With the House of Representatives passing a slightly altered version of the Senate's CAN-SPAM bill early Saturday morning, the country is expected to have its first federal law regulating unsolicited commercial email before the week is out. But while many parties with a stake in the debate welcome a blanket federal law that supersedes the hodgepodge of state anti-spam statutes, none believe that the bill is anything more than a partial solution to the spam epidemic. The main problem, experts reiterate, remains that nothing short of a combination of legislation, technology, and consumer action is likely to reduce the volume of spam delivered daily to e-mailboxes. Beyond that, they question why the bill limits private rights of action (ISPs can sue mass spammers but consumers cannot) and why tough opt-in provisions are eschewed in favor of opt-out ones. "I'm disappointed by it," says Anne Mitchell, president of the California-based Institute for Spam and Internet Public Policy. "As an attorney I understand the desire for unified laws, but overall it's not the largest step forward." Adds Roger Matus, chief executive of Audiotrieve, developer of the InBoxer desktop anti-spam filter: "The House proposal is a start, but it's just not strong enough. We have very, very good laws on the books for mail fraud - it's a criminal act, people have the right to sue for damages, et cetera. The same level of criminality and punishment should be available for email fraud." Included in the House bill, and expected to be affirmed by the Senate by Tuesday and signed by the President shortly thereafter, are many of the provisions that have already found their way into state laws: spammers can't harvest email addresses, hijack consumers' computers for the purpose of sending spam or include false or misleading information in the "from" or "subject" headings. Likewise, every unsolicited commercial email must contain a working "unsubscribe" mechanism. As for enforcement, the Federal Trade Commission will have to do most of the legwork, but state agencies and attorneys general can sue in federal court on behalf of that state's citizens. Despite her overall dissatisfaction with the House proposal, Mitchell singles out two of its provisions for praise. She notes that the law will not interfere with the right of ISPs to determine their own email policies. "They can say 'we're not going to accept any [unsolicited commercial] email unless it's confirmed by opt-in and sent on the third Sunday of the month,' and spammers can't do anything about it," she explains. More importantly, the bill holds vendors whose products or services are advertised in spam as liable for their actions as if they'd pressed the "send" button themselves. Previously, vendors dodged responsibility by saying, in essence, "It doesn't matter than my herbal Viagra was advertised in the email - I didn't send it." Mitchell characterizes this overlooked provision as essential for one simple reason: it's relatively easy to locate vendors. "The people who hit 'send,' they're the ones that move from place to place and switch ISPs and everything else," she adds. "That's not true of the vendors whose products are being featured. They need to tell [consumers] where to send money for the products." And, once caught, these vendors may well be eager to give law-enforcement officials what they really want: the names and contact information of the spammers themselves. As for the proposed law's most controversial exclusions, experts remain split on whether the lack of private rights of action for consumers will prove to be a major issue. Internet Alliance acting executive director Emily Hackett, whose organization counts Comcast, eBay, IBM, and Time Warner among its members, says she's "neutral" on the provision. "I don't think a lot of individual suits would make much of a difference," she shrugs. "ISPs have both the deep pockets and commercial incentive to solve the spam problem. I think they'll be even more vigorous [in going after spammers]." Regarding the opt-out requirements of the bill, critics are considerably harsher, most wondering why consumers should have to take steps to rid themselves of something they never asked for in the first place. "It legitimizes the use of somebody's email until they cry 'uncle!,' and that's not right," Mitchell argues. Hackett, one of the bill's biggest boosters ("it seems very simple to say that there shouldn't be fraud on the Internet, but putting that in a national bill is a very profound statement"), is the only expert contacted by MediaDailyNews who seems 100 percent comfortable with its preemption of state anti-spam laws. While she acknowledges that "states led the way" in the anti-spam regulatory battle, she says that the federal legislation does not differ much from what several states have already enacted. Others aren't so sure. "Dealing with a patchwork of state laws might be tricky, but for anyone working on this issue at the state level this [bill] is absolutely a kick in the teeth," Mitchell says. Matus, on the other hand, wonders whether state officials are secretly happy about the new federal law: "Maybe they were acting mostly because the U.S. government wasn't."
In a major push for the online classified ad industry, top newspaper publishers including Knight Ridder and the Washington Post Co. are backing Tribe Networks, the type of community-based online classified advertising portal that is beginning to nip at the mainstay of many local newspapers. On Monday, Tribe said it received $6.3 million in new venture financing from Mayfield, Knight Ridder and Washington Post Co. While some analysts maintain that the downturn in the newspaper industry's classified advertising base is due primarily to sparsely populated help wanted sections, others believe at least part of the decline represents attrition for the print medium as more consumers migrate online. "Where's the first place you turn to if you're buying a car or looking for a job?" asked Lisa Carparelli of the Online Publishers Association (OPA), adding that the Internet, if you have access to it, is the first place most people turn to for research. The OPA has been suggesting that the real decline in print-edition classifieds has been masked by the growth in classified ad revenues from online editions. Cox Newspapers, which publishes the Atlanta Journal-Constitution, reported that classifieds currently represents 50 percent of upsold revenues compared with 70 percent a year ago. The declining interest in classifieds is less of a problem when weighed next to Cox Newspaper's burgeoning online ad revenue, made possible by a significant upturn in page views per month. Other OPA findings show strong third quarter revenue increases for several major publishers. Tribune Interactive's Christine Hennessey reports $25 million in third quarter revenue, up 24 percent due in large part to strength in classified, banner and sponsorship advertising. She cites smart online investments in classifieds services, noting the success of two such Tribune classified ventures, apartments.com and cars.com. According to the Newspaper Association of America, in the third quarter, employment advertising dropped 10.7 percent to $940 million. Overall classified advertising was down 0.5 percent to $3.8 billion-this after a 3.9 percent second quarter drop. While online classified spending is certainly on the rise, the young industry still only generates a quarter of newspaper classified spending, at $ 4.3 billion. Most analysts believe this number will rise, and upstart personal and classifieds sites like Tribe.net will rely on such assertions. On Monday, social networking service Tribe.Net announced the receipt of $6.3 million in financing from blue chip venture firm Mayfield, Knight Ridder Inc.-publisher of the Philadelphia Enquirer and the San Jose Mercury News among others, and the Washington Post Company. Tribe.net posts classified listings for its members, who may sign up to the networking community free of charge, which in turn generates qualified leads for jobs, apartments, cars, used merchandise, and recommendations. Tribe plans to create revenue by selling paid listings and targeted advertising. Hilary Schneider, CEO of Knight Ridder Digital, says her belief in the online classifieds industry is underscored by KRD's investment in Tribe.net. "We have years of real-world experience on the front lines of the classifieds business," she says, adding that the combination of Tribe's targeted reach and Knight Ridder's local market presence experience should reap rewards for both sides. Local market, user-created content and communities translate into a lower cost of doing business, says Ralph Terkowitz, chief technology officer of the Washington Post Company, which he notes is appealing to advertisers and publishers alike. Tribe CEO Mark Pincus, however, underlines the risks involved in entering a new marketplace like online classifieds. "The goal for Tribe is to become a sustainable, profitable, independent company in this new market space."