New FCC regs limit faxes

AUG. 18 UPDATE: FCC Postpones New Regs

In a move that could have a huge impact on how distributors communicate with customers and prospects, the Federal Communications Commission announced new regulations governing how businesses can use faxes to send marketing communications. The new rules, contained in a revision to the Telephone Consumer Protection Act, also impact how trade associations can use faxes to communicate with their members or prospective members.

The regulations, scheduled to take effect Aug. 25, 2003, require signed, written consent to send any fax that contains an "unsolicited advertisement." However, enforcement of the new rules likely won't take place until at least the end of September, and probably later, so the Office of Management and Budget can review the impact of the new rules covered by the federal Paperwork Reduction Act following public comment.

An advertisement includes "any material advertising the commercial availability or quality of any property, goods or services," which for a distributor could include:

• product information


• special promotions


• closeouts


• distribution services


• catalog availability


• or even open houses, even if a fee is not charged.

According to one interpretation, you would not even be able to send invoices for products or services by fax without specific written consent, even if a customer has requested it over the telephone.

Fax marketing has been regulated since 1992, when the FCC created regulations under the TCPA that allowed you to market by fax if you had an "established business relationship" with a prospect or customer. The new rules require a written opt-in permission form signed by each customer or prospect with the specified fax number(s) to which faxes may be sent.

Immediate impact on distributors

Though it appears likely the FCC may revise the burdensome compliance requirements for fax marketers as well as the date the new regulations will take effect, many distributors are already taking defensive measures by faxing consent forms to their customers (see comments of distributors regarding the proposed regulations following this article). While some trade associations are sending suggested "opt-in" forms for their members to use, as well as asking members to send them signed consent forms, other associations are focused on getting the FCC to delay implementing the regulations and revising them with some commonsense provisions.

"We're hopeful the proposed rules won't go into effect Aug. 25," says Jade West, executive vice president-government relations for the National Association of Wholesaler-Distributors. "It's a regulation nightmare that has a huge impact on anyone who markets by fax."

Since the new regulations were published in the Federal Register on July 25, 2003, there has been a strong backlash by business and non-profit groups that stand to lose an important communications tool, West said. There are also several provisions in the regulations that appear to make the current deadlines for compliance impossible.

NAW has joined with other major trade associations in Washington to file a petition with the FCC for a stay of execution of all the do-not-fax regulations, which include commercial and non-profit fax regulations. "We have been in constant contact with White House staff, met with an FCC commissioner, requested a meeting with an official at the Office of Management and Budget, and raised the issue with the Treasury Department," West said. "We have received feedback from dozens of our members on how these regs would impact their business relationships and operations, and will continue to pressure to have them reconsidered."

NAW also has joined a coalition of 1,100 trade associations to petition the FCC to stay the

execution date, and review and clarify the regulations as they apply to non-profit organizations and trade associations, West said.

Compliance timetable

Under the new regulations, businesses have until Aug. 25 to fax the opt-in permission forms to customers seeking their written consent. After Aug. 25, 2003, the regulations require you to send the forms by some other means of communication, such as U.S. mail or e-mail. As this edition of MDM went to press, there was hope the FCC might announce a delay during the week of Aug. 11 to consider the strong opposition that has mushroomed(See www.mdm.com for the latest daily developments).

NAW has issued a legal advisory on the regulations concerning faxed advertisements (see Legal Advisory). An excellent explanation of the new rules with a focus on the impact on trade associations, prepared by the Washington law firm Venable LLP for the American Society of Association Executives, is available on ASAE's web site, www.asaenet.org.

Other marketing channels ﾖ U.S. mail, telephone and e-mail ﾖ require a recipient to opt out, even with the new do-not call regulations that were the high-visibility part of the FCC's current revisions to the TCPA rules. The spam factor notwithstanding, cost-effective marketing options are decreasing rapidly. It's likely to get worse, with e-mail spam under scrutiny of Congress, the new do-not-call provisions, and these new fax regulations.

Comments on the new FCC regulations restricting commercial fax communications

The following select comments are from more than 13 pages of response the National Association of Wholesaler-Distributors has received from its members regarding the proposed do-not-fax regulations requiring signed, written consent to deliver an advertisement. If the regulations remain in their current form, scheduled to go into effect this fall, the impact will be felt across all wholesale lines of trade. Particularly hard hit may be those distributors who serve small-business customer segments, which may not have e-mail capabilities or the account size to receive salesperson visits to learn about new products, special promotions and other product and sales information.

"We do anywhere from 2,000 to 5,000 faxes a month to our customer base that does not have direct internet access, i.e., maintenance foreman as an example, and we have very strong response from our customer bases. This is a real issue. E-mail is as big an issue."

"We communicate with our customers daily in person, by phone, by mail, by e-mail and by fax. Many times we are making special offers to customers at a lower than published price. We will typically call large customers about a temporary discount but fax smaller companies. This only hurts the little guy."

"This action is very detrimental to the normal process flow in our organization regarding communication with customers and prospective customers. Fax is a very efficient manner in which to communicate with our end users and the proposed guidelines are overly demanding, costly, and impossible to adequately manage given our very large customer base."

"This new regulation will cause more problems for our customers than us. Now we'll have to get their permission to send them quotes they expect on a regular basis. It will also waste the time of their & our employees to keep records of letters, generate more paperwork for all. This will only hinder us in our relations with regular customers. I get unsolicited faxes now, but there's a number to call to delete my name from their list. I don't believe this fax problem is abused and will only burden small businesses which are struggling in this economy already."

"What in the world is the FCC doing? B to B faxing should not be confused with e-mail SPAM abuse nor with consumer

telemarketing. Our customers are very good about telling us what they like and don't like and we damn well listen. This regulation is nuts!
Someone within the administration ought to advise the FCC that there is a recession going out here in the real world. They should be working to find ways for us to do more business, not making it harder."

"We have over 22,000 customers that we communicate with on a regular basis via fax. Our customers expect to see weekly specials opportunities to purchase discounted or special merchandise that helps them run their business on a more competitive basis. While we could move from fax to e-mail with some customers, typically our largest customer segment does not have "state of the art" computer and internet connectivity and this would be a competitive disadvantage for the smaller customer.
Also many of our customers communicate needs and problems with our 185 sales people via fax. Our reps are on the road five days a week, and are often hard to get via telephone. Once they get home at night they can respond to customer issues via fax. This new regulation will impose a hardship our company as well as customers."

"Ours is a company that uses a variety of media formats to communicate with our customers, one of which is the fax. While our sales and customer service departments bear the brunt of the communications responsibility, we have found that "touching" our customers, using various methods, keeps them more thoroughly informed than they otherwise would be. The fax is an inexpensive yet efficient way to do this.

The new legislation will complicate this practice, if not eliminate it. Requesting the signatures of recipients may very possibly create a perception, on the part of that recipient, that they are authorizing junk faxes, which is obviously what this legislation is intended to prevent. Asking someone to sign something indicates that a contractual relationship will be established. This seems to be just a little over board for faxes.

Don't get me wrong. I myself have asked advertisers sending me faxes to stop sending, because, they would send me something once a week or every couple days. The problem is ' not everybody abuses faxing. Not every sender sends a fax to a fax list once or twice a week, or even more. We may fax something to our customers perhaps once a month or even every 6 weeks, just to supplement our communications program. That's the key word ﾖ supplement. This legislature is obviously aimed at senders that abuse this medium. What about those of us that do not?
I can understand the need to address the junk fax issue, however, this broad brush approach will hinder the efforts of companies that use faxing as a tool yet do not abuse it."

"Thanks to the government (small letters for small minds) for adding more work to both the daily transaction of business and the initial set up of a customer. What a "stupid" burden to be placed on the industry. As a large distributor, I would imagine that our IS Dept. and its creative staff will find an "electronic" solution for this senseless waste of manpower. Pity the small guy that will have to really struggle to comply. Who benefits from this regulation?"

"Fax broadcasting is a vital part of our company's communication with our customers. Without it, they would miss out on important price-specials and educational training (often free of charge) that they might not have known about if they haven't ventured into one of our branches recently. This is a benefit to them. If a customer decides that they no longer wish to receive our faxings, they are removed immediately. Please do what you can to reverse this decision, as it does more harm to our customers than it does to us. We want to be able to continue to serve our customers to the best of our ability."

"Fax advertising is our most cost effective advertising (about ﾼ the cost of traditional direct mail) and generates a significant portion of our overall business revenue. By forcing customers to send fax consent forms, we could greatly reduce the number of existing customers we can market our products to. The consent forms will also add increased administrative costs to our business."