Commercial E-Mailers Tepid to Digital Postage Idea

E-mail marketers reacted cautiously to recent proposals for a digital postage system that would require bulk senders to pay a fee, questioning whether such a system would work and how much it would cost.

The e-mail postage idea gained traction last month when Microsoft chairman Bill Gates told luminaries at the World Economic Forum in Davos, Switzerland, that the solution to the spam problem required adding a cost to the sending of e-mail. He sketched out a “sender-pays” system for bulk e-mail.

The idea was buttressed with the announced launch of Goodmail, a Mountain View, CA, startup that proposes requiring bulk e-mailers to first identify themselves and then buy a digital postage stamp for their mailings. The money generated would be split between Goodmail and Internet service providers handling the mail.

“There's been a lot of discussion about bringing economics to e-mail,” said Richard Gingras, Goodmail's chief executive. “Our view is what's required is a very elegant solution that shifts the cost from the ISPs and consumers to the bulk mailers.”

Gingras said the fee could be as high as a penny per e-mail, stressing that only bulk commercial e-mailers would need to pay, not consumers. Goodmail and the receiving domains would split the fees, which would offset the cost of handling and blocking huge volumes of unwanted e-mail. Goodmail hopes to have its system in place sometime this summer.

AOL and Yahoo declined to comment specifically on the proposal, but both expressed interest in systems that create what Yahoo vice president Brad Garlinghouse called “economic friction.”

Trevor Hughes, executive director of the E-mail Service Provider Coalition, said the spam debate first should address the problem of authenticating e-mailers' identities. Various authentication proposals have been made in recent months, including Microsoft's “caller ID” system, Yahoo's DomainKeys and AOL's championing of the SPF protocol.

“Until we have a method for authenticating e-mail, we can't talk about laying costs on the sender,” he said.

Even a small cost for sending e-mail would hurt small businesses, which rely on e-mail as a cheap marketing vehicle, Hughes said.

“We need to come up with solutions that offer the full breadth of the marketplace a palatable, workable solution,” he said.

Gingras acknowledged that an e-mail postage system would need to give non-commercial e-mailers a break in price and set up a tiered pricing system for small businesses.

“We will look to address that as best we can,” he said. “That's a very valid concern.”

For commercial e-mailers, digital postage could become a big expense. Quinn Jalli, head of ISP relations at e-mail service provider Digital Impact, estimated that a penny per e-mail charge would cost the company $700,000 yearly just to send to AOL.

“We're going to pass those costs along to our customers,” he said.

Instead of levying fees on sending e-mail, Hughes favors another monetary solution suggested by Gates: forcing unknown senders to complete a computational problem before their e-mail is delivered. This would not affect regular e-mailers, but would require spammers to operate numerous servers and pay for increased bandwidth.

“That would so drastically slow down the ability of spammers to deliver large amounts of e-mail,” Hughes said.

Rich Wong, general manager of messaging solutions at Openwave, a Redwood City, CA, messaging-software firm, said digital postage systems would need to hash out various technical issues, chiefly guarding against false identities and developing a cost-effective system for both senders and receivers.

“There's a giant infrastructure that needs to be put into place to keep track of the stamps,” he said. “You have to account for all these debits, credits on a worldwide ISP basis.”

Gingras said identity could be established easily in a process similar to a credit check and that the setup costs would not overwhelm the system. Digital postage, though aimed at reducing spam, also would cause bulk e-mailers to think twice before sending large amounts of e-mail, he said.

“The intent of our system is to cause volume senders to take monetary responsibility,” he said.

One bulk e-mailer agrees with this sentiment. Al DiGuido, chief executive of New York e-mail service provider Bigfoot Interactive, said ISPs should act like other media companies and charge for access to their audiences.

“You'd have to go through the same process that every other marketer has gone through in every other medium,” he said.

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