WikiLeaks Document Release
http://wikileaks.org/wiki/CRS-RS21647
February 2, 2009
Congressional Research Service
Report RS21647
Facsimile Advertising Rules Under the Junk Fax Prevention
Act of 2005
Patricia Moloney Figliola, Resources, Science, and Industry Division
September 24, 2007
Abstract. On July 9, 2005, President Bush signed S. 714, the Junk Fax Prevention Act ("the act" or JFPA)
(P.L. 109-21) and on April 5, 2006, the Federal Communications Commission (FCC) issued its final rules in
the related proceeding. These rules provided an established business relationship (EBR) exemption to the
prohibition on sending unsolicited facsimile advertisements; provided a definition of an EBR to be used in the
context of unsolicited facsimile advertisements; required the sender of a facsimile advertisement to provide
specified notice and contact information on the facsimile that allows recipients to "opt-out" of any future
facsimile transmissions from the sender; and specified the circumstances under which a request to "opt-out"
complied with the JFPA. Also, the rules required that small businesses and nonprofits adhere to the rules and
clarified the term "unsolicited advertisement." The FCC did not address whether there should be a time limit
on the duration of an EBR. The rules in their entirety became effective on August 1, 2006. On April 5, 2006,
in accordance with the JFPA, the GAO submitted a report to Congress on the FCC's enforcement of the junk
fax law. On January 4, 2007, in accordance with the JFPA, the FCC released its first annual report on the
enforcement of its junk fax rules.
Order Code RS21647
Updated September 24, 2007
Facsimile Advertising Rules Under the
Junk Fax Prevention Act of 2005
Patricia Moloney Figliola
Specialist in Telecommunications and Internet Policy
Resources, Science, and Industry Division
Summary
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On July 9, 2005, President Bush signed S. 714, the Junk Fax Prevention Act ("the
act" or JFPA) (P.L. 109-21) and on April 5, 2006, the Federal Communications
Commission (FCC) issued its final rules in the related proceeding. These rules
! provided an established business relationship (EBR) exemption to the
prohibition on sending unsolicited facsimile advertisements;
! provided a definition of an EBR to be used in the context of unsolicited
facsimile advertisements;
! required the sender of a facsimile advertisement to provide specified
notice and contact information on the facsimile that allows recipients
to "opt-out" of any future facsimile transmissions from the sender; and
! specified the circumstances under which a request to "opt-out"
complied with the JFPA.
Also, the rules required that small businesses and nonprofits adhere to the rules and
clarified the term "unsolicited advertisement." The FCC did not address whether there
should be a time limit on the duration of an EBR. The rules in their entirety became
effective on August 1, 2006.
On April 5, 2006, in accordance with the JFPA, the GAO submitted a report to
Congress on the FCC's enforcement of the junk fax law.
On January 4, 2007, in accordance with the JFPA, the FCC released its first annual
report on the enforcement of its junk fax rules.
The FCC's Junk Fax Fact Sheet is available online at [http://www.fcc.gov/cgb/
consumerfacts/unwantedfaxes.html].
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The Junk Fax Prevention Act
President Bush signed S. 714, the Junk Fax Prevention Act ("the act" or JFPA), on
July 9, 2005.1 This law vacated previous rules promulgated by the Federal
Communications Commission (FCC) in July 2003 relating to unsolicited facsimile (fax)
advertising; those rules amended section 227 of the Communications Act of 1934 (47
U.S.C. 227). The JFPA contains the following specific provisions relating to fax
advertising.
! Provides an "established business relationship" (EBR) exemption,
allowing businesses, political organizations, and trade associations to
send advertisements and solicitations to persons with whom they have an
existing relationship.
! Requires organizations to place a "clear and conspicuous" notice on the
first page of each fax informing the recipient how to opt out of future
faxes -- the notice must include U.S. telephone and fax numbers and a
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"cost-free" way for recipients to make their requests.
! Requires that businesses be able to accept opt-out requests 24-hours a
day, seven days a week.
The JFPA also directed the FCC to conduct a rulemaking to implement certain
portions of the act (see below, "FCC Activity") and the Government Accountability
Office (GAO) to issue a report on the effectiveness of the FCC's junk fax enforcement
policies by April 5, 2006 (see below, "GAO Activity").
FCC Activity
The JFPA required the FCC to adopt rules concerning unsolicited fax advertising as
well as issue an annual report on its enforcement activities.
FCC Junk Fax Rules
On December 9, 2005, the FCC released a Notice of Proposed Rulemaking (NPRM)
and Order on various questions related to the regulation of commercial faxes.2 On April
5, 2006, the FCC adopted its final rules in this proceeding. These rules
! codified an exemption to the fax rules to allow fax advertisements to be
sent to parties with whom the sender has an EBR and provided a
1
The Junk Fax Prevention Act of 2005, P.L. 109-21, 119 Stat. 359 (2005). This legislation, S.
714 (S.Rept. 109-76), was introduced by Senator Gordon Smith on April 6, 2005.
2
Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CG
Docket No. 02-278, FCC 03-208, Order on Reconsideration (rel. August 18, 2003), available
online at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/ FCC-05-206A1.pdf].
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definition of an EBR to be used in the context of sending fax
advertisements;3
! required that, even in the case of an EBR, a person sending a fax
advertisement must obtain the fax number directly from the recipient or
ensure that the recipient voluntarily agreed to make the number available
for public distribution;
! required the sender of fax advertisements to provide clear and
conspicuous notice and contact information on the first page of a fax that
allows recipients to "opt-out" of future fax transmissions from the
sender;
! required senders to honor opt-out requests within the shortest reasonable
period of time, not to exceed 30 days;
! determined not to exempt small businesses or nonprofit trade
associations from the rules; and
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! clarified the term "unsolicited advertisement."4
In this proceeding, the FCC did not address whether there should be a time limit on the
duration of an EBR, although the act allows the FCC to revisit that issue at another time.
The FCC's Junk Fax Fact Sheet is available online at [http://www.fcc.gov/cgb/
consumerfacts/unwantedfaxes.html].5
FCC Annual Report on JFPA Enforcement
As required by the JFPA, in January 2007, the FCC released its first annual report
on junk fax enforcement.6 According to the report, the Commission issued 125 citations
3
The term "established business relationship" means a prior or existing relationship formed by
a voluntary two-way communication between a person or entity and a business or residential
subscriber with or without an exchange of consideration, on the basis of an inquiry, application,
purchase or transaction by the business or residential subscriber regarding products or services
offered by such person or entity, which relationship has not been previously terminated by either
party. See amended rule at 47 C.F.R. � 64.1200(f)(5).
4
The term "unsolicited advertisement" means any material advertising the commercial
availability or quality of any property, goods, or services which is transmitted to any person
without the person's prior express invitation or permission, in writing or otherwise. See amended
rule at 47 C.F.R. � 64.1200(f)(13).
5
In the Report and Order, the FCC indicated that those rules containing information collection
requirements under the Paperwork Reduction Act required approval by the Office of
Management and Budget (OMB) before they could become effective. On July 19, 2006, the FCC
received approval from OMB. Therefore, as announced in the Federal Register on July 26, 2006
(71 Fed. Reg. 42297), the amended facsimile rules became effective on August 1, 2006.
6
Federal Communications Commission, In the Matter of Rules and Regulations Implementing
the Telephone Consumer Protection Act of 1991 (CG Docket 02-278) and Junk Fax Prevention
(continued...)
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in response to 47,704 junk fax complaints representing 102,004 alleged violations during
the period July 2005 through July 2006. The report further states that the Commission
fully addressed approximately 85 percent of those alleged violations, but that figure
includes not only complaints against which the FCC issued a citation, but also violations
that were found to be non-actionable for various reasons.
GAO Activity
As required under the JFPA, on April 5, 2006, the GAO submitted its report to
Congress on the FCC's enforcement of the junk fax law.7 The report addressed the
following.
! The FCC's junk fax procedures and outcomes.
! The strengths and weaknesses of FCC's procedures.
! The FCC's junk fax management challenges.
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The GAO found that the FCC had instituted procedures for receiving and
acknowledging the increasing number of junk fax complaints, but that the numbers of
investigations and enforcement actions had remained mostly the same. For example, the
GAO stated that in 2000, the FCC recorded about 2,200 junk fax complaints; in 2005, the
FCC recorded over 46,000 complaints. However, in total, the GAO found that the FCC's
Enforcement Bureau issued only 261 warnings from 2000 through 2005. Further, the
GAO discovered that although the bureau had ordered six companies to pay forfeitures
totaling over $6.9 million for continuing to violate the junk fax rules after receiving
warnings, none of that total had been collected by the Department of Justice. The GAO
also stated that FCC officials cited competing demands, resource constraints, and the
rising sophistication of violators in hiding their identities as hindrances to enforcement.
With respect to strengths and weaknesses in the FCC's procedures, the GAO
determined that an emphasis on customer service, an effort to document consumers'
complaints, and an attempt to target enforcement resources efficiently were strengths in
FCC's procedures; however, inefficient data management, resulting in time-consuming
manual data entry, data errors, and -- most importantly -- the exclusion of the majority
of complaints from decisions about investigations and enforcement, continue to be
weaknesses. Further, the GAO stated that the FCC does not provide consumers with
adequate guidance or information to support the FCC's enforcement efforts.
Finally, the GAO stated that FCC faces management challenges in carrying out its
junk fax responsibilities. The FCC has no clearly articulated long-term or annual goals
for junk fax monitoring and enforcement, and it is not analyzing the data it collects.
6
(...continued)
Act of 2005 (CG Docket 05-338), Annual Report on Unsolicited Facsimile Advertisements (DA
07-16), January 4, 2007, available online at [http://hraunfoss.fcc.gov/edocs_public/ attachmatch/
DA-07-16A1.pdf].
7
General Accountability Office, Weaknesses in Procedures and Performance Management
Hinder Junk Fax Enforcement, April 5, 2006, available online at [http://www.gao.gov/new.items/
d06425.pdf].
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Without analysis, the FCC cannot assess whether it needs to change its rules, procedures,
or consumer guidance guidelines. Most importantly, the GAO found that without
performance goals and measures and without analysis of complaint and enforcement data,
it was not possible to explore the effectiveness of current enforcement measures.
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