Direct mail double cross?

A fight over opt-in marketing has anti-spam activists crying foul.

Published November 12, 1999 5:00PM (EST)

In December, nine prominent Internet activists from the United States and Canada arrived in Washington for a secret meeting with officials from the Direct Marketing Association (DMA). The activists' message: Stop spamming, please.

For five hours straight, the activists -- founding members of the Coalition Against Unsolicited Commercial E-mail (CAUCE) and representatives from various Internet service providers, telecommunications companies and software developers, including Microsoft -- tried to impress upon the DMA's honchos why they should shun unsolicited junk e-mail. They tried to educate the marketers about the economic and ethical issues of "cost-shifted advertising" (whereby the recipient pays), and about the threat that unbridled spam poses to consumers' privacy, to companies' private property rights and to the cooperative culture of the Internet. And they hoped that an agreement could be reached that would reduce spam without government intervention.

The Spam Summit, bringing together as it did some vocal adversaries, was often contentious, but a joint press release composed at the meeting's end showed evidence of consensus. Both groups agreed to a set of recommendations, including support for legislation prohibiting false identification in commercial e-mail; both also acknowledged that "opt-in" (whereby commercial e-mail is sent only to people who have opted to receive it) is the most successful way for online marketers to target consumers, and agreed to create a nonprofit global "opt-out" list, which would allow individuals and companies to register that they did not want to receive unsolicited e-mail.

But it seems the truce was short-lived. In recent days, the DMA has praised the potential of spam and lauded the success of the Net's self-regulation. The activists, meanwhile, admit that this may be the moment to give in to something they never wanted -- government regulation. No one is eager to invite Uncle Sam to oversee the Net, but anti-spammers -- angered by what they consider to be an about-face by the DMA -- concede they don't know how else to stem the flow of unsolicited e-mail.

"We tried repeatedly to show them how they could have their cake and eat it too -- that opt-in marketing is a win-win situation for the DMA and consumers," says Nick Nicholas, the executive director of the Mail Abuse Prevention System, which operates the Real-time Blackhole List (RBL) -- a blacklist of Internet addresses known to send spam. "But," he posted to an anti-spam newsgroup, "the DMA has shown that they are untrustworthy and completely lacking in integrity."

Of course, no one ever expected that a direct-marketing organization would agree to anything like a ban on spam, or would denounce an advertising opportunity. But the activists had high hopes that they could convince the marketers to limit commercial e-mail, targeting only those who request it.

The DMA, however, sounds quite excited about the possibilities opened up by the Internet. DMA president and CEO Robert Wientzen touted the use of unsolicited commercial e-mail as a "powerful marketing tool" at the association's 82nd annual conference last month in Toronto. And in congressional testimony last week, DMA Senior Vice President for Government Affairs Jerry Cerasale lauded the success of the marketing industry's efforts at self-regulation. Last week, the DMA also announced the launch of a global remove list -- but one that does not allow ISPs to opt out their own domains.

"I'm not terribly surprised about their about-face, but I'm most appalled by their dishonesty," says Nicholas. "My breath is taken away by how blatantly they turned around and have done and said completely different things."

Other participants in last year's meeting echoed his sentiments. "I am really dismayed that they seem to have done a complete about-face from the assurances they gave us at the Spam Summit a year ago," said John Levine, author of the bestselling "Internet for Dummies" book. "When we met, one of the things we agreed was that opt-in was by far the best way to do advertising. But now, both in Wientzen's remarks at the convention and [Cerasale's] testimony on the Hill, they've said they want to do opt-out advertising."

The DMA says that it has not broken any promises. It maintains that the agreement reached at the Spam Summit concerned recommendations, not necessarily specific actions; the group didn't leave the summit with a directive to change direct marketers' business methods, but with a sense of a mutual comprehension. As Pat Faley, vice president for ethics and consumer affairs, put it: "We understood their position and they understood ours."

Faley was quick to dismiss any notion of an agreement about opt-in marketing. "As a legal principle, we maintain the right of commercial free speech," Faley explained. "If you're a small business trying to get off the ground, the only way to do that is to reach out and let people know what products you have, to offer it to the world on the Internet. That's why we say that a marketer should be able to let consumers know what they have to offer them; and then if a consumer says 'I don't want to hear from you again,' a marketer should respect that. It's the 'one bite at the apple' approach."

Still, it sounds as if the DMA is aware of making some commitments at the summit. When asked about the DMA's support for anti-spam legislation, Faley produced DMA testimony from a June 1998 congressional hearing (six months before the Spam Summit), endorsing legislation to combat electronic fraud.

Faley was particularly proud of the DMA's compliance with the agreement to create a global opt-out list. The e-mail preference service (or e-mps), which has been in the planning stage for more than a year, will maintain a list of e-mail addresses whose owners have registered a preference to not receive unsolicited commercial e-mail. Marketers can then compare their mailing lists with the e-mps database and cleanse their list of those who have requested to be removed.

The service will be launched on Jan. 10, 2000, and all DMA members will be required to use it. The DMA's nearly 4,600 members will have access to the list at no charge, but non-members will have to pay $100 annually for unlimited use. If a good chunk of the more than 22 million small businesses in the United States decide to use the list, it could become a great source of revenue for the DMA. If, however, small businesses balk at paying a fee to find out who not to advertise to, the list will hardly fulfill its mission of giving consumers the option to be left off mass mailings.

While arguments could be made that the DMA has turned a consumer rights issue into a proprietary service, what really has activists seeing red is how the DMA has configured the opt-out list: It will not allow ISPs to opt out for their own domains. Faley cited concerns that allowing ISPs to opt out would restrict the rights of individual consumers -- those consumers who would choose to receive commercial e-mail.

"The truth is that ISPs have the ability right now to stop bulk e-mail," Faley added. "They have technological systems that can detect mass influxes of e-mail from one location and can stop them. ISPs don't need an e-mail preference service."

But some ISPs beg to differ. "That's patently wrong," said Afterburner, the abuse manager for large regional ISP Erols/RCN. "But even if it were possible, why should the burden of blocking unwanted e-mail fall upon the recipients?"

It certainly doesn't make sense to Rodney Joffe, a self-described "marketing geek" who has been a card-carrying member of the DMA for nearly 20 years -- and is also a passionate anti-spammer. "I believe that the way the Internet has developed is opposed to the way the marketers want to shape it," says Joffe, who organized the Spam Summit.

Two months prior to that meeting, Joffe had created an e-mail preference service called SAFE-eps to rival the DMA's planned service. Unlike the DMA's e-mps, SAFE-eps had the support of the Internet community and allowed domain-wide opt-out, including for ISPs. Among its first registrants were America Online and Microsoft's Hotmail. He had hoped that the DMA would adopt his approach -- but it didn't work out that way.

"The DMA position is arrogant and absolutely untenable," says Joffe, "by taking this [opt-out] position, the DMA is undermining the fundamental principles of the Internet -- specifically by shifting the costs of advertising onto the recipient and not allowing ISPs to control their own destiny."

Joffe had planned the Spam Summit quietly, to avoid the wrath of the legions of spam-hating netizens who consider their personal computers to be private property (unlike postal mailboxes, which are technically owned by the government) and see the proponents of opt-out marketing as criminal trespassers. But now that the marketers have failed to honor what the anti-spam lobbyists considered a mutual agreement, Joffe predicts dire consequences:
"I'm terribly distressed by this. I'd hoped that logic and good sense would prevail and that it wouldn't come to this. We tried to explain that although we were only nine individuals, we spoke for hundreds of thousands of people. There have been mumbling and grumbling until now, but this will turn out to be the pivotal point by which the DMA and Internet community at large will finally go head to head. This will be the catalyst which will begin the war at large between the Internet and the DMA.

Some anti-spammers, who have loosely grouped themselves under the name the Lumber Cartel, are already calling for retaliation against the DMA and its members. If the DMA condones the use of unsolicited commercial e-mail, these activists reason, they can turn the tables and target the DMA and its members with "exciting news and opportunities" of their own. Others are calling for a boycott of all DMA members, including IBM, AT&T and others. (Microsoft, which sat on the anti-spammer side of the table at the summit, is also a DMA member.) One anti-spammer has already proposed a software program called "Pandora's Box," which would automate the process of responding to unsolicited commercial e-mail by targeting executives from the company that sent the spam.

But Nicholas and other anti-spam lobbyists advise against fighting abuse with abuse. "Our only recourse is to go right over their heads to approach Congress and let them know that the Internet community has met with marketers in an effort to help self-regulate, but the DMA has reneged on every promise it made," he says.

Joffe agrees. "Federal legislation is anathema to the Internet culture, and we were hoping that it will get solved without federal interference," he said. "But we now know that we need the weight and power of law behind us. It's the only way to control spam."

Ray Everett-Church, a founding member of CAUCE and chief privacy officer and vice president of public policy at, has already been working with Congress to help craft such legislation. There are currently four different anti-spam bills before Congress, and Everett-Church is advising members of the House Subcommittee on Telecommunications, Trade and Consumer Protection on the issues and their implications. One bill, the Can Spam Act, would give ISPs the right to post notice that they do not accept spam and to sue spammers who violate their wishes; it would also create criminal penalties for hijacking domain names when sending spam.

"I think that ultimately we'll see legislation that will combine the best of all current pending legislation, that gives both consumers and ISPs means of protecting themselves from unwanted ads, and gives them legal recourse if their wishes are not respected. That's the bottom line," Everett-Church says.

Meanwhile, visitors to the DMA's annual conference last month reported seeing booths and exhibits displaying products that would facilitate spamming -- and violate certain state laws -- including a computer program to help marketers "guess" at individuals' e-mail addresses by generating variations of a person's name.

"The only conclusion I can draw from the apparent interest in these services is that the direct marketing industry still doesn't understand why unsolicited commercial e-mail is a bad idea for all involved," author Levine wrote in a press release earlier this month. "Flooding the network with unsolicited commercial e-mail is as damaging to the sender as it is to the recipient. Understanding this is the first step towards understanding how to take advantage of the promise of permission-based online marketing."

Spam has long been employed by unprofessional and unethical business people (referred to by anti-spammers as "chickenboners" -- an epithet synonymous with "trailer trash,"
or someone who gnaws on fried chicken and throws the bones in the back of the trailer) to tout scams, porn sites or the latest way to "fire the boss and kill the alarm clock." But in recent months, some legitimate businesses have been charged with venturing into the sticky swamp of junk e-mailers -- among them, Harper Collins, and RealNetworks.

DMA president Wientzen, in his keynote at the marketers' ball, acknowledged that spam has been tainted by scams and fraud but stated: "[W]e cannot let the unsavory, dubiously employed bulk e-mail out there destroy the opportunities of targeted, sophisticated, responsibly used commercial e-mail, which, without doubt, holds promise as a powerful marketing tool ... The DMA is endeavoring to do just that: preserve unsolicited commercial e-mail as a business communications tool, while also supporting the development of various permission marketing models."

Wientzen's only mention of opt-in marketing was to denounce it: "[W]e feel that most of those who push for an opt-in only regime have very little understanding of the incredibly negative impact it would have on the future use of e-mail as a marketing tool."

Remarks like these are just untenable to the likes of Nicholas. "Thank you, Bob [Wientzen] and Jerry [Cerasale]," wrote Nicholas in his newsgroup posting. "Thank you for showing in a public and concrete way that even though you may dine on food finer than KFC and live in a neighborhood better than a trailer park, from a moral standpoint you're really no different from the chickenboners we despise so much."

By Deborah Scoblionkov

Deborah Scoblionkov is a Philadelphia writer.

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