Advisory opinion letter

Attorney
Second Letter of Request
November 2, 1977
Dear Chairman Pertschuk:

Several months ago I wrote to you seeking a conference with your agency concerning legal requirements under the jurisdiction of your

ADVISORY OPINIONS 1027 agency applicable to possible cigarette advertising on my company’s telephone announcement service. You did not reply. Rather, an FTC staff member, Dolores Montgomery, contacted me to suggest that I convert my letter into a request for Advisory Opinion. This was done, the request being filed under date of June 3, 1977 (Case No. 26718666). Hearing nothing for three months I inquired by letter to Ms. Montgomery in September. No reply.

Approximately two weeks ago I contacted Ms. Montgomery by telephone, who referred me to Murray Francis Slagel of your staff to whom I spoke on the telephone. I was assured I would receive a response to my request within the next day or two. To date, I have not received even the courtesy of a return call or letter. It is now approximately six months since my first contact with you. I have no answer to what must surely be a rather simple question, and it now appears that I am getting a “run-around” from FTC staff. , I am sure the FTC staff thinks it is working on important public business, and after all my inquiry only affects (in however vital a way) one small private business. But surely I am entitled to some answer to my request (the agency’s rules so indicated)- and within a reasonable time. As I recall, President Carter said something about bureaucratic responsiveness (or lack thereof) in his campaign. Let me reiterate that what I seek is the advice which I was led to believe your agency is both authorized and required by law to give. While my problem may be of little moment in Washington, the present uncertainty is very damaging to my business.

Very truly yours,
FONAWIN CORPORATION
By /s/ Stuart Scheftel

Stuart Scheftel
President
Letter of Request
June 3, 1977
Dear Sir:

The purpose of this letter is to request, on behalf of Fonawin Corporation (Fonawin), an Advisory Opinion pursuant to Subpart A, Part 1, of the Commission’s Procedures and Rules of Practice. Fonawin is engaged in the business of providing one-minute

recorded announcements of horse racing results as received from tracks where New York City’s Offtrack Betting Corporation (OTB) handles races.

This Corporation with which our company has an exclusive contract is controlled by the State of New York and returns approximately One hundred million dollars a year to State, City and Local funds.

It provides this service to any person calling a certain New York City telephone number (999-2121), utilizing the New York Telephone Company 9A Multi-Customer Announcement Service (which has the technical capacity to accomodate simultaneously up to 3300 incoming telephone calls on a single line). Fonawin’s recorded racing information service is supported by the sale of advertising messages, which are incorporated into the recorded 60-second announcements. Under date of July 28, 1976, the Federal Communications Commission issued a declaratory ruling concerning the applicability of Section 6 of the Public Health Cigarette Smoking Act of 1969 (15 U.S.C. § 1835) to the carriage of cigarette advertising in connection with the non-toll intrastate aspect of Fonawin’s service; a copy of that ruling is attached hereto. More particularly, Fonawin advised the FCC that it had become technically feasible to separate the nontoll intrastate aspect of its service (i.e, local calls made in the 212 Numbering Plan Area) from other calls, and sought guidance whether, under these circumstances, the carriage of cigarette advertising in the non-toll intrastate aspect only was prohibited. The FCC’s ruling was to the effect that Section 6 of the Cigarette Smoking Act of 1969 does not preclude the carriage of cigarette advertising in the limited circumstance of the non-toll intrastate aspect of Fonawin’s service.

Notwithstanding the FCC ruling, there remains a question whether any statutory or regulatory requirement within the general jurisdiction of the Federal Trade Commission would affect the carriage of such cigarette advertising. Specifically, an Advisory Opinion is sought as to whether such cigarette advertising would have to carry some form of warning to the effect that cigarette smoking may be harmful to the smoker’s health. At present, Fonawin is not carrying and has not sold any cigarette advertising and, indeed, has not separated the non-toll intrastate aspect of its service. Before pursuing such separation and before pursuing further the sale of cigarette advertising, it seeks Commission guidance with respect to the warning subject. This is because Fonawin has reason to believe that a warning requirement, if applicable, would discourage cigarette companies from advertising

on Fonawin’s service (owing, apparently, to the brevity of the advertisement and its oral form). Consequently, an Advisory Opinion is sought in order that Fonawin can decide whether to proceed to separate the non-toll intrastate aspect of its service and to pursue further the sale of cigarette advertising. So far as Fonawin is aware, the matter raised by this request for Advisory Opinion is not the subject of any current proceeding or ruling by this Commission, or any other agency or government. There is one additional matter which may be of interest to the Commission. Fonawin is under the impression that, for the most part, persons calling its service are OTB bettors (the Fonawin number is conspicuously posted in the OTB betting parlors). Persons under 18 years of age are not eligible to place bets with OTB. Consequently, it is to be presumed that such cigarette advertising as may be carried on the non-toll intrastate aspect of Fonawin’s service will have little, if any, exposure to children. Should the Commission desire additional information with respect to Fonawin’s service, or should the Commission consider a conference useful, Fonawin is prepared to cooperate fully. Contact can be made to Fonawin’s President: Mr. Stuart Scheftel, 4 West 58th Street, New York, New York; telephone number (212) Plaza 9-2929.

Very truly yours,
FONAWIN CORPORATION
by /s/ Stuart Scheftel