FCC Fax Rule Update

FCC Grants Chamber's Request for Stay on Fax Rule:

New 'Existing Business Relationship' Definition Still Looming

August 19, 2003

Yesterday, the Federal Communications Commission ("FCC") adopted an Order on Reconsideration extending until January 1, 2005 certain restrictions on the faxing of "unsolicited advertisements." Although this provides serious relief from some of the most serious restrictions on faxing adopted recently by the FCC, businesses must carefully adhere to other aspects of the new rule, including the new definition of the "existing business relationship." Because the details of implementation are unclear on the face on the Order, the summary below reflects the understanding of senior FCC staff based on conversations this morning.

Background:

"Unsolicited advertisement" is defined broadly to cover any material advertising the commercial availability or quality of any property, goods or services. The FCC's ban on fax ads applies regardless of whether the sender or recipient of a fax is an individual, business or non-profit organization.

Since 1992, the FCC's rule against unsolicited ad faxes included two exceptions, which allowed businesses to send ad faxes to recipients: (1) with whom they have an "established business relationship" ("EBR"); or (2) from whom they have received a "prior express invitation or permission." In a Report and Order released on July 3 (FCC 03-153), the FCC eliminated the EBR exception and raised the bar on the consent exception, requiring that permission be in the form of a written, signed agreement to receive ad faxes that included the fax number to be called. In yesterday's Order on Reconsideration, the FCC agreed essentially to revert to the 1992 rule by reinstating the old EBR and consent exceptions, at least until January 1, 2005.

Bottom line for fax senders:

If senders of fax ads are using the consent exception: Until January 1, 2005, senders of fax ads do not need to obtain recipients' written, signed permission, including the fax number to be called. Rather, the FCC requires only that permission is express (i.e., "opt-in") and obtained prior to sending any unsolicited ad faxes. However, unless the FCC adopts a different rule in response to Petitions for Reconsideration, after January 1, 2005, written, signed permission will be required.
If senders of fax ads are using the EBR exception: Despite yesterday's Order on Reconsideration, the requirements of this exception are still in flux. In the July 3 Report and Order, the FCC released a new definition of the EBR exception, which must still be approved by the Office of Management and Budget ("OMB") before it goes into effect. Thus, senders of ad faxes under this exception should use the following standards:
- For the present time: Senders should use the 1992 definition of an EBR, "a prior or existing relationship formed by a voluntary two-way communication between [the fax sender and the fax recipient] 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."
- If OMB approves the new EBR definition, and following publication in the Federal Register: Senders would need to use the FCC's revised EBR definition announced in the July 3 Report and Order, which imposes time limits on the exception. The definition of an EBR would essentially be the same as quoted above, except that it would expire: (a) 18 months after the fax recipient's last purchase or transaction with the fax sender; or (b) three months after an inquiry from the fax recipient to fax sender.
- After January 1, 2005: Unless the FCC changes its rules, the EBR exception will expire.

Companies may petition for the FCC to reconsider these rules until August 25, 2003.

View a copy of the FCC's order issued Aug 18, 2003 (PDF)

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