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Facing uproar, FCC pauses till '05 on implementing new fax rule for businesses

November 23, 2010
Businesses won a reprieve from a cumbersome Federal Communications Commission ruling that would have fined businesses for sending faxes to consumers unless a consumer gives explicit consent first. The Telephone Consumer Protection Act was to have taken effect Aug. 25. The FCC on Aug. 18 moved to extend that date to Jan. 1, 2005, to reconsider the matter in the wake of waves of objections. The FCC proposed the rule last fall, but the rule's exact wording was not published until July 25. In addition, most observers focused on the rule's telemarketing provisions, which set limits on when a business can call people at home. The provision concerning unwanted faxes begins at paragraph 185 of the FCC's 225-paragraph report on the new rule. Since 1992, businesses can send faxes to recipients with which they have an "established business relationship," regarded by the FCC as customers who bought something from the business in the past 18 months or made an inquiry in the past three months. Those periods expire if the fax recipient requests not to be contacted by the fax sender. The July report by the FCC reversed course, concluding "that the established business relationship would no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements." If businesses or associations violated the proposed rule, the FCC could assess penalties of up to $11,000 for each fax. In addition, the person who received an unwanted fax could sue for $500 for each violation, with the possibility of receiving triple damages if the business knowingly broke the law. Non-profit associations objected loudly to the FCC, arguing against the requirement that they get written permission before faxing any "advertisement"- including notice of an upcoming meeting or seminar that charges a fee-to their own dues-paying members. Small businesses, which rely heavily on faxes, also railed against the proposed rule, saying it would be too burdensome. "It's inconvenient, it's a lot of paperwork, and it's a lot of time," said Steve Bokat, general counsel for the U.S. Chamber of Commerce. The rule change would have forced businesses to secure the recipient's permission in advance. Express consent would have had to (1) be in writing; (2) include the recipient's signature, in electronic or digital form; and (3) clearly indicate the recipient's advance consent to receive any facsimile advertisements from a business.