Trade Regulations Rule Concerning the Incandescent Lamp (Light Bulb) Industry

FEDERAL TRADE COMMISSION

16 CFR Part 409

Trade Regulations Rule Concerning the Incandescent Lamp (Light

Bulb) Industry

AGENCY: Federal Trade Commission.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Federal Trade Commission (``Commission'' or ``FTC'')

announces the commencement of a rulemaking proceeding to consider

whether or not the Trade Regulation Rule Concerning the Incandescent

Lamp (Light Bulb) Industry (``Light Bulb Rule'' or ``Rule'') should be

repealed. This notice includes a description of the procedures to be

followed, an invitation to submit written comments, a list of questions

and issues upon which the Commission particularly desires comments, and

instructions for prospective witnesses and other interested persons who

desire to participate in the proceeding.

DATES: Written comments must be submitted on or before March 7, 1996.

Notifications of interest in testifying must be submitted on or

before March 7, 1996. If interested parties request the opportunity to

present testimony, the Commission will publish a notice in the Federal

Register stating the time and place when the hearings will be held and

describing the procedures that will be followed in conducting the

hearings. In addition to submitting a request to testify, interested

parties who wish to present testimony must submit, on or before March

7, 1996, a written comment or statement that describes the issues on

which the party wishes to

[[Page 4383]]

testify and the nature of the testimony to be given.

ADDRESSES: Written comments and requests to testify should be submitted

to Office of the Secretary, Federal Trade Commission, Room H-159, Sixth

Street and Pennsylvania Avenue, N.W., Washington, DC 20580, telephone

number 202-326-2506. Comments and requests to testify should be

identified as ``16 CFR Part 409--Comment--Light Bulb Rule'' and ``16

CFR Part 409--Request to Testify--Light Bulb Rule,'' respectively. If

possible, submit comments both in writing and on a personal computer

diskette in Word Perfect or other word processing format (to assist in

processing, please identify the format and version used). Written

comments should be submitted, when feasible and not burdensome, in five

copies.

FOR FURTHER INFORMATION CONTACT: Kent C. Howerton or James G. Mills,

Attorneys, Federal Trade Commission, Bureau of Consumer Protection,

Division of Enforcement, Room S-4302, 601 Pennsylvania Avenue, N.W.,

Washington, DC 20580, telephone (202) 326-3013 or (202) 326-3035,

respectively.

SUPPLEMENTARY INFORMATION:

I. Background Information

A. Purpose of this Proceeding

On April 6, 1995, the Commission published a request for comments

concerning the Light Bulb Rule as part of the Commission's regulatory

review program for all of its rules and guides.1 When the

Commission issued the lamp amendments to the Appliance Labeling Rule,

it announced that, although there were no conflicts between the two

Rules, it would decide following the amendment proceeding what further

action, if any, it should take concerning the Light Bulb Rule. The

April 6, 1995, notice solicited comments about the benefits and burdens

of the Light Bulb Rule to consumers and industry, and about whether a

need still exists for the Light Bulb Rule in light of the new labeling

requirements in the Appliance Labeling Rule.2 The Commission

received nine comments in response to the notice. The comments are

discussed in Part II.A, below.

\1\ Request for comments, 60 FR 17491. The comment period was

scheduled to end on June 6, 1995, but was extended until August 7,

1995, at the request of industry members.

\2\ Under section 18(b)(2) of the FTC Act, 15 U.S.C. 57a(b)(2),

the Commission must publish an advance notice of proposed rulemaking

(``ANPR'') prior to initiating a proceeding to promulgate, amend, or

repeal a trade regulation rule. The Commission has determined to

treat the April 6, 1995, notice as an ANPR because it contained all

the elements that section 18(b)(2) requires in an ANPR.

Specifically: (1) it contained a brief description of the area of

inquiry under consideration, the objectives which the Commission

seeks to achieve, and possible regulatory alternatives under

consideration; and (2) it invited interested parties to submit

comments, including any suggestions or alternative methods for

achieving such objectives. To comply with section 18, the Commission

subsequently submitted the notice to the Chairman of the Committee

on Commerce, Science, and Transportation, United States Senate and

the Chairman of the Subcommittee on Commerce, Trade and Hazardous

Materials, United States House of Representatives.

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Pursuant to the FTC Act, 15 U.S.C. 41-58, and the Administrative

Procedure Act, 5 U.S.C. 551-59, 701-06, by this Notice of Proposed

Rulemaking (``NPR'') the Commission initiates a proceeding to consider

whether the Light Bulb Rule should be repealed, modified, or remain in

effect as is.3 The Commission solicits public comments on these

issues. Section 18 of the FTC Act, 15 U.S.C. 57a, authorizes the

Commission to promulgate, amend, and repeal trade regulation rules that

define with specificity acts or practices that are unfair or deceptive

in or affecting commerce within the meaning of section 5(a)(1) of the

FTC Act, 15 U.S.C. 45(a)(1). If the Commission determines, based on the

data, views and arguments submitted, that the Commission should

consider additional alternatives, it will publish a supplemental notice

of proposed rulemaking and will request public comments on those

alternatives.

\3\ In accordance with section 18 of the FTC Act, 15 U.S.C. 47a,

the Commission submitted this NPR to the Chairman of the Committee

on Commerce, Science, and Transportation, United States Senate and

the Chairman of the Subcommittee on Commerce, Trade and Hazardous

Materials, United States House of Representatives 30 days prior to

publication of the NPR.

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The Commission is undertaking this rulemaking proceeding as part of

the Commission's ongoing program of evaluating trade regulation rules

and industry guides to determine their effectiveness, impact, cost and

need. This proceeding also responds to President Clinton's National

Regulatory Reinvention Initiative, which, among other things, urges

agencies to eliminate obsolete or unnecessary regulations.

B. History and Requirements of the Light Bulb Rule

The Commission promulgated the Light Bulb Rule on July 23, 1970,

following a public rulemaking proceeding.4 The Rule became

effective on January 25, 1971. The Light Bulb Rule applies only to

general service incandescent electric lamps (commonly referred to as

``light bulbs'').5

\4\ Final Rule and Statement of Basis and Purpose (``Light Bulb

Rule SBP''), 35 FR 11784 (1970).

\5\ The Rule defines ``general service incandescent lamps'' as

all medium screw base incandescent electric lamps, 15-watt through

150-watt, 115-volt through 130-volt. The term includes lamps in the

customary ``A'' type and other bulb shapes included in Interim

Federal Specification W-L-00101G, and lamps that are produced in

generally comparable bulb shapes for sale in competition with other

general service incandescent lamps. The Rule specifically excludes

lamps designed and promoted primarily for decorative applications,

appliances, traffic signals, showcases, projectors, airport

equipment, trains, and lamps such as color, flood, reflector, rough

service, and vibration service. 16 CFR 409.1 n. 3. The lamp products

covered by the Light Bulb Rule commonly are referred to as ``light

bulbs.'' The term ``lamp products,'' on the other hand, refers more

broadly to all types of lighting products. In this notice, the term

``light bulb'' refers only to those lamp products covered by the

Light Bulb Rule.

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Based on the record in the rulemaking proceeding, the Commission

made the following factual findings, among others: (1) manufacturers

normally marked light bulbs or their containers with only voltage and

wattage ratings; (2) a substantial portion of the consuming public

believed that all light bulbs of the same wattage would last

approximately the same length of time and/or would emit approximately

the same amount of light; (3) light bulbs of the same wattage were

marketed with different rated lives and varying amounts of lumen output

(light output); (4) there is a scientific principle that, for any given

wattage, as the design life of a bulb increases, the bulb's light

output decreases; (5) a substantial portion of the consuming public

preferred purchasing light bulbs for specific purposes such as reading,

working, or for convenience; (6) cost savings claims had been made,

such as ``Save ____ Dollars'' or ``Outlasts ____ Bulbs,'' that did not

include all of the data essential for consumers to make valid cost

comparisons and that resulted in half truths; and (7) claims had been

made concerning ``more or brighter light'' and ``longer life'' without

disclosing the specific comparisons being drawn. 35 FR at 11785.

The Commission concluded that: (1) the failure to disclose lumens,

life, cost, and other data can mislead and deceive consumers; (2) cost

savings claims that do not tell the complete story are deceptive; (3)

unqualified claims such as ``long life'' or ``more light'' are

inherently deceptive if the lumen and life ratings of the products

being advertised and the products being compared are not disclosed; and

(4) claims such as ``maintain brightness better'' are deceptive if not

accompanied by a disclosure of lumens maintained over time for both the

advertised and compared products. Id. at 11788, 11791.

The Commission promulgated the Light Bulb Rule to prevent these

misleading and deceptive acts and

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practices. In summary, the Rule declares it is an unfair method of

competition and an unfair and deceptive act or practice, in connection

with the sale of general service incandescent light bulbs, to:

(1) fail to disclose clearly and conspicuously on the containers of

such light bulbs (or, if there are no containers, on the bulbs

themselves) their average initial wattage, average initial lumens, and

average laboratory life, 16 CFR 409.1(a)-(b);

(2) fail to disclose clearly and conspicuously on the bulbs

themselves their average initial wattage and design voltage, Id. at

409.1(b); 6

\6\ In the Light Bulb Rule SBP, the Commission explained that

industry stressed the need to maintain a prominent wattage

disclosure on incandescent light bulbs because the use of excess

wattage in fixtures is unsafe and because consumers were accustomed

to buying on the basis of wattage. 35 FR at 11786.

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(3) represent or imply that savings in light bulb cost or the cost

of light output will result from the use of a particular light bulb

product because of the bulb's life or light output unless, in computing

such savings, the following factors are taken into account and

disclosed clearly and conspicuously for the light bulb being sold and

the bulb with which the comparison is being made: light bulb cost,

electrical power cost, labor cost for bulb replacement (if any), actual

light output in average initial lumens, and average laboratory life in

hours, Id. at 409.1(c); and

(4) represent or imply that a light bulb will give more light,

maintain brightness longer, or furnish longer life without clearly and

conspicuously disclosing, for both the light bulb being sold and the

light bulb with which the comparison is being made: the average initial

light output in lumens, the average initial wattage, the laboratory

life in hours, and, if there is a claim that the light bulb maintains

brightness longer, the light output in lumens at 70% of the bulbs'

rated lives (``maintained average lumens''), Id. at 409.1(d).

Four notes at the end of the Rule define terms used in the Rule or

require certain procedures or tests to be used in making disclosures

required by the Rule. Specifically, these notes: (1) state how

manufacturers must determine the wattage, lumen, and life rating

disclosures required by the Rule, and require these ratings to be

determined at the light bulb's stated design voltage, Id. at 409.1 n.

1; (2) required for one year following the effective date of the Rule

that all light bulb labels explain the meaning of the word ``lumen''

whenever it was used, Id. at 409.1 n. 2; (3) define the term ``general

service incandescent lamp'' to mean all medium screw base incandescent

light bulbs, including ``A'' type bulbs and all other incandescent

bulbs that are substantially the same as ``A'' type bulbs, Id. at 409.1

n. 3; and (4) define the meaning of the Rule's term ``clear and

conspicuous'' with respect to the minimum type size and style for

required disclosures and state where the required disclosures must be

made, Id. at 409.1 n. 4.

C. Comparison to Requirements of the Appliance Labeling Rule

In 1994, pursuant to a directive of the Energy Policy Act of 1992

(``EPA 92''),7 the Commission amended its Rule Concerning

Disclosures Regarding Energy Consumption and Water Use of Certain Home

Appliances and Other Products Required Under the Energy Policy and

Conservation Act (``Appliance Labeling Rule''), 16 CFR 305, to specify

new labeling requirements for lamp products.8 EPA 92 directed the

Commission to prescribe rules requiring that certain types of lamp

products be labeled with ``such information as the Commission deems

necessary to enable consumers to select the most energy efficient lamps

which meet their requirements.'' 42 U.S.C. 6294(a)(2)(C)(i).

\7\ Pub. L. No. 102-486, 106 Stat. 2776, 2817-2832 (Oct. 24,

1992) (codified in 42 U.S.C. 6201, 6291-6309). EPA 92 amended in

several respects the Energy Policy and Conservation Act of 1975

(``EPCA''), which requires the Commission to prescribe labeling

rules for certain major household appliances and other products.

\8\ Final Rule and Statement of Basis and Purpose (``Appliance

Labeling Rule/Lamps SBP''), 59 FR 25176 (1994). The lamp labeling

requirements of the Appliance Labeling Rule became effective on May

15, 1995. In light of amendments to the Appliance Labeling Rule that

the Commission proposed on March 22, 1995, in response to a petition

from the National Electrical Manufacturers Association (``NEMA''),

and apparent uncertainties among incandescent lamp manufacturers

regarding their compliance responsibilities under the combined

requirements of the Appliance Labeling Rule and the Light Bulb Rule,

the Commission determined, however, that it would not take law

enforcement actions until December 1, 1995, against manufacturers of

incandescent lamp products not in compliance with the Appliance

Labeling Rule. 60 FR 15198 (March 22, 1995).

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In addition to incandescent light bulbs, the Appliance Labeling

Rule applies to incandescent reflector lamps, 16 CFR at 305.03(m),

medium screw base compact fluorescent lamps, Id. at 305.03(l), and

general service fluorescent lamps, Id. at 305.03(k). Although there are

no direct conflicts between the Light Bulb Rule and the Appliance

Labeling Rule, there are overlapping requirements for the light bulbs

that are covered by both Rules. The discussion in this notice

summarizes only the requirements of the two Rules that apply to these

light bulbs.

Like the Light Bulb Rule, the Appliance Labeling Rule requires

disclosures on package labels of light output, wattage, and life

ratings. 16 CFR 305.11(e)(1) (i)-(ii). As required by EPCA, 42 U.S.C.

6294(a)(2)(C)(i), the Appliance Labeling Rule requires that these

disclosures be based on performance at 120 volts input, regardless of

the rated lamp voltage (design voltage).9 The Appliance Labeling

Rule, however, allows manufacturers the option of adding disclosures on

lamp packages based on the lamp's performance at a different design

voltage of 125 volts or 130 volts, if the applicable voltage (i.e.,

120, 125, or 130) is disclosed on the label along with each disclosure

of light output, wattage, and life. Manufacturers may choose to place

the performance information at a design voltage of 125 volts or 130

volts on the primary display panel of the package and place the

performance information at 120 volts elsewhere on the package. If they

do so, they must add a specific disclosure on the primary display panel

that describes the effect on performance of the difference in voltage

and where on the package the performance information at 120 volts may

be found.10

\9\ 16 CFR 305.11(e)(1)(iii) (1995). The Commission amended this

paragraph regarding other requirements on June 13, 1995. Final Rule

(``1995 lamp amendments''), 60 FR 31077, 31081 (1995) (to be

codified at 16 CFR 305.11(e)(1)(iii)).

\10\ Id. The specific disclosure is: ``This product is designed

for [125/130] volts. When used on the normal line voltage of 120

volts, the light output and energy efficiency are noticeably

reduced. See [side/back] panel for 120 volt ratings.''

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The Appliance Labeling Rule requires that these disclosures appear

together in a specified order and be worded in a certain way (i.e., as

``Light Output: ____ Lumens; Energy Used: ____ Watts; Life: ____

Hours'') on the label's principal display panel. 16 CFR

305.11(e)(1)(ii). The Light Bulb Rule, on the other hand, does not

specify any order or wording for its required disclosures. It simply

specifies that the three ratings be disclosed in terms of lumens,

watts, and hours, and appear together on at least two panels of the

label, and on any other panel on which a lumen, wattage, or hours of

life claim is made. 16 CFR 409.1(a), 409.1 n. 4.

The Appliance Labeling Rule requires that the disclosures of light

output, energy used, and life appear with equal clarity and

conspicuousness. 16 CFR 305.11(e)(ii). It does not specify any

particular type style or type size, but it requires that certain

disclosures be made in the same size print, and that

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other disclosures be approximately 50% as large. The Light Bulb Rule

specifies that both the lumens and hours rating disclosures be in a

medium- or bold-face type that is at least two-fifths the height of the

wattage rating figure on the same panel or three-sixteenths of an inch

in height, whichever is larger. 16 CFR 409.1 n. 4. The Light Bulb Rule

also includes similar type size and style requirements for the

disclosures for multiple filament (three-way) light bulbs.

The Appliance Labeling Rule specifies two additional disclosures

that are not required by the Light Bulb Rule. First, the following

statement must appear on the principal display panel of the package

label: 11

\11\ 16 CFR 305.11(e)(1)(vi) (1995). On June 13, 1995, the

Commission amended this provision to allow manufacturers of

incandescent reflector lamps to add to this advisory statement a

reference to selecting a lamp at the beam spread, as well as the

light output, that purchasers need. 60 FR at 31081 (1995) (to be

codified at 16 CFR 305.11(e)(1)(vi)).

To save energy costs, find the bulbs with the light output you

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need, then choose the one with the lowest watts.

Second, all cartons of covered lamps that are shipped within or

imported into the United States must be marked with the following

statement:

These lamps comply with Federal energy efficiency labeling

requirements. 16 CFR 305.11(e)(4).

The Light Bulb Rule requires that the disclosures of light output,

wattage, and life be determined in accordance with a specific Federal

purchase specification and be based upon generally accepted and

approved test methods and specifications, at the lamp product's design

voltage.12 The Appliance Labeling Rule requires that disclosures

of design voltage, wattage, light output or life be based upon a

reasonable basis consisting of competent and reliable scientific tests

that substantiate the disclosures. Under the Appliance Labeling Rule,

for light output and life ratings the Commission will accept, but does

not require, tests conducted according to specific test protocols

issued by IES,13 or testing in accordance with final test

procedures issued by the U.S. Department of Energy.14

\12\ 16 CFR 409.1 n. 1. The Light Bulb Rule states that, for

light bulbs covered by that Rule, the ``average initial wattage,

average initial lumen, and average laboratory life disclosures

required by this section shall be in accordance with the

requirements of interim Federal Specification, Lamp, Incandescent

(Electric, Large, Tungsten-Filament) W-L-00101 G and shall be based

upon generally accepted and approved test methods and procedures.''

In 1977, that specification ceased being interim and is now known as

Federal Specification, Lamp, Incandescent (Electric, Large,

Tungsten-Filament) W-L-101H/GEN. This specification refers to

pertinent American National Standards Institute (``ANSI'') test

protocols, which are consistent with the Illuminating Engineering

Society of North America (``IES'') protocols that are cited in the

Appliance Labeling Rule, 16 CFR 305.5(b), as an acceptable

reasonable basis for determining the light output and life of

incandescent light bulbs. 59 FR at 25200 n. 251.

\13\ 16 CFR 305.5(b). See also note 12, supra.

\14\ 59 FR at 25200.

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Both Rules contain provisions concerning claims about a lamp

product's operating cost. The Appliance Labeling Rule requires that any

label, printed material prepared for display or distribution at the

point of sale, or catalog from which a covered lamp product may be

ordered that contains an operating cost claim clearly and conspicuously

disclose, in close proximity to the claim, the assumptions upon which

the claim is based, including, e.g., purchase price, unit cost of

electricity, hours of use, patterns of use. 16 CFR 305.11(e)(3),

305.13(a)(3), 305.14(c)(2). These Appliance Labeling Rule disclosure

requirements do not apply to such claims made in other promotional

materials, such as advertisements.

The Light Bulb Rule's provision applies to claims that savings in

either light bulb cost or cost of light will result from the use of a

particular light bulb because of the bulb's life or light output. It

covers all comparative light bulb life, light output, and light bulb

cost claims. The Light Bulb Rule specifies additional factors (e.g.,

labor costs for replacement, light output, life) that, depending on the

particular claim being made, must be taken into consideration and

clearly and conspicuously disclosed, for both the light bulb being

offered for sale and the bulb(s) with which the comparison is being

made. 16 CFR 409.1(c). The Light Bulb Rule's requirements apply to

these claims made in all types of advertising, as well as on labels,

point-of-sale printed materials, and catalogs.

Unlike the Light Bulb Rule, the Appliance Labeling Rule does not

include disclosure requirements concerning comparative claims that a

lamp product will give more light, maintain brightness longer, or

furnish longer life. In addition, the Appliance Labeling Rule does not

require that lamp products be marked with any information. The Light

Bulb Rule, on the other hand, requires that light bulbs themselves be

marked clearly and conspicuously with wattage and design voltage. 16

CFR 409.1(b).

II. Discussion and Analysis

A. Regulatory Review Comments

The Commission received nine comments in response to the April 6,

1995, notice.15 Four comments were submitted by individual

consumers, one by an organization that purchases and uses light bulbs

(``organization/user comment''), three by lamp product manufacturers,

and one by a trade association that represents lamp product

manufacturers.16

\15\ Anderson, #1; Raeth, #2; Bowe, #3; McGarry, #4; Hytron

Electric Products, a division of Trojan Inc. (``Hytron''), #5; Delta

Phi Epsilon, Washington, DC, #6 (``DPE''); Philips Lighting, Philips

Elmet, a division of North American Philips Corporation

(``Philips''), #7; GE Lighting, General Electric Company (``GE''),

#8; and Lamp Section, NEMA, #9. The comments submitted in response

to the April 6, 1995, notice are filed as document numbers

B17240700001, B17240700002, etc. In today's notice, the comments are

cited as #1, #2, etc.

\16\ The trade association, NEMA, is the largest U.S. trade

association representing manufacturers of products used in the

generation, transmission, distribution, control, and end-use of

electricity. Member companies in the Lamp Section of NEMA produce

more than 90% of general service incandescent and fluorescent lamp

products sold in the United States. NEMA Lamp Section members

include General Electric Lighting, Osram Sylvania, Inc., Philips

Lighting Company, Supreme Corp., Venture Lighting International,

Duro-Test Corp. and EYE Lighting International. NEMA, #9, cover

letter, comment pg. 1.

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The four individual consumer comments state that the Rule is still

needed because the disclosures required by the Rule help consumers make

informed purchasing decisions.17 They want labels to continue to

disclose light output, wattage, and life information. These comments do

not address whether, if the Commission repealed the Light Bulb Rule,

the labeling requirements of the Appliance Labeling Rule would require

that manufacturers provide consumers with this information. The

organization/user comment also opposes the elimination of the Light

Bulb Rule. It contends consumers would lose valuable consumer

protections that are only contained in the Light Bulb Rule.18

\17\ Matt Anderson, #1 (Rule very valuable to him as a consumer;

reads labels very closely, particularly as to lumens and voltage;

label information can be a safety factor since many enclosed

fixtures are rated for up to 60W but 75+W bulbs will fit the same

sockets); Marilyn Raeth, #2 (eliminating the Rule would be a great

disservice to the consumer, who would not know the value of what he

or she was purchasing); Madeline Bowe, #3 (maintain Rule requiring

packages to show wattage, lumens, and bulb life; consumers have a

right to know what they are buying); and James A. McGarry, #4 (do

not weaken the labeling requirements; uses information to make

comparative decisions when purchasing).

\18\ DPE, #6.

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Hytron, a manufacturer of extended-service, long-life incandescent

lamp products, including incandescent reflector lamps and traffic

signal lamps, supports keeping the Light Bulb Rule, and, instead,

eliminating the lamp labeling requirements of the Appliance

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Labeling Rule.19 It appears that Hytron primarily objects to the

Appliance Labeling Rule because it requires labeling disclosures of

incandescent lamps at 120 volts regardless of the lamp's design

voltage, and because it requires the labeling of incandescent reflector

lamps.20

\19\ Hytron, #5.

\20\ The Commission does not have the authority to eliminate

these requirements from the Appliance Labeling Rule. EPCA requires

that labeling information for incandescent lamps under the Appliance

Labeling Rule be based on operation at 120 volts. 42 U.S.C.

6294(a)(2)(C)(i). EPCA also defines the lamp products, including

incandescent reflector lamps, that are to be covered by the lamp

labeling rules under the Appliance Labeling Rule. 42 U.S.C.

6291(30), 6294(a)(2)(C)(i).

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The comments from two manufacturers (Philips and GE) and the trade

association state that the Light Bulb Rule's disclosure requirements of

light output, wattage, and life for general service incandescent light

bulbs are unnecessary because of the uniform disclosure requirements

for various types of competing lamp products in the Appliance Labeling

Rule.21 They recommend that the Commission repeal the Light Bulb

Rule's disclosure requirements to avoid conflicts, multiple and

overlapping requirements, and inconsistencies with the disclosure

requirements of the Appliance Labeling Rule.

\21\ Philips, #7; GE, #8; and NEMA, #9.

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GE recommends that the Commission repeal the entire Light Bulb

Rule.22 It believes the Appliance Labeling Rule's requirements are

better for today's modern products and consumers' information needs,

and for advancing the energy efficiency goals of our modern day

workplace. According to GE, retaining the Light Bulb Rule, in addition

to the Appliance Labeling Rule, is inefficient and exposes

manufacturers to a significant risk that they may fail to comply with

both sets of Rules. Further, although the Light Bulb Rule requires that

light bulbs be marked clearly and conspicuously with wattage and design

voltage and the Appliance Labeling Rule does not, GE believes that such

marking is a common industry practice that would not be affected by the

rescission of the Light Bulb Rule. It states that this is a ``sound

business practice that reduces liability and gives consumers important

information.'' Accordingly, GE marks many products that are not covered

by the Light Bulb Rule with wattage, and, as appropriate, with design

voltage.

\22\ GE, #8.

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NEMA states that lamp product manufacturers should be subject to

only one set of lamp labeling and disclosure regulations, which would

ensure uniform disclosures of lamp product performance information to

consumers. NEMA believes that the Appliance Labeling Rule represents

the more comprehensive and modern approach to lamp labeling and that

the disclosures required under the Appliance Labeling Rule fully and

fairly inform consumers about lamp product performance.23 It

believes that the objectives of the Light Bulb Rule are fully served by

the disclosures required by the Appliance Labeling Rule. For these

reasons, NEMA recommends that the Commission repeal the Light Bulb Rule

and retain the Appliance Labeling Rule as the sole federal labeling and

disclosure requirements for lamp products.

\23\ NEMA, #9.

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NEMA also believes that repealing the Light Bulb Rule would not

induce manufacturers to abandon their practice of inscribing wattage

and design voltage on incandescent lamps and wattage on fluorescent

lamps. NEMA states that manufacturers routinely mark their general

service incandescent and fluorescent lamps, even those for which such

marking is not required under federal labeling rules. Further, NEMA

states that an international safety standard issued by the

International Electrotechnical Commission (``IEC'') (IEC 432-1, 1993)

requires marking of wattage and voltage on general service incandescent

lamps. NEMA, therefore, believes that manufacturers generally would

continue the marking practices required by the Light Bulb Rule, even if

the Commission repealed the Rule.

Philips strongly supports NEMA's position. Philips, however, also

states that the best alternative would be for the Commission to repeal

the Light Bulb Rule, and to modify the Appliance Labeling Rule to

include the requirements of paragraph 409.1(c) (which requires

disclosures in connection with product comparison claims about lamp

cost or cost of light), but without requiring disclosure of the lamp

cost or cost of replacement, and paragraph 409.1(d) (which requires

disclosures in connection with claims that a light bulb will give more

light, maintain brightness longer or furnish longer life) of the Light

Bulb Rule.24 Philips believes that adding these disclosure

requirements would strengthen the Appliance Labeling Rule.

\24\ Philips, #7.

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B. Current Need for the Light Bulb Rule

The Commission has compared the requirements of the Light Bulb Rule

and the Appliance Labeling Rule, analyzed the bases for both Rules

explained in the Light Bulb Rule SBP and the Appliance Labeling Rule/

Lamps SBP, and reviewed the comments filed in response to the request

for comments in the regulatory review of the Light Bulb Rule. The

requirements of the two Rules fall into three categories: (1) basic

disclosures of performance information (light output, watts, and life);

(2) substantiation based on testing for these disclosures; and (3)

additional disclosures that must be made in conjunction with certain

performance claims. Based on the Commission's comparison, analysis, and

review, the Commission believes there may not be a continuing need for

the Light Bulb Rule and proposes repealing the Rule for the following

reasons.

First, the requirements in the Light Bulb Rule that the basic

disclosures of light output, watts, and life be made on package labels

may be unnecessary because they are duplicated by the Appliance

Labeling Rule. The Appliance Labeling Rule requires that this

information also be disclosed in catalogs from which the products can

be ordered. Further, it requires that these disclosures be made on

labels and in catalogs for competing medium screw base compact

fluorescent lamps and incandescent reflector lamps, as well as for

light bulbs covered by the Light Bulb Rule. These disclosures, in

conjunction with the required advisory statement about how consumers

can select the most energy-efficient lamp that meets their needs, will

give consumers the information they need at the point of sale to select

the appropriate lamp product.25

\25\ In addition, the Appliance Labeling Rule's format

requirements for the disclosure of basic performance data on labels

and in catalogs obviate the need for the specific type size and

placement requirements of the Light Bulb Rule for package labels.

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Second, the requirement in the Light Bulb Rule that manufacturers

mark bulbs with wattage and voltage information appears to be

unnecessary. According to the comments, currently manufacturers

voluntarily mark various types of lamp products with wattage and design

voltage information so that consumers can use these lamp products

safely. The Commission believes that the marketplace would provide

incentives for manufacturers to continue marking this information on

lamp products, even if the Commission repealed the Light Bulb Rule. The

Commission, however, is particularly interested in receiving public

comments concerning the continuing need for the requirement that

manufacturers mark light bulbs with wattage and design voltage

information, along with additional information regarding the

[[Page 4387]]

specific requirements of IEC international safety standard (IEC 432-1,

1993) and its application.

Third, the Light Bulb Rule's substantiation requirements may be

unnecessary because these requirements are duplicated in the Appliance

Labeling Rule. The requirement in the Appliance Labeling Rule that the

basic disclosures be based on ``a reasonable basis consisting of

competent and reliable scientific tests substantiating the

representation'' is sufficient to ensure the accuracy and uniformity of

the disclosures for competing lamp products. Further, based on the

evidence in the rulemaking proceeding for the Appliance Labeling Rule,

it appears that the test protocols required by the Light Bulb Rule are

consistent with IES test protocols that the Appliance Labeling Rule

recognizes as sufficient to satisfy its reasonable basis standard for

the disclosures of light output and life.26 However, the Appliance

Labeling Rule provides manufacturers flexibility to use other

scientific test protocols if they are competent and reliable.

\26\ 59 FR at 25200 n. 251.

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Fourth, the Light Bulb Rule requires that labels, ads, and other

promotional materials that make comparison claims about savings in

light bulb cost or cost of operation,27 or claims that a light

bulb will give more light, maintain brightness longer, or furnish

longer life,28 also include certain disclosures about the

advertised light bulb and the bulb to which it is compared. The

disclosures may be unnecessary or inappropriate, for the following

reasons:

\27\ See Part I.B, supra.

\28\ Id.

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(1) Under the Appliance Labeling Rule, light output and life

information must be disclosed in labels and catalogs even if the Light

Bulb Rule is repealed. The Appliance Labeling Rule requires that labels

and catalogs for incandescent ``A'' type bulbs, as well as for

competing medium screw base compact fluorescent lamps and incandescent

reflector lamps, disclose light output, wattage, and life, along with

an advisory statement about how the consumer can select the lamp

product that will cost the least to operate for a specific light

output. This information enables consumers to evaluate comparison light

output and lifetime claims for competing products at the point of sale

and to select the appropriate lamp that meets their needs.

(2) Under the Appliance Labeling Rule, claims about cost of

operation of a covered lamp product in labels, point-of-sale printed

materials, and catalogs must be accompanied by disclosures of the

assumptions on which the claims are based (e.g., purchase price, unit

cost of electricity, hours of use, patterns of use). These disclosures,

along with the advisory statement and the disclosures of light output,

wattage, and life, for competing lamp products on product labels and in

catalogs give consumers the information they need at the point of

purchase to evaluate comparison claims about savings in cost of

operation.

(3) Purchase price information is readily available to consumers at

the point of sale (both in retail stores and in catalogs). Thus,

consumers have information at the point of sale to evaluate comparison

claims about lamp product purchase costs.

(4) Unit electrical cost information is readily available to

consumers on their monthly electric utility bills or from their

electrical utility companies. Consumers can use this information, along

with the advisory statement and the disclosures of basic performance

information on packages and catalogs, to evaluate any comparison

operating cost claims.

The Appliance Labeling Rule does not contain a disclosure

requirement similar to the Light Bulb Rule covering claims that a light

bulb will maintain brightness longer. It also does not require that

disclosures about product comparison claims be made in advertisements

or promotional materials other than labels, point-of-sale printed

materials, or catalogs. The Commission does not currently have

information about the occurrence of brightness claims and whether the

Light Bulb Rule's requirements continue to be important. In addition,

the Commission does not presently have information to evaluate how

extensively product comparison claims are made in advertisements and

other promotional materials not covered by the Appliance Labeling Rule.

Thus, the significance of repealing these portions of the Light Bulb

Rule is unclear, and the Commission is particularly interested in

comments about the continued need for these requirements.

Repealing these Light Bulb Rule disclosure requirements would

prevent the Commission from obtaining civil penalties for the failure

to make these disclosures. But, the Commission believes it would not

seriously impair the Commission's ability to act effectively. The

Commission could address any significant problems that might arise

concerning specific performance claims or a failure to disclose

material purchase information on a case-by-case basis,

administratively, under section 5 of the FTC Act, 15 U.S.C. 45, or

through section 13(b) actions, 15 U.S.C. 53(b), filed in federal

district court. Prosecuting serious misrepresentations and the failure

to disclose material information in district court allows the

Commission to obtain injunctive relief as well as equitable remedies,

such as redress or disgorgement.

III. Rulemaking Procedures

The Commission finds that the public interest will be served by

using expedited procedures in this proceeding. First, there do not

appear to be any material issues of disputed fact that are necessary

for the Commission to resolve in determining whether to repeal the

Rule. Second, the use of expedited procedures will support the

Commission's goal of eliminating obsolete or unnecessary regulations

without an undue expenditure of resources, while ensuring that the

public has an opportunity to submit data, views and arguments on

whether the Commission should repeal the Rule.

The Commission, therefore, has determined, pursuant to 16 CFR 1.20,

to use the procedures set forth in this notice. These procedures

include: (1) publishing this Notice of Proposed Rulemaking; (2)

soliciting written comments on the Commission's proposal to repeal the

Rule; (3) holding an informal hearing, if requested by interested

parties; (4) obtaining a final recommendation from staff; and (5)

announcing final Commission action in a document published in the

Federal Register.

IV. Request for Comments

Interested persons are requested to submit written data, views or

arguments on any issue of fact, law or policy they believe may be

relevant to the Commission's decision on whether it should repeal the

Light Bulb Rule in its entirety, or, as an alternative, whether it

should repeal those portions that are duplicated by the Appliance

Labeling Rule and retain some or all of the remaining provisions. The

Commission requests that commenters provide representative factual data

in support of their comments. Individual firms' experiences are

relevant to the extent they typify industry experience in general or

the experience of similar-sized firms. Comments opposing the proposed

repeal of the Rule should explain the reasons they believe the Rule is

still needed and, if appropriate, suggest specific alternatives.

Proposals for alternative requirements should include reasons and data

that indicate why the alternatives would better protect consumers from

unfair or

[[Page 4388]]

deceptive acts or practices under section 5 of the FTC Act, 15 U.S.C.

45.

Below, the Commission identifies specific questions for which it

solicits public comment. The questions are designed to assist the

public and should not be construed as limiting the issues on which

public comment may be submitted. All written comments should state

clearly the question or issue that the commenter is addressing. The

Commission has placed the comments submitted in response to the April

6, 1995, notice on the public record of this proceeding. Commenters

whose views have not changed and who wish to rely on their previous

comments may do so and need not file an additional comment at this

time. Previous commenters who have additional information or views,

however, may wish to submit a comment in response to this notice.

Before taking final action, the Commission will consider all

written comments timely submitted to the Secretary of the Commission

and testimony given on the record at any hearings scheduled in response

to requests to testify. Written comments submitted will be available

for public inspection in accordance with the Freedom of Information

Act, 5 U.S.C. 552, and Commission regulations, on normal business days

between the hours of 8:30 a.m. to 5:00 p.m. at the Federal Trade

Commission, Public Reference Room, Room H-130, Federal Trade

Commission, Sixth Street and Pennsylvania Avenue, NW., Washington, DC

20580, telephone number 202/326-2222.

Questions for Comment

(1) In what manner and to what extent would repealing the Light

Bulb Rule affect the specific benefits consumers or other purchasers

derive from the Light Bulb Rule beyond the benefits they derive from

the Appliance Labeling Rule?

(2) In what manner and to what extent would repealing the Light

Bulb Rule affect or relieve the specific burdens experienced by

manufacturers or other sellers that are due to the Light Bulb Rule

beyond any burdens or costs that are incurred in complying with the

Appliance Labeling Rule?

(3) Are there any other federal or state laws or regulations, or

private industry standards, in addition to the Appliance Labeling Rule,

that apply to the labeling, testing, or advertising of lamp products

covered by the Light Bulb Rule?

(a) If so, what are those federal or state laws or regulations, or

private industry standards, and what do they require?

(b) If so, to whom do they apply?

(4) Are there any current federal, state, or local laws or

regulations, or private industry standards, in addition to the Light

Bulb Rule, that require lamp products to be marked with wattage or

voltage information?

(a) If so, what are these federal, state, or local laws or

regulations, or private industry standards, and what specific markings

do they require?

(b) If so, to whom do they apply?

(5) Do manufacturers or other sellers currently make comparison

claims about lamp product cost, cost of light, cost of operation,

amount of light, brightness, or length of life?

(a) If so, who currently makes these claims?

(b) If so, what claims and disclosures do they make?

(c) If so, what medium (e.g., advertisements, point-of-sale printed

materials) do they use in making these claims and disclosures?

(d) If so, are the comparisons valid ones?

V. Requests for Public Hearings

Because there does not appear to be any dispute as to the material

facts or issues raised by this proceeding and because written comments

appear adequate to present the views of all interested parties, a

public hearing has not been scheduled. If any person would like the

Commission to schedule public hearings, he or she should address a

request to present oral testimony to the Office of the Secretary,

Federal Trade Commission, Room H-159, Sixth Street and Pennsylvania

Avenue, NW., Washington, DC 20580, telephone number 202-326-2506, as

soon as possible but not later than March 7, 1996. All persons wishing

to testify also must submit, on or before March 7, 1996, a written

comment or statement that describes the issues on which the party

wishes to testify and the nature of the testimony to be given.

VI. Preliminary Regulatory Analysis

The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-11, requires

an analysis of the anticipated impact of the proposed repeal of the

Rule on small businesses.29 The analysis must contain, as

applicable, a description of the reasons why action is being

considered, the objectives of and legal basis for the proposed action,

the class and number of small entities affected, the projected

reporting, recordkeeping and other compliance requirements being

proposed, any existing federal rules that may duplicate, overlap or

conflict with the proposed action, and any significant alternatives to

the proposed action that accomplish its objectives and, at the same

time, minimize its impact on small entities.

\29\ Section 22 of the FTC Act, 15 U.S.C. 57b-3, also requires

the Commission to perform ``regulatory impact analyses'' of a

proposed rule, but only if the rule will have certain

``significant'' economic or regulatory effects. The Commission has

determined that a preliminary regulatory analysis is not required by

section 22 in this proceeding because the Commission has no reason

to believe that repealing the Rule will have a ``significant''

economic or regulatory impact, either beneficial or detrimental,

upon persons subject to the Rule or upon consumers.

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A description of the reasons why action is being considered and the

objectives of the proposed repeal of the Rule have been explained

elsewhere in this Notice. Repeal of the Rule would appear to have

little or no effect on any small business. The Commission is not aware

of any existing federal laws or regulations that would conflict with

repeal of the Rule.

For these reasons, the Commission certifies, pursuant to section

605 of RFA, 5 U.S.C. 605, that if the Commission determines to repeal

the Rule that action will not have a significant impact on a

substantial number of small entities. To ensure that no substantial

economic impact is being overlooked, however, the Commission requests

comments on this issue. After reviewing any comments received, the

Commission will determine whether it is necessary to prepare a final

regulatory flexibility analysis.

VII. Paperwork Reduction Act

The Light Bulb Rule imposes third-party disclosure requirements,

which are described in Part I.B, above, that constitute ``information

collection requirements'' under the Paperwork Reduction Act (``PRA''),

44 U.S.C. 3501 et seq. Accordingly, repeal of the Rule would eliminate

any burdens on the public imposed by these disclosure requirements that

are not duplicated by the Appliance Labeling Rule.

VIII. Additional Information for Interested Persons

A. Motions or Petitions

Any motions or petitions in connection with this proceeding must be

filed with the Secretary of the Commission.

B. Communications by Outside Parties to Commissioners or Their Advisors

Pursuant to Rule 1.18(c) of the Commission's Rules of Practice, 16

CFR 1.18(c), communications with respect to the merits of this

proceeding from any outside party to any Commissioner or Commissioner's

advisor during the course of this rulemaking shall be

[[Page 4389]]

subject to the following treatment. Written communications, including

written communications from members of Congress, shall be forwarded

promptly to the Secretary for placement on the public record. Oral

communications, not including oral communications from members of

Congress, are permitted only when such oral communications are

transcribed verbatim or summarized at the discretion of the

Commissioner or Commissioner's advisor to whom such oral communications

are made, and are promptly placed on the public record, together with

any written communications relating to such oral communications.

Memoranda prepared by a Commissioner or Commissioner's advisor setting

forth the contents of any oral communications from members of Congress

shall be placed promptly on the public record. If the communication

with a member of Congress is transcribed verbatim or summarized, the

transcript or summary will be placed promptly on the public record.

Authority: Section 18 of the Federal Trade Commission Act, 15

U.S.C. 57a.

List of Subjects in 16 CFR Part 405

Advertising, Consumer protection, Energy conservation, Labeling,

Lamp products, Trade practices.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 96-2431 Filed 2-5-96; 8:45 am]

BILLING CODE 6750-01-P