22720 Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Proposed Rules 

1 The comment must also be accompanied by an 

explicit request for confidential treatment, 

including the factual and legal basis for the request, 

and must identify the specific portions of the 

comment to be withheld from the public record. 

The request will be granted or denied by the 

Commission’s General Counsel, consistent with 

applicable law and the public interest. See 

Commission Rule 4.9(c), 16 CFR 4.9(c). 

2 The Rule became effective on June 4, 1974. 

3 51 FR 42087 (Nov. 21, 1986). 

4 62 FR 15135 (Mar. 31, 1997). 

Issued in Washington, DC, on May 7, 2009. 

Nan Shellabarger, 

Director of Aviation Policy and Plans. 

[FR Doc. E9–11291 Filed 5–13–09; 8:45 am] 

BILLING CODE 4910–13–P 

FEDERAL TRADE COMMISSION 

16 CFR Part 425 

Rule Concerning the Use of 

Prenotification Negative Option Plans 

AGENCY: Federal Trade Commission 

(‘‘FTC’’ or ‘‘Commission’’). 

ACTION: Advance Notice of Proposed 

Rulemaking; Request for public 

comments. 

SUMMARY: As part of the Commission’s 

systematic review of all current FTC 

rules and guides, the Commission 

requests public comment on the overall 

costs, benefits, necessity, and regulatory 

and economic impact of the FTC’s Trade 

Regulation Rule concerning ‘‘Use of 

Prenotification Negative Option Plans.’’ 

DATES: Written comments must be 

received on or before July 27, 2009. 

ADDRESSES: Interested parties are 

invited to submit written comments. 

Comments should refer to 

‘‘Prenotification Negative Option Rule 

Review, Matter No. P064202’’ to 

facilitate the organization of comments. 

Please note that your comment— 

including your name and your state— 

will be placed on the public record of 

this proceeding, including on the 

publicly accessible FTC website, at 

(http://www.ftc.gov/os/ 

publiccomments.shtm). 

Because comments will be made 

public, they should not include any 

sensitive personal information, such as 

an individual’s Social Security Number; 

date of birth; driver’s license number or 

other state identification number, or 

foreign country equivalent; passport 

number; financial account number; or 

credit or debit card number. Comments 

also should not include any sensitive 

health information, such as medical 

records or other individually 

identifiable health information. In 

addition, comments should not include 

any ‘‘[t]rade secret or any commercial or 

financial information which is obtained 

from any person and which is privileged 

or confidential,’’ as provided in Section 

6(f) of the FTC Act, 15 U.S.C. 46(f), and 

Commission Rule 4.10(a)(2), 16 CFR 

4.10(a)(2). Comments containing 

material for which confidential 

treatment is requested must be filed in 

paper form and clearly labeled 

‘‘Confidential.’’1

Because paper mail addressed to the 

FTC is subject to delay due to 

heightened security screening, please 

consider submitting your comments in 

electronic form. Comments filed in 

electronic form should be submitted by 

using the following weblink: (https:// 

secure.commentworks.com/ftcNegativeOptionRuleANPR) (and 

following the instructions on the webbased form). To ensure that the 

Commission considers an electronic 

comment, you must file it on the webbased form at the weblink (https:// 

secure.commentworks.com/ftcNegativeOptionRuleANPR). If this 

Notice appears at (http:// 

www.regulations.gov/search/index.jsp), 

you may also file an electronic comment 

through that website. The Commission 

will consider all comments that 

regulations.gov forwards to it. You may 

also visit the FTC website at http:// 

www.ftc.gov to read the Notice and the 

news release describing it. 

A comment filed in paper form 

should include the ‘‘Prenotification 

Negative Option Rule Review, Matter 

No. P064202’’ reference both in the text 

and on the envelope, and should be 

mailed or delivered to the following 

address: Federal Trade Commission/ 

Office of the Secretary, Room H-135 

(Annex Q), 600 Pennsylvania Avenue, 

N.W., Washington, D.C. 20580. The FTC 

is requesting that any comment filed in 

paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. 

The Federal Trade Commission Act 

(‘‘FTC Act’’) and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives, 

whether filed in paper or electronic 

form. Comments received will be 

available to the public on the FTC 

website, to the extent practicable, at 

(http://www.ftc.gov/os/ 

publiccomments.shtm). As a matter of 

discretion, the Commission makes every 

effort to remove home contact 

information for individuals from the 

public comments it receives before 

placing those comments on the FTC 

website. More information, including 

routine uses permitted by the Privacy 

Act, may be found in the FTC’s privacy 

policy, at (http://www.ftc.gov/ftc/ 

privacy.shtm). 

FOR FURTHER INFORMATION CONTACT: 

Robin Rosen Spector, (202) 326-3740 or 

Matthew Wilshire, (202) 326-2976, 

Attorneys, Division of Enforcement, 

Bureau of Consumer Protection, Federal 

Trade Commission, 600 Pennsylvania 

Avenue, N.W., Washington, D.C. 20580. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A ‘‘negative option’’ is any type of 

sales term or condition that allows a 

seller to interpret the customer’s silence 

or failure to take an affirmative step as 

acceptance of an offer. One common 

‘‘negative option’’ is the prenotification 

negative option plan. In such a plan, 

consumers receive periodic 

announcements of upcoming 

merchandise and have a set period to 

contact the company and decline the 

item. If they remain silent, the company 

sends them the merchandise. 

The Rule Concerning the Use of 

Prenotification Negative Option Plans 

(‘‘Negative Option Rule’’ or ‘‘Rule’’) 

regulates prenotification negative option 

plans for the sale of goods. The 

Commission first promulgated the Rule 

(then titled the ‘‘Negative Option Rule’’) 

in 1973 under the FTC Act, 15 U.S.C. 41 

et seq., after finding that prenotification 

negative option marketers had 

committed unfair and deceptive 

marketing practices violative of Section 

5 of the Act. 15 U.S.C. 45.2 In 1986, the 

Commission reviewed the Rule 

pursuant to Section 610 of the 

Regulatory Flexibility Act, 5 U.S.C. 610, 

to determine the impact of the Rule on 

small entities. The Commission 

concluded that the Rule had not had a 

significant impact on a substantial 

number of small entities and should not 

be changed.3 In 1997, the Commission 

reviewed the Rule again and solicited 

comments on whether there was a 

continuing need for the Rule and 

whether it should be changed to 

increase its benefits or reduce its costs 

or other burdens.4 Based on the 

response, in August 1998, the 

Commission concluded that the Rule 

‘‘continue[d] to be of value to 

consumers and firms, and [was] 

functioning well in the marketplace at 


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Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Proposed Rules 22721 

5 63 FR 44555 (Aug. 20, 1998). 

6 The Commission: deleted a Note that had 

become obsolete; amended two paragraphs to read 

‘‘in or affecting commerce’’ in lieu of ‘‘in 

commerce’’ to conform the Rule to the FTC Act; and 

changed the title from ‘‘Negative Option Rule’’ to 

‘‘Use of Prenotification Negative Option Plans’’ to 

better describe the Rule’s coverage. 

7 These terms are: the aspect of the plan under 

which subscribers must notify the seller if they do 

not wish to purchase the selection; any minimum 

purchase obligations; the subscribers’ right to 

cancel; whether billing charges include postage and 

handling; that subscribers will be given at least ten 

days to reject a selection; that if any subscriber is 

not given ten days to reject a selection, the seller 

will credit the return of the selection and postage 

to return the selection, along with shipping and 

handling; and the frequency with which 

announcements and forms will be sent, and the 

maximum number of announcements subscribers 

should expect to receive during a twelve-month 

period. 16 CFR 425.1(a)(1)(i-vii). 

8 16 CFR 425.1(a)(2)(3); 425.1(b). 

minimal cost.’’5 The Commission 

retained the Rule but announced three 

technical, non-substantive amendments 

to clarify it and conform its language to 

amendments in the FTC Act.6

The Rule requires sellers to clearly 

and conspicuously disclose the material 

terms of a prenotification negative 

option plan to consumers before they 

subscribe and to follow certain 

procedures in operating the plan. The 

Rule enumerates seven material terms 

that sellers must disclose clearly and 

conspicuously.7 In addition, the Rule 

requires sellers to follow certain 

procedures, including: abiding by 

particular time periods during which 

sellers must send introductory 

merchandise and announcements 

identifying merchandise the seller plans 

to send; giving consumers a specified 

time period to respond to 

announcements; providing instructions 

for rejecting merchandise in 

announcements; and honoring promptly 

written requests to cancel from 

consumers who have met any minimum 

purchase requirements.8

II. Regulatory Review Program 

The Commission reviews its rules and 

guides periodically. These reviews seek 

information about the costs and benefits 

of the rules and guides as well as their 

regulatory and economic impact. These 

reviews assist the Commission in 

identifying rules and guides that 

warrant modification or rescission. 

Therefore, the Commission now solicits 

comments on, among other things, the 

economic impact of, and the continuing 

need for, the Negative Option Rule; the 

benefits of the Rule to consumers 

purchasing goods through 

prenotification negative option plans; 

and the burdens the Rule places on 

firms subject to its requirements. The 

Commission also solicits comment on 

whether it should expand the Rule to 

cover additional types of negative 

option offers. 

The Rule covers only a subset of 

negative option offers—prenotification 

negative option plans. There are, 

however, several other types of 

commonly used negative option offers. 

One such offer is called a continuity 

plan. In this type of offer, consumers 

receive regular shipments of 

merchandise until they cancel the 

agreement. A second common offer is 

the trial conversion. Consumers who 

accept such an offer agree to receive 

products or services for a trial period at 

no charge or for a reduced price. If the 

consumers do not cancel their 

agreement before the end of the trial 

period, the product shipments or 

provision of services continue and they 

incur charges. A third familiar negative 

option is the automatic renewal. In an 

automatic renewal, a magazine seller, 

for example, may automatically renew 

consumers’ subscriptions when they 

expire and charge for them, unless the 

consumers cancel their subscriptions. 

The Commission seeks comment on 

whether there is a basis to expand the 

Rule to cover these additional offers, 

and, if so, what requirements the Rule 

should include. The Commission’s goal 

in seeking comment is to determine the 

best way to protect consumers from 

deceptive or unfair practices in negative 

option marketing. Possible alternative 

and/or additional methods of achieving 

that goal include consumer education 

campaigns, industry guidance, and 

continued law enforcement actions. 

III. Request for Comment 

The Commission solicits comments 

on the following specific questions 

related to the Negative Option Rule: 

(1) Is there a continuing need for the 

Rule as currently promulgated? Why or 

why not? 

(2) What benefits has the Rule 

provided to consumers? What evidence 

supports the asserted benefits? 

(3) What modifications, if any, should 

the Commission make to the Rule to 

increase its benefits to consumers? 

(a) What evidence supports your 

proposed modifications? 

(b) How would these modifications 

affect the costs and benefits of the Rule 

for consumers? 

(c) How would these modifications 

affect the costs and benefits of the Rule 

for businesses, particularly small 

businesses? 

(4) What impact has the Rule had on 

the flow of truthful information to 

consumers and on the flow of deceptive 

information to consumers? What 

evidence supports the asserted impact? 

(5) What significant costs has the Rule 

imposed on consumers? What evidence 

supports the asserted costs? 

(6) What modifications, if any, should 

be made to the Rule to reduce the costs 

imposed on consumers? 

(a) What evidence supports your 

proposed modifications? 

(b) How would these modifications 

affect the costs and benefits of the Rule 

for consumers? 

(c) How would these modifications 

affect the costs and benefits of the Rule 

for businesses, particularly small 

businesses? 

(7) Please provide any evidence that 

has become available since 1998 

concerning consumer perception of, or 

experience with, negative option offers, 

including offers for prenotification 

negative option plans, continuity plans, 

trial conversions, or automatic renewals. 

Does this new information indicate that 

the Rule should be modified? If so, why, 

and how? If not, why not? 

(8) What benefits, if any, has the Rule 

provided to businesses, and in 

particular to small businesses? What 

evidence supports the asserted benefits? 

(9) What modifications, if any, should 

be made to the Rule to increase its 

benefits to businesses, particularly small 

businesses? 

(a) What evidence supports your 

proposed modifications? 

(b) How would these modifications 

affect the costs and benefits of the Rule 

for consumers? 

(c) How would these modifications 

affect the costs and benefits of the Rule 

for businesses? 

(10) What significant costs, including 

costs of compliance, has the Rule 

imposed on businesses, particularly 

small businesses? What evidence 

supports the asserted costs? 

(11) What modifications, if any, 

should be made to the Rule to reduce 

the costs imposed on businesses, 

particularly small businesses? 

(a) What evidence supports your 

proposed modifications? 

(b) How would these modifications 

affect the costs and benefits of the Rule 

for consumers? 

(c) How would these modifications 

affect the costs and benefits of the Rule 

for businesses? 

(12) What evidence is available 

concerning the degree of compliance 

with the Rule? Does this evidence 

indicate that the Rule should be 

modified? If so, why, and how? If not, 

why not? 

(13) Are any of the Rule’s 

requirements no longer needed? If so, 

explain. Please provide supporting 

evidence. 

(14) Should the Rule define ‘‘clearly 

and conspicuously,’’ given that it 


sroberts on PROD1PC70 with PROPOSALS
22722 Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Proposed Rules 

requires marketers to make certain 

disclosures clearly and conspicuously? 

If so, why, and how? If not, why not? 

(15) What potentially unfair or 

deceptive practices concerning the 

marketing of prenotification negative 

option plans, if any, are not covered by 

the Rule? 

(a) What evidence, such as empirical 

data, consumer perception studies, or 

consumer complaints, demonstrates 

whether there is widespread existence 

of such practices? Please provide this 

evidence. 

(b) What evidence demonstrates that 

such practices cause consumer injury? 

Please provide this evidence. 

(c) With reference to such practices, 

should the Rule be modified? If so, why, 

and how? If not, why not? 

(16) What potentially unfair or 

deceptive practices concerning the 

marketing of negative option plans, not 

covered by the Rule, are occurring in the 

marketplace? 

(a) What evidence, such as empirical 

data, consumer perception studies, or 

consumer complaints, demonstrates 

whether there is widespread existence 

of such practices? Please provide this 

evidence. 

(b) What evidence demonstrates that 

such practices cause consumer injury? 

Please provide this evidence. 

(c) With reference to such practices, 

should the Rule be modified? If so, why, 

and how? If not, why not? 

(17) What modifications, if any, 

should be made to the Rule to account 

for changes in relevant technology or 

economic conditions? 

(a) What evidence supports the 

proposed modifications? 

(b) How would these modifications 

affect the costs and benefits of the Rule 

for consumers and businesses, 

particularly small businesses? 

(18) Does the Rule overlap or conflict 

with other federal, state, or local laws or 

regulations? If so, how? 

(a) What evidence supports the 

asserted conflicts? 

(b) With reference to the asserted 

conflicts, should the Rule be modified? 

If so, why, and how? If not, why not? 

(c) Is there evidence concerning 

whether the Rule has assisted in 

promoting national consistency with 

respect to the marketing and operation 

of prenotification negative option plans? 

If so, please provide that evidence. 

(19) Are there foreign or international 

laws, regulations, or standards with 

respect to negative option plans that the 

Commission should consider as it 

reviews the Rule? If so, what are they? 

(a) Should the Rule be modified in 

order to harmonize with these 

international laws, regulations, or 

standards? If so, why, and how? If not, 

why not? 

(b) How would such harmonization 

affect the costs and benefits of the Rule 

for consumers and businesses, 

particularly small businesses? 

(20) Do current or impending changes 

in technology affect whether and how 

the Rule should be modified? 

List of Subjects in 16 CFR Part 306 

Negative Options, Trade practices. 

Authority: 15 U.S.C. 41-58. 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. E9–11226 Filed 5–13–09: 8:45 am] 

BILLING CODE 6750–01–S 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket No. USCG–2009–0139] 

RIN 1625–AA11 

Regulated Navigation Area; Gulf 

Intracoastal Waterway, Inner Harbor 

Navigation Canal, New Orleans, LA 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Coast Guard proposes for 

a rule to prohibit all floating vessels 

from being within an area in the Inner 

Harbor Navigation Canal from Mile 

Marker 22 (west of Chef Menteur Pass) 

on the Gulf Intracoastal Waterway, west 

through the Gulf Intracoastal Waterway 

and Inner Harbor Navigation Canal out 

to Lake Ponchartrain and the 

Mississippi River in New Orleans, LA. 

This regulated navigation area would 

also apply to part of the Harvey Canal, 

between Lapalco Boulevard Bridge and 

the intersection of the Harvey Canal and 

the Algiers Alternate Route of the 

Intracoastal Waterway. This action is 

necessary to protect the high-risk areas 

in the flood protection for New Orleans. 

The proposed rule will protect the 

floodwalls in the designated areas of the 

Inner Harbor Navigation Canal and the 

Harvey Canal from damage caused by 

drifting vessels by excluding vessels 

from the area under certain weather 

conditions. 

DATES: Comments and related material 

must be received by the Coast Guard on 

or before June 15, 2009. Requests for 

public meetings must be received by the 

Coast Guard on or before June 15, 2009. 

ADDRESSES: You may submit comments 

identified by docket number USCG– 

2009–0139 using any one of the 

following methods: 

(1) Federal eRulemaking Portal: 

http://www.regulations.gov. 

(2) Fax: 202–493–2251. 

(3) Mail: Docket Management Facility 

(M–30), U.S. Department of 

Transportation, West Building Ground 

Floor, Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590– 

0001. 

(4) Hand Delivery: Same as mail 

address above, between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. The telephone number 

is 202–366–9329. 

To avoid duplication, please use only 

one of these four methods. See the 

‘‘Public Participation and Request for 

Comments’’ portion of the 

SUPPLEMENTARY INFORMATION section 

below for instructions on submitting 

comments. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this proposed 

rule, call or e-mail Lieutenant 

Commander (LCDR) Eva Van Camp, 

Coast Guard; telephone (504) 846–5923; 

e-mail Eva.VanCamp@uscg.mil. If you 

have questions on viewing or submitting 

material to the docket, call Renee V. 

Wright, Program Manager, Docket 

Operations, telephone 202–366–9826. 

SUPPLEMENTARY INFORMATION: 

Public Participation and Request for 

Comments 

We encourage you to participate in 

this rulemaking by submitting 

comments and related materials. All 

comments received will be posted 

without change to http:// 

www.regulations.gov and will include 

any personal information you have 

provided. 

Submitting Comments 

If you submit a comment, please 

include the docket number for this 

rulemaking (USCG–2009–0139), 

indicate the specific section of this 

document to which each comment 

applies, and provide a reason for each 

suggestion or recommendation. You 

may submit your comments and 

material online (via http:// 

www.regulations.gov) or by fax, mail, or 

hand delivery, but please use only one 

of these means. If you submit a 

comment online via http:// 

www.regulations.gov, it will be 

considered received by the Coast Guard 

when you successfully transmit the 

comment. If you fax, hand deliver, or 

mail your comment, it will be 

considered as having been received by 


sroberts on PROD1PC70 with PROPOSALS