FCC Commences Rulemaking to Implement Junk Fax Prevention Act of 2005
Posted by Ronald London
The recent adoption of an Order and Notice of Proposed Rulemaking ( “NPRM”) by the Federal Communications Commission to implement the Junk Fax Prevention Act of 2005 appears to drive the final nail into the coffin of the abortive FCC effort to tighten its “junk fax” rules by eliminating the exception for faxes to recipients with whom the sender has an “established business relationship, i.e., an “EBR.” The action is the first step toward realization of Congress’s reversal of an FCC decision that critics said would undermine, among other things, the vitality of faxes as a business-to-business tool and as a means for associations to communicate with their members. In the most immediate term, the significance of the FCC’s action is that the Order indefinitely suspends the effectiveness of a rule the FCC adopted in 2003 (which has been stayed since its adoption and thus never has taken effect) to require prior written consent for all unsolicited fax advertisements.
The FCC issued the Order/NPRM in response to the mandate in the Junk Fax Protection Act that the Commission adopt rules implementing the Act, the origins of which we describe here, by April 5, 2006, i.e., 270 days after the Act’s passage. The new law became necessary after the FCC’s 2003 decision to reverse its then decade-old rule that the Telephone Consumer Protection Act’s prohibition on the use of fax machines to send unsolicited advertisements did not encompasses those sent pursuant to an EBR, the existence of which, the FCC reasoned, rendered the ads not “unsolicited.” The FCC reversed itself on this point in 2003 on grounds that it received numerous complaints from recipients of unsolicited faxes citing intrusion on their residential privacy and/or the extent to which the faxes impose costs in time, toner and paper.
The Junk Fax Prevention Act restores the EBR exemption the FCC attempted to eliminate, but subject to a new “opt-out” right by recipients, the contours of which we describe here. The FCC’s NPRM accordingly centers on the three core concepts of the Junk Fax Prevention Act -- (1) recognition and contours of the EBR exemption, (2) notice of the right to opt out of future faxes, and (3) communication and implementation of opt-out requests. In doing so, it makes a handful of determinations associated with implementing these tenets, and otherwise asks a series of questions geared toward the practicalities of a new opt-out regime. These include matters such as explaining that “in the context of an EBR … prior express permission may be formed by means other than a signed, written statement,” and soliciting information about the formation of EBRs, whether they should have a fixed duration and, if so, what time period is appropriate.
The NPRM also asks questions geared toward the notice that senders of unsolicited fax ads must place on the first page under the Act informing recipients of the opt-out right and how to exercise it. These questions relate to the wording of the notice, how long senders have to effectuate an opt-out request, the types of mechanisms that senders should and/or may be required to establish to receive opt-out requests (i.e., phone numbers, faxes, email, etc.) The NPRM goes on to inquire as to what should be required for an effective opt-out request, including whether there is a need to specify that an opt-out terminates an EBR even if the recipient continues to do business with the sender, how the opt-out should apply in cases where the sender faxes through a third-party agent or fax broadcaster, and whether senders should be required to honor opt-out requests received by means other than those provided in the opt-out notice (for example, if the sender provides only a domestic phone number and toll-free number for opt-outs, should opt-outs also received via website/email be effective?). The NPRM also raises questions associated with the Act’s grant of optional authority for the FCC to exempt nonprofit organizations from the notice requirements.
Comments are due 30 days after the NPRM appears in the Federal Register (which as of this writing has not occurred). Action by the FCC is anticipated, as noted above, by April 5, 2005.