Telecommunications: Weaknesses in Procedures and Performance	 
Management Hinder Junk Fax Enforcement (05-APR-06, GAO-06-425).  
                                                                 
The Telephone Consumer Protection Act of 1991 prohibited invasive
telemarketing practices, including the faxing of unsolicited	 
advertisements, known as "junk faxes," to individual consumers	 
and businesses. Junk faxes create costs for consumers (paper and 
toner) and disrupt their fax operations. The Junk Fax Prevention 
Act of 2005 clarified an established business relationship	 
exemption, specified opt-out procedures for consumers, and	 
requires the Federal Communications Commission (FCC)--the federal
agency responsible for junk fax enforcement0--to report annually 
to Congress on junk fax complaints and enforcement. The law also 
required GAO to report to Congress on FCC's enforcement of the	 
junk fax laws. This report addresses (1) FCC's junk fax 	 
procedures and outcomes, (2) the strengths and weaknesses of	 
FCC's procedures, and (3) FCC's junk fax management challenges.  
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-425 					        
    ACCNO:   A50898						        
  TITLE:     Telecommunications: Weaknesses in Procedures and	      
Performance Management Hinder Junk Fax Enforcement		 
     DATE:   04/05/2006 
  SUBJECT:   Consumer protection				 
	     FAX						 
	     Internal controls					 
	     Law enforcement					 
	     Performance measures				 
	     Spam						 
	     Telemarketing					 

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GAO-06-425

     

     * Report to Congressional Committees
          * April 2006
     * TELECOMMUNICATIONS
          * Weaknesses in Procedures and Performance Management Hinder Junk
            Fax Enforcement
     * Contents
          * Results in Brief
          * Background
          * FCC Has Recorded a Growing Number of Junk Fax Complaints, but Has
            Taken Limited Enforcement Action to Date
               * FCC's Consumer & Governmental Affairs Bureau Has Received an
                 Increasing Number of Junk Fax Complaints, Especially through
                 Internet Forms
               * FCC's Enforcement Bureau Has Generally Issued a Limited
                 Number of Citations Each Year since 2000 and Has Rarely
                 Issued Forfeiture Orders
          * FCC's Procedures Have Emphasized Customer Service and
            Documentation, but Enforcement Is Hampered by Multiple Factors
               * Focus on Customer Service and Documentation Is
                 Time-consuming, and Data Entry Errors May Occur
               * CGB's Database Does Not Meet EB's Enforcement Needs, Leading
                 to Duplicate Data Entry and Demonstrating Limited
                 Coordination
               * Practice of Limiting Consideration for Enforcement to
                 Complaints with Attached Faxes Has Excluded the Majority of
                 Reported Complaints
          * FCC Faces Management Challenges in Carrying Out Its Junk Fax
            Responsibilities
          * Conclusions
          * Recommendations for Executive Action
          * Agency Comments and Our Evaluation
     * Statutes Protecting Consumers from Unsolicited Advertisements
          * Regulating Unsolicited Telephone and E-mail Advertisements
               * FCC - The Telephone Consumer Protection Act of 1991
               * FTC - The Telemarketing and Consumer Fraud and Abuse
                 Prevention Act of 1994
               * The National Do-Not-Call Registry
               * The CAN-SPAM Act of 2003
     * Scope and Methodology
     * Consumer Complaints Reported to FCC

Report to Congressional Committees

April 2006

TELECOMMUNICATIONS

Weaknesses in Procedures and Performance Management Hinder Junk Fax
Enforcement

Contents

Tables

Figures

April 5, 2006Letter

The Honorable Ted Stevens Chairman The Honorable Daniel Inouye Co-Chairman
Committee on Commerce, Science, and Transportation United States Senate

The Honorable Joe Barton Chairman The Honorable John Dingell Ranking
Minority Member Committee on Energy and Commerce House of Representatives

For more than a decade, it has generally been illegal to send unsolicited
facsimile (fax) advertisements, commonly known as "junk faxes," to
consumers and businesses. This type of advertising burdens consumers and
businesses because they incur costs associated with receiving the fax
(paper and toner) as well as cause disruptions to their fax operations.
The Telephone Consumer Protection Act of 1991 (TCPA)1 prohibited a variety
of telemarketing practices, including the faxing of advertisements without
the recipient's prior express permission. In 1992, the Federal
Communications Commission (FCC) established rules for receiving junk fax
complaints and taking enforcement actions. In July 2005, Congress enacted
the Junk Fax Prevention Act of 2005 (2005 Act),2 which amended certain
provisions of TCPA. Specifically, the 2005 Act clarified an "established
business relationship" exception, required specific opt-out procedures for
consumers and businesses, and required FCC to report annually to Congress
on junk fax complaints and enforcement actions. FCC is to adopt new rules
implementing these changes by April 5, 2006.

The 2005 Act required GAO to report to Congress on FCC's enforcement of
the junk fax laws. Accordingly, we answered the following questions in
this report: (1) What procedures has FCC established for taking action on
junk fax complaints-including procedures for receipt, acknowledgment,
investigation, and enforcement-and to what extent has it taken such
action? (2) What are the strengths and weaknesses of FCC's junk fax
procedures? and (3) What challenges do FCC face in carrying out its junk
fax responsibilities? In addition, we provide in appendix I of this report
information on enforcement measures and penalties that have been
established to protect consumers from other types of unsolicited
advertising.

To assess FCC's procedures, implementation, and strengths and weaknesses,
we reviewed the applicable statutes and FCC rules pertaining to junk fax
enforcement. We interviewed FCC officials responsible for receiving junk
fax complaints and taking enforcement actions. We obtained FCC data on
junk fax complaints and enforcement actions and reviewed portions of the
complaint database and enforcement spreadsheet. Although we discuss
limitations to the complaint data in the report, we determined that these
data were sufficiently reliable for us to present overall trends and
approximate figures.3 To identify challenges, we compared FCC's
enforcement efforts with recognized performance management practices and
reviewed applicable FCC performance goals, measures, and data analysis.
Finally, we reviewed other statutes relevant to protecting consumers from
unsolicited advertisements. We conducted our work from November 2005
through March 2006 in accordance with generally accepted government
auditing standards. See appendix II for a more detailed explanation of our
scope and methodology.

Results in Brief

FCC has applied its procedures for receiving and acknowledging junk fax
complaints to the rapidly increasing number of complaints; however, the
numbers of investigations and enforcement actions have generally remained
about the same. In 2000, FCC recorded about 2,200 junk fax complaints; in
2005, it recorded over 46,000. FCC has never separately publicly reported
the annual number of junk fax complaints. Yet, since 2003, consumers have
complained more to FCC about junk faxes than about any other issue under
FCC's jurisdiction except indecency and obscenity in radio and television
broadcasting. Both individual consumers and businesses can report junk fax
complaints to FCC by e-mail, postal mail, fax, or telephone or through an
on-line complaint form. FCC's Consumer & Governmental Affairs Bureau (CGB)
receives and records these complaints in a database, scans in any
attachments, and acknowledges most complaints in a letter sent by postal
mail that provides information on the complainant's enforcement rights.
FCC's Enforcement Bureau (EB) handles junk fax investigations and
enforcement. Because of the large number of complaints and limited
resources, EB does not investigate each junk fax complaint received by
FCC. Instead, EB officials said, they try to identify and take enforcement
action against the major alleged violators and repeat offenders who, they
believe, have had the greatest impact on consumers. EB's formal
enforcement actions, as required by statute, consist of two sequential
steps. First, EB may issue a citation that notifies the faxer of the
complaint(s) against it and informs the faxer that its alleged activity is
illegal. Second, if FCC receives further complaints against a faxer, EB
may pursue a "forfeiture" action (i.e., a monetary penalty against the
faxer). FCC has issued 261 citations covering 1,456 junk fax complaints,
or just over 1 percent of the more than 108,000 junk fax complaints
recorded by FCC from 2000 to 2005. EB officials said that they have
identified eight repeat offenders from the 261 citations issued and have
pursued forfeiture actions against each of them. Six of these eight repeat
offenders have received forfeiture orders. The amounts of the monetary
forfeitures have increased, and the six forfeiture orders total over $6.9
million, but the Department of Justice has collected no forfeitures to
date because, for example, violators were no longer in business or could
not be located. EB officials identified competing demands, resource
constraints, and the rising sophistication of junk faxers in hiding their
identities as hindrances to enforcement.

An emphasis on customer service, an effort to document consumer
complaints, and an attempt to target enforcement resources efficiently are
the strengths of FCC's procedures. However, inefficient and uncoordinated
data management, resulting in time-consuming manual data entry, data
errors, and-most important-the exclusion of the majority of complaints
from decisions about investigations and enforcement, are weaknesses. CGB
has emphasized customer service by establishing multiple methods for
consumers to report junk fax complaints to FCC, providing multiple sources
of information about junk fax issues, and sending a letter in response to
most complainants. However, these procedures are time-consuming and errors
can occur when complaints are miscoded or not matched with supporting
faxes. These errors may, to an unknown extent, affect the reliability of
CGB's complaint counts. They may also impact the quality of the report
that FCC is now required to provide to Congress on the number of junk fax
complaints received each year. In addition, CGB and EB have not
coordinated their data needs. This has led to the development of a
separate spreadsheet by EB because the CGB database does not meet its
needs. As a result, EB analysts spend about half of their time on manual,
redundant data entry. Furthermore, it is EB's practice to consider only
complaints with an attached fax for enforcement action. For 2005, about 60
percent of the complaints-including almost all of the complaints reported
via the Internet-did not have an attachment. Therefore, under EB's
practice, the Internet complaints would not have been included in EB's
enforcement spreadsheet. As a result, EB would not have included these
complaints in its searches for major alleged violators or repeat offenders
or have considered them in its decisions about investigation or
enforcement. Compounding this problem is FCC's consumer guidance on
submitting junk fax complaints. Some of this guidance encourages consumers
to send in the junk faxes they have received. However, none of the
guidance states that without a copy of the junk fax, EB analysts do not
review a complaint, include it in their investigations, consider it for
enforcement action, or include it in their searches for repeat offenders.
Moreover, although about half of the junk fax complaints are now reported
through FCC's Internet form, that form explains nothing about sending in
the fax to FCC or how to do so.

FCC faces management challenges in carrying out its junk fax
responsibilities. The Government Performance and Results Act of 1993
embodies recognized performance management practices that are to be
applied to an agency's efforts in carrying out its various
responsibilities. FCC does not appear to be applying these practices to
its junk fax monitoring and enforcement efforts; therefore, it lacks an
important tool in assessing and reporting its progress. For example, FCC
has no clearly articulated long-term or annual goals for junk fax
monitoring and enforcement. FCC is not using the information it collects
through junk fax complaints to measure its performance, set priorities, or
allocate resources. Additionally, FCC is not analyzing the nature and
frequency of the principal types of junk fax problems that complainants
are reporting. As a result, FCC has not fully addressed concerns that
consumers are raising, such as the percentages of complainants who
reported that they were continuing to receive junk faxes after calling the
opt-out number or the impact of the National Do-Not-Call Registry on junk
faxes. Furthermore, FCC cannot identify and monitor trends in complaints
and enforcement; therefore, it cannot target its resources to
complainants' greatest concerns or evaluate its own performance in
addressing those concerns. Having information on the nature and frequency
of problems with opt-out numbers and FCC's success in addressing these
problems is particularly important because Congress, in the 2005 Act,
specified opt-out procedures to protect consumers and businesses from
repeated unwanted faxes. Without analysis, FCC is limited in its ability
to understand the need for changes to its rules, procedures, or consumer
guidance that might help deter junk fax violations or give consumers a
better understanding of the junk fax rules. For example, many comments in
CGB's database indicated that consumers believed the National Do-Not-Call
Registry that applies to telemarketers should protect them from junk
faxes; however, FCC has only recently revised some of its guidance to
clarify whether the National Do-Not-Call Registry applies to fax
advertising. Most important, without establishing performance goals and
measures and without analyzing complaint and enforcement data, it is not
possible to explore the effectiveness of current enforcement measures.
Without first gaining an understanding of the effectiveness of current
enforcement measures, it is similarly not possible to determine whether
additional enforcement measures are necessary to protect consumers.

To address the procedural and performance management weaknesses we have
identified, we recommend that the Chairman of FCC (1) revise FCC's current
guidance to alert complainants of the necessity, under current FCC
practices, of submitting a copy of the junk fax(es) along with the
complaint; (2) develop data management strategies to make the consumer
complaint database more usable to enforcement staff and mitigate the
amount of time spent on manual data entry, as well as possible errors
resulting from this manual data entry; and (3) implement recognized
performance management practices to improve the performance and
accountability of FCC's junk fax enforcement efforts.

We provided a draft of this report to FCC for comment. Senior officials
from the commission's Enforcement and Consumer & Governmental Affairs
Bureaus provided oral comments. FCC generally concurred with our
recommendations and noted that they have already begun taking steps to
address our recommendations. FCC took issue with our conclusion that FCC's
current process for prioritizing junk fax complaints for enforcement does
not identify major alleged violators and repeat offenders. However, we
reiterate that EB's spreadsheet contains less than half of the total
number of junk fax complaints received and contains almost none of the
Internet complaints. FCC has done no analysis to determine whether the
complaints that have been excluded from enforcement consideration involve
the same entities they have identified as major alleged violators.
Moreover, EB relies on its spreadsheet to identify repeat offenders by
searching the spreadsheet for the names or telephone numbers of junk fax
violators that have already been warned by FCC with a citation to cease
their activities. Since EB is using a subset of all complaint information
received for this search, it is likely repeat offenders are being missed.
In addition, this limited search process is not as effective since even
one additional violation makes the repeat offender subject to further
enforcement action, including monetary forfeitures. FCC also provided
technical comments that were incorporated throughout this report as
appropriate.

Background

In 1991, Congress enacted TCPA to address a growing number of telephone
marketing calls and certain telemarketing practices thought to be an
invasion of consumer privacy and, in some cases, costly to consumers.
Provisions of this law generally prohibit anyone from faxing unsolicited
advertisements, or "junk faxes," to consumers or businesses. An
unsolicited advertisement under TCPA was defined as "any material
advertising the commercial availability or quality of any property, goods,
or services which is transmitted to any person without that person's prior
express invitation or permission."4

In addition, there are three distinct enforcement mechanisms for
violations of the junk fax provisions.5 First, persons or entities that
believe they have been sent a fax in violation of the act have a private
right of action-that is, they can sue the fax advertiser in an appropriate
court for damages and/or injunctive relief.6 Second, a state attorney
general (or another official or agency designated by the state) may bring
a civil lawsuit for damages and/or injunctive relief when a case involves
a pattern or practice of violations.7 Third, FCC is authorized to assess
and enforce a "forfeiture" against those who violate the junk fax
provisions-that is, a monetary

penalty against the faxer for violating the junk fax rules.8 Appendix I
provides a brief overview of how unsolicited advertisements sent via
telephone, the Internet, and cellular telephones are regulated and
enforced.

In 1992, FCC adopted rules implementing TCPA, including restrictions on
the transmission of junk faxes. In a footnote, the commission concluded
that entities that have an "established business relationship" (EBR) with
a recipient can conclude that they have the necessary invitation or
permission of the recipient to receive the fax advertisement.9 The
commission defined an EBR to mean the following:

In July 2003, FCC revised many of its telemarketing and fax advertising
rules under TCPA. In part, the commission reversed its prior conclusion
about an EBR, stating that its existence alone does not constitute the
express permission required by TCPA. Instead, the commission concluded
that a fax advertiser must first obtain written permission, including the
recipient's signature, before a fax can be sent. This requirement for
written permission was stayed by FCC pending reconsideration and, to date,
has not taken effect.11

Congress has now settled the question of whether prior written consent is
explicitly required with the Junk Fax Prevention Act of 2005. The act

(1) amends TCPA and codifies the EBR by expressly permitting businesses or
entities to fax unsolicited advertisements to those with whom they have an
EBR and (2) provides that prior permission may be in writing or otherwise.
The act does, however, impose new disclosure and opt-out requirements on
advertisers. Businesses or entities sending fax advertisements must now
include on the first page of the ad an opt-out notice, the date and time
the fax was sent, the registered name of the company sending the fax, and
the telephone number of the company sending the fax or the sending fax
machine's telephone number. The opt-out notice should clearly state that
the recipient may opt out of any future faxes and provide clear
instructions for doing so. The opt-out telephone number must be domestic
and free of charge to the recipient.12

Some businesses and individuals contract with fax broadcaster (also known
as "fax blasters") companies that transmit mass fax advertisements for
others. This practice is legitimate if the fax broadcaster complies with
the junk fax rules. In some instances, however, fax broadcasters fax
unsolicited advertisements to parties that have no EBR with the
advertising company. According to Verizon officials in an FCC filing, fax
broadcasters often use automatic dialers on outbound fax servers to send
large volumes of faxes in a short time, often in the middle of the night.
Furthermore, their dialing lists may include primary residential telephone
numbers as well as fax numbers. For example, according to these officials,
one fax broadcaster transmitted 10,600 calls over Verizon's network within
10 minutes.

Two FCC bureaus-CGB and EB-are primarily responsible for developing and
implementing rules and procedures to collect and analyze junk fax
complaints and for conducting investigations and enforcement, among their
other responsibilities. CGB develops and implements FCC's consumer
policies. CGB also addresses consumers' informal inquiries and works to
mediate and resolve complaints under FCC's jurisdiction.13 These include
complaints about the commission's regulated entities, including common
carrier, broadcast, wireless, satellite, and cable companies; complaints
about unauthorized changes in telecommunications providers (slamming);

complaints about unwanted e-mail messages on wireless devices such as
mobile telephones (spamming); and six types of TCPA-related complaints,
including junk faxes, violations of the do-not-call list, and time-of-day
violations (marketing between 9 p.m. and 8 a.m).14

EB is responsible for enforcing TCPA's provisions and the commission's
rules and orders. EB handles three major areas of enforcement: local
competition, public safety and homeland security, and consumer protection.
Enforcement officials said that they follow FCC's guidance on how to
prioritize these responsibilities, and that these priorities can change as
required by circumstances. EB's Telecommunications Consumers Division is
responsible for considering junk fax complaints for investigation and
enforcement.15

EB uses several procedures to select complaints for investigation and
possible enforcement. EB's formal enforcement actions consist of several
sequential steps. First, EB issues a citation, which notifies the faxer of
the complaint(s) against it and informs the faxer that its alleged
activity is illegal. The citation also states that further such activity
could make the faxer subject to a forfeiture action.16 If FCC receives
additional complaints against the faxer for violations of the junk fax
rules and substantiates the complaints, EB may pursue the forfeiture
action.17 This could lead to the involvement of the Department of Justice
(DOJ), which is responsible for collection. Figure 1 depicts FCC's process
for responding to junk fax complaints.

FCC's Consumer & Governmental Affairs Bureau Has Received an Increasing
Number of Junk Fax Complaints, Especially through Internet Forms

In 2000, CGB began using a new database to record the various types of
consumer complaints under FCC's jurisdiction, including complaints about
TCPA violations. For junk fax complaints, CGB staff accept the complaints;
enter information into the database; and scan the materials submitted with
the complaints, including copies of the alleged junk faxes. CGB staff mail
a letter to the majority of complainants acknowledging FCC's receipt of
their complaint. The letter states that FCC does not resolve individual
complaints and cannot award monetary or other damages directly to the
complainant. The letter also states that the complainant has the right to
take private legal action against any junk fax violator.18

In 2000, FCC recorded about 2,200 complaints; in 2005, that number had
grown to more than 46,000. Since 2002, FCC has reported quarterly on the
number of consumer complaints received, consolidating all six types of
TCPA complaints into one category. As a result, the number of junk fax
complaints has never been separately reported. Using CGB data, we found
that within the specific category of TCPA complaints, junk faxes
represented over 85 percent of the complaints logged in 2005. In fact,
when looking at all types of reported consumer complaints, junk fax
complaints have ranked as the second most frequently reported since
2003-second only to complaints about indecency and obscenity in radio and
television broadcasting.19 Appendix II lists the number of complaints
reported publicly by FCC, by type, from 2003 through 2005 and details the
percentage of the TCPA complaints that are junk fax complaints.

Both individual consumers and businesses can report junk fax complaints to
the commission by e-mail, postal mail, fax, telephone, or the Internet
(using an on-line complaint form-Form 475-that appears on FCC's Web site).
FCC documents both the type of complainant (individual consumer or
business) and the method of reporting (e-mail, postal mail, fax,
telephone, or the Internet). Figure 2 shows the number of junk fax
complaints that businesses and individuals reported through various
methods from 2003 through 2005. As the figures indicate, the number of
junk fax complaints reported by businesses dropped in 2005, but the number
of complaints reported by individuals increased, bringing the total for
both groups significantly higher in 2005 than in prior years.
Additionally, the number of complaints reported using the on-line
complaint form has increased, especially for individual consumers. In
2005, about half of all junk fax complaints were reported via the
Internet.

Figure 2: Number of Individual Consumer and Business Junk Fax Complaints,
by Method Submitted to FCC, 2003-2005

In their junk fax complaints to FCC, individuals and businesses often
described the adverse effects of junk faxes. We looked at hundreds of
complainant comments received from September through December 2005 and
found complaints that cited the costs of toner and paper, the disruption
of business activities during junk fax transmissions, and interruptions to
personal lives. For example, the complainants expressed frustration about
calls coming in the middle of the night and waking them up or causing
panic. FCC has recently addressed this issue.20 Some complainants noted
problems with the opt-out number-that is, the telephone number that they
should be able to call to stop receiving the faxes. For example, the
opt-out number did not work, was always busy, or was connected to a
prerecorded message.21 According to some complainants, calling the opt-out
number seemed to increase the number of junk faxes they received.
Additionally, some complainants expressed frustration with the
commission's response to their prior complaints.

Some complainants described junk faxes they had received as unbelievable
or potentially fraudulent. Among the frequently cited topics were hot
stocks, cheap vacations, low-interest mortgages, and low-cost health care.
We asked FCC officials whether they believed fraud was an issue with junk
faxes. They said that, although enforcement related to fraud falls outside
of FCC's jurisdiction, some of the faxes advertising stock tips could be
fraudulent and come under the jurisdiction of the Securities and Exchange
Commission (SEC). Federal Trade Commission (FTC) staff, whom we also asked
about fraud in connection with junk faxes, said they believed it was a
concern and they cited travel and mortgage offers. FTC staff also
mentioned pump-and-dump marketing schemes, which they also noted would
come under SEC's jurisdiction.22

FCC's Enforcement Bureau Has Generally Issued a Limited Number of
Citations Each Year since 2000 and Has Rarely Issued Forfeiture Orders

FCC's EB, established in November 1999, is responsible for investigating
and determining the appropriate enforcement action for all types of TCPA
complaints, including junk fax complaints. Currently, EB dedicates 11
staff (9 full-time analysts and 2 part-time attorneys) to work on junk fax
enforcement. According to EB officials, the bureau's overall staffing
levels have remained relatively stable over the years. As a result, the
staffing level for junk fax enforcement has remained about the same over
the past 5 years, even though the number of junk fax complaints has
rapidly increased.

Because of the large number of complaints and limited resources, EB does
not investigate each junk fax complaint. Instead, EB officials said, they
try to identify and take enforcement action against the major alleged
violators and repeat offenders who, they believe, have had the greatest
impact on consumers. EB defines a major alleged violator as a company,
carrier, or individual that has sent a large number of junk faxes to
complainants over a given period of time; it defines a repeat offender as
a company, carrier, or individual that continues to violate the junk fax
rules after receiving a citation from the commission.

To identify major alleged violators, the EB analysts responsible for
responding to junk fax complaints first review CGB's complaint database to
identify those complaints with an attached fax.23 EB officials said they
use only complaints with attached faxes because they contain the best
evidence for starting an investigation. The analysts then transfer
information from the complaint and the fax into an enforcement
spreadsheet.24 Periodically, the EB analysts sort the information in the
enforcement spreadsheet to align matching telephone numbers and identify
those that are repeated most often. According to enforcement officials,
the most frequently repeated telephone numbers are indicative of the major
alleged violators that are creating the most widespread problems for
consumers.25 In addition to using EB's spreadsheet to prioritize which
complaints receive enforcement action, EB will also initiate enforcement
action on the basis of complaints received from other sources, such as
congressional offices, FCC commissioners, or state attorneys general. In
the past year, about half of the citations issued by EB were based, at
least in part, on referrals from outside sources-the majority of these
outside sources were Members of Congress.

The next step in the investigation is for the EB analysts to identify the
major alleged violators associated with the most frequently repeated
telephone numbers. Finding their names and addresses involves contacting
carriers to learn who was paying for the telephone numbers from which the
alleged junk faxes were sent on the dates the faxes were sent. Waiting for
this information from the carriers can take several days. According to
enforcement officials, identifying and locating major alleged violators is
the most challenging aspect of junk fax enforcement. They said that
obtaining this information is becoming increasingly more challenging
because violators have become more adept at hiding their identity. As a
result, the officials said, the analysts have to spend more time on each
investigation.

Once a major alleged violator is identified, the analysts can decide
whether to begin the formal, two-step enforcement process of citation and
possible forfeiture action. EB officials said they consider the citation
to be their most efficient enforcement action because many, perhaps the
majority, of the violators are unaware that their activities are illegal
and could lead to monetary forfeitures. As a result, the officials said,
most violators that receive a citation do cease their junk fax activities.
However, EB officials could not provide data to support this assertion.26

EB officials have issued a limited number of citations over the past 6
years, and the annual number did not change substantially, except in
2002.27 As table 1 indicates, FCC issued 261 citations covering 1,456 junk
fax complaints from 2000 through 2005. EB officials cited competing
demands, personnel reductions, and the increasing skill of violators in
concealing their identity as reasons for the limited number of citations
issued.

Table 1: Citations Issued to Junk Fax Violators, Complaints Resulting in a
Citation, and Approximate Percentage of Total Annual Complaints Resulting
in a Citation, 2000-2005

                                        

Year         Number of Number of complaints      Approximate percentage of 
         citations issued       resulting in a         total annual number of 
                                      citation      complaints resulting in a 
                                                                     citation 
2000                29                  128                           5.7% 
2001                18                   72                            2.9 
2002               120                  639                            8.4 
2003                32                   68                            0.4 
2004                38                  230                            0.7 
2005                24                  319                            0.7 
Total              261                1,456                           1.3% 

Source: FCC.

EB officials also noted that in 2005 the average number of complaints that
each citation covered increased. They believe this demonstrates EB has
successfully targeted the major alleged violators. However, as shown in
table 1, the percentage of the total annual number of complaints resulting
in a citation has been less than 1 percent since 2003.

To identify repeat violators, EB analysts enter citation information into
their enforcement spreadsheet, including the telephone numbers of the
citation recipients, and search the information in the spreadsheet to
identify any complaints sent after the citation date against these
recipients. If any such complaints are found, the analysts decide whether
to take the second formal enforcement step-a forfeiture action-which
begins with the issuance of a notice of apparent liability. This notice
informs the alleged repeat violator that its actions make it liable for
forfeiture of a specific dollar amount.28 The notice must

o be issued within 1 year of the alleged violation(s) that forms the basis
for the notice;

o identify each specific statute, rule, order, term, or condition that
allegedly has been violated;

o explain how the alleged repeat offender's activities have violated the
junk fax rules and the dates of the violations; and

o specify the amount of the proposed monetary forfeiture.29

According to EB officials, their enforcement efforts are hampered by the
requirement that a notice of apparent liability be issued within 1 year of
an alleged repeat violation. For example, FCC's notice of apparent
liability against Fax.Com, Inc., stated that although FCC received some
consumers' correspondences and related declarations detailing additional
unsolicited advertisements received from Fax.Com, FCC was unable to
include these violations in the forfeiture action because they were beyond
the 1-year statute of limitations. This statute of limitations is
problematic, they said, because it takes time, after identifying a repeat
violation, to prepare the notice and obtain a sworn statement from the
complainant verifying that there was no EBR with the sender of the fax.
FTC staff said that they have a statute of limitations of at least 5 years
to enforce various telemarketing rules by seeking civil penalties, and
they agreed with FCC that a 1-year statute of limitations was restrictive.

Within a reasonable period of time, usually within 30 days of receiving
the notice, the alleged repeat offender must either pay the proposed
forfeiture in full or file a written response requesting that the proposed
forfeiture be rescinded or be reduced. If the proposed forfeiture penalty
is not paid in full in response to the notice, the commission, upon
considering all relevant information available to it, will issue an order
(1) canceling or reducing the proposed forfeiture or requiring that it be
paid in full and (2) stating the date by which the forfeiture must be
paid. If the recipient of the order fails to pay the fine within 30 days
from the date it is due, EB staff will refer the case to the commission's
Office of General Counsel (OGC).30

If the recipient ignores OGC's request for payment, the commission refers
the forfeiture order to DOJ for collection.31

EB officials stated that they have identified eight repeat offenders from
the 261 citations issued from 2000 through 2005, and that they have
pursued forfeiture actions against all of the repeat offenders they have
identified. Six of the eight repeat offenders have received forfeiture
orders, as detailed in table 2. The amounts of the monetary forfeitures
have increased, but no forfeitures have been collected to date. For
various reasons, five of the six forfeitures will never be collected. The
sixth forfeiture order accounts for about 78 percent of the fines FCC has
levied.32

Table 2: Status of Forfeitures Issued for Repeat Junk Fax Violations,
2000-2005

                                        

      Company      Date of     Number of Amount of           Status           
                  forfeiture  violations      fine  
                    order                           
Get-Aways,    March 2000           19   $85,500  Referred to FCC's OGC and 
Inc.                                             DOJ. DOJ closed this case 
                                                    because the company filed 
                                                    for bankruptcy.           
Tri Star      October 2000          8    47,000  Referred to both OGC and  
Marketing,                                       DOJ. DOJ closed this case 
Inc.                                             because litigation was    
                                                    not cost-effective        
                                                    considering the amount of 
                                                    potential recovery. Also, 
                                                    collection was            
                                                    questionable since        
                                                    Washington State had      
                                                    already received a        
                                                    judgment in excess of $2  
                                                    million dollars against   
                                                    the company.              
Carolina      November             34   230,000  Referred to both OGC and  
Liquidators,  2000                               DOJ. DOJ closed this case 
Inc.                                             because the company or    
                                                    its principal could not   
                                                    be found.                 
U.S. Notary,  October 2001         26    90,000  Referred to both OGC and  
Inc.                                             DOJ. DOJ closed this case 
                                                    because the company was   
                                                    out of business and       
                                                    unable to pay its debt.   
21st Century  January 2002        152 1,107,500  Referred to both OGC and  
Faxes                                            DOJ. DOJ closed this case 
                                                    because faxes were        
                                                    transmitted from outside  
                                                    the United States.a       
Fax.Com, Inc. January 2004        489 5,379,000  Referred to both OGC and  
                                                    DOJ. Litigation is        
                                                    ongoing. FCC staff is     
                                                    assisting DOJ to seek     
                                                    collection of the         
                                                    forfeiture.               

Source: FCC.

aIn 2003, Congress extended the reach of TCPA to violations by persons
outside of the United States if the recipient is within the United States.
Pub. L. No. 108-187, S: 12, 117 Stat. 2717 (2003).

Two additional enforcement actions were taken in early 2006, outside the
scope of our review. The remaining two forfeiture actions that EB began
are against Elf Painting and Wallpaper (Elf) and First Choice Healthcare,
Inc. (First Choice). FCC issued a notice of apparent liability to Elf in
December 2004 for continuing to send junk faxes after receiving a citation
in February 2003. The notice proposed a penalty of $22,500 for five
specific violations of the junk fax rules. A final forfeiture order
issuing a fine of $22,500 was released by FCC against Elf on March 10,
2006. In February 2006, FCC issued a notice of apparent liability against
First Choice, proposing a fine of $776,500 against the company for sending
at least 98 unsolicited fax advertisements after receiving a citation in
July 2004.

FCC's Procedures Have Emphasized Customer Service and Documentation, but
Enforcement Is Hampered by Multiple Factors

The strengths of FCC's junk fax procedures are that CGB has emphasized
both customer service and documentation of consumers' complaints; however,
these processes are resource-intensive and susceptible to error.
Additionally, CGB's database contains detailed information about
complaints, but does not present the information in a way that meets EB's
enforcement needs. While EB's approach to making investigation and
enforcement decisions is designed to make efficient use of limited
enforcement resources, it does not consider or factor in the majority of
complaints.

Focus on Customer Service and Documentation Is Time-consuming, and Data
Entry Errors May Occur

CGB has emphasized customer service by establishing multiple methods for
consumers to report junk fax complaints to FCC, providing multiple sources
of information about junk fax issues, and sending a letter in response to
the majority of the junk fax complaints. As previously discussed,
consumers can report junk fax complaints by postal mail, telephone, fax,
e-mail, and the Internet. FCC also staffs two consumer centers  to handle
consumer inquiries and provide junk fax guidance. This guidance is located
in several places, including FCC's Web page, a consumer fact sheet, and
the Internet consumer complaint form (Form 475). The letter that FCC sends
in response to complaints further advises consumers of their legal options
for addressing their complaints.

CGB consolidates and maintains information about complaints in its
database, together with any attachments. According to CGB officials, the
database has improved CGB's coding and counting of TCPA complaints.
However, entering complaint information into the database is
time-consuming. Data from complaints reported by postal mail, e-mail, fax,
and telephone must be entered manually, while data reported on FCC's
Internet complaint form (Form 475) can be electronically transferred from
the form to the database. However, CGB staff still have to review the
complaint summary from the consumer's complaint (by opening a text box
from the Form 475) to determine what type of TCPA violation is being
reported. As figure 3 shows, the form includes a text box that asks the
complainant, among other things, to describe the type of violation.33 CGB
staff then have to analyze the consumer's comment and manually code the
type of TCPA violation into the database.

Figure 3: FCC Form 475: Internet Complaint Form for General-Communications
Related Issues

Besides being time-consuming, CGB's data entry processes may cause errors
in the database, despite the periodic supervisory review that CGB
officials told us takes place. For example, errors can occur in coding
complaints, matching complaints with associated attachments, and dating
complaints. These problems may, to an unknown extent, affect the
reliability of CGB's complaint counts. They also may impact the quality of
the report that FCC is now required to provide to Congress on the number
of junk fax complaints received each year. Given the large numbers of
complaints, we do believe that overall trends can be reported, but the
specific numbers may not be accurate.

Errors in coding complaints can occur if the complainant's comments on the
Form 475 do not provide CGB staff with sufficient information to determine
what type of violation should be coded in the database, or if the CGB
staff simply miscode a comment. In a cursory review of 2005 complaint
data, we found several instances in which an Internet complaint was
miscoded. For example, CGB's database incorrectly identified one Internet
complaint as a junk fax complaint, even though the complainant was asking
for assistance in having charges removed that resulted from unsolicited
advertisements sent as text messages to the complainant's cellular
telephone.

Errors may also occur in matching complaints submitted by telephone,
e-mail, or the Internet with the associated faxes sent to FCC separately
by postal mail. Unless the consumer writes on the fax the unique
identifier that CGB assigns to every complaint on the fax and CGB staff
scan the fax into the database with the original complaint, the fax may be
entered into the database as a new complaint. CGB officials acknowledged
that these types of errors could be occurring, but they could not estimate
the extent of the problem.

CGB's Database Does Not Meet EB's Enforcement Needs, Leading to Duplicate
Data Entry and Demonstrating Limited Coordination

Although CGB's database contains detailed information about complaints,
the database does not present the information in a way that meets EB's
enforcement needs. According to EB officials, CGB's database does not meet
EB's enforcement needs because it does not contain separate fields for all
of the information EB requires, and not all fields of the database can

be easily searched.34 For example, the database does not contain separate
fields for the names of the businesses or individuals that may have sent
the junk faxes or for their telephone numbers.35 Most of this information,
if included in the complaint, has been entered into a comment field
manually by CGB staff or transferred electronically from a text box on the
Form 475. To find the most frequently reported businesses or individuals
(major alleged violators), EB staff would have to use the "Find" feature
to search the comment fields for one name or telephone number at a time.

Because CGB's database does not contain the data fields that EB needs for
enforcement, EB has developed a separate spreadsheet that contains the
requisite data fields and allows the data to be searched and sorted to
support EB's enforcement activities. This spreadsheet is not linked in any
way to CGB's database. Consequently, EB analysts manually enter the data
they need from CGB's database and from the faxes scanned in as attachments
to CGB's database. Furthermore, since the type of attachment is not
identified in the database, EB analysts have to open each attachment to
determine whether it is a fax. According to EB officials, the 9 EB
analysts who work on junk fax complaints spend about half their time on
data entry and the remainder of their time on enforcement activities.

This duplication of data management activities demonstrates that limited
coordination has taken place between CGB and EB in determining how best to
manage junk fax complaint data. For example, CGB staff currently have no
follow-up procedures to obtain any additional information from junk fax
complainants that may assist in investigations and enforcement.36 In
addition, EB staff acknowledged that maintaining a separate spreadsheet
takes resources away from investigation and enforcement.

Practice of Limiting Consideration for Enforcement to Complaints with
Attached Faxes Has Excluded the Majority of Reported Complaints

EB's practice is to investigate and consider taking enforcement action
only when a fax is provided with a complaint. As previously noted,
according to EB officials, a fax is not needed to issue a citation but may
be needed for other formal enforcement actions. EB staff enter data into
their spreadsheet only for those complaints from CGB's database that have
an attached fax. As figure 4 indicates, the majority of the junk fax
complaints in CGB's database for every year from 2003 through 2005 did not
have an attachment.37 The remaining complaints had an attachment that may
or may not have been a fax.38 For 2005, about 60 percent of the
complaints-including almost all of the complaints reported via the
Internet-did not have an attachment and, therefore, under EB's practice,
would not have been included in EB's enforcement spreadsheet. As a result,
EB would not have included these complaints in its searches for major
alleged violators or repeat offenders or considered them in its decisions
about investigation or enforcement.39

Figure 4: Number of Junk Fax Complaints with an Attachment That Could Be a
Fax, 2003-2005

With the majority of reported complaints excluded from EB's review, the
chances of identifying repeat offenders-those who have already received a
citation or a notice of apparent liability from FCC but have continued to
send junk faxes-are more limited.40 We searched CGB's 2005 complaint data
for selected company names and telephone numbers from issued citations,
using the "Find" feature, and found several complaints alleging violations
by citation recipients dated after the citations were issued. However,
none of these complaints had an attachment, and we did not find these
repeat offenders when we searched EB's spreadsheet. In addition, we found
six complaints of violations by Elf Painting and Wallpaper that postdated
the notice of apparent liability issued to this firm in December 2004. The
most recent complaint was dated November 2005. However, these complaints
were all reported via the Internet and lacked an attachment; therefore,
like the 2005 complaints we found against the other citation recipients,
they may not have been found in a search of EB's spreadsheet.

Compounding this problem is FCC's consumer guidance on submitting junk fax
complaints. Some of this guidance encourage consumers to send in the junk
faxes they have received. However, none of the guidance state that without
a fax, EB analysts do not review a complaint, include it in their
investigations, consider it for enforcement action, or include it in their
searches for repeat offenders.

For example, FCC's junk fax fact sheet and consumer center staff guidance
both encourage complainants to send in the fax if possible, as the
following excerpt from both documents indicates:

By contrast, the form for reporting complaints via the Internet says
nothing about sending in a copy of the fax to FCC and does not tell
complainants how to do so. As shown in figure 2, the Form 475 is designed
for consumers to report a wide variety of telephone complaints. As a
result, much of the information the form provides, as well as the
information it seeks from consumers, does not apply to junk fax
complaints. Only the last section of the form applies to junk fax
complaints.

Our review of a portion of CGB's 2005 complaint data revealed that several
consumers who reported junk fax complaints via the Internet were
frustrated because they could not attach the faxes they had received to
the form and could not find any guidance on how to send the faxes to FCC.
For example, some consumers said they had kept copies of the faxes but did
not know how to send them to FCC. Other consumers asked FCC to contact
them to let them know how to send the faxes.

Both CGB and EB officials said they do not explicitly state that a fax is
needed for enforcement because they do not want to discourage consumers
who no longer have the fax from sending in a complaint. In some instances,
consumers who received a junk fax may not have kept the fax. In addition,
CGB officials said the Form 475 asks for all of the information from the
fax that is useful for EB to consider for possible investigatory action or
to issue a citation, such as the telephone number of the company or
individual that sent the fax and the "opt-out" numbers provided on the
fax. However, enforcement officials will not see this information because,
under current practice, they are only looking for complaints that have an
attached fax to transfer to the EB spreadsheet, regardless of how complete
the information is on the Form 475.

FCC Faces Management Challenges in Carrying Out Its Junk Fax
Responsibilities

Congress passed the Government Performance and Results Act of 1993
(GPRA)41 to require federal agencies to take specific steps to improve
their performance. In general, GPRA sets forth recognized performance
management practices that agencies can apply in carrying out their
governmental responsibilities. These practices include establishing
long-term strategic goals and annual goals, measuring performance in
meeting these goals, and reporting publicly on the agency's progress.42
These performance management practices are critical in helping an agency
determine how well it is achieving intended outcomes. FCC does not appear
to be applying this model to its junk fax monitoring and enforcement
activities and, therefore, lacks an important tool for assessing and
reporting its progress.

The agency has not indicated, for example, whether its focus is to
decrease the number of junk fax complaints received, increase the number
of formal enforcement actions, or improve consumer guidance on how to stop
junk faxes. FCC's strategic goal includes a target for reducing the amount
of time it takes to respond to consumer complaints; however, this goal may
be encouraging FCC to shift its focus from monitoring and enforcement to
customer service. CGB officials maintained, for example, that they
generally send a letter to complainants within 2 to 3 days acknowledging
that FCC has received their complaint. While this letter provides
complainants with information on alternative enforcement mechanisms under
the law-that is, their private right of action and a civil action brought
by their state attorney general-it does not seek additional information
from them, if needed, to pursue an FCC enforcement action. Furthermore,
once CGB has responded to a complaint with the acknowledgment letter, it
codes the complaint as a closed case for CGB purposes, meaning that these
data can be purged from the database after

2 years. As a result, these data are no longer available for use in
identifying major alleged violators and repeat offenders or for
identifying and monitoring trends in complaints and assessing the effects
of enforcement actions.

FCC is not using the information on junk fax complaints that it collects
to measure its performance in carrying out its junk fax responsibilities.
Although CGB allocates considerable staff and other resources to entering
complaint data into its database, FCC is not analyzing these data and
using the results of its analyses to set priorities and allocate
resources. For example, it is not monitoring the number of junk fax
complaints recorded each year. Thus, FCC's quarterly reports identify the
total number of TCPA complaints, but do not break out the total for each
of the six types of TCPA complaints.43 As a result, the quarterly reports
mask the magnitude of the junk fax problem, which, as our analysis
indicates, accounts for about 85 percent of all TCPA complaints received
in 2005. In addition, the reports do not indicate that junk fax complaints
are the second most frequently recorded type of consumer complaint
overall. Without analyzing the data it collects to determine the relative
frequency of junk fax and other types of complaints, FCC is limited in its
ability to determine whether its staff and other resources are
appropriately aligned to address the problems consumers are experiencing.

Additionally, FCC is not analyzing the nature of the principal types of
junk fax problems complainants are reporting. This information appears in
a comment field, where CGB staff enter comments provided by complainants,
but the information cannot be analyzed electronically. As a result, FCC
may not be able to fully address concerns such as the percentages of
complainants who reported that they were continuing to receive junk faxes
after calling the opt-out number or who were receiving junk faxes in the
middle of the night. Furthermore, FCC cannot identify and monitor trends
in complaints and enforcement and, therefore, cannot target its resources
to complainants' greatest concerns or evaluate its own performance in
addressing those concerns. Having information on the nature and frequency
of problems with opt-out numbers and FCC's success in addressing these
problems is particularly important because Congress, in the 2005 Act,
required the opt-out number to protect consumers from repeated unwanted
faxes. FCC officials stated that these issues will be addressed once the
new junk fax rules are implemented.

Without analysis, FCC cannot explore the need for, or implement, changes
to its rules, procedures, or consumer guidance that might help deter junk
fax violations or give consumers a better understanding of the junk fax
rules. We found, for example, from our review of comments in CGB's
database from 2005, that many complainants seemed to believe the National
Do-Not-Call Registry applies to fax numbers as well as their home
telephone numbers. Repeatedly, complainants reported that they had asked
to have their fax numbers placed on this list, and they did not understand
why they were still receiving junk faxes. FTC, together with FCC,
implemented this list in 2003 to protect consumers from unwanted
telemarketing calls. FTC staff explained that the list does not apply to
fax numbers-that is, telemarketers must consult this list before placing
covered calls to consumers, but senders of fax advertisements are not
required to consult the list before faxing. FTC has provided guidance to
consumers that fax numbers are not covered under the National Do-Not-Call
Registry. Despite the many comments in CGB's database indicative of
complainants' misunderstanding, FCC has not considered this issue in a
rulemaking context or revised all of its guidance to clarify whether the
National Do-Not-Call Registry is applicable to fax advertising.44

Most important, without establishing performance goals and measures and
without analyzing complaint and enforcement data, it is not possible to
explore the effectiveness of current enforcement measures. Without first
gaining an understanding of the effectiveness of current enforcement
measures, it is similarly not possible to determine whether additional
enforcement measures are necessary to protect consumers.

Conclusions

Consumer frustration with junk faxes is evident in the rapidly increasing
number of complaints and in the time that consumers are willing to take to
seek relief from this type of unsolicited advertising. FCC has provided
consumers with several methods to submit their complaints about junk faxes
and several sources of consumer information about junk faxes, and it
promptly acknowledges receipt of most of the complaints. However, despite
collecting thousands of junk fax complaints, including the information
submitted with them, FCC has taken formal enforcement actions against
relatively few junk faxers. More important, FCC is simply not considering
the majority of complaints or any of the information contained in those
complaints when making decisions about investigations and enforcement.

We acknowledge that FCC cannot be expected to take enforcement action
against every junk fax complaint received. The growth in complaints,
together with limited resources, would make such an effort both impossible
and impractical. However, FCC has put in place data collection and
management processes that contain clear inefficiencies and limit its
ability to target major alleged violators and repeat offenders. Overall,
there has been limited collaboration between CGB and EB to ensure that
FCC's data processes are efficient, make the fullest use of the data
collected, and fully support the needs of EB.

FCC is not making use of performance management tools to improve its junk
fax enforcement. There are no goals or measures of success for handling
complaints or for investigating them and taking enforcement action. More
fundamentally, FCC has not done the analysis that would help it to
establish such goals and measures. Without analyzing the complaint data,
FCC does not know if it could be doing more to better target its limited
resources to address the concerns of consumers, such as seeking out faxers
that may be providing fake opt-out numbers or providing clearer guidance
to consumers on the impact of time restrictions and the National
Do-Not-Call Registry on junk fax concerns. FCC also has not established
what it needs to do to be able to completely and accurately report the
number of complaints it has received in carrying out its junk fax
responsibilities as required under the 2005 Act. Because FCC's junk fax
enforcement efforts have data management issues, lack data analysis, and
lack performance goals and measures, it is not possible to determine
whether any additional enforcement measures would better protect consumers
and businesses from receiving junk faxes. FCC simply cannot say whether
its junk fax enforcement efforts are successful in combating junk fax
advertising. However, the steady number of citations issued from year to
year should be cause for concern in the face of the rising number of junk
fax complaints.

Recommendations for Executive Action

FCC's current consumer guidance does not alert consumers to the necessity,
under FCC's current practice, of submitting a copy of the junk fax(es)
along with the complaint. Because this impacts the number of complaints
that FCC takes into consideration when searching for major alleged
violators and repeat offenders, we recommend that the Chairman of the
Federal Communications Commission direct staff to take the following two
actions:

o Revise consumer complaint guidance to make it clear to consumers that
they need to include a copy of the fax in order to make it possible for
any investigation or enforcement action to take place. This includes
revising the wording of the Consumer Fact Sheet, the Internet complaint
form (Form 475), the consumer center script, and any other junk fax
guidance provided to consumers.

o Revise the Form 475 so that it includes clear instructions for
complainants on how to submit a copy of the fax. This may include
developing procedures and instructions to let consumers know how to
electronically attach a scanned copy of the fax so that it accompanies
their complaint form.

FCC's current data collection and management processes contain
inefficiencies and adversely affect FCC's procedures for targeting major
alleged violators and repeat offenders. To begin to address these
problems, we recommend that FCC take the following action:

o Direct consumer and enforcement staff to develop data management
strategies to (1) make the consumer complaint database more usable for
FCC's staff and (2) mitigate the amount of time spent on manual data
entry, as well as possible errors, resulting from this manual data entry.
For example, these efforts could include, but not be limited to, revising
the Form 475 so that consumers identify through checked boxes, or another
similar method, the type of complaint they are filing. This could enhance
accuracy and improve staff efficiency by eliminating the need for FCC
staff to read a text box to identify the type of complaint and then enter
that information into the database. In addition, staff should develop
strategies that would enable enforcement staff to search all consumer
complaint information contained in the database to identify major and
repeat violators.

Finally, FCC should introduce recognized performance management practices
into its operations in order to improve the performance of its junk fax
enforcement efforts. Toward this effort, FCC should take the following
three actions:

o Establish goals and performance measures for receiving, acknowledging,
investigating, and taking enforcement actions on junk fax complaints.

o Use the information in the complaint database to analyze the nature and
scope of the complaints. FCC can then begin to determine whether its
current enforcement efforts are sufficient in combating junk faxers, and
whether any additional enforcement mechanisms might be needed to protect
consumers.

o Evaluate whether its staff and other resources are appropriately aligned
to carry out its junk fax responsibilities. This could include, but not be
limited to, evaluating the benefits of targeting staff resources to issue
more citations that could prompt more violators to cease their offending
behavior.

Agency Comments and Our Evaluation

We provided a draft of this report to FCC for comment. Senior officials
from the commission's Enforcement and Consumer & Governmental Affairs
Bureaus provided oral comments. FCC generally concurred with our
recommendations and noted that they have already begun taking steps to
address our recommendations. For example, FCC officials stated staff have
been working to implement a new data management system that will in part
consolidate all inquiry and complaint data into a new database by May
2006. FCC officials said this new database will identify possible
duplicate complaint records and increase the efficiency of processing junk
fax inquiries and complaints. They also said discussions on developing
additional modifications to the new database are now under way, including
modifications that would eliminate the need for EB to have its own
enforcement spreadsheet. In the interim, FCC officials said CGB and EB
staff are planning to link the EB spreadsheet to the new database, but the
officials could not provide a workplan describing how and when this
linkage would be accomplished.

FCC officials said they take issue with our conclusion that FCC's current
process for prioritizing junk fax complaints for enforcement may not
identify the major alleged violators and repeat offenders. FCC believes
that the number of complaints transferred to EB's spreadsheet for review,
although only a portion of the total number of complaints received, is
large enough to identify the major alleged violators and repeat offenders.
We reiterate that EB's spreadsheet contains less than half of the total
number of junk fax complaints received and contains almost none of the
Internet complaints. FCC has done no analysis to determine whether the
complaints that have been excluded from enforcement consideration involve
the same entities they have identified as major alleged violators.
Moreover, searching for repeat offenders (junk fax violators that have
already been warned by FCC to cease their activities) using a subset of
the complaints received is not as effective since even one additional
violation makes the entity subject to further enforcement action,
including monetary forfeiture.

Since FCC is beginning to explore changes to its database to eliminate the
need for a separate EB spreadsheet, as previously noted, it is possible
for FCC to also explore changes to the database that would improve EB's
ability to analyze all complaint data to better identify the major alleged
violators, as we have recommended. Improved search functions within the
database would also aid in identifying the repeat offenders.

FCC officials also said the agency had included a consumer protection goal
that covered junk fax issues in the agency's 2004 performance summary. FCC
officials also provided us with 2004 and 2005 CGB goals. However, after
reviewing these documents, we maintain that FCC does not have goals or
measures specifically related to junk fax enforcement. We reiterate that
the introduction of recognized performance management practices into FCC's
operations could improve the performance of its junk fax enforcement
efforts. FCC also provided technical comments that were incorporated
throughout this report as appropriate.

We are sending copies of this report to interested congressional
committees and the Chairman, FCC. We will make copies available to others
upon request. The report is available at no charge on GAO's Web site at h 
ttp://www.gao.gov.

If you or your staff have any questions concerning this report, please
contact me on (202) 512-2834 or [email protected] . Contact points for
our Offices of Congressional Relations and Public Affairs may be found on

the last page of this report. Key contributors to this report were Faye
Morrison, Assistant Director; Kimberly Berry; Elizabeth Eisenstadt; Edda
Emmanuelli-Perez; Chad Factor; Michele Fejfar; Mike Mgebroff; Josh Ormond;
Terri Russell; and Mindi Weisenbloom.

Mark L. Goldstein Director, Physical Infrastructure Issues

Statutes Protecting Consumers from Unsolicited Advertisements Appendix I

This appendix provides a brief description of how unsolicited
advertisements provided through commercial telephone calls and e-mails are
regulated and how the regulations are enforced.

Regulating Unsolicited Telephone and E-mail Advertisements

In response to consumer frustration and dissatisfaction with advertising
via unsolicited telephone calls and e-mails, Congress has passed several
statutes directing the Federal Communications Commission (FCC) and the
Federal Trade Commission (FTC) to regulate unsolicited advertisements
delivered by telephone or e-mail. The Telephone Consumer Protection Act of
1991 is FCC's basic statutory mandate with respect to telemarketers and
applies to unwanted telemarketing calls and facsimile (fax)
solicitations.1 The Telemarketing and Consumer Fraud and Abuse Prevention
Act of 1994 is FTC's specific statutory mandate regarding telemarketing.2
The Controlling Assault of Non-Solicited Pornography & Marketing Act of
2003 (CAN-SPAM Act) provides FTC with the authority to regulate commercial
e-mails whose "primary purpose" is the "commercial advertising or
promoting of a commercial product or service."3 FCC has authority under
the CAN-SPAM Act to regulate unsolicited commercial messages on wireless
devices.4 Thus, FCC's and FTC's enforcements are based upon different
statutory authority.

FCC's enforcement efforts are generally accomplished through an
administrative process. FTC's enforcement actions are usually filed in
federal district court and seek injunctive relief; consumer redress; and,
in some circumstances, civil penalties. The latter actions are filed by
the Department of Justice (DOJ) on behalf of FTC. Both commissions can
obtain civil penalties up to $11,000 per violation.

FCC - The Telephone Consumer Protection Act of 1991

The Telephone Consumer Protection Act of 1991 (TCPA) was created in
response to consumer concerns about the growing number of unsolicited
telemarketing calls to their homes and the increasing use of automated and
prerecorded messages. FCC's rules under that act prohibit telephone
solicitation calls to homes between the hours of 9 p.m. and 8 a.m. Also,
under the rules, anyone making a call to a home, must provide his or her
name, the name of the person or entity on whose behalf the call is being
made, and a telephone number or address at which the person or entity may
be contacted. These telemarketing rules do not apply to calls or messages
placed with a consumer's prior expressed permission, by or on behalf of a
tax-exempt nonprofit organization, or from a person or organization with
whom the consumer has an established business relationship (EBR). TCPA
telephone solicitation violations are enforced in the same manner as TCPA
junk fax violations.

FTC - The Telemarketing and Consumer Fraud and Abuse Prevention Act of
1994

The purpose of the Telemarketing and Consumer Fraud and Abuse Prevention
Act of 1994 was to combat telemarketing fraud by providing law enforcement
agencies with new tools and to give consumers new protections. The act
directed FTC to issue a rule prohibiting deceptive and abusive
telemarketing acts or practices, and specified, among other things,
certain acts or practices FTC's rule must address, including
"...unsolicited telephone calls which the reasonable consumer would
consider coercive or abusive of such consumer's right to privacy."5

FTC issued its original Telemarketing Sales Rule (TSR) in 1995. TSR
requires certain disclosures and prohibits misrepresentations. Some of the
provisions of the rule will include the following: (1) the rule restricts
calls to the hours between 8:00 a.m. and 9:00 p.m.; (2) the rule forbids
telemarketers from calling consumers if they have been asked not to call;
and (3) the rule requires certain prompt disclosures, prohibits certain
misrepresentations and lying to get consumers to pay, and makes it illegal
for a telemarketer to withdraw money directly from a checking account
without the account holder's specific, verifiable authorization. The TSR
rule was amended in 2003. The amended TSR established the National
Do-Not-Call Registry. In addition, the amended TSR places restrictions on
unauthorized billing, reduces abandoned calls, and requires caller
identification transmissions.6

Several types of calls are expressly exempted from TSR coverage, including
calls initiated by consumers in response to direct mail (provided certain
disclosures are made), calls initiated by consumers in response to
advertisements in the general media (such as newspapers or media), and
business-to-business calls.7 Catalog sales calls also are exempt.

Under the statute, violations of TSR are treated as "unfair or deceptive
acts or practices in violation of the FTC Act."8 FTC's enforcement actions
generally are accomplished by seeking injunctive relief and consumer
redress. Under some circumstances (e.g., do-not-call violations),
injunctions and sometimes civil penalties (up to $11,000 per violation)
are sought. Actions seeking civil penalties are filed by DOJ on behalf of
FTC and are less common. FTC itself files and litigates its actions
seeking injunctive relief and consumer redress.

States, through their attorneys general, may bring civil actions on behalf
of their residents to enjoin the violation; enforce compliance with TSR;
obtain damages, restitution, or other compensation on behalf of residents;
and obtain such other relief as the court may deem appropriate.9 Private
parties may also bring a civil action within 3 years after discovery of
the violation, if the amount in controversy exceeds the sum or value of
$50,000 in actual damages for each person adversely affected by such
telemarketing. Such an action may be brought to enjoin such telemarketing,
enforce compliance with any rule, obtain damages, or obtain such
additional and other relief as the court may deem appropriate.10

The National Do-Not-Call Registry

In January 2002, FTC proposed a National Do-Not-Call registry. One year
later, FTC amended its TSR to create the national registry and prohibit
covered telemarketing calls to consumers who registered their telephone
numbers. FCC revised its regulations pursuant to TCPA in June 2003,
requiring telemarketers under its jurisdiction to comply with the
requirements of the national registry.

In March 2003, Congress passed the Do-Not-Call Implementation Act, which
authorized FTC to establish fees "sufficient to implement and enforce" the
national registry.11 In September 2003, in response to legal challenges to
the national registry and requirements, Congress passed additional
legislation (1) expressly authorizing FTC to implement and enforce a
National Do-Not-Call Registry under the Telemarketing and Consumer Fraud
and Abuse Prevention Act and (2) ratifying the National Do-Not-Call
Registry regulation as promulgated by FTC in 2002.12

Under FTC's and FCC's rules, the registry covers both traditional (wired)
and mobile (wireless) telephones. The registry is national in scope,
applies to all telemarketers (with the exception of certain nonprofit
organizations), and covers both interstate and intrastate telemarketing
calls. Commercial telemarketers are not allowed to call a consumer if his
or her telephone number is on the registry, unless there is an EBR between
the seller and the consumer or the consumer has given prior written
consent to be called.13 Nontelemarketing calls, such as political
fundraising, market research surveys, or debt collection, are not
prohibited by the registry's provisions. The national registry started
accepting consumer telephone number registrations in late June 2003,14 and
telemarketers began accessing the national registry to obtain registered
consumer telephone numbers in September 2003. FTC and FCC began enforcing
the provisions of the national registry in October 2003.

FTC and FCC have different but overlapping jurisdiction over the
activities of entities that make telemarketing calls. FTC's authority
under its telemarketing law is limited to entities engaged in interstate
telemarketing, while FCC's authority covers both intrastate and interstate
entities. In addition, by statute, certain entities are wholly or
partially exempt from FTC jurisdiction but remain subject to FCC
jurisdiction. These entities include common carriers, banks, credit
unions, saving and loans institutions, airlines, nonprofit organizations,
and insurance companies.

FTC and FCC do not take action on every complaint alleging a violation of
the national registry provision; rather, they consider a number of
factors- such as the number and persistence or duration of complaints
filed against a telemarketer, the nature of the claims made by the
telemarketer, and any past history of complaints or law violations-to
determine whether to take action against a telemarketer for violations of
the national registry provision.

The CAN-SPAM Act of 2003

The CAN-SPAM Act of 2003 establishes requirements for those who send
commercial e-mail, spells out penalties for spammers and companies whose
products are advertised in spam if they violate the law, and gives
consumers the right to ask e-mailers to stop spamming them.15 The law
covers e-mail whose primary purpose is advertising or promoting a
commercial product or service. A "transactional or relationship message"
(e.g., an e-mail that facilitates an agreed-upon transaction or updates a
customer in an EBR) may not contain false or misleading routing
information, but otherwise is exempt from most provisions of the CAN-SPAM
Act. State laws specifically related to commercial e-mail are preempted.
However, state laws that are not specifically applicable to e-mail, such
as trespass, contract, tort law, or state laws that relate to fraud or
computer crimes, are not preempted.16

Under the CAN-SPAM Act's major provisions, false or misleading header
information is prohibited. An e-mail's "From," "To," and routing
information (including the originating domain name and e-mail address)
must be accurate and identify the person who initiated the e-mail. The law
prohibits deceptive subject lines and requires that the e-mail give
recipients an opt-out method. Specifically, the sender must provide a
return e-mail or another Internet-based response mechanism that allows a
recipient to request that the sender not send future e-mails to the e-mail
address. Senders must honor opt-out requests. Additionally, the act
requires that the commercial e-mail be identified as an advertisement and
include the sender's valid physical postal address.

FTC (and various other agencies) is authorized to enforce the CAN-SPAM
Act. Each violation is subject to fines of up to $11,000 per violation.
FTC also responds to deceptive commercial e-mail as a violation of the FTC
act. State attorneys general, state law enforcement agencies, and Internet
service providers (ISP) may also bring suit under CAN-SPAM for statutorily
set damages.17 In a December 2005 report to Congress, FTC stated that the
commission had brought 20 cases alleging violation of the act.18 The
report also noted that at the state level, three attorneys general have
filed a total of three actions-one with FTC as a coplaintiff-in federal
court, naming 15 defendants under the CAN-SPAM Act. In addition, the
report stated that ISPs have also filed CAN-SPAM Act suits initially
against more than 100 known defendants and more than 580 unknown (John
Doe) defendants.

DOJ has the authority to enforce the criminal penalties established under
the act.19 Criminal penalties may include fines or imprisonment. According
to the legislative history of the act, aggressive civil and criminal
enforcement actions were needed to curb the growth of spam on all fronts.
The criminal provisions were targeted to those who use fraudulent and
deceptive means to send unwanted e-mail messages. The need for these
criminal provisions was based, in part, on a study by FTC that found that
66 percent of spam contained some kind of false, fraudulent, or misleading
information, and one-third of all spam contained a fraudulent return
e-mail

address that was included in the routing information, or header, of the
e-mail message.20

Section 4 of the CAN-SPAM Act criminalized five types of activities in
connection with e-mail, set forth the maximum penalties for each type, and
called for the U.S. Sentencing Commission to consider new sentencing
guidelines.21 Specifically, the five types of activities are as follows:

o accessing a protected computer without authorization to send multiple
commercial e-mail messages,

o using open relays with intent to deceive in sending multiple commercial
e-mail messages,

o using materially false header information in sending commercial e-mail
messages,

o falsely registering e-mail accounts or domain names in connection with
sending multiple commercial e-mail messages, and

o falsely claiming to be the registrant of Internet protocol addresses for
sending spam.22

The criminal penalties fall into three tiers. First, a 5-year statutory
maximum applies when the CAN-SPAM violation is in furtherance of any
felony under state or federal law, or when the defendant has previously
been convicted of an offense under 18 U.S.C. S: 1037.23 Second, a 3-year
maximum applies for convictions of hacking into a computer, or to use a
computer system that the owner has made available for other purposes, as a
conduit for bulk commercial e-mail or for other violations of 18 U.S.C. S:
1037 (a) when one of several additional conditions apply. The conditions
relate to the measure of the economic gain or loss, the volume of e-mail
sent, the number of false registrations used, or whether the defendant had
a leadership role in the offense. Finally, a 1-year statutory maximum
applies for any other violation of 18 U.S.C. S: 1037. In addition, 18
U.S.C. S: 1037(c) allows DOJ to seek the criminal forfeiture of both
property obtained from spamming profits and the computers used to send the
spam. In December 2005, FTC reported to Congress that DOJ had brought four
criminal prosecutions under the CAN-SPAM Act, and that numerous other
nonpublic investigations were ongoing.24

Lastly, the CAN-SPAM Act supplements some consumer protections that were
already established by TCPA for regulating unwanted text messages and
e-mail on mobile devices. Together, the two laws impose limitations on
both unsolicited telephone marketing calls and any other calls to a paging
service, cellular telephone service, other radio common carrier service,
or any service for which the person being called would be charged for the
call. Under TCPA rules, a "call" includes text messaging if the messaging
is sent to a telephone number rather than an e-mail account. Electronic
messages can be sent to mobile devices using a variety of methods. The
type of technology used to send the electronic message determines how the
electronic message is regulated.

The CAN-SPAM Act required that FCC adopt rules to protect consumers from
receiving unsolicited mobile service commercial messages.25 Under the act,
a mobile service commercial message is a commercial e-mail message that is
transmitted directly to a wireless device that is utilized by a subscriber
of commercial mobile service in connection with that service. The act
defines an e-mail message as a message having a unique e-mail address that
includes a reference to an Internet domain. FCC issued rules in August
2004.

FCC adopted a general prohibition on sending commercial messages to any
address referencing an Internet domain name associated with wireless
subscriber message services. To assist the senders of such messages in
identifying those subscribers, FCC requires commercial radio service
providers to submit those names to the commission, for inclusion on a
public list. FCC pursues violations of both CAN-SPAM and TCPA as it
relates to wireless devices under its general enforcement authority.

As part of our study, we considered whether additional enforcement
measures might be necessary to protect consumers from junk faxes, and
whether establishing junk fax penalties and enforcement actions for repeat
violators or abusive violations similar to the criminal penalties under
CAN-SPAM would have a greater deterrent effect. As explained in the letter
of this report, without FCC establishing performance goals and measures
and analyzing complaint and enforcement data, it is not possible to
explore the effectiveness of current enforcement measures. Without first
gaining an understanding of the effectiveness of current enforcement
measures, it is similarly not possible to determine whether additional
enforcement measures are necessary to protect consumers. We did, however,
ask federal government officials, representatives of the state attorneys
general, consumer advocates, and business associations for their opinions
regarding whether additional enforcement measures are currently necessary
to enforce junk fax violations. Those with whom we spoke generally did not
believe that additional measures were necessary at this time and did not
support imposing criminal sanctions on junk fax violators similar to those
imposed on spammers under CAN-SPAM.26 A few of those with whom we spoke
thought that the role of the telephone companies might be expanded,
similar to the role of ISPs under the CAN-SPAM Act, so that telephone
companies could bring suit against junk faxers using their networks.

Scope and Methodology Appendix II

The Junk Fax Prevention Act of 2005 required GAO to report to Congress on
FCC's enforcement of the junk fax laws. Accordingly, we answered the
following questions: (1) What procedures have FCC established for taking
action on junk fax complaints-including receipt, acknowledgment,
investigation, and enforcement-and to what extent has it taken such
action? (2) What are the strengths and weaknesses of FCC's junk fax
procedures? and (3) What challenges do FCC face in carrying out its junk
fax responsibilities?

To determine FCC's procedures for taking action on junk fax complaints, we
reviewed provisions of TCPA as well as FCC's rules and procedures for
implementing the provisions of the act. We interviewed officials from
FCC's Consumer & Governmental Affairs Bureau (CGB)-whose responsibilities
include developing FCC rules and accepting and acknowledging
complaints-and FCC's Enforcement Bureau-whose responsibilities include
junk fax enforcement. Additionally, we reviewed FCC's guidance to
complainants for submitting junk fax complaints as well as FCC's
procedures for receiving and documenting these complaints. Finally, we
obtained and reviewed FCC's procedures for determining which complaints
would receive further investigative and enforcement actions.

To determine the extent to which FCC has taken action on junk fax
complaints, we obtained and analyzed FCC's database for documenting junk
fax complaints and the spreadsheet used for determining investigatory and
enforcement actions. We obtained summary data on the number of complaints
received from 2000 through 2005, by source and method. We also obtained
detailed information on the amount of formal enforcement actions taken
against junk faxers since the formation of FCC's Enforcement Bureau.
Further, to determine the type of concerns expressed by consumers and
businesses, we reviewed some individual consumer and business comments
submitted to FCC as part of the junk fax complaints and contained in FCC's
database.

To assess the reliability of FCC's complaint data, we interviewed FCC
officials responsible for the database regarding data entry and control
procedures and reviewed existing documentation about the system. We
conducted limited electronic tests on 2005 data to determine missing data
and duplicative complaint identification numbers; these tests revealed
only minor problems. We also conducted manual reviews to identify any
discrepancies in the database. For example, we reviewed a portion of the
comment fields in the database and found that some complaints that were
coded as junk fax complaints should not have been. Since this type of
review requires reading the comments for each complaint entered, which is
resource-intensive, we did not review all of the comments to determine the
extent of this problem. CGB officials acknowledged limitations of the
data, including reliability problems in previous years of tracking
complaint information, possible inaccuracies in coding, and continual
changes to more recent data as additional complaints are added. We
determined that the data were sufficiently reliable to present overall
trends and approximate figures. Specifically, we report only overall
complaint numbers for 2000 through 2002, and approximate numbers at a more
detailed level for complaints from 2003 through 2005.

To determine the strengths and weaknesses of FCC's junk fax procedures, we
analyzed these procedures, including those used to determine which junk
fax complaints would be considered for further investigatory and
enforcement actions. In addition, we reviewed business and consumer
comments submitted to FCC during junk fax rulemaking and reconsideration
of existing rules. We also analyzed all junk fax consumer complaint
guidance provided by FCC to determine if the guidance was consistent with
the enforcement procedures.

To determine the challenges FCC faces in carrying out its junk fax
responsibilities, we reviewed provisions of the Government Performance and
Results Act of 1993, as well as documents and records used by FCC to
establish goals and performance measures-that is, budget justifications,
performance summaries, and strategic plans. We also reviewed FCC's
quarterly complaint reports to determine the level of analysis being
conducted on junk fax complaints.

Finally, we used existing statutes and regulations to provide information
on additional enforcement measures and penalties that have been
established to protect consumers from other types of unsolicited
advertising. We interviewed FTC staff, representatives from the National
Association of Attorney's General, and representatives from industry
groups to obtain more information on different enforcement rules and
actions.

We conducted our work from November 2005 through March 2006 in accordance
with generally accepted government auditing standards.

Consumer Complaints Reported to FCC Appendix III

Table 3: Number of Complaints Reported Publicly by FCC, by Type, 2003-2005

                                        

                                        Complaints, by     
                                         calendar year     
Type of complaints                                 2005      2004     2003 
Cable and satellite services                                       
Billing and rates                                   290       289      256 
Cable modem services                                148        93      113 
Connections to cable TV system                        0         0        0 
Satellite home viewer                                 0         0        0 
improvement act                                                    
Accessibility issues                                 75        63       88 
Programming issues                                  600       152      137 
Service-related issues                              264       145      425 
Radio and television                                              
broadcasting                                                      
Accessibility issues                                 86       102      337 
Loud commercial                                       0         0       24 
Howard Stern commentary                               0        20        0 
Programming - general criticism                   1,071       615      351 
Programming -                                   233,471 1,405,419  166,683 
indecency/obscenity                                                
Programming - religious                               0         0        4 
Other programming issues                            106       136      260 
Wireless telecommunications                                       
Billing and rates                                13,065    14,546   10,592 
Carrier marketing and                             3,080     3,104    2,133 
advertising                                                        
Contract - early termination                      3,956     3,958    2,386 
Cramming                                              0         0        0 
Number portability                                    0     4,839    3,447 
Equipment                                         1,832         0      633 
Service quality                                   4,009     3,031    2,166 
Wireline telecommunications                                       
Billing and rates                                13,562    14,775   17,956 
Carrier marketing and                               433     1,952    2,834 
advertising                                                        
Cramming                                          1,761       526    2,450 
Service quality                                   2,093     1,487      470 
Slamming                                          1,932     4,535    6,052 
Telephone Consumer Protection                    54,932    37,702   25,674 
Act                                                                

Source: FCC.

Figure 5: Percentage of TCPA Complaints Reported in FCC Quarterly Reports
That Are Junk Fax Complaints, 2003-2005

(543153)

www.gao.gov/cgi-bin/getrpt? GAO-06-425 .

To view the full product, including the scope

and methodology, click on the link above.

For more information, contact Mark L. Goldstein, (202) 512-2834,
[email protected].

Highlights of GAO-06-425 , a report to congressional committees

April 2006

TELECOMMUNICATIONS

Weaknesses in Procedures and Performance Management Hinder Junk Fax
Enforcement

The Telephone Consumer Protection Act of 1991 prohibited invasive
telemarketing practices, including the faxing of unsolicited
advertisements, known as "junk faxes," to individual consumers and
businesses. Junk faxes create costs for consumers (paper and toner) and
disrupt their fax operations. The Junk Fax Prevention Act of 2005
clarified an established business relationship exemption, specified
opt-out procedures for consumers, and requires the Federal Communications
Commission (FCC)-the federal agency responsible for junk fax
enforcement-to report annually to Congress on junk fax complaints and
enforcement. The law also required GAO to report to Congress on FCC's
enforcement of the junk fax laws. This report addresses (1) FCC's junk fax
procedures and outcomes, (2) the strengths and weaknesses of FCC's
procedures, and (3) FCC's junk fax management challenges.

What GAO Recommends

GAO recommends that FCC revise its junk fax guidance for consumers,
develop data management strategies, and implement recognized performance
management practices in carrying out its junk fax responsibilities. FCC
officials said they generally concur with the recommendations. FCC also
provided technical comments that were incorporated throughout this report
as appropriate.

FCC has procedures for receiving and acknowledging the rapidly increasing
number of junk fax complaints, but the numbers of investigations and
enforcement actions have generally remained the same. In 2000, FCC
recorded about 2,200 junk fax complaints; in 2005, it recorded over
46,000. Using its procedures to review the complaints, FCC's Enforcement
Bureau (EB) issued 261 citations (i.e., warnings) from 2000 through 2005.
EB has ordered six companies to pay forfeitures for continuing to violate
the junk fax rules after receiving a citation. The six forfeitures totaled
over $6.9 million, none of which has been collected by the Department of
Justice for various reasons. EB officials cited competing demands,
resource constraints, and the rising sophistication of junk faxers in
hiding their identities as hindrances to enforcement.

An emphasis on customer service, an effort to document consumers'
complaints, and an attempt to target enforcement resources efficiently are
the strengths of FCC's procedures; however, inefficient data management,
resulting in time-consuming manual data entry, data errors, and-most
important-the exclusion of the majority of complaints from decisions about
investigations and enforcement, are weaknesses. FCC's guidance to
consumers does not provide them with all of the information they need to
support FCC's enforcement efforts.

FCC faces management challenges in carrying out its junk fax
responsibilities. The commission has no clearly articulated long-term or
annual goals for junk fax monitoring and enforcement, and it is not
analyzing the junk fax data. Without analysis, FCC cannot explore the need
for, or implement, changes to its rules, procedures, or consumer guidance
that might help deter junk fax violations or give consumers a better
understanding of the junk fax rules. Most important, without performance
goals and measures and without analysis of complaint and enforcement data,
it is not possible to explore the effectiveness of current enforcement
measures.

Citations Issued to Junk Fax Violators, Complaints Resulting in a
Citation, and Approximate Percentage of Total Annual Complaints Resulting
in a Citation, 2000-2005

Year  Citations issued Complaints resulting      Approximate percentage of 
                                 in a citation         total annual number of 
                                                    complaints resulting in a 
                                                                     citation 
2000                29                  128                           5.7% 
2001                18                   72                            2.9 
2002               120                  639                            8.4 
2003                32                   68                            0.4 
2004                38                  230                            0.7 
2005                24                  319                            0.7 
Total              261                1,456                           1.3% 

Source: FCC.
*** End of document. ***