Detailed Information on the
Trade Regulation Assessment

Measure: Each year, the FTC will stop approximately $400 million in Internet and other consumer fraud; over a five-year period, the FTC will have saved consumers at least $2 billion through law enforcement actions stopping consumer fraud.

Explanation:

Measure: Take action against mergers likely to harm competition in markets with a total of at least $200 billion in annual sales. To meet this goal, the FTC will need to take action each year against mergers likely to harm competition in markets with an average total of $40 billion in annual sales. Because external factors, such as level of merger activity, may cause the results to fluctuate significantly from year to year, we have expressed this goal in terms of an aggregate target for the five-year strategic plan period, rather than as a yearly target.

Explanation:

Measure: Take action against anticompetitive conduct in markets with a total of at least $100 billion in annual sales. To meet this goal, the FTC will need to take action each year against anticompetitive conduct affecting markets with an average total of $20 billion in annual sales. Because external factors may cause the results to fluctuate significantly from year to year, we have expressed this goal in terms of an aggregate target for the five-year strategic plan period, rather than as a yearly target.

Explanation:

Is the program purpose clear?

Explanation: The Federal Trade Commission (FTC) has two separate but related strategic goals. The first is to Maintain Competition by promoting free markets and preventing anticompetitive practices and arrangements. The second is to Protect Consumers by preventing fraud, deception, and unfair practices in the marketplace. These two goals are closely related and complement each other - when consumers have accurate information about goods and services, they can make sound decisions among the choices presented, thus benefiting from and prompting competition. The FTC accomplishes this by enforcing laws that prohibit business practices that are anticompetitive, deceptive, or unfair to consumers. It also promotes informed consumer choice and public understanding of the competitive process. The work of the FTC is critical to protecting and strengthening free and open markets in both the United States and the world. The FTC is the only federal consumer protection agency with jurisdiction over a wide spectrum of consumer issues. The impact of the FTC on the nation's marketplace is significant. Consumers are affected every day by the FTC's activities as they, for example, receive fewer telemarketing calls, obtain free credit reports, receive less spam, access truthful information about health and weight loss products, receive identity theft victim assistance, pay lower prescription drug prices due to the availability of generic drugs, and enjoy competitive prices for goods as a result of a blocked merger. In addition to its broad law enforcement authority and more limited rulemaking activities, the FTC has unique jurisdiction to gather, analyze, and make public information concerning markets, the state of competition, and business practices. With this information and analysis, the agency contributes to the policy deliberations of the Congress, the Executive Branch, other independent agencies, and state and local governments.

Evidence: FTC's Performance and Accountability Report for Fiscal Year 2005, Part I, http://www.ftc.gov/par

Does the program address a specific and existing problem, interest, or need?

Explanation: The FTC addresses issues of major concern to American consumers and performs its mission through the use of a variety of tools, including law enforcement; rulemaking; research and studies on marketplace trends and legal developments; and consumer and business education and outreach. In the consumer protection area, current areas of major concern include a wide variety of fraudulent and deceptive activity, consumer privacy, data security, and identity theft. Among other activities, the FTC also monitors the marketing of media violence to children; maintains and enforces the National Do Not Call Registry; and enforces credit, financial, and retail laws and regulations. In addition, the FTC has a vigorous business and consumer education outreach program. Finally, the agency maintains a national Consumer Response Center for consumer inquiries and complaints, which receives more than 30,000 contacts per week via its toll-free numbers and Internet complaint forms. In the competition area, the FTC investigates anticompetitive conduct, focusing its resources on sectors of the economy that affect consumer spending the most, such as energy, health care, and high technology. Finally, the FTC reviews each year well over 1,000 proposed mergers, most reported under the Hart-Scott-Rodino Premerger Notification Act (HSR), to determine if they are likely to reduce competition substantially in the relevant markets. In both consumer protection and competition, the agency's focus is increasingly global. It works with competition and consumer protection agencies around the world to promote cooperation and convergence toward best practices.

Evidence: Commission Testimony Concerning Appropriations (FY 2007) before House of Representatives Subcommittee Press Release and Text http://www.ftc.gov/opa/2006/03/appropriationstest.htm FTC Consumer and Business Education, http://www.ftc.gov, see For Consumers, For Businesses, Hurricane Recovery, Subject Icons, Newsroom, etc.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The FTC's primary focus is the enforcement of federal laws to protect consumers. State and local agencies have the authority to bring enforcement actions pursuant to certain federal laws and also to enforce state consumer protection and antitrust laws. The FTC coordinates with state and other federal agencies to ensure consistency and prevent redundancy in the enforcement of such laws. Effective law enforcement requires the participation of federal authorities because a state's jurisdiction and ability to obtain relief may be limited by the borders of the state. Participation of the FTC helps to ensure that law enforcement actions will bring relief to all U.S. consumers and not just to those in one state. In the case of state law, the various agencies coordinate efforts through regular conference calls, meetings, and training. On enforcement matters, the FTC and states share documentary evidence, conduct joint investigational hearings and telephone calls, share legal theories, and reach joint settlements with the affected parties so that the investigation and litigation process is less burdensome on the subjects of the investigations, and does not unduly duplicate the use of public resources. Careful coordination ensures that the efforts of different federal and state agencies complement each other, are not redundant, and provide clear, consistent guidance to stakeholders in the marketplace. The FTC's primary connection with many other law enforcers, especially at the local level, is through its Consumer Sentinel database that houses over 3 million fraud and identity theft complaints that are shared among our over 1,500 partners. Any law enforcer who is investigating a particular matter can place an alert in Consumer Sentinel, so that others can see that the investigation is taking place, and avoid duplication and share information. The FTC also works with many private organizations, such as the Better Business Bureaus, AARP, and a host of other consumer and business organizations, primarily to deliver outreach and education. In many cases, the FTC creates educational materials for these organizations to use and distribute. This allows the FTC to achieve wider distribution of its message and reach segments of the population that it might not otherwise, and saves the private organizations the time and expense of creating such materials. For example, the FTC and a partnership of cybersecurity experts, online marketers, consumer advocates, and federal officials launched a new multimedia, interactive consumer education campaign to help consumers stay safe online. OnGuardOnline.gov makes tips, articles, videos, and interactive activities available to consumer agencies and organizations. In addition to the FTC, other federal agencies have some consumer protection or competition law enforcement responsibilities, particularly in areas where the industry or practice is currently statutorily exempt from FTC jurisdiction. In those cases, the FTC coordinates with other relevant agencies to harmonize efforts for more consistent treatment across jurisdictional lines. In other cases, including areas in which there is overlapping jurisdiction, the division of responsibility is established via statute or MOU. A clear example of this division of responsibility exists between the FTC and DOJ's Antitrust Division. While the two agencies have overlapping jurisdiction over civil antitrust markets, they have avoided duplication by dividing responsibilities pursuant to a clearance process dating back to the late 1940's and memorialized in a MOU during the 1990's. The MOU guides the activities of each agency to avoid redundancy and channel cases toward the agency that has the most experience in the area or otherwise is best equipped to handle any expected challenges. Finally, in all rulemakings, the FTC also solicits and coordinates comments on whether the rule will duplicate efforts at the federal, state, or local level.

Evidence: Protocol for Coordination in Merger Investigations between the Federal Enforcement Agencies and the State Attorneys General http://www.ftc.gov/os/1998/03/mergerco.op.htm Clearance Agreement, copy of 1993 and 1995 press releases - hard copy provided Memorandum Of Understanding with FDA - hard copy provided Telemarketing and Consumer Fraud and Abuse Act (Section 6103 Actions by States) http://www.law.cornell.edu/uscode/html/uscode15/usc_sup_01_15_10_87.html Green Lights and Red Flags Training Seminars http://www.ftc.gov/bcp/workshops/nyadseminar/index.html Press Release for On Guard Online Initiative http://www.ftc.gov/opa/2005/09/onguardonline.htm

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The design of FTC's program calls for two major, strongly centralized bureaus, specialized substantive divisions within each bureau, and flexibility to shift resources between divisions as needs change. There is also a third bureau and other offices that support the consumer protection and competition missions of the two major bureaus. There is no evidence of major flaws in the design and no indication that a different design would better accomplish FTC's purpose. The FTC's cases are often complex and have national implications. Many FTC cases also require in-depth substantive expertise. These conditions require a high degree of consistency and national oversight that would be difficult and inefficient to maintain in a decentralized system. Expert staff members are best used in the two major bureaus or in the third bureau, the economics support organization, where they can provide assistance, either at headquarters or one of a few strategically placed regional offices. The inherent flexibility in the system allows the bureaus to reallocate resources between divisions and regional offices in reaction to changing consumer and marketplace needs. This type of flexibility would be difficult to maintain across a much greater number of geographically diverse, decentralized offices.

Evidence: FTC's Performance and Accountability Report for Fiscal Year 2005 http://www.ftc.gov/par

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The FTC's competition and consumer protection missions have the shared strategic goal of improving consumer welfare through a competitive marketplace. The beneficiaries of these missions include individual consumers and businesses, as well as, to the same degree, federal, state, local, and international law enforcers. In the maintaining competition area, the FTC focuses its enforcement efforts on anticompetitive conduct that most threatens consumer welfare, such as horizontal agreements among competitors to set prices or allocate markets. To ensure that the FTC is addressing the conduct that will have the greatest effect, the agency has held hearings to solicit the views of scholars and the business community on the structure and practices of particular industries where the FTC enforces the antitrust laws. For instance, the FTC held 28 days of hearings in 2003 on Health Care and Competition Law and Policy and 24 days of hearings in 2002 that addressed Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy. The FTC and the DOJ have announced plans for hearings in 2006 that will address how best to identify business practices that constitute anticompetitive exclusionary conduct that should be condemned under Section 2 of the Sherman Antitrust Act. For the FTC to ensure that resources are effectively and efficiently expended, the agency engages in the systematic collection and analysis of information about consumer experiences in the global marketplace. For example, Consumer Sentinel, the FTC's fraud and identity theft complaint database, now houses more than 3 million complaint records that are analyzed and monitored to quantify problems, spot trends, and measure the effectiveness of proposed solutions and policy decisions. This information is shared with approximately 1,500 law enforcement partners at the federal, state, and local levels. The FTC also has extended this effort internationally through econsumer.gov, which serves as the complaint clearinghouse for the International Consumer Protection Enforcement Network. To supplement and produce context for the analysis of consumer complaint data, the FTC also conducts surveys. For example, in August 2004, the FTC released a random-sample scientific survey on consumer fraud in the United States. The survey showed that certain racial and ethnic minorities, including Hispanics, were more likely to be victims of fraud than other groups. It also showed that three of the top four categories of fraud related to credit. In response, the FTC launched its Hispanic law enforcement and outreach initiative, created a new educational Website for consumers (available in Spanish) about credit issues, and has translated over 100 consumer education publications into Spanish. The FTC pursues cases and projects that have the greatest potential for major substantive impact on the beneficiaries. The FTC accomplishes this by maintaining a prioritization system for cases and other projects, selecting those with significant legal, financial, or policy ramifications. Once the FTC selects cases or other projects, it allocates financial and human resources in a flexible manner to allow efficient redirection to any new or emerging area, as required. The results of these cases show that expended resources are, indeed, having a positive impact on the intended beneficiaries. The FTC has protected consumers and businesses from billions of dollars in lost revenue, brought actions against thousands of defendants who violated federal laws, recovered millions of dollars in restitution and fines that are provided to consumers or the U.S. Treasury (as restitution or civil monetary penalties), and produced ground breaking studies and economic analysis that provide the basis for informed public policy, not only for the FTC but for other policymakers as well.

Evidence: FTC's 2003-2008 Strategic Plan, http://www.ftc.gov/opp/gpra/spfy03fy08.pdf Health Care and Competition Law and Policy http://www.ftc.gov/ogc/healthcarehearings/index.htm Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy http://www.ftc.gov/opp/intellect/index.htm Consumer Sentinel http://www.consumer.gov/sentinel/ Identity Theft Clearing House http://www.consumer.gov/idtheft/ Fraud Survey http://www.ftc.gov/reports/consumerfraud/040805confraudrpt.pdf Hispanic Initiative (En Espanol) http://www.ftc.gov/bcp/conline/edcams/ojo/s-index.htm FTC's Website on Credit http://www.ftc.gov/bcp/conline/edcams/credit/index.html Report: Top Ten Complaint Categories http://www.consumer.gov/sentinel/pubs/Top10Fraud2005.pdf http://www.consumer.gov/sentinel/pubs/Top10Fraud2004.pdf http://www.consumer.gov/sentinel/pubs/Top10Fraud2003.pdf econsumer.gov http://www.econsumer.gov/

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The mission of the program, as stated in 1.1, is to protect consumers and maintain and promote competition in the marketplace. The FTC has a number of goals and desired outcomes in performing its mission, including stopping fraud and anticompetitive mergers or conduct through strategic law enforcement actions, and through effective consumer and business education. It is difficult, if not impossible, to measure the value, in monetary terms or otherwise, of deterrence and education, but the agency is confident, taking into account the performance measures it currently has (discussed below), that consumers benefit from accurate consumer issues and from the deterrence of unfair or deceptive acts and anticompetitive mergers or conduct. A measurable outcome of the program's mission is substantial financial savings to consumers through law enforcement actions to stop specific frauds and anticompetitive conduct or mergers. The FTC has developed performance measures directed at these law enforcement actions. Even so, the FTC strives to develop better performance measures that directly target these desired outcomes. The agency is conducting a review of its performance measures for the 2008 GPRA performance plans with the aim of developing additional outcome measures. The FTC now measures its achievement of outcomes using three long-term performance measures: (1) the five-year consumer protection performance goal to save consumers approximately $2 billion through law enforcement actions stopping consumer fraud; (2) the five-year maintaining competition performance goal to take action against anticompetitive mergers in markets with a total of at least $200 billion in annual sales; and (3) a second five-year maintaining competition goal to take law enforcement action against anticompetitive nonmerger conduct in markets with a total of at least $100 billion in annual sales. These three performance measures, in addition to several other annual performance measures, were developed to comply with the requirements of the Government Performance and Results Act (GPRA), and are included in the FTC Strategic Plan (2003-2008) and the annual FTC Performance and Accountability Report (PAR). The agency collects the data underlying these measures through case management systems, economic analyses, and Internet tracking systems and verifies their accuracy through a number of quality assurance efforts. The FTC's Office of the Inspector General reviews the systems and methodologies for collecting performance data, and senior economists from the FTC's Bureau of Economics review statistical data, as appropriate. The Commission and senior management review performance goals periodically throughout the fiscal year.

Evidence: FTC's 2003-2008 Strategic Plan, http://www.ftc.gov/opp/gpra/spfy03fy08.pdf FTC's Performance and Accountability Report for Fiscal Year 2005 http://www.ftc.gov/par

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The FTC has set both baselines and targets for its long-term outcome goals. The baseline for each measure is FY 2003, with quantified targets for FY 2008, the latest year under FTC's current strategic plan. As noted in question 2.1, the five-year targets are to save consumers $2 billion by FY 2008 through law enforcement actions stopping consumer fraud, to bring successful merger actions in markets with a volume of commerce of $200 billion, and to bring successful nonmerger actions in markets with a volume of commerce of $100 billion. These targets are held constant from the baseline, but, due to internal and external circumstances, still remain ambitious. For example, the consumer savings measure is affected by the speed with which the FTC can stop a fraudulent scheme. Obviously consumers benefit greatly when the FTC stops a fraudulent scheme quickly, and this also decreases the amount of loss and thus the results of this measure. In the competition area, meeting the targets depends on the amount of merger activity. Economic activity generally and the number of HSR merger filings increased during FY 2004 and 2005. In FY 2005, the FTC experienced an increase of more than 25 percent in the number of mergers requiring investigation. The total dollar value of merger transactions reported under HSR also increased substantially from $630 billion in FY 2004 to $1.1 trillion in FY 2005. In addition, the FTC has seen the character of some of its investigations and cases change. For example, more cases involve high-technology sectors of the economy, such as those that produce computer hardware and pharmaceutical products, or include intellectual property concerns, raising difficult questions about how to reconcile two bodies of law that both aim to promote innovation. These cases tend to be more time-consuming and complex than antitrust cases in low technology areas, and they often break new legal ground and set new precedents. The consumer protection staff face similar challenges from some undesirable outgrowths of new technologies, such as spam, spyware, and phishing, and as well as from ever-increasing levels of internationalization.

Evidence: FY 2007 Congressional Budget Justification, http://www.ftc.gov/ftc/oed/fmo/budgetsummary07.pdf FTC's 2003-2008 Strategic Plan, http://www.ftc.gov/opp/gpra/spfy03fy08.pdf

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The strategic goals of the program, as stated in 1.1, are to protect consumers and maintain competition. The desired outcomes of these goals are to identify illegal practices that cause the greatest consumer injury, stop illegal practices through law enforcement, and prevent consumer injury through education. The FTC can measure its achievement of the desired outcomes using its long-term performance goals and annual targets for these goals -- the dollar savings to consumers by stopping fraud and the volume of commerce affected by successful merger and nonmerger enforcement actions. These long-term performance goals are the same goals discussed under question 2.1, but results are reported annually. By tracking the achievement of long-term goals on an annual basis, the FTC can clearly measure its progress toward its long-term goals. The FTC is developing efficiency measures for the consumer protection and maintaining competition strategic goals for the 2008 GPRA performance plans as discussed under question 3.4.

Evidence: FTC's Performance and Accountability Report for Fiscal Year 2005 http://www.ftc.gov/par

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The FTC has baselines and continues to aim for ambitious targets for its annual goals. The baseline for each measure that is still active is included in its 2003-2008 Strategic Plan in FY 2003, with quantified targets for each fiscal year through FY 2008. Because some measures have been added or deleted since 2003, baselines for new measures are included in the first annual performance plan in which they were added. Based on a high level of achievement in the early years, the FTC has raised the targets for some of its initial annual measures. And based on experience with some other measures, the FTC dropped them for not effectively measuring performance and substituted new targets. The goal of developing new measures is to improve the FTC's performance measurement. Again, it is difficult to measure all the outcomes of law enforcement actions and more difficult yet to measure the positive outcomes of law violation deterrence and educational campaigns. Even so, the FTC has worked continuously to develop more effective measures. In accordance with the discussion of targets under question 2.2, the annual goal targets are held constant from the baseline, but, due to internal and external circumstances, are still ambitious. As noted above, one major reason for this is the increasing size, complexity, and duration of FTC cases, especially merger cases. Many of these cases require numerous FTC lawyers and other professionals to staff them, involve many products and markets requiring competitive analysis, and may last months before achieving a successful resolution. This makes it challenging to maintain the same level of success in every single year. This trend is not expected to level off or reverse itself in the foreseeable future. In addition, the character of some of the FTC's investigations and cases has changed. For example, more cases involve high-technology sectors of the economy, such as those that produce computer hardware and pharmaceutical products, or invoke intellectual property concerns, raising difficult questions about how to reconcile competition and patent law, which both aim to promote innovation for the benefit of consumers. These cases tend to be more time consuming and complex than cases in more traditional industries, and they often break new legal ground and set new precedents. The consumer protection staff face similar challenges stemming from circumstances such as advances in technology and ever-increasing levels of internationalization.

Evidence: FY 2007 Congressional Budget Justification, http://www.ftc.gov/ftc/oed/fmo/budgetsummary07.pdf FTC's 2003-2008 Strategic Plan, http://www.ftc.gov/opp/gpra/spfy03fy08.pdf FTC and DOJ Joint Commentary on Horizontal Merger Guidelines http://www.ftc.gov/opa/2006/03/mergercom.htm

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The FTC effectively partners with a broad variety of federal, state, local, private sector, and international partners. On competition policy matters, the FTC and DOJ's Antitrust Division work together on an ongoing basis. The two agencies together provide consistent guidance to businesses and the bar, releasing for example, a joint Commentary on the Horizontal Merger Guidelines (HMG) in March 2006. Earlier cooperative efforts include Antitrust Guidelines for Collaborations Among Competitors (2000), Statements of Antitrust Enforcement Policy in Health Care (1996), and revisions to the HMG (1997). They also confer on a regular basis, in a process referred to as "clearance," to ensure that only one of the agencies investigates a specific merger or conduct matter to avoid any duplication of effort. The FTC also works with other federal agencies, providing competition advice and guidance, as requested, or collaborating on mutual enforcement matters (e.g., working with the FCC on a cable merger). The FTC partners with state antitrust enforcement agencies in prosecuting some competition cases. Finally, the FTC, a member of the International Competition Network and party to many bilateral and multilateral agreements, is a leader in the international community of competition enforcement agencies, working to promote convergence and best practices in the development of competition law and policy. On consumer protection matters, the FTC has collaborated with a number of federal, state, local, and international law enforcement agencies in enforcement sweeps to address serious fraud. These sweeps focus on a particular fraud or violation in a specified location, on specified dates, and have resulted in hundreds of FTC and other agency law enforcement actions since 1995. Because the FTC only has civil law enforcement jurisdiction, one recent key dimension of this effort has been to engage criminal law enforcement agencies in prosecuting serious fraud as a crime. Through its Criminal Liaison Unit, the FTC has provided practical assistance to criminal law enforcers in developing criminal prosecutions. The FTC also coordinates ID theft law enforcement training for state and local law enforcers. To date, the FTC, in cooperation with its partners, has conducted 20 training seminars attended by more than 2,880 officers from more than 1,000 agencies. Furthermore, the agency continues to work cooperatively with the Food and Drug Administration in investigating false and deceptive claims for dietary supplements, is working with the Department of Health and Human Services and the private sector to address concerns about food marketing and childhood obesity, and has worked closely with the federal bank regulators to develop rules and studies under the Fair and Accurate Credit Transactions Act. In addition, since 1999, the FTC and the U.S. Postal Inspection Service regularly have held joint campaigns to provide educational materials to consumers to help protect them from fraud. Finally, Consumer Sentinel, the FTC's fraud and identity theft complaint database, provides about 1,500 law enforcement agencies across the globe with immediate access to more than 3 million searchable complaints, allowing agencies to coordinate investigations and efficiently pursue leads and halt unlawful practices.

Evidence: FTC's Performance and Accountability Report for Fiscal Year 2005 http://www.ftc.gov/par FTC's 2003-2008 Strategic Plan, http://www.ftc.gov/opp/gpra/spfy03fy08.pdf Consumer Sentinel http://www.consumer.gov/sentinel/ Workshop with HHS http://www.ftc.gov/bcp/workshops/foodmarketingtokids/index.htm Sample Law Enforcement Sweeps (Internet Fraud, Spam, Business Opportunities) http://www.ftc.gov/opa/2003/05/swnetforce.htm http://www.ftc.gov/opa/2002/04/spam.htm http://www.ftc.gov/opa/2005/02/bizoppflop.htm http://www.ftc.gov/opa/2005/07/alrsweep.htm

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: Many independent entities have reviewed various aspects of the agency's work. The FTC has received nine consecutive unqualified opinions on its financial statements - the highest audit opinion available. These audits have included tests of internal control and compliance with laws and regulations. In his 2005 audit opinion letter, the Inspector General identified no management deficiencies at the FTC. The IG conducts other performance and compliance audits on a regular basis. Recent examples include audits of FTC Redress Administration (2006) and the Do Not Call Registry Scrubbing Process (2005). In addition to audits, the FTC's Inspector General conducts reviews, such as Review of FTC Implementation of GPRA (2006); FTC Implementation of the Federal Information Management Security Act for Fiscal Year 2005; and Review of FTC Credit and Travel Card Active Account Lists (2005). The Government Accountability Office (GAO) also conducts evaluations of FTC rules and program activities, including several significant reports, such as Telemarketing: Implementation of the National Do-Not-Call Registry; Federal Trade Commission: Study Needed to Assess the Effects of Recent Divestitures on Competition in Retail Markets; and Federal Trade Commission: Enforcement of the Franchise Rule. Web links to these and 14 other sample evaluations are listed in the evidence section. The FTC's 2006-2011 Strategic Plan will include evaluations for each strategic goal by objective. Many of these evaluations will be independently conducted by the agency's non-program offices, such as the FTC's Bureau of Economics, Office of Policy Planning, or the Inspector General, as appropriate. Several of the evaluations involve consumer surveys of FTC activities. The FTC also will look to evaluations of its programs and initiatives by outside groups, such as GAO, for additional independent views of its activities. In addition, the FTC will send its preliminary Strategic Plan for 2006-2011 to agency stakeholders, who will have the opportunity to evaluate and comment on the FTC's plans and performance measures for the next five years. The Antitrust Modernization Commission (AMC), an independent federal government entity established in 2004 by federal statute, is currently engaged in a three-year long review of the antitrust laws. A major emphasis in this review is a critical assessment of the effectiveness of the FTC's competition program - the AMC will examine the FTC's rules, procedures, and practices. The AMC has held a series of hearings on specific topics to collect the testimony of antitrust experts from both the government and private bar and has solicited public comments. At the conclusion of the review, the AMC must submit a report to Congress and the President, based on all of the evidence and testimony gathered, which will provide an evaluation of the FTC's effectiveness in maintaining and promoting competition. Other examples of independent evaluations of various FTC programs include the American Customer Satisfaction Index, which annually ranks federal government call center services based upon the results of consumer satisfaction surveys gathered during the year. In 2006, the FTC's call center services on the FTC Help and identity theft lines were ranked #1 among all federal call centers providing similar services. The FTC's National Do Not Call Registry also has received high marks for its effectiveness. According to a Harris Interactive poll, 76 percent of all U.S. adults say that they have signed up for the Registry, and 91 percent of those registered report they have received no or fewer telemarketing calls. The FTC Do Not Call team won the prestigious Service to America Medal, a national award recognizing outstanding accomplishments of public servants. Many of the FTC's consumer education campaigns have won awards from preeminent national organizations. The FTC considers this recognition as independent evaluations of its effectiveness.

Evidence: FTC OIG Audits http://www.ftc.gov/oig/oigaudit.htm FTC OIG Review of FTC Implementation of GPRA http://www.ftc.gov/oig/reports/ar0670.pdf OIG 2005 General Audit Opinion Letter, 2005 FTC PAR, Section III, pg. 66 http://www.ftc.gov/opp/gpra/2005par.pdf Antitrust Modernization Commission http://www.amc.gov/about_commission.htm http://www.amc.gov/pdf/statute/amc_act.pdf http://www.amc.gov/pdf/meetings/list_of_study_groups_rev.pdf "The FTC in 2006: Committed to Consumers and Competition," FTC Report, April 2006 (cites call center rank) - http://www.ftc.gov/os/2006/03/ChairmanReportFinal2006.pdf and hard copy provided FTC Press Release: Compliance with Do Not Call Registry Exceptional (Harris Poll) http://www.ftc.gov/opa/2004/02/dncstats0204.htm Service to America Medal http://www.ourpublicservice.org/staff_name3761/staff_name_show.htm?doc_id=228772 and http://www.govexec.com/features/1004sam/1004samS8.htm and http://www.ftc.gov/opa/2004/09/dncamericanmedal.htm GAO evaluations of FTC Programs from 2001-2006 Report on Major Rule - Privacy of Consumer Information June 2000 http://www.gao.gov/decisions/majrule/og00040.pdf Federal Trade Commission: Definitions and Implementation Under the CAN-SPAM Act, GAO-05-279R, January 28, 2005 http://www.gao.gov/decisions/majrule/d05279r.htm Comparison of Federal Agency Practices With FTC's Fair Information Principles, September 11, 2000 http://www.gao.gov/new.items/ai00296r.pdf Identity Theft: Some Outreach Efforts to Promote Awareness of New Consumer Rights are Underway (GAO-05-710 August 2005) http://www.gao.gov/new.items/d03971.pdf Credit Reporting Literacy: Consumers Understood the Basics but Could Benefit from Targeted Educational Efforts http://www.gao.gov/new.items/d05223.pdf Telemarketing: Implementation of the National Do-Not-Call Registry (GAO-05-113 January 2003) http://www.gao.gov/new.items/d05113.pdf Energy Markets: Effect of Mergers and Market Concentration in the U.S. Petroleum Industry (GAO-04-96 May 2004) http://www.gao.gov/new.items/d05113.pdf Predatory Lending: Federal and State Agencies Face Challenges in Regulating Predatory Lending (GAO-04-280 Jan. 2004) http://www.gao.gov/new.items/d04280.pdf Federal trade Commission: Study Needed to Assess the Effects of Recent Divestitures on Competition in Retail Markets (GAO- 02-793-September 2002) http://www.gao.gov/new.items/d02793.pdf Dietary Supplements for Weight Loss: Limited Federal Oversight has Focused More on Markets Than on Safety (GAO-02-985T July 2002) http://www.gao.gov/new.items/d02985T.pdf Identity Theft: Greater Awareness and Use of Existing data are Needed (GAO-02-766 June 2002) http://www.gao.gov/new.items/d02766.pdf Identity Theft: Prevalence and Cost Appear to be Growing (GAO-02-363 March 2002) http://www.gao.gov/new.items/d02363.pdf Identity Theft: Available Data Indicate Increase in Prevalence and Cost (GAO-02-424t February 2002) http://www.gao.gov/new.items/d02424t.pdf Health Products for Seniors: Potential Harm from Anti-Aging Products (GAO 01-1139T September 2001) http://www.gao.gov/new.items/d011139t.pdf Health Products for Seniors: "Anti-Aging" Products Pose Potential for Physical and Economic Harm (GAO-01-1129 September 2001) http://www.gao.gov/new.items/d011129.pdf Federal Trade Commission: Enforcement of the Franchise Rule (GAO-01-776 July 2001) http://www.gao.gov/new.items/d01776.pdf Financial Privacy: Too Soon to Assess Financial Privacy Provisions in the Gramm-Leach-Bliley Act of 1999 (GAO-01-617 May 2001) http://www.gao.gov/new.items/d01617.pdf

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The FTC's budget requests explicitly tie resources to the accomplishment of its performance goals. This is done through a variety of mechanisms. The first is to align resources (both in the base and requested enhancements) with the agency's strategic goals, making it obvious what overarching purpose is supported by which level of funding. The budget requests also present resource needs in a complete and transparent manner. Full-time equivalent (FTE) and requested dollars are presented for the consumer protection and maintaining competition strategic goals. In addition, the FTC has targeted funds to implement its five-year financial management strategic plan. The plan calls for selection of a core financial management system (FMS), which will include budget, finance, acquisition, and performance measurement, and a Center of Excellence. The new FMS will provide the FTC with its first opportunity to integrate budget and performance measurement information in one core system. The FTC recently has completed diagraming its "to-be" processes, and currently is developing its requirements for the new system, with a particular emphasis on integrating budget and performance measurement.

Evidence: FY 2007 Congressional Budget Justification, http://www.ftc.gov/ftc/oed/fmo/budgetsummary07.pdf FTC's Five-Year Financial Management Strategic Plan - hard copy to be provided

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: Yes, the FTC is taking all steps to improve strategic planning, although no deficiencies - management or strategic planning - have been identified. In 2006, FTC management worked closely with the Office of the Inspector General on a review of the FTC's compliance with the Government Performance and Results Act (GPRA). The few recommendations of the review are not considered management deficiencies and are being addressed in the current strategic plan update process. Since 1997, the FTC has been deploying the GPRA strategic planning process and undergoing constant improvement to reduce the likelihood of a deficiency occurring in the future. The FTC also is developing a plan to address more effectively the need for an independent evaluation of the agency on a regular basis to identify opportunities for improvement. The agency is looking at requesting funds for such an evaluation through the FY 2008 budget process. In addition, the FTC undergoes an annual independent financial audit, which includes tests of internal control and compliance with laws and regulations. The FTC is undergoing the required three-year update of its strategic plan for fiscal years 2006-2011. The FTC's Chairman approved formation of an Executive Committee to oversee the process, co-chaired by the Executive Director and the Director of the Office of Policy Planning. Each bureau also goes through an annual strategic planning exercise in order to update either individual strategic plans or the Strategies, Issues, and Outcomes sections of congressional budget submissions. The current strategic planning process includes a rigorous review of performance measures, focusing on developing outcome and efficiency measures.

Evidence: OIG Review of FTC Implementation of the Government Performance and Results Act (AR-06-070) http://www.ftc.gov/oig/reports/ar0670.pdf OIG 2005 General Audit Opinion Letter, 2005 FTC PAR, Section III, pg. 66 http://www.ftc.gov/opp/gpra/2005par.pdf FTC 2003-2008 Strategic Plan http://www.ftc.gov/opp/gpra/spfy03fy08.pdf FTC Preliminary 2006-2011 Strategic Plan to be sent to OMB for comment in July 2006 FTC's FY 2008 Performance Plans and Budget Request (not yet available)

Are all regulations issued by the program/agency necessary to meet the stated goals of the program, and do all regulations clearly indicate how the rules contribute to achievement of the goals?

Explanation: The FTC is primarily a law enforcement agency. A small portion of the agency's annual resources, however, are dedicated to rulemaking, and those rules most often are Congressionally mandated. In each case, the agency seeks to promulgate workable, narrowly targeted, market-oriented rules. The FTC's rulemaking process includes obtaining input from interested parties in order to achieve this goal. The FTC initially may publish in the Federal Register an Advance Notice of Proposed Rulemaking that requests comments on the relevant legal and factual issues. After reviewing the comments, the FTC publishes a Notice of Proposed Rulemaking seeking comment on the proposed rule itself. Various groups submit comments, including industry associations, businesses, consumer groups, individuals, and federal and state agencies. In some instances, the FTC will convene a public workshop to discuss issues raised by the comments. The FTC issues a final rule after taking into consideration all of the views provided during the rulemaking process. In addition, the FTC's advocacy program often comments on other rulemaking proceedings, state laws, and rules to promote market oriented approaches. Examples of recent rulemakings include: Pursuant to the CAN-SPAM Act, which was signed into law on December 16, 2003, the FTC promulgated the Label for E-mail Messages Containing Sexually Oriented Material Rule. This Rule requires, among other things that spam that contains sexually oriented material must include the warning "SEXUALLY-EXPLICIT: " in the subject line. The purpose of the Rule is to inform recipients that a spam message contains sexually oriented material and to make it easier to filter out messages they do not wish to receive. Pursuant to the Gramm-Leach-Bliley Act, the FTC promulgated the Safeguards Rule, which requires financial institutions under the FTC's jurisdiction to develop and implement appropriate physical, technical, and procedural safeguards to protect customer information. The Safeguards Rule is an important enforcement and guidance tool to ensure greater security for consumers' sensitive financial information. Pursuant to the Telemarketing and Consumer Fraud and Abuse Prevention Act, the FTC issued the amended Telemarketing Sales Rule (TSR) on January 29, 2003. The Amended TSR established the FTC's National Do Not Call Registry, which protects consumer privacy by prohibiting commercial telemarketing calls to consumers who register their telephone numbers. Since 2003, more than 120 million telephone numbers have been registered with the National Do Not Call Registry. Pursuant to the Fair and Accurate Credit Transactions Act of 2003, the FTC issued the "Free Annual File Disclosures" Rule, which requires the three national credit bureaus to establish a central Website, phone number, and mail address for consumers to order a free copy of their credit report once every 12 months. Millions of American consumers have availed themselves of this new right. The FTC is mindful that rules and guides can outlive their usefulness. In 1992, the FTC launched a concerted effort to review all of its rules and guides at least once every ten years. It announced the initial ten-year schedule the following year. Each review has considered the costs and benefits of the rule or guide to help the Commission determine whether to retain, revise, or repeal it. Pursuant to this regulatory review program, the Commission has repealed more than half of the non-statutory rules and guides in effect in 1992. In December 2005, the FTC announced a revised regulatory review calendar for the next ten years.

Evidence: Notice of Revised Regulatory Review Schedule http://www.ftc.gov/os/2004/01/040113frnregulatoryreform.pdf CAN-SPAM Act, FTC Rule http://www.ftc.gov/opa/2004/04/adultlabel.htm Gramm-Leach-Bliley Act - Safeguards Rule http://www.ftc.gov/opa/2003/05/safeguards.htm Amended Telemarketing Sales Rule (TSR) - National Do Not Call Registry http://www.ftc.gov/opa/2003/06/donotcall.htm Fair and Accurate Credit Transactions Act (FACTA) - Free Credit Report http://www.ftc.gov/opa/2005/08/freecredreports.htm

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The FTC collects and uses performance information on a quarterly basis. At the first level, each bureau monitors performance information generated by its electronic systems and review processes. At a higher level, the FTC collects information on its established performance goals and reports it to its Financial Management Office (FMO). Each quarter, the bureau directors and the FMO review the budget and performance information provided, assess the program's progress toward its goals, and determine any necessary actions to improve performance or realign resources. Semiannually, the five-member Commission reviews performance information and votes on the preliminary results as part of the OMB GPRA budget request, and on the final fiscal year results for inclusion in the annual Performance and Accountability Report. Agency case management systems provide detailed workload statistics that are used by FTC managers to allocate and reallocate resources as needed. One example is the way the competition program captures the number of HSR premerger second requests for information and draws other information from a case management system to provide division leaders with an accurate picture of work hours, and case status. Managers then use this information to make decisions regarding human and financial resources. The FTC regularly collects statistics on law enforcement sweeps conducted with its federal, state, local, and international law enforcement partners program partners to bring cases on a particular type of law violation, such as fraudulent business opportunities, Internet fraud, credit repair schemes. Since 1995, the FTC has conducted 87 sweeps, with 831 partners, resulting in 2499 cases - 1918 of those cases were brought by the FTC's partners. These sweeps have proven to be an excellent way for the FTC to work with its partners to leverage its resources, without duplicating effort. In addition, the FTC's designated Criminal Liaison Unit facilitates prosecution of consumer fraud by coordinating with criminal law enforcement authorities. From April 2005 through March 2006, the FTC assisted these authorities in criminal prosecutions of 117 FTC defendants or their associates. Finally, the FTC and DOJ cooperate in preparing annual HSR reports, as required by statute. The annual HSR report to Congress includes statistics from both the FTC and DOJ's Antitrust Division on the HSR program, including number of transactions reported to the two agencies, the number of second requests issued, and the number of merger enforcement actions taken by the two agencies.

Evidence: FTC's Performance and Accountability Report for Fiscal Year 2005, http://www.ftc.gov/par FY 2007 Congressional Budget Justification, http://www.ftc.gov/ftc/oed/fmo/budgetsummary07.pdf Press Release: Project Biz Opp Flop http://www.ftc.gov/opa/2005/02/bizoppflop.htm Press Release: International Internet Sweep Day http://www.ftc.gov/opa/1997/11/intlsurf.htm Press Release: Project Credit Despair http://www.ftc.gov/opa/2006/02/badcreditbgone.htm FTC Annual HSR Report to Congress http://www.ftc.gov/bc/hsr/hsrinfopub.htm

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: After interim SES performance system regulations were published in July 2004, the agency sought and received provisional certification from OMB and OPM for it performance-based SES pay and performance management system. The FTC sought and received provisional certification for fiscal year 2005 as well. As agency managers are becoming more experienced with the new SES framework, they are continuing to revise the FTC's pay and performance management program to better align executive accomplishments with agency mission goals, to address accountability, and to connect compensation more directly with results. For 2006, agency SES performance plans directly link GPRA goals to specific executive work priorities, and focus more heavily on results achieved in relation to those priorities. The agency anticipates that performance plans, currently under development for the performance cycle that begins October 1, 2006, will reflect a cascading of accountability for accomplishment of mission-centric objectives from the Senior Executive Service to the GS-15 and GS-14 level supervisors that report to SES managers, and will enhance the agency's ability to make meaningful distinctions in appraising performance and rewarding accomplishment. The FTC has a small number of contractors that primarily provide information technology services. FTC staff members must take a required in-house training program on administration responsibilities, performance evaluation, internal controls, and fiscal management prior to the FTC's Acquisition Office assigning them as a contract officer's technical assistant. The FTC's Inspector General reviews or audits agency contract management, when necessary.

Evidence: Fiscal Year 2007 Congressional Justification, President's Management Agenda http://www.ftc.gov/ftc/oed/fmo/budgetsummary07.pdf Human Resources Management Office Documentation - hard copy to be provided

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: The FTC plans and tracks obligations through the agency's annual Operating Budget (OB). The initial OB for each fiscal year displays actual obligations from the prior fiscal year and estimates obligations for the current fiscal year by mission, by organization, and by object class. The FTC Chairman and Commissioners review the OB after enactment of the current appropriation, and the agency revises the OB immediately following any major change of funding levels, including supplemental appropriations, reprogrammings, transfers, or rescissions. Staff continually review the OB status to ensure that funds are used for their intended purposes and in accordance with appropriations law. Staff brief senior agency managers, including the Chief Financial Officer and the Executive Director, periodically on the OB status and provide updates comparing projected and actual obligations, as well as projected and actual performance and workload indicators, to ensure that funds are being spent timely and in accordance with the established plans. If there are significant deviations from the initial estimates, staff perform additional reviews to discuss the source of the deviation and devise possible routes of action to address the problem. The Commission officially reviews the status of the OB at a meeting held in late July or August. Additional proof of the timely and appropriate obligation of funds includes a record of extremely low unobligated balance rate (less than 0.75% average from FYs 2001-2006) and nine consecutive clean annual audits showing that obligations are accurate and proper.

Evidence: FTC's Performance and Accountability Report for Fiscal Year 2005 http://www.ftc.gov/par FY 2007 Congressional Budget Justification, http://www.ftc.gov/ftc/oed/fmo/budgetsummary07.pdf FY 2006 Operating Budget/FY 2005 Year-End Review - hard copy to be provided OIG Audit Reports http://www.ftc.gov/oig/oigaudit.htm

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The FTC is developing measures to track progress toward greater efficiency for its 2006-2011 Strategic Plan. In recognition of the varied types of work performed, each mission is developing its own measures. Each measure will capture the concept of efficiency in a different way. In general, the FTC's acquisition office ensures that competitive performance-based contracts are used for commercial and central support functions, when appropriate. For example, the FTC's recently awarded Help Desk contract is performance-based. The agency reviews all new requirements for services for consideration as performance-based service contracts. In addition, the FTC has made significant IT investments that enable the agency to work more productively and, consequently, accomplish more. IT initiatives include: (1) implementing new document and case management systems to make files paperless, searchable, and easier to share; (2) improving information sharing by standardizing IT systems across the agency; and (3) providing BlackBerries to managers to allow them to continue working when outside of the office.

Evidence: FY 2007 Congressional Budget Justification, President's Management Agenda http://www.ftc.gov/ftc/oed/fmo/budgetsummary07.pdf

Does the program collaborate and coordinate effectively with related programs?

Explanation: The FTC collaborates and coordinates with other programs in a range of contexts. The competition mission's closest partner is DOJ's Antitrust Division, which shares jurisdiction with the FTC in enforcing most of the nation's competition laws. The two agencies (1) collaborate in issuing substantive guidance on interpretation or application of the competition laws, (2) cooperate to ensure that there is no duplication of effort on individual investigations or cases through an ongoing clearance process, and (3) collaborate in the administration of the HSR Premerger Notification Program with the FTC administering the program on behalf of both agencies. The FTC engages in collaborative efforts with other partners, and maintains close contact with a broad range of other agencies to discuss competition and consumer protection issues, strategies, and challenges. Collaboration is sometimes accomplished through formal MOUs and sometimes through less structured meetings, workshops, and consultations on issue-specific matters. The FTC has collaborated with a host of U.S.-based partners in recent years on issues such as the intersection of patent and competition law, competition in the real estate industry, and health care and competition law. As required, the FTC advises the Administration on competition and consumer protection issues. The FTC also works with foreign competition agencies in international organizations. On the consumer protection side, the FTC also collaborates with partners on a range of issues. Over the past several years, the FTC has convened workshops on groundbreaking issues such as spam, spyware, Radio Frequency ID, peer-to-peer file sharing, information security, and mortgage lending practices, that bring together a broad array of interested public and private sector participants to debate public policy issues and develop a basis for rational market-based solutions. In November 2006, the FTC will host global hearings on technology, bringing together experts from the business, government, and technology sectors, as well as consumer advocates, academicians, and law enforcement officials to explore the ways in which convergence and the globalization of commerce impact consumer protection. Finally, in this era of increased globalization, the FTC works to promote cooperation, collaboration, and convergence toward best practices with competition and consumer protection agencies around the world. The FTC has built a strong network of cooperative relationships with its counterparts abroad, and plays a lead role in key multilateral fora.

Evidence: FTC Workshops Website http://www.ftc.gov/ftc/workshops.htm Agreement Between the Federal Trade Commission of the United States of America and the Australian Competition & Consumer Commission On the Mutual Enforcement Assistance in Consumer Protection Matters (Jul. 20, 1999), available at http://www.ftc.gov/opa/2000/07/usaccc.htm; Agreement Between the Government of the United States of America and the Government of Canada Regarding the Application of their Competition and Deceptive Marketing Practices Laws, Trade Reg. Rep. (1995), available at http://www.usdoj.gov/atr/public/international/docs/uscan721.htm; Memorandum Of Understanding On Mutual Enforcement Assistance In Consumer Protection Matters Between The United States Federal Trade Commission And Ireland's Office of the Director of Consumer Affairs (Oct. 9, 2003), available at http://www.ftc.gov/opa/2003/10/irelandcb.htm; Memorandum of Understanding On Mutual Assistance In Consumer Protection Matters Between the Federal Trade Commission of the United States of America and the Procuraduria Federal Del Consumidor (Office of the Federal Attorney for Consumer Protection) of the United Mexican States (Jan. 27, 2005), available at http://www.ftc.gov/opa/2005/01/memunderstanding.htm Memorandum Of Understanding On Mutual Enforcement Assistance In Consumer Protection Matters Between The Federal Trade Commission Of The United States of America And Her Majesty's Secretary of State for Trade And Industry And The Director General Of Fair Trading In The United Kingdom (Oct. 31, 2000), available at http://www.ftc.gov/opa/2000/10/ukimsn.htm; Memorandum of Understanding on Mutual Enforcement Assistance in Commercial Email Matters among the Following Agencies of the United States, the United Kingdom, and Australia: the United States Federal Trade Commission, the United Kingdom's Office of Fair Trading, the United Kingdom's Information Commissioner, Her Majesty's Secretary of State for Trade And Industry in the United Kingdom, the Australian Competition and Consumer Commission, and the Australian Communications Authority (Jul. 2, 2004), available at http://www.ftc.gov/opa/2004/07/mou.htm; Memorandum of Understanding On Mutual Enforcement Assistance In Commercial Email Matters Between the Federal Trade Commission of the United States of America and the Agencia Espanola de Proteccion de Datos (Feb. 24, 2005), available at http://www.ftc.gov/opa/2005/02/spainspam.htm.

Does the program use strong financial management practices?

Explanation: An important goal of the FTC is to implement good financial management practices to ensure that its resources are well-managed and wisely used. The FY 2005 independent financial audit resulted in the FTC's ninth consecutive unqualified opinion, the highest audit opinion available. The audit of the FTC's financial statements, which includes tests of internal control and compliance with laws and regulations, is conducted in accordance with Government Auditing Standards and the Office of Management and Budget Bulletin No. 01-02. In addition, the agency is making progress to advance its goal to migrate to a new core financial management system that will facilitate the integration of financial and performance systems.

Evidence: FTC's Performance and Accountability Report for Fiscal Year 2005 http://www.ftc.gov/par FMO Five-Year Strategic Plan - hard copy to be provided OIG Audit Reports http://www.ftc.gov/oig/oigaudit.htm

Has the program taken meaningful steps to address its management deficiencies?

Explanation: In his 2005 audit opinion letter, the Inspector General identified no management deficiencies at the FTC. The FTC's Office of the Inspector General conducts audits of FTC activities on a regular basis. The FTC Chairman sets agency management policy, and the Commissioners provide guidance and advice, as appropriate. The agency works diligently to manage its human, financial, and other resources. Each bureau and division hold regular meetings for senior managers to discuss issues and strategies in basic management areas such as budget, IT, and human resources. These groups task any identified problems to an individual or group for follow-up action, and then monitor progress until the issue is resolved. The bureaus also provide training to new managers and a mentor program for junior attorneys. The FTC's Office of the Executive Director provides additional guidance about agency-wide management initiatives. In the management area, the FTC has received nine consecutive unqualified opinions, the highest audit opinion available, which included tests of internal control and compliance with laws and regulations.

Evidence: OIG 2005 General Audit and Management Letter http://www.ftc.gov/oig/reports/ar05069.pdf http://www.ftc.gov/oig/reports/ar05069a.pdf OIG Audits http://www.ftc.gov/oig/oigaudit.htm

Did the program seek and take into account the views of all affected parties (e.g., consumers; large and small businesses; State, local and tribal governments; beneficiaries; and the general public) when developing significant regulations?

Explanation: The FTC seeks and takes into account the view of all affected parties in developing its regulations. It solicits and considers such views at all stages of the regulatory cycle (i.e., before, during, and after the issuance and implementation of a rule), and it employs a variety of formal and informal methods to obtain and consider the views of affected parties in developing the necessary factual and legal foundations for its administrative rulemaking records and evaluating the efficacy of its regulatory efforts. The most important and formal method that the FTC uses to obtain and take into account the views of affected parties is its notices of proposed rulemaking (NPRMs) routinely published in the Federal Register, including, where required or appropriate, its advanced notices of proposed rulemaking (ANPRMs). These notices are typically required or authorized by the Administrative Procedure Act, the FTC Act, or other special statutes that provide the legal basis for the regulation. The FTC also solicits and considers the views of affected parties when publishing related regulatory analyses when required under the Paperwork Reduction Act, the Regulatory Flexibility Act, the FTC Act, or other applicable authorities. These FTC rulemaking notices invite the views of any and all affected parties, whether they are consumers, large and small businesses, state, local, and tribal governments, beneficiaries, the general public, or some other potentially affected individual or entity. To encourage comments, the notices provide affected parties with convenient options for submitting their views to the agency (i.e., electronically through e-mail or regulations.gov or by postal mail). The agency uses these notices to identify and discuss the relevant legal and factual issues, including the agency's analysis of the interests of affected parties and the potential compliance obligations of the rule. In the case of an ANPRM or NPRM, this discussion and analysis helps interested parties understand how the regulation may affect them, in order to provide them with a meaningful opportunity to comment. In a final rulemaking notice, such discussion and analysis explains exactly how the FTC considered the views and interests of affected parties in issuing a final rule. These formal rulemaking notices and regulatory analyses, however, are far from the only means by which the FTC has routinely solicited and taken the views of affected parties into account. The FTC also has employed less formal but equally important and effective supplementary methods of outreach and intake, including: press releases; speeches; public comment periods, outreach efforts aimed at consumers and businesses; announcements and information on the agency's Web site, meetings, correspondence, and other communications with regulated entities and their counsel to determine the impact or efficacy of an existing rule, its compliance burdens, and how a rule might be amended in order to fulfill its intended purpose better; consumer complaints collected through the FTC's Web site and its Consumer Response Center to learn what acts or practices may warrant rulemaking or amendments to existing rules; public conferences and workshops, academic and industry experts studies; consumer surveys, and meetings with other federal, state, local, and international enforcement and regulatory officials, as well as with legislative committees and individual Members of Congress or other legislative bodies.

Evidence: FTC Operating Manual, Chapter. 7 http://www.ftc.gov/foia/ch07rulemaking.pdf 16 C.F.R. Part 1, Sections 1 1 through 199 http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=295fffc6d5feeb20f4af7439e0074f57&rgn=div5&view=text&node=16:1.0.1.1.2&idno=16 Administrative Procedure Act http://usgovinfo.about.com/library/bills/blapa.htm FTC Act § 22 http://www.fda.gov/opacom/laws/ftca.htm Paperwork Reduction Act http://www.cio.gov/archive/paperwork_reduction_act_1995.html Regulatory Flexibility Act http://www.sba.gov/advo/laws/regflex.html CP websites of press releases http://www.ftc.gov/ftc/consumer.htm

Did the program prepare adequate regulatory impact analyses if required by Executive Order 12866, regulatory flexibility analyses if required by the Regulatory Flexibility Act and SBREFA, and cost-benefit analyses if required under the Unfunded Mandates Reform Act; and did those analyses comply with OMB guidelines?

Explanation: The FTC has prepared all necessary regulatory impact analyses in compliance with any applicable OMB guidelines in matters where such analyses are required. Specifically, the FTC has included initial and final regulatory analyses required under the Regulatory Flexibility Act (Regflex Act), as amended by SBREFA and administered by the Small Business Administration, in all appropriate agency Federal Register rulemaking notices. Indeed, the FTC, as a matter of practice, has included such analyses even in certain cases where the agency has determined that the rule will not have a significant impact on a substantial number of small entities. Furthermore, under section 22 of the FTC Act, the FTC has included additional regulatory analyses required by that provision to assess the impact of trade regulation rules issued under section 18 of the FTC Act, where such rules may have a major economic impact, including an assessment of the rule's costs and benefits. Where section 22 applies, the section 22 analysis strongly overlaps with the analysis requirements of Executive Order 12866 and any additional analysis that would be required by the Unfunded Mandates Reform Act, which are not directly applicable to the FTC as an independent regulatory agency. The FTC's Rules of Practice and its internal Operating Manual document the procedures for satisfying the applicable regulatory analysis requirements, and apply to rulemakings conducted under either the agency's program for consumer protection or for maintaining competition.

Evidence: FTC Operating Manual, Chapter. 7, Rulemaking http://www.ftc.gov/foia/ch07rulemaking.pdf 16 C.F.R. Part 1, Sections 1 1 through 199 http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=295fffc6d5feeb20f4af7439e0074f57&rgn=div5&view=text&node=16:1.0.1.1.2&idno=16 Rules of Practice http://www.ftc.gov/ogc/rules.htm

Are the regulations designed to achieve program goals, to the extent practicable, by maximizing the net benefits of its regulatory activity?

Explanation: As noted in the above responses, the FTC promulgates workable, narrowly targeted, market-oriented rules designed to promote competition and protect American consumers. Throughout the rulemaking process, the agency employs formal and informal methods for ensuring that the agency has identified and considered all relevant costs, interests, and parties in order to maximize benefits for consumers and the marketplace while minimizing costs to regulated entities. Furthermore, the FTC seeks to maximize the benefits of regulatory activity by applying the experience and expertise developed through the regulatory implementation process to related areas of concern. In appropriate cases, the agency has determined that a regulatory response would not be the most cost-effective solution for a particular problem. Specific examples illustrate these points. The FTC's National Do Not Call Registry protects consumer privacy by prohibiting commercial telemarketing calls to consumers who register their telephone numbers. The Rule is narrowly tailored to prevent a specific harm to consumers by allowing individual consumers to make the personal choice to stop commercial telemarketing to their telephone number. Although the Registry is a significant success for American consumers, the FTC has opposed efforts to extend the concept of a registry to other areas of commerce where such a program would not provide maximum benefits for consumers and competition. The FTC, for example, issued the Do Not Email Registry Report on June 14, 2004, explaining that after significant fact finding, the agency had concluded that such a program likely would fail to reduce spam and might instead have the opposite effect. The FTC issued a rule pursuant to the CAN-SPAM Act requiring spammers to identify sexually explicit content in the subject line of email. The rule implements the objective of the CAN-SPAM Act to protect email recipients from unwitting exposure to unwanted sexual images in spam. The FTC crafted a narrowly tailored rule to address a significant consumer concern but carefully assessed critical issues, including First Amendment arguments advanced by various stakeholders. Unlike other laws and legislative efforts designed to protect children and other users from exposure to objectionable materials, this Rule has been implemented and aggressively enforced without facing First Amendment legal challenges and court-ordered injunctions. The Safeguards Rule requires financial institutions under the FTC's jurisdiction to develop and implement appropriate physical, technical, and procedural safeguards to protect customer information. The Rule does not require regulated entities to implement a specific set of safeguards. Rather, the Rule requires that a company's data security program be reasonable in light of the nature of its business and the sensitivity of the information it handles. The Rule acknowledges that what is "reasonable" depends on the sensitivity of the information, the potential risks to it, and the costs of avoiding those risks. This flexible approach is workable for financial institutions and any other business that maintains sensitive consumer information. Although only financial institutions are required to comply with the Safeguards Rule, the Rule's reasonableness standard serves as a model and guide for the agency's information security enforcement program under other statutes.

Evidence: CAN-SPAM Act, FTC Rule http://www.ftc.gov/opa/2004/04/adultlabel.htm Gramm-Leach-Bliley Act - Safeguards Rule http://www.ftc.gov/opa/2003/05/safeguards.htm Amended Telemarketing Sales Rule (TSR) - National Do Not Call Registry http://www.ftc.gov/opa/2003/06/donotcall.htm

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program's long-term measures are also tracked on an annual basis. As such, meeting the annual goals constitutes progress toward achieving long-term goals as well. Performance data indicate that the program is on track to achieve its long-term performance goals. For the past several years, one FTC target was to save consumers more than $400 million annually by stopping fraudulent practices in the marketplace. The FTC saved consumers an estimated $366 million in FY 2005, $349 million in FY 2004, and $606 million in 2003. Because the amount of savings varies from year to year, in its 2003-2008 Strategic Plan, the FTC also set a long-term performance goal of saving consumers at least $2 billion by FY 2008. With the results attained in the past three years totaling approximately $1.3 billion, the agency is slightly ahead of schedule toward meeting its $2 billion target. The agency also measured the volume of commerce in markets in which the FTC took enforcement action to protect competition from the effects of both unlawful conduct and mergers that were likely to be anticompetitive. In FY 2005, the FTC took merger enforcement actions that protected competition in markets with a total of $61.8 billion in annual sales (or more than 150 percent of its annual target of $40 billion). The FTC's nonmerger enforcement actions in FY 2005 protected commerce in markets with a total of $19.36 billion in annual sales (or more than 99 percent of its annual target of $20 billion). The FY 2005 results exceed or equal the annual averages needed to attain the five-year goals of $200 billion (annual average $40 billion) and $100 billion (annual average $20 billion). The results of the two volume of commerce measures illustrate why the agency expressed its targets in terms of five-year amounts. The FY 2005 increase over FY 2004 results in these measures indicates that future results should be higher and the five-year targets attainable. Several factors support this conclusion. First, merger activity is increasing but is still short of the level it is likely to reach as the economy continues its recent pattern of growth. Second, the continued trend of administrative litigation means that some of the FTC's current merger and nonmerger enforcement efforts are being devoted to ongoing matters that are not yet included in any measure. Third, the size of individual FTC cases varies widely, and a small number of large cases can have a significant impact on these measures. Finally, the agency's record over the past several years is consistent with FY 2005, and viewed comprehensively, the FTC's productivity last year was high.

Evidence: FTC's Performance and Accountability Reports http://www.ftc.gov/par FTC's 2003-2008 Strategic Plan, http://www.ftc.gov/opp/gpra/spfy03fy08.pdf

Does the program (including program partners) achieve its annual performance goals?

Explanation: As described in the FTC's annual Performance and Accountability Reports, the agency generally achieves its annual performance goals. As explained in 4.1, these annual results keep the agency on track to meet its long-term performance goals. Fluctuations from year-to-year are reflective of workload and case complexity, issues that were factors in determining the targets for FY 2004-FY2008. As discussed in Section 2, these trends are not expected to change.

Evidence: FTC's Performance and Accountability Reports http://www.ftc.gov/par Fiscal Year 2007 Congressional Justification, http://www.ftc.gov/ftc/oed/fmo/budgetsummary07.pdf;

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The FTC has been engaged in long-term, concerted efforts to work smarter and more effectively. The FTC continues to work to improve management and program performance. The agency has a solid record of assessment, realignment, innovation, and improvement. There are several efforts underway to address, among other areas, recruitment and training, diversity and opportunity, program performance and associated costs, and financial systems and associated reporting. The FTC is engaged in a systematic program to improve staff training of all types - professional, managerial, technical, and administrative. Training is a key component to working smarter and improving productivity. In FY 2005, the FTC acquired "QuickHire," an automated staffing system which will allow applicants to apply for open positions on-line. Upon implementation, human resources (HR) staff time for administrative tasks of the hiring process will be dramatically reduced. As a result, staff will be able to focus more analysis-intensive aspects of the process. The FTC streamlined clerical support, administrative, and technical functions, and replaced positions with reimbursable support service arrangements with other federal agencies. The FTC commemorated the two-year anniversary of the National Do Not Call Registry in June 2005. The Registry makes it easier for consumers to stop getting unsolicited telemarketing calls. The FTC has been a leader in the use of technology and the Internet to inform citizens of its mission without having to enlarge its workforce significantly. FTC's website provides a wide array of information about the actions and operations of the agency and direct access to consumer and business education information and publications. In the last several years, electronic distribution of education materials has surpassed print distribution. The site also permits citizens to file online complaints about consumer fraud and identity theft. The FTC's planned and ongoing procurement enhancements are designed around the Integrated Acquisition Environment (IAE), one of the Administration's e-government initiatives. Program efficiency measures are being developed for inclusion in the 2008 GPRA OMB Budget Request.

Evidence: Fiscal Year 2007 Congressional Justification, President's Management Agenda http://www.ftc.gov/ftc/oed/fmo/budgetsummary07.pdf

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: The FTC's performance is most logically and meaningfully compared to DOJ's Antitrust Division and federal, state, local, and international consumer protection law enforcement entities. Comparisons to external programs are difficult because of the general lack of evaluations of the FTC in relation to other federal agencies or state, local, or international efforts. However, some limited information is available on individual activities within the overall program. For example, the Global Competition Review regularly ranks the United States first in the world for the effectiveness of its competition policy enforcement, which is conducted through both the FTC and DOJ's Antitrust Division.

Evidence: FTC performance statistics; Global Competition Review, "Rating Enforcement," Volume 7, Issue 3, April 2004

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: The FTC's effectiveness is generally lauded by outside organizations commenting on its programs. As noted in 2.6, independent organizations have rated highly the effectiveness of the FTC's work To summarize, the American Customer Satisfaction Index ranked the FTC Help and Identity Theft toll-free phone lines #1 among all federal call centers; a Harris Interactive Poll reported that 76 percent of all U.S. adults say that they have signed up for the Registry, with 91 percent of those registered saying they have received no or fewer telemarketing calls; the FTC Do Not Call team won a Service to America Medal, and the FTC's consumer education campaigns have won awards from several national organizations. Although not an evaluation of the FTC per se, the Antitrust Modernization Commission, an independent entity established in 2004 by federal statute, is currently engaged in a three-year long review of the antitrust laws and related issues, and this review will provide a critical assessment of the effectiveness of the FTC's competition program. The AMC's review includes a general examination of the rules, procedures, and practices of the FTC. In the management area, the FTC has received nine consecutive unqualified opinions, the highest audit opinion available, which included tests of internal control and compliance with laws and regulations, In his 2005 audit opinion letter, the Inspector General identified no management deficiencies at the FTC. The FTC's Office of the Inspector General (OIG) conducts audits and reviews of other FTC activities on a regular basis.

Evidence: "The FTC in 2006: Committed to Consumers and Competition," FTC Report, April 2006 (sites call center rank) - hard copy Service to America Medal http://www.ourpublicservice.org/staff_name3761/staff_name_show.htm?doc_id=228772, http://www.govexec.com/features/1004sam/1004samS8.htm and http://www.ftc.gov/opa/2004/09/dncamericanmedal.htm OIG Audits http://www.ftc.gov/oig/oigaudit.htm OIG 2005 General Audit Opinion Letter, 2005 FTC PAR, Section III, pg. 66 http://www.ftc.gov/opp/gpra/2005par.pdf

Were programmatic goals (and benefits) achieved at the least incremental societal cost and did the program maximize net benefits?

Explanation:

Evidence: