Alerts and Updates
Junk Fax Prevention Act of 2005
July 15, 2005
The Federal Communications Commission has been vigorously enforcing a ban on the faxing of unsolicited advertising. Numerous entities have been fined for violations of the Telephone Consumer Protection Act of 1991 (the "TCPA") and the FCC's junk fax rules — including one fine of over $5 million.
Background
The TCPA prohibits any person from sending an "unsolicited advertisement to a telephone facsimile machine" without the "prior express invitation or permission of the recipient." As originally interpreted by the FCC, the existence of an established business relationship between the sender and the recipient was deemed sufficient to constitute prior consent.
In 2003 the FCC revised its Rules. The FCC re-interpreted the TCPA so as to render it unlawful for a business to send unsolicited advertising via facsimile unless the sender had obtained in advance a written consent signed by the recipient. No longer were businesses entitled to rely on the prior FCC interpretation, namely that an "established business relationship" between the sender and the recipient would be deemed sufficient to constitute consent. The 2003 decision made another important change as well: Pending its complete elimination, the established business relationship exception would be limited to a period of 18 months after the recipient had made a purchase from the sender, or three months after the recipient had inquired about the sender's products or services.
Many businesses and trade associations challenged the revised Rules, both at the FCC and on Capitol Hill. The FCC heard the complaints and on three separate occasions stayed the effect of its new rules, most recently in an Order released June 27 with the stay being effective until January 9, 2006.
Congress likewise heard the complaints. After an unsuccessful effort to secure a legislative solution in the last Congress, business interests renewed their efforts this year. Very recently those efforts reached fruition, and the President signed legislation known as the "Junk Fax Prevention Act of 2005" (the "Junk Fax Act") into law on July 9.
The Junk Fax Act
The new legislation responds to the concerns of businesses regarding the burdens and costs of complying with the FCC's revised rules. Among other things, the Junk Fax Act:
- Restores (subject to the condition noted below) the established business relationship exception. In other words, such a relationship will be deemed to once again constitute consent.
- While the exception is restored, senders of unsolicited fax advertising must now include detailed notices alerting recipients to a right to opt out of receiving further faxes if they wish.
- It eliminates the limits specified by the FCC for established business relationships in connection with faxed advertising, i.e., 18 months after a transaction and three months after a purchase - in other words, an established business relationship can be deemed to exist for an indeterminate period.
- While the 18 month/three month limits have been rescinded, the FCC is specifically authorized to reinstate those or other time limits depending upon the agency's experience administering the new law, e.g., if the FCC receives a large volume of complaints, among other factors, in the months to come.
- The FCC is required to adopt rules implementing the Act within 270 days. This includes rules specifying the requirements for the opt-out provisions.
- The FCC is given the authority to exempt non-profit trade associations from the requirements of the opt-out provisions for faxes to members of the association if it finds that such faxes are in furtherance of the group's tax-exempt purposes.
Conclusion
Passage of the Junk Fax Act represents a major victory for businesses and trade associations. However, the opt-out provisions are an important new qualification to what would otherwise be a broad right to fax advertisements where there is an established business relationship. (In effect, Congress has substituted opt-out for the FCC's prior signed consent requirement.) Also, businesses should not overlook that the TCPA contains provisions for private rights of action for recovery of damages and injunctive relief for violations of the law on junk faxes. It thus behooves businesses and associations to be mindful of the provisions of the new law (especially the opt-out) even though it may be months before the FCC adopts new rules implementing same.
For more information or if you have any questions regarding the Junk Fax Act, and compliance therewith, please contact Ken Keane in our Washington, D.C. office, Eric Sinrod in our San Francisco office, or the attorney in the firm with whom you are regularly in contact.
Information Technologies and Telecom | Attorney Listing, practice head Michael J. Silverman
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
