FC: FCC levies $5.4 million junk fax fine -- but will it stick?

[Declan McCullagh <declan@well.com>]

Earlier on Politech we saw a federal district court rule in a case 
involving fax.com:

   "Federal court rules ban on 'junk faxes' violates First Amendment"
   http://www.politechbot.com/p-03394.html

I don't know what the status of this case is (has an appeals court gone the 
other way?), but it seems possible that the FCC's "junk fax" fine will also 
be tossed out.

This has implications for federal anti-spam legislation. If the "junk fax" 
law can't stand, how could an anti-spam law?

-Declan

---

Below from FCC:


The following is (1) a news release being issued this morning on an FCC 
enforcement action, and (2) a statement on the case by Commissioner Abernathy

FOR IMMEDIATE RELEASE                      NEWS MEDIA CONTACT
August 7, 2002  :                                   John Winston, (202) 
418-7450 
jwinston@fcc.gov

FCC PROPOSES $5,379,000 FINE AGAINST FAX.COM, INC.
FOR VIOLATING "JUNK FAX" PROHIBITION

Washington, D.C. - Today the Federal Communications Commission (FCC) 
proposed to fine Fax.com, Inc. $5,379,000 for sending unsolicited 
advertisements, commonly known as "junk faxes," in violation of the 
Telephone Consumer Protection Act (TCPA) and Commission rules. Today's 
action represents the largest fine ever proposed by the Commission for 
violations of the TCPA and marks the first forfeiture action by the FCC 
against a fax broadcaster.

The Commission determined that Fax.com, which operates as a "Fax 
Broadcaster" faxing messages on behalf of others for a fee, apparently 
violated the TCPA and the Commission's rules on 489 separate 
occasions.  Moreover, the Commission found that Fax.com appears to have 
engaged in a pattern of deception to conceal its involvement in sending the 
prohibited faxes, and that the company has not been forthcoming in its 
dealings with the agency.

In view of the "pervasive and egregious pattern of deception" underlying 
the apparent violations and the gravity of Fax.com's conduct, the 
Commission concluded that Fax.com is apparently liable for the maximum fine 
of $11,000 for each of the 489 fax violations, for a total proposed fine of 
$5,379,000.

In related actions, the Commission staff is issuing over 100 citations and 
letters of inquiry to businesses that used Fax.com to send their 
advertisements to telephone facsimile machines. The citations warn the 
businesses that they may face fines of up to $11,000 per violation if they 
continue to send unsolicited fax 
advertisements.
Action by the Commission on August 2, 2002 by Notice of Apparent 
Liability,           (FCC 02-226). Chairman Powell; Commissioners Abernathy 
(issuing a separate statement), Copps and Martin.

File No. EB-02-TC-120

Enforcement Bureau contacts: John Winston at (202) 418-7450, and Colleen 
Heitkamp at (202) 418-7320.

SEPARATE STATEMENT OF COMMISSIONER KATHLEEN Q. ABERNATHY

Re:  Fax.com Apparent Liability for Forfeiture, File No. 
EB-02-TC-120  (released August 7, 2002).

I strongly support this Notice of Apparent Liability and hope that other 
fax broadcasters will take notice that the Commission will strictly enforce 
the Telephone Consumer Protection Act.  As set forth in detail in the NAL, 
Fax.com appears to have founded its business on the practice of sending 
unsolicited faxes in flagrant violation of the TCPA.  The record also 
suggests that Fax.com deliberately misled consumers regarding the company's 
requirements and consumers' rights under the TCPA.  Despite repeated 
warnings from the Commission and numerous consumer complaints, the company 
appears to have made no effort to mend its ways.  As a result, many 
consumers have been harassed in their homes and had their businesses 
disrupted by unwanted fax solicitations ? and, adding insult to injury, 
were forced to pay for this privilege.

This NAL makes clear that the Commission will not tolerate such conduct; 
indeed, we propose to punish Fax.com to the maximum extent of our statutory 
authority.  When I became a Commissioner, I pledged to protect consumers by 
stringently enforcing the Communications Act and the Commission's rules.  I 
am proud that the Commission is taking this responsibility seriously and 
sending such a strong signal that companies cannot violate the law with 
impunity.




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