Over the past year, as consumers won relief from unwanted telemarketers with a national do-not-call registry and regulators wrestled with the practicality of a do-not-spam list for e-mail users, many business groups lobbied to salvage some semblance of the use of another oft-mentioned irritant: the business fax.
The National Association of Wholesale-Distributors and the National Association of Realtors, among others, were upset at the decision by the Federal Communications Commission a year ago to get rid of an exception to the 1991 law outlawing junk faxes, one that allowed companies that had an "established business relationship" with a person or business to send faxes without prior written permission. FCC regulators, saying they had been deluged with 1,500 complaints a month, decided last June that written consent was required after all, including the recipient's name and fax number.
The change sent business into orbit.
Realtors said they would not be able to do business. For example, a Realtor would not be able to fax a listing to a customer who asked for one without first getting written consent. Trade associations said they would not be able to send members reminders about upcoming conventions or dues without the time-consuming process of gathering thousands of written permissions.
The issue is a sensitive one. The National Federation of Independent Business, for example, was sued by its own members. In a case decided last June, a Missouri state circuit court ruled that the FCC had no business establishing the business exemption. Thus the NFIB had no right to send a fax advertising insurance services without express permission. It fined the NFIB $2,000 plus court costs.
"I think the FCC did informed consent because they didn't realize how companies operate in this country," said David R. Straus, an attorney who represents media companies that have been sued for faxing customers, usually to confirm renewals. "How do you get 40,000 signed consents?"
The business community and other groups filed 42 petitions with the agency, asking it to reconsider. The Office of Management and Budget weighed in and said the permission requirement would be impractical and burdensome for business.
In response, the FCC stayed its decision and gave businesses until January 2005 to get ready for the change. But business groups weren't satisfied and went to Congress for help.
Last week, Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce telecommunications and Internet subcommittee, held a hearing to try to sort out how to separate legitimate business-to-business faxing from anonymous blast faxers.
On Wednesday, Upton introduced the Junk Fax Prevention Act of 2004. It reinstates the status quo, allowing the "established business relationship" exemption to prevail.
"There will be a tremendously burdensome cost if we don't fix this, particularly for those with fellow organization members," Upton said in an interview. "We have a very simple bill. It allows for organizations to send faxes to their members when they have a prior business relationship without seeking permission."
Reps. Ed Markey (Mass.) and John Dingell (Mich.) are among 13 Democrats who support the bill, but they want to make sure consumers keep control of their fax machines. In exchange for restoring the exemption, Democrats pushed for an "opt-out" mechanism for recipients. Faxers would have to include on the first page of the document an option for the receiver to respond, by fax or phone, to say, "Send no more faxes."
The bill also would allow the FCC to excuse trade groups from the opt-out requirement in the bill.
At the hearing, Democrats pressed the FCC for tougher enforcement. The commission levied a $5.4 million fine against California fax broadcaster Fax.com, but so far nothing has been paid.
David H. Solomon, chief of the FCC's enforcement bureau, said the success of the enforcement program should be judged by the number of companies that stop the practice. He said the vast majority of companies stop faxing if they are cited.
Consumer groups want to see any business exemption drafted narrowly. The National Consumers League said it liked the FCC's original idea to require written permission.
"Opt in was a good approach because it showed someone consciously agreed to receive advertisements. A broadly defined 'established business relationship' puts more burden on the fax recipient," said Susan Grant, vice president of public policy for the consumer group.
FCC officials defend their decision to change their minds and push for getting rid of the business exception on faxes that Upton's bill would preserve.
"The record indicated that consumers and large and small businesses were being inundated with faxes. We did see an issue. We get 1,500 complaints a month," K. Dane Snowden, chief of the FCC's consumer and governmental affairs bureau, said in an interview. "We want to assure that consumers and businesses alike can control the faxes they receive or at least opt out of those faxes."
Snowden said Congress did not establish such a loophole for business faxes, and the comments the FCC received from frustrated and angry consumers about having their fax machines tied up for hours persuaded the FCC to order the change. In its July 2003 order, the FCC said it heard from consumers who felt "besieged" by unsolicited faxes and advertisers who refused to stop sending them when asked.
The commission also by this time had experience trying to enforce the law. It said it has issued close to $7 million in fines for junk faxing, as well as 233 citations, which are warnings required before the agency can take further action.