[Federal Register: December 19, 2005 (Volume 70, Number 242)]
[Proposed Rules]
[Page 75102-75110]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19de05-30]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CG Docket No. 02-278; CG Docket No. 05-338; FCC 05-206]
Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: The Junk Fax Prevention Act of 2005 amends section 227 of the
Communications Act of 1934 relating to unsolicited facsimile
advertisements. The Junk Fax Prevention Act requires the Commission to
issue regulations to implement the amendments made by the statute no
later than 270 days after the date of enactment of the Act. In this
document, the Commission proposes amendments to its unsolicited
facsimile advertising rules and seeks comment on related aspects of
those rules. Specifically, the Commission seeks comment on the
established business relationship (EBR) exception to the rules, the
requirement to include an opt-out notice and contact information on
facsimile advertisements, and other rules implementing the Junk Fax
Prevention Act. The Commission also opens a new docket for all filings
in response to this document and those addressing the facsimile
advertising rules generally.
DATES: Comments due January 18, 2006. Reply comments due February 2,
2006. Written comments on the Paperwork Reduction Act (PRA) proposed
information collection requirements must be submitted by the general
public, Office of Management and Budget (OMB), and other interested
parties on or before February 17, 2006.
ADDRESSES: You may submit comments, identified by CG Docket No. 05-338,
by any of the following methods:
[[Page 75103]]
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/.
Follow the instructions for submitting comments.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: FCC504@fcc.gov or phone (2020 418-
0539 or TTY: (202) 418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document. In addition, a copy of any
comments on the Paperwork Reduction Act (PRA) information collection
requirements contained herein should be submitted to Leslie Smith,
Federal Communications Commission, Room 1-A804, 445 12th Street, SW.,
Washington, DC 20554, or via the Internet to Leslie.Smith@fcc.gov, and
to Kristy L. LaLonde, OMB Desk Officer, Room 10234 NEOB, 725 17th
Street, NW., Washington, DC 20503, via the Internet to
Kristy_L._LaLonde@omb.eop.gov, or via fax at (202) 395-5167.
FOR FURTHER INFORMATION CONTACT: Erica McMahon or Richard Smith,
Consumer & Governmental Affairs Bureau, (202) 418-2512. For additional
information concerning the Paperwork Reduction Act information
collection requirements contained in this document, contact Les Smith
at (202) 418-0217, or via the Internet at Leslie.Smith@fcc.gov.
SUPPLEMENTARY INFORMATION: This Notice of Proposed Rulemaking (NPRM),
CG Docket No. 02-278, FCC 05-206, contains proposed information
collection requirements subject to the PRA, Public Law 104-13. It will
be submitted to the Office of Management and Budget (OMB) for review
under section 3507 of the PRA. OMB, the general public, and other
Federal agencies are invited to comment on the proposed information
collection requirements contained in this proceeding. This is a summary
of the Commission's NPRM, FCC 05-206, adopted December 9, 2005, and
released December 9, 2005 in CG Docket No. 02-278 and CG Docket No.05-
338. The Commission also opens a new docket--CG Docket No. 05-338--for
all filings in response to this document and those addressing the
facsimile advertising rules generally. In addition, this NPRM is
associated with an Order, FCC 05-206, adopted December 9, 2005,
released December 9, 2005, addressing the delayed effective date of the
written consent requirement for sending facsimile advertisements. The
Final rule is published elsewhere in this issue of the Federal
Register.
Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's rules,
47 CFR 1.415 and 1.419, interested parties may file comments on January
18, 2006 and reply comments on February 2, 2006. Comments may be filed
using: (1) The Commission's Electronic Comment Filing System (ECFS);
(2) the Federal Government's eRulemaking Portal; or (3) or by filing
paper copies. See Electronic Filing of Documents in Rulemaking
Proceedings, 63 FR 24121, May 1, 1998.
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ or the Federal eRulemaking Portal: http://www.regulations.gov. Filers
should follow the instructions provided on the Web site for submitting
comments.
For ECFS filers, although multiple docket numbers appear
in the caption of this proceeding, filers should transmit one
electronic copy of the comments for CG Docket No. 05-338 only. In
completing the transmittal screen, filers should include their full
name, U.S. Postal Service mailing address, and the applicable docket or
rulemaking number, which in this instance is CG Docket No. 05-338.
Parties may also submit an electronic comment by Internet e-mail. To
get filing instructions, filers should send an e-mail to ecfs@fcc.gov,
and include the following words in the body of the message, ``get
form.'' A sample form and directions will be sent in response.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing in CG Docket No. 05-
338. Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail (although the Commission continues to experience delays in
receiving U.S. Postal Service mail). All filings must be addressed to
the Commission's Secretary, Office of the Secretary, Federal
Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
Comments and reply comments must include a short and concise
summary of the substantive discussion and questions raised in the NPRM.
The Commission further directs all interested parties to include the
name of the filing party and the date of the filing on each page of
their comments and reply comments. The Commission strongly encourages
that parties track the organization set forth in the NPRM in order to
facilitate the Commission's internal review process. Comments and reply
comments must otherwise comply with Sec. 1.48 of the Commission's
rules and all other applicable sections of the Commission's rules. (See
47 CFR 1.48).
Pursuant to Sec. 1.1200 of the Commission's rules, 47 CFR 1.1200,
this matter shall be treated as a ``permit-but-disclose'' proceeding in
accordance with the Commission's ex parte rules. Persons making oral ex
parte presentations are reminded that memoranda summarizing the
presentations must contain summaries of the substances of the
presentations and not merely a listing of the subjects discussed. More
than a one or two sentence description of the views and arguments
presented is generally required. See 47 CFR 1.1206(b). Other rules
pertaining to oral and written ex parte presentations in permit-but-
disclose proceedings are set forth in Sec. 1.1206(b) of the
Commission's rules, 47 CFR 1.1206(b).
To request materials in accessible formats for people with
disabilities (Braille, large print, electronic files, audio format),
send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).
Initial Paperwork Reduction Act of 1995 Analysis
This NPRM contains proposed information collection requirements.
The Commission, as part of its continuing effort to reduce paperwork
burdens, invites the general public and the Office of Management and
Budget (OMB) to comment on the information collection requirements
contained in this NPRM, as required by the Paperwork Reduction Act of
1995, Public Law 104-13. Public and agency comments are due February
17, 2006.
[[Page 75104]]
Comments should address: (a) Whether the proposed collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology. In
addition, pursuant to the Small Business Paperwork Relief Act of 2002,
Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks
specific comment on how the Commission might ``further reduce the
information collection burden for small business concerns with fewer
than 25 employees.''
OMB Control Number: 3060-XXXX.
Title: Rules and Regulations Implementing the Junk Fax Prevention
Act of 2005.
Form Number: N/A.
Type of Review: New Collection.
Respondents: Individuals or households; Business and other for-
profit entities; and Not-for-profit institutions.
Number of Respondents: 5,000,000--(4 million facsimile
advertisement senders and 1,000,000 complainants).
Number of Responses: 5,150,000 responses.
Estimated Time per Response: 15 seconds to 1 hour.
Frequency of Responses: On occasion reporting requirement; monthly
recordkeeping; third party.
Total Annual Burden: 13,170,000 hours.
Total Annual Cost: $60,000,000.
Privacy Impact Assessment: Yes.
Needs and Uses: On December 9, 2005, the Commission released a
Notice of Proposed Rulemaking, Rules and Regulations Implementing the
Telephone Consumer Protection Act of 1991 (NPRM), which proposes
modifications to the Commission's rules on unsolicited facsimile
advertisements and seeks comment on related aspects of those rules,
pursuant to the Junk Fax Prevention Act. The Commission is considering
the adoption of rules governing the transmission of facsimile
advertisements. Because the facsimile advertising rules involve
different issues and different entities than do the telemarketing rules
under the Telephone Consumer Protection Act (TCPA), the Commission
believes that it will be easier for the public if the burden hours
associated with the facsimile advertising rules are identified in a
separate information collection. Therefore, the Commission is
initiating a new collection for the proposed facsimile advertising
rules described below:
(1) The Junk Fax Prevention Act requires senders of unsolicited
facsimile advertisements to include a notice on the first page of the
facsimile that informs the recipient of the ability and means to
request that they not receive future unsolicited facsimile
advertisements from the sender. The NPRM must include a domestic
contact telephone and facsimile machine number for the recipient to
transmit such a request to the sender, as well as a cost-free mechanism
for a recipient to transmit a request pursuant to such notice to the
sender of the unsolicited advertisement. The telephone and facsimile
numbers and cost-free mechanism must permit an individual or business
to make such a request at any time on any day of the week. The
Commission proposes amending the Commission's rules to require entities
to comply with the specific notice requirements in the Junk Fax
Prevention Act. The Commission also asks whether a 30-day limitation is
the shortest reasonable period in which a sender should comply with a
request not to receive future facsimile advertisements.
(2) In addition, the Junk Fax Prevention Act provides that, if a
sender relies on an EBR for permission to fax an advertisement, the
sender must have obtained the number of the telephone facsimile machine
through the voluntary communication of such number, within the context
of such EBR or through a directory, advertisement, or site on the
Internet to which the recipient voluntarily agreed to make available
its facsimile number. This provision does not apply in the case of an
advertisement sent based on an established business relationship with
the recipient that was in existence before the date of enactment of the
Junk Fax Prevention Act (July 9, 2005). The Commission seeks comment on
whether to require the sender to make reasonable efforts to confirm
with the entity that compiled the numbers that the recipients have
voluntarily agreed to allow them to be made publicly available. The
Commission also proposes amending the rules, consistent with the Junk
Fax Prevention Act, to permit senders to send facsimile advertisements
to persons with whom an EBR was formed prior to July 9, 2005, provided
the facsimile number was in the sender's possession before July 9,
2005, as well. While there is no ongoing reporting requirement
associated with this proposed rule, if a complaint is filed involving
the existence of an EBR or the duration of the EBR, the facsimile
sender may need to obtain and provide records kept in the usual course
of business evidencing the duration of the EBR.
(3) Finally the Commission seeks comment on situations in which a
consumer that has made a do-not-fax request of a sender subsequently
provides express invitation or permission to receive facsimile
advertisements from that entity. Specifically, the Commission asks
whether the facsimile sender should bear the burden of proof to
demonstrate that it had the consumer's express invitation or permission
to send the advertisement. Again, while there is no ongoing
recordkeeping or reporting requirement associated with this proposed
rule, if a complaint is filed, the facsimile sender may need to obtain
and provide records demonstrating that express invitation or permission
was subsequently provided by the recipient.
Synopsis
The Junk Fax Prevention Act of 2005 (the Junk Fax Prevention Act)
amends the provisions of section 227 of the Communications Act of 1934
(the Act) relating to unsolicited facsimile advertisements. As required
by the Junk Fax Prevention Act, the Commission proposes modifications
to the Commission's rules on unsolicited facsimile advertisements and
seeks comment on related aspects of those rules. The Junk Fax
Prevention Act was signed into law on July 9, 2005. Section 2(h) of the
Junk Fax Prevention Act provides that ``not later than 270 days after
the date of enactment of this Act, the Federal Communications
Commission shall issue regulations to implement the amendments made by
this section.'' Therefore, the Commission must issue regulations to
implement these amendments no later than April 5, 2006.
Recognition of an Established Business Relationship Exemption
Background
Section 2(a) of the Junk Fax Prevention Act amends section
227(b)(1)(C) of the Act by adding an established business relationship
(EBR) exemption to the prohibition on sending unsolicited facsimile
advertisements. Specifically, section 2(a) provides that it shall be
unlawful for any person within the United States or any person outside
the United States if the recipient is within the United States:
(C) To use any telephone facsimile machine, computer, or other
device to
[[Page 75105]]
send, to a telephone facsimile machine, an unsolicited advertisement,
unless--
(i) The unsolicited advertisement is from a sender with an
established business relationship with the recipient;
(ii) The sender obtained the number of the telephone facsimile
machine through--
(I) The voluntary communication of such number, within the context
of such established business relationship, from the recipient of the
unsolicited advertisement, or
(II) A directory, advertisement, or site on the Internet to which
the recipient voluntarily agreed to make available its facsimile number
for public distribution, except that this clause shall not apply in the
case of an unsolicited advertisement that is sent based on an
established business relationship with the recipient that was in
existence before the date of enactment of the Junk Fax Prevention Act
of 2005 if the sender possessed the facsimile machine number of the
recipient before such date of enactment; and
(iii) The unsolicited advertisement contains a notice meeting the
requirements under paragraph (2)(D), except that the exception under
clause (i) and (ii) shall not apply with respect to an unsolicited
advertisement sent to a telephone facsimile machine by a sender to whom
a request has been made not to send future unsolicited advertisements
to such telephone facsimile machine that complies with the requirements
under paragraph (2)(E).
Discussion
The Commission proposes amending Sec. 64.1200(a)(3) of the
Commission's rules in accordance with the specific requirements in
section 2(a) of the Junk Fax Prevention Act regarding the express
recognition of an EBR exemption. Specifically, the Commission proposes
removing Sec. 64.1200(a)(3)(i) of the Commission's rules which
provides that a facsimile advertisement is unsolicited unless ``the
recipient has granted the sender prior express invitation or permission
to deliver the advertisement, as evidenced by a signed, written
statement that * * * clearly indicates the recipient's consent to
receive such facsimile advertisements from the sender.'' Congress has
concluded that an unsolicited advertisement from a sender with an EBR
to the recipient will not be governed by the general prohibition found
in section 227(b)(1)(C) of the Act. As discussed further below, in the
context of an EBR, such prior express permission may be formed by means
other than a signed, written statement that indicates the recipient's
consent to receive facsimile advertisements. The Commission seeks
comment on these and any other issues that commenters may consider
pertinent to this topic.
In addition, the Commission seeks specific comment on whether the
Commission should establish parameters defining what it means for a
person to provide a facsimile number ``within the context of [an]
established business relationship.'' Under what circumstances should
the Commission recognize that a person has voluntarily agreed to make a
facsimile number available for public distribution? Should the burden
rest with the sender to establish that the recipient has agreed to make
the number publicly available? When the sender obtains the facsimile
number from a directory, advertisement, or site on the Internet, should
the sender be required to make reasonable efforts to confirm with the
entity that compiled the numbers that the recipients have
``voluntarily'' agreed to allow them to be made publicly available?
Finally, the Junk Fax Prevention Act provides an exception from the
requirement that any sender transmitting a facsimile advertisement on
the basis of an EBR must have obtained the facsimile number through the
``voluntary communication of such number, within the context of such
established business relationship'' or through ``a directory,
advertisement, or site on the Internet to which the recipient
voluntarily agreed to make available its facsimile number for public
distribution.'' Under the statute, if the EBR was in existence prior to
the date of enactment of the statute and the sender also possessed the
facsimile number before the date of enactment of the statute, the
sender is not required to demonstrate how it obtained the facsimile
number. The Commission proposes amending the Commission's rules
consistent with this exception, which would permit senders to send
facsimile advertisements to persons with whom an EBR was formed prior
to July 9, 2005, provided the facsimile number was in the sender's
possession before July 9, 2005, as well. If the Commission adopts this
proposal, how should the Commission verify that a sender had an EBR and
the recipient's facsimile number prior to July 9, 2005? The Commission
seeks comment on this proposal and any other issues that relate to the
sender's ability to send facsimile advertisements to persons with whom
an EBR was formed prior to enactment of the Junk Fax Prevention Act.
Definition of Established Business Relationship
Background
Section 2(b) of the Junk Fax Prevention Act--Definition of
Established Business Relationship--amends section 227(a) of the Act by
providing a definition of an EBR to be used in the context of
unsolicited facsimile advertisements. Specifically, section 2(b) adds
the following language:
(2) The term `established business relationship', for purposes only
of subsection (b)(1)(C)(i) [creating an EBR exemption for unsolicited
facsimile advertisements] shall have the meaning given the term in
section 64.1200 of title 47, Code of Federal Regulations, as in effect
on January 1, 2003, except that--
(A) Such term shall include a relationship between a person or
entity and a business subscriber subject to the same terms applicable
under such section to a relationship between a person or entity and a
residential subscriber; and
(B) An established business relationship shall be subject to any
time limitation established pursuant to paragraph (2)(G).
Paragraph 2(G)'' refers to Section 2(f) of the Junk Fax Prevention
Act. That provision authorizes the Commission to limit the duration of
the EBR in the context of unsolicited facsimile advertisements.
Specifically, Section 2(f) provides that the Commission:
(G)(i) May, consistent with clause (ii), limit the duration of
the existence of an established business relationship, however,
before establishing any such limits, the Commission shall--
(I) Determine whether the existence of the exception under
paragraph
(1)(C) Relating to an established business relationship has
resulted in a significant number of complaints to the Commission
regarding the sending of unsolicited advertisements to telephone
facsimile machines;
(II) Determine whether a significant number of any such
complaints involve unsolicited advertisements that were sent on the
basis of an established business relationship that was longer in
duration than the Commission believes is consistent with the
reasonable expectations of consumers;
(III) Evaluate the costs to senders of demonstrating the
existence of an established business relationship within a specified
period of time and the benefits to recipients of establishing a
limitation on such established business relationship; and
(IV) Determine whether with respect to small businesses, the
costs would not be unduly burdensome; and
(ii) May not commence a proceeding to determine whether to limit
the duration of
[[Page 75106]]
the existence of an established business relationship before the
expiration of the 3-month period that begins on the date of the
enactment of the Junk Fax Prevention Act of 2005.
Discussion
As contemplated by section 2(b) of the statute, the Commission
seeks comment on whether to incorporate into the Commission's facsimile
advertising rules the following definition of an EBR:
For purposes of paragraph (a)(3) of this section, the term
established business relationship means 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 by the business or residential
subscriber regarding products or services offered by such person or
entity, which relationship has not been previously terminated by
either party.
The Commission notes that this proposed EBR definition differs from
the definition of an EBR in the Commission's rules for telephone
solicitations in that it expressly extends the exemption to faxes sent
to both business and residential subscribers, rather than just
residential subscribers. This is consistent with the fact that the
prohibition on sending unsolicited facsimile advertisements, unlike
telephone solicitations, applies to both businesses and residential
subscribers.
The Junk Fax Prevention Act authorizes the Commission, after a
period of three months from the date of enactment of the Act, to
consider limits on the duration of an EBR. Therefore, the Commission
takes this opportunity to seek comment on whether to limit the EBR as
applied to unsolicited facsimile advertisements. As part of the
Commission's review, and as required by the statute, the Commission
will evaluate the Commission's complaint data to determine whether the
EBR exception has resulted in a significant number of complaints
regarding facsimile advertisements, and whether such complaints involve
facsimile advertisements sent based on an EBR of a duration that is
inconsistent with the reasonable expectations of consumers.
In the context of telephone solicitations, Congress has concluded
that the right to call consumers becomes more tenuous over time. See
House of Representatives Report Number 102-317, page 14. Consistent
with the conclusion of the Federal Trade Commission, this Commission
has limited the duration of the EBR for telephone solicitations to 18
months following a purchase or transaction and three months after an
application or inquiry. The Commission concluded that this 18/3-month
limitation on the duration of an EBR strikes an appropriate balance
between industry practices and consumers' privacy interests.
Accordingly, the Commission seeks comment on whether it is appropriate
to limit the EBR duration for unsolicited facsimile advertisements in
the same manner as telephone solicitations. To the extent that
commenters suggest EBR durations for facsimile advertisements that may
vary from those imposed on telephone solicitations, including not
adopting any limitation on the duration of the facsimile EBR, the
Commission seeks empirical evidence to distinguish the Commission's
findings relating to the EBR duration for telephone solicitations.
In addition, as set forth in the Junk Fax Prevention Act, the
Commission seeks comment on the benefits to facsimile recipients of
limits on the EBR. Are there direct costs to consumers associated with
receiving facsimile advertisements, such as costs for paper, toner, and
time spent collecting and sorting faxes that weighs in favor of
limiting the facsimile EBR? Are there direct benefits to consumers of
having an EBR that is not limited in duration? If the Commission adopts
any such limits on the EBR, the Commission also asks commenters to
describe the costs to senders of demonstrating the existence of an EBR
that is limited in duration. Would these costs be overly burdensome,
particularly for small businesses?
Notice of Opt-Out Opportunity
Background
Section 2(c) of the Junk Fax Prevention Act--Required Notice of
Opt-Out Opportunity--amends section 227(b)(2) of the Act by adding
language that requires senders of unsolicited facsimile advertisements
to include a notice on the first page of the facsimile that informs the
recipient of the ability and means to request that they not receive
future unsolicited facsimile advertisements from the sender.
Specifically, section 2(c) requires that the Commission:
(D) Shall provide that a notice contained in an unsolicited
advertisement complies with the requirements under this subparagraph
only if--
(i) The notice is clear and conspicuous and on the first page of
the unsolicited advertisement;
(ii) The notice states that the recipient may make a request to
the sender of the unsolicited advertisement not to send any future
unsolicited advertisements to a telephone facsimile machine or
machines and that failure to comply, within the shortest reasonable
time, as determined by the Commission, with such a request meeting
the requirements under subparagraph (E) [setting forth the
circumstances under which a request to opt-out complies with the
Act] is unlawful;
(iii) The notice sets forth the requirements for a request under
subparagraph (E);
(iv) The notice includes--
(I) A domestic contact telephone and facsimile machine number
for the recipient to transmit such a request to the sender; and
(II) A cost-free mechanism for a recipient to transmit a request
pursuant to such notice to the sender of the unsolicited
advertisement; the Commission shall by rule require the sender to
provide such a mechanism and may, in the discretion of the
Commission and subject to such conditions as the Commission may
prescribe, exempt certain classes of small business senders, but
only if the Commission determines that the costs to such class are
unduly burdensome given the revenues generated by such small
businesses;
(v) The telephone and facsimile machine numbers and cost-free
mechanism set forth pursuant to clause (iv) permit an individual or
business to make such a request at any time on any day of the week;
and
(vi) The notice complies with the requirements of subsection
(d).
Discussion
The Commission proposes amending the Commission's rules to comply
with the specific notice requirements on unsolicited facsimile
advertisements as set forth by Congress in section 2 of the Junk Fax
Prevention Act. In addition, the Commission seeks comment on whether it
is necessary to set forth in our rules under what circumstances a
notice will be considered ``clear and conspicuous.'' If so, the
Commission asks commenters to describe those circumstances under which
a notice should be considered ``clear and conspicuous.'' As directed by
Congress, the Commission also seeks comment on the ``shortest
reasonable time'' within which a sender of unsolicited facsimile
advertisements must comply with a request not to receive future
facsimile advertisements from the sender. The Commission notes that the
Commission's rules require that persons or entities making calls for
telemarketing purposes must honor a do-not-call request within a
reasonable time. The Commission's rules provide that this reasonable
period ``may not exceed thirty days from the date of such request.''
The Commission seeks comment on whether this 30-day limitation is the
shortest reasonable period in which to expect senders of unsolicited
facsimile advertisements to honor a do-not-fax request. If not, the
Commission seeks empirical evidence
[[Page 75107]]
from commenters to support proposals for longer or shorter periods.
The Commission notes that the Commission's rules currently require
senders of facsimile messages to identify themselves on the message,
along with the telephone number of the sending machine or the business,
other entity, or individual sending the message. The Commission
therefore seeks comment on the interplay between this identification
requirement and the notice requirement described above for senders of
unsolicited facsimile advertisements. The Commission seeks comment on
ways to minimize the burdens associated with complying with these
separate requirements that are consistent with the goals of the TCPA
and its recent amendments.
As provided by the Junk Fax Prevention Act, the Commission also
seeks comment on whether to exempt certain classes of small business
senders from the requirement to provide a cost-free mechanism for a
recipient to transmit a request not to receive future facsimile
advertisements. In particular, the Commission seeks empirical
information as to whether the costs to such small businesses are unduly
burdensome given the revenues generated by such small businesses.
Should the Commission decide to exempt certain classes of small
businesses from the requirement, the Commission seeks specific
information on how such ``classes'' of small businesses may be defined.
Do the Small Business Administration's Standard Industrial
Classification regulations provide any useful guidance? Are there any
legal impediments to adopting a definition of small business or class
of small businesses for use in this context that may deviate from the
SBA's standard definition? Does the Junk Fax Prevention Act provide
sufficient authority to allow the Commission to adopt a small business
classification that varies from the SBA? Would such an exemption for
small business senders have any adverse impact on consumers and
businesses who receive facsimile advertisements from small businesses?
Are there alternative mechanisms available so that recipients are able
to request of any small business that it not send future unsolicited
advertisements?
In addition, the Commission seeks comment on whether the Commission
needs to enumerate specific ``cost-free'' mechanisms for a recipient to
transmit a do-not-fax request, and, if so, the Commission seeks comment
on what those specific mechanisms should be. For instance, should the
provision of a toll-free telephone number, website, or email address
for receiving do-not-fax requests, comply with this requirement? Should
a local telephone number be considered a ``cost-free'' mechanism if the
unsolicited facsimile advertisements are sent only to local consumers?
The Commission seeks comment on these issues and any other issues
commenters may consider pertinent to this topic.
Request to Opt-Out of Future Unsolicited Advertisements
Background
Section 2(d) of the Junk Prevention Act--Request to Opt-Out of
Future Unsolicited Advertisements--amends section 227(b)(2) of the Act
by adding language that sets forth when a request not to send future
unsolicited facsimile advertisements complies with the Act.
Specifically, section 2(d) states that the Commission:
(E) Shall provide, by rule, that a request not to send future
unsolicited advertisements to a telephone facsimile machine complies
with the requirements under this subparagraph only if--
(i) The request identifies the telephone number or numbers of
the telephone facsimile machine or machines to which the request
relates;
(ii) The request is made to the telephone or facsimile number of
the sender of such an unsolicited advertisement provided pursuant to
subparagraph (D)(iv) or by any other method of communication as
determined by the Commission; and
(iii) The person making the request has not, subsequent to such
request, provided express invitation or permission to the sender, in
writing or otherwise, to send such advertisements to such person at
such telephone facsimile machine.
Discussion
The Commission proposes adopting the requirements provided in the
Junk Fax Prevention Act regarding the making of a request not to
receive future unsolicited facsimile advertisements. Section 2(a) of
the Junk Fax Prevention Act provides that ``the exception under clauses
(i) and (ii) [creating the EBR exemption] shall not apply with respect
to an unsolicited advertisement sent to a telephone facsimile machine
by a sender to whom a request has been made not to send future
unsolicited advertisements to such telephone facsimile machine* * * .''
The Commission seeks comment on whether the Commission's rules should
reflect that a do-not-fax request terminates the EBR exemption with the
sender of the facsimile even if the recipient continues to do business
with the sender. The Commission seeks comment on whether to specify
that if the sender of the facsimile advertisement is a third party
agent or fax broadcaster that any do-not-fax request sent to that
sender will extend to the underlying business on whose behalf the fax
is transmitted. The Commission also seeks comment on whether there are
any other methods of communication that the Commission should prescribe
for making a do-not-fax request other than those required in the notice
section discussed above (i.e., a domestic contact telephone and
facsimile number and a cost-free mechanism). Should, for instance, a
sender be required to honor a request made by mail or e-mail even if
such addresses are not necessarily provided by the sender in the
facsimile communication's ``opt-out'' notice? Finally, the Commission
seeks comment on situations in which a consumer that has made a do-not-
fax request of a sender subsequently provides express invitation or
permission to receive facsimile advertisements from that entity. Should
the facsimile sender bear the burden of proof to demonstrate that it
had the consumer's express invitation or permission to send the
facsimile advertisement?
Authority To Establish Nonprofit Exception
Background
Section 2(e) of the Junk Fax Prevention Act--Authority to Establish
Nonprofit Exemption--amends section 227(b)(2) of the Act by adding
language that authorizes the Commission to consider exempting nonprofit
organizations from the notice requirements discussed above.
Specifically, section 2(e) provides that the Commission:
(F) May, in the discretion of the Commission and subject to such
conditions as the Commission may prescribe, allow professional or
trade associations that are tax-exempt nonprofit organizations to
send unsolicited advertisements to their members in furtherance of
the association's tax-exempt purpose that do not contain the notice
required by paragraph (1)(C)(iii), except that the Commission may
take action under this subparagraph only--
(i) By regulation issued after public comment; and
(ii) If the Commission determines that such notice required by
paragraph (1)(C)(iii) is not necessary to protect the ability of the
members of such associations to stop such associations from sending
any future unsolicited advertisements[.]
Discussion
The Commission seeks comment on whether the Commission should allow
professional or trade associations that are tax-exempt nonprofit
organizations to send unsolicited advertisements to their members in
furtherance of the associations' tax-exempt purpose that
[[Page 75108]]
do not contain the ``opt-out'' notice required by the Junk Fax
Prevention Act. In particular, the Commission seeks comment on whether
such notice is necessary to protect the ability of members of such
associations to stop the sending of any future unsolicited
advertisements. For example, how will members of such associations
obtain the necessary information to opt-out if associations are not
required to provide such information? What benefits, if any, are there
to nonprofit organizations if the Commission exempts them from this
requirement? How should the Commission determine whether an unsolicited
advertisement is sent ``in furtherance of the association's tax-exempt
purpose?'' The Commission seeks comment on these issues and any other
issues commenters may consider pertinent to this topic.
Unsolicited Advertisement
Background
Section 2(g) of the Junk Fax Prevention Act--Unsolicited
Advertisement--amends section 227(a)(5) of the Act which defines the
term ``unsolicited advertisement'' by adding ``in writing or
otherwise'' before the period at the end of that section.
Discussion
The Commission proposes amending the definition of unsolicited
advertisement in Sec. 64.1200(f)(10) of the Commission's rules to read
as follows:
The term unsolicited advertisement means any material
advertising the commercial availability or quality of any property,
goods, or services which is transmitted to any person without that
person's prior express invitation or permission, in writing or
otherwise.
In addition, the Commission seeks comment on the phrase ``prior
express invitation or permission'' in the definition. In addition to
written permission, what other forms of permission should be allowed by
our rules? If permission is given orally, for instance, should the
facsimile sender bear the burden of proof to demonstrate that it had
the consumer's prior express invitation or permission?
Other Issues: Creation of CG Docket No. 05-338
In this NPRM, the Commission opens a new docket--CG Docket No. 05-
338. All filings in response to this NPRM and those addressing the
Commission's facsimile advertising rules generally, should be filed in
CG Docket No. 05-338. Although the Commission urges parties that
previously filed in CG Docket No. 02-278 on the facsimile advertising
rules to re-file in new CG Docket No. 05-338, such filings nevertheless
will be considered in this proceeding. Therefore, the Commission
incorporates by reference comments filed in CG Docket No. 02-278 that
are responsive to the issues raised in this proceeding. The existing
TCPA docket, CG Docket 02-278, will remain open for other TCPA-related
filings.
Initial Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act of 1980, as amended
(RFA), the Commission has prepared this present Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on a substantial number of small entities by the policies and rules
proposed in this Notice of Proposed Rulemaking (NPRM). Written public
comments are requested on this IRFA. Comments must be identified as
responses to the IRFA and must be filed by January 18, 2006. The
Commission will send a copy of the NPRM, including this IRFA, to the
Chief Counsel for Advocacy of the Small Business Administration (SBA).
In addition, the NPRM and IRFA (or summaries thereof) will be published
in the Federal Register.
A. Need for, and Objectives of, the Proposed Rules
On July 9, 2005, the Junk Fax Prevention Act was signed into law
amending the provisions of section 227 of the Communications Act. The
Junk Fax Prevention Act codifies an established business relationship
exemption to the provision which prohibits the sending of unsolicited
facsimile advertisements. It also requires the sender of a facsimile
advertisement to provide specified notice and contact information on
the facsimile that allows recipients to ``opt-out'' of any future
facsimile transmissions from the sender. It also requires the
Commission to issue regulations to implement the amendments within 270
days of the date of enactment of the statute. Therefore, the proposed
rules are necessary to comply with this congressional mandate and to
provide additional guidance to regulated entities that must comply with
the federal statute. The proposed modifications to the Commission's
existing rules are necessary if they are to be consistent with the
amendments made by the Junk Fax Prevention Act.
In this NPRM, the Commission proposes a number of modifications to
the Commission's rules on unsolicited facsimile advertisements. The
Commission proposes amending Sec. 64.1200(a)(3) of the Commission's
rules to expressly recognize an established business relationship (EBR)
exemption. The Commission also proposes removing Sec. 64.1200(a)(3)(i)
of the Commission's rules which provides that a facsimile advertisement
is unsolicited unless the recipient has granted the sender prior
express invitation or permission to deliver the advertisement, as
evidenced by a signed, written statement that clearly indicates the
recipient's consent to receive such facsimile advertisements from the
sender. The Commission also proposes amending the Commission's rules to
permit senders to send facsimile advertisements to persons with whom an
established business relationship was formed prior to July 9, 2005,
provided the facsimile number was in the sender's possession before
July 9, 2005. In addition, the Commission proposes incorporating into
our rules the definition of ``established business relationship'' that
applied to telephone solicitations and was in effect on January 1,
2003. The Commission also seeks comment on whether to limit the
duration of the EBR as applied to facsimile advertising.
The Junk Fax Prevention Act requires senders of unsolicited
facsimile advertisements to include a notice on the first page of the
facsimile that informs the recipient of the ability and means to
request that they not receive future unsolicited facsimile
advertisements from the sender. Therefore, the Commission proposes
amending the Commission's rules consistent with these specific notice
requirements and clarifying under what circumstances a notice will be
considered ``clear and conspicuous.'' Additionally, the Commission
proposes defining the ``shortest reasonable time'' within which a
sender of unsolicited facsimile advertisements must comply with a
request not to receive future facsimile advertisements from the sender.
The Commission also proposes adopting the requirements provided in the
Junk Fax Prevention Act regarding the making of a request not to
receive future unsolicited facsimile advertisements. The request would
need to identify the numbers of the telephone facsimile machine or
machines and be made to the sender of the advertisement.
As contemplated by the Junk Fax Prevention Act, the proposed rules
also address the ability of professional or trade associations that are
tax-exempt nonprofit organizations to send to their members unsolicited
advertisements in furtherance of the association's tax-exempt purpose
that do not contain the ``opt-out'' notice required by the statute. In
addition, the proposed rules address
[[Page 75109]]
the ability of small business senders to provide ``cost-free''
mechanisms for recipients to transmit opt-out requests. Finally, the
Commission proposes amending the definition of ``unsolicited
advertisement'' so that it is consistent with the definition in the
Junk Fax Prevention Act.
B. Legal Basis
The proposed action is authorized under sections 1-4, 227 and
303(r) of the Communications Act of 1934, as amended; 47 U.S.C. 151-154
and 227, and the Junk Fax Prevention Act of 2005, Public Law Number
109-21, 119 Statute 359.
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply
The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A small business concern is one which: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the SBA.
The Commission's rules on the sending of unsolicited facsimile
advertisements would apply to any entity, including any
telecommunications carrier, that uses the telephone facsimile machine
to advertise. Thus, the Commission expects that the proposals in this
NPRM could have a significant economic impact on a substantial number
of small entities, including the following:
Interexchange Carriers. Neither the Commission nor the SBA has
developed a specific size standard for small entities specifically
applicable to providers of interexchange services. The closest
applicable size standard under the SBA rules is for Wired
Telecommunications Carriers. Under that standard, such a business is
small if it has 1,500 or fewer employees. According to the FCC's
Telephone Trends Report data, 281 carriers reported that their primary
telecommunications service activity was the provision of interexchange
services. Of these 281 carriers, an estimated 254 have 1,500 or fewer
employees, and 27 have more than 1,500 employees. Consequently, the
Commission estimates that a majority of interexchange carriers may be
affected by the rules.
Incumbent Local Exchange Carriers. Neither the Commission nor the
SBA has developed a small business size standard for providers of
incumbent local exchange services. The closest applicable size standard
under the SBA rules is for Wired Telecommunications Carriers. Under
that standard, such a business is small if it has 1,500 or fewer
employees. According to the FCC's Telephone Trends Report data, 1,310
incumbent local exchange carriers reported that they were engaged in
the provision of local exchange services. Of these 1,310 carriers, an
estimated 1,025 have 1,500 or fewer employees and 285 have more than
1,500 employees. Consequently, the Commission estimates that the
majority of providers of local exchange service are small entities that
may be affected by the rules and policies adopted herein.
Wireless Service Providers. The SBA has developed a small business
size standard for wireless firms within the two broad economic census
categories of ``Paging'' and ``Cellular and Other Wireless
Telecommunications.'' Under both SBA categories, a wireless business is
small if it has 1,500 or fewer employees. For the census category of
Paging, Census Bureau data for 1997 show that there were 1,320 firms in
this category, total, that operated for the entire year. Of this total,
1,303 firms had employment of 999 or fewer employees, and an additional
17 firms had employment of 1,000 employees or more. Thus, under this
category and associated small business size standard, the great
majority of firms can be considered small. For the census category
Cellular and Other Wireless Telecommunications, Census Bureau data for
1997 show that there were 977 firms in this category, total, that
operated for the entire year. Of this total, 965 firms had employment
of 999 or fewer employees, and an additional 12 firms had employment of
1,000 employees or more. Thus, under this second category and size
standard, the great majority of firms can, again, be considered small.
Ordinarily, the Commission does not seek comment on the entities
that must comply with proposed rules. However, the proposed rules in
this document potentially could apply to any entity, including any
telecommunications carrier, that sends an unsolicited advertisement to
a telephone facsimile machine. Thus, under these unusual circumstances,
the Commission seeks comment on whether the approximately 4.44 million
small business firms in the United States, as identified in SBA data,
will need to comply with these rules, or whether it is reasonable to
assume that only a subset of them will be subject to these rules given
that not all small businesses use the facsimile machine for advertising
purposes. After evaluating the comments, the Commission will examine
further the effect any rule changes might have on small entities not
named herein, and will set forth our findings in the final Regulatory
Flexibility Analysis.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
The NPRM seeks comment on a number of rule changes that will affect
reporting, recordkeeping and other compliance requirements for entities
sending unsolicited facsimile advertisements. The proposed rules will
apply to all entities using telephone facsimile machines to send
unsolicited advertisements. If the Commission adopts an EBR exemption
to the prohibition on sending unsolicited facsimile advertisements,
many entities that send such messages only to their EBR customers will
not be required to obtain separate permission from recipients, thereby
potentially minimizing some of the compliance requirements. However, in
the event a question arises about the existence of an EBR or the
duration of the EBR, the sender might need to maintain records
evidencing the EBR and when the EBR was formed. Such records might also
need to demonstrate whether or not the facsimile number was in the
sender's possession before date of enactment of the Junk Fax Prevention
Act. Because the Commission determined in 1992 that an EBR could
evidence permission to send a facsimile advertisement, the Commission
believes most senders of facsimile advertisements currently maintain
these records and will not be required to take any new action to comply
with the proposed rules.
In addition, the NPRM proposes adopting the specific notice
requirements on unsolicited facsimile advertisements set forth in
section 2 of the Junk Fax Prevention Act. As mandated by the Junk Fax
Prevention Act, senders of unsolicited advertisements must include a
notice on the first page of the facsimile that informs the recipient of
the ability and means to request that they not receive future
unsolicited advertisements from the sender. Under the Junk Fax
Prevention Act, the notice must be on the first page of the
advertisement; be clear and conspicuous; include a domestic contact
telephone and facsimile machine number for the
[[Page 75110]]
recipient to transmit an opt-out request to the sender; and provide a
cost-free mechanism for a recipient to transmit a request pursuant to
such notice to the sender of the advertisement. Finally, the telephone
and facsimile machine numbers and cost-free mechanism must permit an
individual or business to make such a request at any time on any day of
the week. Should the Commission adopt the notice requirements in the
Junk Fax Prevention Act, senders would need to take steps to ensure
that their facsimile advertisements contained the notice and that such
notice meets any specific criteria as outlined above. In addition,
senders of facsimile advertisements must implement a cost-free
mechanism, if they do not already have one in place, to allow
recipients of such messages to request not to receive future
advertisements.
The NPRM also seeks comment on the ``shortest reasonable time''
within which a sender of facsimile advertisements must comply with a
request not to receive future facsimile advertisements from the sender.
If the Commission adopts a 30-day limitation, or an alternative time
period, within which senders of unsolicited facsimile advertisements
must honor a do-not-fax request, entities subject to the rules would
need to make sure to utilize some recordkeeping system to ensure that
such requests are honored within 30 days or an alternative period of
time. Finally, should the Commission require the fax sender to bear the
burden of proof to demonstrate that a consumer provided express
invitation or permission to receive a facsimile advertisement after the
consumer had previously made a do-not-fax request, the sender would
likely need to maintain some record of that permission.
E. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
The RFA requires an agency to describe any significant alternatives
that it has considered in reaching its proposed approach, which may
include the following four alternatives (among others): (1) The
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.
In proposing rules to implement the Junk Fax Prevention Act, the
Commission also considers alternatives that potentially could minimize
the burdens on, or simplify compliance requirements for, small
businesses. First, the Commission considers exempting certain classes
of small business senders from the requirement to provide a cost-free
mechanism for a recipient to transmit a request not to receive future
facsimile advertisements. In considering this alternative, the
Commission will evaluate the costs to such small businesses of
providing the cost-free mechanism and whether such costs are unduly
burdensome given the revenues generated by small businesses. The
Commission also compares and evaluates alternative ``cost-free''
mechanisms that businesses might utilize to minimize burdens on small
businesses, but still allow recipients to request of any small business
that it not send future facsimile advertisements. Finally, in
determining whether to limit the duration of the EBR, the Commission
will consider the costs to small businesses of demonstrating the
existence of a limited EBR.
In addition, the Commission considers exempting certain nonprofit
organizations from the notice requirements in the Junk Fax Prevention
Act. This alternative proposal will allow professional or trade
associations that are tax-exempt nonprofit organizations to send
unsolicited advertisements to their members in furtherance of the
associations' tax-exempt purpose that do not contain the ``opt-out''
notice required by the Junk Fax Prevention Act. Should the Commission
determine that such notice is not necessary to protect the ability of
members of such associations to stop the sending of any future
unsolicited advertisements, this alternative approach could minimize
compliance burdens on those professional and trade associations that
are small businesses.
As described above, the Junk Fax Prevention Act requires that
senders of facsimile advertisements include notices stating that the
recipients may request not to receive any future unsolicited facsimile
advertisements. The Commission is considering alternative time periods
within which a sender of unsolicited facsimile advertisements must
comply with a request not to receive future facsimile advertisements
from the sender. The Commission will compare and evaluate these
alternative time periods to ensure that they are the ``shortest
reasonable time periods'' within which senders can comply with the
rules and that they are not overly burdensome to small businesses.
F. Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rule
The Commission's proposal in this NPRM to expressly recognize an
EBR exemption to the prohibition on sending unsolicited facsimile
advertisements appears to conflict with Sec. 64.1200(a)(3)(i) of the
Commission's existing rules. Therefore, this NPRM proposes revising or
removing Sec. 64.1200(a)(3)(i) of the Commission's rules, which
provides that a facsimile advertisement is unsolicited unless ``the
recipient has granted the sender prior express invitation or permission
to deliver the advertisement, as evidenced by a signed, written
statement that * * * clearly indicates the recipient's consent to
receive such facsimile advertisements from the sender.''
Ordering Clauses
Pursuant to the authority contained in sections 1-4, 227, and
303(r), of the Communications Act of 1934, as amended; 47 U.S.C. 151-
154, 227, and 303(r); the Junk Fax Prevention Act of 2005, and Sec.
64.1200 of the Commission's rules, 47 CFR 64.1200, 64.2401, this Notice
of Proposed Rulemaking in CG Docket 02-278 is adopted.
CG Docket No. 05-338 shall be created for this proceeding and for
other issues related to the Commission's facsimile advertising rules.
The Commission's Consumer & Governmental Affairs Bureau, Reference
Information Center, shall send a copy of the Notice of Proposed
Rulemaking, including the Initial Regulatory Flexibility Analysis, to
the Chief Counsel for Advocacy of the Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 05-24211 Filed 12-16-05; 8:45 am]
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