FCC Could Exempt Certain Internet Faxes from TCPA Regulation

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December 4, 2015

internet-faxesLast Tuesday, the Federal Communications Commission (the “FCC” or “Commission”) announced that it is seeking public comment on whether Internet faxes that are both sent and received digitally should be governed by the Telephone Consumer Protection Act (the “TCPA”) or the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (the “CAN-SPAM Act”).

Could Internet fax marketers escape TCPA regulation?

Petition for TCPA Exemption

Joseph T. Ryerson & Son. Inc. (“Ryerson”), a distributor and processor of metals, is involved in pending TCPA class action litigation for delivering an Internet fax through a third-party Web portal, which was then received by the intended recipient via email. On November 4, 2015, Ryerson filed a Petition for Declaratory Ruling with the FCC, asking the Commission “to declare that alleged ‘faxes’ that initiate in digital form and are received in digital form do not fall within the TCPA.” Ryerson raises three arguments in support of its Petition.

First, Ryerson claims that Internet faxes that are both sent and received digitally are more closely analogous to an email than a traditional fax and, therefore, should be governed by the CAN-SPAM Act. Ryerson notes that “no paper, ink, or toner was used in the alleged transmission, and Connector’s phone line was not tied up for incoming business calls or faxes. For all intents and purposes, the transmission to Connector was exactly like an email – it started on a Web-based platform that looks like many email user interfaces, and it ended in the recipient’s email account.” Distinguishing the subject messages from those featured in the FCC’s Westfax ruling this August, Ryerson’s Petition highlights Westfax’s definition of “efax” – “a fax that is converted to email” – and contends that the FCC’s “analysis might be different if the message was both incepted and received digitally.”

Second, Ryerson argues that application of the TCPA to Internet faxes that are both sent and received digitally would violate the First Amendment. To that end, Ryerson maintains that because the TCPA is a content-based restriction on speech – a regulation that distinguishes between speech by its subject matter, function or purpose (telemarketing/advertising messages) –the statute is subject to strict scrutiny and, therefore, may be justified only if the government proves that application of the TCPA to such Internet faxes is narrowly tailored to serve compelling state interests. Ryerson contends that Congress’s reasons for enacting the TCPA’s fax restrictions (costs associated with the use of fax machines and paper; the time in which fax machines are unable to process actual business communications; and other “interference, interruptions and expense”) are less than compelling when applied to messages transmitted and received in digital form.

Third, Ryerson claims that application of the TCPA to Internet faxes that are both sent and received digitally would be unconstitutionally vague under the First and Fifth Amendments because nothing in the express language of the TCPA or its legislative history suggests that the statute would or should apply to such messages. “Thus, if the TCPA is intended to apply to digital messages (digital at inception and at receipt),” Ryerson argues, “it fails to give a reasonable person notice of what is prohibited.”

Internet Fax Marketers: Stay Tuned

As announced last Tuesday, the FCC is accepting comments through Tuesday, December 8, 2015, on the issues raised in Ryerson’s Petition, including whether: (i) Internet faxes that are both sent and received digitally are beyond the scope of the TCPA’s coverage; and (ii) such messages should instead be governed by the CAN-SPAM Act. This blog will explore the Commission’s response to this Petition in greater detail as more information becomes available. In the interim, fax and email marketers should ensure that their marketing campaigns remain in compliance with the TCPA, the CAN-SPAM Act and other applicable regulations.

If you are interested in learning more about this topic, or if you have been served with legal process relating to the TCPA or CAN-SPAM Act, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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