House measure takes aim at FCC junk fax rule

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On July 20, the House of Representatives unanimously passed the Junk Fax Prevention Act (H.R. 4600).

The bill would reinstate the "established business relationship" exemption to allow businesses, associations, and charities to send commercial faxes to their customers and members without first receiving written permission.

It also expands consumer protections by requiring faxes to have an opt-out notice apprising the recipient that they have a right to opt out of receiving such faxes in the future.

Congress passed the Telephone Consumer Protection Act in 1991, which included provisions protecting consumers from receiving unwanted and unsolicited commercial faxes.

For more than 10 years, the Federal Communications Commission had interpreted the law to provide businesses with an exception to the general ban when they faxed commercial or advertising material to their existing business customers. The FCC, however, changed its interpretation of the law in 2003.

Under the new FCC rules, every business, association, nonprofit organization, and charity would be required to obtain prior written approval from each individual before sending a commercial fax.

The U.S. Chamber of Commerce estimated the cost to the average small business to be at least $5,000 in the first year and more than $3,000 each year thereafter. Moreover, it would take more than 27 hours of staff time to obtain the initial written consent from their customers and an additional 20 hours each year to keep the forms current.

Last August, Rep. Fred Upton of Michigan wrote the FCC and requested that the commission delay the effective date of the new rules. Upton is chairman of the House Energy and Commerce Subcommittee on Telecommunications and the Internet. The FCC agreed and stayed the effective date until January 2005.

Upton later introduced the Junk Fax Prevention Act, which would reinstate the "established business relationship" exemption.

The Senate Commerce Committee passed similar legislation (S. 2603) this July. That bill, introduced by Oregon Sen. Gordon Smith, awaits Senate floor action.