82 FR 21685 - Freedom of Information Act; Miscellaneous Rules

FEDERAL TRADE COMMISSION

Federal Register Volume 82, Issue 89 (May 10, 2017)

The Federal Trade Commission is implementing provisions of the FOIA Improvement Act of 2016 by amending the regulation governing fees the agency may assess to offset the cost of disseminating information and records to the public. The FTC is also making other clarifying changes and updates to the fee regulation.

[Federal Register Volume 82, Number 89 (Wednesday, May 10, 2017)]
[Rules and Regulations]
[Pages 21685-21687]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-09432]


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FEDERAL TRADE COMMISSION

16 CFR Part 4


Freedom of Information Act; Miscellaneous Rules

AGENCY: Federal Trade Commission (FTC).

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission is implementing provisions of the 
FOIA Improvement Act of 2016 by amending the regulation governing fees 
the agency may assess to offset the cost of disseminating information 
and records to the public. The FTC is also making other clarifying 
changes and updates to the fee regulation.

DATES: These amendments are effective May 10, 2017.

FOR FURTHER INFORMATION CONTACT: G. Richard Gold, Attorney, (202) 326-
3355, Office of the General Counsel, Federal Trade Commission, 600 
Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: In a document previously published in the 
Federal Register, 81 FR 93861 (Dec. 22, 2016), the Federal Trade 
Commission, as required by the Freedom of Information Act (FOIA), 
sought comments on proposed revisions to its fee regulation. See 5 
U.S.C. 552(a)(4)(A)(i). The FTC proposed to change its fee schedule to 
implement the FOIA Improvement Act of 2016 (the ``2016 FOIA 
Amendments'') \1\ as appropriate and to revise the regulation to 
account for other fee-related changes.\2\
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    \1\ On June 30, 2016, President Obama signed into law the FOIA 
Improvement Act of 2016, Public Law 114-185, amending the Freedom of 
Information Act (FOIA), 5 U.S.C. 552. The new law addresses a range 
of procedural issues and places additional limitations on assessing 
search fees (or, for requesters with preferred fee status, 
duplication fees) if an agency's response time to a requester is 
delayed.
    \2\ On December 22, 2016, the FTC also implemented a final rule 
that incorporated other parts of the 2016 FOIA Amendments. 81 FR 
93804. Pursuant to 5 U.S.C. 553, these changes did not require 
public comment.
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A. Public Comments

    The FTC received two comments in response to the proposed rule 
changes: one from Hartley Rathaway and one from the Reporters Committee 
for Freedom of the Press (``Reporters Committee'').\3\
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    \3\ See https://www.ftc.gov/policy/public-comments/initiative-691 for links to each comment.
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Comment by Hartley Rathaway

    The comment from Hartley Rathaway argues that ``it is [not] fair 
that the government should force the citizenry to bear the costs of 
seeing the truth. Cut spending on wars, cut subsidies for the 
oligarchs, and then put that money toward uses like these. Charging us 
fees for information is unjust.'' The FTC understands this concern and 
notes that most agency FOIA responses do not impose any costs on the 
requester. For example, members of the public are entitled to two hours 
of free search time and 100 free pages, and are not charged for review 
time.\4\ Other requester categories (including Educational, Non-
commercial Scientific Institution, or News Media) are not charged for 
search or review time, and are also entitled to 100 free pages.\5\ The 
FTC also waives fees if the total chargeable fees for a request are 
under $25.00.\6\ Finally, the Commission may produce releasable records 
without any charge or at a charge reduced below the established fees if 
disclosure of the information is in the public interest because it is 
likely to contribute significantly to public understanding of the 
operations or activities of the government, and is not primarily in the 
commercial interest of the requester.\7\ Requesters are required to 
provide support for a fee waiver or reduction request, or a request to 
be granted status in one of the noncommercial requester categories.
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    \4\ 16 CFR 4.8(b).
    \5\ Id.
    \6\ 16 CFR 4.8(b)(4).
    \7\ 16 CFR 4.8(e).
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    Additionally, the FTC follows FOIA statutory language and Office of 
Management and Budget (``OMB'') directives to recoup allowable direct 
costs. The Freedom of Information Reform Act of 1986 (``FOIA Reform 
Act'') charged the OMB with responsibility for promulgating, pursuant 
to notice and comment, guidelines containing a uniform schedule of fees 
for individual agencies to follow when promulgating their FOIA fee 
regulations. 5 U.S.C. 552(a)(4)(A)(i). On March 27, 1987, the OMB 
issued its Uniform Freedom of Information Act Fee Schedule and 
Guidelines (OMB Fee Guidelines) but also concluded that issuance of a 
government-wide fee schedule was precluded by language of the FOIA 
Reform Act requiring ``each agency's fees to be based upon its direct 
reasonable operating costs of providing FOIA services.'' See 52 FR at 
10015. The FOIA Reform Act mandated that agencies conform their fee 
schedules to these guidelines. The guidelines specifically direct that 
``[a]gencies should charge fees that recoup the full allowable direct 
costs they incur . . . and shall use the most efficient and least 
costly methods to comply with requests for documents made under the 
FOIA.'' Id. at 10018. The FTC enforces this OMB directive to recoup 
allowable direct costs while also providing for lower cost requester 
categories and fee reductions or waivers as directed.

Comment by the Reporters Committee for Freedom of the Press

    The Reporters Committee supports the FTC's efforts to update its 
regulations to comply with FOIA but argues that two aspects of the 
proposed rule are inconsistent with both the text of FOIA and its 
recent interpretation by the U.S. Court of Appeals for the District

[[Page 21686]]

of Columbia Circuit in Cause of Action v. Federal Trade Commission, 799 
F.3d 1108 (D.C. Cir. 2015).
    First, the Reporters Committee claims that Sec.  4.8(b)(2)(iii) of 
the proposed rule sets forth an incorrect definition of 
``representative of the news media.'' Specifically, the Reporters 
Committee states:

    FOIA defines a ``representative of the news media'' as any 
person or entity that gathers information of potential interest to a 
segment of the public, uses its editorial skills to turn the raw 
materials into a distinct work, and distributes that work to an 
audience. 5 U.S.C. 552(a)(4)(A) (emphasis added). The Proposed Rule, 
however, defines a ``representative of the news media'' as any 
person or entity that gathers information of potential interest to a 
segment of the public, uses its editorial skills to turn the raw 
materials into a distinct work, and distributes that work to the 
public.

The Reporters Committee argues that the proposed rule's departure from 
the statutory text should be revised to mirror the language of FOIA. 
The FTC agrees and is incorporating the Reporters Committee's suggested 
edit to the Final Rule's definition of ``representative of the news 
media'' as set out in Sec.  4.8(b)(2)(iii).
    Additionally, the Reporters Committee also claims that Sec.  
4.8(e)(2)(i)(C) of the proposed rule places impermissible limitations 
on the conditions pursuant to which a public interest fee waiver will 
be granted. Section 4.8(e)(2)(i)(C) of the proposed rule stated as 
follows:

    The understanding to which disclosure is likely to contribute is 
public understanding, as opposed to the understanding of the 
individual requester or a narrow segment of interested persons 
(e.g., by providing specific information about the requester's 
expertise in the subject area of the request and about the ability 
and intention to disseminate the information to the public) . . .

The Reporters Committee claims that this portion of the FTC's proposed 
rule does not comply with the recent decision by the U.S. Court of 
Appeals for the District of Columbia Circuit in Cause of Action v. 
Federal Trade Commission, 799 F.3d 1108 (D.C. Cir. 2015). For public 
interest fee waivers, the court determined that the FOIA statute does 
not:

require a requester to show an ability to convey the information to 
a ``broad segment'' of the public or to a ``wide audience.'' To the 
contrary, we have held that ``proof of the ability to disseminate 
the released information to a broad cross-section of the public is 
not required.'' . . . FOIA does not require that a requester be able 
to reach a ``wide audience.'' Rather, as the Second Circuit has 
held, ``the relevant inquiry . . . is whether the requester will 
disseminate the disclosed records to a reasonably broad audience of 
persons interested in the subject.''

    Cause of Action, 799 F.3d at 1116 (emphasis added) (citations 
omitted). The Reporters Committee argues that Cause of Action shows 
that for public interest fee waivers it is entirely sufficient if the 
requested records will increase the understanding of an audience of 
persons interested in the subject, even if that group is ``narrow'' as 
compared to the public at large. See Comment by the Reporters Committee 
(citing Cause of Action, 799 F.3d at 1116). The Reporters Committee 
thus claims that the reference to ``a narrow segment of interested 
persons'' as not meeting the standard for ``public understanding'' for 
fee waiver determinations should be deleted.
    The FTC has considered this suggested edit but is denying the 
request. The final rule section relating to Sec.  4.8(e)(2)(i)(C) is 
the same language that was previously proposed. This language complies 
with the FOIA statute and case law. Both the Cause of Action case that 
the Reporters Committee cites and the subsequent decision in National 
Security Counselors v. Department of Justice, 848 F.3d 467, 472 (D.C. 
Cir. Feb. 14, 2017), stated that, ``although a fee-waiver applicant 
need not demonstrate its ability to reach a `wide audience,' it must at 
least show that it can `disseminate the disclosed records to a 
reasonably broad audience of persons interested in the subject.' ''
    The National Security Counselors case then concluded that where a 
FOIA requester fails to provide sufficiently specific and non-
conclusory statements demonstrating its ability to disseminate the 
disclosures to a reasonably broad audience of persons interested in the 
subject, that deficiency alone is a sufficient basis for denying the 
fee waiver request. The National Security Counselors court denied the 
appellant's fee waiver request and stated that the appellant in that 
case did not identify a discernible audience for the proposed 
disclosures and was no more than a clearing house for the records it 
received. The appellant did not actively engage in gathering 
information to produce original publications and did not produce 
information about the size of its audience or the amount of traffic 
received by its Web site. National Security Counselors, 848 F.3d at 
472, 474. Thus the FTC concludes that a reasonably broad audience 
interested in the subject is clearly distinct from ``a narrow segment 
of interested persons'' and it is appropriate to consider whether the 
requested disclosure is likely to contribute to the understanding of 
``a narrow segment of interested persons'' as opposed to ``public 
understanding.'' \8\
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    \8\ See Crooker v. Department of the Army, 577 F. Supp. 1220, 
1223 (D.D.C. 1984) (rejecting fee waiver under previous standard for 
information of interest to ``a small segment of the scientific 
community,'' which would not ``benefit the public at large''), 
appeal dismissed as frivolous, No. 84-5089 (D.C. Cir. June 22, 
1984).
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Conclusion

    The Commission certifies that the Rule amendments set forth in this 
final rule do not require an initial or final regulatory analysis under 
the Regulatory Flexibility Act because the amendments will not have a 
significant economic impact on a substantial number of small entities. 
See 5 U.S.C. 605(b). Most requests for access to FTC records are filed 
by individuals who are not ``small entities'' within the meaning of 
that Act. Id. at 601(6). In any event, the economic impact of the rule 
changes on all requesters is expected to be minimal, if any. The Rule 
amendments also do not contain information collection requirements 
within the meaning of the Paperwork Reduction Act, 44 U.S.C. 3501-3520.

List of Subjects in 16 CFR Part 4

    Administrative practice and procedure, Freedom of information.

0
For the reasons set forth in the preamble, the Federal Trade Commission 
amends Title 16, Chapter I, Subchapter A of the Code of Federal 
Regulations as follows:

PART 4--MISCELLANEOUS RULES

0
1. The authority citation for Part 4 continues to read as follows:

    Authority: 15 U.S.C. 46.


0
2. Amend Sec.  4.8 by revising paragraphs (b)(2)(iii), (b)(6)(i), 
(b)(7), (e)(2)(i)(C) and (i) to read as follows:


Sec.  4.8  Costs for obtaining Commission records.

* * * * *
    (b) * * *
    (2) * * *
    (iii) A representative of the news media is any person or entity 
that gathers information of potential interest to a segment of the 
public, uses its editorial skills to turn the raw materials into a 
distinct work, and distributes that work to an audience. The term 
``news'' means information that is about current events or that would 
be of current interest to the public. Examples of news media entities 
include television or radio stations broadcasting to the public at 
large and publishers of periodicals (but only in those instances where 
they

[[Page 21687]]

can qualify as disseminators of news) who make their products available 
for purchase by or subscription by the general public or free 
distribution to the general public. These examples are not intended to 
be all-inclusive. As traditional methods of news delivery evolve (e.g., 
electronic dissemination of newspapers through telecommunications 
services), such alternative media shall be considered to be news-media 
entities. A freelance journalist shall be regarded as working for a 
news-media entity if the journalist can demonstrate a solid basis for 
expecting publication through that entity, whether or not the 
journalist is actually employed by the entity. A publication contract 
would provide a solid basis for such an expectation, but the past 
publication record of a requester may also be considered in making such 
a determination. To qualify for news media status, a request must not 
be for a nonjournalistic commercial use. A request for records 
supporting the news dissemination function of the requester is not 
considered a commercial use.
* * * * *
    (6)(i) Schedule of direct costs. The following uniform schedule of 
fees applies to records held by all constituent units of the 
Commission:

------------------------------------------------------------------------
 
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                               Duplication
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Paper to paper copy (up to 8.5'' x       $0.14 per page.
 14'').
Converting paper into electronic format  Quarter hour rate of operator
 (scanning).                              (Clerical, Other Professional,
                                          Attorney/Economist).
Other reproduction (e.g., converting     Actual direct cost, including
 from one electronic format to computer   operator time.
 disk or printout, microfilm,
 microfiche, or microform).
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                           Electronic Services
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Compact disc (CD)......................  $3.00 per disc.
DVD....................................  $3.00 per disc.
Videotape cassette.....................  $2.00 per cassette.
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                           Microfilm Services
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Conversion of existing fiche/film to     $0.14 per page.
 paper.
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                               Other Fees
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Certification..........................  $25.00 each.
Express Mail...........................  U.S. Postal Service Market
                                          Rates.
Records maintained at Iron Mountain or   Contract Rates.
 Washington National Records Center
 facilities (records retrieval,
 refiling, et cetera).
Other Services as they arise...........  Market Rates.
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* * * * *
    (7) Untimely responses. (i) Except as provided in paragraphs 
(b)(7)(ii)-(iv) of this section, search fees for responding to a 
Freedom of Information Act request will not be assessed for responses 
that fail to comply with the time limits, as provided at 5 U.S.C. 
552(a)(4)(A)(viii), Sec.  4.11(a)(1)(ii) and Sec.  4.11(a)(3)(ii), if 
there are no unusual or exceptional circumstances, as those terms are 
defined by 5 U.S.C. 552(a)(6) and Sec.  4.11(a)(1)(ii). Except as 
provided below, duplication fees will not be assessed for an untimely 
response, where there are no unusual or exceptional circumstances, made 
to a requester qualifying for one of the fee categories set forth in 
paragraph (b)(2) of this section.
    (ii) If the Commission has determined that unusual circumstances 
apply and has provided a timely written notice to the requester in 
accordance with 5 U.S.C. 552(a)(6)(B), the delay in a response is 
excused for an additional 10 days. If the Commission fails to comply 
with the extended time limit, it will not charge search fees (or, for a 
requester qualifying for one of the fee categories set forth in 
paragraph (b)(2) of this section, will not charge duplication fees).
    (iii) If the Commission has determined that unusual circumstances 
apply and more than 5,000 pages are necessary to respond to the 
request, the agency may charge search fees (or, for requesters 
qualifying for one of the fee categories set forth in paragraph (b)(2) 
of this section, may charge duplication fees) if timely written notice 
has been provided to the requester and the agency has discussed with 
the requester via written mail, electronic mail, or telephone (or made 
not less than 3 good-faith attempts to do so) how the requester could 
effectively limit the scope of the request.
    (iv) If a court determines that exceptional circumstances exist, 
the Commission's failure to comply with a time limit shall be excused 
for the length of time provided by the court order.
* * * * *
    (e) * * *
    (2) * * *
    (i) * * *
    (C) The understanding to which disclosure is likely to contribute 
is public understanding, as opposed to the understanding of the 
individual requester or a narrow segment of interested persons (e.g., 
by providing specific information about the requester's expertise in 
the subject area of the request and about the ability and intention to 
disseminate the information to the public); and
* * * * *
    (i) Means of payment. Payment shall be made either electronically 
through the Department of Treasury's pay.gov Web site or by check or 
money order payable to the Treasury of the United States.
* * * * *

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-09432 Filed 5-9-17; 8:45 am]
BILLING CODE 6750-01-P