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Unsolicited faxes have long been the ugly downside of fax technology. Every business owner with a facsimile machine can relate to arriving at the office in the morning to find the fax clogged with unwanted travel promotions, hot investment options and other unwanted solicitations, all of which consumed paper, toner or otherwise prevented important faxes from getting through. Curtailing unsolicited fax advertisements is a key objective of comprehensive new regulations released by the Federal Communications Commissions on July 3, 2003. [FOOTNOTE 1] Congress first recognized the problem of unsolicited faxes in 1991, when it enacted the Federal Telephone Consumer Protection Act (TCPA). The act amended the Communications Act of 1934 by adding � 227(b)(1)(C). This section makes it unlawful for a person to send a fax advertisement without the “prior express invitation or permission” of the recipient. [FOOTNOTE 2] The 8th U.S. Circuit Court of Appeals recently upheld the TCPA’s constraints on unsolicited faxes as satisfying the constitutional test for regulation of commercial speech. [FOOTNOTE 3]Rules implementing the act are codified at 47 C.F.R. Part 64.1200. EBR EXEMPTION In 1992, the FCC promulgated its first rules under the TCPA for the control of unsolicited faxes. [FOOTNOTE 4]While the 1992 rules prohibited unsolicited faxes generally, the 1992 TCPA Order included a loophole permitting the delivery of unsolicited faxes to recipients with whom the sender had an “established business relationship” (EBR). [FOOTNOTE 5] The EBR exemption has been subject to considerable abuse. For example, relying on the exemption, consumers have been besieged by unsolicited faxes from companies they had not dealt with for years, or by “strategic partners” who have become affiliated with a business simply to gain access to its fax lists. These abuses effectively came to an end on July 3 with the release of the new TCPA regulations, which reversed and expressly overruled the prior FCC regulations, and eliminated an EBR as implied consent to receive an otherwise unsolicited fax advertisement. Under the 2003 TCPA Order, the FCC has reversed its prior ruling, and determined that the TCPA requires a person or entity to obtain the prior express invitation or permission of the recipient before transmitting an unsolicited fax ad. An EBR may no longer be relied upon as tantamount to consent to receive a fax solicitation. The new FCC rules now require that no fax solicitation may be sent without the express written invitation or permission, bearing the signature of the intended fax recipient. The recipient must clearly indicate that she consents to receiving such faxed advertisements from the company to which permission is given, and must list the individual or business’ fax number to which faxes may be sent. The order will be effective 30 days after publication in the Federal Register. As of that date, an EBR will not be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements. OBTAINING CONSENT Advertisers may obtain consent for their faxes through such means as direct mail, Web sites and interaction with customers in their stores. For example, a company that requests a fax number on an application form could include a clear statement indicating that, by providing such fax number, the individual or business agrees to receive faxed ads from that company. Such a statement, if accompanied by the recipient’s signature, will according to the FCC “constitute the necessary prior express permission to send facsimile advertisements to that individual or business.” It is important to note, however, that under the new rules, the permission to send fax ads cannot be in the form of a “negative option.” [FOOTNOTE 6] The act’s prohibition against unsolicited faxes applies to all unsolicited advertisement directed to a facsimile machine, regardless of how the advertisement is sent. The TCPA makes it unlawful for any person to use any telephone facsimile machine, computer, or other device to send an unsolicited advertisement to a telephone facsimile machine. The TCPA defines the term “telephone facsimile machine” to mean “equipment which has the capacity (A) to transcribe text or images, or both, from paper into an electronic signal and to transmit that signal over a regular telephone line, or (B) to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper.” [FOOTNOTE 7] In the 2003 TCPA Order, the FCC further determined that faxes sent to personal computers equipped with, or attached to, modems and to computerized fax servers are subject to the act’s prohibition on unsolicited faxes. However, the FCC also stated that the prohibition against unsolicited faxes does not extend to facsimile messages sent as e-mail over the Internet. A conventional stand-alone telephone fax machine is just one device used for the receipt of fax transmissions. Today, a modem attached to a personal computer allows one to transmit and receive electronic documents, such as faxes. “Fax servers” enable multiple desktops to send and receive faxes from the same or shared telephony lines. Recognizing this, the FCC concluded that the act’s definition of “telephone facsimile machine” broadly applies to any equipment that has the capacity to send or receive text or images. TELEMARKETING The 2003 TCPA Order addresses a broad universe of issues related to telemarketing. In addition to providing detailed new regulations for fax advertising, the new regulations establish the first national “do-not-call” list; establish new rules for automated dialers; and impose new identification requirements on telemarketers, including caller ID requirements. This new universe of legal requirements must be viewed against the private enforcement provisions in the TCPA, which permit consumers to file suit in state court if an entity violates the TCPA prohibitions on the use of facsimile machines, automatic telephone dialing systems, and artificial or prerecorded voice messages and telephone solicitation. Consumers may recover actual damages or receive up to $500 in damages for each violation, whichever is greater. If the court finds that the entity willfully or knowingly violated the act, consumers may recover an amount equal to not more than three times this amount. Consumers may also bring their complaints regarding TCPA violations to the attention of a state attorney general or an official designated by the state. This state entity may bring a civil action on behalf of its residents to enjoin a person or entity engaged in a pattern of telephone calls or other transmissions in violation of the TCPA. Additionally, a consumer may request that the commission take enforcement actions regarding violations of the TCPA and the regulations adopted to enforce it. [FOOTNOTE 8] These private TCPA enforcement options are in addition to the enforcement options available to the FCC. For example, on Aug. 2, 2002, the FCC imposed a $5.4 million fine against Inc., for illegal fax blasting. [FOOTNOTE 9] Companies that rely on dealers, agents, franchisees or other third parties for marketing, advertising and telemarketing services must be particularly cognizant of the new TCPA rules and the enforcement actions applying these rules. The concern for companies is significant since the FCC in 1995 interpreted the anti-fax blasting provisions of the TCPA, holding that “the entity or entities on whose behalf faxes are transmitted are ultimately liable for compliance with the rule banning unsolicited facsimile advertisements.” [FOOTNOTE 10]Companies can therefore be held liable for the TCPA violations of agents, subcontractors and franchisees. In light of the powerful enforcement tools available to consumers and regulatory agencies, companies that use any form of telemarketing, whether it involves fax machines, automatic telephone dialing systems, artificial or pre-recorded voice messages and/or telephone solicitation, must be fully aware of the significant new changes adopted by the FCC in its 2003 TCPA Order. David L. Snyder is a founding partner of Snyder & Snyder ( ). Seth M. Mandelbaum is a senior associate at the firm. If you are interested in submitting an article to, please click here for our submission guidelines. ::::FOOTNOTES:::: FN 1 In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, FCC 03-152 (CG Docket No. 02-278) (the 2003 TCPA Order). FN 247 U.S.C. �227(a)(4). FN 3 See Missouri ex rel Nixon v. American Blast Fax, Inc., 323 F.3d 649 (8th Cir. 2003) (petition for rehearing pending). FN 4 SeeRules and Regulations Implementing the Telephone Consumer Protection Act of 1991, CC Docket No. 92-90, Report and Order, 7 FCC Rcd 8752 (1992) (the 1992 TCPA Order). FN 51992 TCPA Order, 7 FCC Rcd at 8779, para. 54, n. 87. FN 6A facsimile advertisement containing a telephone number and an instruction to call if the recipient no longer wishes to receive such faxes would constitute a “negative option.” This option (in which the sender presumes consent unless advised otherwise) would impose costs on facsimile recipients unless or until the recipient were able to ask that such transmissions be stopped, and is unlawful under the new rules. 2003 TCPA Order, �191, n. 705. FN 747 U.S.C. �227(a)(2); this definition was incorporated into �64.1200(f)(2) of the commission’s rules. FN 8 See47 C.F.R. � 1.41 on informal requests for commission action and 47 C.F.R. �1.716 on the commission’s process for complaints filed against common carriers. FN 9 See In the Matter of, Inc.(FCC 02-226). FN 10 See1995 TCPA Reconsideration Order, 10 FCC Rcd at 12407, para. 35.

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