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IIABA Cheers FCC Stay of Onerous Fax Provision

“Existing Business Relationship” Prohibition Delayed Until 2005

WASHINGTON, D.C., August 19 - The Independent Insurance Agents & Brokers of America (IIABA) is calling yesterday’s Federal Communications Commission (FCC) decision to delay implementation of a contentious provision of its “Do Not Fax” rule a “significant victory” for business owners and associations, says Senior Vice President of Federal Government Affairs Maria L. Berthoud.


The FCC announced late yesterday that it had issued a “stay order” or delay of the so-called “Existing Business Relationship” provision that would have prohibited associations and businesses from sending many types of unsolicited faxes to individuals with whom they have a pre-existing relationship. The Do Not Fax rule was published in the Federal Register on July 25 and was scheduled to take effect August 25. Thanks to the FCC’s action, implementation of the prohibition will be suspended until Jan. 1, 2005.


From the outset of the FCC’s issuance of the Do Not Fax rule, IIABA and its 300,000 members have asserted that the rule is onerous, costly and most importantly anti-commerce. Its compliance provisions requiring a signed permission form for each person being sent faxes by an association or business were unrealistic, especially given the short lead time before its implementation, and an expensive economic burden for practically everyone impacted by the new rule.


“IIABA firmly believes that the Do Not Fax rule is an unwarranted and unwanted intrusion into business or customer relationships that have been forged over many years,” says Berthoud. “The rules are a government solution to a non-existent problem. It is a shining example of a federal regulator overreaching its mandate to hinder commerce and economic activity.


“Anybody with even the smallest knowledge of business and association operations knows that it takes considerably longer than 30 days to gather these permission forms from hundreds or thousands of customers or members, and that it would cost a significant amount of resources—time and money—to gain compliance,” explains Berthoud.


“In short, the Do Not Fax rules in general, and the existing business relationship prohibition specifically are anti-consumer in that they hinder the flow of commerce,” asserts Berthoud. “Business owners and associations don’t need these types of costly regulations in this difficult economic environment. What our members need instead are common-sense provisions that will boost business activity not dampen growth opportunities, which would have been the net effect of the FCC’s rules.”


If the new rule had been implemented on schedule it would have created an extremely negative impact on the association community’s ability to effectively communicate with its members about valuable member benefits, says IIABA Executive Vice President and General Counsel Debra L. Perkins. 


“The FCC rule prohibits anyone from sending unsolicited faxes—regardless of a pre-existing business relationship—on any topic that could be considered an advertisement,” explains Perkins. “Even faxes for an upcoming annual meeting or business-related course would require prior written consent from the recipient in order to avoid penalties of up to $11,000.


“While IIABA understands that the foundation of this provision was created with the rights of residential fax users in mind, it creates an onerous restriction on an association’s ability to communicate effectively about resources members expect to access through their trade association,” continues Perkins. “The effect of this restriction would severely undermine the progress our association has endeavored to make in serving our members by providing them with information and tools to maintain the highest level of professionalism possible.”


Because the stay is temporary, Berthoud says IIABA will continue the work it has launched to convince the FCC and Congress that the Do Not Fax rule will be a roadblock to economic growth for the nation’s businesses and a needless impediment to member communications for trade associations. Yesterday, before the stay was issued, IIABA convened a group of leading business organizations, to include the U.S. Chamber of Commerce and National Association of Realtors, in its Capitol Hill office to strategize on the onerous Do Not Fax rule. The work of this ad-hoc group will continue, notes Berthoud.


“The important consideration for IIABA members and other businesses is that this is a temporary stay. The FCC intends to go through with its implementation in 2005,” says Berthoud. “It is our job to persuade lawmakers and the federal agency that this rule is not in the best interest of consumers, Main Street businesses or the economy. IIABA and its allies will keep the pressure on until we reach a suitable resolution.”


Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products. Web address:


​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

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