, moreover, under which either of the amendments and any other law
or regulation governing telemarketing requires that a specific disclosure be made in duplicative
ways to satisfy the Rule’s requirements and the requirements of a parallel law or regulation.
15

Technology exists that permits telemarketers to detect when an answering machine or voice mail service
picks up, thus permitting sellers and telemarketers to tailor the opt-out message to disclose either a keypress or
a toll-free number opt-out option.

16

16 C.F.R. §§ 310.5(a)(1) and (5). No specific recordkeeping requirement in the TSR applies to any other
provision of the prerecorded call amendment. Telemarketers will continue to have the burden of proof to
establish as an affirmative defense that they have complied with the call abandonment safe harbor, and may
keep records showing that their call abandonment rates have not exceeded 3 percent over a 30-day period
under the abandonment rate calculation amendment. Such record retention, however, is not expressly required
by the TSR.

17

See supra note 14 and accompanying text.

18

47 C.F.R. § 64.1200(a)(6); e.g.,California Public Utilities Commission, Interim Opinion, Rulemaking 0202-020 (June 27, 2002) at 20.

4

(5)

Efforts to Minimize Burden on Small Businesses

The Commission believes that the two amendments to the TSR that it is adopting are not
likely to have a significant impact on small business for several reasons. Most small businesses
serve local customers, develop personal relationships with their clientele, and are therefore likely
to be able to obtain their customers’ agreements to receive useful prerecorded telemarketing
messages. Moreover, purely informational prerecorded messages are not covered by the TSR,
and the use of such messages to schedule service calls, delivery times, and the like therefore will
not be subject to the written agreement requirement. Finally, as a result of the Commission’s
decision to defer the effective date of the written agreement requirement for twelve months,
small businesses with annual service or other contracts with their customers will have ample
time to revise their contracts and seek their customers’ permission to receive prerecorded
telemarketing messages.
For these same reasons, the Commission believes that small business telemarketers
providing prerecorded call services to such small business sellers are unlikely to be significantly
affected by the prerecorded call amendment. In addition, for more than two years, small and
large telemarketers alike, as well as sellers that conduct their own telemarketing, have been
governed by the Commission’s enforcement forbearance policy for prerecorded messages
answered by a consumer, which has mandated an up-front disclosure to consumers of how to
opt-out, and encouraged the use of an interactive opt-out mechanism. During that time,
according to the comments, many of which came from small business telemarketers, the industry
has transitioned to automated interactive message systems that are now affordable and widely
available. Consequently, the Commission does not believe that the three months it is allowing
until December 1, 2008 for sellers and telemarketers to provide automated interactive opt-out
mechanisms will disadvantage either small or large business telemarketers or sellers. Although
prerecorded message calls placed on answering machines or voicemail services were not subject
to the Commission’s enforcement forbearance policy, there is nothing in the record to suggest
that application of the requirement of an automated interactive opt-out mechanism to such calls
could not be accomplished within the phase-in period, or would disadvantage either small or
large business telemarketers or sellers.
Further, the amendment adjusting the method for measuring the permissible call
abandonment rate by predictive dialers in live telemarketing campaigns is not likely to have a
significant impact on small business. If anything, the change in the standard from a “per day” to
a per-30-day calculation should lead to a reduction in the cost of live telemarketing campaigns
for both small and large businesses, for the reasons previously stated, and will likely encourage
the use of such calls to EBR customers by small and large businesses alike. In fact, small
business sellers and telemarketers are likely to derive the greatest benefit from the amendment
because the smaller size of their calling lists has prevented full realization of the efficiencies of
predictive dialers under the existing measurement standard, an unintended consequence that the
amendment will correct.
Accordingly, the two amendments to the TSR will not have a significant nor
disproportionate impact on the costs of small business.
5

(6)

Consequences of Conducting the Collection Less Frequently
(a) Recordkeeping

The TSR requires specified records to be retained for 24 months. A record retention
period less than a two-year period would be inadequate for investigations under the FTC’s
enforcement program. Consumers who complain to the FTC about transactions covered by the
Rule often do not do so immediately. Therefore, there may already be a substantial “lag time”
between the time the alleged rule violations occurred and the time the FTC learns of the alleged
violations. A two-year record retention period allows the Commission staff to gather the
information needed to pursue enforcement actions and to identify those persons who have most
recently suffered injury from the alleged deceptive or abusive telemarketing practices.
(b) Disclosures
The final rule’s prerecorded call amendment includes two separate disclosure
requirements: (1) a clear and conspicuous disclosure, when sellers seek a consumer’s agreement
to receive prerecorded calls, that the purpose of the agreement is to authorize the seller to place
prerecorded calls to them; and (2) a disclosure at the outset of all prerecorded calls informing
consumers how to place their telephone numbers on the seller’s company-specific do-not-call
list. Preparation of these brief disclosures, whether in print or electronic media, including voice
recording, should be a one-time event, although they may be used more than once in seeking
consumer consent to be called with prerecorded messages or at the outset of each such message.
Compared to the modest cost and burden these disclosures may impose, omitting either one
when required by the amendment would defeat the amendment’s purpose, which is to protect
consumer privacy as mandated by the Telemarketing Act.
(7)

Circumstances Requiring Collection Inconsistent With OMB Guidelines

The collection of information in the amended TSR is consistent with all applicable
guidelines contained in 5 C.F.R. § 1320.5(d)(2).
(8)

Consultation Outside the Agency

The Commission has twice sought comment from interested parties on both the
prerecorded call amendment and the amendment to revise the method for calculating the call
abandonment rate. In response to industry requests, the Commission first sought comment on a
proposed amendment to permit prerecorded messages when a business had an “established
business relationship” with a consumer, so long as each message included a keypress mechanism
or toll-free telephone number to opt-out that was disclosed at the outset of the call.19 The same
request for comments also asked for input on an industry proposal to modify the method for
calculating the call abandonment rate. While industry comments generally supported both

19

69 Fed. Reg. 67,287 (Nov. 17, 2004).

6

proposals, and a few consumer comments even supported the call abandonment rate calculation
amendment, well over 13,000 consumer comments vociferously opposed the proposed
prerecorded call amendment.
In response to those comments, the Commission in 2006 reversed course and requested
comment from interested parties on a proposed amendment making the implicit prohibition on
prerecorded calls in the TSR’s call abandonment provision explicit, and permitting such calls
only if the seller had first obtained the express agreement, in writing, of a consumer to receive
prerecorded calls.20 The Federal Register notice also sought comment on a proposed amendment
to revise the calculation of the call abandonment rate from a “3 percent per day” to a “per 30day” standard because the “per day” standard was preventing small businesses from using
predictive dialers, which are too inaccurate with small calling lists to ensure compliance with the
3 percent requirement.
The Commission received some 229 additional comments from individual consumers
and nine consumer advocacy organizations supporting the revised proposed prerecorded call
amendment and largely opposing the “3 percent per 30-day” amendment. Sellers, telemarketers,
their trade associations and technology providers submitted 73 comments supporting the “3
percent per 30-day” amendment and opposing the “opt-in” approach of the proposed prerecorded
call amendment.21
The industry comments generally objecting to the amendment’s written agreement
requirement appear to assume that the agreement must be obtained with pen and paper,
notwithstanding similar provisions in the TSR that expressly authorize the use of electronic
signatures that comply with the E-SIGN Act. In response, the Commission has added a footnote
to the amendment that expressly authorizes the use of electronic signatures under E-SIGN in
order to make absolutely clear that nothing in the amendment requires the creation or retention
of paper records.22 This clarification will minimize any paperwork burden in creating and
retaining the written agreements the amendment requires.
The one comment directly addressing the PRA, which also appears to assume that pen
and paper agreements are required, objects that the Commission’s analysis in the NPRM ignored
the initial cost for sellers of reprinting credit card and loyalty applications and revising systems
and procedures to obtain the required agreements from existing and new customers.23 While

20

71 Fed. Reg. 58,716 (Oct. 6, 2006).

21

Many of the industry comments argued that the Commission instead should permit prerecorded calls so
long as they provided an interactive opt-out mechanism.

22

For this reason, if a seller nonetheless elects to use paper records, any attendant cost or other burden is selfimposed, rather than imposed by the amendment.

23

Comment by SmartReply, Inc., at 18-19 (November 1, 2006), available at
http://www.ftc.gov/os/comments/tsrrevisedcallabandon/525547-00105.pdf. In response to these concerns, the

7

there will be some initial burden in converting from EBR records to agreement records, which
staff has included in revised burden estimates below, the Commission has taken two additional
steps designed to reduce that burden significantly. First, the Commission will accept agreements
obtained by consumers’ use of a keypress on a telephone keypad. Second, the Commission has
provided a phase-in that defers the written agreement requirement until September 1, 2009,
during which time sellers may continue to place low-cost prerecorded calls to their EBR
customers that could include a request for agreement to receive prerecorded calls in the future
with a simple keypress.
(9)

Payments or Gifts to Respondents
Not applicable.

(10) & (11)

Assurances of Confidentiality/Matters of a Sensitive Nature

The collection of information in this proposed Rule is consistent with all applicable
guidelines contained in 5 C.F.R. § 1320.5(d)(2). To the extent that information covered by a
recordkeeping requirement of the Rule is collected by the Commission for law enforcement
purposes, the confidentiality provisions of Sections 6(f) and 21 of the Federal Trade Commission
Act, 15 U.S.C. §§ 46(f) and 57b-2, will apply.
(12)

Hours Burden

Estimated incremental annual hours burden: 82,865 hours
When the FTC last sought renewed PRA clearance for the Rule, staff estimates were
based on data from the FTC’s Do-Not-Call Registry (“Registry”). The most recent full-year data
then available was for the period from 3/1/05 - 2/28/06. In order to focus strictly on the
incremental PRA burdens posed by the final Rule amendments, we use data for the same time
period in this burden analysis.24 To obtain figures for sellers only, however (because only they,
not telemarketers, will have new compliance obligations attributable to the final amendments),
we have analyzed the 2006 data in greater detail.
In seeking the 2006 clearance, staff estimated that 15,000 telemarketing entities (sellers

Commission has acted to minimize any such unavoidable costs and burdens by deferring the effective date of
the written agreement requirement until September 1, 2009 to allow time for the orderly phase-in of revised
credit card and other applications, and the implementation and use of other systems and procedures to obtain
the required agreements from existing and new customers.
24

We will update our population estimates in early 2009 when preparing our next PRA clearance request for
the amended TSR as a whole for the period from July 31, 2009 - July 31, 2012.

8

and the telemarketers that serve them) were subject to the Rule.25 New Registry data for the
period 3/1/05 - 2/28/06 that we believe is more accurate shows that the total number of
telemarketing entities subject to the TSR is 19,208.26 Of that total, there were 4,393 sellers and
also 2,635 telemarketers with independent access to the Registry that downloaded telephone
numbers from more than one state (to avoid TSR violations by automated “scrubbing” of the
numbers on the Registry from their calling lists).27 The number of sellers subject to the TSR,
therefore, is 16,573 (19,208 telemarketing entities - 2,635 telemarketers =16,573 sellers).
Recordkeeping: Under the amendment, no prerecorded call may be placed by or on
behalf of a seller unless the seller has obtained a written agreement from the person called to
receive such calls. Thus, the recordkeeping obligations of the prerecorded call amendment fall
on sellers rather than telemarketers.28
In view of the phase-in and the amendment’s clarification allowing written agreements to
be created and maintained electronically pursuant to E-SIGN, any initial burden caused by the
transition from EBR records to written agreement records should not be material. Once the
necessary systems and procedures are in place, any ongoing incremental burden to create and
retain electronic records of agreements by new customers to receive prerecorded calls should be
minimal.29
Staff estimates that each of the 16,573 sellers subject to the prerecorded call amendment
will require approximately 1 hour to prepare and maintain records required by the amendment;
thus, 16,573 total recordkeeping hours. This reflects a one-time modification of existing
customer databases to include an additional field to record consumer agreements.
25

See 71 Fed. Reg. 28,698 (May 17, 2006) and the associated May 2006 supporting statement submitted to
OMB for the details underlying this estimate.

26

This figure, derived from data provided from the Registry’s current contractor, is determined as follows:
65,768 total entities accessing the Registry - 933 exempt entities - 45,627 non-exempt entities that accessed
telephone numbers solely intrastate (and thus not subject to the TSR) = 19,208. (This calculation employs the
same methodology as was used in the 2006 clearance request.)

27

Staff assumes that telemarketers that make prerecorded calls download telephone numbers listed on the
Registry rather than conduct online searches as the latter may consume considerably more time. Other
telemarketers not placing the high-volume of automated prerecorded calls may elect to search online, rather
than to download.

28

Although telemarketers that place prerecorded telemarketing calls on behalf of sellers must capture and
transmit to the seller any requests they receive to place a consumer’s telephone number on the seller’s entityspecific do-not-call list, this de minimis obligation extends both to live and prerecorded telemarketing calls,
and was accounted for in the 2006 estimates. Moreover, software that automates this process for prerecorded
calls is widely available and in use.
29

If it is not feasible to obtain a written agreement at the point of sale after the written agreement requirement
takes effect, sellers could, for example, obtain a customer’s email address and request an agreement via email
to receive prerecorded calls.

9

Disclosure: Staff estimates that the 16,573 sellers will require, on average, 4 hours each - 66,292 hours cumulatively -- to implement the incremental disclosure requirements posed by
the final rule amendments. This estimate is comprised of the following tasks: (1) one-time
creation, recording, and implementation of a brief telephone script requesting a consumer’s
agreement via a telephone keypad response;30 (2) modify or create electronic forms or
agreements for use in emails to consumers or on a website;31 (3) one-time revision of any
existing paper forms (e.g., credit card or loyalty club forms, or printed consumer contracts) to
include a request for the consumer’s agreement to receive prerecorded calls;32 and (4) legal
consultation, if needed, regarding compliance.
Any remaining time needed to make the required opt-out disclosure for all prerecorded
calls would pose no greater time increment, and arguably less, than the pre-existing FCC
disclosure provision.33 In any event, because this disclosure applies only to prerecorded calls,
which are fully automated, no additional manpower hours would be expended in its delivery.
Other: The revised standard for measuring the three percent call abandonment rate will
not impose any new or affect any existing reporting, recordkeeping or third-party disclosure
requirements within the meaning of the PRA. The amendment relaxes the present requirement
that the abandonment rate be calculated on a ‘‘per day per campaign’’ basis by permitting, but
not requiring, its calculation over a 30-day period as requested by the industry. Sellers and
telemarketers already have established automated recordkeeping systems to document their
compliance with the current standard. The proposed amendment likely will reduce their overall
compliance burden because it relaxes the current requirement. The current “per day”
requirement has forced telemarketers to turn off their predictive dialers on many occasions when
unexpected spikes in call abandonment rates occur late in the day, and thereby prevented
realization of the cost savings that predictive dialers provide.

30

During the one-year phase-in before the written agreement requirement takes effect, the Commission will
permit sellers to use prerecorded message calls made to existing customers to secure their agreements to
receive prerecorded calls by pressing a key on their telephone keypad. Once a script is written and recorded, it
can be used in all calls made by or on behalf of the seller to obtain the required agreements. Sellers will be
able to include the request for the agreement in their regular prerecorded calls, thus making the time necessary
to request the required agreements, and the cost of doing so, de minimis during the year-long phase-in that will
overlap with the final year of the current PRA clearance.

31

This figure includes both the minimal time required to create the electronic form and the time to encode it
in HTML for the seller’s website.

32

As previously noted, the Commission has provided suggested language for this purpose that should
minimize the time required to modify any paper disclosures.

33

See supra note 14 and accompanying text.

10

Estimated incremental labor cost burden: $3,488,000, rounded
Recordkeeping: As indicated above, staff estimates that existing sellers making use of
prerecorded calls will require 16,753 hours, cumulatively, to comply with the amendment’s
recordkeeping requirements during the final year of the current PRA clearance. Staff assumes
that the aforementioned tasks will be performed by managerial and/or professional technical
personnel, at an hourly rate of $38.93.34 Accordingly, incremental labor cost in the final year of
the current clearance would be $652,194.
Disclosure: Staff estimates that approximately 75% of the disclosure-related tasks
previously noted would be performed by managerial and/or professional technical personnel,
again, at an hourly rate of $38.93, with 25% allocable to legal staff, at an hourly rate of $54.35.35
Thus, of the 66,292 total estimated disclosure burden hours, 49,719 hours would be attributable
to managerial and/or professional technical personnel, with the remaining 16,573 hours
attributable to legal staff. This yields $1,935,561 and $900,743, respectively, in labor cost – in
total, $2,836,304.
Cumulatively, for recordkeeping and disclosure, labor cost would total $3,488,498 for the
final year of the current clearance.
(13)

Capital and Other Non-labor Cost

Other than the initial recordkeeping costs, the amendment’s written agreement
requirement will impose de minimis costs, as discussed above. The one possible exception that
might arise involves credit card or loyalty program agreements that retailers revise to request
agreements from consumers to receive prerecorded calls. Retailers might have to replace any
existing supplies of such agreements. Staff believes, however, that the one-year phase-in of the
written agreement requirement will allow retailers to exhaust existing supplies of any such
preprinted forms, so that no material additional cost would be incurred to print revised forms.
Similarly, staff has no reason to believe that the amendment’s requirement of an
automated interactive opt-out mechanism will impose other than de minimis costs, for the
reasons discussed above. The industry comments on the amendment uniformly support the view
that automated interactive keypress technologies are now affordable, cost-effective, and widely

34

This cost is derived from the median hourly wage from the 2006 National Occupational Employment and
Wage Estimates by the Bureau of Labor Statistics for management occupations. See
http://www.bls.gov/oes/current/oes_nat.htm#b11-0000.

35

This cost is derived from the median hourly wage for lawyers from the "National Compensation Survey:
Occupational Wages in the United States, June 2006," Table 2. See
http://www.stats.bls.gov/ncs/ocs/sp/ncbl0910.pdf.

11

available.36 Moreover, most, if not all of the industry telemarketers who commented, including
many small business telemarketers, said they are currently using interactive keypress
mechanisms. Thus, it does not appear that this requirement will impose any material capital or
other non-labor costs on telemarketers.
(14)

Estimated Cost to the Federal Government

In the Science, State, Justice, Commerce, and Related Agencies Appropriations Act,
2006, Congress directed the FTC to collect fees from sellers and telemarketers sufficient to
implement and enforce the TSR.38 In the rulemaking to establish the appropriate fees to charge
sellers and telemarketers, the Commission stated that the fees would offset costs the Commission
expected to incur in the following areas: (1) operation of the Registry; (2) all FTC law
enforcement efforts; and (3) ongoing agency infrastructure and administration costs associated
with the operation of the Registry and enforcement of the TSR.39 As mandated by the Do-NotCall Registry Fee Extension Act of 2007,40 the Commission recently reduced these fees as of
October 1, 2008.41 Although the fees have been reduced, it is anticipated that, as in the past, the
FTC’s expenditures will continue to be less than or equal to the fees collected. Consequently,
although enforcement of the amendments may require reallocation of resources available for
TSR enforcement, there will be no incremental increase in the costs to the federal government.
37

(15)

Adjustments

As detailed above, staff estimates that in the final year of the current clearance,
incremental burden resulting from the Rule amendment concerning prerecorded calls will be
82,865 hours and approximately $3,488,000 in associated labor costs.
(16)

Statistical Use of Information
There are no plans to publish any information for statistical use.

36

See, e.g., Comment by IAC/InterActiveCorp & HSN LLC (December 18,2006), at 3, available at
http://www.ftc.gov/os/comments/tsrrevisedcallabandon/525547-00600.pdf.

37

Pub. L. No. 109-108, 119 Stat. 2290 (2005).

38

119 Stat. at 2330.

39

71 Fed. Reg. 43048, 43052 (July 31, 2006).

40

Pub. L. 110–188, 122 Stat. 635.

41

73 Fed. Reg. 43,354 (July 25, 2008).

12

(17)

Exceptions for the Display of the Expiration Date for OMB Approval
Not applicable.

(18)

Exceptions to the “Certification for Paperwork Reduction Act Submissions”
Not applicable.

13