[Congressional Record Volume 150, Number 89 (Thursday, June 24, 2004)]
[Senate]
[Pages S7481-S7483]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SMITH (for himself, Mr. Allen, Mr. Hollings, and Mr. 
        Sununu):
  S. 2603. 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; to the Committee on Commerce, Science, and 
Transportation.
  Mr. SMITH. Mr. President, I rise today with Senators Allen, Hollings 
and Sununu to introduce the ``Junk Fax Prevention Act of 2004.'' This 
bill will strengthen existing laws by providing consumers the ability 
to prevent unsolicited fax advertisements and provide greater 
Congressional oversight of enforcement efforts by the Federal 
Communications Commission (FCC). This bill will also help businesses by 
allowing them to continue to send faxes to their customers in a manner 
that has proven successful with both businesses and consumers.
  At the end of last summer, the FCC reconsidered its Telephone 
Consumer Protection Act (TCPA) rules and elected to eliminate the 
ability for businesses to contact their customers even where there 
exists an established business relationship. The effect of the FCC's 
rule would be to prevent a business from sending a fax solicitation to 
any person, whether it is a supplier or customer, without first 
obtaining prior written consent. This approach, while seemingly 
sensible, would impose significant costs on businesses in the form of 
extensive record keeping. Almost immediately after issuing this rule, 
the Commission stayed its implementation until January 1, 2005.
  The purpose of this legislation is to preserve the established 
business relationship exception currently recognized under the TCPA. In 
addition, this bill will allow consumers to opt out of receiving 
further unsolicited faxes. This is a new consumer protection that does 
not exist under the TCPA today.
  We believe that this bipartisan bill strikes the appropriate balance 
in providing significant protections to consumers from unwanted 
unsolicited fax advertisements and preserves the many benefits that 
result from legitimate fax communications. We hope that this body can 
pass this legislation in a timely manner, prior to January 1, 2005, 
when the FCC's stay expires.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2603

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Junk Fax Prevention Act of 
     2004''.

     SEC. 2. PROHIBITION ON FAX TRANSMISSIONS CONTAINING 
                   UNSOLICITED ADVERTISEMENTS.

       (a) Prohibition.--Section 227(b)(1)(C) of the 
     Communications Act of 1934 (47 U.S.C. 227(b)(1)(C)) is 
     amended to read as follows:
       ``(C) to use any telephone facsimile machine, computer, or 
     other device to send, to a telephone facsimile machine, an 
     unsolicited advertisement, unless--
       ``(i) the unsolicited advertisement is from a sender with 
     an established business relationship with the recipient; and
       ``(ii) the unsolicited advertisement contains a notice 
     meeting the requirements under paragraph (2)(D), except that 
     the exception under clauses (i) and (ii) shall not apply with 
     respect to an unsolicited advertisement sent to a telephone 
     facsimile machine by a sender to whom a request has been made 
     not to send future unsolicited advertisements to such 
     telephone facsimile

[[Page S7482]]

     machine that complies with the requirements under paragraph 
     (2)(E); or''.
       (b) Definition of Established Business Relationship.--
     Section 227(a) of the Communications Act of 1934 (47 U.S.C. 
     227(a)) is amended--
       (1) by redesignating paragraphs (2) through (4) as 
     paragraphs (3) through (5), respectively; and
       (2) by inserting after paragraph (1) the following:
       ``(2) The term `established business relationship', for 
     purposes only of subsection (b)(1)(C)(i), shall have the 
     meaning given the term in section 64.1200 of title 47, Code 
     of Federal Regulations, as in effect on January 1, 2003, 
     except that--
       ``(A) such term shall include a relationship between a 
     person or entity and a business subscriber subject to the 
     same terms applicable under such section to a relationship 
     between a person or entity and a residential subscriber; and
       ``(B) an established business relationship shall be subject 
     to any time limitation established pursuant to paragraph 
     (2)(G))''.
       (c) Required Notice of Opt-Out Opportunity.--Section 
     227(b)(2) of the Communications Act of 1934 (47 U.S.C. 
     227(b)(2)) is amended--
       (1) in subparagraph (B), by striking ``and'' at the end;
       (2) in subparagraph (C), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(D) shall provide that a notice contained in an 
     unsolicited advertisement complies with the requirements 
     under this subparagraph only if--
       ``(i) the notice is clear and conspicuous and on the first 
     page of the unsolicited advertisement;
       ``(ii) the notice states that the recipient may make a 
     request to the sender of the unsolicited advertisement not to 
     send any future unsolicited advertisements to a telephone 
     facsimile machine or machines and that failure to comply, 
     within the shortest reasonable time, as determined by the 
     Commission, with such a request meeting the requirements 
     under subparagraph (E) is unlawful;
       ``(iii) the notice sets forth the requirements for a 
     request under subparagraph (E);
       ``(iv) the notice includes--

       ``(I) a domestic contact telephone and facsimile machine 
     number for the recipient to transmit such a request to the 
     sender; and
       ``(II) a cost-free mechanism for a recipient to transmit a 
     request pursuant to such notice to the sender of the 
     unsolicited advertisement; the Commission shall by rule 
     require the sender to provide such a mechanism and may, in 
     the discretion of the Commission and subject to such 
     conditions as the Commission may prescribe, exempt certain 
     classes of small business senders, but only if the Commission 
     determines that the costs to such class are unduly burdensome 
     given the revenues generated by such small businesses;

       ``(v) the telephone and facsimile machine numbers and the 
     cost-free mechanism set forth pursuant to clause (iv) permit 
     an individual or business to make such a request during 
     regular business hours; and
       ``(vi) the notice complies with the requirements of 
     subsection (d);''.
       (d) Request to Opt-Out of Future Unsolicited 
     Advertisements.--Section 227(b)(2) of the Communications Act 
     of 1934 (47 U.S.C. 227(b)(2)), as amended by subsection (c), 
     is further amended by adding at the end the following:
       ``(E) shall provide, by rule, that a request not to send 
     future unsolicited advertisements to a telephone facsimile 
     machine complies with the requirements under this 
     subparagraph only if--
       ``(i) the request identifies the telephone number or 
     numbers of the telephone facsimile machine or machines to 
     which the request relates;
       ``(ii) the request is made to the telephone or facsimile 
     number of the sender of such an unsolicited advertisement 
     provided pursuant to subparagraph (D)(iv) or by any other 
     method of communication as determined by the Commission; and
       ``(iii) the person making the request has not, subsequent 
     to such request, provided express invitation or permission to 
     the sender, in writing or otherwise, to send such 
     advertisements to such person at such telephone facsimile 
     machine;''.
       (e) Authority to Establish Nonprofit Exception.--Section 
     227(b)(2) of the Communications Act of 1934 (47 U.S.C. 
     227(b)(2)), as amended by subsections (c) and (d), is further 
     amended by adding at the end the following:
       ``(F) may, in the discretion of the Commission and subject 
     to such conditions as the Commission may prescribe, allow 
     professional or trade associations that are tax-exempt 
     nonprofit organizations to send unsolicited advertisements to 
     their members in furtherance of the association's tax-exempt 
     purpose that do not contain the notice required by paragraph 
     (1)(C)(ii), except that the Commission may take action under 
     this subparagraph only--
       ``(i) by regulation issued after public notice and 
     opportunity for public comment; and
       ``(ii) if the Commission determines that such notice 
     required by paragraph (1)(C)(ii) is not necessary to protect 
     the ability of the members of such associations to stop such 
     associations from sending any future unsolicited 
     advertisements; and''.
       (f) Authority to Establish Time Limit on Established 
     Business Relationship Exception.--Section 227(b)(2) of the 
     Communications Act of 1934 (47 U.S.C. 227(b)(2)), as amended 
     by subsections (c), (d), and (e) of this section, is further 
     amended by adding at the end the following:
       ``(G)(i) may, consistent with clause (ii), limit the 
     duration of the existence of an established business 
     relationship to a period not shorter than 5 years and not 
     longer than 7 years after the last occurrence of an action 
     sufficient to establish such a relationship, but only if--
       ``(I) the Commission determines that the existence of the 
     exception under paragraph (1)(C) relating to an established 
     business relationship has resulted in a significant number of 
     complaints to the Commission regarding the sending of 
     unsolicited advertisements to telephone facsimile machines;
       ``(II) upon review of such complaints referred to in 
     subclause (I), the Commission has reason to believe that a 
     significant number of such complaints involve unsolicited 
     advertisements that were sent on the basis of an established 
     business relationship that was longer in duration than the 
     Commission believes is consistent with the reasonable 
     expectations of consumers;
       ``(III) the Commission determines that the costs to senders 
     of demonstrating the existence of an established business 
     relationship within a specified period of time do not 
     outweigh the benefits to recipients of establishing a 
     limitation on such established business relationship; and
       ``(IV) the Commission determines that, with respect to 
     small businesses, the costs are not unduly burdensome, given 
     the revenues generated by small businesses, and taking into 
     account the number of specific complaints to the Commission 
     regarding the sending of unsolicited advertisements to 
     telephone facsimile machines by small businesses; and
       ``(ii) may not commence a proceeding to determine whether 
     to limit the duration of the existence of an established 
     business relationship before the expiration of the 3-year 
     period that begins on the date of the enactment of the Junk 
     Fax Prevention Act of 2004.''.
       (g) Unsolicited Advertisement.--Section 227(a)(5) of the 
     Communications Act of 1934, as so redesignated by subsection 
     (b)(1), is amended by inserting ``, in writing or otherwise'' 
     before the period at the end.
       (h) Regulations.--Except as provided in section 
     227(b)(2)(G)(ii) of the Communications Act of 1934 (as added 
     by subsection (f)), not later than 270 days after the date of 
     enactment of this Act, the Federal Communications Commission 
     shall issue regulations to implement the amendments made by 
     this section.

     SEC. 3. FCC ANNUAL REPORT REGARDING JUNK FAX ENFORCEMENT.

       Section 227 of the Communications Act of 1934 (47 U. S.C. 
     227) is amended by adding at the end the following:
       ``(g) Junk Fax Enforcement Report.--The Commission shall 
     submit an annual report to Congress regarding the enforcement 
     during the past year of the provisions of this section 
     relating to sending of unsolicited advertisements to 
     telephone facsimile machines, which report shall include--
       ``(1) the number of complaints received by the Commission 
     during such year alleging that a consumer received an 
     unsolicited advertisement via telephone facsimile machine in 
     violation of the Commission's rules;
       ``(2) the number of such complaints received during the 
     year on which the Commission has taken action;
       ``(3) the number of such complaints that remain pending at 
     the end of the year;
       ``(4) the number of citations issued by the Commission 
     pursuant to section 503 during the year to enforce any law, 
     regulation, or policy relating to sending of unsolicited 
     advertisements to telephone facsimile machines;
       ``(5) the number of notices of apparent liability issued by 
     the Commission pursuant to section 503 during the year to 
     enforce any law, regulation, or policy relating to sending of 
     unsolicited advertisements to telephone facsimile machines;
       ``(6) for each notice referred to in paragraph (5)--
       ``(A) the amount of the proposed forfeiture penalty 
     involved;
       ``(B) the person to whom the notice was issued;
       ``(C) the length of time between the date on which the 
     complaint was filed and the date on which the notice was 
     issued; and
       ``(D) the status of the proceeding;
       ``(7) the number of final orders imposing forfeiture 
     penalties issued pursuant to section 503 during the year to 
     enforce any law, regulation, or policy relating to sending of 
     unsolicited advertisements to telephone facsimile machines;
       ``(8) for each forfeiture order referred to in paragraph 
     (7)--
       ``(A) the amount of the penalty imposed by the order;
       ``(B) the person to whom the order was issued;
       ``(C) whether the forfeiture penalty has been paid; and
       ``(D) the amount paid;
       ``(9) for each case in which a person has failed to pay a 
     forfeiture penalty imposed by such a final order, whether the 
     Commission referred such matter for recovery of the penalty; 
     and
       ``(10) for each case in which the Commission referred such 
     an order for recovery--

[[Page S7483]]

       ``(A) the number of days from the date the Commission 
     issued such order to the date of such referral;
       ``(B) whether an action has been commenced to recover the 
     penalty, and if so, the number of days from the date the 
     Commission referred such order for recovery to the date of 
     such commencement; and
       ``(C) whether the recovery action resulted in collection of 
     any amount, and if so, the amount collected.''.

     SEC. 4. GAO STUDY OF JUNK FAX ENFORCEMENT.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study regarding complaints received by 
     the Federal Communications Commission concerning unsolicited 
     advertisements sent to telephone facsimile machines, which 
     study shall determine--
       (1) the mechanisms established by the Commission to 
     receive, investigate, and respond to such complaints;
       (2) the level of enforcement success achieved by the 
     Commission regarding such complaints;
       (3) whether complainants to the Commission are adequately 
     informed by the Commission of the responses to their 
     complaints; and
       (4) whether additional enforcement measures are necessary 
     to protect consumers, including recommendations regarding 
     such additional enforcement measures.
       (b) Additional Enforcement Remedies.--In conducting the 
     analysis and making the recommendations required under 
     subsection (a)(4), the Comptroller General shall specifically 
     examine--
       (1) the adequacy of existing statutory enforcement actions 
     available to the Commission;
       (2) the adequacy of existing statutory enforcement actions 
     and remedies available to consumers;
       (3) the impact of existing statutory enforcement remedies 
     on senders of facsimiles;
       (4) whether increasing the amount of financial penalties is 
     warranted to achieve greater deterrent effect; and
       (5) whether establishing penalties and enforcement actions 
     for repeat violators or abusive violations similar to those 
     established under section 1037 of title 18, United States 
     Code, would have a greater deterrent effect.
       (c) Report.--Not later than 270 days after the date of the 
     enactment of this Act, the Comptroller General shall submit a 
     report on the results of the study under this section to 
     Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Commerce, Science, and 
     Transportation of the Senate.
                                 ______