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FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
October 12, 2005
VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED
SMC LLC
13612 Midway Road, Suite 405
Dallas, TX 75244-3410
RE: EB-05-TC-040
Dear Correspondent:
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 you are involved in
transmitting to telephone facsimile machines unsolicited
advertisements for property, goods, or services offered by
another entity (see attachments).3 As explained in detail below,
section 227(b)(1)(C) of the Communications Act and section
64.1200(a)(3) of the Commission's rules 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
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 has ``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, among other things,
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. You may be
subject to monetary forfeitures if, among other things, you: (1)
are highly involved in sending unsolicited facsimile
advertisements on behalf of any party, as evidenced by such
actions as supplying the telephone facsimile numbers to which you
transmit unsolicited advertisements or influencing the content of
fax messages; or (2) continue to transmit facsimile
advertisements for the entity or entities for whom you faxed the
advertisements that are attached to this correspondence without
taking steps to ensure that either that entity or your company
has an established business relationship with each recipient or
has otherwise obtained each recipient's permission to fax
advertisements.
Finally, section 68.318(d) of the Commission's rules
requires that a fax broadcaster with a high degree of involvement
in the messages it transmits include on each message the name
under which it is registered to conduct business with the
relevant State Corporation Commission or comparable regulatory
authority. The attached materials indicate that you have failed
to include this information on the faxes at issue. This omission
violates the Commission's rules, and subsequent violations of the
type may subject you to monetary forfeitures if, in fact, you are
highly involved in your customers' sending of facsimile messages,
as evidenced by the factors outlined above.
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. 10
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 Dallas
office in Dallas, TX. Please call Al McCloud at (202) 418-2499
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.
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.
Information to be provided
1. Discuss in detail the Company's involvement in
transmitting to telephone facsimile machines the
advertisements that are attached to this correspondence and
identify, including name(s), business telephone number(s),
and address(es) of, the entity or entities for which the
Company transmitted such advertisements. Discuss any other
services that the Company provides to the entity or entities
whose property, goods, or services are promoted in the
attached advertisements. Provide all relevant documents,
including any contracts, agreements, or any other materials
that address or memorialize the terms and conditions under
which the Company transmits telephone facsimile messages
for, or provides any other services to, the entity or
entities whose property, goods, or services are promoted in
the attached advertisements.
2. Has the Company disclosed to the entity or entities
whose property, goods, or services are promoted in the
attached advertisements, or any other entities for which it
transmits telephone facsimile messages, that sending
unsolicited advertisements to telephone facsimile machines
is unlawful? Provide all relevant documents.
3. Has the Company had any control over or involvement in
influencing the content of the attached advertisements or
any other advertisements that the Company transmits by
facsimile? Does the Company offer any type of editing or
graphic design services for advertisements that it transmits
by facsimile? Describe all such control, involvement, or
services in detail. Provide all relevant documents.
4. Who provided, compiled, or generated the distribution
list(s) of telephone facsimile numbers used to transmit the
attached advertisements or any other advertisements that the
Company transmits by facsimile? Provide all relevant
documents.
5. Does the company assist its customers in any way in
obtaining a list of telephone facsimile numbers for delivery
of fax messages, including providing such a list itself or
recommending an entity or entities from which customers may
obtain such lists? Describe all such assistance in detail.
For each entity that the Company has recommended as a source
of telephone facsimile numbers, provide the name, telephone
number, and address of the recommended entity as well as the
date(s) of the Company's recommendation(s) and the
customer(s) to whom the Company recommended the entity.
Provide all relevant documents including any contracts or
communications with entities that it may recommend to
customers as a source of lists of telephone facsimile
numbers.
6. If the Company has been involved in any way in
providing, compiling, generating, or editing the
distribution list(s) of telephone facsimile numbers used to
transmit the attached advertisements or any other
advertisements that the Company transmits by facsimile,
describe in detail the process by which the Company obtains,
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. Provide all relevant
documents.
7. If the Company has been involved in any way in
providing, compiling, generating, or editing the
distribution list(s) of telephone facsimile numbers used to
transmit the attached advertisements or any other
advertisements that the Company transmits by facsimile, 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 advertisement(s)?
Describe in detail the manner in which the Company records
consumers' consent or the existence of an established
business relationship. Provide all relevant documents.
8. Does the Company advertise facsimile transmittal
services or any other services associated with facsimile
advertisements, and, if so, by what means? Provide copies
of all print, audio, and video materials that have been used
within the past year to promote such services. For each
advertisement, list the media in which the advertisement
appeared and the date(s) of such appearance(s).
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. 4-C222
Washington, DC, 20554.
Include the file number, EB-04-TC-040, in any
correspondence.
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
_________________________
1These 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 facsimile advertisement(s) promotes healthcare services.
According to common carrier billing information, your company
holds the opt-out number provided on the advertisements.
4 47 U.S.C. § 227(b)(1)(C); see also 47 C.F.R. § 64.1200(a)(3)
(providing that no person or entity may . . . use a telephone
facsimile machine, computer, or other device to send an
unsolicited advertisement to a telephone facsimile machine).
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 9, 2006. Rules and Regulations Implementing
the Telephone Consumer Protection Act of 1991, Order, FCC 05-132
(rel. June 27, 2005). 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). Rules and Regulations
Implementing the Telephone Consumer Protection Act of 1991, Order
on Reconsideration, 18 FCC Rcd 16972 (2003).
10 See 47 C.F.R. § 1.80(b)(3).