30+ Years of Global Video Expertise

Introduction
Thank you, Mr. Chairman and Committee Members, for the opportunity to speak to you today about an important issue affecting Washington businesses and residents alike. My name is Ed McNichol and I come to the Energy and Utilities Committee seeking relief from the growing problem of unsolicited commercial e-mail. I am the Digital Editing Specialist and Webmaster at American Production Services, the Northwest's largest video and audio production facility, with offices in Seattle and Redmond. I am also the owner of my own firm, EDcetera™, which provides high quality consulting services to the video industry. In addition, I own and administer the McNichol.com Internet domain. I am also a member of the Coalition Against Unsolicited Commercial E-Mail, or CAUCE.
PROBLEM
In these capacities, electronic mail is a mission critical component of the communications aspects of these companies. I was recently on assignment for my largest client, the Sony corporation headquartered in Atsugi, Japan.  I was in Detroit supporting a NBA on TNT broadcast when I had occasion to seek urgent support via electronic mail.  When I went to read the reply from the sustaining engineer, my in-box was so clogged with junk e-mail that I could not open the message I needed.  This created a very real business problem for me and kept me from performing my duties.  At APS, e-mail is used to receive and process customers orders, as well as provide an important communications link with our Satellite offices and roaming employees.
However, as the worldwide use of electronic mail has grown, so has the problem of unsolicited commercial electronic mail. This junk e-mail, or Spam as it has come to be known, has exponentially grown to the point where it has become a serious burden on my daily business. Two years ago, I met with my legislators office and presented them with over 15 junk e-mail messages that I had received that very day. At that time, it appeared that the Federal government would be taking some action to address this problem. That obviously has not happened.
It is clear that there are inherent problems with unsolicited commercial e-mail. Primarily, these problems are;
Cost-Shifting
Unsolicited commercial e-mail senders shift the financial burden of their messages to the recipients. It costs me money to receive these messages. And a spammer can send several hundred thousand e-mail messages per hour at little cost. In the attached junk e-mail message titled "Bulk E-mail for Profit", the sender is selling a computer program (Floodgate) of which he brags, "Prepare a mailing of 50,000+ in less than a ½ hour". In an August 9, 1997, New York Times article, one firm boasts of sending 25 million unsolicited commercial messages every day!
An the largest national Internet Service Provider, America Online, estimates that 30% of today's e-mail is Spam.   CompuServe, a large service provider, and owners of Washington based Sprynet, has blocked over 1 billion messages in the last twelve months. These messages cost CompuServe, and the end user, hard dollars in the funds required to develop, implement and maintain this filtering system. And still a percentage gets through to the end user. This gives a good gauge to the scale of this problem.
These messages extract a cost in terms of the monetary loss experienced while the user is charged for connecting and reading these messages. I pay to receive these messages.  This places the financial burden on the recipient of these advertisements.
Waste of Resource
Not only do these messages extract a financial cost from the recipient, they also cause a significant drain on a precious common resource, Internet bandwidth. While millions of Americans have flocked to the Internet, some are now referring to it as the "World Wide Wait". This is due in large part to the tremendous amount of garbage that is being sent through the network. The largest single Internet Service Provider in America, America Online, has found that, of the 30 million e-mail messages processed each day, on average 30% was unsolicited commercial e-mail. The passage of every single piece of junk e-mail through numerous servers causes a system wide drag on the legitimate messages and information being processed at the same time.
Fraud
The clear majority of junk e-mail is in regards to shady and fringe businesses. Most promote products such as pornographic web sites, chain letters, and such. A prime example is the attached e-mail titled "Make Money Fast…IT’S LEGAL TOO!!!". This message is clearly a chain letter pyramid scheme and is most likely in violation of state and federal statutes. Most of these messages are sent using false "headers", the Internets equivalent of a return address. If the recipient replies to the original mail, that new message is frequently sent either to an innocent victim or to a non-existent address. This then results in system error messages bouncing all about the net. And in most cases, the unsolicited commercial messages appear with deceiving text in the subject field. Topics such as "Hi There!", "Information Request" and "Your Business Records" have been used. This deceptive practice makes it virtually impossible to discern junk e-mail from the messages critical to my business. And most junk e-mails appear numerous times from numerous senders.  I have never received on of these messages from IBM or Sears, nor do I know anyone who has.
Displacement of Normal E-Mail
Unsolicited Commercial E-mail delays the timely processing of legitimate messages. Even if you aren’t personally receiving these irritating messages, you can bet that your use of the Internet is being slowed down as a result of them. All Internet activities, from web browsing to file downloads, can be hampered by the strain placed by the millions of unsolicited commercial messages being transmitted.
SOLUTION
The only clear solution to this problem is effective legislation that provides my business with real relief from this rapidly escalating situation. And this solution is contained in the excellent bill before you.
Present Bill
This bill would relieve my company of the daily drain on our resources. It specifically prohibits unsolicited commercial e-mail messages, unless the sender has previous approval from the recipient to send such a message. In that case, the bill requires the sender to make it clear that the message is an unsolicited commercial message by including the term "advertisement" in the subject field.
Best of all, a violation of the act falls under the consumer protection act, chapter 19.86 RCW. This allows the actual victim to pursue the violator as provided for in RCW. Further, the bill allows for Internet Service Providers, who suffer greatly from these illegitimate messages, to recover damages also.
Precedent
The anti-Spamming measure is remarkably similar to the state junk fax ban, RCW 80.36.540, which prohibits the transmittal of unsolicited commercial faxes. This statute has been in existence for some time and clearly works. And in addition to the bill we are talking about today, there are similar measures now in eleven other states.
There is also a Federal statute, 47USC Sec. 227 (b) (1) (C), which makes it unlawful to send an unsolicited advertisement to a telephone facsimile machine
Court Affirmation
While the federal junk fax law has been challenged, the courts have repeatedly upheld it. In fact, based on a Ninth Circuit Court decision in Destination Ventures v. FCC (1995), there is substantial government interest in protecting consumers from having to bear the costs of third-party advertising. In addition, the court also held that advertisers have no right to turn consumers into a "captive audience" that is "incapable of declining to receive a message." There are also cases sited below in which the court upheld the rights of individuals to be free from these messages.
ARGUMENTS AGAINST THE BILL
While there is no prominent organized opposition to this measure, large bulk e-mailers, such as Cyber Promotions of New Jersey, have long spoken against similar bills in other states. And in a January 20, article in The Seattle Times, Gerard Sheelan of the ACLU-Washington, said, "We are always wary of the government setting out rules about when speech may not happen."
First Amendment Violation?
The greatest concern in passing legislation of this type is infringing on First Amendment rights. However, if you want to advertise, you must pay the costs and not force those costs onto others. The Federal Junk Fax Ban mentioned above was challenged under this free speech pretense. Federal Judge Stanley Sporkin, in Turner Broadcasting v. FCC said,
"[They] have come to court not because their freedom of speech is seriously threatened but because their profits are; to dress up their complaints in First Amendment garb demeans the principles for which the First Amendment stands and the protections it was designed to afford."
This is not a ban on unsolicited mail. Unsolicited Commercial E-mail will be allowed, but only if the junk e-mailers bear the minimal burden of making sure their messages reach only people who have expressly agreed to bear the costs. Many large corporations, including Microsoft Corporation, currently employ this policy, and it clearly works. There is even case history where the courts have held that such interference is a violation of an individuals privacy. In Rowan v. U.S. Post Office, a decision relating to junk postal mail, the court held:
"Nothing in the Constitution compels us to listen to or view any unwanted communication, whatever its merit…We therefore categorically reject the argument that a vendor has the right under the Constitution or otherwise to send unwanted material into the home of another…We repeat, the right of a mailer stops at the outer boundary of every person's domain."
This bill clearly does not infringe on any First Amendment rights. It merely asks advertisers to pay the costs of their messages and ensure that these messages are directed to those who have specifically asked to receive them. The First Amendment guarantees no person the right to hijack my private business tool and subvert it into a public forum for their financial gain, in my home and at my expense.
Unlimited Access Costs Nothing?
It is not always apparent to the end user, much less the junk e-mailer, that there are many different places along the process of transmitting and delivering e-mail where costs are incurred. For all of the separate servers through which these items pass, they create a "drag" on the timely process of important and legitimate mail. This overload of mail causes numerous problems for Internet Service Providers, who are forced to make technical investments to handle this increased load. The costs for these improvements are then passed directly on to the consumer.
While some compare junk e-mail to junk postal mail, this comparison would be valid only if junk postal mail arrived postage due. There is no direct cost placed on the receiver of junk postal mail. The same holds true of telephone solicitations. If these were collect calls, where the receiver had no option but to pay, it could then be compared to junk e-mail.
Also, many people still use accounts which do not include unlimited use. Sprynet, an Internet Service Provider located in Bellevue, estimates that 40% of users do not have unlimited access accounts. These individuals and companies are charged for access by the minute, and there very much is a direct cost associated with these messages.  And a Gardner report estimates that 70% of users by 2001 will pay based on usage.
Filtering Programs?
There is some limited technology in development that allows for these messages to be filtered out. However, this method is not foolproof and the Spammers have cleverly eluded these programs to date. Also, the filtering programs create a huge burden on the servers which run them. This forces Internet Service Provides to increase server capacity, a cost which is then passed on to the end user. And still the junk e-mail gets through. And what messages do get filtered have already done their damage via the drag they have created on Internet bandwidth.
Just Delete It?
The weakest argument by far is, "Why not just delete the message when you get it?" The simple answer is, by that time I’ve already paid for it. I do delete these messages. The time I spend online reading the messages and determining which are Spam costs me real money. And with my unlimited use accounts, it takes time to review each of the messages in my mailbox, merely to determine which are important and which are junk. It can also take a long time to download the larger messages, only to then delete them. And by that point, the damage has already been done.
SUMMARY
Electronic mail is a critical communication method for many Washington businesses. Unsolicited commercial messages are choking this business lifeline. This bill provides an ideal solution to this growing problem.
As Vint Cerf, Senior Vice President at MCI and acknowledged "Father of the Internet" said,
"Spamming is the scourge of electronic mail and newsgroups on the Internet. It can seriously interfere with the operation of public services, to say nothing of the effect it may have on an individual's e-mail system…Spammers are, in effect, taking resources away from users and service suppliers without compensation and without authorization."
If you do not pass this bill today, how bad will this problem have to get before action is taken? At the rate unsolicited commercial e-mail is growing, we don't have any time to waste. I urge your approval of this important bill.
I thank the Committee for the opportunity to testify today.