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The Problem With Junk E-Mail

The Problem With Junk E-Mail

September 27, 2002
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" Some junk emailers say, "Just hit the Delete key!" Unfortunately, the problem is much bigger than the time and effort of one person deleting a couple of emails. "

We all get junk mail at home. It's an accepted fact of life, at least in the U.S., So why is Unsolicited Commercial Email (UCE) - a/k/a "spam" or "junk email" such a problem?

To understand the problem of UCE, you must first understand what is most often advertised via UCE. There are many places on the Internet where copies of UCE are reposted by recipients and system administrators in order to help notify the Internet community about where UCE is originating. Surveying mailing lists like SPAM-L and USENET newsgroups in the news.admin.net-abuse.* hierarchy, you will see that there are very few reputable marketers using UCE to advertise goods and services. To the contrary, the most commonly seen UCEs advertise:

Chain letters
Pyramid schemes (including Multilevel Marketing, or MLM) Other "Get Rich Quick" or "Make Money Fast" (MMF) schemes Offers of phone sex lines and ads for pornographic web sites Offers of software for collecting e-mail addresses and sending UCE Offers of bulk e-mailing services for sending UCE Stock offerings for unknown start-up corporations Quack health products and remedies Illegally pirated software ("Warez") So why is this such a problem?

Cost-Shifting
Sending bulk email is amazingly cheap. With a 28.8 dialup connection and a PC, a spammer can send hundreds of thousands of messages per hour. Sounds great, huh? Well, it is for the spammer. However, every person receiving the spam must help pay the costs of dealing with it. And the costs for the recipients are much greater than the costs of the sender.

Some junk emailers say, "Just hit the Delete key!" Unfortunately, the problem is much bigger than the time and effort of one person deleting a couple of emails. There are many different places along the process of transmitting and delivering email where costs are incurred. In the Internet world, "time" equals many different things besides the hourly rate that many people are still charged.

For example, for an Internet Service Provider, "time" includes the load on the processor in their mail servers; "CPU time" is a precious commodity and processor performance is a critical issue for ISPs. When their CPUs are tied up processing spam, it creates a drag on all of the mail in that queue -- wanted and unwanted alike. This is also a problem with "filtering" schemes; filtering email consumes vast amounts of CPU time and is the primary reason most ISPs cannot implement it as a strategy for eliminating junk email.

The problem is also compounded by the fact that ISPs purchase bandwidth -- their connection to the rest of the Internet -- based on their projected usage by their prospective user base. For most small to mid-sized ISPs, bandwidth costs are among one of the greatest portions of their budget and contributes to the reason why many ISPs have a tiny profit margin. Without junk email, greater consumption of bandwidth would normally track with increased numbers of customers. However, when an outside entity (e.g., the junk emailer) begins to consume an ISP's bandwidth, the ISP has few choices: 1) let the paying customers cope with slower internet access, 2) eat the costs of increasing bandwidth, or 3) raise rates. In short, the recipients are still forced to bear costs that the advertiser has avoided.

"Time" also makes for some other interesting problems, especially coupled with volume. Recent public comments by AOL are a useful point of reference: of the estimated 30 million email messages each day, about 30% on average was unsolicited commercial email. With volumes such as that, it's a tremendous burden shifted to the ISP to process and store that amount of data. Volumes like that may undoubtedly contribute to many of the access, speed, and reliability problems we've seen with lots of ISPs. Indeed, many large ISPs have suffered major system outages as the result of massive junk email campaigns. If huge outfits like Netcom and AOL can barely cope with the flood, it is no wonder that smaller ISPs are dying under the crush of spam.

Fraud
Spammers know that in survey after survey, the overwhelming majority (often approaching 95%) of recipients don't want to receive their messages. As a result, many junk emailers use tricks to get you to open their messages. For instance, they make the mail "subject" look like it is anything other than an advertisement.

In many cases, ISPs and consumers have set up "filters" to help dispose of the crush of UCE. While filters often consume more resources at the ISP, making mail delivery and web surfing slower, they can sometimes help end-users cope a little bit better. Spammers know this, so as they see that mail is being blocked or filtered, the use tricks that help disguise the origin of their messages. One of the most common tricks is to relay their messages off the mail server of an innocent third party. This tactic doubles the damages: both the receiving system, and the innocent relay system are flooded with junk email. And for any mail that gets through, often times the flood of complaints goes back to the innocent site because they were made to look like the origin of the spam.

Another common trick that spammers use is to forge the headers of messages, making it appear as though the message originated elsewhere, again providing a convenient target. When a spammer sends an email message to a million people, it is carried by numerous other systems en route to its destination, once again shifting cost away from the originator.

Waste of Other's Resources
When a spammer sends an email message to a million people, it is carried by numerous other systems en route to its destination, once again shifting cost away from the originator. The carriers in between are suddenly bearing the burden of carrying advertisements for the spammer. The number of spams sent out each day is truly remarkable, and each one must be handled by other systems; there is no justification for forcing third parties to bear the load of unsolicited advertising.

The methods employed by spammers to avoid being held responsible for their actions are very often fraudulent and tortious. Numerous court cases are underway between spammers and innocent victims who have been subjected to such floods. Unfortunately, while major corporations can afford to fight these cutting edge cyberlaw battles, small "mom-and-pop" ISPs and their customers are left to suffer the floods.

There's a long tradition in this country of making commercial enterprises bear the costs of what that do to make money. For example, it would be far cheaper for chemical manufacturers to dump their waste into the rivers and lakes... however "externalities" (as the economists call it) are bad because they allow one person to profit at another's -- or everyone's -- expense.

The great economist Ronald Coase won a Nobel Prize talking about exactly this kind of situation. He said that it is particularly dangerous for the free market when an inefficient business (one that can't bear the costs of its own activities) distributes its costs across a greater and greater numbers of victims. What makes this situation so dangerous is that when millions of people only suffer a small amount of damage, it is often more costly for the victims to go out and hire lawyers to recover the few bucks in damages they suffer. That population will likely continue to bear those unnecessary and detrimental costs unless and until their indivudual damage becomes so great that those costs outweigh the transaction costs of uniting and fighting back. And the spammers are counting on that: they hope that if they steal only a tiny bit from millions of people, very few people will bother to fight back.

In economic terms, this is a prescription for disaster. Because when inefficiencies are allowed to continue, the free market no longer functions at peak efficiency. As you learn in college Microeconomics, the "invisible hands" normally balance the market and keep it efficient, but inefficiencies tip everything out of balance. And in the context of the Internet, these invisible marketplace forces aren't invisible anymore. The inefficiencies can be seen every time you have trouble accessing a web site, or whenever your email takes 3 hours to travel from AOL to Prodigy, or when your ISP's server is crashed by a flood of spam.

CAUCE believes that stealing is stealing, whether you take a penny or a dollar or a thousand dollars. Remember, you only need to steal a penny from 4 million people in order to have enough to buy yourself a brand new Mercedes Benz.

Displacement of Normal Email. Email is increasingly becoming a critical business tool. In the late 1980s, as more and more businesses began to use Fax machines, the marketers decided that they could Fax you their advertisements. For anyone in a busy office in the late 1980s, you will remember the piles and piles of office supply advertisements and business printing ads that came pouring out of your Fax machine... making it impossible to get the Fax that you were expecting from your East Coast office.

This problem spawned the original Anti-Junk-Fax law that CAUCE is seeking to amend. In the first major court challenge to that law, a junk fax company called Destination Ventures lost their suit. The 9th Circuit Court of Appeals said that the law was constitutional because the imposition of such high costs and inconvenience onto businesses and consumers made the law a reasonable restriction. By extension, we argue that junk email isn't very different from junk faxes in the way it consumes the resources of others.

Spam can and will overwhelm your electronic mail box if it isn't fought. Over time, unless the growth of UCE isn't stopped, it will destroy the usefulness and effectiveness of email as a communication tool.

Annoyance Factor
Your email address is not the public domain! It is yours, you paid for it, and you should have control over what it is used for. If you wish to receive tons of unsolicited advertisements, you should be able to. But you shouldn't be forced to suffer the flood unless and until you actually request it. This is the heart of the "Opt In" approach supported by CAUCE. But what about junk mail makes it so annoying? In part, it's because accessing email for many people is still a bit of a struggle. For example, try as they may, many of the major online services are still hard to connect into. Their software doesn't always configure very easily. After a few calls to customer support, you finally got it installed. So, after being away for a few days, you try to get your email. Of course, you have to keep dialing, dialing, dialing... busy signals. Finally you connect -- only it might be a 9600 baud connection, because all of their 28.8 modems are busy. Still, you're finally connected and you see that "You've got mail!"

But when you try to retrieve your email, the "System Is Not Responding. Please Try Again Later." After five or ten more minutes of this, you finally get your email to start downloading. You were only out of town for four days; there must be a lot of mail, because it takes you about 10 minutes to get it all downloaded. Once you've retrieved it all, you open it up, and what do you see? Five pornographic web site spams, three letters from some guy named Dave Rhodes and his cousin Christohper Erickson telling you how to make $50,000 in a week, somebody telling you that you're too fat and you need Pyruvate (sprinkled with Blue Green Algae), and two offers to buy stock in a "New Startup Company"...only the broker is a really bad speller and can't decide whether he's selling "stock" or "stork."

Oh, and there was an email from the "Postmaster" telling you that when you tried to "Remove" yourself from a junk email list, the address: "Work.At.Home@noreply.org" was of course "Unknown."

So after a half hour of delays and frustration, all you've got to show for your efforts is a box full of spam. Is it any wonder people are annoyed?

Ethics
Spam is based on theft of service, fraud and deceit as well as cost shifting to the recipient. The great preponderance of products and services marketed by UCE are of dubious legality. Any business that depends on stealing from its customers, preying on the innocent, and abusing the open standards of the Internet is -- and should be -- doomed to failure.

For a more detailed analysis of how junk mailers operate, and how the practice of spamming affects ISPs and consumers, please see the Official Testimony of CAUCE's Ray Everett-Church at the Federal Trade Commission's "Public Workshop on Consumer Information Privacy" and before the US Senate.


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