Small business owners disagree on spam approach

WASHINGTON – Small-business owners disagreed Thursday on what action the U.S. Congress should take on spam, with some saying unsolicited e-mail should be banned and others defending it as a valuable marketing tool.

A national do-not-e-mail list would hurt small companies trying to market their products to new customers, some small business owners told the Small Business Committee’s Subcommittee on Regulatory Reform and Oversight of the U.S. House of Representatives. Others disagreed, saying spam is growing at an exponential rate and needs to be stopped.

One former business owner said that frustrations over the amount of spam his Internet T-shirt sales business was receiving drove him to sell the business in the past week. “You could say spam finally shut me down,” said Bruce Goldberg, founder of Weathermen Records based in Farmers Branch, Texas. “If the problem continues to grow at the rate it currently is growing, it will be impossible for businesses to rely on the Internet and e-mail as a form of communication.”

Goldberg’s business was at one point getting 15 spam e-mails for every one legitimate e-mail, and even after using a spam filter, the ratio was still three to one of spam to legitimate e-mail. “The hard part was distinguishing the legitimate e-mail from junk, as I have to treat each new e-mail as a potential customer,” he added. “Even as careful as I was, I would still lose customers by accidentally deleting their messages.”

Others testifying urged Congress not to go too far in its effort to regulate unsolicited commercial e-mail. A national do-not-spam registry, included with a spam bill the Senate approved Oct. 22, would prohibit small businesses from prospecting for new customers through e-mail, said John Rizzi, chief executive officer of e-Dialog Inc., a Lexington, Massachusetts, e-mail marketing service provider who sends e-mail to established customers of companies such as JC Penney Co. Inc. and the National Football League.

The House has not yet taken action on a spam bill this year.

The national do-not-spam list, promoted by Senator Charles Schumer, a New York Democrat, would be a “disaster” for small businesses, Rizzi said. Most true spammers won’t abide by the list, but legitimate small businesses will, he said.

“You’ll see customers frustrated because they’re getting less and less e-mail from their favorite companies, but no less spam,” Rizzi said. “Remember, spammers are law-breakers. They’re not going to take their list and match it and clean it against this list.”

Schumer’s office did not respond to a message asking for comment on the House hearing. But a representative of the U.S. Federal Trade Commission (FTC), required by the Senate bill to create a report on implementing a do-not-spam list, said the agency continues to oppose the registry.

Unlike the national do-not-call telemarketing list that went into effect this month, a do-not-e-mail list would be tougher to enforce, because it’s so easy for spammers to hide their identities on the Internet, said J. Howard Beales III, the director of the FTC’s Bureau of Consumer Protection. “Our key concern about this do-not-spam (list) is enforceability,” he said. “These are not people who pay a lot of attention to legal rules. We’re concerned that a do-not-spam list would not make any appreciable reduction, any observable reduction, in the volume of spam.”

The FTC supports national spam legislation instead of state laws, because the Internet does not have borders, but the long-term solution to spam may be more technological than legislative, Beales said.

But Representative Charles Gonzalez, a Texas Democrat, questioned if a national spam law would work at all if spammers are so difficult to find. “So until technology allows us to identify the senders … it doesn’t matter what legislative scheme we come up with, it’s going to be very difficult,” he said.

Gonzalez urged Congress not to go “overboard” in trying to outlaw spam when legislative approaches may not work.

Rizzi and Jerry Ceresale, senior vice president of government affairs for the Direct Marketing Association, both cheered congressional efforts to pass a national spam law, saying such a law would save small businesses from negotiating more than 35 state antispam laws. Rizzi also promoted an idea from the Email Service Provider Coalition calling for large-scale e-mailers to voluntarily become part of a registry that would certify their identities, thus blacklisting spammers who don’t play by the rules.

Ceresale encouraged Congress to find a way to combat the “dark side” of e-mail — the fraudulent, pornographic, or virus-laden spam — without banning all types of commercial solicitations. “What we have to do is … kill the dark side without killing the promise,” he added.

The do-not-spam list and an opt-in approach to commercial e-mail advanced by some consumer groups will kill some of that promise, Ceresale added. He suggested that many consumers find unsolicited e-mail useful. A May survey by his organization found that more than 11 percent of adults that received unsolicited commercial e-mail in the previous year purchased a product from an unsolicited e-mail. “E-commerce is very important to all marketers, especially small businesses,” Ceresale added. “It’s a low barrier to entry.”