Agency Information Collection Activities; Proposed Collection; Comment Request, 62261-62266 [E6-17790]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 71, Number 205 (Tuesday, October 24, 2006)]
[Notices]
[Pages 62261-62266]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-17790]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Notice.

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SUMMARY: The information collection requirements described below are 
being submitted to the Office of Management and Budget (``OMB'') for 
review, as required by the Paperwork Reduction Act (``PRA''), 44 U.S.C. 
3501-3520. The FTC is seeking public comments on proposed information 
requests to beverage alcohol advertisers. The FTC proposes to issue 
compulsory process orders to beverage alcohol advertisers for 
information concerning, inter alia, compliance with voluntary 
advertising placement provisions, sales and marketing expenditures, and 
the status of third-party review of complaints regarding compliance 
with voluntary advertising codes.

DATES: Comments must be received on or before November 24, 2006.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to the ``Alcohol Reports: Paperwork Comment, FTC 
File No. P064505'' to facilitate the organization of the comments. A 
comment filed in paper form should include this reference both in the 
text and on the envelope and should be mailed or delivered, with two 
complete copies, to the following address: Federal Trade Commission/
Office of the Secretary, Room H-135 (Annex J), 600 Pennsylvania Avenue, 
NW., Washington, DC 20580. Because paper mail in the Washington area 
and at the Commission is subject to delay, please consider submitting 
your comments in electronic form, as prescribed below. However, if the 
comment contains any material for which confidential treatment is 
requested, it must be filed in paper form, and the first page of the 
document must be clearly labeled ``Confidential.'' \1\ The FTC is 
requesting that any comment filed in paper form be sent by courier or 
overnight service, if possible.
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must 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 requst 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).
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    Comments filed in electronic form should be submitted by clicking 
on the following weblink: https://secure.commentworks.com/FTC_
Alcohol_Reports and following the instructions on the web-based form. 
To ensure that the Commission considers an electronic comment, you must 
file it on the web-based form at the https://secure.commentworks.com/
FTC_Alcohol_Reports weblink. If this notice appears at https://
www.regulations.gov, you may also file an electronic comment through 
that Web site. The Commission will consider all comments that 
regulations.gov forwards to it.
    All comments should additionally be submitted to: Office of 
Management and Budget, Attention: Desk Officer for the Federal Trade 
Commission. Comments should be submitted via facsimile to (202) 395-
6974 because U.S. Postal Mail is subject to lengthy delays due to 
heightened security precautions.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at https://www.ftc.gov. As a matter of discretion, the FTC 
makes every effort to remove home contact information for individuals 
from public comments it receives before placing those comments on the 
FTC Web site. More information, including routine uses permitted by the 
Privacy Act, may be found in the FTC's privacy policy, at https://
www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be addressed to Janet Evans or Phyllis H. Marcus, Attorneys, 
Division of Advertising Practices, Bureau of Consumer Protection, 
Federal Trade Commission, 600 Pennsylvania Avenue, NW., NJ-3212, 
Washington, DC 20580; telephone: (202) 326-2125 or (202) 326-2854.

SUPPLEMENTARY INFORMATION: In September 1999 and September 2003, the 
FTC published reports on voluntary advertising self-regulation by the 
alcohol industry based on information U.S. beverage alcohol advertisers 
submitted to the Commission, pursuant to compulsory process. The FTC 
has authority to compel production of this information from advertisers 
under Section 6 of the FTC Act, 15 U.S.C. 46. The Commission believes 
it is in the public interest to: (1) Collect updated data from U.S. 
beverage alcohol advertisers on sales and marketing expenditures, 
compliance with the industry's self regulatory code provisions 
concerning advertising placement and the status of third-party review 
of complaints regarding compliance with the industry's self-regulatory 
advertising standards; and (2) publish a report on the data obtained.
    The Commission intends to address its information requests to the 
corporate entities responsible for the majority of alcohol advertising 
in the U.S., including their affiliated and subsidiary companies. 
Because the number of separately incorporated companies affected by the 
Commission's requests will exceed ten entities, the Commission seeks 
OMB clearance under the Paperwork Reduction Act (``PRA'').
    On March 8, 2006, the FTC published a Federal Register Notice 
seeking comments from the public concerning the proposed collection of 
information

[[Page 62262]]

from beverage alcohol advertisers. See 71 FR 11659 (``March 8 
Notice''). Under the OMB regulations that implement the PRA (5 CFR part 
1320), the FTC is providing this second opportunity for public comment 
while requesting that OMB provide clearance for the proposed collection 
of information. All comments should be filed as prescribed in the 
ADDRESSES section above, and must be received on or before November 24, 
2006.

A. Public Comments/Consultation Outside the Agency

    The FTC received 1,299 comments in response to the March 8 
Notice.\2\ While six comments did not specifically address the proposed 
data collection,\3\ 1,292 comments expressly favored it. These were 
submitted by: (1) Three members of Congress; \4\ (2) members of the 
National Association of Attorneys General's Youth Access to Alcohol 
Committee (``NAAG Committee''); (3) 48 organizations engaged in 
advocacy regarding public health, including the Center for Science in 
the Public Interest (``CSPI''), Consumer Federation of America, Join 
Together, and the Leadership to Keep Children Alcohol Free Initiative 
(hereafter ``the 48-organizations comment''); (4) six comments (five 
from public health organizations and one from an individual) that were 
nearly identical to the 48-organizations comment; (5) the American 
Medical Association (``AMA''); (6) Pacific Institute for Research and 
Evaluation (``PIRE''); (7) National Council on Alcoholism and Drug 
Dependence, Inc., Sacramento Region Affiliate (``NCADD/Sacramento''); 
(8) Center on Alcohol Marketing and Youth (``CAMY''); (9) Prevention 
Network (referencing and reiterating points made in the CAMY comment); 
(10) Marin Institute; and (11) approximately 1,283 individually 
submitted form letters (``Form Letters''). The Miller Brewing Company 
submitted the only comment from the alcohol industry; it did not oppose 
data collection but requested that it be limited to reduce the burden 
on the companies.\5\
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    \2\ The comments are available at https://www.ftc.gov/os/
comments/alcoholmanufacadstudy/index.htm.
    \3\ Among these, one opposed any government action on alcohol 
advertising. See comment by Stanford Owen (May 2, 2006). The other 
five either expressed concerns about alcohol advertising or 
supported a new FTC report about alcohol advertising. See Comments 
by Ziming Xuan (May 9, 2006); Independent State Store Union (ISSU) 
(May 5, 2006); Fred Reid (May 4, 2006); William Bailey (May 2, 
2006); and Abigail Pederson (April 17, 2006).
    \4\ These are: Representatives Lucille Roybal-Allard, Jose E. 
Serrano, and Frank R. Wolf.
    \5\ On July 13, 2006, CSPI submitted a letter to FTC Chairman 
Deborah Platt Majoras requesting that the FTC's planned study 
include examination of alcohol sponsorship at NASCAR racing events. 
Although the CSPI letter is not characterized as a formal comment on 
the Federal Register Notice, the FTC took CSPI's request into 
consideration in preparing the proposed Section 6 Orders.
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1. General Support for Data Collection

    The NAAG Committee comment stated that it is in the public interest 
for the FTC to collect updated data from advertisers. The 48-
organizations comment stated that the information previously collected 
from the alcohol companies and reported on by the FTC has increased 
understanding of alcohol advertising issues and the role of the 
industry in regulating its own advertising practices. This comment 
noted that entities that use this information include Federal and state 
government legislative and regulatory bodies, law enforcement and legal 
officials, administrative health agencies, public health organizations, 
academia, the news media, and the general public. CAMY stated that, 
given the risks of teen drinking, the proposed information requests are 
integral to the FTC's consumer protection mission and provide useful 
information not only to the Commission but to parents, policy makers, 
and the public health field.

2. Sales Data

    In its March 8 Notice, the FTC stated that it would seek company 
data showing alcohol sales. Only one comment appeared to address this 
request. Miller Brewing Company stated that the FTC should not request 
brand-specific information, as such collection would greatly increase 
the company's burden without furthering the FTC's purpose. This 
background information, however, will enable the FTC, in its report, to 
better describe the nature of the industry, including the number of 
brands, volume sold, and the dollar value of those sales. Accordingly, 
the proposed Section 6 Orders will request such information, asking 
each company to identify by name each individual alcohol brand or 
variety that it sold during the calendar year 2005, and for each brand 
or variety, state total sales in dollars and in number of 9-liter or 
2.25 gallon cases sold.
    As a related matter, PIRE, CAMY, and the Form Letters requested 
that the FTC also seek any information the companies have collected or 
received regarding use of their brands by persons below the legal 
drinking age. The FTC will request that the companies submit any 
unpublished data they possess showing the brands of alcohol consumed by 
persons under the legal drinking age in the United States. The request 
will exclude publicly available data (such as data published by CSPI, 
the AMA, and others).

3. Expenditure Data

    In the March 8 Notice, the FTC stated that it would seek 
information about expenditures to advertise and promote beverage 
alcohol in both measured and unmeasured media. Many of the comments 
offered suggestions regarding collection of this expenditure data.
    The letter from the three Congressional representatives recommended 
that the report include information on measured media advertising, 
sponsorships and promotions, broken down by state, race, and ethnicity 
of the target audience. It also asked for a report on brand-specific 
expenditures. The NAAG Committee requested that the FTC seek detailed 
data on the percentage of company advertising budgets expended on each 
type of media and, specifically, where ads are placed (e.g., which 
television and radio shows, in which movies, during which events).
    The 48-organization comment urged the FTC to seek information on: 
Promotional allowance and retail value-added expenditures; advertising 
in Spanish-language and other ethnic media; sports-related and college 
sports-related advertising and marketing (including telecasts, 
sponsorships, local print and promotional expenditures, and stadium 
signage); college marketing and promotional activities and expenditures 
(including spring break promotions in the U.S. and at popular off-shore 
spring break destinations); marketing, promotions, and brand awareness 
activity that utilize popular music, celebrities, and/or internet games 
and sponsorship of community events; and newer avenues of beverage 
alcohol marketing through ``non-traditional'' media, such as cell 
phones, mobile television, podcasts, and brand tie-ins with popular Web 
sites. The 48-organization comment also asked that the data be broken 
down state-by-state, company- and brand-specific (subject to relevant 
trade secret and confidentiality provisions), and by ethnicity of the 
target audience. Marin Institute joined the 48-organization comment and 
further requested that the FTC collect data on producer and wholesaler 
sponsorship of community events and non-profit organizations, and that 
it measure use of emerging electronic media, such as text messaging, 
mobile television, and podcasting. The AMA

[[Page 62263]]

suggested that the data be modeled on information requests the FTC has 
issued to cigarette companies, which seek information on 26 categories 
of expenditures.
    The AMA requested that the FTC collect data on measured and 
unmeasured media, including sponsorship, retail incentives, point-of-
purchase, and product placement fees. PIRE requested that the Section 6 
Orders seek: Expenditures by media type regarding Internet advertising, 
sponsorship, text messaging, other new marketing techniques, price 
discounting and promotional allowances paid to third parties; data on 
expenditures for educational campaigns and youth consumption 
prevention; and grants to third parties to promote prevention and 
treatment. It also asked that the data break out expenditures for 
sports-related marketing and college marketing.
    CAMY requested that the FTC seek two or more years of data for 
measured media advertising, by media type (including broadcast network, 
cable network, spot, local/regional cable, interconnects, and Hispanic 
television); magazine advertising, broken down by full-run and 
demographic editions; spot and network radio; Internet advertising 
(including web advertising, email, company Web sites, and IM 
sponsorships); and ``out-of-home'' advertising. Regarding unmeasured 
media, CAMY urged the FTC to seek, at a minimum, data on the kinds of 
expenditures sought in the 2003 Section 6 Orders to the cigarette 
companies (including price discounting, promotional allowances, 
educational campaigns). CAMY suggested that the FTC obtain data on 
industry spending on ``social aspects organizations'' such as 
International Center on Alcohol Policies and the Century Council). It 
also requested that the agency seek expenditures for ``new media,'' for 
example, ``pixting'' (i.e., picture, or multimedia, messaging) and 
``texting'' (i.e., text messaging) on mobile phones, podcasting, and 
online viral marketing. Finally, CAMY asked that the data break out 
aggregate spending on sports and college marketing across all 
categories.
    Miller Brewing Company asked that the Commission not request 
expenditures on a brand-specific basis. It stated that such a request 
would greatly increase the burden in collecting the data and would not 
further the agency's stated purpose. It noted that the FTC's prior 
alcohol reports published data on an aggregate basis, and urged that 
the data be collected that way. Miller Brewing Company also requested 
that the agency seek expenditure data for measured media (television, 
radio, print, outdoor) only, noting that measured media can be tracked, 
reported, and compared with reasonable precision. Miller stated that 
unmeasured media does not have a universally accepted definition, and 
that certain expenditures in this group may bear no relation to 
marketing. For example, Miller noted that sports sponsorships include 
fees for ticket allotments, suites, and use of facilities, and that the 
expenditures are not broken down as to whether they are marketing-
related. Miller stated that collection of unmeasured media data will be 
burdensome, but did not provide a cost estimate.
    The FTC's 1999 Report estimated that measured marketing 
expenditures may account for only one-third of alcohol brand 
promotional budgets. The proposed Section 6 Orders are designed to 
enable the FTC to better understand how alcohol industry promotional 
dollars targeted to consumers are spent and how much current self-
regulatory efforts aptly address legitimate public concerns about 
alcohol promotion. See section B. 1.a of this notice detailing what the 
Commission will seek on expenditure data through its Section B Orders.

4. Advertisement Placement

    The voluntary advertising guidelines of the beer, wine, and 
distilled spirits industries each state that alcohol advertising should 
be placed in television, radio, and print communications only where at 
least 70% of the audience is reasonably expected to be above the legal 
purchase age (the ``70% placement standard''). In the March 8 Notice, 
the FTC stated that it planned to seek data on compliance with this 
standard.
    The comment from the three Congressional representatives expressed 
the hope that the FTC's analysis of alcohol industry placement 
practices will not be limited to reporting on what percentage of ads 
comply with the 70% placement standard, and specifically requested 
information that would allow the Commission to determine whether ads 
targeted to the Hispanic community comply with the current placement 
standard. The NAAG Committee comment urged the FTC to collect detailed 
data showing whether alcohol companies have complied with the 70% 
placement standard, including data showing where advertisements are 
placed (e.g., what shows, movies, or events) and the demographics of 
the audience, including data showing what percentage of the audience 
falls within the following age groups: 12-20, 21-24, and 21-34. The 
NAAG Committee further suggested that the FTC collect data on other 
efforts made by the companies to ensure compliance, including whether 
they use ``no buy'' lists, follow higher-than-required standards, and 
audit past placements. The 48-organization comment urged the FTC to 
seek information on magazine and television advertising in publications 
or programs with youth readership or viewership rates over 15 percent, 
or 2 million, youth readers. PIRE requested that the FTC obtain data 
evaluating adherence to the 70% placement standard, by specific brand. 
In that regard, it asked that the agency seek data used for planning 
media placement, as well as actual gross advertising impressions, gross 
ratings points, and audience delivery for each target audience, 
audience ages 12-20, and total audience age 12 and above. NCADD/
Sacramento asked that the FTC seek information that will allow it to 
compare voluntary advertising compliance among industry members and to 
identify magazine and television advertising where youth constitute 
more than 15% of the audience. CAMY asked that the FTC seek data that 
will allow it to evaluate compliance with the 70% placement standard on 
a per-brand basis; to collect data on primary and secondary target 
audiences (age, gender, etc.), gross ad impressions, gross ratings 
points, and audience delivery (reach and frequency) for audience ages 
12-20 and total audience 12 and above. CAMY also requested that: 
advertisement placement data be provided on a local market basis for 
local placements; data be reported as planned and as achieved; 
companies report on what media and channels they have audience 
composition data and, where data is unavailable, that they specify 
sources and standards for audience estimates.
    The scope of the Orders specifically regarding advertisement 
placement is detailed in Part B.1.b. of this notice.

5. External Review of Code Compliance

    The trade associations representing the three segments of the 
beverage alcohol industry--the Distilled Spirits Counsel of the United 
States (``DISCUS''), Beer Institute (``BI''), and Wine Institute 
(``WI'')--each have adopted a mechanism for considering whether member 
ads comply with the association's voluntary advertising code. The FTC's 
March 8 Notice stated that the proposed Section 6 Orders would seek 
data regarding those external compliance review mechanisms. No comments 
opposed this request. The comment from the three Congressional 
representatives urged the Commission to evaluate the effectiveness of 
the

[[Page 62264]]

compliance review process among the various segments of the alcohol 
industry, including the outcomes of complaints filed with the industry 
review boards. CAMY requested that the FTC also consider how 
``independent'' such external review programs are, by analyzing their 
degree of transparency, the breadth of their purview, and their 
timeliness. The NAAG Committee asked that the FTC also collect data on 
the percentage of industry members having pre-publication third-party 
review, the percentage of proposed ads that fail review and why, the 
number of ads that pass but are later the subject of complaints, and 
the way companies respond to complaints.
    The scope of the Orders specifically regarding external review of 
code compliance is detailed in Part B.1.c. of this notice.

6. Other Requests Contained in Comments

    Many of the comments filed in response to the March 8 Notice 
addressed what ongoing action the FTC should take after its initial 
data collection. Some of the comments suggested that the agency collect 
information from the alcohol companies and issue annual or bi-annual 
reports. The FTC plans to complete the current study before considering 
this proposal.
    Some comments suggested that the FTC evaluate other issues, such as 
alcohol product placement in movies and underage access to beverage 
alcohol websites. The proposed Section 6 Orders will seek information 
about expenditures for product placements and website advertising but 
will not seek information on the extent that these media expose minors 
to promotions. The goal of the current study is to conduct a 
comprehensive review of: alcohol advertising and marketing 
expenditures; industry compliance with current placement standards as 
they pertain to television, radio, magazine, and newspaper advertising 
over the stated period of time; and third-party review of complaints. 
The FTC expects that focusing its efforts in this manner will produce a 
study of the highest possible quality. It is committed to ongoing 
monitoring of this subject area, however, and anticipates that it will 
address other issues raised by alcohol advertising and marketing in the 
future.

B. Information Requests to the Beverage Alcohol Industry

1. Description of the Collection of Information and Proposed Use

    The FTC proposes to send information requests to up to twelve 
parent companies (``industry members'') responsible for domestic 
advertising of beer, wine, or distilled spirits The information 
requests will seek, to the extent industry members possess it, data and 
information regarding: (1) Company sales of beverage alcohol on a per 
brand basis, in both dollars and units sold; (2) company expenditures 
to advertise, market, and promote beverage alcohol in the United 
States; (3) compliance with the 70% placement standard contained in the 
industry's self-regulatory codes; and (4) the status of external 
mechanisms to review complaints about code compliance.

    Note: With this publication any destruction, removal, 
mutilation, alteration, or falsification of documentary evidence 
that may be responsive to this information collection, within the 
possession or control of a person, partnership, or corporation 
subject to the FTC Act, may be subject to criminal prosecution. 15 
U.S.C. 50; see also 18 U.S.C. 1505.

    Confidentiality: Section 6(f) of the FTC Act, 15 U.S.C. 46(f), bars 
the Commission from publicly disclosing trade secrets or confidential 
commercial or financial information it receives from persons pursuant 
to, among other methods, special orders authorized by section 6(b) of 
the FTC Act. Such information also would be exempt from disclosure 
under the Freedom of Information Act. 5 U.S.C. 552(b)(4). Moreover, 
under section 21(c) of the FTC Act, 15 U.S.C. 57b-2(c), a submitter who 
designates a submission as confidential is entitled to 10 days' advance 
notice of any anticipated public disclosure by the Commission, assuming 
that the Commission has determined that the information does not, in 
fact, constitute 6(f) material. Although materials covered under one or 
more of these various sections are protected by stringent 
confidentiality constraints, the FTC Act and the Commission's rules 
authorize disclosure in limited circumstances (e.g., official requests 
by Congress, requests from other agencies for law enforcement purposes, 
or administrative or judicial proceedings). Even in those limited 
contexts, however, the Commission's rules may afford protections to the 
submitter, such as advance notice to seek a protective order in 
litigation.
    See 15 U.S.C. 57b-2; 16 CFR 4.9-4.11.
    The information presented in the study will not reveal company-
specific data. See 15 U.S.C. 57b-2(d)(1)(B). Rather, the Commission 
anticipates presenting information on an anonymous or aggregated basis, 
in a manner sufficient to protect individual companies' confidential 
information.
a. Information About Expenditure Data
    The proposed Section 6 Orders will seek expenditures for 
advertising, merchandising, or promotion of alcohol during calendar 
year 2005. The Orders require that the expenditures be broken down into 
22 categories.\6\ Thus, the proposed Section 6 Orders seek 
comprehensive information about expenditures to promote alcohol to 
consumers, including most of the information suggested in the 
comments.\7\ This information will help the agency evaluate how 
industry members allocate their promotional expenditures, so as to 
better determine the degree industry self-regulatory codes address the 
various kinds of promotions employed by the industry. The categories 
are carefully defined to facilitate compliance with the requests. The 
Commission agrees with Miller Brewing Company, however, that it is not 
necessary for the alcohol companies to report such information on a 
brand-by-brand basis. Given the substantially expanded scope of this 
request, brand-by-brand reporting may pose an unnecessary additional 
burden on the companies without meaningfully increasing the FTC's 
understanding how promotional dollars are directed on an industry-wide 
basis.
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    \6\ These are: Television advertising; radio advertising; 
magazine advertising; newspaper advertising; transit advertising; 
other outdoor advertising; direct mail advertising; company-
sponsored Internet sites; other Internet site advertising; other 
digital advertising; specialty item distribution; public 
entertainment events: not sports-related; sponsorship of sporting 
events, sports teams or individual athletes; other point-of-sale 
advertising and promotions; spring break promotions; product 
placements; retail value-added expenditures; telemarketing; 
promotional allowances; and total reportable expenditures. In 
addition, the proposed Section 6 Orders will seek cross-category 
totals for sports and sporting events and social responsibility 
programs and messages.
    \7\ Some of the suggested requests are more extensive than 
needed for the FTC's current purposes. For example, the FTC does not 
propose to require the companies to allocate magazine advertising 
expenditures among ``full run'' and ``demographic'' editions. The 
burden of collecting such data is likely to outweigh the benefits to 
the FTC and the public of obtaining it.
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    The proposed Section 6 Orders do not seek a breakdown of 
expenditures by race or ethnicity of the target audience. The agency is 
concerned that reporting specific expenditure data by race or ethnicity 
might produce potentially misleading results due to the difficulty of 
separating targeted advertising from

[[Page 62265]]

general advertising that may have the same or broader reach to a 
particular racial or ethnic group. The Commission will, however, seek 
advertisement placement data that will help the FTC to evaluate whether 
ads targeted to an Hispanic or African-American audience comply with 
industry placement standards, as further discussed below.\8\
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    \8\ The proposed orders also will not seek information on 
expenditures for slotting allowances or price discounts; such 
information does not enhance the agency's understanding of self-
regulation. The requests focus on expenditures for advertising and 
promotions that may be seen by underage consumers. Payments for 
shelf space, payments to wholesalers, and price discounts to 
wholesalers and retailers do not provide such information. Given the 
expanded nature of this request, seeking data on them would be 
unnecessarily burdensome.
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b. Information About Advertising Placement
    The proposed Section 6 Orders will require the companies to 
provide, for each instance of advertising dissemination between January 
1 and June 30, 2006, on television, on radio in measured markets, in 
magazines, and in newspapers: the advertisement's name; the brand 
advertised; the name of the media and location of dissemination; the 
date and time that the advertisement appeared; the name of the show 
during or in conjunction with the advertisement appeared; and the 
demographics of the audience (persons under 21, and persons 21 and 
over), in absolute numbers and percentages, for that dissemination.\9\ 
The proposed Section 6 Orders also will require the companies to 
provide a company-wide summary of this data to facilitate analysis. 
This data will permit the Commission to measure the extent that the 
youth audience for each ad placement exceeded 30% of the total 
audience, or whether they complied with existing industry codes.\10\ 
Further, given concerns about whether advertisements targeted primarily 
to Hispanic or African-American consumers are more likely than others 
to reach underage consumers, the Commission will require that the 
companies identify such ads so that the agency can evaluate this 
concern.
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    \9\ Two sets of demographics are relevant to Evaluating 
compliance with placement standards: the historical demographics 
used by a company for planning purposes when purchasing ad time, and 
audience demographics when a placement actually occurred. The 
proposed Section 6 Orders seek the latter data. To illustrate, for 
an ad placed on television, the Orders require the companies to 
provide the average demographic data for the program during which 
the show ran, over the three-month period (the ``quarter'') when the 
placement appeared. If program-specific data is unavailable (as is 
often the case with cable), the Orders seek the quarterly average 
data for the daypart during which the ad appeared.
    \10\ This data also will permit the Commission to evaluate the 
audience for televised NASCAR events, in connection with CSPI's 
request that the FTC review the degree that NASCAR promotions reach 
a youth audience.
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    The Commission's proposed Section 6 Orders also seek a narrative 
description of: the steps taken when placing ads to reduce the 
proportion of persons under 21 in the audience, including the 
demographic databases relied on in making placement decisions; how 
often post-placement data are reviewed to verify that a placement 
complied with the placement guidelines and the steps taken if a 
compliance shortfall is identified; and the additional safeguards in 
place (e.g., use of ``no buy'' lists and higher placement standards, 
media content review) to reduce the likelihood of reaching underage 
audiences. This will permit the Commission to obtain a clear and 
detailed picture of the alcohol industry's advertising placement 
practices during the period at issue.
    The proposed Section 6 Orders will not require the companies to 
identify, for each ad, the gross rating points and the breakdown of 
consumers aged 12-20, 21-24, and 21-34 in the audience. Given the 
significantly expanded scope of the current requests, such requirements 
would be unnecessarily burdensome and the information not fully 
relevant to compliance with the placement standard contained in the 
industry's voluntary advertising codes.
c. Information About External Review of Code Compliance
    The proposed Section 6 Orders will require the alcohol companies to 
describe in detail the enforcement mechanism(s) available as of 
December 31, 2006 for possible violations of the DISCUS, BI, and WI 
voluntary advertising codes. The response to this aspect of the Section 
6 Orders will not be due until January 10, 2007, to allow the FTC time 
to receive and evaluate whole-year information regarding third-party 
review. The proposed Orders also will require, for each complaint about 
the company's advertising, promotion, or marketing forwarded for 
independent review between January 1, 2006 and December 31, 2006, that 
the company provide a copy of the complaint, any document reflecting 
the reviewer's decision or recommendation, and describe what action, if 
any, the company took in response to the reviewer's decision or 
recommendation. These requests will enable the Commission to evaluate 
the efficacy of current advertising review mechanisms. Currently, the 
Commission does not plan to ask about pre-publication review of 
proposed ads by third parties, or the number of ads that pass but are 
later the subject of complaints, and the way companies respond to 
complaints. The goal of this section of the proposed Section 6 Orders 
is to evaluate how the various segments of the industry have responded 
to the FTC's recommendation that they adopt systems for external, post-
publication review of complaints about advertising code compliance.

2. Estimated Hours Burden

    FTC staff's estimate of the hours burden is based on the time 
required to respond to each information request. The Commission intends 
to issue the information requests to the 12 largest beverage alcohol 
advertisers. Because these companies vary greatly in size, in the 
number of products that they sell, and in the extent and variety of 
their advertising and promotion, staff has provided a range of the 
estimated hours burden. Based upon its knowledge of the industry, the 
staff estimates that the time required to identify, obtain, organize, 
and prepare responses to each of the four information categories will 
range, on average, between 15 and 120 hours for most companies. Staff 
anticipates, however, that the largest companies may require up to 280 
hours for the most time-consuming category, advertising placement 
information. The total estimated burden per company is based on the 
following assumptions:
    Identify, obtain, and organize sales information; prepare response: 
15-35 hrs.
    Identify, obtain, and organize information on advertising and 
marketing expenditures; prepare response: 40-65 hrs.
    Identify, obtain, and organize placement information; prepare 
response: 150-280 hrs.
    Identify, obtain, and organize information regarding compliance 
review; prepare response: 15-20 hrs.
    FTC staff anticipates that the cumulative hours burden to respond 
to the information requests will be between 220 hours and 400 hours per 
company. Nonetheless, staff conservatively assumes that the burden per 
company for each of the twelve (12) intended recipients will be 400 
hours. Accordingly, cumulative estimated burden is 4,800 hours. These 
estimates include any time spent by separately incorporated 
subsidiaries and other entities affiliated with the parent company that 
received the information requests.

3. Estimated Cost Burden

    It is difficult to calculate precisely labor costs associated with 
this data production. Labor costs entail varying

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compensation levels of management and/or support staff among companies 
of different sizes. Although financial, marketing, legal, and clerical 
personnel may be involved in the information collection process, FTC 
staff has assumed that mid-management personnel and outside legal 
counsel will handle most of the tasks involved in gathering and 
producing responsive information, and has applied an average rate of 
$250/hour for their labor. FTC staff anticipates that the labor costs 
per company will range between $55,000 (220 hours x $250/hour) and 
$100,000 (400 hours x $250/hour). Nonetheless, as a conservative 
measure, staff estimates that the total labor costs per company will be 
$100,000.
    FTC staff believes that the capital or other non-labor costs 
associated with the information requests are minimal. Although the 
information requests may require industry members to maintain the 
requested information the Commission seeks, they should already have in 
place the means to compile and maintain it.

John D. Graubert,
Acting General Counsel.
 [FR Doc. E6-17790 Filed 10-23-06; 8:45 am]
BILLING CODE 6750-01-P