Bush OKs
spam bill--but critics not convinced

By Declan McCullagh

CNET News.com

December 16, 2003, 7:05
AM PT

President Bush signed the "Can-Spam" bill Tuesday, creating the first
federal law regulating spam, a move backers say will
be a major step in the war against e-mail solicitations for pornography,
Viagra, diet pills, get-rich-quick schemes and the like.

But critics scoff that
e-mail users will be unlikely to see a decline in the volume of junk in their
in-boxes as a result of the Controlling
the Assault of Non-Solicited Pornography and Marketing Act, which would
kick in on New Year's Day.

Congress overwhelmingly
approved the legislation earlier this month, after more than six years of
unsuccessful attempts to enact a law to interrupt the flood of commercial
e-mail.

With Bush's signature, a
complex set of rules will take effect Jan. 1 to govern how companies may
communicate with customers they already know and with people they don't.
Falsified e-mail headers could be punished with prison terms, as could sending "sexually oriented" e-mail that is not
properly labeled. The Federal Trade Commission receives new enforcement
authority and could choose to set up a "do not e-mail" list akin to
the commission's wildly popular National
Do Not Call registry.

America Online in a
statement issued Wednesday hailed the signing as "a huge step forward for
our millions of members who loathe the offensive and unwanted junk e-mail
forced into their mailboxes by fraudulent means."

Web portal and e-mail giant
Yahoo was also quick to applaud the bill's enactment.

"This legislation is a
victory for consumers and the Internet," Yahoo said in a statement.
"It provides businesses with important new legal weapons in the ongoing
battle against spam. And it supplements the current technological, educational
and legal tools Yahoo and others are using to fight this threat," the ecompany said.

But the law has raised
alarm among some spam fighters because it would legalize sending nonfraudulent spam and zap state laws that in some cases
prohibit that practice. At least 34 states have slapped regulations on bulk
e-mail, with some jurisdictions going much farther than Washington, D.C.
Washington
state has granted e-mail recipients the right to sue spammers, and California and Delaware have mandated
an "opt-in" approach that prohibits unsolicited commercial e-mail
without a prior business relationship.

Unlike the California and Delaware laws, Can-Spam
sets an "opt-out" standard, and it denies
individuals the right to sue spammers. California Sen. Debra
Bowen, a Democrat who supported her state's legislation, said in a
statement on Dec. 8 that Can-Spam "doesn't can spam, it gives it the
congressional seal of approval...An advertiser's First Amendment right to free
speech doesn't trump a person's basic right to be left alone. Spam isn't
legitimate advertising and it's not free speech."

Bush's signature comes as
the flow of solicitations from bogus confidants of deposed Nigerian dictators
has reached an all-time high, bedeviling corporate America and driving individual PC
users to distraction. E-mail security company MessageLabs
said last week that spam increased dramatically in 2003, with a 77 percent
increase over last year. In May, spam accounted for more than 50 percent of all
business e-mail traffic, and it now represents about two-thirds, MessageLabs said.

Criticism of Can-Spam has
also come from an unlikely source: the very federal and state agencies it would
charge with prosecuting the most egregious spammers.

Tim Muris,
the chairman of the Federal Trade Commission and a veteran of the spam wars,
has been warning since the summer that Can-Spam might do more harm than good.
Instead of helping, Muris said, the measure
"could actually be harmful" to the FTC's ongoing efforts to
sue spammers. (The FTC preferred a
different bill that would have let the commission cooperate closely with
governments abroad and serve U.S. Internet service providers with secret
requests for subscriber information.)

In a speech
in August, Muris warned that under Can-Spam,
"the FTC would have to prove that the seller (who hires a spammer to
advertise a product or service) knew, or consciously avoided knowing, that the
third-party mailer intended to violate the law. This standard requires proof of
both the seller's and spammer's level of knowledge...These requirements to
prove intent pose a serious hurdle that we do not have to meet to obtain an
injunction under our current jurisdiction." In a private meeting in
November, according to a participant, Muris told one antispam advocacy group that even after Can-Spam is
enacted, the FTC would probably continue to use pre-existing laws against
spammers.

The National
Association of Attorneys General, which would also be charged with
enforcing Can-Spam, is more blunt. In November, the
group sent a letter to Congress that warned: "The bill creates so many
loopholes, exceptions, and high standards of proof, that it provides minimal
consumer protections and creates too many burdens for effective
enforcement...We respectfully request that you not move forward..."

In defense of Can-Spam

Can-Spam's proponents say critics are overreacting. Chris Fitzgerald, a
spokesman for Sen. Ron
Wyden, D-Ore., said the federal law would leave intact some state laws
dealing with deception and fraud.

"We're going to have a
difference of opinion," Fitzgerald said. "The bottom line here is the
Internet doesn't recognize state borders. What you need is a single, uniform,
nationwide standard that puts spammers on notice...You need a single nationwide
standard to crack down on kingpin spammers that are filling up the nation's
in-boxes and threatening the future of the Internet."

Other members of Congress
have argued that while Can-Spam may be flawed, it is better than no federal
legislation.

Rep. Ed
Markey, D-Mass., said in a floor speech that Can-Spam includes regulations
on wireless spam, an area that state laws have not addressed. "Imagine if
you reach a point where there are 150 unwanted rings on your phone, your cell
phone, this zone of privacy which we all have, as these marketers are calling
you on your cell phone all day long," Markey said. "What this
legislation does is it ensures that the Federal Communications Commission and
the Federal Trade Commission take the actions which give protections in this
new battleground."

Other portions of Can-Spam
are set to do the following:

• Prohibit
recipients from suing spammers, even if they are repeatedly and maliciously
spammed. An unsuccessful House
of Representatives bill introduced by Rep. Zoe
Lofgren, D-Calif., would have given Americans this "private right of
action." An equally unsuccessful Senate bill would have done the same,
letting spammees sue spammers for $1,000 per unlawful spam.

• Force spammers
to let recipients unsubscribe from their list--but they don't have to make it
easy. They don't have to offer an obvious click-to-unsubscribe link. Instead,
Can-Spam will let them use any "Internet-based mechanism," prompting
complaints that an unsubscribe feature could be buried in a Web site clogged
with pop-ups.

• Impose no
labeling requirement on e-mail unless it was sexually explicit. Currently at
least 15 states require "ADV:" or a similar label on all unsolicited
commercial e-mail, according to law professor David Sorkin's
Spam Laws site.
Because Can-Spam would zap those laws and includes no labeling requirement of
its own, spammers in those states could no longer be sued if they chose not to
label. (The list of states includes Arizona,
California, Colorado, Illinois, Michigan, Nevada, Texas and Utah.)

• Refrain from
regulating spam from political, religious or nonprofit groups. No other antispam law in the United States appears to do this
either, primarily because of questions about whether levying such regulations
on noncommercial speech would jibe with the First Amendment's guarantee of
freedom of expression. Also, politicians sometimes engage in spam themselves
and prefer to keep their options open.

Technologists' views

Technology companies are split on whether Can-Spam will prove to be a boon or a
bust. Microsoft and AOL have applauded Can-Spam, as have the Direct Marketing
Association and other e-mailers worried about being dragged into court on
frivolous charges under California's
antispam law. The state law is set to take effect on Jan. 1, 2004.

DMA public affairs director
Louis Mastria said it is "imperative that we
have a national standard for e-mail marketing, because it's at the very least a
national marketplace. To have anything that's less than a federal standard would
be, No. 1, ineffective and, No. 2, put a (damper) on the larger
marketplace."

Analysts and spam-fighting
companies have warned, however, that Can-Spam could lead to even more
unsolicited commercial e-mail. MessageLabs predicts
that it "could increase already growing volumes of spam and adversely
affect consumers and businesses." Gartner warns spam would likely worsen
despite the existence of a federal law.

Ray
Everett-Church, a lawyer at antispam firm ePrivacyGroup.com,
says that even with the FTC and state attorneys general, there is not
"enough enforcement to make spammers think twice about engaging in the
practice."

Everett-Church and other
spam opponents have said that because Can-Spam will legalize nonfraudulent spam, every business in the United States
could send an unspecified amount of unsolicited e-mail repeatedly, until the
recipient asks to be removed. The Small Business Administration says
there are 22.9 million small businesses in the country, and each one would be
able to take advantage of this new legal right.

It's also unclear what
effect any U.S.
law can have internationally, something that Congress appears to be slowly
recognizing. Two U.S.
senators and three U.K.
members of Parliament endorsed close "cross-border" cooperation
between the two countries in a joint letter on Dec. 8. The agenda
of a United Nations summit that began Dec. 10 in Geneva urges governments to
"take appropriate action on spam at national and international levels,"
and an Organization
for Economic Cooperation and Development summit is scheduled for Brussels
in February.

Perhaps that explains why,
even before Bush signed Can-Spam into law, some U.S. politicians are already
talking about what to do next. Rep. John
Dingell, D-Mich., predicted in November that
"it is quite possible that we will have to revisit this matter
again."