The Federal Communications Commission (the "FCC") has issued an important Report and Order1 governing the use of any telephone facsimile machine,2 computer, or other device to send "unsolicited advertisements" to telephone facsimile machines, personal computers equipped with, or attached to, modems, or computerized fax servers (the "Fax Advertisement Rules").3 Unsolicited advertisements are 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

The Fax Advertisement Rules will become effective on August 25, 2003. Below is a summary of the Rules, pertinent to associations that wish to communicate with their members via facsimile.

Two Primary Requirements of the Fax Advertisement Rules

To comply with the Fax Advertisement Rules, an association that wishes to send advertisements to its members' fax machines ("Fax Advertisements")5 must comply with the following conditions, as further described below: (i) prior to sending Fax Advertisements to a member, an association must obtain the express written invitation or permission of such member to receive Fax Advertisements from the association; and (ii) an association must include in all Fax Advertisements certain identifying information.6

1. Prior Express Written Invitation or Permission

The Fax Advertisement Rules require a person or entity to obtain the prior express written invitation or permission of the recipient before transmitting Fax Advertisements to the recipient. In clarifying what does, and what does not, constitute an acceptable express invitation or permission to deliver Fax Advertisements, the FCC concluded as follows:

What does constitute sufficient consent

• writing and must include the recipient's signature. The term "signature" includes an electronic or digital form of signature to the extent that such form of signature is recognized as a valid signature under applicable federal law or state contract law.7
• The recipient must clearly indicate that he or she consents to receiving Fax Advertisements from the company to which permission is given, and the recipient must provide the recipient's fax number to which Fax Advertisements may be sent.8
• Companies may obtain consent to transmit their Fax Advertisements through such means as direct mail, websites, and interaction with customers in their stores or elsewhere. As to customer interaction, the FCC has clarified that a company that requests a fax number on an application form could, for example, include a clear statement indicating that, by providing such fax number, the individual or business agrees to receive Fax Advertisements from that company. Such statement, if accompanied by the recipient's signature, will constitute the necessary prior express permission to send Fax Advertisements to that individual or business.9

Examples of what does not constitute sufficient consent

• In a change from the prior rules, the new Fax Advertisement Rules provide that an established business relationship will no longer be sufficient to show that an individual or business has given their express permission to receive Fax Advertisements.10 Accordingly, an association will not be deemed to have permission to send Fax Advertisements to persons or entities based on such persons' or entities' membership in the association alone.
• In order to send Fax Advertisements to a person or entity, it is not sufficient to merely obtain from the recipient the recipient's fax number nor is it sufficient to obtain the recipient's consent to publish the fax number in the directory of the association.11
• The permission to send Fax Advertisements cannot be in the form of a "negative option." A Fax Advertisement containing a telephone number and an instruction to call if the recipient no longer wishes to receive such faxes, would constitute a "negative option."12
• Facsimile requests seeking permission to transmit Fax Advertisements to a recipient are also prohibited.13

Unless the Fax Advertisement rules are modified or clarified prior to their effective date, associations seeking permission in their membership applications and/or dues statements to send Fax Advertisements may wish to include the following language in such documents:

Unless you do not wish for [Insert Association Name] to send you advertisements via facsimile, please provide below the facsimile number through which you wish to receive facsimile advertisements from [Insert Association Name]. By providing [Insert Association Name] with this facsimile number and by signing this document at the below, you have agreed to receive facsimile advertisements from [Insert Association Name].

Facsimile Number __________________________

Signature __________________________

2. Sufficient Identification on the Fax

In a margin at the top or bottom of each transmitted page, or on the first page of the transmission, each Fax Advertisement must clearly contain the following information:

1. the date and time the Fax Advertisement is sent;
2. an identification of the business, other entity, or individual sending the message;14 and
3. the telephone number of the sending machine or of such business, other entity, or individual sending the message.

Liability for Violating the Fax Advertisement Rules

Enforcement action at the FCC against violators of the Fax Advertisement Rules may include forfeiture proceedings pursuant to which the FCC may impose fines, cease and desist proceedings, and injunctions.15 The maximum fine at the FCC for a single violation by an association of the Fax Advertisement Rules would generally be $11,000.16

Persons receiving Fax Advertisements sent in violation of the Fax Advertisement Rules may file suit in state court against the violator, and may recover actual damages or receive up to $500 in damages for each violation, whichever is greater. If the court finds that the entity willfully or knowingly violated the law, violators may be liable for an amount equal to not more than three times this amount.17

If you have any questions or wish to discuss the implications of the Fax Advertisement Rules on your association or other business entity, please contact Alan Fishel or Jeffrey Rummel at the numbers below.

Special Note: We are aware that the American Society of Association Executive (ASAE) has been in discussions with the FCC concerning this issue, and has submitted two petitions to the agency requesting, respectively, "emergency clarification" of the FCC's Order and a stay of the Order. If our association clients wish to convey their views to the FCC about this controversial rule, this can be done:

1. directly to the FCC
2. through ASAE, by contacting its Public Policy Division at 202-626-2703; or
3. through Arent Fox, on behalf of our association client(s).

In our view, an association may be able to make a persuasive case to the FCC in this matter if it can demonstrate: (a) that it would be extremely time consuming and cumbersome to obtain written approvals from each of its members for faxed advertisements/promotions; (b) that it is critical to the association's business that it send its members faxed advertisements/promotions; and (c) that its members want to receive such faxed materials from the association.

1. See "Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991", Report and Order, CG Docket No. 02-278, FCC 03-153 (rel. July 3, 2003) ("Order").
2. A telephone facsimile machine is "equipment which has the capacity (A) to transcribe text or images, or both, from paper into an electronic signal and to transmit that signal over a regular telephone line, or (B) to transcribe text or images (or both) from an electronic signal received over a regular telephone line onto paper." Order, Appendix A (citing 47 C.F.R §64.1200 (f) (8)).
3. Id. at 185-203. The Fax Advertisement Rules do not apply to facsimile messages sent as e-mail over the Internet. Id. at n. 736.
4. Id. at Appendix A (citing 47 C.F.R. §64.1200 (f) (10)).
5. Fax Advertisements would also include advertisements sent to an association's members' personal computers equipped with, or attached to, modems, or computerized fax servers. Id. at 200.
6. Id. at 192-193, 203 and Appendix A (citing 47 C.F.R. §§64.1200(a)(3), 68.318(d)).
7. Id. at 187 and n. 691.
8. Id. at 187; See also Id. at Appendix A (citing 47 C.F.R. §64.1200(a)(3)(i)).
9. Id. at 191.
10. Id. at 188-189.
11. Id. at 193.
12. Id. at 191 and n. 705.
13. Id. at 193.
14. The Fax Advertisement Rules require that senders of Fax Advertisements use the name under which they are officially registered to conduct business. Id. at 203 and Appendix A (citing 47 C.F.R. §68.318(d)). Where the entity that transmits the message is not the same as the entity that creates the message, at a minimum, the identifying information of the creator of the message must be provided, and under certain circumstances the entity transmitting the message must also be identified. Id. at 195, 203.
15. Id. at 214.
16. Id. at 214; 47 C.F.R. §1.80.
17. Order at n. 7. Persons receiving Fax Advertisements sent in violation of the Fax Advertisement Rules may also bring their complaints to the attention of the FCC, the applicable state attorney general or an official designated by the state. Id.