FCC Completes Rulemaking to Implement Junk Fax Prevention Act of 2005
Posted by Ronald G. London
The Federal Communications Commission has completed its rulemaking to adopt regulations codifying the "established business relationship" or "EBR" exemption to the federal prohibition on unsolicited facsimile advertisements in the Telephone Consumer Protection Act (TCPA). The codification was necessary under the Junk Fax Prevention Act, which mandated that the FCC re¬instate the "EBR exemption" the agency announced it would eliminate in 2003 (after it had been in effect since 1992) in favor of requiring prior written consent for unsoli¬cited fax ads. The new rules create a new "do-not-fax" regime for unsolicited advertisements whereby those who send such faxes must maintain an internal list of recipients who "opt out" of further faxes from the sender.
The TCPA and FCC rules basically prohibit using any device to send to a telephone facsimile machine any "unsolicited advertisement," defined as "material advertising the commercial avail¬ability 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." Unless the sender has such prior express permission, the only way to send a fax ad is under the EBR exemption. The new FCC rules and Report & Order adopting them, among other things, (1) clarify the scope of the EBR exemption; (2) require senders to provide notice and contact information that allows recipients to "opt-out" of future faxes from the sender; and (3) specify the circum¬stances under which a request to "opt-out" is effective. Highlights include:
- The FCC defined "EBR" for purposes of the exemption as "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 ... which relationship has not been previously terminated by either party"- Anyone sending a fax ad under the EBR exemption must have obtained the fax number directly from the recipient within the context of the EBR (e.g., through an application, information request, contact information form, membership renewal, or business card, etc.), or ensure the recipient voluntarily agreed to make the number available by publica¬tion in/on its own directory, advertisement, or Internet site, or other material accessible to the public
- "Prior express invitation or permission" may be in oral or written (including electronic) form and must (i) be express and given prior to sending any fax ad (and thus cannot be obtained by fax in the first instance, unless an EBR predates the request for permission), (ii) include a fax number to which faxes may be sent, and (iii) not be in the form of a "negative option"
- The FCC established procedures whereby all unsolicited fax ads must contain a "clear and conspicuous" notice at the top or bottom of the first page stating the recipient is entitled to request the sender not send future unsolicited ads, and a domestic contact phone and fax number for recipients to make opt-out requests and at least one cost-free mechanism for doing so (e.g., website, email address, toll-free phone number, or toll-free fax number)
- The FCC determined that senders must comply with opt-out requests in the shortest reason¬able time, not to exceed thirty (30) days, or sooner if the sender has the capacity to do so
- The FCC clarified that reference to a commercial entity does not by itself make a fax an ad - for example, company logos or slogans on a statement do not convert it into an ad as long as the primary purpose is non-advertising (e.g., to relay account information), nor does a fax contain advertising if it is merely seeks to facilitate, complete, or confirm a transaction the recipient previously agreed to enter with the sender, but faxes for free goods and services that promote them (such as free subscriptions, catalogs, consultations, etc.), are unsolicited ads
- The FCC issued a reminder that faxes that are subject to its rules because they contain unsoli¬cited advertising must include in the margin at the top or bottom of the first page, or on each transmitted page, the date and time sent, identification of the sender, and a telephone number of the sending machine or of the entity sending the fax
- There is no exemption to the rules for trade associations, though the FCC appears to assume EBRs exist between associations and their members, and messages that are not commercial do not constitute "unsolicited advertisements" and thus fall outside the rules