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FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
April 1, 2004
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
AND FACSIMILE
Network Fax, Inc.
Network Fax, Inc.
d.b.a. Network Fax Corporation
d.b.a. Network Fax Corporation
d.b.a. Network Fax
d.b.a. Network Fax
14543 Highway 105 W., #201
P.O. Box 100
Conroe, Texas 77304
Scott, Louisiana 70583-0100
Attn: Bill Nieman, Owner Attn:
Bill Nieman, Owner
Michael Clements, President
Michael Clements, President
Network Fax, Inc.
Network Fax, Inc.
d.b.a. Network Fax Corporation
d.b.a. Network Fax Corporation
d.b.a. Network Fax
d.b.a. Network Fax
2425 West Loop South
1000 Fm 1960 Road W.
Suite 1000, 10th Floor
Houston, Texas 77090-2508
Houston, Texas 77027-4210
Attn: Bill Nieman, Owner
Attn: Bill Nieman, Owner
Michael Clements, President
Michael Clements, President
RE: EB-04-TC-052
Dear Correspondents:
This is an official CITATION and LETTER OF INQUIRY1
related to violations of the Communications Act of 1934, as
amended, and the Federal Communications Commission's rules
that govern telephone solicitations and unsolicited
advertisements.2 As explained below, future violations of
the Act or Commission's rules in this regard may subject you
to monetary forfeitures.
It has come to our attention that your company sent one
or more unsolicited advertisements to telephone facsimile
machines in violation of section 227(b)(1)(C) of the
Communications Act and section 64.1200(a)(3) of the
Commission's rules.3 As explained in detail below, these
provisions generally prohibit the delivery of unsolicited
advertisements to telephone facsimile machines.
We direct you to respond to this Citation and Letter of
Inquiry by providing the information and documents specified
below no later than 30 days after the date of this
correspondence.
I. CITATION FOR VIOLATIONS OF 47 U.S.C. § 227(b)(1)(C)
AND 47 C.F.R. § 64.1200(a)(3)
Section 227(b)(1)(C) of the Communications Act makes it
``unlawful for any person within the United States, or any
person outside the United States if the recipient is within
the United States . . . to use a telephone facsimile
machine, computer, or other device to send an unsolicited
advertisement to a telephone facsimile machine.'' 4 The
term ``unsolicited advertisement'' is defined in the Act and
the Commission's rules 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.''5 Under
Commission rules and orders currently in effect, the
Commission considers an established business relationship
between a fax sender and recipient to constitute prior
express invitation or permission to send a facsimile
advertisement.6 Mere distribution or publication of a fax
number, however, does not establish consent to receive
advertisements by fax.7
Because your advertisement(s) promotes fax broadcasting
services, you should be aware of the Commission's rules
governing such activities. Although entities that merely
transmit or ``broadcast'' facsimile messages on behalf of
others are not generally liable for compliance with the
prohibition on faxing unsolicited advertisements, the
exemption from liability does not exist when a facsimile
broadcaster8 demonstrates ``a high degree of involvement in,
or actual notice of, the unlawful activity and fails to take
steps to prevent such facsimile transmissions.''9 Supplying
the telephone facsimile numbers to which messages are sent
or influencing the content of the fax message evidence a
high degree of involvement. Therefore, in certain
circumstances, fax broadcasters may be held liable for
unsolicited advertisements that they transmit to telephone
facsimile machines on behalf of other entities.
Accordingly, you may be subject to monetary forfeitures for
unsolicited advertisements that you transmit on behalf of
your customers if you are highly involved in this activity,
as evidenced by such actions as supplying the telephone
facsimile numbers to which you transmit unsolicited
advertisements or influencing the content of such fax
messages.
In addition to the violation identified above, it
appears that your company also has violated the provisions
of the Act and the Commission's rules that require any
person or entity who sends a message via a telephone
facsimile machine to clearly mark ``in a margin at the top
or bottom of each transmitted page of the message or on the
first page of the transmission, the date and time it is sent
and an identification of the business, other entity, or
individual sending the message and the telephone number of
the sending machine or of such business, other entity, or
individual.''10 As a fax broadcaster, you should also be
aware that you may be required to include your own
identification information on fax messages that you transmit
for your customers. Section 63.318(d) of the Commission's
rules requires that a fax broadcaster with a high degree of
involvement in the messages it transmits to include on each
message the name under which it is registered to conduct
business with the relevant State Corporation Commission or
comparable regulatory authority.
If, after receipt of this citation, you violate the
Communications Act or the Commission's rules in any manner
described herein, the Commission may impose monetary
forfeitures not to exceed $11,000 for each such violation or
each day of a continuing violation. 11
You may respond to this citation within 30 days from
the date of this letter either through (1) a personal
interview at the Commission's Field Office nearest to your
place of business, or (2) a written statement. Your
response should specify the actions that you are taking to
ensure that you do not violate the Commission's rules
governing telephone solicitation and unsolicited
advertisements, as described above.
The nearest Commission field office appears to be the
Houston Office in Houston, Texas. Please call Senetta
Lancaster at (202) 418-7320 if you wish to schedule a
personal interview. You should schedule any interview to
take place within 30 days of the date of this letter. You
should include any written statement with your answers to
the inquiries set forth in section II of this
correspondence, and direct such statement to the address
provided below.
Reasonable accommodations for people with disabilities
are available upon request. Include a description of the
accommodation you will need including as much detail as you
can. Also include a way we can contact you if we need more
information. Please allow at least 5 days advance notice;
last minute requests will be accepted, but may be impossible
to fill. Send an e-mail to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau:
For sign language interpreters, CART, and other
reasonable accommodations:
202-418-0530 (voice), 202-418-0432 (tty);
For accessible format materials (braille, large
print, electronic files, and audio
format): 202-418-0531 (voice), 202-418-7365 (tty).
II. INQUIRY REGARDING FAX BROADCASTING ACTIVITIES
We direct your Company, pursuant to sections 4(i),
4(j), and 403 of the Act, 47 U.S.C. §§ 154(i), 154(j), 403,
to provide the information and Documents, where relevant,
specified herein within 30 calendar days from the date of
this letter.
Instructions
If the Company requests that any information or
Documents, as defined herein, responsive to this letter be
treated in a confidential manner, it shall submit, along
with all responsive information and Documents, as defined
herein, a statement in accordance with Section 0.459 of the
Commission's rules. 47 C.F.R. § 0.459. Requests for
confidential treatment must comply with the requirements of
Section 0.459, including the standards of
specificity mandated by Section 0.459(b). Accordingly,
``blanket'' requests for confidentiality of a large set of
documents are unacceptable. Pursuant with Section 0.459(c),
the Bureau will not consider requests that do not comply
with the requirements of Section 0.459.
If the Company withholds any information or Documents
under claim of privilege, it shall submit, together with any
claim of privilege, a schedule of the items withheld that
states, individually as to each such item, the numbered
inquiry to which each item responds and the type, title,
specific subject matter, and date of the item; the names,
addresses, positions, and organizations of all authors and
recipients of the item; and the specific ground(s) for
claiming that the item is privileged.
Each requested Document not subject to a claim of
privilege shall be submitted in its entirety, even if only a
portion of that Document is responsive to an inquiry made
herein. This means that the Document shall not be edited,
cut, or expunged, and shall include all appendices, tables,
or other attachments, and all other Documents referred to in
the Document or attachments. All written materials
necessary to understand any Document responsive to these
inquiries must also be submitted.
If a Document responsive to any inquiry made herein
existed but is no longer available, or if the Company is
unable for any reason to produce a Document responsive to
any inquiry, identify each such Document by author,
recipient, date, title, and specific subject matter, and
explain fully why the Document is no longer available or why
the Company is otherwise unable to produce it.
With respect only to Documents responsive to the
specific inquiries made herein and any other Documents
relevant to those inquiries , the Company is directed to
retain the originals of those Documents for twenty-four (24)
months from the date of this letter unless (1) the Company
is directed or informed by the Enforcement Bureau in writing
to retain such Documents for some other period of time or
(2) the Enforcement Bureau and/or the Commission releases
any item on the subject of this investigation, including,
but not limited to, a Notice of Apparent Liability for
Forfeiture or an order disposing of the issues in the
investigation, in which case, the Company must retain all
such Documents until the matter has been finally concluded
by payment of any monetary penalty, satisfaction of all
conditions, expiration of all possible appeals, conclusion
of any collection action brought by the United States
Department of Justice or execution and implementation of a
final settlement with the Commission or the Enforcement
Bureau.
The specific inquiries made herein are continuing in
nature. The Company is required to produce in the future
any and all Documents and information that are responsive to
the inquiries made herein but not initially produced at the
time, date and place specified herein. In this regard, the
Company must supplement its responses (a) if the Company
learns that, in some material respect, the Documents and
information initially disclosed were incomplete or incorrect
or (b) if additional responsive Documents or information are
acquired by or become known to the Company after the initial
production. The requirement to update the record will
continue for twenty-four (24) months from the date of this
letter unless (1) the Company is directed or informed by the
Enforcement Bureau in writing that the Company's obligation
to update the record will continue for some other period of
time or (2) the Enforcement Bureau and/or the Commission
releases an item on the subject of this investigation,
including, but not limited to, a Notice of Apparent
Liability for Forfeiture or an order disposing of the issues
in the investigation, in which case the obligation to update
the record will continue until the release of such item.
For each Document or statement submitted in response to
the inquiries below, indicate, by number, to which inquiry
it is responsive and identify the person(s) from whose files
the Document was retrieved. If any Document is not dated,
state the date on which it was prepared. If any Document
does not identify its author(s) or recipient(s), state, if
known, the name(s) of the author(s) or recipient(s). The
Company must identify with reasonable specificity all
Documents provided in response to these inquiries.
Unless otherwise indicated, the period of time covered
by these inquiries begins one year before the date of this
letter and ends with the date of the Company's response.
Definitions
For purposes of this letter, the following definitions
apply:
"Any" shall be construed to include the word "all," and
the word "all" shall be construed to include the word "any."
Additionally, the word "or" shall be construed to include
the word "and," and the word "and" shall be construed to
include the word "or." The word "each" shall be construed
to include the word "every," and the word "every" shall be
construed to include the word "each."
"Document" shall mean the complete original (or in lieu
thereof, exact copies of the original) and any non-identical
copy (whether different from the original because of
notations on the copy or otherwise), regardless of origin or
location, of any taped, recorded, transcribed, written,
typed, printed, filmed, punched, computer-stored, or graphic
matter of every type and description, however and by
whomever prepared, produced, disseminated, or made,
including but not limited to any advertisement, book,
pamphlet, periodical, contract, correspondence, letter,
facsimile, e-mail, file, invoice, memorandum, note,
telegram, report, record, handwritten note, working paper,
routing slip, chart, graph, photograph, paper, index, map,
tabulation, manual, guide, outline, script, abstract,
history, calendar, diary, agenda, minute, marketing plan,
research paper, preliminary drafts, or versions of all of
the above, and computer material (print-outs, cards,
magnetic or electronic tapes, disks and such codes or
instructions as will transform such computer materials into
easily understandable form).
``Company'' shall include the Company as noted on page
1 of this letter, and any predecessor-in-interest,
successor?in?interest, affiliate, parent company, any wholly
or partially owned subsidiary, or other affiliated
company(s) or business(es), and all owners, including but
not limited to, partners or principals, and all directors,
officers, employees, or agents, including consultants and
any other persons working for or on behalf of the foregoing
at any time during the period covered by this letter.
1. Provide any generic service contracts or
agreements that relate to the Company's fax
broadcasting services.
2. Does the Company disclose to customers or
potential customers that sending unsolicited
advertisements to telephone facsimile machines is
unlawful? Provide all relevant documents.
3. Does the Company have any control over or
involvement in determining the content of
advertisements that it transmits by facsimile on behalf
of other entities? Describe such control or
involvement in detail and provide all relevant
documents.
4. Who provides, compiles, or generates the
distribution list(s) of telephone facsimile numbers the
Company uses in its fax broadcasting services? Provide
all relevant documents.
5. If the Company is involved in any way in
providing, compiling, generating, or editing the
distribution list(s) of telephone facsimile numbers
used to transmit advertisements on behalf of other
entities, describe in detail the process by which the
Company produces or participates in the generation of
such list(s). Does the Company employ or compensate
any individuals or entities outside the Company for any
service, activity, assistance, or facilities used in
connection with providing, compiling, generating, or
editing of such list(s)? Describe such arrangements in
detail and provide all relevant documents.
6. If the Company is involved in any way in
providing, compiling, generating, or editing the
distribution list(s) of telephone facsimile numbers
used to transmit advertisements on behalf of other
entities, what steps has the Company taken to ensure
that the telephone facsimile numbers belong to
individuals or entities who have agreed, by explicit
consent or by virtue of an established business
relationship to receive the advertisements? Describe
in detail the manner in which the Company records
consumers' consent or the existence of an established
business relationship. Provide all relevant documents.
We direct the Company to support its responses with an
affidavit or declaration under penalty of perjury, signed
and dated by an authorized officer of the Company with
personal knowledge of the representations provided in the
Company's response, verifying the truth and accuracy of the
information therein and that all of the Documents and
information requested by this letter which are in the
Company's possession, custody, control or knowledge have
been produced. If multiple Company employees contribute to
the response, in addition to such general affidavit or
declaration of the authorized officer of the Company noted
above, provide separate affidavits or declarations of each
such individual that identify clearly to which responses the
affiant or declarant is attesting. All such declarations
provided should comply with section 1.16 of the Commission's
rules, 47 C.F.R. § 1.16, and be substantially in the form
set forth therein.
The Company should direct its response to the
attention of
Kurt A. Schroeder
Deputy Chief
Telecommunications Consumers Division
Enforcement Bureau
Federal Communications Commission
445-12th Street, S.W., Rm. 3-C366
Washington, D.C.
20554
Reference EB-04-TC-052 when corresponding with the
Commission.
Under the Privacy Act of 1974, 5 U.S.C. § 552(a)(e)(3),
we are informing you that the Commission's staff will use
all relevant material information before it to determine
what, if any, enforcement action is required to ensure your
compliance with the TCPA and the Commission's rules. This
will include any information that you disclose in your
interview or written statement in response to the Citation
and Letter of Inquiry.
The knowing and willful making of any false statement,
or the concealment of any material fact, in reply to this
Citation and Letter of Inquiry is punishable by fine or
imprisonment under 18 U.S.C. § 1001.
Thank you in advance for your anticipated cooperation.
Sincerely,
Kurt A. Schroeder
Deputy Chief, Telecommunications
Consumers Division
Enforcement Bureau
Federal Communications Commission
Enclosures
_________________________
1 These actions are taken pursuant to 47 U.S.C. §§ 154(i),
403, 503(b)(5).
2 47 U.S.C. § 227; 47 C.F.R. § 64.1200. A copy of these
provisions is enclosed for your convenience. Section 227
was added to the Communications Act by the Telephone
Consumer Protection Act of 1991 and is most commonly known
as the TCPA. The TCPA and the Commission's parallel rules
restrict a variety of practices that are associated with
telephone solicitation and use of the telephone network to
deliver unsolicited advertisements, including fax
advertising.
3 The advertisement(s) promotes your fax broadcasting
services.
4 47 U.S.C. § 227(b)(1)(C); 47 C.F.R. § 64.1200(a)(3). Both
the TCPA and the Commission's rules define ``telephone
facsimile machine'' as ``equipment which has the capacity to
transcribe text or images, or both, from paper into an
electronic signal and to transmit that signal over a regular
telephone line, or to transcribe text or images (or both)
from an electronic signal received over a regular telephone
line onto paper.'' 47 U.S.C. § 227(a)(2); 47 C.F.R. §
64.1200(f)(8). The Commission has stated that ``[t]he
TCPA's definition of `telephone facsimile machine' broadly
applies to any equipment that has the capacity to send or
receive text or images.'' Thus, ``faxes sent to personal
computers equipped with, or attached to, modems and to
computerized fax servers are subject to the TCPA's
prohibition on unsolicited faxes. . . [although] the
prohibition does not extend to facsimile messages sent as
email over the Internet.'' Rules and Regulations
Implementing the Telephone Consumer Protection Act of 1991,
Report and Order, 18 FCC Rcd 14014, 14131-32 (2003) (2003
TCPA Report and Order).
5 47 U.S.C. § 227(a)(4); 47 C.F.R. § 64.1200(f)(10).
6 Rules and Regulations Implementing the Telephone Consumer
Protection Act of 1991, Memorandum Opinion and Order, 10 FCC
Rcd 12391, 12405 (1995) (1995 TCPA Reconsideration Order).
In June 2003, the Commission amended its rules to specify
that prior express invitation or permission to receive a
facsimile advertisement must be recorded in a ``signed
written statement that includes the facsimile number to
which any advertisements may be sent and clearly indicates
the recipient's consent to receive such facsimile
advertisements from the sender.'' 2003 TCPA Report and
Order, 18 FCC Rcd at 14124-28 (adopting new section
64.1200(a)(3)(i)). This new provision, which supercedes the
established business relationship exception, is scheduled to
take effect January 1, 2005. Rules and Regulations
Implementing the Telephone Consumer Protection Act of 1991,
Order on Reconsideration, 18 FCC Rcd 16972 (2003); Rules and
Regulations Implementing the Telephone Consumer Protection
Act of 1991, Order, FCC 03-230 (rel. Oct. 3, 2003). The
Commission currently is considering petitions that seek to
retain the established business relationship exception or
require methods other than a signed written statement to
demonstrate prior express consent to receive fax
advertising.
71995 Reconsideration Order, 10 FCC Rcd at 12408-09; see
also 2003 TCPA Report and Order, 18 FCC Rcd at 14128
(concluding that publication of a fax number in a trade
publication or directory does not demonstrate consent to
receive fax advertising).
8 The term ``facsimile broadcaster'' means ``a person or
entity that transmits messages to telephone facsimile
machines on behalf of another person or entity for a fee.''
47 C.F.R. § 64.1200(f)(4).
9 47 C.F.R. § 64.1200(a)(3)(ii); 2003 TCPA Report and Order,
18 FCC Rcd at 14129.
10 47 U.S.C. § 227(d)(1)(B); 47 C.F.R. § 68.318(d).
11 See 47 C.F.R. § 1.80(b)(3).