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House moves to right do-not-fax change

November 22, 2010
The U.S. House has moved to change last year's rulemaking by the Federal Communications Commission that would forbid all business-to-business faxes, effective next Jan. 1, even between businesses with established relationships. The contention stems from a 1991 measure that made it a federal violation for anyone to send an unsolicited ad to a telephone fax machine. Those receiving junk faxes could sue for at least $500 per solicitation. In that ruling, the FCC created a loophole allowing businesses to send unsolicited faxes to those who had established relationships with them. For instance, a realtor could send a listing sheet to an interested buyer or forward a bid to a seller. Last year, however, the FCC abruptly reinterpreted its rules to eliminate the established- relationship exemption. The commission ruled that, beginning Jan. 1, 2005, every business, association or not-for-profit must obtain prior written approval from each individual before sending a commercial fax or face stiff financial penalties. The Junk Fax Prevention Act, passed this month by the House, would restore the 13-year-old loophole. The Senate is considering similar legislation. When the FCC in 2002 proposed the Telephone Consumer Protection Act, the prohibition against telemarketer calls grabbed all the attention. The act's provision concerning unwanted faxes begins on paragraph 185 of the FCC's 225- paragraph report. The FCC reversal concluded "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. Also, someone 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, 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 rule change, 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. If not derailed by Congress before Jan. 1, the rule change would force businesses to secure the recipient's permission in advance. Express consent would have 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.