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Congress, critics wrinkle noses at spam bills

Spam may be an unwanted staple in your in-box, but don't expect lawmakers to serve up new regulations anytime soon.

Spam may be an unwanted staple in your in-box, but don't expect lawmakers to serve up new regulations anytime soon.

Proposed anti-spam measures before Congress this year are facing opposition from all sides, despite longstanding angst over junk e-mail and high hopes that 2001 would be the year a federal law would pass.

No one appears to strongly support the handful of anti-spam provisions before the 107th Congress--despite popular demand for federal protections. Legislators and anti-spammers alike are taking shots at each of the bills, with one camp calling some provisions in the bills extreme and another camp saying they're not tough enough.

At a time when the antipathy for junk e-mail is growing as fast as the Web population, some say there's little chance an anti-spam bill will pass.

"If a bill does pass, it would be over the objections of virtually every interested group," said Ray Everett Church, co-founder and board member of The Coalition Against Unsolicited Commercial E-Mail (CAUCE).

Meanwhile, the Federal Trade Commission is gearing up to enforce any eventual legislation. Jennifer Mandigo, staff attorney for the FTC appointed to enforce anti-spam law, is set to discuss the commission's concerns with spam during a keynote speech this week at spam conference SpamCon in San Francisco.

Doubts shroud the proposed legislation for several reasons, including the problem of defining what spam is and whether consumers and Internet service providers should have the right to "opt in" or "opt out" of bulk e-mail. Although some say receiving an e-mail promotion from IKEA, for example, is valid and helpful, others call it an invasion of privacy.

The twists and turns of each bill also underscore the vexing issue of defining spam. Sen. Jay Rockefeller, D-W.Va., who is seeking a right for consumers to take legal action against spammers, asked those testifying at a spam hearing earlier this month whether "pop-up" advertising should be added to the definition of spam.

"The definition of spam varies widely from ISP to consumer to legislator to prosecutor," said Gary Hermansen, CEO of Brightmail, which provides spam-filtering technology to Microsoft, EarthLink, AT&T WorldNet and Excite@Home.

Ready for prime time?
The bill apparently garnering the most attention on Capitol Hill is the Unsolicited Commercial Electronic Mail Act of 2001, or HR 718, sponsored by Rep. Heather Wilson, R-N.M. The bill reiterates legislation that nearly passed in Congress last year, but it's been modified this year--much to the chagrin of consumer advocates.

Regulating spam
Spam legislation has not been enacted at the federal level. Below is pending legislation before the 107th Congress.

Wireless Telephone Spam Protection Act (HR 113)
Introduced in January 2001 by Rep. Rush Holt, D-N.J., the bill would block unwanted ads sent to wireless devices.
Status: Referred to the House Committee on Energy and Commerce.

Unsolicited Commercial Electronic Mail Act of 2001 (HR 718)
Introduced in February 2001 by Rep. Heather Wilson, R-N.M., and identical to a bill passed by the House in 2000. The bill requires unsolicited commercial e-mail to be labeled and to include opt-out instructions; it also prohibits false headers. As amended in committee March 2001, the bill prevents ISPs from legal action against a spammer unless the provider had already asked to opt out of further communication. It gives ISPs the right to enforce violations up to $500 per illegal spam.
Status: Pending review in House Judiciary Committee until June 5, 2001.

Anti-Spamming Act of 2001 (HR 1017)
Introduced by Rep. Bob Goodlatte, R-Va., in March 2001. Amends federal computer crime laws to make it illegal to send unsolicited bulk e-mail messages containing a false sender address or header, or to distribute software designed for this purpose.
Status: House committee hearings held May 5.

The "Can Spam" Act of 2001 (S. 630)
Introduced by Sen. Conrad R. Burns, R-Mont., in March 2001. Requires junk messages to be labeled and to include opt-out instructions; it also prohibits deceptive subject lines and false headers. It gives ISPs the right to enforce violations up to $10 per illegal spam. The FTC and state attorneys general also have right of enforcement.
Status: Senate hearing could happen as early as next week.

Anti-spam organizations that earlier supported this bill are now opposed because it doesn't give ISPs the right to post a no-trespassing sign on their networks keeping spammers out. In essence, network operators must first contact every unwelcome marketer asking them to stop further messages before taking legal action. Although the bill gives consumers the right to legal recourse, new language also places limits on those rights.

The revised bill "came out of a House committee so changed, so tilted against consumers and service providers, we had to pull our support of it," CAUCE's Everett Church said. "At the end of the day, because consumers would have so few opportunities to bring action against spammers, and service providers would have so many hurdles before them, we found the legislation to be ultimately unhelpful."

Still, the bill slaps a $500 penalty on marketers for each occurrence of unsolicited commercial e-mail. It defines an offending e-mail as having false headers or an invalid return address, and one that requires a method for stopping further communication. The bill passed the House Committee on Energy and Commerce; it was sent to the House Judiciary Committee on March 28.

Rep. Bob Barr, R-Ga., called the legislation "broad and heavy-handed" in a House committee hearing last week.

In addition, The Direct Marketing Association (DMA) opposes the Wilson bill because of a provision that gives ISPs the right to notify a marketer not to send any of its members an e-mail once the initial communication is received and shunned.

"We think that an opt-out should be an individual choice, not an organization's choice," said Jerry Cerasale, the DMA's senior vice president of government affairs.

The group does support another bill before the House, the Anti-Spamming Act of 2001, or HR 1017, sponsored by Rep. Bob Goodlatte, R-Va. This bill provides criminal penalties for e-mail sent with false headers, bunk return addresses or fake identifiers. It resembles Wilson's bill but removes the ISPs' right to define their own spam policies and enforce them legally.

A companion bill in the Senate, S 630 sponsored by Sens. Conrad Burns, R-Mont., and Ron Wyden, D-Ore., closely mirrors the Wilson bill but gives ISPs the ability to enforce violations only up to $10 per illegal spam.

The silver lining for an anti-spam bill may lie with cellular power. Industry watchers say that the Wireless Telephone Spam Protection Act, R113, introduced by Rep. Rush Holt, D-N.J., has the best chance of getting passed this year. The bill amends the Communications Act of 1934 to make it unlawful to transmit an unsolicited advertisement through a mobile phone.

Attention outside of congressional committees also has focused on receiving spam via wireless devices. Rodney Joffe, head of CenterGate Research Group, a for-profit think tank and technology incubator, is fed up with receiving and paying for useless messages sent via his mobile device. He's rounding up other recipients of wireless spam and talking about filing a class-action lawsuit against a Phoenix-based mortgage company that sent text messages via his AT&T wireless device.

Different views
One of the difficulties with anti-spam legislation is that it's "looked at with two different lenses. One is that spam is imposing an unfair cost and getting users upset," said Marc Rotenberg, policy analyst at the Electronic Privacy Information Center. "They believe the bill will help promote Internet commerce."

The other side "starts to get nervous when talking about fines. They're concerned about the possible impact of the penalties from the bill."

For this reason, the DMA opposes most of the proposed bills. "Marketers are very concerned about class-action lawsuits," Cerasale said.

Anti-spam organizations, however, widely oppose the proposed measures because they require consumers to opt out, leaving the burden on individuals to ask every marketer not to send further communications. CAUCE estimated this week that if only 1 percent of the 24 million small U.S. businesses sent one e-mail promotion a year, a consumer would get 657 messages in an in-box a day.

"The opt-out 'solutions' proposed by the marketing industry and its allies in the financial services and other industries are worse than no action at all. Who has time to opt out of 600 advertisements a day?" said CAUCE Chairman Scott Hazen Mueller.

The argument against opt-out provisions is that unlike with regular mail, the costs of e-mail are passed onto the consumer.

"It is free to the senders, but it's expensive to the consumer, the ISP and everyone in between," said Steve Dougherty, director of systems vendor management at ISP EarthLink.

His sentiment is echoed widely in the anti-spam community, which argues that contrary to popular belief, e-mail is not free. The transmission of junk e-mail racks up nearly $8.8 billion in costs annually incurred to consumers worldwide, according to a study earlier this year from the European Commission.

"You have to spend time deleting and reading this mail. And even if it's 5 or 10 seconds per e-mail, it could be up to billions of dollars a year just in time," said Dougherty, who said about 10 percent to 30 percent of e-mail that ISPs transmit is spam.

That's added to the millions of dollars that EarthLink spends annually on labor, additional bandwidth and software dedicated to stemming junk e-mail's steady inbound stream to its network and customers. Such costs typically get passed on to consumers in rate hikes, for example.

Because costs to send bulk e-mail are nominal compared with other forms of direct marketing, lobbyists for interest groups such as the financial services are working to stamp out any proposed legislation that would place limits on e-mail.

Still, if all else fails, consumers and businesses in 19 states have recourse against spammers through state legislation. California, for example, approved a bill in September 1998 that requires unsolicited commercial e-mail to include opt-out instructions and contact information, and opt-out requests must be honored.

"The raw amount of spam that's being produced is now at a point where, emotionally, there's such a large awareness of the problem," Brightmail's Hermansen said. "But what will be passed will most likely be a compromise."