II 

Calendar No. 741 

108TH CONGRESS 

2D SESSION S. 2603 

[Report No. 108–381] 

To amend section 227 of the Communications Act of 1934 (47 U.S.C. 

227) relating to the prohibition on junk fax transmissions. 

IN THE SENATE OF THE UNITED STATES 

JUNE 24, 2004 

Mr. SMITH (for himself, Mr. ALLEN, Mr. HOLLINGS, Mr. SUNUNU, Mr. 

BREAUX, Mr. LAUTENBERG, Mr. NELSON of Florida, Mr. BURNS, Mr. 

BUNNING, Ms. SNOWE, Mr. CRAIG, Mr. DORGAN, Mr. STEVENS, Mr. 

LOTT, and Mr. CARPER) introduced the following bill; which was read 

twice and referred to the Committee on Commerce, Science, and Transportation 

SEPTEMBER 28, 2004 

Reported by Mr. MCCAIN, without amendment 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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•S 2603 RS 

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Junk Fax Prevention 

3 Act of 2004’’. 

4 SEC. 2. PROHIBITION ON FAX TRANSMISSIONS CONTAINING 

5 UNSOLICITED ADVERTISEMENTS. 

6 (a) PROHIBITION.—Section 227(b)(1)(C) of the Com7 munications Act of 1934 (47 U.S.C. 227(b)(1)(C)) is 

8 amended to read as follows: 

9 ‘‘(C) to use any telephone facsimile ma10 chine, computer, or other device to send, to a 

11 telephone facsimile machine, an unsolicited ad12 vertisement, unless— 

13 ‘‘(i) the unsolicited advertisement is 

14 from a sender with an established business 

15 relationship with the recipient; and 

16 ‘‘(ii) the unsolicited advertisement 

17 contains a notice meeting the requirements 

18 under paragraph (2)(D), except that the 

19 exception under clauses (i) and (ii) shall 

20 not apply with respect to an unsolicited ad21 vertisement sent to a telephone facsimile 

22 machine by a sender to whom a request 

23 has been made not to send future unsolic24 ited advertisements to such telephone fac25 simile machine that complies with the re26 quirements under paragraph (2)(E); or’’. 
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1 (b) DEFINITION OF ESTABLISHED BUSINESS RELA2 TIONSHIP.—Section 227(a) of the Communications Act of 

3 1934 (47 U.S.C. 227(a)) is amended— 

4 (1) by redesignating paragraphs (2) through 

5 (4) as paragraphs (3) through (5), respectively; and 

6 (2) by inserting after paragraph (1) the fol7 lowing: 

8 ‘‘(2) The term ‘established business relation9 ship’, for purposes only of subsection (b)(1)(C)(i), 

10 shall have the meaning given the term in section 

11 64.1200 of title 47, Code of Federal Regulations, as 

12 in effect on January 1, 2003, except that— 

13 ‘‘(A) such term shall include a relationship 

14 between a person or entity and a business sub15 scriber subject to the same terms applicable 

16 under such section to a relationship between a 

17 person or entity and a residential subscriber; 

18 and 

19 ‘‘(B) an established business relationship 

20 shall be subject to any time limitation estab21 lished pursuant to paragraph (2)(G))’’. 

22 (c) REQUIRED NOTICE OF OPT-OUT OPPOR23 TUNITY.—Section 227(b)(2) of the Communications Act 

24 of 1934 (47 U.S.C. 227(b)(2)) is amended— 
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•S 2603 RS 

1 (1) in subparagraph (B), by striking ‘‘and’’ at 

2 the end; 

3 (2) in subparagraph (C), by striking the period 

4 at the end and inserting a semicolon; and 

5 (3) by adding at the end the following: 

6 ‘‘(D) shall provide that a notice contained 

7 in an unsolicited advertisement complies with 

8 the requirements under this subparagraph only 

9 if— 

10 ‘‘(i) the notice is clear and con11 spicuous and on the first page of the unso12 licited advertisement; 

13 ‘‘(ii) the notice states that the recipi14 ent may make a request to the sender of 

15 the unsolicited advertisement not to send 

16 any future unsolicited advertisements to a 

17 telephone facsimile machine or machines 

18 and that failure to comply, within the 

19 shortest reasonable time, as determined by 

20 the Commission, with such a request meet21 ing the requirements under subparagraph 

22 (E) is unlawful; 

23 ‘‘(iii) the notice sets forth the require24 ments for a request under subparagraph 

25 (E); 
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1 ‘‘(iv) the notice includes— 

2 ‘‘(I) a domestic contact telephone 

3 and facsimile machine number for the 

4 recipient to transmit such a request to 

5 the sender; and 

6 ‘‘(II) a cost-free mechanism for a 

7 recipient to transmit a request pursu8 ant to such notice to the sender of the 

9 unsolicited advertisement; the Com10 mission shall by rule require the send11 er to provide such a mechanism and 

12 may, in the discretion of the Commis13 sion and subject to such conditions as 

14 the Commission may prescribe, ex15 empt certain classes of small business 

16 senders, but only if the Commission 

17 determines that the costs to such class 

18 are unduly burdensome given the rev19 enues generated by such small busi20 nesses; 

21 ‘‘(v) the telephone and facsimile ma22 chine numbers and the cost-free mecha23 nism set forth pursuant to clause (iv) per24 mit an individual or business to make such 
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1 a request during regular business hours; 

2 and 

3 ‘‘(vi) the notice complies with the re4 quirements of subsection (d);’’. 

5 (d) REQUEST TO OPT-OUT OF FUTURE UNSOLIC6 ITED ADVERTISEMENTS.—Section 227(b)(2) of the Com7 munications Act of 1934 (47 U.S.C. 227(b)(2)), as 

8 amended by subsection (c), is further amended by adding 

9 at the end the following: 

10 ‘‘(E) shall provide, by rule, that a request 

11 not to send future unsolicited advertisements to 

12 a telephone facsimile machine complies with the 

13 requirements under this subparagraph only if— 

14 ‘‘(i) the request identifies the tele15 phone number or numbers of the telephone 

16 facsimile machine or machines to which the 

17 request relates; 

18 ‘‘(ii) the request is made to the tele19 phone or facsimile number of the sender of 

20 such an unsolicited advertisement provided 

21 pursuant to subparagraph (D)(iv) or by 

22 any other method of communication as de23 termined by the Commission; and 

24 ‘‘(iii) the person making the request 

25 has not, subsequent to such request, pro-
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1 vided express invitation or permission to 

2 the sender, in writing or otherwise, to send 

3 such advertisements to such person at such 

4 telephone facsimile machine;’’. 

5 (e) AUTHORITY TO ESTABLISH NONPROFIT EXCEP6 TION.—Section 227(b)(2) of the Communications Act of 

7 1934 (47 U.S.C. 227(b)(2)), as amended by subsections 

8 (c) and (d), is further amended by adding at the end the 

9 following: 

10 ‘‘(F) may, in the discretion of the Commis11 sion and subject to such conditions as the Com12 mission may prescribe, allow professional or 

13 trade associations that are tax-exempt nonprofit 

14 organizations to send unsolicited advertisements 

15 to their members in furtherance of the associa16 tion’s tax-exempt purpose that do not contain 

17 the notice required by paragraph (1)(C)(ii), ex18 cept that the Commission may take action 

19 under this subparagraph only— 

20 ‘‘(i) by regulation issued after public 

21 notice and opportunity for public comment; 

22 and 

23 ‘‘(ii) if the Commission determines 

24 that such notice required by paragraph 

25 (1)(C)(ii) is not necessary to protect the 
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1 ability of the members of such associations 

2 to stop such associations from sending any 

3 future unsolicited advertisements; and’’. 

4 (f) AUTHORITY TO ESTABLISH TIME LIMIT ON ES5 TABLISHED BUSINESS RELATIONSHIP EXCEPTION.—Sec6 tion 227(b)(2) of the Communications Act of 1934 (47 

7 U.S.C. 227(b)(2)), as amended by subsections (c), (d), 

8 and (e) of this section, is further amended by adding at 

9 the end the following: 

10 ‘‘(G)(i) may, consistent with clause (ii), 

11 limit the duration of the existence of an estab12 lished business relationship to a period not 

13 shorter than 5 years and not longer than 7 

14 years after the last occurrence of an action suf15 ficient to establish such a relationship, but only 

16 if— 

17 ‘‘(I) the Commission determines that 

18 the existence of the exception under para19 graph (1)(C) relating to an established 

20 business relationship has resulted in a sig21 nificant number of complaints to the Com22 mission regarding the sending of unsolic23 ited advertisements to telephone facsimile 

24 machines; 
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1 ‘‘(II) upon review of such complaints 

2 referred to in subclause (I), the Commis3 sion has reason to believe that a significant 

4 number of such complaints involve unsolic5 ited advertisements that were sent on the 

6 basis of an established business relation7 ship that was longer in duration than the 

8 Commission believes is consistent with the 

9 reasonable expectations of consumers; 

10 ‘‘(III) the Commission determines 

11 that the costs to senders of demonstrating 

12 the existence of an established business re13 lationship within a specified period of time 

14 do not outweigh the benefits to recipients 

15 of establishing a limitation on such estab16 lished business relationship; and 

17 ‘‘(IV) the Commission determines 

18 that, with respect to small businesses, the 

19 costs are not unduly burdensome, given the 

20 revenues generated by small businesses, 

21 and taking into account the number of spe22 cific complaints to the Commission regard23 ing the sending of unsolicited advertise24 ments to telephone facsimile machines by 

25 small businesses; and 
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1 ‘‘(ii) may not commence a proceeding to 

2 determine whether to limit the duration of the 

3 existence of an established business relationship 

4 before the expiration of the 3-year period that 

5 begins on the date of the enactment of the Junk 

6 Fax Prevention Act of 2004.’’. 

7 (g) UNSOLICITED ADVERTISEMENT.—Section 

8 227(a)(5) of the Communications Act of 1934, as so re9 designated by subsection (b)(1), is amended by inserting 

10 ‘‘, in writing or otherwise’’ before the period at the end. 

11 (h) REGULATIONS.—Except as provided in section 

12 227(b)(2)(G)(ii) of the Communications Act of 1934 (as 

13 added by subsection (f)), not later than 270 days after 

14 the date of enactment of this Act, the Federal Commu15 nications Commission shall issue regulations to implement 

16 the amendments made by this section. 

17 SEC. 3. FCC ANNUAL REPORT REGARDING JUNK FAX EN18 FORCEMENT. 

19 Section 227 of the Communications Act of 1934 (47 

20 U.S.C. 227) is amended by adding at the end the fol21 lowing: 

22 ‘‘(g) JUNK FAX ENFORCEMENT REPORT.—The Com23 mission shall submit an annual report to Congress regard24 ing the enforcement during the past year of the provisions 

25 of this section relating to sending of unsolicited advertise-
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1 ments to telephone facsimile machines, which report shall 

2 include— 

3 ‘‘(1) the number of complaints received by the 

4 Commission during such year alleging that a con5 sumer received an unsolicited advertisement via tele6 phone facsimile machine in violation of the Commis7 sion’s rules; 

8 ‘‘(2) the number of such complaints received 

9 during the year on which the Commission has taken 

10 action; 

11 ‘‘(3) the number of such complaints that re12 main pending at the end of the year; 

13 ‘‘(4) the number of citations issued by the Com14 mission pursuant to section 503 during the year to 

15 enforce any law, regulation, or policy relating to 

16 sending of unsolicited advertisements to telephone 

17 facsimile machines; 

18 ‘‘(5) the number of notices of apparent liability 

19 issued by the Commission pursuant to section 503 

20 during the year to enforce any law, regulation, or 

21 policy relating to sending of unsolicited advertise22 ments to telephone facsimile machines; 

23 ‘‘(6) for each notice referred to in paragraph 

24 (5)— 
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1 ‘‘(A) the amount of the proposed forfeiture 

2 penalty involved; 

3 ‘‘(B) the person to whom the notice was 

4 issued; 

5 ‘‘(C) the length of time between the date 

6 on which the complaint was filed and the date 

7 on which the notice was issued; and 

8 ‘‘(D) the status of the proceeding; 

9 ‘‘(7) the number of final orders imposing for10 feiture penalties issued pursuant to section 503 dur11 ing the year to enforce any law, regulation, or policy 

12 relating to sending of unsolicited advertisements to 

13 telephone facsimile machines; 

14 ‘‘(8) for each forfeiture order referred to in 

15 paragraph (7)— 

16 ‘‘(A) the amount of the penalty imposed by 

17 the order; 

18 ‘‘(B) the person to whom the order was 

19 issued; 

20 ‘‘(C) whether the forfeiture penalty has 

21 been paid; and 

22 ‘‘(D) the amount paid; 

23 ‘‘(9) for each case in which a person has failed 

24 to pay a forfeiture penalty imposed by such a final 
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1 order, whether the Commission referred such matter 

2 for recovery of the penalty; and 

3 ‘‘(10) for each case in which the Commission 

4 referred such an order for recovery— 

5 ‘‘(A) the number of days from the date the 

6 Commission issued such order to the date of 

7 such referral; 

8 ‘‘(B) whether an action has been com9 menced to recover the penalty, and if so, the 

10 number of days from the date the Commission 

11 referred such order for recovery to the date of 

12 such commencement; and 

13 ‘‘(C) whether the recovery action resulted 

14 in collection of any amount, and if so, the 

15 amount collected.’’. 

16 SEC. 4. GAO STUDY OF JUNK FAX ENFORCEMENT. 

17 (a) IN GENERAL.—The Comptroller General of the 

18 United States shall conduct a study regarding complaints 

19 received by the Federal Communications Commission con20 cerning unsolicited advertisements sent to telephone fac21 simile machines, which study shall determine— 

22 (1) the mechanisms established by the Commis23 sion to receive, investigate, and respond to such 

24 complaints; 
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1 (2) the level of enforcement success achieved by 

2 the Commission regarding such complaints; 

3 (3) whether complainants to the Commission 

4 are adequately informed by the Commission of the 

5 responses to their complaints; and 

6 (4) whether additional enforcement measures 

7 are necessary to protect consumers, including rec8 ommendations regarding such additional enforce9 ment measures. 

10 (b) ADDITIONAL ENFORCEMENT REMEDIES.—In 

11 conducting the analysis and making the recommendations 

12 required under subsection (a)(4), the Comptroller General 

13 shall specifically examine— 

14 (1) the adequacy of existing statutory enforce15 ment actions available to the Commission; 

16 (2) the adequacy of existing statutory enforce17 ment actions and remedies available to consumers; 

18 (3) the impact of existing statutory enforcement 

19 remedies on senders of facsimiles; 

20 (4) whether increasing the amount of financial 

21 penalties is warranted to achieve greater deterrent 

22 effect; and 

23 (5) whether establishing penalties and enforce24 ment actions for repeat violators or abusive viola25 tions similar to those established under section 1037 
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1 of title 18, United States Code, would have a greater 

2 deterrent effect. 

3 (c) REPORT.—Not later than 270 days after the date 

4 of the enactment of this Act, the Comptroller General shall 

5 submit a report on the results of the study under this sec6 tion to Committee on Energy and Commerce of the House 

7 of Representatives and the Committee on Commerce, 

8 Science, and Transportation of the Senate. 
Calendar No. 741 

108TH CONGRESS 

2D SESSION S. 2603 

[Report No. 108–381] 

A BILL 

To amend section 227 of the Communications Act 

tion on junk fax transmissions. of 1934 (47 U.S.C. 227) relating to the prohibiSEPTEMBER 28, 2004 

Reported without amendment