FTC Panelists: Federal Spam Law Needed

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WASHINGTON -- With only a single dissenting voice, FTC forum panelists representing a spectrum of interests including marketing said the time has come for federal anti-spam legislation.


But not surprisingly, what such legislation should entail is another matter entirely, especially when few agree on what spam is.


Universally panned was a recent proposal by Rep. Zoe Lofgren, D-CA, that would require "ADV" labeling in commercial e-mail subject lines and offer computer users who report spammers a bounty as per a proposal by professor Lawrence Lessig of Stanford.


Finding spammers is not the problem, panelists said.


Drawing mixed reactions was the recent proposal by Sen. Charles Schumer, D-NY, to create a national do-not-spam list to be maintained by the Federal Trade Commission.


Though some panelists said such a list at least would cure some of the problem, others said it would be a nightmare to manage because, for example, people change their e-mail addresses often and frequently have more than one.


Earlier in the forum, Schumer said that though he concedes the original figure he put forward of $75 million to manage the registry was quite high, "money will not be an object."


Direct Marketing Association senior vice president Jerry Cerasale said the organization opposes a do-not-spam registry because only legitimate marketers would use it, and spammers would continue to spam, sullying the reputation of its members.


"It's not going to work, and expectations are not going to be met, and then legitimate marketers are going to be blamed," he said.


Overall, when asked to give legislators an anti-spam-law wish list, panelists' differences were succinctly defined.


"First do no harm, and [make it] opt in," said David Sorkin, an associate professor of law at John Marshall Law School in Chicago. "And if you can't do opt in, let the technologists do their work."


From the other side of the spectrum, John Patrick, chairman of the Global Internet Project, said to "put your pens away. This is a time to be very optimistic about spam. There are a lot of good things happening."


Patrick referred to America Online, Microsoft and Yahoo saying recently that they have partnered to fight spam as evidence that the problem of spam can be corrected without federal legislation. Throughout the panel, Patrick held the position that the Internet's global nature precludes any U.S. federal and state laws.


"MIT recently held a technology conference, and some of the smartest computer scientists in the world are really intrigued by this problem, and they have a lot of good ideas," Patrick said. "Venture capitalists see it as an opportunity to make money."


Countered David Kramer, a partner with high-tech law firm Wilson Sonsini Goodrich & Rosati, Palo Alto, CA: "This is an enormous problem, and Congress hasn't acted for 10 years. The cost of spam to industry, business and ultimately consumers is staggering. This cries out for a legislative solution, and the legislative solution is right in front of us."


Kramer advocated modeling spam legislation after existing junk fax laws, claiming that the diminishment of unsolicited faxes in the past decade is evidence a similar anti-spam law would work.


Moderator Eileen Harrington, associate director, division of marketing practices at the FTC, however, noted that the diminished unsolicited commercial faxing may be due more to advancing e-mail technology than to law.


Kramer also suggested a law enabling individuals to take spammers to court to try to "put the costs of spam back onto spammers and take them off of consumers," to which the room erupted in applause.


Paula Selis, senior counsel, Washington state attorney general's office, advocated a law with "effective and substantive" enforcement provisions.


"It's a dollars-and-cents issue, and if the balance is on the side of fear of enforcement, the spamming will stop," she said.


Ray Everett-Church, counsel for the Coalition Against Unsolicited E-mail, urged legislators to "resist the temptation to repeat past mistakes. Opt-out approaches have not worked. Labeling has not worked. ... Business can live with opt in. Business lives every day with opt in."


Charles Curran, assistant general counsel at America Online, said AOL thinks "that technology and legislation complement one another. There is no magic bullet." However, he said legislation "can set boundaries for activity" and "provide a backstop to a good consumer experience."


Steve Richter, general counsel for the E-mail Marketing Association, said, "We can't wait for Enron and Worldcom to hit this industry, where we're going to make examples of a few and hope the others run, or then we catch them and we fine them." He urged legislation be passed "right now. If it's not the best legislation, then we can catch up with it later."


Richter also urged financial penalties on spammers: "We have got to go after their pocketbooks. That will put them out of business."


Cerasale urged legislators "to go after the bad actors." He also urged legislators to give law enforcement agencies the money to enforce whatever law is enacted.


"If you don't do that, then don't bother writing the law," he said. "But you also have to keep in mind that the Internet is an unbelievable economic and informational system. ... Don't close it. Let's keep it open so in the future this can be an economic driver."


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