SPAMMING: THE E-MAIL YOU WANT TO CAN HEARING BEFORE THE SUBCOMMITTEE ON TELECOMMUNICATIONS, TRADE, AND CONSUMER PROTECTION OF THE COMMITTEE ON COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTH CONGRESS FIRST SESSION NOVEMBER 3, 1999 Serial No. 106±84 Printed for the use of the Committee on Commerce ( U.S. GOVERNMENT PRINTING OFFICE 61±040CC WASHINGTON : 1999 VerDate 11-SEP-98 08:58 Dec 17, 1999 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 61040.TXT HCOM2 PsN: HCOM2 COMMITTEE ON COMMERCE TOM BLILEY, Virginia, Chairman W.J. ``BILLY'' TAUZIN, Louisiana JOHN D. DINGELL, Michigan MICHAEL G. OXLEY, Ohio HENRY A. WAXMAN, California MICHAEL BILIRAKIS, Florida EDWARD J. MARKEY, Massachusetts JOE BARTON, Texas RALPH M. HALL, Texas FRED UPTON, Michigan RICK BOUCHER, Virginia CLIFF STEARNS, Florida EDOLPHUS TOWNS, New York PAUL E. GILLMOR, Ohio FRANK PALLONE, Jr., New Jersey Vice Chairman SHERROD BROWN, Ohio JAMES C. GREENWOOD, Pennsylvania BART GORDON, Tennessee CHRISTOPHER COX, California PETER DEUTSCH, Florida NATHAN DEAL, Georgia BOBBY L. RUSH, Illinois STEVE LARGENT, Oklahoma ANNA G. ESHOO, California RICHARD BURR, North Carolina RON KLINK, Pennsylvania BRIAN P. BILBRAY, California BART STUPAK, Michigan ED WHITFIELD, Kentucky ELIOT L. ENGEL, New York GREG GANSKE, Iowa THOMAS C. SAWYER, Ohio CHARLIE NORWOOD, Georgia ALBERT R. WYNN, Maryland TOM A. COBURN, Oklahoma GENE GREEN, Texas RICK LAZIO, New York KAREN MCCARTHY, Missouri BARBARA CUBIN, Wyoming TED STRICKLAND, Ohio JAMES E. ROGAN, California DIANA DEGETTE, Colorado JOHN SHIMKUS, Illinois THOMAS M. BARRETT, Wisconsin HEATHER WILSON, New Mexico BILL LUTHER, Minnesota JOHN B. SHADEGG, Arizona LOIS CAPPS, California CHARLES W. ``CHIP'' PICKERING, Mississippi VITO FOSSELLA, New York ROY BLUNT, Missouri ED BRYANT, Tennessee ROBERT L. EHRLICH, Jr., Maryland JAMES E. DERDERIAN, Chief of Staff JAMES D. BARNETTE, General Counsel REID P.F. STUNTZ, Minority Staff Director and Chief Counsel SUBCOMMITTEE ON TELECOMMUNICATIONS, TRADE, AND CONSUMER PROTECTION W.J. ``BILLY'' TAUZIN, Louisiana, Chairman MICHAEL G. OXLEY, Ohio, EDWARD J. MARKEY, Massachusetts Vice Chairman RICK BOUCHER, Virginia CLIFF STEARNS, Florida BART GORDON, Tennessee PAUL E. GILLMOR, Ohio BOBBY L. RUSH, Illinois CHRISTOPHER COX, California ANNA G. ESHOO, California NATHAN DEAL, Georgia ELIOT L. ENGEL, New York STEVE LARGENT, Oklahoma ALBERT R. WYNN, Maryland BARBARA CUBIN, Wyoming BILL LUTHER, Minnesota JAMES E. ROGAN, California RON KLINK, Pennsylvania JOHN SHIMKUS, Illinois THOMAS C. SAWYER, Ohio HEATHER WILSON, New Mexico GENE GREEN, Texas CHARLES W. ``CHIP'' PICKERING, KAREN MCCARTHY, Missouri Mississippi JOHN D. DINGELL, Michigan, VITO FOSSELLA, New York (Ex Officio) ROY BLUNT, Missouri ROBERT L. EHRLICH, Jr., Maryland TOM BLILEY, Virginia, (Ex Officio) (II) VerDate 11-SEP-98 08:58 Dec 17, 1999 Jkt 000000 PO 00000 Frm 00002 Fmt 6011 Sfmt 0486 61040.TXT HCOM2 PsN: HCOM2 C O N T E N T S Page Testimony of: Brown, John M., President, iHighway.net Incorporated ............................... 30 Cerasale, Jerry, Senior Vice President, Direct Marketing Association ........ 49 Everett-Church, Ray, Chief Privacy Officer and Vice President for Public Privacy, AllAdvantage.com ........................................................................... 53 Green, Hon. Gene, a Representative in Congress from the State of Texas . 6 Harrington, Eileen, Associate Director of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission ................................. 22 Kennedy, Charles H., Morrison & Forester LLP ........................................... 43 Miller, Hon. Gary G., a Representative in Congress from the State of California ....................................................................................................... 8 Raul, Alan Charles, Sidley & Austin .............................................................. 34 Russina, Michael, Senior Director, Systems Operations, SBC Communica- tions Incorporated ......................................................................................... 40 Wilson, Hon. Heather, a Representative in Congress from the State of New Mexico ................................................................................................... 13 (III) 2 VerDate 11-SEP-98 08:58 Dec 17, 1999 Jkt 000000 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 61040.TXT HCOM2 PsN: HCOM2 SPAMMING: THE E-MAIL YOU WANT TO CAN WEDNESDAY, NOVEMBER 3, 1999 HOUSE OF REPRESENTATIVES, COMMITTEE ON COMMERCE, SUBCOMMITTEE ON TELECOMMUNICATIONS, TRADE, AND CONSUMER PROTECTION, Washington, DC. The subcommittee met, pursuant to notice, at 10:10 a.m., in room 2123, Rayburn House Office Building, Hon. W.J. ``Billy'' Tauzin (chairman) presiding. Members present: Representatives Tauzin, Oxley, Stearns, Gillmor, Cox, Largent, Rogan, Shimkus, Wilson, Ehrlich, Markey, Eshoo, Luther, Green, and McCarthy. Staff present: Linda Bloss-Baum, majority counsel; Mike O'Rielly, majority professional staff; Cliff Riccio, legislative clerk; and Andrew W. Levin, minority counsel. Mr. TAUZIN. The subcommittee will come to order. Good morning. The Chair will recognize himself for an opening statement. The Internet offers us new and exciting ways to communicate with others across the globe with unprecedented speed and cer- tainty. But just as we experienced in our non-cyberspace everyday lives, the digital world has also inundated us with communications that sometimes we do not want to receive. The problem of unsolic- ited e-mail, commonly known as spam, is becoming more prevalent as the technology which allows for massive distribution of digital material increases. America Online, the largest online service provider, estimates that one-third of the e-mail messages coming into its network from the Internet are spam. That is between 10 million and 24 million spam e-mails per day just on AOL alone. Consumers not only find the practice of spamming annoying and inconvenient, they also find it expensive. More often than not, the receiver must pay for e-mail advertisements. This is akin to receiving junk mail with postage due or having a telemarketer call your cell phone and you find out your cell phone bills have gone up. These financial costs are only aggravated by the time and energy it takes for consumers to determine which e-mail is spam, and which is not before deleting the spam. Oftentimes this leads to ac- cidentally discarding personal and solicited messages in the process of trying to filter out the unwanted spam. Furthermore, ISPs must, as well, spend money and time to try to filter spamÐthat is, buy more sophisticated computers, hire additional staff to keep the spamming problem under control. The unsolicited e-mails also cause quite a burden on the ISP's network and technical capabili- (1) VerDate 11-SEP-98 08:58 Dec 17, 1999 Jkt 000000 PO 00000 Frm 00004 Fmt 6633 Sfmt 6633 61040.TXT HCOM2 PsN: HCOM2 2 ties. I am glad we have representatives from several ISPs with us this morning to discuss the profound effect that spam has had on their businesses. Several States have enacted anti-spam laws such as California, thanks to my colleague, Mr. Miller, who is here today. We now have several pieces of Federal legislation pending before the com- mittee which would allow for national guidelines on the issue of spamming. Our own colleagues from the subcommittee, Mrs. Heather Wilson and Mr. Green, have both also filed bills and are joined this morning by Mr. Miller. And Chris Smith, who was sup- posed to be with us, unfortunately is required to chair a hearing across the hall and has called me to apologize and to express his strong interest in this subject matter and his interest, Mr. Miller, Mr. Green, Mrs. Wilson in working with the three of you in hope- fully crafting a solid piece of legislation. We look forward to hearing from each of our members this morn- ing to discuss their legislative proposals to help us put a stop to the practice of spamming that has become so prevalent in the dig- ital world. I do want to say at the outset, however, that we must be careful in legislating in this area. Any legislation must be care- fully crafted in order to be hard on spam without interfering with legitimate practices of businesses using e-mail to build stronger re- lationships with existing customers. The information age depends upon free-flowingÐconstantly free- flowing and efficient systems of information. For example, when someone visits a website and indicates interest in receiving further information or updates, any e-mail that business then sends to the individual is not technically spam because it has been actually so- licited. And, obviously, we have to take into account those legiti- mate needs of both consumers and businesses in communicating with each other. Again, I want to thank our witnesses for taking the time to edu- cate us today about this exciting issue regarding the digital econ- omy. It is one of many hearings our committee has held on elec- tronic commerce and each time we come away better educated and hopefully better informed in terms of how to make decent policy in this critical area. I will now ask if any of the members have opening statements. The gentleman from Florida, Mr. Stearns. Mr. STEARNS. Thank you, Mr. Chairman, for holding this hear- ing. I think I know most about this hearing. I had the opportunity to hear my colleague, Mrs. Wilson, on I guess C-SPAN radio or something when I was coming in. All the questions around the country were coming in, and I think she sort of explained it and talked about it, but I thought I would mention some of the statis- tics here. I think a lot of us have been on the Internet, and we see these sort of commercial e-mails. And they appear to be legitimate com- mercial, unsolicited e-mails, and they talk about how you can make $50,000 in less than 90 days or you can eat as much as you want and you can lose 10 pounds a week and it is guaranteed. Of course, you double click on this and then something else is selling you dif- ferent products. VerDate 11-SEP-98 08:58 Dec 17, 1999 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 61040.TXT HCOM2 PsN: HCOM2 3 Most of these e-mails are too good to be true.