Commentary: Price of spam too high for struggling ISPs

Gartner says PSINet's so-called pink contract allowing spam shows poor business judgment--and will likely turn out to be a costly decision.

2 min read
By Maurene Caplan Grey, Gartner Analyst

As Internet service providers come under increasing pressure to generate revenue, they are faced with the temptation to get some "easy" revenue from spammers--companies that send out unsolicited mass email, including advertising.

See news story:
PSINet assailed as spam contract surfaces
It is not surprising, therefore, that a struggling ISP such as PSINet has been caught entering into a so-called pink contract allowing spam, but it does show poor business judgment--and will likely turn out to be a costly decision.

Spam falls into one of three categories:

 Trash: The email's return address is invalid (the originating account closed after the message was sent) or the email contains content deemed objectionable by the recipient. Cultural or regional idioms in a marketing email may be considered offensive by those outside the culture or region and, therefore, also deemed to be spam.

 Chain letters and hoaxes: These include such items as pyramid schemes.

 Unsolicited commercial email: The email is sent without the recipient's permission (opt-in) and without a method to stop future mailings (opt-out). Most consumers and enterprises do not want to receive spam, which they define simply as email they have not chosen to receive. More important, most have also made it clear that they are prepared to punish ISPs that knowingly do business with spammers.

Subscribers who become aware that their ISPs are making it easy for spammers to send them unwanted email are increasingly likely to cancel their subscriptions--and the revenue loss from those canceled subscriptions will likely be far greater than the short-term revenue gains from the spammers.

Even more important, other ISPs--responding to pressure from their subscribers--may block all email originating from the spammer-friendly service. Services such as Brightmail and Mail Abuse Prevention System (MAPS) maintain up-to-date blacklists of spammer-friendly ISPs, and those blacklists make it easy for other ISPs to block email from the offending services.

Once subscribers of a spammer-friendly ISP realize that those practices are making it difficult for them to get their email messages through to the destinations, even more cancellations are likely--which is the last thing a troubled ISP can afford.

The bottom line is that ISPs must resist the temptation to turn to spammers for revenue, no matter how desperately they need it. The damage to an ISP's reputation--and the loss of revenues as angry subscribers cancel their service agreements--will more than offset any short-term gain in cash flow.

(For related commentary on email marketing and email spam, see TechRepublic.com--free registration required.)

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