Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15135

1Section 5 of the FTC Act declares unfair

methods of competition and unfair or deceptive acts

or practices to be unlawful.

2Negative option plans often require subscribers

to purchase a minimum quantity of merchandise,

after which they may cancel their subscriptions.

The Rule refers to a subscriber who has purchased

the minimum quantity of merchandise required by

the terms of the plan as a ‘‘contract-complete

subscriber.’’

F33C and A36TC; Bellanca model 17–30A;

Cessna models 172XP, A185, 188, A188, 206,

T206, 207, T207, 210, T210, P210, 310R,

T310P, T310Q, T310R, 320D, 320E, 320F,

336, 337, T337, P337, 340, 401, 402, 414 and

T41B/C; Colemill conversion of Commander

500A; Goodyear Airship Blimp 22; Maule

model M–4; Mooney model M20–K; Navion

model H; Pierre Robin HR 100; The New

Piper Aircraft, Inc. (formerly Piper Aircraft

Company) models PA28–201T, PA28R–201T,

PA28RT–201T, PA34–200T and PA34–220T;

Prinair Dehavilland Heron; Reims models

FR172, F337 and FT337; and Swift Museum

Foundation, Inc. models GC–1A and GC–1B

equipped with the IO–360 engine.

Note 1: This airworthiness directive (AD)

applies to each engine identified in the

preceding applicability provision, regardless

of whether it has been modified, altered, or

repaired in the area subject to the

requirements of this AD. For engines that

have been modified, altered, or repaired so

that the performance of the requirements of

this AD is affected, the owner/operator must

request approval for an alternative method of

compliance in accordance with paragraph (d)

of this AD. The request should include an

assessment of the effect of the modification,

alteration, or repair on the unsafe condition

addressed by this AD; and, if the unsafe

condition has not been eliminated, the

request should include specific proposed

actions to address it.

Compliance: Required as indicated, unless

accomplished previously.

To prevent crankshaft failure and

subsequent engine failure, accomplish the

following:

(a) At the next engine overhaul, or

whenever the crankshaft is next removed

from the engine, after the effective date of

this AD, whichever occurs first, determine if

the crankshaft was manufactured using the

airmelt or vacuum arc remelt (VAR) process

in accordance with the identification

procedure described in TCM Critical SB No.

CSB96–8, dated June 25, 1996. If the

crankshaft was manufactured using the

airmelt process or if the manufacturing

process is unknown, remove the crankshaft

from service and replace with a serviceable

crankshaft manufactured using the VAR

process.

(b) For all TCM IO–360, LTSIO–360, TSIO–

360, IO–520, LIO–520, LTSIO–520 and

TSIO–520 and Rolls-Royce, plc IO–360 and

TSIO–360 engine models that have VAR

crankshafts installed, regardless of serial

number; at the next and every subsequent

crankshaft removal from the engine case or

installation of a replacement crankshaft, prior

to crankshaft installation in the engine,

conduct an ultrasonic inspection of the

crankshaft in accordance with the procedures

specified in TCM Mandatory SB No. MSB96–

10, dated August 15, 1996, and, if necessary,

replace with a serviceable part.

Note 2: Accomplishment of the ultrasonic

inspection required by this AD does not

fulfill any requirements for magnaflux or any

other inspections specified in TCM or RollsRoyce, plc overhaul manuals.

(c) The ultrasonic inspection of the

crankshaft must be performed by a nondestructive test (NDT) ultrasonic (UT) Level

II inspector who is qualified under the

guidelines established by the American

Society of Nondestructive Testing or MIL–

STD–410 or FAA-approved equivalent, or

must be trained by TCM personnel or their

designated representative on how to

accomplish and conduct this inspection

procedure. The person approving the engine

for return to service is required to verify that

the UT inspection was accomplished in

accordance with the requirements of this

paragraph.

(d) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager, Atlanta

Aircraft Certification Office. The request

should be forwarded through an appropriate

FAA Maintenance Inspector, who may add

comments and then send it to the Manager,

Atlanta Aircraft Certification Office.

Note 3: Information concerning the

existence of approved alternative methods of

compliance with this airworthiness directive,

if any, may be obtained from the Atlanta

Aircraft Certification Office.

(e) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the aircraft to

a location where the requirements of this AD

can be accomplished.

Issued in Burlington, Massachusetts, on

March 12, 1997.

James C. Jones,

Acting Manager, Engine and Propeller

Directorate, Aircraft Certification Service.

[FR Doc. 97–7978 Filed 3–28–97; 8:45 am]

BILLING CODE 4910–13–U

FEDERAL TRADE COMMISSION

16 CFR Part 425

Request for Comments Concerning

Rule Regarding Use of negative Option

Plans by Sellers in Commerce

AGENCY: Federal Trade Commission.

ACTION: Request for public comments.

SUMMARY: The Federal Trade

Commission (‘‘Commission’’) requests

public comments about the overall costs

and benefits and the continuing need for

its Trade Regulation Rule regarding the

Use of Negative Option Plans by Sellers

in Commerce (‘‘the Negative Option

Rule’’ or ‘‘the Rule’’), as part of the

Commission’s systematic review of all

current Commission regulations and

guides.

DATES: Written comments will be

accepted until June 2, 1997.

ADDRESSES: Comments should be

directed to: Secretary, Federal Trade

Commission, Room H–159, Sixth Street

and Pennsylvania Ave., N.W.,

Washington, D.C. 20580. Comments

should be identified as ‘‘Negative

Option Rule, 16 CFR Part 425—

Comment.’’

FOR FURTHER INFORMATION CONTACT:

Edwin Rodriguez, Attorney, Federal

Trade Commission, Washington, D.C.

20580, telephone number (202) 326–

3147.

SUPPLEMENTARY INFORMATION:

I. Background

A. Negative Option Rule

The Commission promulgated the

Negative Option Rule on February 15,

1973, 38 FR 4896 (1973), under section

5 of the Federal Trade Commission Act

(‘‘FTC Act’’), 15 U.S.C. 45.1 The Rule

became effective on June 7, 1974. In

promulgating the Rule following a

rulemaking proceeding, the Commission

made the following findings:

(1) marketers of prenotification

negative option plans had failed to

disclose adequately the provisions of

such plans to the detriment of their

subscribers, Id. at 4899;

(2) subscribers had encounters

difficulties in substantiating that they

were not given adequate time to respond

to the negative option notice supplied

by the merchandiser, Id. at 4900;

(3) marketers of prenotification

negative option plans had delivered

unordered or substituted merchandise

in the place of merchandise specifically

ordered by subscribers, without their

subscribers’ prior consent, Id.;

(4) marketers of prenotification

negative option plans had failed to

honor proper cancellation notices from

contract-complete subscribers 2 and

continued to send them merchandise,

Id. at 4901;

(5) subscribers had been dunned or

billed for unordered merchandise, and

sellers had failed to provide meaningful

service to a large number of their

subscribers in connection with

complaints involving operations,

particularly in regard to billing

problems, Id.; and

(6) marketers of prenotification

negative option plans had operated their

entire systems in such a manner as to

place the burden for correcting ‘‘errors’’

on their subscribers, Id. at 4902.

Based on these findings, the

Commission determined that it was in

the public interest to prescribe
15136 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

3The Rule applies only to prenotification

negative option plans, i.e., those in which marketers

send a notice of selection to subscribers prior to

shipment of merchandise and ship and bill the

subscriber for the merchandise if the subscriber

does not return a rejection notice within a

prescribed time. The Rule does not apply to

negative option marketing arrangements under

which marketers optionally tender merchandise to

subscribers without previously sending a

prenotification announcement. The Commission

determined that the latter arrangements that were

used at the time the Commission promulgated the

Rule (which were known as continuity plans,

subscription shipments, library standing order

arrangements, or annual and series arrangements)

were so different from the prenotification negative

option plans (such as book and record clubs) that

separate treatment by the Commission would be

warranted if and when consumer complaints

justified Commission attention. Id. at 4908.

4The Commission considered and rejected

assertions that it should ban prenotification

negative option plans as being inherently unfair. Id.

at 4902–04.

5Under section 3009(a) of the Postal

Reorganization Act, mailing of unordered

merchandise constitutes a violation of section 5 of

the FTC Act. In a public notice it published on

September 11, 1970, the Commission formally

recognized section 3009 as the proper interpretation

of section 5, 35 FR 14328 (1970). In order to clarify

the 1970 notice and avoid misunderstanding

concerning the Commission’s enforcement policy,

the Commission published an additional notice on

January 31, 1978, stating that the standard under

section 5 of the FTC Act was not limited to

unordered merchandise sent by U.S. mail. The

Commission explained that it might, for example,

prosecute as a violation of section 5 a nonmail

shipment of merchandise that does not meet the

standards of 39 U.S.C. 3009, 43 FR 4113 (1978).

regulations for the operation of

prenotification negative option plans.3

The Rule defines covered ‘‘negative

option plans’’ as contractual

arrangements under which a seller and

a subscriber enter into an agreement

whereby the seller periodically sends

the subscriber an announcement in

advance (the ‘‘prenotification’’) that

identifies merchandise it proposes to

send to the subscriber, and thereafter

bills the subscriber for the merchandise

unless the subscriber instructs the seller

by a date or within a time specified in

the announcement not to send the

merchandise (the ‘‘negative option’’).4

In summary, the Negative Option Rule

requires a seller using a prenotification

‘‘negative option plan’’ to:

(1) disclose specific material

information about the plan ‘‘clearly and

conspicuously’’ in promotional

materials;

(2) send the subscriber an

announcement (which identifies the

merchandise selection to be sent) in

advance of shipping merchandise and

give the subscriber a specific amount of

time to notify the seller that the

subscriber does not want the selection

(otherwise, the seller may send the

merchandise and bill the subscriber for

it);

(3) notify subscribers that they may

return merchandise with return postage

guaranteed and receive credit under

certain circumstances;

(4) give credit to subscribers and

guarantee postage adequate to return

merchandise under certain

circumstances;

(5) ship introductory and bonus

merchandise within four weeks of

receipt of an order;

(6) terminate promptly the

subscription of a contract-complete

subscriber upon written request; and

(7) ship substitute merchandise only

with the express consent of the

subscriber.

In 1986, the Commission conducted a

review of the Negative Option Rule

pursuant to the Regulatory Flexibility

Act, 5 U.S.C. 601 et seq., to determine

the impact of the Rule on small entities.

In a Federal Register notice published

on November 21, 1986, 51 FR 42087, the

Commission announced the results of

that review, concluding that ‘‘there is a

continued need for the Rule; there is no

reason to believe that the Rule has had

a significant economic impact on a

substantial number of small entities;

and the rule should not be changed.’’

B. Treatment of Unordered Merchandise

In commenting on the Negative

Option Rule; interested parties should

be aware of certain other legal

requirements that apply to any marketer

who ships and attempts to collect for

unordered merchandise. Specifically, it

is unlawful to send any merchandise by

any means without the express prior

request of the recipient (unless the

merchandise is clearly identified as a

gift, free sample, or the like, or is mailed

by a charitable organization soliciting

contributions); or, to try to obtain

payment for or the return of the

unordered merchandise. Merchandise

sent without the customer’s prior

express agreement may be treated as

unordered merchandise pursuant to

section 3009 of the Postal

Reorganization Act of 1970, 39 U.S.C.

3009, and section 5 of the FTC Act.5

Customers who receive unordered

merchandise are legally entitled to treat

the merchandise as a gift. The law

concerning unordered merchandise is

not being reviewed in this proceeding.

An understanding of how that law

works in tandem with the Negative

Option Rule, however, is useful.

II. Regulatory Review Program

The Commission has determined to

review all current Commission rules

and guides periodically. These reviews

seek information about the costs and

benefits of the Commission’s rules and

guides and their regulatory and

economic impact. The information

obtained assists the Commission in

identifying rules and guides that

warrant modification or recision.

Therefore, the Commission solicits

comments on, among other things, the

economic impact of and the continuing

need for the Negative Option Rule;

possible conflict between the Rule and

state, local, or other federal laws; and

the effect on the Rule of any

technological, economic, or other

industry changes.

III. Request for Comment

The Commission solicits written

public comments on the following

questions:

(1) Is there a continuing need for the

Negative Option Rule?

(a) What benefits has the Rule

provided to purchasers of the products

affected by the Rule?

(b) Has the Rule imposed costs on

purchasers?

(2) What changes, if any, should be

made to the Rule to increase the benefits

of the Rule to purchasers?

(a) How would these changes affect

the costs the Rule imposes on firms

subject to its requirements? How would

these changes affect the benefits to

purchasers?

(3) What significant burdens or costs,

including costs of compliance, has the

Rule imposed on firms subject to its

requirements?

(a) Has the Rule provided benefits to

such firms? If so, what benefits?

(4) What changes, if any, should be

made to the Rule to reduce the burdens

or costs imposed on firms subject to its

requirements?

(a) How would these changes affect

the benefits provided by the Rule?

(5) Does the Rule overlap or conflict

with other federal, state, or local laws or

regulations?

(6) Since the Rule was issued, what

effects, if any, have changes in relevant

technology or economic conditions had

on the Rule? For example, do sellers use

E-mail or the Internet to promote or sell

subscriptions to negative option plans?

If so, in what manner; and does use of

this new technology affect consumers’

rights or sellers’ responsibilities under

the Rule?

(7) Are there any abuses occurring in

the promotion, sale, or operation of

negative option plans that are not

prohibited or regulated by the Rule? If

so, what mechanisms should be

explored to address such abuses (e.g.,

consumer education, industry selfregulation, rule amendment)?
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15137

List of Subjects in 16 CFR Part 425

Trade practices.

Authority: 15 U.S.C. 41–58.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 97–8064 Filed 3–28–97; 8:45 am]

BILLING CODE 6750–01–M

NATIONAL ARCHIVES AND RECORDS

ADMINISTRATION

36 CFR Part 1258

RIN 3095–AA71

NARA Reproduction Fee Schedule

AGENCY: National Archives and Records

Administration (NARA).

ACTION: Notice of proposed rulemaking.

SUMMARY: NARA proposes to revise its

schedule of fees for reproduction of

records created by other Federal

agencies and transferred to the custody

of the Archivist of the United States;

donated historical materials;

Presidential records and Presidential

historical materials transferred to the

custody of the Archivist; and records

filed with the Office of the Federal

Register. The fees are being changed to

reflect current costs of providing the

reproductions. This rule will affect

members of the public and Federal

agencies who order reproductions from

NARA.

DATES: Comments must be received by

May 30, 1997.

ADDRESSES: Submit comments to the

Regulation Comment Desk (NPOL),

Room 4100, National Archives at

College Park, 8601 Adelphi Road,

College Park, MD 20740–6001.

Comments may also be faxed to

(301)713–7270.

FOR FURTHER INFORMATION CONTACT:

Nancy Allard on (301) 713–7360.

SUPPLEMENTARY INFORMATION: The fees

for reproduction of records promulgated

in 36 CFR Part 1258 are set in

accordance with 44 U.S.C. 2116(c),

which requires that, to the extent

possible, NARA recover the actual cost

of making copies of records and other

materials transferred to the custody of

the Archivist of the United States. In

general, NARA has chosen to recoup

only the order handling labor, the direct

materials costs, shipping, and the labor

directly associated with making the

reproduction. The majority of these fees

were last revised in 1991 on the basis of

a cost study conducted in 1989 and

1990. That study concentrated on a few

‘‘typical’’ organizations in the

Washington, DC, area and applied the

resulting fees nationwide.

Since 1991, NARA costs have

increased because of higher materials

and shipping costs and mandatory cost

of living adjustments to staff salaries.

Changes in work processes from the

opening of the new Archives II facility,

use of vendor services for fulfillment of

textual and non-textual orders in the

Washington, DC, area, and a need to

better reflect reproduction processes at

our field locations required a

comprehensive review of the

reproduction process. In 1995, NARA

contracted with a nationally recognized

accounting firm to conduct a new fee

schedule study. The activity-based

costing (ABC) method was used for the

study, which surveyed all NARA

organizations involved in the

reproduction order process.

Based on recommendations in the

study, we propose to modify the way

that NARA charges for certain types of

reproductions. For electrostatic copies

of paper documents made by NARA

staff in the Washington, DC, area and

original camera microfilming, we

propose to use ‘‘blended’’ pricing, i.e., a

price per block of copies, rather than per

unit fees. This pricing structure is

intended to reduce the amount of time

spent by archival staff estimating the

number of pages to be copied when

preparing quotes for researchers and to

reduce the amount of time spent by the

Trust Fund staff in processing refunds

for overestimated copy counts and in

pursuing debt collection for

underestimated copy counts. We also

propose to sell copies of accessioned

microfilm by the roll, rather than by the

foot as we currently do, to eliminate the

need to measure the film before

preparing quotes and to make the

pricing structure parallel to the

microfilm publications program.

We propose to raise the minimum fee

for mail orders from $6 to $10 to better

cover the costs that are directly

associated with handling an order of

any size, including order tracking,

payment processing, and shipping. We

are deleting published fees for products

and services for which there has been

little demand in the past several years,

including technical service fees,

although fees will be computed upon

request as stated in paragraph

§ 1258.12(i).

We are retaining the current fees for

self-service paper-to-paper (10 cents per

copy) and microfilm-to-paper copies (25

cents per copy), which represent

approximately 42 percent of our

reproduction volume. While the new

fees for electrostatic copying done by

NARA staff are significantly higher than

the current fee, comparisons of NARA’s

fees to the prices charged by quick-copy

shops would be misleading. Due to the

fragile condition of our paper records

and the need to preserve them for future

use, NARA must forego the use of

certain automating features available for

today’s copiers. We have compared our

fees with those charged by similar

organizations: the Library of Congress,

the Georgia State Archives, and the

University of Maryland Interlibrary

Loan Program.

In general, our prices fall into the

same range as these organizations. Using

a mail order for 30 paper-to-paper

copies as an example, this would be the

cost to the customer at each

organization:

$15 at NARA ($10 for the first block

of 20 copies; $5 for each additional

block of 20 copies);

$15.50 at the Library of Congress ($10

for the first 25 copies; 50¢ for each

additional copy; $3 for each citation or

item handled);

$15 or $25 at the Georgia State

Archives (25¢ per copy with minimum

mail order amounts determined by

residency of the customer); and

$14.50 at the University of Maryland

Interlibrary Loan Program ($12.50 for

the first 20 copies; 20¢ for each

additional copy).

We have removed §§ 1258.2(c)(10)

and 1258.11 relating to fees for

reproduction of accessioned records in

response to Freedom of Information Act

(FOIA) requests as unnecessary. The

fees in § 1258.11 have always been

identical to the fees in § 1258.12 since

NARA has long held the position that

the fee provisions of the FOIA do not

apply to archival records, rather that our

specific fee statute (44 U.S.C. 2116(c))

serves as an alternative statute for fee

issues.

Finally, we propose to make this fee

schedule effective July 1, 1997, as we

indicate in proposed § 1258.16.

This proposed rule is not a significant

regulatory action for purposes of

Executive Order 12866 of September 30,

1993, and has not been reviewed by the

Office of Management and Budget. As

required by the Regulatory Flexibility

Act, it is hereby certified that this rule

will not have a significant impact on

small entities.

List of Subjects in 36 CFR 1258

Archives and records.

For the reasons set forth in the

preamble, NARA proposes to amend

chapter XII of title 36, Code of Federal

Regulations, as follows: