FCC Fax Regulations Could Create Marketing Roadblock for Publishers

Circulation Management, Sept 1, 2003

Byline: Barbara Love, Marybeth Luczak

To the relief of publishers and the marketing community, the new commercial fax rules issued by the Federal Communications Commission in early July and scheduled to go into effect on August 25 have been put on hold, at least temporarily. The federal agency released a statement on August 18, extending the effective date of the rules until January 1, 2005, buying substantial time for marketers to get into compliance (if the FCC decides to enforce its original ruling) and for the agency to consider objections and possible revisions. (The Commission refused to stay its new telemarketing rules.)

If implemented, the fax rules could spell disaster for all businesses communicating with prospects and customers via fax, because they render such faxing nearly impossible.

Publishers - especially those in the business-to-business sector trying to qualify and requalify subscribers - rely heavily on faxing for communications with subscribers.

American Business Media, among other industry organizations, including Brecksville, OH-based Proximity Marketing, had petitioned the FCC in early August for a stay of its fax restrictions for one year, pending clarification of the rules.

The summary of ABM's "petition for stay" informed the FCC that "If the requested stays are not granted, publishers will suffer irreparable injury because the manner in which they have conducted business for many years will be disrupted. Their ability to obtain 'requests' required by the Postal Service will be seriously compromised if they cannot fax even to subscribers, and they will lose circulation, advertising revenues and possibly their postal privileges."

Previously, publishers understood that they could send faxes if they had "an established business relationship" with subscribers. However, the FCC's July ruling - responding to "some consumers" who feel "besieged by faxes" - decreed that there was no established business relationship exception in the law. The rule stated that "the permission to send faxed advertisements must be provided in writing, include the recipient's signature and facsimile number, and cannot be in the form of a 'negative option.'" Faxes sent to fax servers, as opposed to standard fax machines, were also covered.

At press time, ABM was in the process of filing a request for clarification and reconsideration, in which it will "ask the Commission to rule that certain types of faxes used in the publishing industry, such as request renewals, are not advertisements, and to withdraw the proposed rule requiring signatures," David Straus, counsel for ABM and managing partner for Washington, DC-based Thompson Coburn, told association members. (The FCC's stay order expressly states that the announced delay will enable it to review and consider such additional comments.)

Fortunately for marketers, the stay allows them to send faxes to customers with whom they have an established business relationship and extends the effective date of the rule requiring written consent before sending faxes. The FCC's new definition of an established business relationship is one that exists for 18 months following a "purchase or transaction" or three months after an "inquiry."

Regardless of the extension, however, "fax transmitters still must obtain prior express permission from fax recipients with whom they do not have established business relationships," according to the FCC.

In late July and early August, publishers scurried to fax out forms to subscribers seeking the required information and signatures by the original August 25 deadline. With the deadline extended, they may not be permitted to fax even a permission form to existing customers after January 1, 2005. All forms requesting permission to fax will have to be sent by traditional mail. (Email, of course, has its own restrictions.)

At press time, Straus recommended that publishers "continue their efforts to modify forms in a way that provides (them) with signed consent, both because the FCC might decide to retain its proposed rule with a later effective date and because, whatever its ultimate rule, that signed permission is (their) best protection against future threats."

If the FCC's proposed rule is upheld in the end, Straus told CM that "combined with the new national do-not-call list, it looks like the Postal Service is the only winner."

Publishers in the United States and abroad at the highest levels were buzzing about the severity of the possible fax restrictions. Al Goodloe, international direct marketing consultant, called CM saying that he had heard from overseas clients that they were afraid they couldn't fax U.S. businessmen about their seminars.

The ruling has certainly caused confusion. Prior to the stay, publishers had questions about the new FCC written-signature rule that would permit digital or electronic signatures, according Straus. The rule had stated that they were acceptable "to the extent that such form of signature is recognized as a valid signature under federal and state contract law."