Slamming Spam

Enough already, says America -- and regulators are cracking down

Last fall, the server at Cincinnati's Bluespring Software Inc. crashed. E-mail was down for three hours, and CEO Robert B. Daly missed three meetings because his appointment files had vanished. Says Daly: "It makes you look ridiculous."

The culprit? Spam -- the fast-rising flood of unsolicited junk mail that is crashing computer systems and provoking howls of outrage from Internet users coast to coast. Fully half of all e-mail is now spam, according to Brightmail Inc., the San Francisco maker of spam-blocking software. Moreover, the junk e-mail increasingly emanates from shady sources using false identities, flogging everything from Viagra and other drugs to pornography and dubious investments. Of 11 million spam messages collected by the Federal Trade Commission, 44% came from phony addresses.

Little surprise, then, that the wave of unwanted e-mail has the business and tech communities ratcheting up the war on spam. They've launched a multi-pronged campaign: developing technological weapons against spam, taking spammers to court, and lobbying for anti-spam legislation. On Apr. 28, Yahoo! (YHOO ), AOL (AOL ), and MSN (MSFT ) announced a joint anti-spam offensive that will combine technological and legal measures. Two days later, the FTC convened a brainstorming session in Washington to drum up other anti-spam measures. Politicians, too, are getting into the act. On Apr. 29, Virginia enacted a law that calls for jail time for spammers who hide their identity or send 10,000 copies of one e-mail message, and a flurry of anti-spam bills have been introduced in Congress.

Why the big move now? Spam's impact on business and consumers cannot be overstated. Dealing with all that junk e-mail is costing U.S. organizations $10 billion a year, according to Ferris Research in San Francisco. Internet service providers are being inundated with complaints from subscribers about junk mail. And retailers and others who rely on direct marketing worry that e-mail will be sullied as a legitimate sales tool. "Long term, if the industry cannot deal with spam," says Joe Barrett, AOL's senior vice-president for network operation, "it's going to destroy e-mail."

Of course, this isn't the first attempt to solve the spam problem. Both AOL and MSN launched upgrades of their Web portals in recent months, vowing that new spam-blocking software would help stem the flood. But while AOL and MSN claim they are blocking billions of spam a day, plenty more is still getting through. As a result, says MSN Vice-President Brian Arbogast, "we're seeing an amazing backlash from folks who realize that e-mail is no longer a dependable means of communication because their messages are treated like spam."

The overarching goal of the AOL-MSN-Yahoo alliance is to make spam uneconomical by using technology to make it tougher for senders of junk e-mail to gain access to servers or reach individual in-boxes, and by filing more lawsuits against the worst violators. "Everything we do will add to the cost of spammers," Arbogast says.

Still, those efforts are likely to achieve only moderate success without stronger federal laws regulating spam. One recently introduced bill proposed by Senators Conrad Burns (R-Mont.) and Ron Wyden (D-Ore.) would make it a crime to send unsolicited commercial e-mail with false or misleading headers or return addresses. The bill, which goes before the Senate Commerce Committee this month, also would allow state attorneys general and the FTC to impose stiff criminal or civil fines.

The mounting crackdown has legitimate business spooked, especially direct marketers who count on e-mail to push their products. "There's a lot of money involved for us," says H. Robert Wientzen, president of the Direct Marketing Assn. (DMA), whose members include everyone from the Home Shopping Network to AT&T (T ). That's why the DMA is teaming up with the FBI and Secret Service to go after mailers responsible for the most egregious spam.

Clearly, spammers have attracted powerful enemies. No single front will put all bogus junk mailers out of business. But the coordinated effort at least raises hopes that the tide will be stemmed, if not reversed.

By Lorraine Woellert, with Stephen H. Wildstrom and Catherine Yang, in Washington and with Robert Berner in Chicago

— With assistance by Stephen H Wildstrom, Catherine Yang, and Robert Berner

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