108TH CONGRESS

2D SESSION H. R. 4600

AN ACT

To amend section 227 of the Communications Act

transmissions.of 1934 to clarify the prohibition on junk fax

108TH CONGRESS

2D SESSION H. R. 4600

AN ACT

To amend section 227 of the Communications Act of 1934

to clarify 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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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.—Subparagraph (C) of section

7 227(b)(1) of the Communications Act of 1934 (47 U.S.C.

8 227(b)(1)(C)) is 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),

19 except that the exception under clauses (i) and

20 (ii) shall not apply with respect to an unsolic21 ited advertisement sent to a telephone facsimile

22 machine by a sender to whom a request has

23 been made not to send future unsolicited adver24 tisements to such telephone facsimile machine

25 that complies with the requirements under

26 paragraph (2)(E); or’’.
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1 (b) DEFINITION OF ESTABLISHED BUSINESS RELA2 TIONSHIP.—Subsection (a) of section 227 of the Commu3 nications Act of 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 new paragraph:

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 the Commission’s regulations, as in ef12 fect 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.—Paragraph (2) of section 227(b) of the Commu24 nications Act of 1934 (47 U.S.C. 227(b)(2)) is amended—
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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 new sub6 paragraph:

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

8 in an unsolicited advertisement complies with

9 the requirements under this subparagraph only

10 if—

11 ‘‘(i) the notice is clear and con12 spicuous and on the first page of the unso13 licited advertisement;

14 ‘‘(ii) the notice states that the recipi15 ent may make a request to the sender of

16 the unsolicited advertisement not to send

17 any future unsolicited advertisements to a

18 telephone facsimile machine or machines

19 and that failure to comply, within the

20 shortest reasonable time, as determined by

21 the Commission, with such a request meet22 ing the requirements under subparagraph

23 (E) is unlawful;
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1 ‘‘(iii) the notice sets forth the require2 ments for a request under subparagraph

3 (E);

4 ‘‘(iv) the notice includes—

5 ‘‘(I) a domestic contact telephone

6 and facsimile machine number for the

7 recipient to transmit such a request to

8 the sender; and

9 ‘‘(II) a cost-free mechanism for a

10 recipient to transmit a request pursu11 ant to such notice to the sender of the

12 unsolicited advertisement; the Com13 mission shall by rule require the send14 er to provide such a mechanism and

15 may, in the discretion of the Commis16 sion and subject to such conditions as

17 the Commission may prescribe, ex18 empt certain classes of small business

19 senders, but only if the Commission

20 determines that the costs to such class

21 are unduly burdensome given the rev22 enues generated by such small busi23 nesses;

24 ‘‘(v) the telephone and facsimile ma25 chine numbers and the cost-free mecha-
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1 nism set forth pursuant to clause (iv) per2 mit an individual or business to make such

3 a request during regular business hours;

4 and

5 ‘‘(vi) the notice complies with the re6 quirements of subsection (d);’’.

7 (d) REQUEST TO OPT-OUT OF FUTURE UNSOLIC8 ITED ADVERTISEMENTS.—Paragraph (2) of section

9 227(b) of the Communications Act of 1934 (47 U.S.C.

10 227(b)(2)), as amended by subsection (c) of this section,

11 is further amended by adding at the end the following new

12 subparagraph:

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

14 not to send future unsolicited advertisements to

15 a telephone facsimile machine complies with the

16 requirements under this subparagraph only if—

17 ‘‘(i) the request identifies the tele18 phone number or numbers of the telephone

19 facsimile machine or machines to which the

20 request relates;

21 ‘‘(ii) the request is made to the tele22 phone or facsimile number of the sender of

23 such an unsolicited advertisement provided

24 pursuant to subparagraph (D)(iv) or by
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1 any other method of communication as de2 termined by the Commission; and

3 ‘‘(iii) the person making the request

4 has not, subsequent to such request, pro5 vided express invitation or permission to

6 the sender, in writing or otherwise, to send

7 such advertisements to such person at such

8 telephone facsimile machine;’’.

9 (e) AUTHORITY TO ESTABLISH NONPROFIT EXCEP10 TION.—Paragraph (2) of section 227(b) of the Commu11 nications Act of 1934 (47 U.S.C. 227(b)(2)), as amended

12 by subsections (c) and (d) of this section, is further

13 amended by adding at the end the following new subpara14 graph:

15 ‘‘(F) may, in the discretion of the Commis16 sion and subject to such conditions as the Com17 mission may prescribe, allow professional or

18 trade associations that are tax-exempt nonprofit

19 organizations to send unsolicited advertisements

20 to their members in furtherance of the associa21 tion’s tax-exempt purpose that do not contain

22 the notice required by paragraph (1)(C)(ii), ex23 cept that the Commission may take action

24 under this subparagraph only by regulation

25 issued after public notice and opportunity for
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1 public comment and only if the Commission de2 termines that such notice required by para3 graph (1)(C)(ii) is not necessary to protect the

4 ability of the members of such associations to

5 stop such associations from sending any future

6 unsolicited advertisements; and’’.

7 (f) AUTHORITY TO ESTABLISH TIME LIMIT ON ES8 TABLISHED BUSINESS RELATIONSHIP EXCEPTION.—

9 Paragraph (2) of section 227(b) of the Communications

10 Act of 1934 (47 U.S.C. 227(b)(2)), as amended by sub11 sections (c), (d), and (e) of this section, is further amend12 ed by adding at the end the following new subparagraph:

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

14 limit the duration of the existence of an estab15 lished business relationship to a period not

16 shorter than 5 years and not longer than 7

17 years after the last occurrence of an action suf18 ficient to establish such a relationship, but only

19 if—

20 ‘‘(I) the Commission determines

21 that the existence of the exception

22 under paragraph (1)(C) relating to an

23 established business relationship has

24 resulted in a significant number of

25 complaints to the Commission regard-
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1 ing the sending of unsolicited adver2 tisements to telephone facsimile ma3 chines;

4 ‘‘(II) upon review of such com5 plaints referred to in subclause (I),

6 the Commission has reason to believe

7 that a significant number of such

8 complaints involve unsolicited adver9 tisements that were sent on the basis

10 of an established business relationship

11 that was longer in duration than the

12 Commission believes is consistent with

13 the reasonable expectations of con14 sumers;

15 ‘‘(III) the Commission deter16 mines that the costs to senders of

17 demonstrating the existence of an es18 tablished business relationship within

19 a specified period of time do not out20 weigh the benefits to recipients of es21 tablishing a limitation on such estab22 lished business relationship; and

23 ‘‘(IV) the Commission determines

24 that, with respect to small businesses,

25 the costs are not unduly burdensome,
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1 given the revenues generated by small

2 businesses, and taking into account

3 the number of specific complaints to

4 the Commission regarding the sending

5 of unsolicited advertisements to tele6 phone facsimile machines by small

7 businesses; and

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

9 determine whether to limit the duration of the

10 existence of an established business relationship

11 before the expiration of the 3-year period that

12 begins on the date of the enactment of the

13 Junk Fax Prevention Act of 2004.’’.

14 (g) UNSOLICITED ADVERTISEMENT.—Paragraph (5)

15 of section 227(a) of the Communications Act of 1934 (47

16 U.S.C. 227(a)(4)), as so redesignated by subsection (b)(1)

17 of this section, is amended by inserting ‘‘, in writing or

18 otherwise’’ before the period at the end.

19 (h) REGULATIONS.—Except as provided in clause (ii)

20 of section 227(b)(2)(G) of the Communications Act of

21 1934 (as added by subsection (f) of this section), not later

22 than 270 days after the date of the enactment of this Act,

23 the Federal Communications Commission shall issue regu24 lations to implement the amendments made by this sec25 tion.
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1 SEC. 3. FCC ANNUAL REPORT REGARDING JUNK FAX EN2 FORCEMENT.

3 Section 227 of the Communications Act of 1934 (47

4 U.S.C. 227) is amended by adding at the end the following

5 new subsection:

6 ‘‘(g) JUNK FAX ENFORCEMENT REPORT.—The Com7 mission shall submit a report to the Congress for each

8 year regarding the enforcement of the provisions of this

9 section relating to sending of unsolicited advertisements

10 to telephone facsimile machines, which shall include the

11 following information:

12 ‘‘(1) The number of complaints received by the

13 Commission during such year alleging that a con14 sumer received an unsolicited advertisement via tele15 phone facsimile machine in violation of the Commis16 sion’s rules.

17 ‘‘(2) The number of such complaints received

18 during the year on which the Commission has taken

19 action.

20 ‘‘(3) The number of such complaints that re21 main pending at the end of the year.

22 ‘‘(4) The number of citations issued by the

23 Commission pursuant to section 503 during the year

24 to enforce any law, regulation, or policy relating to

25 sending of unsolicited advertisements to telephone

26 facsimile machines.
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1 ‘‘(5) The number of notices of apparent liability

2 issued by the Commission pursuant to section 503

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

4 policy relating to sending of unsolicited advertise5 ments to telephone facsimile machines.

6 ‘‘(6) For each such notice—

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

8 penalty involved;

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

10 issued;

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

12 on which the complaint was filed and the date

13 on which the notice was issued; and

14 ‘‘(D) the status of the proceeding.

15 ‘‘(7) The number of final orders imposing for16 feiture penalties issued pursuant to section 503 dur17 ing the year to enforce any law, regulation, or policy

18 relating to sending of unsolicited advertisements to

19 telephone facsimile machines.

20 ‘‘(8) For each such forfeiture order—

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

22 the order;

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

24 issued;
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1 ‘‘(C) whether the forfeiture penalty has

2 been paid; and

3 ‘‘(D) the amount paid.

4 ‘‘(9) For each case in which a person has failed

5 to pay a forfeiture penalty imposed by such a final

6 order, whether the Commission referred such matter

7 for recovery of the penalty.

8 ‘‘(10) For each case in which the Commission

9 referred such an order for recovery—

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

11 Commission issued such order to the date of

12 such referral;

13 ‘‘(B) whether an action has been com14 menced to recover the penalty, and if so, the

15 number of days from the date the Commission

16 referred such order for recovery to the date of

17 such commencement; and

18 ‘‘(C) whether the recovery action resulted

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

20 amount collected.’’.

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

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

23 United States shall conduct a study regarding complaints

24 received by the Federal Communications Commission con-
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1 cerning unsolicited advertisements sent to telephone fac2 simile machines, which shall determine—

3 (1) the mechanisms established by the Commis4 sion to receive, investigate, and respond to such

5 complaints;

6 (2) the level of enforcement success achieved by

7 the Commission regarding such complaints;

8 (3) whether complainants to the Commission

9 are adequately informed by the Commission of the

10 responses to their complaints; and

11 (4) whether additional enforcement measures

12 are necessary to protect consumers, including rec13 ommendations regarding such additional enforce14 ment measures.

15 (b) ADDITIONAL ENFORCEMENT REMEDIES.—In

16 conducting the analysis and making the recommendations

17 required under paragraph (7) of subsection (a), the Comp18 troller General shall specifically examine—

19 (1) the adequacy of existing statutory enforce20 ment actions available to the Commission;

21 (2) the adequacy of existing statutory enforce22 ment actions and remedies available to consumers;

23 (3) the impact of existing statutory enforcement

24 remedies on senders of facsimiles;
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1 (4) whether increasing the amount of financial

2 penalties is warranted to achieve greater deterrent

3 effect; and

4 (5) whether establishing penalties and enforce5 ment actions for repeat violators or abusive viola6 tions similar to those established by section 4 of the

7 CAN–SPAM Act of 2003 (15 U.S.C. 7703) would

8 have a greater deterrent effect.

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

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

11 submit a report on the results of the study under this sec12 tion to Committee on Energy and Commerce of the House

13 of Representatives and the Committee on Commerce,

14 Science, and Transportation of the Senate.

Passed the House of Representatives July 20, 2004.

Attest:

Clerk.