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Congress Likely to Pass Industry-Favored =

Anti-Spam Legislation This Year, Experts Say =





Driven by worries that a spam epedemic threatens to impair
the Internet, legislation is expected to move quickly
through both the House and Senate that would curb the worst
forms of spam, while allowing legitimate e-mail marketing
companies to stay in business, according to congressional
and industry sources interviewed by BNA.


The RID Spam Act (H.R. 2214), an industry favorite, is being
pushed by two key House committee chairmen who would like to
see the bill approved this summer. A similar bill, the
CAN-SPAM Act (S. 877), has broad support in the Senate,
staffers told BNA.


"There is broad consensus that CAN-SPAM and RID Spam are two
proposals that appear to be moving," said J. Trevor Hughes,
executive director of the Network Advertising Initiative, a
group of e-mail marketing companies.


But the bills are opposed by consumer advocates, who prefer
legislation that would ban unsolicited e-mail altogether and
give individuals the right to sue spammers.


Both CAN-SPAM and RID Spam would allow marketers to send
unsolicited e-mail, as long as they follow certain rules,
such as giving recipients an opportunity to opt-out of
receiving future messages.


The bills would also prohibit deceptive practices, such as
the use of false header information, which have been
employed by Internet scammers, pornographers, and other bad
actors. In addition, the government and Internet service
providers (ISPs) would be given enforcement authority to go
after violators.

DMA, AOL Among Supporters



A spokesman from the Direct Marketing Association told BNA
that CAN-SPAM and RID Spam are the best anti-spam proposals
to come before Congress so far. America Online Inc. has also
backed the measures.


When RID Spam was introduced, an AOL spokesman said the bill
would provide a good framework for ISPs and law enforcement
to pursue the most egregious spammers, while setting
"appropriate and practical rules of the road for senders of
legitimate e-mail."


RID Spam, introduced by Rep. Richard Burr (R-N.C.), is
co-sponsored by House Energy and Commerce Committee Chairman
W.J. "Billy" Tauzin (R-La.) and House Judiciary Committee
Chairman James Sensenbrenner (R-Wis.).


The chairmen are hoping to get the bill passed this summer,
according to Tauzin spokesman Ken Johnson.


CAN-SPAM, introduced by Sen. Conrad Burns (R-Mont.) and
co-sponsored by Sen. Ron Wyden (D-Ore.), is expected to move
just as quickly. The bill is currently before the Senate
Committee on Commerce, Science, and Transportation, and is
scheduled for markup on June 19, a staffer said.


Committee Chairman John McCain (R-Ariz.), while not
expressing support for any particular bill, has said he
would like to get spam legislation to the Senate floor
before the summer recess.


Last year, the committee approved CAN-SPAM by voice vote,
but it never came before the full Senate. Commentators
expect a very different result this year, now that there
appears to be a huge public outcry for a national law to
stop spam.


While industry groups and consumer advocates may disagree
over what kind of legislative solution would be most
effective, both sides have called on Congress to pass strong
anti-spam legislation this year.


"There is substantial momentum behind this," said DMA
spokesman Louis Mastria.


AOL estimates that spam now accounts for 60 to 80 percent of
all mail coming to its members, and is costing U.S.
businesses in excess of $10 billion annually.

Industry Pushing for New Protections



While industry groups are generally pleased with CAN-SPAM
and RID Spam, they are seeking changes that would protect
legitimate marketers from abusive lawsuits and make it
easier for them to be distinguished from bad actors.


The Senate bill contains an affirmative defense for
marketers that are taken to court, but the House legislation
does not have a comparable provision, according to Hughes.
Otherwise, he saw only "technical" differences at this point
between CAN-SPAM and RID Spam.


"We're working right now with other industry groups to try
and reconcile those," Hughes said.


An affirmative defense would help to ensure that a new
federal anti-spam law is not used to go after legitimate
companies that are caught in a "gotcha" situation, Hughes
added.


"The concept there is that companies that create robust
programs and do what they can in good faith to comply with
the law would not be targets of abusive enforcement," he
said. "We should be targeting enforcement against the worst
actors."


Hughes said marketers are pushing to have an affirmative
defense added to the House bill. They would also like a
"safe harbor" provision, similar to one proposed by
Microsoft Corp., added to both bills. Under that proposal,
companies could be certified to send marketing messages by
agreeing to adopt best practices. The FTC would approve the
list of certified companies, but would have no oversight
authority, Hughes said.


One congressional source told BNA that a safe harbor
provision would make CAN-SPAM and RID Spam even more
unpopular with consumer advocates, who are already strongly
opposed to the bills.


Microsoft policy analyst Bill Ashworth said his company's
safe harbor proposal has not been included in any draft
bills he has seen, "but we're still trying to convince
people that it's a good way to differentiate between the
good guys and bad guys."


"I think people support the idea in principle," Ashworth
said. "The challenge is: how do we translate it into
effective legislation?"


Microsoft is pushing for legislation containing, among other
things, strong enforcement provisions, best practices, and
strong prohibitions against fraud and deception, Ashworth
said. However, the technology giant has not yet endorsed any
particular bills.

FTC Weighs in With Suggestions



The Federal Trade Commission has also avoided backing
specific anti-spam bills, but the agency has asked Congress
for new powers to fight spam, including the ability to write
rules under a revised Telemarketing and Consumer Fraud and
Abuse Prevention Act.


During June 11 testimony before a House Energy and Commerce
subcommittee, FTC officials said that new rulemaking
authority "would set out bright lines between acceptable and
unacceptable practices for the business community." Similar
comments were made the same day before a subcommittee of the
Senate Commerce, Science and Transportation Committee.


While the commission has some authority to fight spam under
the FTC Act, the agency told lawmakers that additional law
enforcement tools "would make more explicit the boundaries
of legal and illegal conduct, and they could enhance the
sanctions that the agency can impose on violators."


According to the commission, examples of deceptive or
abusive practices under the amended TCFAPA might include:

Following the hearings, Tauzin said in a statement that he
looked forward to working with the FTC to "refine and
improve" RID Spam.


"Since H.R. 2214 does not supersede the FTC's authority to
enforce against spam under its unfair and deceptive trade
practices authority, it should be a nice supplement to the
commission's existing authority," Tauzin said. "In fact,
H.R. 2214 may go even further than the FTC proposal as it
allows consumers the opportunity to opt out of all
commercial e-mail, not just unsolicited commercial e-mail."

State Preemption a Problem?



So far, consumer advocates and state attorneys general have
been the most outspoken opponents of CAN-SPAM and RID Spam.
States say the bills would preempt their own anti-spam laws,
which in some cases provide stronger protections for
consumers.


"Both bills prohibit the sending of spam to people who have
opted out, but contain no private right of action [for
individuals]," said Paula Selis, senior counsel, Washington
State Attorney General's Office, in an interview with BNA.
"The consumer who is hurt has no remedy."


According to the National Council of State Legislatures,
there are 33 anti-spam laws at the state level with varying
requirements and penalties.


Marketers say this has created a crazy quilt of anti-spam
legislation. "It's almost impossible to advise a client on
how to comply with these laws," said Steve Richter, general
counsel for the Email Marketing Association.


Marketers say they are also opposed to a private right of
action for individuals, because it would result in a flood
of litigation. "Consumers and plaintiffs' attorneys have
limited resources," Hughes said. "As they're looking for
targets, they're not going to spend resources to go after
spammers. They're going to go after legitimate businesses
that are trying to do the right thing."


As an example, Hughes pointed to a two-year-old anti-spam
statute in Utah, which has been used by a single law firm to
file about 1,000 cases on behalf of private citizen.


"The law is simply creating litigation that is lining the
pockets of plaintiffs attorneys in Utah," Hughes said.


Selis told BNA the state of Washington would be open to a
federal statute that preempts state laws, as long as it has
strong consumer provisions.

'Opt-In' Versus 'Opt-Out.'



Consumer advocacy groups are not only calling for a private
right of action for individuals, but also for an "opt-in"
provision, which would effectively ban unsolicited e-mail.


In a May 22 letter to leading congressional committees, a
coalition of privacy, anti-spam, and consumer groups said
that opt-in was vital to curbing spam. "Any law that defines
acceptable criteria for sending unsolicited bulk commercial
e-mail will amount to little more than establishing the
conditions for a federal license to spam," the letter said.


But marketing companies argue that opt-in would be
impractical. "Opt-in assumes that every consumer knows every
conceivable new product that exists," said Mastria.
"Advertising provides a vital role in terms of educating
consumers. How can you do that in an opt-in environment? You
can't."


Selis said that opt-in would be ideal, but she doubted that
it would be included in federal legislation.


"I think there's enough industry concern that that would be
a tough sell," she said.

Schumer Bill Offers Tougher Approach



John Mozena, co-founder and vice president of the Coalition
Against Unsolicited Commercial Email, told BNA his
organization has been pushing for several years for a
federal anti-spam law with both opt-in and a private right
of action for individuals. However, he doubted that such
legislation will be passed any time soon.


So far, a bill introduced by Sen. Charles Schumer (D-N.Y.)
comes closest to the kind of legislation that CAUCE is
seeking, according to Mozena.


That bill (S.1231) would create a national "do-not-spam"
registry, tough criminal and civil penalties, and a private
right of action for individuals.


"This certainly isn't a perfect bill, but it shows more
concern for the plight of consumers when it comes to spam
than most of the bills out there right now," Mozena said.


The "do-not-spam" registry would be modeled after the
"do-not-call" list that is being implemented by the FTC.
Commercial e-mailers would have to consult the "do-not-spam"
list before sending mass e-mail messages.


Mozena said Schumer has agreed to honor a CAUCE request to
make it clear that entire domains can be included in the
registry. For example, General Motors would be able to tell
the FTC that it does not want any of its employees to
receive spam, Mozena said. Schumer also plans to get as much
of the bill's provisions added to the CAN-SPAM Act during
mark-up, he said.

Privacy Concerns



Privacy groups have raised concerns about security issues
associated with implementing the "do-not-spam" list, and at
least one FTC commissioner has said that the agency does not
have the resources to take on such a project.


Schumer's office did not return calls for comment.


Other anti-spam bills have been introduced by Sen. Bill
Nelson (D-Fl.) and Rep. Zoe Lofgren (D-Calif.) .


Nelson's bill (S. 1052) would make spamming illegal under
existing federal racketeering legislation. Lofgren's bill
(H.R. 1933) would provide a bounty to individuals who help
law enforcement agencies to catch spammers.


Rep. Heather Wilson (R-N.M.) plans to introduce legislation
that would modify the definition of commercial e-mail and
enforcement standards contained in RID Spam, a spokesman
said. The bill is expected to be introduced during the week
of June 16, he said.


For the full text of the RID SPAM Act, go to:
http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.2214:. For
the full text of the CAN-SPAM Act, go to:
http://thomas.loc.gov/cgi-bin/query/D?c108:4:./temp/~c108hJ7UdU::
.


For a list of states that have passed anti-spam laws, go to:
http://www.ncsl.org/programs/lis/legislation/spamlaws02.htm


For testimony submitted to Congress by the FTC, go to:
http://www.ftc.gov/opa/2003/06/reauthorization.htm. For more
on the FTC's three-day spam forum, go to:
http://www.ftc.gov/bcp/workshops/spam/index.html.


For more on Microsoft's legislative proposal, go to:
http://www.microsoft.com/presspass/misc/billgspam05-21-03.asp
.


For comments by consumer advocates on anti-spam legislation,
go to: http://www.cauce.org/pressreleases/20030522.shtml.
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By Alexei Alexis

Copyright © 2003 by The Bureau of National Affairs, Inc.,
Washington D.C.