Federal Register / Vol. 66, No. 98 / Monday, May 21, 2001 / Notices 27973

false and deceptive advertising of

Gateway’s Internet access service,

‘‘Gateway.net.’’ The Commission’s

proposed complaint alleges that

Gateway advertised that with the

purchase of certain computer models,

Gateway.net Internet access service

would be included for free for one year,

or could be purchased for a flat fee, such

as $14.95 a month. In fact, for many

consumers one year of Gateway.net was

not free or obtainable for a flat fee,

because these customers incurred long

distance charges to access Gateway.net,

or were charged $3.95 per hour by

Gateway for the use of a ‘‘toll-free’’

telephone number to access the service.

The Commission’s proposed complaint

challenges these ‘‘free’’ or ‘‘flat-fee’’ ads

as both misrepresentations and as

failures to disclose material facts under

Section 5 of the FTC Act. Further, the

complaint alleges that Gateway falsely

represented that the use of its ‘‘toll-free’’

1–888 number to connect to the Internet

was free to consumers. In fact, Gateway

charged consumers $3.95 per hour for

the use of this ‘‘toll-free’’ number.

The proposed consent order contains

provisions designed to prevent Gateway

from engaging in similar acts and

practices in the future. Part I of the

proposed order prohibits the company

from misrepresenting the price or cost of

any Internet access service, or of any

‘‘toll-free’’ telephone number. Under the

order, the term ‘‘Internet access service’’

is defined as ‘‘any service that enables

a consumer to access the Internet or any

other electronic network.’’

Part II of the order prohibits

representations regarding the price or

cost of any ‘‘1–800’’ or ‘‘toll-free’’

telephone number provided to the

consumer by Gateway unless it

discloses, clearly and conspicuously,

the dollar amounts of any hourly

surcharges and any other fees it charges

for the use of such numbers. Part III of

the proposed order requires that

Gateway clearly and prominently

disclose that consumers may have to

pay long distance telephone charges,

hourly surcharges, or other costs in

excess of local telephone service charges

to access any Internet access service.

Gateway must disclose the dollar

amounts of any such fees within its

control or the control of any of its

promotional partners providing the

service. It must also provide a means for

each consumer to ascertain whether he

or she would incur such fees to access

the service, and inform consumers that

they should contact their local

telephone company to determine

whether using the access telephone

number for the location closet to them

will result in charges in excess of local

telephone service charges.

Part IV of the order requires that

Gateway maintain customer support to

answer consumer inquiries regarding

any Internet access service, including

but not limited to, an adequately staffed

toll-free number where consumers can

determine whether they have a local

access number for such service.

Part V is a redress provision requiring

that Gateway refund all charges for

‘‘toll-free’’ numbers paid by local access

plan gateway.net customers who

registered for the plan between January

19, and April 1, 1999, and who paid

such fees up until August 15, 1999.

Parts VI through IX of the proposed

order contain the usual reporting and

compliance provisions, and, Part X is a

provision ‘‘sunsetting’’ the order after

twenty years, with certain exceptions.

The purpose of this analysis is to

facilitate public comment on the

proposed order. It is not intended to

constitute an official interpretation of

the agreement and proposed order or to

modify in any way their terms.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 01–12677 Filed 5–18–01; 8:45 am]

BILLING CODE 6750–01–M

FEDERAL TRADE COMMISSION

[File No. 002 3061]

Juno Online Services, Inc.; Analysis To

Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: The consent agreement in this

matter settles alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

complaint that accompanies the consent

agreement and the terms of the consent

order—embodied in the consent

agreement—that would settle these

allegations.

DATES: Comments must be received on

or before June 14, 2001.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 600 Pennsylvania Avenue.,

NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Darren Bowie or Laura Sullivan, FTC/S–

4002, 600 Pennsylvania Ave., NW.,

Washington, DC 20580. (202) 326–2018

or 326–3327.

SUPPLEMENTARY INFORMATION: Pursuant

to Section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46 and Section 2.34 of the Commission’s

Rules of Practice (16 CFR 2.34), notice

is hereby given that the above-captioned

consent agreement containing a consent

order to cease and desist, having been

filed with an accepted by the

Commission, has been placed on the

public record for a period of thirty (30)

days. The following Analysis to Aid

Public Comment describes the terms of

the consent agreement, and the

allegations in the complaint. An

electronic copy of the full text of the

consent agreement package can be

obtained from the FTC Home Page (for

May 15, 2001), on the World Wide Web,

at http://www.ftc.gov/os/2001/05/

index.htm A paper copy can be obtained

from the FTC Public Reference Room,

Room H–130, 600 Pennsylvania

Avenue, NW., Washington, DC 20580,

either in person or by calling (202) 326–

3627.

Public comment is invited. Comments

should be directed to: FTC/Office of the

Secretary, Room 159, 600 Pennsylvania

Ave., NW., Washington, DC 20580. Two

paper copies of eac comment should be

filed, and should be accompanied, if

possible, by a 31⁄2 inch diskette

containing an electronic copy of the

comment. Such comments or views will

be considered by the Commission and

will be available for inspection and

copying at its principal office in

accordance with Section 4.9(b)(6)(ii) of

the Commission’s Rules of Practice (16

CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To

Aid Public Comment

The Federal Trade Commission has

accepted, subject to final approval, an

agreement containing a consent order

from Juno Online Services, Inc.

(‘‘Juno’’).

The proposed consent order has been

placed on the public record for thirty

(30) days for receipt of comments by

interested persons. Comments received

during this period will become part of

the public record. After thirty (30) days,

the Commission will again review the

agreement and the comments received,

and will decide whether it should

withdraw from the agreement or make

final the agreement’s proposed order.

Juno is an Internet service provider

with approximately 842,000 subscribers

to its fee-based services and nearly 4

million total active subscribers. Juno

typically charges subscribers a flat

monthly fee for its fee-based services.

The company’s subscriber revenues

reached early $34.5 million for 1999 and

$73.9 million last year.

27974 Federal Register / Vol. 66, No. 98 / Monday, May 21, 2001 / Notices

This matter concerns allegedly false

claims for its ‘‘free’’ and fee-based

online services. The Commission’s

proposed complaint alleges:

• Juno falsely represented that

consumers participating in its free trial

periods for its fee-based Internet service

could cancel at any time before the free

trial expired and avoid incurring

charges, and Juno failed to disclose the

restrictive procedures that subscribers

must follow to cancel this service;

• Juno misrepresented the duration of

its free trial offers for its fee-based

service and, in other instances, failed to

disclose that these free trial periods

must be completed within a month;

• Juno misrepresented that there were

no additional costs associated with

using its free Internet service, and failed

to adequately disclose important

information about potential long

distance telephone toll charges (‘‘toll

charges’’) in promoting its free, feebased and free trial period offers;

• Juno failed to adequately disclose in

its advertising for certain rebate

programs both the possibility of

incurring toll charges while using its

fee-based Internet service and

applicable cancellation penalties; and

• Juno misrepresented that its

Internet service was available for

purchase at certain prices, when it was

not, and concurrently misrepresented

the purpose for which it solicited credit

card and other personal identifying

information from consumers

The proposed consent order contains

several provisions designed to prevent

Juno from engaging in similar acts and

practices in the future and requires

redress for certain injured consumers.

Part I of the proposed consent order

prohibits Juno from misrepresenting the

price or cost of any electronic mail,

Internet or other online service

(‘‘Internet services’’). The Part also

prohibits Juno from misrepresenting the

ability or terms by which consumers can

cancel these Internet services, or the

amount of time consumers have to use

these services during a free trial period

before fees are charged. Part I further

prohibits Juno from falsely representing

that Internet service is available for

purchase—when it is not—and from

falsely representing why it requests or

collects credit card or any other

personal identifying information from

consumers.

Part II of the proposed consent order

prohibits Juno from beginning to

compute the billing cycle or free trial

period for its Internet services before the

consumer is able to use these services.

In cases, however, where it is necessary

to provide consumers with a software

upgrade or hardware installment before

they can use these services as

advertised, Juno can comply with this

Part if it clearly and conspicuously

discloses when it will begin to compute

the billing cycle or free trial period for

these consumers before they register for

these services.

Part III of the proposed consent order

requires Juno to clearly and

conspicuously disclose obligations that

consumers have to cancel their Internet

service and the procedures consumers

must follow to effectively cancel their

service.

Part IV of the proposed consent order

requires Juno to provide consumers

with reasonable means to cancel its

Internet services, at a minimum

providing for cancellation through email and a toll-free telephone number.

The Part further requires Juno to

maintain adequate customer support to

promptly handle requests for

cancellation, terminating service before

the next billing cycle.

Parts V and VI of the proposed

consent order require Juno to disclose

clearly and conspicuously potential toll

charges associated with sing its services

and any cancellation penalties.

Part VII of the proposed consent order

requires that Juno provides consumers

with reasonable means to determine the

telephone numbers available for

accessing its Internet services and the

town or city where these numbers are

located—at least making this

information available in a directory

posted on its Web site and through a

toll-free telephone number. The Part

further requires Juno to maintain

adequate customer support to respond

to consumer inquiries about its access

telephone numbers.

Part VIII of the proposed consent

order prohibits Juno from using or

disclosing the personal identifying

information obtained by the company in

connection with its deceptive dry test

advertisements. The Part further

conditions the Commission’s approval

of this consent order on the veracity of

representations made by Juno that: (1)

did not collect credit card numbers

provided by consumers responding to

these dry test advertisements; (2) it has

since deleted any other personal

identifying information that it did

collect from consumers in connection

with these advertisements; and (3) it did

not share this information with any

third party.

Part IX of the proposed consent order

prohibits Juno from providing the

means and instrumentalities for any

third party to violate any provision of

the consent order.

Part X of the proposed consent order

requires Juno to offer reimbursement to

certain consumers for toll charges

incurred in the first two months of

subscribing to its Internet services.

Eligible consumers include those who:

(a) subscribed to Juno’s Internet service

as part of a rebate program that required

the purchase of another product or

service and subscription to respondent’s

Internet services for a period of more

than a month; and (b) cancelled their

subscription and either (i) identified the

unavailability of a local access number

as a reason for the cancellation; or (ii)

complained to Juno about incurring

telephone toll charges. Eligible

consumers are required to supply Juno

with a copy of their telephone bill(s)

reflecting the amount of the toll charges

they incurred. Consumers, however,

who incurred such toll charges at least

18 months prior to the date on which

they mailed their application form, also

can prove their claim with (a) a copy of

a check or other form of payment; or (b)

a written declaration indicating the

amount of the toll charges that they

incurred. Consumers who provide these

alternative proofs of claim are entitled

to receive a reimbursement not to

exceed a maximum dollar amount.

Parts XI through XV of the proposed

consent order are standard record

keeping and compliance provisions.

Part XIII requires that respondent

provides a summary and explanation of

the consent order requirements and the

consent order to all retailers and other

parties who promoted its Internet

services as part of a rebate program. Part

XVI of the proposed consent order

‘‘sunsets’’ the order after twenty years,

with certain exceptions.

The purpose of this analysis is to

facilitate public comment on the

proposed order. It is not intended to

constitute an official interpretation of

the agreement and proposed order or to

modify in any way their terms.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 01–12678 Filed 5–18–01; 8:45 am]

BILLING CODE 6750–01–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Office of the Secretary

Findings of Scientific Misconduct

AGENCY: Office of the Secretary, HHS.

ACTION: Notice.

SUMMARY: Notice is hereby given that

the Office of Research Integrity (ORI)

and the Assistant Secretary of Health