Fax.com Disconnected?

Fax machine owners rejoiced to read yesterday's news that junk fax purveyor extraordinaire Fax.com had lost its fight against imposition of a $5.4 million fine by the Federal Communications Commission.

Fax.com really has no one to blame but itself for the plight it finds itself in. After all, its entire business model is based on annoying upwards of 30 million people a day (the number of individual and corporate phone numbers it claims to have in its database). As a result, every time it attempts to raise some revenue, it also raises the ire of the famously litigious American citizen.

The results were inevitable: In August of last year, Fax.com lost a $2.2 million lawsuit brought by Washington law firm Covington & Burling after making a truly boneheaded move -- sending upwards of 1500 unsolicited faxes to a firm that sues people for a living. For a company that reportedly only has about $50 million a year in revenue, $2.2 million was a sizeable hit to Fax.com's earnings. So now, more than two years after first objecting to imposition of the FCC fine, the company is faced with a probable loss twice the size of the Covington suit.

As if that weren't enough, Fax.com has a real thundercloud looming on the horizon -- a $2.2 trillion lawsuit brought by dot.com millionaire Steve Kirsch. (Mr. Kirsch has also established a website to monitor junk-faxers such as Fax.com, and to help educate junk fax victims, and their lawyers, about how to sue such pests.)

I'm sure there are more lawsuits out there. Even former California Governor Gray Davis's administration was getting into the act before his recent departure, seeking somewhere in the neighborhood of $15 million in damages from Fax.com. According to a Wired.com article from September of last year, Fax.com was planning to go out of business even before the FCC imposed its fine.

Yet, like the killer asteroid in the 1998 apocalypse-by-rock movie Deep Impact, it appears that Fax.com will avoid being blasted into dust despite the best efforts of the FCC, Covington, and even Mr. Kirsch. The company is already making plans to split into multiple new legal entities, including Impact Marketing, Lighthouse Marketing, Data Research Systems, and Tech Access Systems. Expect their faxes to begin raining down on you soon.

Rich Smith was once awakened by a fax machine calling his Moscow apartment's phone line (no fax attached) every night for a month. Although he does not exactly enjoy e-mail spam, he admits that it is at least quieter than a junk fax.