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S. HRG. 109–278

S. 714, THE JUNK FAX PREVENTION ACT OF

2005

HEARING

BEFORE THE

SUBCOMMITTEE ON TRADE, TOURISM, AND 

ECONOMIC DEVELOPMENT

OF THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

APRIL 13, 2005

Printed for the use of the Committee on Commerce, Science, and Transportation

(

(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

TED STEVENS, Alaska, Chairman 

JOHN MCCAIN, Arizona 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

GORDON H. SMITH, Oregon 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

JIM DEMINT, South Carolina 

DAVID VITTER, Louisiana 

DANIEL K. INOUYE, Hawaii, Co-Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

BYRON L. DORGAN, North Dakota 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

E. BENJAMIN NELSON, Nebraska 

MARK PRYOR, Arkansas 

LISA J. SUTHERLAND, Republican Staff Director 

CHRISTINE DRAGER KURTH, Republican Deputy Staff Director 

DAVID RUSSELL, Republican Chief Counsel 

MARGARET L. CUMMISKY, Democratic Staff Director and Chief Counsel 

SAMUEL E. WHITEHORN, Democratic Deputy Staff Director and General Counsel 

LILA HARPER HELMS, Democratic Policy Director 

SUBCOMMITTEE ON TRADE, TOURISM, AND ECONOMIC DEVELOPMENT 

GORDON H. SMITH, Oregon, Chairman 

TED STEVENS, Alaska 

JOHN MCCAIN, Arizona 

CONRAD BURNS, Montana 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

JIM DEMINT, South Carolina 

DAVID VITTER, Louisiana 

BYRON L. DORGAN, North Dakota, Ranking 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

BILL NELSON, Florida 

E. BENJAMIN NELSON, Nebraska 

MARK PRYOR, Arkansas 

(III)

C O N T E N T S 

Page 

Hearing held on April 13, 2005 .............................................................................. 1

Statement of Senator Boxer .................................................................................... 2

Statement of Senator Lautenberg .......................................................................... 4

Statement of Senator Smith ................................................................................... 1

WITNESSES

Bladine, Jon E., President/Publisher, News-Register Publishing Company ....... 5

Prepared statement .......................................................................................... 7

Feeken, Dave, Broker, RE/MAX; on behalf of the National Association of 

REALTORS  (NAR) ............................................................................................ 11

Prepared statement .......................................................................................... 13

Kirsch, Steven T., Founder/Chairman, Propel Software Corporation ................. 19

Prepared statement .......................................................................................... 21

(1)

S. 714, THE JUNK FAX PREVENTION ACT OF 

2005

WEDNESDAY, APRIL 13, 2005

U.S. SENATE, SUBCOMMITTEE ON TRADE, TOURISM, AND ECONOMIC

DEVELOPMENT, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:45 p.m. in room 

SR–253, Russell Senate Office Building, Hon. Gordon H. Smith, 

Chairman of the Subcommittee, presiding. 

OPENING STATEMENT OF HON. GORDON H. SMITH,

U.S. SENATOR FROM OREGON 

Senator SMITH. We’ll call to order this hearing of the Trade, 

Tourism, and Economic Development Subcommittee of the full 

Commerce Committee. The hearing is on S. 714, The Junk Fax 

Prevention Act of 2005. I apologize to those present that we’ve had 

votes get in the way of our starting at 2:30, but let’s begin. 

I thank the witnesses for being here today. Today’s hearing will 

focus on The Junk Fax Prevention Act of 2005. I thank my colleagues on the Senate Commerce Committee, Senators Inouye, 

Burns, Stevens, Dorgan, Lautenberg, Snowe, and Sununu, a broad 

bipartisan coalition, for co-sponsoring this legislation with me. 

S. 714 would create a statutory exemption to the current communications law prohibiting the faxing of unsolicited advertisements 

to individuals without their prior written invitation or permission. 

This bill would not legalize the sending of junk faxes or blast faxes, 

which have been prohibited for 13 years and will continue to be 

prohibited under this bill. This bill is about continuing legitimate 

fax communications between businesses and customers. 

S. 714 will strengthen existing laws by providing consumers the 

ability to prevent unsolicited fax advertisements and provide greater congressional oversight of enforcement efforts by the Federal 

Communications Commission. This bill will also help businesses by 

allowing them to continue to send faxes to their customers in a 

manner that has proven successful with both businesses and consumers. 

In July of 2003, the FCC reconsidered its Telephone Consumer 

Protection Act rules, and elected to eliminate the ability for businesses to contact their customers even where there exists an established business relationship. The effect of the FCC rule would be 

to prevent a business from sending a fax, fax solicitation, to any 

person, whether it is a supplier or a customer, without first obtainVerDate 0ct 09 2002 14:14 Feb 21, 2006 Jkt 025874 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\WPSHR\GPO\DOCS\25874.TXT JACK PsN: JACKF
2

ing prior written consent. This approach, while seemingly sensible, 

would impose significant costs on businesses in the form of extensive recordkeeping. 

Recognizing the problems created by this rule, the Commission 

has twice delayed the effective date of its implementation, with the 

current extension of its stay expiring on June 30, 2005. 

The purpose of this legislation is to preserve the established 

business relationship exemption currently recognized under TCPA. 

In addition, this bill will allow consumers to opt out of receiving 

further unsolicited faxes. This is a new consumer protection that 

does not exist under the TCPA today. 

We believe that this bipartisan bill strikes the appropriate balance in providing significant protections to consumers from unwanted, unsolicited fax advertisements, and preserves the many 

benefits that result from legitimate fax communications. 

We have heard from hundreds of associations, representing tens 

of thousands of large and small businesses, on the importance of 

swiftly passing this legislation to avoid interfering with legitimate 

communications. In the 108th Congress, this legislation passed 

both the Senate and the House, but was not signed into law prior 

to adjournment of Congress. We hope that both the Senate and the 

House can pass S. 714 in a timely manner prior to June 30, 2005, 

when the FCC stay expires. 

I want to publicly welcome and thank one of my constituents, 

Mr. Jeb Bladine, the publisher and editor of the News-Register, in 

McMinnville, Oregon, who is here to testify about how this bill will 

affect small businesses like him. 

I’m pleased to be joined by my colleague and my neighbor from 

California, Senator Barbara Boxer, who has a slightly different 

view of this bill, I think. 

STATEMENT OF HON. BARBARA BOXER,

U.S. SENATOR FROM CALIFORNIA 

Senator BOXER. Thank you, Mr. Chairman, so very much. And, 

Senator Smith, thank you for the cooperative manner in which we 

have worked since the last session on this legislation. 

I expressed my objections then, and I was able to negotiate greater protections for consumers in the final bill that passed the Senate 

on December 8, 2004. A lot of it had to do with the fact that you 

were willing to work with me, and I so appreciate it now. These 

improvements included important protections for consumers, as 

well as for small business; however, S. 714, the legislation before 

us today, includes none of these protections and is a huge step 

backwards. This is clear to me that, instead of a Junk Fax Prevention Act, which is its title, I think it should be called The Junk Fax 

Promotion Act, because, at the end of the day, that’s what we’re 

doing. 

Let me begin by stating the facts. To clarify, if we do nothing 

here, junk faxes will end on July 1st. This legislation that’s before 

us does not ban junk faxes, it lets them continue. It’s important 

that this fact is on the record and that everyone understands it, because when you read a bill that’s called The Junk Fax Prevention 

Act, you think that you’re doing a good thing; but, in essence, 

you’re promoting junk faxes. 

3

Let me explain in more detail. The FCC regulations scheduled to 

take effect on July 1 says that someone sending a junk fax needs 

written consent from the recipient. Pretty tough rule. You can’t 

send a fax unless you get permission. On the other hand, the bill 

before us will allow any business with, ‘‘an established business relationship with the consumer to send unrequested faxes to that 

consumer’s machine.’’ Now, I’m sure you’ve gotten some of those 

Senator Smith. I certainly have. And it makes me crazy, using up 

my paper, my electricity, to come into my house, and I don’t want 

another mortgage. You know? I’ve got a good one. And if I want 

a better one, I’ll take action. And these people are sending me 

things. I’m getting them every day. And what I should have done 

is collected them, since December, but I didn’t. Maybe I’ll start 

today, and we’ll see how many we’ll have when we get this to the 

floor. 

Consumers interact with hundreds, if not thousands of businesses, each year. To say that all those businesses should then be 

allowed to indiscriminately flood individuals with faxes in perpetuity does not put a stop to a lot of our junk faxes. In fact, I believe it will open up the flood gates. 

One expert estimates—listen to this—that 2 billion faxes are sent 

every year, and that this language, the language in this bill, will 

allow for 4 billion faxes in the near future. Think of it. Under the 

bill that my colleague supports, which I hope we’re going to be able 

to amend, any restaurant, drug store, or gas station that a consumer has visited will be able to send junk faxes to their home or 

business fax machines. 

Junk faxes tie up machines of individuals and businesses, rendering them unusable to their owners. It is not a trivial matter. It 

can be quite serious. For example, the University of Washington 

Medical Center in Seattle had to go to court to stop a sender of 

junk faxes who was crippling its machines, and, therefore, compromising patient care. 

Under this bill, the University of Washington Medical Center, or 

any other hospital, could be contacted by any drug or medical supply company, janitorial service, cleaning product, telephone system, 

or courier they had ever used, and have junk faxes sent to them. 

So we are opening the door to junk faxes wide open. I never 

thought that’s what Senator Smith intended to do. But, in essence, 

that’s what your bill does. 

As the San Jose Mercury News editorial page stated on August 

27, 2004, ‘‘Junk faxes rival only spam as the most egregious form 

of intrusive marketing. They unfairly force recipients to pay, in 

reams of paper and toner cartridges, for ads they never asked for.’’

Now, I acknowledge that the Federal Communications rule went 

too far. I think it’s too burdensome to have to get a written consent 

for a business. And requiring such consent from every fax recipient, 

it is too burdensome, and it’s too expensive for small businesses 

and others. But I disagree that an established business relationship should constitute consent for businesses to send faxes to 

homes and business just because I walk into a store and buy a 

product in that store. Part of the deal was, I gave my money, and 

I got the product, and that’s the end of the deal. The deal doesn’t 

4

mean that they can fax me forever. As much as I might love that 

store, I’m not inviting them into my home. 

So here’s what I think we should do. Instead of written consent, 

I would support allowing verbal consent to suffice before a fax is 

sent. I think that’s a pretty fair deal. You want to send a fax? Get 

verbal consent. That’s important. Get consent. There must be consent. Because I buy toothpaste at Wal-Mart or I order pizza from 

Domino’s doesn’t mean that Wal-Mart or Domino’s should have the 

right to fax me, at will, with anything they want. 

So, in closing, the bill before us cancels the FCC’s regulation, and 

it goes too far in the opposite direction. We shouldn’t let it become 

law without provisions to protect consumers. Surely we can pass 

more reasonable legislation. We’ve done it on the Do Not Call List. 

That’s one of our most popular pieces of legislation. 

So now we have a bill before us. It’s misnamed The Junk Fax 

Prevention Act, when, in fact, it weakens, by miles, an FCC rule 

that I admit has gone too far. This takes us in the other direction, 

and it sanctions probably 4 billion faxes a year. We, as policymakers, should protect consumers from junk faxes, and I want to 

find this middle ground. And I’m hopeful that this panel will help 

us toward that middle ground. 

Thank you, Mr. Chairman. 

Senator SMITH. Thank you, Senator Boxer. And there will be a 

mark-up tomorrow, and we’ll certainly consider your ideas for finding that right middle ground. I think that is all of our motives. 

We’ve been joined by Senator Lautenberg, of New Jersey. 

STATEMENT OF HON. FRANK R. LAUTENBERG,

U.S. SENATOR FROM NEW JERSEY 

Senator LAUTENBERG. Thank you very much, Mr. Chairman. I 

commend you for holding this hearing. 

People are weary of hearing the fax machine beckon your attention and finding out that you got another chance to buy stocks you 

didn’t need. But it is, unfortunately, a good way to curtail the invasion of privacy, as Senator Boxer just said. You know, we did it on 

telephone calls; why shouldn’t we be able to do the same thing concerning the unwanted faxes? The issue of unsolicited fax advertisements dates back to 1991, when we passed the Telephone Consumer Protection Act. Now, that law, still in effect, generally prohibits anyone from faxing unsolicited advertisements without, 

‘‘prior expression—express invitation or permission from the recipient.’’

In October 1992, the FCC released its original order interpreting 

the ban on unsolicited faxes. That order contained a footnote that 

facsimile transmission from persons or entities who have an established business relationship with the recipient can be deemed to be 

invited or permitted by the recipient. 

Now, this interpretation was followed for more than a decade, 

but in July 2003 the Commission reversed its position. As a result, 

many businesses and nonprofit organizations are confused about 

what is and is not permissible, and we need to clear up this confusion, while still protecting consumers from faxes that they don’t 

want and allowing them to receive those they do. 

5

I’m an original co-sponsor of the Junk Fax bill. It is a sensible 

compromise. It balances the need for businesses, nonprofit organizations, and trade groups to continue to communicate with their 

consumers and members, while recognizing the right of the consumer to say ‘‘no thanks’’ to unsolicited faxes. The bill gives consumers an easy way to opt out of receiving unsolicited faxes, at no 

cost to themselves. And, finally, it requires the FCC to report annually on the enforcement of the junk fax provision, so we’ll know 

how well these protections are working. And with effective enforcement and oversight, I believe that this bill will serve the public 

well. 

I thank you, again, Mr. Chairman, and I look forward to the testimony of the witnesses and the opportunity to ask questions. And, 

Mr. Chairman, I have a briefing, a sensitive briefing that I must 

go to. I assume the record will be kept open so that we can submit 

questions. 

Senator SMITH. We’ll keep the record open, Senator, so you can 

ask, in writing, any questions you like. 

Senator LAUTENBERG. Thank you very much. 

Senator SMITH. Thank you. 

Our witnesses will go in this order: Mr. Jon Bladine, President 

and Publisher of the News-Register Publishing Company, in 

McMinnville, Oregon; Mr. Dave Feeken, Broker of RE/MAX of the 

Peninsula, Kenai, Alaska—you’ve come a long way, and we thank 

you for that; and Mr. Steve Kirsch, Founder and Chairman of Propel Software Corporation, in San Jose, California. We thank you for 

being here. 

So, Jon, the mike’s yours. We invite your testimony now. 

STATEMENT OF JON E. BLADINE, PRESIDENT/PUBLISHER, 

NEWS–REGISTER PUBLISHING COMPANY 

Mr. BLADINE. Thank you, Senator. 

Good afternoon, Mr. Chairman, Members of the Committee. My 

name is Jon Bladine, better known in my community as Jeb 

Bladine. I’m here to testify in support of S. 714. 

I’d like to summarize my testimony and provide a longer statement for the record, if I may. 

Senator SMITH. Yes, we’ll accept that. And you can shorten your 

statements, if you want, if you have longer ones, all of you. We will 

include them in the record. 

Mr. BLADINE. Thank you. 

I am president and publisher of the News-Register in 

McMinnville. Our family business spans four generations, since 

1928, with business interests that include the newspaper, commercial printing, Internet access, and Internet software development. 

I’m here today, though, in my role as regional director of the National Newspaper Association, a board on which I represent community newspapers from Alaska, Idaho, Montana, Oregon, and 

Washington. 

The National Newspaper Association has nearly 2,500 members 

across America, and all of them are alarmed at the prospects of a 

signed-consent rule for commercial faxes. The FCC order eliminated the exemption for established business relationship, and 

6

would now require that we get written and signed permission before sending any advertising-related fax. 

The established business relationship was sufficient before. With 

this order, we would have to maintain a costly database and compliance system or abandon fax communications altogether. But the 

true faxers, those whose practices are already illegal, would continue. So, with that order, the guilty would proceed, and this order 

would punish the innocent. 

We were grateful that that deadline was extended. But now we 

are facing a July 1 compliance date. Unless Congress acts now, the 

cost of compliance with the FCC order will start to hit our balance 

sheets in a matter of days. 

Junk faxes waste resources at our business, too. But that blitz 

of anonymous ads does not come from the newspapers that I represent, and they don’t come from the small businesses across America. We use the fax machine as an efficient and urgent tool to communicate information to people who want it. S. 714 would allow us 

to continue that responsible use of fax machines. 

I’d like to give a brief sense of how we use the facsimile machine. 

We send rate cards and market information to people who request 

it. We send information about advertising, circulation, distribution 

zones. The signed-consent rule would stop our advertising department in its tracks every day, maybe every hour. That department 

generates more than 80 percent of our newspaper revenue, so 

that’s a pretty important thing. 

My newspaper has more than 5,000 current advertising clients, 

and many more who call for information. They call from local, regional, and national offices. To comply with the signed-consent 

rule, we would need a fax approval file that might reach 20,000 

numbers. 

Many of our customers advertise only in special sections. For example, a wedding shop might miss the announcement about the 

bridal guide, and miss the single best marketing week of the season. We fax those announcements, because the advertisers prefer 

it, quickly, with the information that they want to get. 

Our clients want to see their ads in advance, and the fax machine often is the only realistic way to deliver them. E-mail has 

many problems with software and file attachments. In-person delivery is very expensive. So we use the fax machine. 

The FCC order would require that we interfere with our customers’ lives to get signed consent forms. My colleague, Cheryl 

Kaechele, of Michigan, described this burden last summer, when 

she testified before the House of Representatives. She described 

that, ‘‘We would have to deliver thousands of consent forms, try to 

convince clients that we need them, send staff out again and again 

to collect them, apologize for bothering them, hire staff to manage 

the process. Our newspaper members say that they would need the 

equivalent of a half-time person to comply with that rule.’’

And, even then, even if we were 99 percent compliant, still fax 

numbers change, people make mistakes. We worry that people 

might change their mind overnight about us, because of something 

we write. An angry reader might spot a fax that falls within that 

1 percent margin of error, and, aha, a lawsuit. We would pay, even 

if the real conflict had nothing to do with the fax. 

7

This bill restores a sensible flow of commerce on fax machines. 

It recognizes established business relationships. Most importantly, 

it tells regulators to consider the true problem. Real junk fax 

doesn’t come from newspapers or other business that have solid 

customer relationships. It comes from people trying to make a buck 

without building a business around respectable business practices. 

The solution is sound enforcement of laws against fax abusers, 

not punishing innocent small businesses. Congress can improve enforcement, and S. 714 takes a sound step in that direction. Our association, the National Newspaper Association, looks forward to 

working with this Committee for quick passage of this legislation. 

Senator SMITH. Thank you very much. 

Mr. BLADINE. Thank you, Senator. 

[The prepared statement of Mr. Bladine follows:]

PREPARED STATEMENT OF JON E. BLADINE, PRESIDENT/PUBLISHER,

NEWS-REGISTER PUBLISHING COMPANY

Good afternoon. My name is Jon E. (Jeb) Bladine. My purpose here today is to 

testify in support of S. 714, The Junk Fax Prevention Act of 2005. Junk faxes are 

the bane of many small businesses, including mine, and I want to congratulate Senator Smith and his co-sponsors for introducing a reasonable way to address them 

while trying to avoid undue burdens on businesses that use the fax machine responsibly. 

1. Introduction and Biography 

I am Publisher and Editor of the News-Register Publishing Company in 

McMinnville, Oregon. I am president of Oregon Lithoprint, Inc., a partner in 

McMinnville Access Company and Pacific Wave Communications, and chairman of 

the board of Oregon Interactive Corporation. Those titles are the long version of 

what I really do, which is to deliver information in print and electronically to my 

community in Northwest Oregon, and through the Internet, worldwide. 

My newspaper, the News-Register, has been in our family since my grandfather 

purchased it in 1928 and moved to Oregon from Iowa. Our family business spans 

four generations, and I am the fourth family member to serve as publisher. Our 

business interests include the newspaper, commercial printing, Internet access and 

Internet software development. 

I have served in local and statewide civic organizations, including the 

McMinnville Jaycees, McMinnville and Oregon downtown development associations, 

Oregon Children’s Services and the Oregon Heritage Commission. I have been a 

board member, legislative chairman and president of the Oregon Newspaper Publishers Association. 

I am here today in my role as a regional director of the National Newspaper Association, a 120-year-old organization of community newspapers. NNA maintains a 

headquarters co-located with the University of Missouri, Columbia, MO, and a small 

office in Arlington, Virginia, to carry out our public affairs work. My job on the 

board, among other things, is to speak for community newspapers in my five states: 

Alaska, Idaho, Montana, Oregon and Washington. 

2. Background of the Junk Fax Issue 

The National Newspaper Association has nearly 2,500 members. It is no understatement to say that our members are quite alarmed about the prospect that the 

Federal Communications Commission signed consent rule for commercial faxes goes 

into effect July 1. 

The Federal Communications Commission delivered quite a jolt to our industry 

with its Report and Order In the Matter of Rules and Regulations Implementing 

the Telephone Consumer Protection Act of 1991. That order, adopted June 26, 2003, 

and released July 3, 2003, turned our world upside down by reversing the Commission’s long-standing recognition that faxes from our newspapers to our established 

business customers are not, in fact, unsolicited faxes in the meaning of the TCPA. 

In discussion of its Report and Order, the Commission said consumers feel ‘‘besieged’’ by unsolicited faxes, despite the fact that the law prohibited them before 

2003 and continues to do so. It announced:

8

‘‘The Commission has 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 advertisement. This express invitation or permission 

must be in writing and include the recipient’s signature. The recipient must 

clearly indicate that he or she consents to receiving such faxed advertisements 

from the company to which permission is given, and provide the individual or 

business’s fax number to which faxes may be sent.’’

The Commission expressly reversed its decision that an established business relationship (EBR) would be sufficient to show that an individual or business had given 

consent to receive a fax. This new rule was even more draconian than the procedures for compliance with the new Do Not Call rules, which were the principal subject of this Report and Order. At least in those rules, businesses were permitted to 

maintain relationships with their customers. Here, barring the creation of a costly 

database and compliance system, we will have to halt our recognized and traditional 

means of conveying information to people who want to receive faxes. 

To add to our consternation, the Commission initially permitted our businesses 

only about six weeks to come into compliance. I know concerned and agitated business owners and staffers all over the country besieged the Commission and this 

Committee about that short deadline. I know staffers besieged most of our publishers’ offices as our marketing departments envisioned their summer turning into 

a futile scramble to obtain these consent forms in time. Fortunately, the Commission relented and extended the deadline, and then extended it again. 

Now we are staring down the barrel of a July 1 compliance date. And again, unless we set up costly database and compliance systems, we will see our use of the 

fax come to a halt this summer. 

This is why we need Congress to pass S. 714—and to move as urgently as possible. The expense will settle on our balance sheets this spring, within a matter of 

days, if action is not taken. 

3. The Truth About Junk Fax 

All of us have seen our paper and ink go to waste from junk fax, for things ranging from cruises to low rate mortgages to health regimens for body parts that we 

don’t all necessarily have. None of us like it. We may differ in our tolerance for 

other people using our machines to convey their commercial messages. But I hear 

complaints, and I complain myself from time to time. 

However, it is important to remember that the newspapers I represent, and most 

of America’s small businesses, are not producing this blitz of fax ads that so irritate 

us. We use the fax machine as a convenience and an efficient and urgent tool to 

communicate information to people who want it. The FCC’s signed consent rule trips 

us up without presenting much of a barrier to those irritating blast faxers. 

I assume that most of what we are complaining about already falls into the category of illegal faxes. Certainly, most of what I get comes from places I never heard 

of, and certainly not from companies with which I have an established business relationship. They were illegal before the FCC acted. They will be illegal after July 

1. And they will continue to flow illegally after July 1, while legitimate commerce 

either abandons fax communication or absorbs a major and wasteful cost. Meanwhile, the junk faxers will continue to pursue their trade. 

4. How Newspapers use Faxes 

I would like to give this Committee a better sense of how we use the facsimile 

machine. 

A. Rate Cards and Market Information Requests 

We send information about the newspaper and website ad rates to those who request them every day. These are business requests for information about our newspaper and website advertising rates, information about upcoming special sections, 

market information about circulation numbers and distribution zones, and more. 

The signed consent fax rule would stop our advertising department in its tracks 

every day. Maybe every hour. Since more than 80 percent of our revenue is generated by that department, it’s pretty important. 

In the past year we ran advertisements for 5,225 different customers. Some ran 

only one ad in that year; some ran several each week. Many times that number of 

potential customers telephone for information because they are considering running 

ads in our market. Also, many of our customers have multiple decision makers from 

a local store, regional headquarters, national headquarters, buying service, advertising agency, etc. It is no exaggeration to suggest that our small company would 

be required to maintain a FAX approval file with nearly 20,000 FAX numbers if we 

had to comply with this rule. 

9

These requests require the fax machine. Most advertising decisions are very timesensitive. Since customers and potential customers need information quickly, they 

routinely ask us to FAX information to them rather than mail it. That information 

might be a rate card, information on a special edition, market demographics, deadline reminders or credit forms. E-mails sometimes are a nice substitute, but there 

are many problems with e-mail attachments. Many businesses still don’t have email, but they all have fax machines. When people request information, they want 

a hard copy now, without having to figure out e-mail attachments. 

B. Special Sections 

The bread and butter of a community newspaper is its special section calendar. 

In that sense, we may be a little like magazines. We cover the routine city council 

and school board news, but we also publish special sections that interest particular 

segments of our advertising clients and our subscribers. Our subjects range from 

bridal guides to sports reviews, from back-to-school to holiday gifts, from health and 

fitness to home and gardens, from economic development to community heritage. 

Among our 5,000-plus customers, many advertise with us only when one of these 

sections is available. A bridal shop, for example, could miss the single best marketing week of the season if it misses out on our special section announcement. Why 

do we fax it? Because the advertisers prefer to receive it that way. They don’t have 

time to scroll through a hundred e-mails a day, and the mailbox contains a similar 

amount of material they don’t want. The fax gets to them quickly and gives them 

what they need. 

C. Advertising Proofs 

I know that in Washington, DC, most advertising is created by fancy agencies 

that do the work for a fee. In McMinnville, the advertising agency for most small 

businesses is the News-Register. A business may phone and talk out an ad concept 

by phone, but the owner wants to see it before it is published—to make changes, 

sign off, have time to prepare point of purchase materials that may be integrated 

with the newspaper piece. 

The fax machine is the only realistic way to get that proof to a small business. 

The e-mail route creates many problems with applications and attachments. We use 

a sophisticated design program that few non-advertising businesses keep on their 

own machines. If we send them the proof in the native application, they can’t open 

it. If we send it in Adobe Acrobat, they usually can’t edit it, and sometimes they 

can’t even open it. If they don’t have a computer, or their computer is on the blink, 

or the guy who usually runs it is gone that day, they are sunk. So they want a fax. 

The other choice is for someone to drive the proof to a customer, but that creates 

tremendous costs in manpower and fuel, as in pre-FAX days. 

D. Invoices and Bookkeeping 

We send monthly statements to our advertisers. Those travel by mail. Often, however, advertisers call with questions, requests for adjustments, extra copies and so 

forth. Those often travel by fax. And since they concern advertising, I would assume 

the Commission would expect us to have consent forms before we sent them. 

E. Other Uses 

A host of other creative ways are used in small towns to keep people informed. 

For example, NNA’s member, the semi-weekly Wise County Messenger in Decatur, 

TX, has a daily fax newspaper ‘‘Update’’ that is distributed to about 1,000 of its 

business and residential subscribers, with news and advertising promotions that 

break between weekly editions. 

Finally, many of our members provide a public fax service. By that I mean that 

they may own the only fax machine in town that is available for public use. That 

is critical, particularly for senior citizens who may not have an office where a fax 

machine is available. These newspapers—usually in small towns—permit citizens to 

come in and use it as needed. This is a practice that would surely come to an end 

under the FCC rule because citizens would not commonly possess the signed consent 

forms. The publishers could not risk the liability of improper use, and they would 

not want to generate ill will with their customers by trying to explain all the new 

rules of faxing. 

5. The Compliance Cost 

The principal concern with the signed consent rule is the Compliance cost. I mentioned the size of database we would need to set up as a tracking system for our 

group of businesses. While my company is among the larger ones in the community 

newspaper industry with about 120 employees, many of NNA’s members have fewer 

than 10 employees. 

10

The Commission has asked us to set up an entire system to interfere with our 

busy customers’ lives so we can get these forms, and to repeatedly bother them to 

keep the forms up to date. I’m going to borrow from my colleague, Cheryl Kaechele, 

who described the burden of compliance last summer when she testified before the 

House of Representatives about this rule.

‘‘Here is what I believe most of my publisher colleagues would have to do, in 

order to comply with this rule:

1) Acquire or upgrade a database program;

2) Mail out, or hand carry, several thousand consent forms;

3) Explain over and over, at the post office, at the golf course, at church, standing in the school parking lot, that, yes, we really must have these forms back;

4) Send someone out again to get some of them back;

5) Send someone out yet again to get some of them back;

6) Explain over and over on the phone, ‘no, we can’t fax you the ad rates, because you forgot to send your form back;’

7) Apologize to an irate customer, while standing in the post office or in the 

school parking lot;

8) Send someone out still again to get some of them back;

9) Hire someone to file them, make a note of them in the database, and remember to check them periodically to make sure nothing has changed; and 

then . . .

10) Send someone out again to get new forms back.

‘‘You get the picture. It is going to require, in all probability, hiring someone 

to do this work. Or it will require shifting someone from selling ads or writing 

stories to take on this new task.’’ (Testimony of Cheryl Kaechele, Publisher of 

Allegan County (MI) News, before the House Subcommittee on Telecommunications and the Internet, June 15, 2004.)

Really, what Cheryl is saying, is that the FCC is requiring us to spend a lot of 

time and money, and our customers’ time and money, getting customers to do what 

they don’t want to do—drop everything to sign yet another form. And for what? To 

stop junk fax? It won’t stop junk fax. But it would hurt a lot of small businesses. 

NNA doesn’t do a lot of survey work. Our association is small, and surveys can 

be quite costly. But we did ask members to give us a sense in 2003 of the cost they 

anticipated for compliance. Most of them told us they would be spending the equivalent of a half-time staff position to comply. This is a cost, for many small weeklies, 

that makes the difference between a profitable year and a loss. 

6. The Threat of Litigation 

One of the most awesome and harmful aspects of the signed consent rule is the 

obvious threat that it leaves hanging over every small business. Fax numbers 

change. We may forget to file a form, or lose it. Someone with apparent authority 

to sign a form might never tell the boss, and then resign without our knowing the 

situation has changed. What is probably most worrisome to those of us in the journalism business is that people can change their minds about us overnight because 

of something we wrote. 

Certainly, we comply today with do-not-call and do-not-send requests. We get very 

few. And 99 percent of the time, we know for a fact that the faxes we send are going 

to people who want them. But in that troubling 1 percent margin of error may lurk 

the angry politician or community activist who disagreed with something I wrote 

in an editorial—and suddenly spies a fax from our marketing department on the 

table. Aha! Maybe we don’t have the signed consent form. And here comes a lawsuit. 

Will we have the form? Will we find it in time? Will I have to pull Marketing off 

their campaign of the week to prepare a defense? And if we’ve messed up that time, 

will we pay, even though we know—and the recipient in all honesty knows—the 

issue isn’t about the fax at all? If you think that doesn’t happen to newspapers, 

come sit in my office for a day when there is a local zoning dispute or controversial 

referendum on the table. 

7. S. 714 Takes a Sensible Approach. 

This bill gives us some breathing room and restores the sensible flow of commerce 

on the fax machine. 

It recognizes the importance of established business relationships. 

It requires us to tell customers how to stop future faxes from coming. 

11

It makes us responsible to demonstrate that we had the consent to send, should 

a dispute arise—as we have that responsibility today. 

It tasks the regulators with looking closely at where the real problem comes from. 

I don’t think the FCC will decide, if it looks closely, that most of the junk fax is 

coming from us, or any other business that expects to maintain a solid relationship 

with its customers. Like spam, it comes from those who use the new technologies 

of our age to latch onto the low barriers to entry in business. They are trying to 

make a buck without going to the trouble of building a respectable business around 

respectable business practices. 

As an Internet company owner, I can assure you that efforts to stop spam by regulating our responsible use haven’t made a dent in that practice. The signed consent 

rule will do no better with faxes. The solutions are found in transparency, sound 

enforcement, and education of consumers on how to do business with people they 

can trust. When spam and junk fax cease to be profitable, they will cease to exist. 

Congress can do a lot to improve the transparency and sound enforcement. S. 714 

takes a solid and sound step in that direction, and I am delighted to declare the 

support of our organization for it. We look forward to working with this Committee 

for quick passage of this legislation.

Senator SMITH. Thank you. 

I notice that a vote has started, so we can either try and finish 

with our witnesses——

Senator BOXER. Let’s try to finish. 

Senator SMITH. OK. 

Mr. ‘‘Fakeen’’—did I pronounce that correctly? 

Mr. FEEKEN. ‘‘Feeken.’’

Senator SMITH. ‘‘Feeken,’’ I’m sorry. 

STATEMENT OF DAVE FEEKEN, BROKER, RE/MAX; ON BEHALF 

OF THE NATIONAL ASSOCIATION OF REALTORS  (NAR) 

Mr. FEEKEN. Thank you. 

Senator Smith and Members of the Committee, my name is Dave 

Feeken. I’m a broker of a RE/MAX real-estate office in Kenai, Alaska. Our office is both a residential and commercial office. I am here 

representing the National Association of Realtors. 

NAR is the Nation’s largest trade association, with 1.2 million 

members. Our members include brokers, sales people, property 

managers, and other professionals engaged in every aspect of the 

real-estate industry. 

I appreciate the opportunity to share our thoughts regarding The 

Junk Fax Prevention Act of 2005, and commend the Committee for 

its leadership in recognizing that the Federal Communications 

Commission’s revised rules governing the use of facsimile transmissions are a radical departure from current practices, and would 

significantly interfere with day-to-day business activities. 

First, let me say that NAR’s members understand and strongly 

support the goals of the Telephone Consumer Protection Act. Realtors, themselves, are the recipient of unsolicited faxes that tie up 

our business fax machines. We understand the problem this legislation is intending to address. NAR does, however, question the need 

for the change that the FCC has made to the TCPA rules. 

The prior rules, with its established business relationship exception, has worked well over the past 12 years. In reversing its rule, 

the Commission could not measure the extent to which consumer 

complaints received were, in fact, the result of faxes sent as the result of the established business relationship, except as opposed to 

those sent in violation of the underlying ban on faxes sent outside 

of an EBR. However, it is clear that the Commission’s revised rules 

12

to address unsolicited faxes would have the unintended consequences of interfering with solicited faxes. 

Despite all the advances in technology, the process of buying and 

selling real estate is still dependent upon faxes. And while faxes 

most commonly used today are to facilitate the paperwork associated with a home sale, faxes are also used in ways that could be 

construed as advertisement or solicitation, and would, therefore, 

meet the FCC’s definition of an unsolicited fax. 

Let me give you an example or two. Real-estate professionals use 

faxes to communicate quickly and inexpensively with consumers 

who have contacted them. Take the case of a homeowner looking 

for an agent to help them sell their home. After an initial phone 

call, an agent could offer to prepare a comparative market analysis 

for a seller’s review. This CMA provides comparative listing data 

on other homes on the market, describes what the agent will do to 

market the home, and proactively solicits the listing. These CMAs 

are most often faxed prior to a face-to-face meeting. Under the revised rules, faxing this presentation would not be permissible without prior signed permission. 

Real-estate brokers and agents also use faxes to send home listing information directly to potential buyers who request it. Under 

the revised rules, the real-estate agent could no longer followup on 

callers’ requests for information on homes on the market with a fax 

of available properties. In a tight housing market, and those of you 

who live in this market know what a tight housing market is, the 

delay caused could have—in obtaining the written permission or 

mailing the information, could mean the difference between a 

buyer successfully purchasing a home, or not. 

Consider, too, how awkward this scenario would be when a potential customer calls and asks for information on a home for sale. 

As I’ve said, under the revised rules the agent would not be able 

to fax the information requested. Instead, the agent would have to 

explain why they can’t fax the info, direct the consumer to a 

Website where they can provide there required written consent, or 

ask for an address so the agent can mail or courier the information, 

along with the consent form for future use. This will create frustration, suspicion, and, in some cases, ill will. This will be a giant step 

backwards in a business where good customer service depends on 

quick turnaround. 

And while I was asked to speak to the use of faxes in communications with consumers, I also must point out that organizations 

like NAR and its state and local associations routinely use faxes to 

communicate with members. Those faxes inform members about 

classes, products and services available to them, often at the member’s preferred price. Once again, since these opportunities are 

available for a fee, these faxes would meet the definition of an unsolicited fax. 

The FCC has argued that obtaining written permission to faxes 

is not difficult. We disagree. Each of the means provided by the 

FCC for obtaining written permission—face-to-face meetings, direct 

mail, and e-mail with electronic signature—presents a challenge for 

the consumers and the real-estate professionals. Interestingly 

enough, the one technology which is fast, inexpensive, and widely 

available is not an allowed means of distributing or returning perVerDate 0ct 09 2002 14:14 Feb 21, 2006 Jkt 025874 PO 00000 Frm 00016 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\25874.TXT JACK PsN: JACKF
13

mission forms. That technology is fax. In discussing the FCC, staff 

has indicated that faxing the permission form would not be allowed, since the form could be construed as a solicitation for which 

written permission is needed. 

Finally, we would like to have been able to quantify for you the 

likely cost of compliance with the revised FCC rule. Unfortunately, 

though, we are unable to predict how more than 1.2 million Realtors, approximately 12 million home sellers and home buyers, 

would have interacted if the revised rules had been in place last 

year. In our written testimony, however, we presented some conservative, simple assumptions. We estimate that a minimum of 

over 66 million written permissions would have been required to 

sustain last year’s roughly six million home sales, 66 million forms 

that would have had to have been printed, sent, collected, and 

stored on the residential side of the real-estate business, alone. Obviously, the dollar costs involved in the preparation, distribution, 

and management of 66 million forms would be sizable. As a result, 

NAR believes that it is critical that the established business-relationship exemption, which has functioned well since the FCC first 

issued rulings to implement the TCPA some 12 years ago, be reestablished, and that alternative means of giving consent be allowed. 

We believe that narrowly crafted technical-correction language of 

The Junk Fax Act can rectify the problems created by the new 

rules and continue protecting consumers from unwanted faxes that 

are already prohibited by the TCPA. 

We look forward to working with you and achieving this end and 

thank you for the opportunity to testify. 

[The prepared statement of Mr. Feeken follows:]

PREPARED STATEMENT OF DAVE FEEKEN, BROKER, RE/MAX; ON BEHALF OF THE

NATIONAL ASSOCIATION OF REALTORS  (NAR) 

Chairman Stevens, Ranking Member Inouye, Senator Smith and Members of the 

Committee, the National Association of REALTORS  (NAR) appreciates the opportunity to share its thoughts regarding S. 714, the Junk Fax Prevention Act of 2005. 

NAR is the Nation’s largest professional trade association with over a million members who belong to over 1,500 REALTOR  associations and boards at the state and 

local levels. NAR membership includes brokers, salespeople, property managers, appraisers and counselors as well as others engaged in every aspect of the real estate 

industry. 

NAR commends the Committee for its leadership in recognizing that the Federal 

Communication Commission’s (FCC) revised rules governing the use of facsimile 

transmissions are a radical departure from current practice and would significantly 

interfere with day-to-day businesses’ activities and impose a costly new compliance 

burden on business of all types. 

NAR understands the goal of Congress in enacting the Telephone Consumer Protection Act (TCPA) was to protect consumers’ privacy expectations to not be bothered by unwanted faxes. As business people and consumers, REALTORS  are often 

the recipients of unsolicited faxes that tie up the fax machines vital to their real 

estate practices. We strongly support, therefore, the goals of the TCPA and believe 

that the law’s provisions banning unsolicited faxes are appropriate. We also appreciate the FCC’s efforts to craft rules to effectively implement the law and the Commission’s willingness to meet with NAR leaders as we have worked to understand 

the new fax requirements. 

We do, however, question the need for the changes that the FCC has made to the 

rules governing the fax provisions of the law. The prior rules, with an established 

business relationship (EBR) exception for faxes sent by firms to established clients 

and allowances for alternative forms of permission, have worked well over the past 

12 years since implementation. The prior ruling created settled expectations among 

consumers and businesses alike. 

14

1 47 CFR § 64.1200(f)(10). 

2 2003 Report and Order, In the Matter of Rules and Regulations Implementing the Telephone 

Consumer Protection Act of 1991, CG Docket No. 02–278 ¶191 (rel. July 3, 2003) (‘‘2003 Report 

and Order’’). 

Now, however, it is also very clear to us that the Commission’s new rules intended to stop unsolicited junk faxes will have the unintended consequences of interfering with solicited faxes. In the case of the real estate industry, for example, faxes 

sent in response to a consumer inquiry or in the course of normal business and desired by the recipient (consumer, agent or firm) will no longer be allowed. In addition, these new rules will also interfere with the NAR’s and its state and local associations’ abilities to satisfy members’ expectations regarding communications and 

service. 

As a result, we believe that it is critical that (1) the established business relationship (EBR) exception which has functioned well since the FCC first issued rules to 

implement of the TCPA some 12 years ago be reestablished and (2) alternative 

means of giving consent be allowed. These two actions are necessary so that communication with existing clients and those who have inquired about a good or service 

is not subject to overly burdensome and disruptive regulation. 

We believe that narrowly crafted, technical correction language such as is being 

considered by the Committee in the Junk Fax Prevention Act of 2005, can rectify 

the problems created by the new FCC rules while at the same time continuing to 

protect consumers and businesses from unwanted faxes that are already prohibited 

by the TCPA. 

Background 

The Telephone Consumer Protection Act (TCPA) of 1991 prohibits the use of any 

telephone facsimile machine, computer or other device to send an ‘‘unsolicited advertisement’’ to a telephone facsimile machine. An unsolicited advertisement is defined 

‘‘as 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.’’ 1

When first implementing the new law in 1992, the Federal Communications Commission determined that an established business relationship constituted express invitation or permission to receive an unsolicited fax. As part of its July 2003 Do-NotCall (DNC) rulemaking, the FCC revised that interpretation. 

In reversing its long-standing rule, the FCC determined that the TCPA requires 

a person or entity to obtain the express invitation or permission from the recipient 

before transmitting any unsolicited fax advertisement. This express invitation or 

permission must be in writing and include the recipient’s signature. The recipient 

must clearly indicate that he or she consents to receiving such faxed advertisements 

from the company and the individual within the company to which permission is 

given. Furthermore, the consent form must specify the individual and the fax number to which faxes may be sent. The permission form cannot be faxed to the recipient or submitted via fax to the entity to whom permission to fax is granted. 2

The Importance of Faxed Information to the Real Estate Industry 

Despite all the advances in communication technology, the process of buying and 

selling a home is still heavily dependent on the ability to send and receive faxed 

information. Consequently, real estate brokers and agents use facsimiles regularly 

to communicate with other real estate professionals, settlement and other service 

firms, as well as with both home buyers and sellers. 

The most common use of fax by the real estate sales industry today is to facilitate 

the completion of the paperwork associated with the sales transaction, i.e. offers to 

purchase, counteroffers, disclosure forms, etc. While these transactional faxes seemingly would be exempt from the new rules, faxes are also routinely used for purposes that would unfortunately meet the current definition of an ‘‘unsolicited’’ fax. 

Business to Business Faxes. Real estate sales agents and brokers commonly 

use facsimiles to quickly share new property listings with other real estate professionals who are active in a given market and may have clients interested in purchasing a newly listed property. In a survey of members of NAR, REALTORS  also 

indicated that faxes are commonly used to inform other real estate professionals of 

price reductions on a property that had been viewed by that agent’s clients or the 

time and date of open houses for newly listed homes. Such faxes communicate valuable market information that benefits recipients and their clients in a manner that 

is both timely and cost-effective. 

15

Business to Consumer Faxes. Real estate sales professionals also use faxes to 

communicate in a quick and cost-effective manner with consumers who are looking 

to sell or buy a home. 

When selling their home, most homeowners contact a real estate professional or 

a number of agents about listing the house. In response to the inquiry, an agent 

will typically prepare a comparative market analysis which (1) describes what the 

agent would do to market the home, (2) provides comparable listing data on homes 

currently on the market so as to begin discussion about a possible listing price and 

(3) proactively solicits the listing. 

In those situations where time is of the essence, this comparative analysis is faxed 

to the seller for review prior to any face-to-face meeting. In some cases, such as the 

sale of a resort or inherited property, a face-to-face meeting may not even occur due 

to time or distance constraints. In all cases, this informational exchange takes place 

prior to any formal business agreement, i.e. listing agreement, which could provide 

a vehicle for the necessary written permission to fax. Under the new rules, faxing 

this listing presentation or even comparative listing information would not be permissible without prior signed permission. 

Real estate brokers and agents also routinely use faxes to send house listing information directly to potential buyers who may request it by telephone, but with whom 

the agent has not yet entered into a formal representation agreement. Under the 

new rules, a real estate professional could no longer share new listings or followup a telephone, personal or even Internet-delivered inquiry with targeted research 

via fax. Consequently, the new rules meant to deal with unsolicited faxes would 

have the unintended effect of interfering with solicited faxes. 

In a tight housing market, the delay caused by having to obtain written permission from a potential client or another real estate professional before the relevant 

house listing information is sent could mean the difference between a buyer getting 

a house they want or losing it. 

Consider too how awkward this scenario would be when a potential customer calls 

and asks for information on a home for sale. Under the new rule, the real estate 

professional would not be able to fax the information requested. Instead the agent 

or broker will have to explain why they can’t fax the information, direct the consumer to a website where they can obtain a form to provide the required written 

consent or ask for an address so the real estate professional can mail or courier the 

information along with a consent form for future use. This will create frustration, 

suspicion and, in some cases, ill-will. This would be a giant step backwards in a 

business where good customer service depends on quick turnaround. 

REALTOR  Association to Member Fax. Similarly, NAR and its state and 

local associations routinely use facsimiles to communicate quickly and efficiently 

with members. These faxes inform members about upcoming continuing education 

classes, meetings, seminars, products, services, and membership renewal. This is information that members not only expect, but for which they have paid NAR, state 

and local associations dues to receive. Once again, many of these faxes will meet 

the definition of unsolicited fax advertisements and could not be sent under the new 

FCC rules. 

The Feasibility of FCC-Suggested Means of Obtaining Permission 

The FCC has argued that obtaining written permission is not a difficult thing to 

do. We disagree. A close examination of the methods proposed by the FCC for business to obtain consent—‘‘direct mail, websites and interaction with their customers 

in their stores’’—points out the hurdles unanticipated by the FCC that will be encountered by the real estate professional. 

Face-to-Face Meetings. As our previous examples indicate, face-to-face meetings 

are not the norm and are sometimes impracticable prior to the need/desire to fax. 

Unlike the corner grocery or neighborhood restaurant, consumers do not regularly 

visit their local real estate firms’ offices. (Most consumers engage in a real estate 

transaction every 7 years.) Consequently, most real estate practitioners will not 

have a consumer’s permission to fax on file when a request for information is received. 

A face-to-face meeting will require a special trip that takes time and incurs some 

travel expenses. At a minimum, these costs will increase the cost of a transaction 

that will be absorbed by the agent, real estate firm or consumer. At its worst, a faceto-face meeting will be impossible, e.g. where an owner lives out of the area as is 

commonly the case in a resort market or when property is inherited. 

Courier. A permission form could be hand-delivered to a potential fax recipient 

via courier or messenger service. This is an expensive means of delivery and would 

be impracticable from a cost perspective for all but a very small number of transactions or those transactions with an assured outcome. Real estate professionals 

16

3 2003 Report and Order, ¶ 191. 

commonly respond to large numbers of customer requests for information—only one 

in twelve contacts eventually results in a home sale and compensation. Delivering 

and collecting permission via courier or messenger would be cost prohibitive for 

most real estate practitioners. 

Mail/Overnight Delivery. Using an overnight service will have the same cost 

drawbacks as a courier service. Both regular and overnight mail will suffer from the 

additional problem that an interested customer will have to wait 24 hours or more 

before the information that they requested can be delivered. In our ‘‘instant gratification’’ world—and an industry where quick customer service can be the difference 

between gaining a new customer or not—the inherent delayed delivery of materials 

would make this a very unattractive approach. 

Internet/E-Mail/Electronic Signature. Despite the rapid adoption of the Internet and e-mail, there are still significant numbers of households—including underserved minority, immigrant and low-income populations, etc.—with limited or no access to the Internet, e-mail or the technology which would allow them to access, let 

alone sign, an electronic document. Additionally, not all states have enacted legislation that allows for the electronic signature of documents. Electronic delivery, therefore, is seriously limited in those markets where real estate professionals serve a 

population with limited access to this means of access or without the appropriate 

state enabling legislation. 

Fax. We would point out that faxing a permission form to a consumer would be 

a quick and inexpensive way to disseminate the form and receive permission. However, in discussions held with the FCC staff on this matter and in its written guidance, the FCC has indicated that faxing a permission form would not be allowed 

since the form itself could be construed as a solicitation or advertisement. 3 Likewise, a faxed permission form with a signature would not provide the necessary 

written permission because the signature is not considered a valid, original signature in some jurisdictions. 

Faxes have been used by the real estate industry to deliver information to consumers and other real estate professionals because of (1) the speed of delivery and 

(2) the minimal cost associated with that speedy transmission. While it is possible 

to use one of the FCC recommended means to obtain written permission, doing so 

will result in delay, increased costs and the very real possibility that the window 

of opportunity to purchase a given property will be lost. It is hard to imagine that 

these new rules will not impede the ability of real estate professionals to quickly 

and efficiently help homebuyers and seller complete a real estate transaction. 

The Magnitude of the Resources Needed for Compliance Purposes 

While the cost of obtaining a signed permission in any one instance may not seem 

significant, in the aggregate, the magnitude of the new paperwork required to obtain written permission and the cost of delivery (e.g. courier, overnight, or mail) required by the new rules are sizable. For example, if the new rules had been in place 

for 2004, NAR estimates that roughly 66 million permission forms would have to 

be printed, circulated, processed and stored in the first year by the real estate sales 

industry in order to comply with the new written permission requirements. This 

total breaks down as follows: 

Agent to a Consumer. Last year, approximately 6 million homes changed hands. 

If we make a conservative assumption that each seller requested information from 

two potential listing agents that would typically be faxed today and each buyer received two faxes from two different agents during their home search that were subject to the new rules, then approximately 24 million faxes would have been sent and 

24 million signed permission forms would have been required before those faxes 

could be sent. Those 24 million permission forms would have to be printed, delivered 

to the consumer by some means at a cost, returned to the agent also at a cost, filed 

and stored. 

This estimate does not account for the fact that many families shop for a new 

home each year without purchasing a home. Consequently, the estimate of 24 million permissions required is a significant underestimate of the volume of permission 

forms that would in fact be generated by the industry acting to comply with the new 

rules. 

Agent to Agent/Real Estate Firms. According to our surveys, faxes are typically used by real estate professionals to advertise open houses, announce new property listings and changes in asking prices for listed homes. To estimate the number 

of permissions needed to facilitate faxes for these purposes, we can conservatively 

assume that each of our 1.2 million, self-employed members will want to fax, at one 

time or another, to at least ten real estate firms/offices, ten individual agents home 

17

4 1992 Report and Order, In the Matter of Rules and Regulations Implementing the Telephone 

Consumer Protection Act of 1991, 7 FCC Rcd 8752, ¶ 34 (rel. Oct. 16, 1992)(CC Docket No. 92–

90) (‘‘1992 Report’’) 

offices, five settlement service providers and five general business service providers. 

Thirty million six hundred thousand permissions, therefore, would need to be gathered to allow for unfettered faxing between real estate professionals and the other 

real estate professionals and firms with which they work. 

Given that the real estate sales population changes significantly from year to year 

as new agents enter the industry, others leave the business, and fax numbers are 

changed and added, the need to seek permissions will be an ongoing yearly effort. 

Consequently, the 30.6 million estimate will be a first year figure that will be added 

to each year as new permissions are needed to stay current of all the changes that 

have ensued. 

Real Estate Firms to Agents/Other Firms. In addition, the Nation’s 93,000 

real estate firms, as legal entities distinct from their independent contractor agent 

sales force, would also need to obtain permission to fax to real estate professionals 

and other firms. Assuming that each firm will have the need to fax to ten other real 

estate firms, thirty agents, twenty settlement service providers and twenty other 

general business service firms, the number of permissions required to support the 

current level of fax activity that is accepted as common practice would total 

7,440,000. Again, this figure is a first year estimate that will need constant updating to account for changes in the industry players and fax numbers. 

REALTOR  Association to Member. In order for NAR and its state and local 

associations to continue to fax their 1.2 million members, an additional 3,600,000 

signed written permission forms would be generated. REALTORS  do not join just 

the national association but join their state associations as well as their local associations. Hence, the need for 3.6 million separate permission forms to be circulated, 

complied, maintained and checked prior to any communications via fax would be 

created. We would anticipate that this would be an annual exercise in which each 

of our associations would engage. 

A Final Thought. It is important to recognize that each of the forgoing estimates 

of numbers of permissions to fax that would be required to comply with the FCC’s 

new fax rules are only one part of the cost equation. We have not attempted to estimate the dollar cost of obtaining each of these permissions and maintaining the resulting records since to do so would require a level of detail that we do not have 

available to us. However, it is clear that given the shear magnitude of the numbers 

involved and the costs of preparation, distribution, and management of the resulting 

paperwork that the costs will be substantial. 

Compliance Cost vs. Benefits Achieved 

As we have illustrated, the costs associated with the elimination of the EBR and 

alternative means of granting permission to fax are enormous. This new burden is 

created despite the fact that the Commission’s do-not-fax rules have worked for over 

a decade. In reversing the 1992 decision, the Commission did not note any consumer 

complaints that were a result of the established business relationship rule. Indeed, 

there is scant evidence of harm to justify the Commission’s abrupt change. 

Though there is not evidence of harm that needed to be fixed by eliminating the 

EBR exception or alternative means of giving permission to fax, there is evidence 

of over 10 years of business expectations in reliance on that exception. NAR, real 

estate professionals, and entities in countless other industries implemented a practice of routinely faxing information regarding products and services to other entities 

with which they have an established business relationship. 

Accordingly, while the compliance costs of the new rule in the aggregate would 

be quite high, the benefits would be minimal. The faxes sent by and received by real 

estate agents are faxes which facilitate a business transaction. These are not the 

type of ‘‘junk’’ faxes that the TCPA and Commission rule were designed to prohibit. 

But the Commissions’ revised rule for the first time covers all faxes, including those 

integral to existing and new business relationships in the real estate market. 

A Solution to the Problems Created by the New Fax Rules 

NAR believes that the established business relationship exception to the TCPA 

rules should be reestablished and that other forms of consent should be allowed. 

In the matter of the EBR exception, NAR believes that the Commission correctly 

analyzed consumer expectations and the affect privacy interests in its 1992 rulemaking: ‘‘a solicitation to someone with whom a prior business relationship exists 

does not adversely affect subscriber privacy interests.’’ 4 Also, the Commission pruVerDate 0ct 09 2002 14:14 Feb 21, 2006 Jkt 025874 PO 00000 Frm 00021 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\25874.TXT JACK PsN: JACKF
18

5 H.R. 102–317, at 13 (1991). Though this statement was made in the context of telephone 

solicitations, the same rationale applies equally to the fax context. 6S.R. 102–178, at 5 (1991). 

7 2003 Report and Order ¶ 114. 

dently found that the standards for a telephone solicitation and faxed advertisement 

should be the same and thus exempted established business relationships from both 

sets of rules. 

With respect to the allowance for means of permission beyond express written 

permission, NAR believes that consent should be allowed that is:

• faxed;

• provided electronically (whether by a web-based ‘‘click-through’’: or in an email);

• orally (in person, by telephone, or in a telephone message); or

• by automated means (in response to an automated fax-on-demand phone system 

by which the caller can request faxed information).

Written signed consent is unnecessary and imposes a requirement far out of proportion to the harm it seeks to address, and thus contradicts the intent of Congress 

in adopting the TCPA. The legislative history shows that Congress considered imposing a written requirement and decided against that high threshold of consent. 

The House Report accompanying the TCPA states that Congress ‘‘did not see a compelling need for consent to be in written form. Requiring written consent would, in 

the Committee’s view, unreasonably restrict the subscriber’s rights to accept solicitations of interest and unfairly expose businesses to unwarranted risk from accepting permissions or invitations from subscribers.’’ 5

The Senate Report is equally on point. The Senate bill as introduced contained 

the phase ‘‘express written consent’’ in the context of telemarketing, but dropping 

the requirement that consent be written was one of three changes the Senate Committee made before favorably reporting the bill. The Committee justified its decision 

to drop the written requirement because the Committee found that mandatory written consent was ill-suited to the interests of consumers and sellers. 6

A written consent requirement also is contrary to the Commission’s telemarketing 

rules. Those regulations exclude from the definition of a telephone solicitation any 

call concerning the sale of goods or services in response to an individual’s inquiry, 

when the individual would be expecting such a call. 7 In contrast, the fax advertising 

rules not only specify that a fax sent in the same situation is an ‘‘unsolicited advertisement,’’ but actually prohibit such a fax. 

This is problematic for two reasons. First, classifying a telephone call made in response to an inquiry as not a solicitation, but a fax sent in exactly the same circumstances as an unsolicited advertisement is confusing, contradictory, and arbitrary since the terms ‘‘solicitation’’ and ‘‘advertisement’’ have the same meaning. 

This is particularly the case since, under the plain meaning of the term, a fax is 

not unsolicited if the recipient has made a request for the information and there 

are numerous other ways to invite or permit a fax other than by providing prior 

written and signed consent. 

Conclusion 

In conclusion, we want to thank the leadership of the Commerce Committee for 

the opportunity to share the views of the National Association of REALTORS  on 

the need for Congressional attention to the problems faced by the real estate industry as the result of the new fax regulations that will take effect January 1, 2005. 

We strongly believe that consumers looking for new homes and rental units will be 

disadvantaged by the new regime as will real estate professionals and firms. We 

urge you to take action to create the statutory authority for an established business 

relationship exception needed by the FCC to allow the EBR exception that has 

served consumers and businesses well for over a decade and clarify once again that 

permission can and should be allowed to be granted by means other than express 

written permission.

Senator SMITH. Thank you, Mr. Feeken. 

Steven Kirsch? 

19

STATEMENT OF STEVEN T. KIRSCH, FOUNDER/CHAIRMAN, 

PROPEL SOFTWARE CORPORATION 

Mr. KIRSCH. Thank you, Mr. Chairman, for allowing me to speak 

with the Committee on my perspective on this very important piece 

of legislation. 

I’m here representing the people who hate junk faxes, and there 

are over 200 million of us. There’s only one real point of contention 

here, and that’s whether to add an EBR exemption to the junk fax 

statute. The other witnesses have testified on the written consent 

issues, and we totally agree, that’s not a problem, we should do 

that. But I’m here to talk about that EBR. And I’d like to give you 

compelling evidence, contrary to what you’ve heard from others, 

that adding an EBR exemption for junk faxes is something that 

should not, and must not, be done; not for my sake, but for everyone’s sake, including the sponsors and including the gentlemen 

here. 

For example, I get a ton of unwanted junk mail in my mailbox 

every day from companies I’ve done business with in the past. You 

probably do, too. You know, suppose you write a law that forced me 

to pay both postage and printing costs for this advertising until 

such time as I notified each one of these businesses to stop? That 

way, all of these businesses could send me stuff that I don’t want 

at virtually no cost to them, and force me to pay for it until such 

time as I got mad enough to write them each a letter to stop. How 

many of you would vote for such a bill? Well, I hope that nobody 

would, but that’s exactly what you’re being asked to do here today. 

Never before in the history of this country has it been legal to 

use another man’s printing press and ink to print your advertising 

at the other man’s expense and without his permission. But that 

is exactly what this bill proposes to do. 

The sponsors have proposed putting the EBR exception, ‘‘back 

into the TCPA’’ in order to, ‘‘restore the status quo,’’ and, ‘‘avoid a 

harsh impact on business communication without providing any 

tangible benefit to consumers.’’ That’s plain nonsense. It’s utterly 

false. And the facts unambiguously show that exactly the opposite 

is true. An EBR exemption is completely unnecessary. And if you 

do put an EBR exemption in, you will impose a harsh impact without any benefit. 

The facts and the record show the following. Number 1, there 

never was, and there never has been, an EBR exemption for junk 

faxes. The EBR was deliberately removed from the TCPA before its 

passage in 1991. Number 2, there are no court cases that I’m 

aware of that have determined that there ever was a legal EBR exemption. Number 3, it’s an undisputed fact that there never was, 

and never has been, an FCC regulation authorizing EBR for junk 

faxes. It’s simply ain’t there, folks. It’s a matter of public record. 

There is no evidence that the TCPA, which never had an EBR, 

is not working well. This was admitted by the Fax Ban Coalition 

and in the testimony of NAR given today. For example, NAR has 

over one million members. They admit that they fax their members 

all the time. Their members fax other members. Their members fax 

their clients. Yet there are no known cases of the NAR or a realestate agent having been sued for any legitimate business-related 

faxes. 

20

So your primary witnesses, the country’s leading trade organization, which extensively uses faxes, is telling you it hasn’t been a 

problem. It’s only the written part that’s been a problem. So if it 

hasn’t been a problem, why do we need to fix it? In fact, we know 

the EBR exemption has never been necessary for the smooth functioning of business, because it’s been there for 14 years, and nobody 

ever complained. In fact, hardly anybody even noticed. Furthermore, there’s not a single company in the world that requires an 

EBR exemption to do legitimate business. Can you name one? 

The only use of an EBR exemption is to allow advertisers to send 

junk mail that people don’t ask for. For example, NFIB has never 

been sued for sending legislative updates to their members by fax. 

That’s why their members joined. But then NFIB faxed a five-page 

unsolicited ad to sell insurance to their members, they were sued, 

and they had to pay a whole $575 fee. The court said, in no uncertain terms, that there was no EBR for faxes. NFIB broke the law, 

because they broke their covenant with their members, who wanted 

legislative updates and not advertising. They can still fax their legislative updates to their members. That has never been regulated 

under the TCPA. Mr. Bladine’s communications have not been regulated. Mr. Feeken, his—faxing of his presentation would not be 

permitted? That’s not true. It’s not even regulated under the TCPA. 

The point is—I mean, they just can’t send ads by fax without asking first. It’s simply good business practice. And it’s also something 

that’s very easy to do. 

Let me give you another scenario. I can call a RE/MAX realty office and ask for information on listings and other services. That 

creates an EBR with me and RE/MAX. If this bill passes, I would 

legally be able to send junk faxes to every RE/MAX fax machine 

in the country advertising my anti-spam products, or anything else, 

for that matter. And I’d do so until each individual RE/MAX office 

tells me to stop. That’s not cost free. That’s not opt out at no cost. 

There’s a lot of effort involved in opting out. That is what this EBR 

exemption in this bill will permit. 

In addition, if you institute an EBR you’re going to cause everyone a lot of work for no benefit, and you’re going to open the flood 

gates for adverse consequences. I’ve surveyed many people, and 

every single one of them would opt out of virtually all unsolicited 

advertising sent to them by fax, whether it is from businesses they 

know or don’t know. And I would encourage you all to go do the 

survey yourself. Why force everyone to jump through a hoop to get 

rid of something that they never wanted in the first place? I mean, 

why force businesses to have to create 800-numbers and data bases 

and all those opt-outs that they don’t have to do today? What’s the 

point of that? 

In conclusion, everyone agrees that TCPA has generally been an 

extremely fine piece of legislation, because it succeeded in striking 

a reasonable balance between the wanted content and allowing 

that, or restricting the unwanted content. We all recognize the 

need to relax the in-writing requirement that the FCC has attempted to add to the regulations, and I agree with my fellow witnesses here, but there is no need for a new EBR exemption to be 

added. Any changes that you do to the TCPA should be done very 

carefully, and only if they’re absolutely necessary. No company in 

21

the world needs an EBR exemption to send legitimate faxes to do 

business; however, it is reasonable, but it is not required, to add 

a special opt-out for membership organizations to send faxes to 

their members. And I have suggested suitable language in my written comments. 

Thank you, and I would be delighted to take any questions. 

[The prepared statement of Mr. Kirsch follows:]

PREPARED STATEMENT OF STEVEN T. KIRSCH, FOUNDER/CHAIRMAN, PROPEL

SOFTWARE CORPORATION

Thank you Mr. Chairman for allowing me to speak with the Committee on my 

perspective on this very important piece of legislation. 

Everyone recognizes the need for legitimate businesses to send legitimate business communications to their customers without fear of being sued. With recent contemplated rule changes by the FCC, this ability has been placed in jeopardy and 

needs to be fixed. 

This bill seeks to solve that problem by doing two things: (1) clarifying that permission to send unsolicited advertisements can be granted verbally and (2) adding 

a new exemption to the law to allow businesses that I have an Established Business 

Relationship (EBR) with to send me junk faxes without my consent until I tell them 

to stop. 

The first thing is an excellent solution. The second is not. 

Unfortunately, adding an EBR exemption, while well intentioned and while solving one aspect of the problem, is completely unnecessary. It will actually hurt legitimate use of the fax machine for businesses because as written, the bill is so broad 

that it permits fax advertising practices that legitimate businesses don’t use and 

thus permits abuses that will make legitimate faxes less useful the way spam email makes legitimate e-mail less attractive. It creates a whole host of new problems and adds new burdens and costs. It’s like ‘‘whack-a-mole’’. . . solve one problem, create 10 or 20 more. Congress has better things to do than solve the same 

problem over and over and over again. 

A better approach is simply to clarify the terms in the TCPA to reflect the original 

intent and current business practice. This solves the problem and restores the status quo without imposing new burdens or introducing any unintended consequences. 

Adding a new EBR Exemption Solves one Problem but Creates Many More 

Contrary to popular belief, there has never been an EBR exemption to the TCPA. 

Although the FCC did erroneously interpret the law this way, the courts have 

never adopted this interpretation and Congress never intended such an exemption. 

Since the enactment of the TCPA, I have not been able to locate a single court case 

where such an exemption has been upheld. In addition, businesses have been acting 

consistent with Congress’ intent and the court’s interpretation as well. For example, 

there is not a single public company that I am aware of that sends junk faxes to 

their customer base. And there is certainly no company in the United States that 

needs to have an EBR exemption to send junk faxes in order to conduct business. 

Therefore, adding a new EBR exemption to the TCPA as currently proposed in 

this bill, is not only completely unnecessary, but it is also counterproductive for the 

following reasons:

• It would dramatically increase the amount of junk faxes I get by an unpredictable amount. NOBODY I know wants to get more junk faxes.

• It would increase my costs since I would bear the cost having to opt out of each 

and every junk fax and keep records and receipts of each request. In short, Congress would be imposing a huge, unwanted cost burden on all recipients of this 

advertising. All the recipients would be forced to incur costs for something that 

they never wanted in the first place.

• It would also increase the burden on every sender who would then be responsible for setting up a toll free opt out number and keeping track of all opt out 

requests. The record keeping burden of the advertiser would actually increase 

under this proposal as the sender would now have to track both opt in and opt 

out requests.

• It would increase the legal liability of the sender since the database of opt out 

numbers would be close to 100 times larger than having to maintain an opt in 

database. Any typo, omission, or mistake in the opt out database required by 

this law could generate a lawsuit. So lawsuits against businesses are 100 times 

22

more likely under the opt out rules required by this legislation. That’s not a 

guess; it’s a mathematical certainty.

• It opens up the door for legalized abuse via the ‘‘unintentional EBR’’ that I describe below creating an unpredictable torrent of junk faxes that would then be 

legal but completely unexpected and unwanted.

• I’ve surveyed many people chosen at random and every single one of them 

would opt-out of virtually all unsolicited advertising, whether it is from businesses they know or do not know.

The bottom line is this: adding a new EBR exemption to the TCPA would create 

needless amounts of work for both sender and recipient, impose new costs on the 

recipients without their consent, and accomplish NOTHING of any economic value. 

Huge burden on everyone, no value. What’s the point of that? 

But there is a better way. 

A Better Approach: Clarify the Original Intent 

I spoke with Jeb Bladine who is testifying here today. In the 30 years he’s been 

in business, his firm has never been sued for the business communications he’s sent 

via fax. Nor is he aware of anyone in his local community that has been sued for 

sending junk faxes. They all use faxes responsibly and the existing law has 

worked for them as written and interpreted by the courts.

Because the law has been working to everyone’s satisfaction until the recent rule 

changes, it is clear that the best way to fix the problem without introducing new 

ones is to clarify the existing law as it has been interpreted by the courts over the 

last 14 years since the TCPA was enacted. 

The best way to restore the status quo is by doing two simple things:

• Clarify that permission does not need to be in writing.

• Modify the definition of ‘‘unsolicited advertisement’’ so that all requested business communications are clearly permitted.

Normal request-response business communication then works as expected without 

fear of litigation. All such communication, such as asking your favorite restaurant 

to fax a menu or asking your real estate agent to send you house information, a 

purchase contract, or counter-offer, etc., would be exempt. These are normal business communications where the recipient has requested the material being transmitted and should not be considered ‘‘unsolicited advertisements’’ that should be 

regulated by the TCPA. 

Even if no records of the request whatsoever are kept by the sender, the very nature of the material being sent and the number of telephone calls made to fax machines by the sender are evidence that would provide an affirmative defense available to any business that might be sued by an unscrupulous recipient. For example, 

a restaurant that faxes an occasional menu to people who call in requesting it is 

a legitimate purpose. It is far different than a restaurant who blindly sends out 

their menu to every fax number in the local Chamber of Commerce directory. 

In short, judges determine whether the material in question constitutes an unsolicited advertisement or legitimate business communication by looking at a number 

of factors in order to determine whether express consent was given or not:

• examination of the material being faxed, 

• the past behavior of the sender (including phone records), 

• the nature of the relationship between the sender and the recipient.

Non-profit membership organizations such as the National Federation of Independent Businesses (NFIB) or the local Chamber of Commerce can still communicate by fax with their members under this proposal. They should just include a 

statement in their membership forms that by joining and providing your fax number, that you are allowing broadcast communications related to the organization to 

be sent to you via fax. Or even better, they could have a check box as to whether 

the member wants to receive official communications by fax, e-mail, etc. This is simply good business practice and any legitimate business already does this. 

Further Protections 

If Congress wishes to further protect the fax communications of non-profit business to communicate with their membership, then it is reasonable to authorize the 

FCC to add a special carve out for non-profit membership organizations communicating to their membership based on subjects that are consistent with the mission 

of the organization, e.g., the Chamber of Commerce could fax a notice about a small 

business seminar the Chamber is putting on, but could not fax discount coupons to 

the local cash wash to members without their consent. 

23

Another important change to protect recipients would be to require that professional ‘‘fax broadcasting’’ companies always identify themselves on the fax regardless of whether they have a high level of involvement or not in the sending of the 

fax. This would expose the identity of a small handful of illegal fax broadcasters 

who are responsible for a large portion of the junk faxes sent today. 

Summary 

Because the recipient bears the brunt of the costs on a fax transmission, fax machines always have to be a request/response mechanism for business communications, not a low-cost mass advertising medium for businesses. We need to keep it 

that way. 

The proposed clarifications to the definitions would maintain the status quo; ensuring that legitimate communications are protected without opening the door to 

abuse. That benefits everyone: consumers, big business, and small business, whether they are recipients or senders. 

If these clarifications are not acceptable, a widely accepted alternative is for Congress to remove the written permission requirements and order the GAO study. 

That way, any additional changes can be reviewed with the benefit of the GAO 

study results for guidance. 

The following sections provide more detail to the concepts presented above. 

Adding a New EBR Exemption to the TCPA Would Be Unprecedented 

When the original TCPA was debated in 1989, unsolicited faxes were recognized 

as the equivalent of ‘‘getting junk mail with the postage due’’—except that you have 

no chance to decline the charges. Telemarketing Practices: Hearings on H.R. 628, 

2131, and 2184 Before the Subcommittee on Telecommunications and Finance of the 

House Committee on Energy and Commerce, 101st Congress, 1st Session (1989) Sup. 

Docs. No. Y4.En2/3:101–43 (U.S. Government Printing Office). Unsolicited faxes are 

no different that using another man’s printing press and ink to print your advertising, at the other man’s expense and without his permission. This conduct has 

never been legal—even before the TCPA was enacted, common law cases recognized 

this as trespass to chattels and some brave souls actually brought junk faxers to 

court and won. See Fax Weighed, 22 Cents Won in ‘‘Junk Mail’’ Suit, L.A. Times,

July 4, 1991, p. 4. 

Let me give you an example. I get a ton of unwanted mail every day from companies I’ve done business with in the past. How about you? 

Suppose we create a law that forced recipients to pay both postage and printing 

costs for this advertising until such time as they notified each business to stop sending the ads? That way, all of these businesses could send me stuff that I don’t want 

at virtually no cost to them and force me to pay for it. How many of you would vote 

for such a bill? 

I hope no one would. 

And ironically, the same business that would love to do that to their customers 

would oppose having their customers do it back to them! In short, it’d be great if 

I could do it to others, but I’d sure hate it if someone did it to me. 

Let me ask you another question. How about we pass a law that would permit 

these same business to send me all this stuff that I now get in the mail to my fax 

machine? 

Businesses would LOVE that because it would reduce their advertising costs. Virtually every single one of these pieces could be sent via fax at a much lower cost 

than mailing it because faxing shifts virtually all of the costs of the advertising on 

to the recipient. 

Should we do that? Should we legalize it so advertisers can send you ads you 

never asked for at your expense until you tell them to stop? 

I don’t think you should. But that’s exactly what you’re being asked to do here! 

It would be like telling Mr. Bladine that anyone who calls his newspaper is entitled to a full page ad in his paper for free, until he explicitly asks them to stop. 

Some people dismiss junk faxes as a de minimus part of owning a fax machine. 

But ask yourself who is more harmful to society—a man who steals one dollar from 

a million people, or a man who steals a million dollars from one person? In both 

cases a million dollars is stolen. But the former miscreant is more harmful because 

he can fly under the radar and the million dollars is never recovered because it isn’t 

worth it to any single victim. That’s true with junk faxes. According to experts and 

published reports, there are over 2 billion junk faxes sent each year and that number is growing. That practice steals hundreds of millions of dollars from American’s 

pockets—a few cents at a time. 

In 1991, Congress considered and explicitly rejected allowing a business to send 

faxes to someone with whom it had an ‘‘established business relationship.’’ The FCC 

24

admits that it was in error in 1995 to pencil back in what Congress took out, and 

now has taken steps to correct that error. 

Before rushing to do this however, we must remember—you are creating a legal 

right for one person to use another person’s property and to take the other person’s 

paper and ink for their own use, all without consent. No one would argue that a 

merchant has the right to come into my house or office (at any time of the day or 

night), drop off an advertisement, and take three to forty cents off of my night stand 

in order to offset his advertising costs. Yet that is precisely what you will do if you 

create any exemptions to the junk fax prohibitions in the TCPA. 

So even if we disagree in the details or scope of any exemptions to be added to 

the TCPA, we all have to agree that because we are shifting the costs for billions 

of unsolicited faxes onto recipients, we must craft such exemptions carefully and 

conservatively. 

Several portions of this bill are not controversial. The annual report and GAO 

study are certainly in that category. Relaxing the FCC’s proposed new rule requiring express consent for junk faxes to be in writing is also not controversial. The 

sticking point is whether or not to create an exemption in the statute for anyone 

you have an ‘‘established business relationship’’ with to send you junk faxes until 

you tell them to stop. 

There is only one major point of contention on this bill: whether or not to add 

new language to the TCPA to allow any business that you have a relationship with 

to send advertising to your fax machine without your consent until you tell them 

to stop. 

I’d like to explain why this is a bad idea and suggest a more appropriate alternative that accomplishes all the stated objectives of the author and sponsors of this 

bill and does so without any unintended consequences. 

The ‘‘Unintentional EBR’’

I’d like to give you two examples. Suppose Joe’s Office Supply decides to take it’s 

in-house customer list, and for those customers who have provided Joe a fax number 

and bought something in the last year Joe wants to send them an advertising flyer 

by fax. Now suppose Bill’s Office Supply wants to send advertising faxes, so he buys 

the list of local fax numbers from the Chamber of Commerce and sends out fax ads. 

In this example, I have received both faxes, and in the past, I have bought something from both Bill and Joe. But I gave Joe my fax numbers, and intentionally 

withheld it from Bill since I suspected he might misuse it. What Joe did, was what 

I think most people think of when they talk about sending fax ads within an ‘‘established business relationship’’ exemption. That is an example of a ‘‘legitimate’’ established business relationship fax. But Bill’s example is not. No one thinks that indiscriminate junk faxing should be permitted or rewarded. Yet in the above example, 

using the language of the bill as it stands today, the indiscriminate junk fax I received from Bill, at a fax number I did not give to Bill, will be exempted from the 

statute. How do we create an ‘‘established business relationship’’ exemption for ‘‘legitimate’’ fax uses, but not create a loophole for exploiting by illegitimate uses? 

This problem is exacerbated by how broadly the term ‘‘established business relationship’’ is defined. Merely making an inquiry of a business, such as calling and 

asking the price of an item or if they carry a particular brand will create an ‘‘established business relationship’’ as that term is defined. Using that definition, who does 

not have an ‘‘established business relationship’’ with large retailers like Wal-Mart 

or Staples? And before you think that ‘‘legitimate’’ businesses such as these would 

not do junk faxing in violation of the TCPA, both of them have in recent years. 

In the last session of Congress, this problem was addressed with compromise language that stated the ‘‘established business relationship’’ exemption only was available as a defense if the faxes were sent ‘‘based on’’ an existing ‘‘established business 

relationship.’’ In the example above, this would permit Joe’s faxes, but prohibit Bill’s 

faxes. This way, faxes sent when a business was legitimately trying to send faxes 

to people it knew were its bona fide customers would qualify for the exemption, but 

faxes ‘‘blasted’’ out indiscriminately would not be permitted, even if they ‘‘accidentally’’ were received by someone who had done business with the sender. 

I share the same goals as the author and sponsors of this bill: we all want to 

allow legitimate faxes and stop the junk faxes. 

I also share the same approach to address some unintended consequences of recent FCC rule changes. We certainly do not want to turn back the clock on a wholesale basis. 

Many of the rule changes were clearly needed due to continued evasions of illegitimate telemarketers and fax advertisers. Reasonable businesses who send legitimate 

faxes do not want to create loopholes that will be exploited by other businesses that 

are not so legitimate. Those businesses who want to make legitimate use of fax as 

25

a communications medium are certainly in favor of protecting that medium from 

abuse. If they don’t their legitimate use of faxes gets tarred and feathered with the 

illegitimate uses. 

The current bill attempts to do two things:

• that express consent may be given in any manner; • that an EBR should be interpreted as providing express consent.

The first change is not controversial. While many people still believe that in some 

circumstances requiring written permission is an appropriate safeguard, there is 

also a consensus that there are many situations where verbal permission is acceptable. However, we know the use of alleged ‘‘verbal’’ permission has been abused by 

miscreants in the past, so future abuses in this are a need to be closely watched. 

But I disagree with the second change because there never has been an EBR 

for fax advertisements, not legally and not in reality. I have reviewed literally 

hundreds of TCPA cases, particularly those reported by the TCPA slip service 

TCPALaw.com, and I have not located a single court decision where the court 

agreed with the FCC’s original interpretation. 

Adding an EBR Would Change the Status Quo, Not Restore It 

Therefore, restoring what was never there in the first place, is not restoring the 

status quo. It is changing the status quo!!! In this particular case, it creates a large 

number of very bad, unintended consequences that I’ve documented in my written 

materials. 

Legitimate fax advertising is sending what someone requested to be sent to them, 

and sending it to them at the phone number they have provided to you. It does not 

include ‘‘mining’’ for fax numbers or sending a fax to any indiscriminate fax number 

you can buy or find. It does not include sending 5 pages of ads for life insurance 

to someone who merely asked for a quote on car insurance and nothing else. It does 

not mean giving carte blanche to any business you have made an inquiry to, for 

them to send you junk mail that you have to pay for. 

Changing the Definitions of the Terms Solves the Problem Without

Unintended Consequences 

The right way to restore balance and permit legitimate fax advertisements without burdening legitimate senders, is simple: just replace Section 2a of this bill so 

that instead of creating a new Established Business Relationship (EBR) exemption 

we simply redefine the meaning of ‘‘unsolicited advertisement’’ so that all legitimate 

faxed communications are exempted from regulation. 

That is easy:

The term ‘’unsolicited advertisement’’ means any material advertising the commercial availability or quality of any property, goods, or services, but does not 

include material which is: (a) expressly requested, in writing or otherwise, by 

the recipient; and (b) transmitted to a telephone number voluntarily provided 

to the sender by the recipient.

Other Improvements 

There is one simple improvement to the law that affects only companies that send 

faxes for others (such as Vision Lab, Protus IP Solutions, etc.):

Require that these professional ‘‘fax broadcasting’’ companies ALWAYS identify 

themselves on the fax REGARDLESS of whether they have a high level of involvement or not in the sending of the fax.

Currently, they are only required to do this if they have a ‘‘high level of involvement’’ in the transmission. Of course, all the illegal broadcasters I know of claim 

in court they do not have a high level of involvement. This makes suing the illegal 

junk fax broadcaster difficult since it is virtually impossible to tell where the fax 

was sent from. 

Conclusion 

Junk faxes are a major problem for businesses and consumers. Everyone hates 

junk faxes. 

The FCC rulemaking has caused a great deal of consternation in the business 

community. We all agree that we need to turn the clock back. 

I’d urge this Committee not to overreact to the problem by creating a new EBR 

exemption which would generate a host of new, unanticipated problems. 

I’d encourage each and every one of you to poll your constituents and ask them 

how many businesses that they would like to receive unsolicited advertisements 

from via fax. I’ve done it and the answer is the same for consumers, big business, 

26

and small business: none want advertisements from businesses they do business 

with unless they expressly ask for it. That is consistent with the FCC findings and 

precisely why the FCC attempted to strengthen the junk fax protections. 

The good news is that there is a simple solution: clarify the definition of an unsolicited advertisement. This will keep the junk faxes at bay while permitting legitimate business communication. 

I hope that you will adopt this approach. It’s the right thing to do as it benefits 

both senders and recipients without the danger of imposing new burdens and new 

legal liabilities. 

Thank you and I would be delighted to take any questions you have.

Senator SMITH. Thank you very much, Steve. 

Let me indicate, they’re barely going to hold this vote open for 

Senator Boxer and myself. But, Steve, my understanding of the 

law—and I want to do this right, but—that it’s already prohibited 

by law to send all the things we’re talking about. I still get them. 

They’re unlawful. I’ve got to take action, I guess, to stop them. I 

worry about the verbal consent, whether it will work for companies, 

that they’ll want a legal defense to claims against them. And I believe our bill allows for an opt-out provision that is, in fact, new. 

So I just want to put that on the record. 

And, Senator Boxer, if you have a comment or a question——

Senator BOXER. Yes, and I know we are rushing through this, 

but I think the importance was to hear from the three of you, and 

I just want to thank the three of you very much. 

Senator SMITH. I join in those thanks. 

Senator BOXER. Yes, because you all presented the best case. And 

so, I want to sum up the way I feel about this. And since we’re 

marking up this bill tomorrow, it’s tough as we have to work quickly. 

But, Mr. Kirsch, my understanding is, if I were to ask you today, 

What does your business do? 

Mr. KIRSCH. We make software for speeding up Internet access 

and also eliminating spam. 

Senator BOXER. OK. I think, under the Smith bill—and I have 

a lot of friends who are on it—we now have a business relationship. 

Mr. KIRSCH. That’s——

Senator BOXER. Is that correct? 

Mr. KIRSCH.—that’s correct, Senator. 

Senator BOXER. So now you have the right to go to the Hill, to 

all the offices in the Hill, and get all of our fax numbers, and fax 

us. 

Mr. KIRSCH. Well, actually, Senator, it goes beyond that. You’ve 

just given—thank you very much for asking me that question, because you’ve just given me the right to send my advertising for any 

product—not only my own products, but for someone else’s product—to every single fax machine in the Federal Government. 

Senator BOXER. OK. 

Mr. KIRSCH. Until they opt out. 

Senator BOXER. Right, exactly. 

Mr. KIRSCH. But——

Senator BOXER. I understand. 

Mr. KIRSCH.—they’ll probably have to opt out one fax machine at 

a time. 

Senator BOXER. I understand. 

27

Mr. KIRSCH. Because if they opt out—if they just send me a list 

of all the fax machines, and say, ‘‘Hey, opt me out,’’ I’m going to 

take—you know, some—I wouldn’t do this, but someone is going to 

take that list of all of the fax machines that the Federal Government has just given me——

Senator BOXER. And sell them. 

Mr. KIRSCH.—and sell it. 

Senator BOXER. Sure. 

Mr. KIRSCH. Sell it to a fax broadcaster, who will then add—you 

know, get into a conversation with you and——

Senator BOXER. Right. 

Mr. KIRSCH.—they’ll fax every machine——

Senator BOXER. Right. 

Mr. KIRSCH.—until each individual machine opts out. 

Senator BOXER. I understand. My point is made. This bill, just 

leans too far in the other direction. I don’t like what the FCC did, 

and I want to say, as I did today—if I’m doing business with someone, Mr. Feeken, you or Mr. Bladine or Mr. Kirsch, and you say, 

‘‘Barbara, I think if I faxed you something, you’ll get a better picture of it,’’ and I say, ‘‘Absolutely fax it, fine,’’ and then I get it and 

I’m a happy person. I’ve given you my verbal consent, and we’re 

done. And you make a quick note, ‘‘She gave a verbal consent,’’ and 

that’s the bottom line. 

I’ll even go a little further than that, if we have to. But the way 

this bill is set up—it has serious unintended consequence. I mean, 

Senator Smith wants to cure the problem of junk faxes, I just think 

the consumer groups that are working with me on this thing, the 

people who drafted this bill missed the mark. And the scenario, Mr. 

Kirsch, that you laid out here is a nightmare scenario. And I don’t 

think that it’s that easy to opt out. I get these faxes sometimes, 

Gordon, and they say, ‘‘Call 1–800 yadda-dadda-dah if you don’t 

want any more faxes.’’ And I do it, and I can’t get anyone. They 

say, ‘‘Do not call now.’’ And matter of fact, in your bill it says, ‘‘during business hours.’’ It’s not like you’re requiring a 24-hour hotline. 

That would be better. So I think there are ways we can work together. 

Now, the last point I’d make is, in your bill you say to the FCC—

FTC ? 

Senator SMITH. FCC. 

Senator BOXER. FCC. I’ve got FTC on the brain, with oil prices. 

You say to the FCC, ‘‘You have 18 months to establish what the 

business relationship is.’’ In the meantime, if I did business with 

someone 40 years ago, that’s an established business relationship, 

under the way the bill is written now. So people who did business 

with me in another world, still will be able to fax me. So I think 

the FCC went too far, and I think we’ve got to rein them in. I think 

a verbal consent would be my preference, because I think what 

Steve Kirsch points out is the current situation has been working 

OK. You, yourself, said that, Mr. Feeken. You, yourself, were nodding. It works OK. What do we need this bill for, that goes so far 

the other way that we’re going to take 2 billion faxes and turn 

them into 4 billion faxes? 

So we’ve got a lot of work to do, because, unfortunately, we have 

the mark-up tomorrow. It’s only because Senator Smith is such a 

28

dear friend and a fair person that we got a chance to hear from 

you today. 

Our time is short. I don’t have any other questions. I just think 

there are a few things we could fix. I hope, maybe over the course 

of these next 12 hours——

Senator SMITH. Well——

Senator BOXER.—you and I can come to some agreements here 

and——

Senator SMITH.—we’ve got some time, and, obviously, even after 

tomorrow on the floor——

Senator BOXER. Right. 

Senator SMITH.—we can keep working this——

Senator BOXER. Good. 

Senator SMITH. We want to get it right. It’s a bedeviling problem 

to manage all of the consequences. When we grab here, it blows up 

over there. But we’ll keep trying, because we really do need, and 

we will get ahead of the expiration of this FCC deadline. 

So, thank you all. We apologize for the truncated schedule, but, 

unfortunately, the Majority Leader does not schedule the Senate 

business around this Subcommittee. 

[Laughter.] 

Senator BOXER. Which is not fair. 

Senator SMITH. Which is not right. But, anyway, that’s what it 

is. 

Senator BOXER. But I think this hearing did what it had to do. 

Senator SMITH. It did. 

Senator BOXER. We got out every point of view, and we so appreciate it. 

Senator SMITH. You’ve contributed to the public record. We’re 

grateful to each of you. We’re adjourned. 

[Whereupon, at 3:25 p.m., the hearing was adjourned.]

Æ