II 

108TH CONGRESS 

2D SESSION S. 2603 

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, and Mr. SUNUNU) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation 

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, 

3 SECTION 1. SHORT TITLE. 

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

5 Act of 2004’’. 
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1 SEC. 2. PROHIBITION ON FAX TRANSMISSIONS CONTAINING 

2 UNSOLICITED ADVERTISEMENTS. 

3 (a) PROHIBITION.—Section 227(b)(1)(C) of the Com4 munications Act of 1934 (47 U.S.C. 227(b)(1)(C)) is 

5 amended to read as follows: 

6 ‘‘(C) to use any telephone facsimile ma7 chine, computer, or other device to send, to a 

8 telephone facsimile machine, an unsolicited ad9 vertisement, unless— 

10 ‘‘(i) the unsolicited advertisement is 

11 from a sender with an established business 

12 relationship with the recipient; and 

13 ‘‘(ii) the unsolicited advertisement 

14 contains a notice meeting the requirements 

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

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

17 not apply with respect to an unsolicited ad18 vertisement sent to a telephone facsimile 

19 machine by a sender to whom a request 

20 has been made not to send future unsolic21 ited advertisements to such telephone fac22 simile machine that complies with the re23 quirements under paragraph (2)(E); or’’. 

24 (b) DEFINITION OF ESTABLISHED BUSINESS RELA25 TIONSHIP.—Section 227(a) of the Communications Act of 

26 1934 (47 U.S.C. 227(a)) is amended— 
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1 (1) by redesignating paragraphs (2) through 

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

3 (2) by inserting after paragraph (1) the fol4 lowing: 

5 ‘‘(2) The term ‘established business relation6 ship’, for purposes only of subsection (b)(1)(C)(i), 

7 shall have the meaning given the term in section 

8 64.1200 of title 47, Code of Federal Regulations, as 

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

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

11 between a person or entity and a business sub12 scriber subject to the same terms applicable 

13 under such section to a relationship between a 

14 person or entity and a residential subscriber; 

15 and 

16 ‘‘(B) an established business relationship 

17 shall be subject to any time limitation estab18 lished pursuant to paragraph (2)(G))’’. 

19 (c) REQUIRED NOTICE OF OPT-OUT OPPOR20 TUNITY.—Section 227(b)(2) of the Communications Act 

21 of 1934 (47 U.S.C. 227(b)(2)) is amended— 

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

23 the end; 

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

25 at the end and inserting a semicolon; and 
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1 (3) by adding at the end the following: 

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

3 in an unsolicited advertisement complies with 

4 the requirements under this subparagraph only 

5 if— 

6 ‘‘(i) the notice is clear and con7 spicuous and on the first page of the unso8 licited advertisement; 

9 ‘‘(ii) the notice states that the recipi10 ent may make a request to the sender of 

11 the unsolicited advertisement not to send 

12 any future unsolicited advertisements to a 

13 telephone facsimile machine or machines 

14 and that failure to comply, within the 

15 shortest reasonable time, as determined by 

16 the Commission, with such a request meet17 ing the requirements under subparagraph 

18 (E) is unlawful; 

19 ‘‘(iii) the notice sets forth the require20 ments for a request under subparagraph 

21 (E); 

22 ‘‘(iv) the notice includes— 

23 ‘‘(I) a domestic contact telephone 

24 and facsimile machine number for the 
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1 recipient to transmit such a request to 

2 the sender; and 

3 ‘‘(II) a cost-free mechanism for a 

4 recipient to transmit a request pursu5 ant to such notice to the sender of the 

6 unsolicited advertisement; the Com7 mission shall by rule require the send8 er to provide such a mechanism and 

9 may, in the discretion of the Commis10 sion and subject to such conditions as 

11 the Commission may prescribe, ex12 empt certain classes of small business 

13 senders, but only if the Commission 

14 determines that the costs to such class 

15 are unduly burdensome given the rev16 enues generated by such small busi17 nesses; 

18 ‘‘(v) the telephone and facsimile ma19 chine numbers and the cost-free mecha20 nism set forth pursuant to clause (iv) per21 mit an individual or business to make such 

22 a request during regular business hours; 

23 and 

24 ‘‘(vi) the notice complies with the re25 quirements of subsection (d);’’. 
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1 (d) REQUEST TO OPT-OUT OF FUTURE UNSOLIC2 ITED ADVERTISEMENTS.—Section 227(b)(2) of the Com3 munications Act of 1934 (47 U.S.C. 227(b)(2)), as 

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

5 at the end the following: 

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

7 not to send future unsolicited advertisements to 

8 a telephone facsimile machine complies with the 

9 requirements under this subparagraph only if— 

10 ‘‘(i) the request identifies the tele11 phone number or numbers of the telephone 

12 facsimile machine or machines to which the 

13 request relates; 

14 ‘‘(ii) the request is made to the tele15 phone or facsimile number of the sender of 

16 such an unsolicited advertisement provided 

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

18 any other method of communication as de19 termined by the Commission; and 

20 ‘‘(iii) the person making the request 

21 has not, subsequent to such request, pro22 vided express invitation or permission to 

23 the sender, in writing or otherwise, to send 

24 such advertisements to such person at such 

25 telephone facsimile machine;’’. 
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1 (e) AUTHORITY TO ESTABLISH NONPROFIT EXCEP2 TION.—Section 227(b)(2) of the Communications Act of 

3 1934 (47 U.S.C. 227(b)(2)), as amended by subsections 

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

5 following: 

6 ‘‘(F) may, in the discretion of the Commis7 sion and subject to such conditions as the Com8 mission may prescribe, allow professional or 

9 trade associations that are tax-exempt nonprofit 

10 organizations to send unsolicited advertisements 

11 to their members in furtherance of the associa12 tion’s tax-exempt purpose that do not contain 

13 the notice required by paragraph (1)(C)(ii), ex14 cept that the Commission may take action 

15 under this subparagraph only— 

16 ‘‘(i) by regulation issued after public 

17 notice and opportunity for public comment; 

18 and 

19 ‘‘(ii) if the Commission determines 

20 that such notice required by paragraph 

21 (1)(C)(ii) is not necessary to protect the 

22 ability of the members of such associations 

23 to stop such associations from sending any 

24 future unsolicited advertisements; and’’. 
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1 (f) AUTHORITY TO ESTABLISH TIME LIMIT ON ES2 TABLISHED BUSINESS RELATIONSHIP EXCEPTION.—Sec3 tion 227(b)(2) of the Communications Act of 1934 (47 

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

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

6 the end the following: 

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

8 limit the duration of the existence of an estab9 lished business relationship to a period not 

10 shorter than 5 years and not longer than 7 

11 years after the last occurrence of an action suf12 ficient to establish such a relationship, but only 

13 if— 

14 ‘‘(I) the Commission determines that 

15 the existence of the exception under para16 graph (1)(C) relating to an established 

17 business relationship has resulted in a sig18 nificant number of complaints to the Com19 mission regarding the sending of unsolic20 ited advertisements to telephone facsimile 

21 machines; 

22 ‘‘(II) upon review of such complaints 

23 referred to in subclause (I), the Commis24 sion has reason to believe that a significant 

25 number of such complaints involve unsolic-
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1 ited advertisements that were sent on the 

2 basis of an established business relation3 ship that was longer in duration than the 

4 Commission believes is consistent with the 

5 reasonable expectations of consumers; 

6 ‘‘(III) the Commission determines 

7 that the costs to senders of demonstrating 

8 the existence of an established business re9 lationship within a specified period of time 

10 do not outweigh the benefits to recipients 

11 of establishing a limitation on such estab12 lished business relationship; and 

13 ‘‘(IV) the Commission determines 

14 that, with respect to small businesses, the 

15 costs are not unduly burdensome, given the 

16 revenues generated by small businesses, 

17 and taking into account the number of spe18 cific complaints to the Commission regard19 ing the sending of unsolicited advertise20 ments to telephone facsimile machines by 

21 small businesses; and 

22 ‘‘(ii) may not commence a proceeding to 

23 determine whether to limit the duration of the 

24 existence of an established business relationship 

25 before the expiration of the 3-year period that 
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1 begins on the date of the enactment of the Junk 

2 Fax Prevention Act of 2004.’’. 

3 (g) UNSOLICITED ADVERTISEMENT.—Section 

4 227(a)(5) of the Communications Act of 1934, as so re5 designated by subsection (b)(1), is amended by inserting 

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

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

8 227(b)(2)(G)(ii) of the Communications Act of 1934 (as 

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

10 the date of enactment of this Act, the Federal Commu11 nications Commission shall issue regulations to implement 

12 the amendments made by this section. 

13 SEC. 3. FCC ANNUAL REPORT REGARDING JUNK FAX EN14 FORCEMENT. 

15 Section 227 of the Communications Act of 1934 (47 

16 U.S.C. 227) is amended by adding at the end the fol17 lowing: 

18 ‘‘(g) JUNK FAX ENFORCEMENT REPORT.—The Com19 mission shall submit an annual report to Congress regard20 ing the enforcement during the past year of the provisions 

21 of this section relating to sending of unsolicited advertise22 ments to telephone facsimile machines, which report shall 

23 include— 

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

25 Commission during such year alleging that a con-
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1 sumer received an unsolicited advertisement via tele2 phone facsimile machine in violation of the Commis3 sion’s rules; 

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

5 during the year on which the Commission has taken 

6 action; 

7 ‘‘(3) the number of such complaints that re8 main pending at the end of the year; 

9 ‘‘(4) the number of citations issued by the Com10 mission pursuant to section 503 during the year to 

11 enforce any law, regulation, or policy relating to 

12 sending of unsolicited advertisements to telephone 

13 facsimile machines; 

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

15 issued by the Commission pursuant to section 503 

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

17 policy relating to sending of unsolicited advertise18 ments to telephone facsimile machines; 

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

20 (5)— 

21 ‘‘(A) the amount of the proposed forfeiture 

22 penalty involved; 

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

24 issued; 
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1 ‘‘(C) the length of time between the date 

2 on which the complaint was filed and the date 

3 on which the notice was issued; and 

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

5 ‘‘(7) the number of final orders imposing for6 feiture penalties issued pursuant to section 503 dur7 ing the year to enforce any law, regulation, or policy 

8 relating to sending of unsolicited advertisements to 

9 telephone facsimile machines; 

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

11 paragraph (7)— 

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

13 the order; 

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

15 issued; 

16 ‘‘(C) whether the forfeiture penalty has 

17 been paid; and 

18 ‘‘(D) the amount paid; 

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

20 to pay a forfeiture penalty imposed by such a final 

21 order, whether the Commission referred such matter 

22 for recovery of the penalty; and 

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

24 referred such an order for recovery— 
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1 ‘‘(A) the number of days from the date the 

2 Commission issued such order to the date of 

3 such referral; 

4 ‘‘(B) whether an action has been com5 menced to recover the penalty, and if so, the 

6 number of days from the date the Commission 

7 referred such order for recovery to the date of 

8 such commencement; and 

9 ‘‘(C) whether the recovery action resulted 

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

11 amount collected.’’. 

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

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

14 United States shall conduct a study regarding complaints 

15 received by the Federal Communications Commission con16 cerning unsolicited advertisements sent to telephone fac17 simile machines, which study shall determine— 

18 (1) the mechanisms established by the Commis19 sion to receive, investigate, and respond to such 

20 complaints; 

21 (2) the level of enforcement success achieved by 

22 the Commission regarding such complaints; 

23 (3) whether complainants to the Commission 

24 are adequately informed by the Commission of the 

25 responses to their complaints; and 
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1 (4) whether additional enforcement measures 

2 are necessary to protect consumers, including rec3 ommendations regarding such additional enforce4 ment measures. 

5 (b) ADDITIONAL ENFORCEMENT REMEDIES.—In 

6 conducting the analysis and making the recommendations 

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

8 shall specifically examine— 

9 (1) the adequacy of existing statutory enforce10 ment actions available to the Commission; 

11 (2) the adequacy of existing statutory enforce12 ment actions and remedies available to consumers; 

13 (3) the impact of existing statutory enforcement 

14 remedies on senders of facsimiles; 

15 (4) whether increasing the amount of financial 

16 penalties is warranted to achieve greater deterrent 

17 effect; and 

18 (5) whether establishing penalties and enforce19 ment actions for repeat violators or abusive viola20 tions similar to those established under section 1037 

21 of title 18, United States Code, would have a greater 

22 deterrent effect. 

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

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

25 submit a report on the results of the study under this sec-
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1 tion to Committee on Energy and Commerce of the House 

2 of Representatives and the Committee on Commerce, 

3 Science, and Transportation of the Senate. 

Æ