U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

29–010

" SENATE ! 108TH CONGRESS

2d Session 

REPORT

2004

108–381

Calendar No. 741

JUNK FAX PREVENTION ACT OF 2004

REPORT

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND 

TRANSPORTATION

ON

S. 2603

SEPTEMBER 28, 2004.—Ordered to be printed 


congress.#13
(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

JOHN MCCAIN, Arizona, Chairman 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

SAM BROWNBACK, Kansas 

GORDON SMITH, Oregon 

PETER G. FITZGERALD, Illinois 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

ERNEST F. HOLLINGS, South Carolina 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

JOHN B. BREAUX, Louisiana 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK LAUTENBERG, New Jersey 

JEANNE BUMPUS, Staff Director and General Counsel 

ROB FREEMAN, Deputy Staff Director 

ROBERT W. CHAMBERLIN, Chief Counsel 

KEVIN D. KAYES, Democratic Staff Director and Chief Counsel 

GREGG ELIAS, Democratic General Counsel 

(II) 

Calendar No. 741

108TH CONGRESS REPORT " SENATE ! 2d Session 108–381

JUNK FAX PREVENTION ACT OF 2004

SEPTEMBER 28, 2004.—Ordered to be printed 

Mr. MCCAIN, from the Committee on Commerce, Science, and 

Transportation, submitted the following 

R E P O R T 

together with 

ADDITIONAL VIEWS 

[To accompany S. 2603]

The Committee on Commerce, Science, and Transportation, to 

which was referred the bill (S. 2603) ‘‘A Bill to amend section 227 

of the Communications Act of 1934 (47 U.S.C. 227) relating to the 

prohibition on junk fax transmissions.’’, having considered the 

same, reports favorably thereon without amendment and recommends that the bill do pass. 

PURPOSE OF THE BILL

The purposes of this legislation are the following: 

• To create a limited statutory exception to the current prohibition against the faxing of unsolicited advertisements to individuals without their ‘‘prior express invitation or permission’’

by permitting such transmission by senders of commercial 

faxes to those with whom they have an established business 

relationship (EBR). 

• To require that senders of faxes with unsolicited advertisements (i.e., ‘‘junk faxes’’) provide notice of a recipient’s ability 

to opt out of receiving any future faxes containing unsolicited 

advertisements and a cost-free mechanism for recipients to opt 

out pursuant to that notice. 

• To require the Federal Communications Commission (FCC) 

and Comptroller General of the United States to provide cerVerDate jul 14 2003 03:48 Oct 01, 2004 Jkt 029008 PO 00000 Frm 00003 Fmt 6659 Sfmt 6601 E:\HR\OC\SR381.XXX SR381
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1P.L. 102–243; 47 U.S.C. 227. 2See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 

CC Docket No. 92–90, Report and Order, 7 FCC Rcd 8752 (rel. 1992) (hereinafter, ‘‘1992 TCPA 

Order’’), at 8779, para. 54, n. 87. 3 Id. 

4FCC Press Release, September 12, 2002 (http://hraunfoss.fcc.gov/edocs—public/attachmatch/

DOC–226183A1.doc). 

tain reports to Congress regarding the enforcement of these 

provisions. 

BACKGROUND AND NEEDS

TELEPHONE CONSUMER PROTECTION ACT OF 1991

Congress first addressed the legality of faxing unsolicited advertisements to residential telephone subscribers in the Telephone 

Consumer Protection Act of 1991 (TCPA).1 The law, which is still 

in effect, generally prohibits anyone from faxing unsolicited advertisements without ‘‘prior express invitation or permission’’ from the 

recipient. The statute contains no other exceptions for junk faxes, 

and does not authorize the FCC to create any additional exceptions. 

In October 1992, the FCC released its original order interpreting 

the TCPA and establishing the rules implementing the junk fax 

prohibition. In response to comments by Mr. Fax and National 

Faxlist urging the Commission not to ban unsolicited faxes, the 

FCC in its order noted in a footnote (which remains unpublished 

in the Code of Federal Regulations) that the TCPA did not give it 

‘‘discretion to create exemptions from or limit the effects of the prohibition.’’ 2 The footnote continued to say, ‘‘We note, however, 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.’’ 3 On this basis, many commercial entities considered an ‘‘established business relationship’’

or ‘‘EBR’’ to be a permissible exemption from the general prohibition of sending unsolicited faxes. Additionally, from 1992 through 

July 2003, the FCC enforced the TCPA junk fax provisions under 

this original interpretation. 

The Commission continued to assess the effectiveness of the 

TCPA’s provisions over the course of the decade and, in September 

2002 sought public comment on a number of issues, including 

whether the FCC should refine or adopt new rules related to ‘‘unsolicited facsimile advertisements.’’ The FCC explained its purpose 

for initiating this formal review proceeding as follows: ‘‘In the last 

ten years, telemarketing practices have changed significantly. New 

technologies have emerged that allow telemarketers to target potential customers better and that make marketing using telephones 

and facsimile machines more cost-effective. At the same time, the 

new telemarketing techniques have increased public concern about 

the impact on consumer privacy.’’ 4

On March 11, 2003, the Do-Not-Call Act was signed into law. In 

addition to authorizing the Federal Trade Commission (FTC) to implement a national registry, it also required the FCC to issue a 

final rule in its ongoing TCPA proceeding within 180 days. Additionally, it required the FCC to consult and coordinate with the 

3

5See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 

CG Docket No. 02–278, Report and Order, 18 FCC Rcd 14014 (2003) (hereinafter, ‘‘July 2003 

TCPA Order’’). 6 Id. 

7 Id. 

8 Id. at para. 186. 

9 Id. 

FTC to ‘‘maximize consistency’’ with the rules promulgated by the 

FTC.5

JULY 2003 FEDERAL COMMUNICATIONS COMMISSION TCPA ORDER: 

REVISED JUNK FAX RULES

On July 3, 2003, the FCC issued its report and order establishing 

the Do-Not-Call registry and updating the provisions of the TCPA, 

including the junk fax provisions. After reviewing the record regarding the use and enforcement of junk faxes as well as the legislative history of the TCPA, the Commission reversed its prior conclusion that the presence of an EBR between a fax sender and recipient establishes the requisite consent necessary to permit businesses to send commercial faxes to their customers, effectively 

eliminating the EBR exception to the general prohibition on unsolicited fax advertisements.6 Instead, the FCC concluded that a recipient’s express invitation or permission must be obtained in writing, include the recipient’s signature, contain a clear indication 

that he or she consents to receiving such faxed advertisements, and 

provide the fax number to which faxes are permitted to be sent.7

Reviewing the record, the FCC found that a majority of consumer 

advocates disagreed with the Commission’s prior interpretation 

that an EBR constituted prior express permission, and they urged 

the Commission to eliminate the EBR exemption. In describing the 

record they had examined since 2002, the FCC stated that consumers felt ‘‘ ‘besieged’ by unsolicited faxes’’ and that ‘‘advertisers 

continue to send faxes despite [their] asking to be removed from 

senders’ fax lists.’’ The FCC also said consumers indicated they 

bore the burden of not only paying for the cost of paper and toner, 

but also the opportunity costs of ‘‘time spent reading and disposing 

of faxes, the time the machine is printing an advertisement and is 

not operational for other purposes, and the intrusiveness of faxes 

transmitted at inconvenient times, including in the middle of the 

night.’’ 8

Conversely, the FCC found that the majority of industry commenters on the issue not only supported the Commission’s prior interpretation permitting reliance on an EBR, but also urged the 

Commission to amend its rules implementing the TCPA to expressly provide for the EBR exemption. Industry comments maintained that ‘‘faxing is a cost-effective way to reach customers’’ particularly for small businesses for whom faxing is a cheaper way to 

advertise.’’ They also warned that eliminating an EBR would 

‘‘interfere with ongoing business relationships, raise business costs, 

and limit the flow of valuable information to consumers.9

In addition to weighing consumer and industry comments, the 

FCC’s order analyzed the legislative history of the TCPA. The Commission stated that Congress’s primary purpose in passing the Act 

was to protect the public from bearing the costs of unwanted advertising, and the FCC maintained that ‘‘certain practices were treatVerDate jul 14 2003 03:48 Oct 01, 2004 Jkt 029008 PO 00000 Frm 00005 Fmt 6659 Sfmt 6601 E:\HR\OC\SR381.XXX SR381
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10 Id. at para. 190. 11 Id. 12 Id. at para. 191. 

ed differently because they impose costs on consumers.’’ 10 The FCC 

cited other examples where the TCPA prohibits advertising calls 

without prior express consent, such as calls to wireless phones and 

other numbers where the called party is charged, viewing that costshifting onto consumers as identical in nature with respect to fax 

advertising where consumers must pay for paper and toner. It also 

pointed out that, unlike telemarketing, Congress provided no mechanism for opting out of unwanted faxes, arguing that to create such 

a system would ‘‘require the recipient to possibly bear the cost of 

the initial facsimile and inappropriately place the burden on the recipient to contact the sender and request inclusion on a ‘do-not-fax’ list.’’ 11 For these reasons, the FCC concluded that Congress had 

made the determination that entities desiring to fax unsolicited advertisements must obtain express permission from the recipient before they do so. 

With respect to the other new requirements imposed by the FCC 

for obtaining prior permission (e.g., written consent, signature, 

etc.), the Commission justified them on the basis that they believed 

‘‘the interest in protecting those who would otherwise be forced to 

bear the burdens of unwanted faxes outweighs the interests of companies that wish to advertise via fax.’’ 12

AUGUST 2003 FEDERAL COMMUNICATIONS COMMISSION ORDER ON RE- CONSIDERATION: STAY OF EFFECTIVE DATE FOR REVISED JUNK FAX

RULES

Following the FCC’s release of the amended TCPA rules, numerous petitions for reconsideration were filed with the Commission 

requesting that the FCC maintain its earlier interpretation of the 

junk fax rules. Those businesses, associations, and other organizations that had relied on the prior interpretation for over a decade 

argued that to now require prior, written permission for every fax 

sent out to an existing customer or client was an overly burdensome regulation that would be expensive to implement and was ultimately unnecessary to protect consumers. Many companies also 

argued that it would be impossible to change their practices overnight and obtain the necessary consents by August 25th (30 days 

after the appearance of rules in the Federal Register) in order to 

comply with the rule’s effective date, leaving them with only the 

option to immediately litigate. 

Finally, many industry petitioners challenged the FCC’s fundamental premise that the new rules were better for consumers, contending instead that the revised interpretation would have significant, unintended consequences that harmed consumers. For example, restaurants pointed out that they would not be able to fax a 

menu to a customer who called and requested one unless the caller 

provided them with a written consent (presumably by fax) or had 

one on file. Additionally, realtors explained that, in their business, 

potential home buyers often call and request faxes when passing by 

homes for sale. They argued that the FCC’s new requirement for 

a written signature would effectively prevent realtors from faxing 

potential new home buyers the listing information they requested 

when they made such calls, adding unnecessary hurdles and delays 

5

13See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 

CG Docket No. 02–278, Order on Reconsideration, FCC 03–208 (rel. Aug. 18, 2003) (hereinafter, 

‘‘August 2003 Order on Reconsideration’’). 14See July 2003 TCPA Order at para. 34. 

even when consumers clearly wanted to receive the faxes as quickly 

as possible. 

In light of these additional claims, on August 18, 2003, the Commission stayed until January 1, 2005, the effective date of both the 

written consent requirements as well as its July 2003 determination that an EBR would no longer be sufficient to show that an individual or business has given express permission to receive unsolicited fax advertisements. At the time, the FCC justified its adoption of the stay because ‘‘the public interest would best be served 

by allowing senders of such advertisements additional time to obtain such express permission before the new rules become effective.’’ The order also noted that this extension would give the FCC 

itself more time to fully consider any more petitions for reconsideration on these or related issues, and that the FCC reserved the 

right to further extend the effective date if necessary.13

OCTOBER 2003 FEDERAL COMMUNICATIONS COMMISSION ORDER: STAY

OF ‘‘18/3’’ TIME LIMITS ON EXISTING BUSINESS RELATIONSHIP EXCEPTION FOR JUNK FAXES

In the July 2003 TCPA Order, the FCC had also modified its definition of an EBR in the context of telephone solicitations to limit 

the duration that a telemarketer could rely on the exception to a 

maximum of 18 months following a purchase or transaction, or a 

maximum of three months following an inquiry or application (commonly referred to as the ‘‘18/3’’ time limits). Prior to that ruling, 

no limitation had been placed on the duration of the EBR as it applied to either telephone or fax solicitations, but the FCC concluded 

that establishing time limits was ‘‘necessary to minimize confusion 

and frustration for consumers who receive calls from companies 

they have not contacted or patronized for many years.’’ Because 

there was ‘‘little consensus’’ among industry players who had offered various lengths of time, the FCC sought a duration that 

‘‘strikes an appropriate balance between industry practices and 

consumer privacy interests,’’ settling on the 18/3 time frame. Acknowledging that these time limits created burdens on industry 

(especially small businesses) to monitor the length of their customer relationships, the FCC argued that endorsing a rule consistent with the FTC’s own 18/3 time limit would benefit businesses by creating a ‘‘uniform standard with which businesses 

must comply’’ regardless of which agency’s jurisdiction the businesses fell under.14 This also helped fulfill the FCC’s charge from 

Congress to maximize consistency between the agencies’ telemarketing rules. 

Recognizing that the FCC’s August 2003 Order on Reconsideration had reinstated an EBR for junk faxes, but potentially limited 

its duration to the 18/3 rule for telemarketing, the U.S. Chamber 

of Commerce and others filed a petition for reconsideration one 

week later on August 25, 2003, requesting, among other things, 

6

15See, e.g., Chamber of Commerce of the United States, Petition for Reconsideration of Facsimile Advertisements Rules, filed August 25, 2003; National Association of Chain Drug Stores, 

Petition for Clarification and Revision, filed August 25, 2003. 16See August 2003 Order on Reconsideration. 

that the FCC reconsider the new 18/3 rule.15 In response, the FCC 

issued an order on October 3, 2003, that stayed until January 1, 

2005, the 18/3 limitations only with respect to their application to 

unsolicited fax advertisements. Because their modification of the 

EBR duration in the July 2003 TCPA Order was promulgated in 

the context of telephone solicitations, the FCC held that there was 

good cause to stay application of those time limitations to the EBR 

in the context of junk faxes until they had time to consider the application of the 18/3 time limits in the context of junk faxes.16 The 

FCC concluded, however, that nothing in this new order would affect its August 2003 decision to recognize an EBR exception to the 

general prohibition against unsolicited faxes until January 1, 2005. 

EFFECTS OF REVISED RULES AND NEED FOR LEGISLATION

In practice, the revised junk fax rules, as ordered by the FCC 

would have significant consequences. The cost and effort of compliance could place significant burdens on some businesses, particularly those small businesses that rely heavily on the efficiency and 

effectiveness of fax machines. In particular, organizations such as 

trade associations and other non-profits, that have hundreds of 

thousands of members, would be saddled with a huge burden to 

collect signatures from each member just to send an unsolicited fax 

advertisement. 

For instance, the National Association of Wholesaler-Distributors 

claimed that its member companies expected to pay an average of 

$22,500 to obtain consent forms and an average of $20,000 for annual compliance. The National Association of Realtors estimated 

that it would have to collect over 67 million permissions to sustain 

the roughly 6 million home sales from last year. Other economic 

impacts included the costs of training, making multiple contracts 

to obtain signatures providing consent, and obtaining permission 

for each fax machine when the recipients change location. 

Finally, over the past 10 years, following enactment of the TCPA 

and issuance of previous FCC orders implementing and interpreting the rules on junk faxes, many legitimate businesses and associations have appropriately relied on the FCC’s interpretation 

and have sent unsolicited faxes to recipients with whom they have 

an EBR. During this time, the FCC has acknowledged that businesses faxing under EBRs were in compliance with the FCC’s existing junk fax rules. If the revised rules go into effect, the previously 

legitimate practices will be immediately unlawful, and 

unsuspecting or uninformed businesses may be subject to unforeseen and costly litigation unrelated to legitimate consumer protection aims. 

The revised rules are currently set to go into effect in January 

2005 following the expiration of the FCC’s currently self-imposed 

stay. Because the Commission may choose not to reverse its new 

rule removing the EBR exception from the general ban on sending 

unsolicited facsimile advertisements, S. 2603, the ‘‘Junk Fax Prevention Act of 2004’’ specifically creates a statutory exception from 

the general prohibition on sending unsolicited advertisements if the 

7

fax is sent based on an EBR and certain conditions are met. This 

legislation is designed to permit legitimate businesses to do business with their established customers and other persons with 

whom they have an established relationship without the burden of 

collecting prior written permission to send these recipients commercial faxes. Nonetheless, in reinstating the EBR exception, the 

Committee determined it was necessary to provide recipients with 

the ability to stop future unwanted faxes sent pursuant to such relationships. The Committee therefore also added the requirement 

that every unsolicited facsimile advertisement contain an opt-out 

notice that gives the recipient the ability to stop future unwanted 

fax solicitations and that senders of such faxes provide recipients 

with a cost-free mechanism to stop future unsolicited faxes. 

SUMMARY OF PROVISIONS

S. 2603, the ‘‘Junk Fax Prevention Act of 2004,’’ reestablishes an 

‘‘established business relationship’’ exception to allow entities to 

send commercial faxes to their customers and members without 

first receiving written permission, and establishes new opt-out 

safeguards to provide additional protections for fax recipients. 

LEGISLATIVE HISTORY

Senator Smith, the chairman of the Competition, Foreign Commerce, and Infrastructure Subcommittee, introduced S. 2603 on 

June 24, 2004, with Senators Hollings, Allen, and Sununu as original cosponsors. The bill is also cosponsored by Senators Breaux, 

Bunning, Burns, Carper, Craig, Dorgan, Lautenberg, Lott, Nelson 

of Florida, Snowe, and Stevens. 

On July 22, 2004, the Committee held an executive session 

chaired by Senator McCain at which S. 2603 was considered. The 

bill was approved unanimously by voice vote and was ordered reported without amendment. 

ESTIMATED COSTS

In accordance with paragraph 11(a) of rule XXVI of the Standing 

Rules of the Senate and section 403 of the Congressional Budget 

Act of 1974, the Committee provides the following cost estimate, 

prepared by the Congressional Budget Office:

S. 2603—Junk Fax Prevention Act of 2004

S. 2603 would amend current law and regulations relating to unsolicited advertisements sent via telephone facsimile machine. The 

bill would direct the Federal Communications Commission (FCC) to 

issue regulations to control such advertisements and would require 

the FCC and the Government Accountability Office to issue reports 

to the Congress on the effectiveness of those regulations. The FCC 

currently enforces laws relating to unsolicited advertisements, including assessing and collecting civil penalties for violations of such 

laws. (Civil penalties are recorded in the federal budget as revenues.) Based on information from the FCC, CBO estimates that implementing S. 2603 would not have a significant effect on revenues 

or spending subject to appropriation. Enacting the bill would not 

affect direct spending. 

8

S. 2603 contains no intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA) and would impose no 

costs on state, local, or tribal governments. 

S. 2603 would impose private-sector mandates, as defined in the 

UMRA, on senders of unsolicited facsimile advertisements. The bill 

would require senders to include an opt-out notice that is clear, 

conspicuous, and on the first page. Such a notice would allow recipients to contact the sender to prevent them from sending unsolicited advertisements in the future. Additionally, the opt-out notice 

must include ‘‘a domestic contact telephone and facsimile machine 

number for the recipient to transmit such a request to the sender; 

and a cost-free mechanism for a recipient to transmit a request.’’

The cost-free mechanism might include either a toll-free or a local 

telephone number. 

Regulations promulgated by the FCC in July 2003, which are 

slated to take effect in January 2005, would require written permission from recipients prior to senders’ transmission of any unsolicited fax advertisements. If this bill were enacted, it would eliminate the requirement to obtain written permission from customers 

but replace this requirement with the opt-out mechanism. Based on 

information from industry sources, CBO expects that the aggregate 

direct cost of mandates in the bill would be fully offset by savings 

from the bill and thus would fall below the annual threshold established by UMRA for private-sector mandates ($120 million in 2004, 

adjusted annually for inflation). 

On July 7, 2004, CBO transmitted a cost-estimate for H.R. 4600, 

the Junk Fax Prevention Act of 2004, as ordered reported by the 

House Committee on Energy and Commerce on June 24, 2004. The 

two pieces of legislation are similar, and the estimated costs are 

the same. 

The CBO staff contacts for this estimate are Melissa E. Zimmerman (for federal costs), Sarah Puro (for the state and local impact), 

and Karen Raupp (for the private-sector impact). The estimate was 

approved by Robert A. Sunshine, Assistant Director for Budget 

Analysis.

REGULATORY IMPACT STATEMENT

NUMBER OF PERSONS COVERED

S. 2603 would provide all individuals with fax machines certain 

protections from unsolicited senders of unsolicited faxes, and an opportunity to opt out of receiving future unsolicited faxes from them. 

Additionally, the legislation would require all persons who send 

commercial faxes to meet certain requirements, including proper 

identification, and to provide phone numbers or another mechanism for recipients so they may opt out of future commercial faxes 

sent by that sender. Therefore, S. 2603 would cover all consumers 

who receive faxes, and all senders of commercial faxes. 

ECONOMIC IMPACT

The legislation would result in new or incremental costs for senders of commercial faxes to comply with the legislation’s requirements, to the extent that those senders have not already made provisions to ensure proper identification of the sender, and provide 

9

mechanisms that allow recipients to choose whether to receive future commercial faxes. 

PRIVACY

S. 2603 would increase the personal privacy of all users of fax 

machines by providing them with the ability to decline to receive 

future unsolicited commercial faxes from the same sender. S. 2603 

also would require senders of unsolicited commercial faxes to identify themselves to the recipients with truthful facsimile and telephone numbers where a recipient can contact the sender, thereby 

better informing the recipient of the identity of the sender. 

PAPERWORK

S. 2603 would require the Comptroller General to conduct a 

study on junk fax enforcement and make recommendations to Congress on whether additional enforcement measures are necessary to 

protect consumers. S. 2603 would also require the FCC to submit 

an annual report to Congress on enforcement of the junk fax provisions of this legislation over the previous year. The legislation is 

expected to generate similar amounts of administrative paperwork 

as other legislation requiring agency enforcement, recommendations for enhancing enforcement, and reports to Congress. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

Section 1 establishes the short title as the ‘‘Junk Fax Prevention 

Act of 2004.’’

Section 2. Prohibition on fax transmissions containing unsolicited 

advertisements. 

Section 2(a) amends section 227(b)(1)(C) of the Communications 

Act of 1934 by creating an exception to the general prohibition 

against sending unsolicited commercial advertisements to fax machines. This provision would permit the sending of unsolicited commercial advertisements if the fax is sent based on an ‘‘established 

business relationship’’ and if the fax contains an opt-out notice and 

a cost-free mechanism for the recipient to respond to the notice. In 

the event a recipient opts out of receiving future unsolicited advertisements, it is unlawful for a sender to fax any additional unsolicited advertisements to such recipients. 

Section 2(b) defines the term ‘‘established business relationship’’

by incorporating the definition of ‘‘established business relationship’’ in 47 C.F.R. 64.1200 as those regulations were in effect as of 

January 1, 2003, except that the definition now applies to both residential and commercial entities. Additionally, section 2(b) allows 

the Commission to limit the duration of the EBR pursuant to section 2(f). 

Section 2(c) adds a new subparagraph (D) to section 227(b)(2) of 

the Communications Act of 1934 by setting forth the necessary elements of an opt-out notice. The opt-out notice must be clear and 

conspicuous and on the first page of the unsolicited advertisement. 

The Committee used the phrase ‘‘first page of the unsolicited advertisement’’ as opposed to the ‘‘first page of the facsimile’’ to ensure 

that senders of unsolicited fax advertisements inadvertently would 

10

not be liable if such faxes were sent and the clear and conspicuous 

notice was not on the first page received by the recipient because 

pages were faxed or received in the wrong order. The Committee 

believes an opt-out notice should comply with this section if it 

clearly and conspicuously appears on the first page of a fax, such 

as a fax cover page, or on the first page of the faxed unsolicited 

advertisement if no fax cover page has been provided. 

The opt-out notice must inform the recipient of his or her ability 

to opt-out of future unsolicited advertisements to any fax machine 

or machines, and that request must be complied with in the shortest reasonable time. The notice must include a domestic telephone 

and facsimile number that will receive an opt-out request, and a 

cost-free mechanism for the recipient to send such a request to the 

sender. This provision should not be interpreted as a mandate for 

such businesses to establish any particular cost-free mechanism to 

receive opt-out requests, but should allow businesses to exercise 

some flexibility and creativity in providing cost-free options that all 

fax recipients could use to submit opt-out requests. In order to minimize the possible financial consequences of this provision, section 

2(c) gives the Commission the authority to, by rule, exempt certain 

classes of small business senders from the requirement to provide 

the additional cost-free mechanism if the Commission determines 

that the costs to those businesses is unduly burdensome given the 

revenues generated by that class of small business. 

Section 2(c) also requires that the telephone and facsimile machine numbers and the cost-free mechanism provided to a recipient 

must permit an individual or business to make an opt-out request 

during regular business hours. Finally, the opt-out notice must 

comply with the current provisions of section 227(d), which require 

that any fax being sent contain in the margins at the top or bottom 

of each page the date and time it is sent, the identification of the 

sender of the message, and the telephone number of the sending 

machine. 

Section 2(d) adds a new subparagraph (E) to section 227(b)(1) of 

the Communications Act of 1934 by setting forth what a recipient 

must do to opt-out of future unsolicited advertisements. The Commission, by rule, shall provide that an opt-out request is valid if 

it (1) identifies the telephone number or numbers of the fax machine or machines subject to the request; (2) is made to the telephone or fax number of the sender that is provided under subparagraph (D)(iv), or by any other method as determined by the Commission; and (3) is made by a person who has not subsequently provided express invitation or permission to receive unsolicited advertisements. Although the ‘‘established business relationship’’ has 

been defined on the basis of a commercial transaction or inquiry, 

with or without the exchange of consideration, the Commission 

should take precautions to ensure that if a recipient opts out of receiving unsolicited facsimile advertisements, that any subsequent 

purchases or inquiries do not create or renew the ‘‘established business relationship’’ exemption without some affirmative opt-in by 

the recipient. 

Section 2(e) adds a new subparagraph (F) to 227(b)(1) of the 

Communications Act of 1934 by giving the Commission the authority to establish an exemption from the opt-out notice requirements 

for tax-exempt, nonprofit trade or professional associations if those 

11

faxes are in furtherance of the group’s tax-exempt purpose. Section 

2(e) is designed to apply to certain entities classified under the Internal Revenue Service’s definition of section 501(c)(6) organizations, which include such groups as business leagues, chambers of 

commerce, real estate boards, and boards of trade which are not organized for profit and no part of the net earnings inures to the benefit of any private shareholder or individual. This section is not designed to apply to charities. This provision is discretionary, and the 

Commission may create a rule only if the Commission finds that 

such opt-out notices are not necessary to protect the ability of association members to stop future unsolicited facsimile advertisements 

sent by the association. The Committee provided the Commission 

with this authority because members of tax-exempt, nonprofit trade 

and professional associations have chosen to affirmatively join a 

particular organization, which typically requires the payment of 

annual dues. Arguably, these members may have an expectation of 

communications, including faxes, as part of their membership and 

have a greater degree of control in effectuating their preferences 

with respect to how their association communicates with them. 

Although under section 2(e), the Commission may decide to exempt tax-exempt, nonprofit trade and professional associations 

from the opt-out notice requirements, nothing in S. 2603 is designed to exempt these organizations from the requirement to 

honor a request to opt-out of future unsolicited facsimile advertisements from their members. 

Section 2(f) adds a new subparagraph (G)(i) to section 227(b)(2) 

of the Communications Act of 1934 by giving the Commission the 

authority to establish a time limit on the ‘‘established business relationship’’ exemption. Under the TCPA junk fax rules as interpreted prior to January 1, 2003, there was no specific time limit 

on the length of the EBR. 

The Committee is mindful that the financial and administrative 

costs incurred by senders to implement a specific time limit on the 

EBR could be burdensome. On the other hand, the costs of not implementing a specific time limit could also harm fax recipients. Accordingly, the Committee has given the Commission the authority 

to create such a specific time limit. Three years after enactment of 

S. 2603, the Commission may by rule create a time limit for the 

EBR exemption for junk faxes that may be no less than 5 years 

and no more than 7 years. The Commission may only create a rule 

if it (1) determines that the existence of the EBR exception has resulted in a significant number of complaints to the Commission regarding the sending of unsolicited advertisements to telephone facsimile machines; (2) upon review of such complaints, the Commission has reason to believe that a significant number of such complaints involve unsolicited advertisements that were sent based on

an EBR that was longer than the Commission believes is consistent 

with the reasonable expectations of consumers; (3) determines that 

the costs to senders of demonstrating the existence of an EBR within a specified period of time do not outweigh the benefits to recipients of establishing a limitation on the EBR; and (4) determines 

that for small businesses, the costs are not unduly burdensome 

given the revenues generated by small businesses and taking into 

consideration the number of specific complaints to the Commission 

involving faxes sent by small businesses. 

12

Section 2(g) amends section 227(a)(4) of the Communications Act 

of 1934 by clarifying that ‘‘express invitation or permission’’ may be 

secured in writing or otherwise, as determined by the Commission. 

Section 2(h) requires the Commission to issue its regulations no 

later than 270 days after enactment of this Act. 

Section 3. FCC annual report regarding junk fax enforcement 

Section 3 adds a new section (g) to section 227 of the Communications Act of 1934 that requires the Commission to report annually to the Congress on the enforcement of the junk fax provisions 

of the TCPA. Specifically, the report must include the following: (1) 

The number of complaints received by the Commission annually alleging a violation of the general ban on sending unsolicited advertisements; (2) the number of such complaints received during the 

year on which the Commission has taken action; (3) the number of 

such complaints that remain pending at the end of the year; (4) the 

number of citations issued for sending unsolicited advertisements; 

(5) the number of notices of apparent liability issued for sending 

unsolicited advertisements; (6) for each such notice (a) the amount 

of the proposed forfeiture; (b) the person to whom the notice was 

issued; (c) the length of time between the date on which the complaint was filed and the date the notice was issued; (d) the status 

of the proceeding; (7) the number of final orders imposing forfeiture 

penalties for sending unsolicited advertisements; (8) for each such 

forfeiture order (a) the amount of the penalty; (b) the person to 

whom the order was issued; (c) whether the penalty was paid; and 

(d) the amount paid; and (9) for each case that was referred for recovery (a) the number of days from the date the Commission issues 

such order to the date of referral; (b) whether an action has been 

commenced to recover the penalty; and (c) whether the recovery action resulted in any amount collected. 

Section 4. GAO study on junk fax enforcement 

Section 4(a) requires the Comptroller General of the United 

States (GAO) to conduct a study regarding complaints received by 

the Commission dealing with unsolicited advertisements that shall 

determine the following: (1) The mechanisms established by the 

Commission to receive, investigate and respond to such complaints; 

(2) the level of enforcement success by the Commission; (3) whether 

complainants are adequately informed by the Commission regarding their complaints; (4) whether additional enforcement measures 

are necessary to protect consumers, including recommendations for 

additional enforcement measures. 

Section 4(b) requires the Comptroller General to specifically examine (1) the adequacy of existing statutory enforcement actions 

available to the Commission; (2) the adequacy of existing statutory 

enforcement actions and remedies available to consumers; (3) the 

impact of existing statutory enforcement remedies on senders of 

facsimiles; (4) whether increasing the amount of financial penalties 

is warranted to achieve greater deterrent effect; and (5) whether 

establishing penalties and enforcement actions for repeat violators 

similar to those established in section 1037 of title 18, United 

States Code, would have a greater deterrent effect. 

13

Section 4(c) states that the Comptroller General shall submit a 

report to Congress no later than 270 days after enactment of this 

Act. 

(14)

ADDITIONAL VIEWS OF SENATOR BOXER 

I strongly support preventing junk faxes, as the title of this bill 

purports to do. 

However, what the bill actually does falls far short and does not 

adequately protect consumers. 

S. 2603 would allow any business with an ‘‘established business 

relationship’’ with a customer to send unrequested faxes to that 

customer’s machine for up to seven years. The bill sets a customer 

inquiry as the very low threshold necessary for businesses to claim 

an established business relationship with a customer. 

In a seven year time frame individuals interact with dozens, if 

not hundreds, of businesses. To say that all those businesses 

should then be allowed to indiscriminately inundate individuals 

with faxes does not put a stop to a lot of junk faxes. 

Now that computers have made it dramatically easier to send 

faxes, many businesses have deemed it their right to drown consumers in junk faxes at their homes and places of business. One 

expert estimates that 2 billion faxes are sent every year and that 

the loose language in this bill will allow for twice that number in 

the near future. 

And, 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 did not ask 

for.’’

The Commerce Committee approved this bill without ever holding a hearing on it and without considering a single amendment 

in Committee. As a result, consumers never had a say, and Senators were never given an opportunity to improve the legislation 

through the amendment process. 

A new Federal Communications Commission rule is scheduled to 

go into effect in January 2005. Some have argued that it places an 

onerous burden on business by requiring prior written permission 

before sending any fax. But, this bill goes much too far in the opposite direction, and we should not let this bill become law without 

additional provisions to protect consumers. 

I believe that we should amend this bill to allow consumers to 

place their fax numbers on a Do-Not-Fax list that trumps the ‘‘established business relationship’’ rule in the legislation. Others have 

suggested that we limit the right of sending faxes to consumers 

with which a business has an established business relationship to 

those consumers from whom the business received the fax number 

directly. And, others have said that at a very minimum, we should 

place a firm 18-month limit on the duration of an established business relationship after a sale or 3 months after an inquiry. 

15

All three ideas would be improvements upon the bill as reported. 

To date, there has been no opportunity to consider them. Before the 

bill passes the Senate, we must have that opportunity. 

Policymakers must protect consumers from junk faxes. It is disingenuous to name this bill the Junk Fax Prevention Act when in 

fact we are doing exactly the opposite. We must find a middle 

ground solution between the FCC rule and this legislation.

BARBARA BOXER. 

(16)

ADDITIONAL VIEWS OF SENATOR MCCAIN, SENATOR 

HOLLINGS, SENATOR SMITH, AND SENATOR SNOWE 

During our consideration of S. 2603, the Junk Fax Protection Act 

of 2004, we had hoped to have an amendment adopted by unanimous consent that had been filed by Senators Smith, Hollings, and 

Snowe. The amendment would have struck language currently in 

the bill that restricts the FCC’s ability to establish a durational 

limit on an ‘‘existing business relationship’’ to a period ‘‘not shorter 

than 5 years and not longer than 7 years.’’ In our view, this language unwisely limits the discretion of the FCC in this area. The 

amendment would have also deleted certain reporting requirements 

tasked to the FCC under the original bill. Due to the invocation of 

a Senate rule which prevented the consideration of amendments to 

this bill, this amendment could not be considered by the committee. 

It is our expectation and hope, however, that these changes will be 

agreed to and accepted as this legislation receives further consideration before the full Senate. 

JOHN MCCAIN. 

ERNEST F. HOLLINGS. 

GORDON SMITH. 

OLYMPIA J. SNOWE. 

(17)

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows (existing law proposed to be omitted 

is enclosed in black brackets, new material is printed in italic, existing law in which no change is proposed is shown in roman): 

SECTION 227 OF THE COMMUNICATIONS ACT OF 1934

SEC. 227. RESTRICTIONS ON THE USE OF TELEPHONE EQUIPMENT. 

(a) DEFINITIONS.—As used in this section—

(1) * * *

(2) The term ‘‘established business relationship’’, for purposes 

only of subsection (b)(1)(C)(i), shall have the meaning given the 

term in section 64.1200 of the Commission’s regulations, as in 

effect on January 1, 2003, except that—

(A) such term shall include a relationship between a person or entity and a business subscriber subject to the same 

terms applicable under such section to a relationship between a person or entity and a residential subscriber; and 

(B) an established business relationship shall be subject 

to any time limitation established pursuant to paragraph 

(2)(G).

ø(2)¿ (3) The term ‘‘telephone facsimile machine’’ means 

equipment which has the capacity (A) to transcribe text or images, or both, from paper into an electronic signal and to transmit that signal over a regular telephone line, or (B) to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper. 

ø(3)¿ (4) The term ‘‘telephone solicitation’’ means the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, 

goods, or services, which is transmitted to any person, but such 

term does not include a call or message (A) to any person with 

that person’s prior express invitation or permission, (B) to any 

person with whom the caller has an established business relationship, or (C) by a tax exempt nonprofit organization. 

ø(4)¿ (5) The term ‘‘unsolicited advertisement’’ means any 

material advertising the commercial availability or quality of 

any property, goods, or services which is transmitted to any 

person without that person’s prior express invitation or permission, in writing or otherwise. 

(b) RESTRICTIONS ON THE USE OF AUTOMATED TELEPHONE EQUIPMENT.—

(1) PROHIBITIONS.—It shall be unlawful for any person within the United States, or any person outside the United States 

if the recipient is within the United States—

18

(A) * * *

* * * * * * *

ø(C) to use any telephone facsimile machine, computer, 

or other device to send an unsolicited advertisement to a 

telephone facsimile machine; or¿

(C) to use any telephone facsimile machine, computer, or 

other device to send, to a telephone facsimile machine, an 

unsolicited advertisement, unless—

(i) the unsolicited advertisement is from a sender 

with an established business relationship with the recipient, and 

(ii) the unsolicited advertisement contains a notice 

meeting the requirements under paragraph (2)(D), 

except that the exception under clauses (i) and (ii) shall not 

apply with respect to an unsolicited advertisement sent to 

a telephone facsimile machine by a sender to whom a request has been made not to send future unsolicited advertisements to such telephone facsimile machine that complies 

with the requirements under paragraph (2)(E); or

* * * * * * *

(2) REGULATIONS; EXEMPTIONS AND OTHER PROVISIONS.—The 

Commission shall prescribe regulations to implement the requirements of this subsection. In implementing the requirements of this subsection, the Commission—

(A) * * *

(B) may, by rule or order, exempt from the requirements 

of paragraph (1)(B) of this subsection, subject to such conditions as the Commission may prescribe—

(i) * * *

(ii) such classes or categories of calls made for commercial purposes as the Commission determines—

(I) * * *

(II) do not include the transmission of any unsolicited advertisement; øand¿

(C) may, by rule or order, exempt from the requirements 

of paragraph (1)(A)(iii) of this subsection calls to a telephone number assigned to a cellular telephone service that 

are not charged to the called party, subject to such conditions as the Commission may prescribe as necessary in the 

interest of the privacy rights this section is intended to 

protectø.¿;

(D) shall provide that a notice contained in an unsolicited advertisement complies with the requirements under 

this subparagraph only if—

(i) the notice is clear and conspicuous and on the 

first page of the unsolicited advertisement; 

(ii) the notice states that the recipient may make a 

request to the sender of the unsolicited advertisement 

not to send any future unsolicited advertisements to a 

telephone facsimile machine or machines and that failure to comply, within the shortest reasonable time, as 

determined by the Commission, with such a request 

19

meeting the requirements under subparagraph (E) is 

unlawful; 

(iii) the notice sets forth the requirements for a request under subparagraph (E); 

(iv) the notice includes— (I) a domestic contact telephone and facsimile 

machine number for the recipient to transmit such 

a request to the sender; and 

(II) a cost-free mechanism for a recipient to 

transmit a request pursuant to such notice to the 

sender of the unsolicited advertisement; the Commission shall by rule require the sender to provide 

such a mechanism and may, in the discretion of 

the Commission and subject to such conditions as 

the Commission may prescribe, exempt certain 

classes of small business senders, but only if the 

Commission determines that the costs to such class 

are unduly burdensome given the revenues generated by such small businesses; 

(v) the telephone and facsimile machine numbers 

and the cost-free mechanism set forth pursuant to 

clause (iv) permit an individual or business to make 

such a request during regular business hours; and 

(vi) the notice complies with the requirements of subsection (d); 

(E) shall provide, by rule, that a request not to send future unsolicited advertisements to a telephone facsimile machine complies with the requirements under this subparagraph only if— (i) the request identifies the telephone number or 

numbers of the telephone facsimile machine or machines to which the request relates; 

(ii) the request is made to the telephone or facsimile 

number of the sender of such an unsolicited advertisement provided pursuant to subparagraph (D)(iv) or by 

any other method of communication as determined by 

the Commission; and 

(iii) the person making the request has not, subsequent to such request, provided express invitation or 

permission to the sender, in writing or otherwise, to 

send such advertisements to such person at such telephone facsimile machine; 

(F) may, in the discretion of the Commission and subject 

to such conditions as the Commission may prescribe, allow 

professional or trade associations that are tax-exempt nonprofit organizations to send unsolicited advertisements to 

their members in furtherance of the association’s tax-exempt purpose that do not contain the notice required by 

paragraph (1)(C)(ii), except that the Commission may take 

action under this subparagraph only by regulation issued 

after public notice and opportunity for public comment and 

only if the Commission determines that such notice required by paragraph (1)(C)(ii) is not necessary to protect 

the ability of the members of such associations to stop such 

20

associations from sending any future unsolicited advertisements; and 

(G)(i) may, consistent with clause (ii), limit the duration 

of the existence of an established business relationship to a 

period not shorter than 5 years and not longer than 7 years 

after the last occurrence of an action sufficient to establish 

such a relationship, but only if—

(I) the Commission determines that the existence 

of the exception under paragraph (1)(C) relating to 

an established business relationship has resulted 

in a significant number of complaints to the Commission regarding the sending of unsolicited advertisements to telephone facsimile machines; 

(II) upon review of such complaints referred to in 

subclause (I), the Commission has reason to believe 

that a significant number of such complaints involve unsolicited advertisements that were sent on 

the basis of an established business relationship 

that was longer in duration than the Commission 

believes is consistent with the reasonable expectations of consumers; 

(III) the Commission determines that the costs to 

senders of demonstrating the existence of an established business relationship within a specified period of time do not outweigh the benefits to recipients of establishing a limitation on such established business relationship; and 

(IV) the Commission determines that, with respect to small businesses, the costs are not unduly 

burdensome, given the revenues generated by small 

businesses, and taking into account the number of 

specific complaints to the Commission regarding 

the sending of unsolicited advertisements to telephone facsimile machines by small businesses; and 

(ii) may not commence a proceeding to determine whether 

to limit the duration of the existence of an established business relationship before the expiration of the 3-year period 

that begins on the date of the enactment of the Junk Fax 

Prevention Act of 2004. 

* * * * * * *

(g) JUNK FAX ENFORCEMENT REPORT.—The Commission shall 

submit a report to the Congress for each year regarding the enforcement of the provisions of this section relating to sending of unsolicited advertisements to telephone facsimile machines, which shall include the following information: 

(1) The number of complaints received by the Commission 

during such year alleging that a consumer received an unsolicited advertisement via telephone facsimile machine in violation 

of the Commission’s rules. 

(2) The number of such complaints received during the year 

on which the Commission has taken action. 

(3) The number of such complaints that remain pending at 

the end of the year. 

21

(4) The number of citations issued by the Commission pursuant to section 503 during the year to enforce any law, regulation, or policy relating to sending of unsolicited advertisements 

to telephone facsimile machines. 

(5) The number of notices of apparent liability issued by the 

Commission pursuant to section 503 during the year to enforce 

any law, regulation, or policy relating to sending of unsolicited 

advertisements to telephone facsimile machines. 

(6) For each such notice— (A) the amount of the proposed forfeiture penalty involved; 

(B) the person to whom the notice was issued; 

(C) the length of time between the date on which the complaint was filed and the date on which the notice was 

issued; and 

(D) the status of the proceeding. 

(7) The number of final orders imposing forfeiture penalties 

issued pursuant to section 503 during the year to enforce any 

law, regulation, or policy relating to sending of unsolicited advertisements to telephone facsimile machines. 

(8) For each such forfeiture order— (A) the amount of the penalty imposed by the order; 

(B) the person to whom the order was issued; 

(C) whether the forfeiture penalty has been paid; and 

(D) the amount paid. 

(9) For each case in which a person has failed to pay a forfeiture penalty imposed by such a final order, whether the Commission referred such matter for recovery of the penalty. 

(10) For each case in which the Commission referred such an 

order for recovery— (A) the number of days from the date the Commission 

issued such order to the date of such referral; 

(B) whether an action has been commenced to recover the 

penalty, and if so, the number of days from the date the 

Commission referred such order for recovery to the date of 

such commencement; and 

(C) whether the recovery action resulted in collection of 

any amount, and if so, the amount collected.

Æ