List Firms Welcome Pre-emption Aspect of Federal Spam Bill

List firms handling e-mail files have embraced the CAN-SPAM Act of 2003, the federal anti-spam legislation likely to gain final congressional approval next week.

Perhaps the most favorable part of the legislation from a list perspective is its pre-emption of state laws, which began popping up this year, the most notable being a tough California law that could have hampered e-mail marketing.

“I think the federal law as a whole is a lot better than the state legislation that was coming out,” said Rob FitzGerald, vice president, business development at Walter Karl Interactive, a division of Walter Karl, Pearl River, NY. “Specifically, the federal law puts us in a much better place than any state legislation like California would have. We think that it's going to be a good thing overall.”

Concern over the California law did affect some list rentals prior to the action on the federal law.

“It created a lot of concern amongst the list owners and the marketers, and it was starting to have some adverse effects on the marketplace,” said Rob Sanchez, senior vice president at MeritDirect, White Plains, NY. “A couple of small mailers canceled campaigns without details of what was going to happen. It was done out of fear and uncertainty.”

California's law banned ad-supported e-mail newsletters as well as unsolicited commercial e-mail. Direct marketers also feared lawsuits under the law's provision for private lawsuits. Under the federal legislation, consumers cannot sue.

Another list professional agreed with Sanchez and said the effects would carry over into next year.

“A lot of the major mailers that rent e-mail lists all the time had to plan for their first- and second-quarter budgets a long time ago. And because they did not know that this piece of federal legislation was going to go through, many eliminated prospecting e-mail,” said Jay Schwedelson, corporate vice president at Worldata, Boca Raton, FL.

He expects that list rental revenue will be affected, especially in the first quarter of the year.

Even so, the lost revenue will be less than if marketers had to cease e-mailing people in California as of Jan. 1.

“This federal piece of legislation is a major step in the right direction for permission-based list owners, managers and brokers because without this law, come Jan. 1 the e-mail environment would have been dead,” Schwedelson said.

Worldata was looking to eliminate “about 40 percent of almost every single list,” he said, because of the inability to verify whether the e-mails were being sent to California residents.

Not all e-mail list users are bound to strict planning schedules.

“The good news is that the majority of e-mail list orders come from small and medium-size mailers, and most of these businesses don't do their budgeting that far ahead and will be able to continue using e-mail in the first quarter,” Schwedelson said.

Among its other provisions, the federal law would require that commercial e-mailers include legitimate e-mail addresses, provide and honor opt-out mechanisms and use honest subject lines. Most list professionals say their clients already do these things.

“All along we've been following best practices that really exceed what's in the law,” Sanchez said. “This federal law just clears things up for those who haven't and sets a standard.”

However, another provision would mandate that the Federal Trade Commission look at creating a national do-not-e-mail registry six months after the bill's Jan. 1 effective date. Similarly to FTC chairman Timothy Muris, list professionals doubt the merit of such an endeavor.

“I don't think a do-not-e-mail registry will ever work but we will address that when the time comes,” Sanchez said.

FitzGerald echoed that sentiment.

“Obviously there are things that we will have to address as they evolve, such as the proposed national do-not-e-mail registry,” he said. “Ultimately, everybody has a responsibility, not just the list management and brokerage companies but also the marketers, the ad agencies and the data owners have to pay attention to what's going on and make sure to comply with the legislation.”

Overall, e-mail list professionals are optimistic about the legislation's effect on the coming year.

“We're hopeful that this will lift a bit of the cloud off of next year and get people thinking about e-mail,” Sanchez said.

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