Given at a Full Committee Hearing:
Thursday, May 20 2004 - 10:15 AM - SR - 253
The Testimony of Mr. Ronald Scelson
May, 18, 2004
May, 20, 2004
To the Honorable Senator McCain and the subcommittee on Commerce
I am greatly honored to be invited to speak before this subcommittee
today and would like to thank Senator McCain for inviting me.
As we have worked under the new CAN SPAM Law a few issues have
CAN SPAM CAN WORK I would like to begin however by stating that
there are a few reasons why the new CAN SPAM Act is working and
It is very
promising to see our government working to do something about
activities on the internet. It is very good to
see companies that are identifying themselves. It has helped tremendously
in the following areas: · Repeat business and · New
business for the mailing companies. · It has helped the
recipients who are familiar with the law to identify US companies
working to be legitimate from non-compliant companies both abroad
and in the US. · Finally, it has helped those Internet Service
Providers who do wish to work with mailing companies to know whom
they can offer services to without violating any laws themselves.
ALL NEW THINGS
HAVE A ROUGH TIME Despite all this good news, there are still
problems with implementation, cooperation, interpretation,
and fraudulent or misleading practices – many stemming from
the ISPs or their providers.
Following are some examples and issues that need to be looked
at and resolved for the internet community to work in harmony.
Since the enactment of the CAN SPAM Act, my company and several
others have all worked in compliance of the new law, which has
been an extremely difficult task each day.
When we mail under the new law the major ISPs focus on our from
addresses, subjects lines, our company information, and our disclaimers
on the bottom of the email as well as our IP address. They use
this information to block our emails. Thus the Act that is to curtail
fraud, is in fact curtailing our ability to engage in free enterprise
and our business is greatly hindered.
With this situation,
many mailers – especially in foreign
countries still have not been able to fully implement all steps
of the new law. They are faced with the problem of how to comply
with the law when the ISPs and backbones themselves are not being
respectful of the new law. Although it is clear that the CAN SPAM
law does not dive into the legalities or illegalities of the practices
of ISPs, many mailing companies are still – simply put—backed
into a corner. Shall they comply and go out of business due to
ISP filtering or shall they attempt to comply partially, hoping
that it will be clear that they have the intent to follow the law
and remain out of trouble with the US regulating bodies. This is
the dilemma for many.
Of course foreign
companies have mainly chosen to follow the laws of their land
the laws of the United States – especially
with the actions of the ISPs to put all bulk email in the trash.
SHUT DOWN = AUTOMATIC NON-COMPLIANCE Every time a registrar shuts
off a domain, an ISP closes a connection, or a hosting company
shuts off or blocks an IP Address of a mailing company, there is
a non-compliance issue. According to CAN SPAM of 2003, all mailing
companies are to keep their removal systems active for 30 days
after the email was sent. Every company including my own has had
a major situation complying to this part of the law because ISPs,
Registrars or hosting companies shut down the services without
providing 30 day notice and keeping our connections active so that
we can remain in compliance. Often we even lose our remove lists
that were contained on the equipment that they now deny us access
BLOCK, TACKLE AND THROW Here is an example of what our company
and many others have experienced.
AOL, Hotmail, Yahoo and other major carriers have blocked our
network based on our company information. The larger anti-spam
groups have done the same.
groups act like vigilantes now more than ever before. They put
their blacklists—often networking
these blacklists to other anti-spam groups as well. It is possible
to have both your company name and IP addresses completely blocked
in as little as 4 hours, thus preventing you from delivering your
mail to more than ½ the internet. These groups will not
remove the blacklist even if you prove to them that you are compliant
with the new legislation. These organizations are not government
backed or funded. They do not identify themselves like we do so
pursuing legal action against them is nearly impossible. Many of
these groups are not even on US soil. These are the same people
who want our information published on the web. Nothing is done
to stop them or interfere with them.
The ultimate blow for the mailing company however is how many
of these groups also use automated systems to generate multiple
complaints to the Internet service providers. They make it look
like one person received numerous copies of the advertisement,
or like the mailing company has generated a large amount of complaints
and thus should be shut down.
For the Backbones and the ISPs the issue has always been how to
engage in business without generating too many complaints. Since,
with most of these groups, the number of complaints is the determining
factor on when to leave services on or when to shut them off, many
of the vigilante groups now have set up anonymous and multiple
complaint sending automated systems. In fact, you will find that
very few of the complaints that are generated today come from the
intended recipient of the email as compared to the number that
come from the automated anonymous complaint-sending systems. Interestingly,
there are some vigilante groups that encourage people to purchase
and use their software with proxies to prevent detection when sending
of this year, the ISP I am currently with (WorldCom) received
that I had joined AOL's whitelist and was mailing
non-unsolicited email and had AOL's full permission to send mail
into their domain. This was not spam. Because AOL’s automated
remove system sent a copy of the undeliverable emails not only
to us but also to WorldCom, WorldCom told us to stop mailing or
they were going to shut us down. What was the logic in this action
by WorldCom? AOL had granted us permission to mail into their domain.
We were fully compliant with the law, and we were offering products
and services that were a) in great demand and b) not fraudulent.
And this was not even because of complaints. It was ONLY non-deliverable
addresses in our list.
WHAT ABOUT THAT COMMON CARRIER LAW? When we review the FCC Communication
Act, the above actions show that the ISPs are unjustly denying
us service. In many cases, these groups are in fact common carriers
providing us nothing more than a way to connect to the Information
Highway. WorldCom is in violation of the FCC Communication Act,
which clearly states that common carriers cannot tamper with, read,
or alter the communications that they transmit. This includes communications
across data lines.
The issue of
whether or not an ISP is a common carrier has been argued in
as far back as 1997. In one suit, AOL claimed
that they were a common carrier, yet just a short while later they
claimed that they were not a common carrier. The FCC supported
AOL’s claim that they were not common carriers and thus set
a precedent that many ISPs have followed since. Interestingly,
as we understand the charter of the FCC, they do not have the authority
to determine who is or is not a common carrier. This is the job
section 3 47 USC 153 – Section Ten of this
act: “Common Carrier: the term of a “common carrier” or “carrier” means
any person engaged as a common carrier for hire in interstate or
foreign communication by wire or radio or in interstate or foreign
radio transmission of energy, except where reference is made to
common carriers not subject to this act; the persons engaged in
radio broadcasting shall not, insofar as such person is so engaged,
be determined the common carrier.” At the time of this submission,
I have yet to locate any ISP not subject to this act.
I located more information on common carriers at a website that
detailed a lawsuit against Western Union a while ago.
“A ‘common carrier’ has
a legislatively-granted monopoly over a particular route, region,
or type of communications.
In return, the carrier must carry everything and has no right to
reject particular passengers or communications.
made Western Union a common carrier, for example, when it refused
to carry cables from reporters to their newspapers
because they competed with its own news service.
obvious that services which sell only a connection to the internet
be treated as common carriers. While Compuserve
and AOL should have a right to edit and refuse to carry speech
they do not like, ISPs should have no more right to do so than
Western Union or the phone companies.”
Of course, this statement was made about AOL and Compuserve before
they owned their own carrier lines. Thus it no longer holds true
for these groups either.
LET THEM BE REMOVED The Can Spam Act also calls for the FTC to
implement the Global Remove System. Absence of this removal system
has allowed problems with removal to persist; its implementation
could result in a much calmer internet environment much faster
than anything else we have available to us today.
1. A recipient who wishes to receive no advertisements at all
must remove himself
from any advertisement that arrives
in his inbox. This could quickly add up to a lot of extra work.
With the Global Removal system, he would have to only remove himself
once. 2. An Internet Service Provider continually gets complaints
from the same person who enjoys sending such complaints and will
not remove himself from a mailing list – the ISP can enter
his email address into the removal system, thus putting an end
to the problem, while maintaining his privacy. 3. By giving the
rights back to the individuals, there is no need for any ISP to
subscribe to the vigilante groups that filter and file multiple
Yet, many of the anti-spam groups are strongly opposed to such
a system. There are reasons for this: Just as commercial bulk email
is big business, so is anti-spamming. With software and services
to be sold to stop the flow of commercial email, their sales would
be interrupted if the public had an easy and effective way to remove
themselves from receiving internet email advertisements.
the anti-spammers claim that there are people who would mail
to the remove list – I
have never met one however. Yes, there is a solution to this
problem if it did exist. When
a recipient of an email receives unwanted advertisements they click
the remove link. This link takes them to a government site where
they submit their email address, which will be encrypted. Software
would be available to the mailers for doing removes. The software
would retrieve the remove list while encrypted and remove the people
without the mailer ever seeing the actual email address.
A program could be implemented where bulk mailers could sign up
with the government and their IP address and Domains would be whitelisted
with the ISPs allowing people who send compliant mail to get in
while being able to stop spam.
ABOVE THE LAW? While we worked to get whitelisted with AOL, here
is what we experienced: Things started out well, AOL was willing
to work with us as we worked to deliver our list into their domain
and get our non-deliverables removed. After just 3 mailings we
were receiving virtually no undeliverable emails and very few complaints.
The majority of this list was undeliverable mainly because the
list had been built since I started mailing years ago. Obviously
many email addresses changed over the years. The only way to get
the bad addresses out of the list was to deliver into AOL and pick
up their non-deliverable reports back to us.
in and tried to shut me down even after AOL sent proof of our
classification. However, it seems that AOL
found out who I was and denied me the whitelisting after this exchange
of information between AOL and WorldCom. Charles Stiles, postmaster
for AOL denied the whitelisting based on my list not being “true
opt-in” and threatened to bring in their legal department.
Yet, Opt-In had never been a part of the original whitelisting
agreement with AOL.
The problem I have with this is just last year Ted Leonsis with
AOL stated in front of congress that they send bulk email but they
provided a way for there receivers to opt-out, which of course
I do too. I fail to see the difference.
While small companies are often thwarted in their attempts to
follow the laws of the land and the rules of the ISP, which do
not align at this time, they are hard-pressed to stay in business.
Large corporations however, not only disregard the laws of the
land as passed by Congress, they ignore rulings by judges.
Recently I hired an attorney to sue the large carrier Covista.
This resulted in an injunction that demanded they turn my service
back on. Covista just ignored it.
AOL was recently
sent an order to allow CI host to send mail to AOL’s network. AOL just like Covista is ignoring the judge’s
Scott Richter of Opt-In Real Big has been involved in an ongoing
legal battle to allow him to send compliant email through his two
providers. He too was awarded an injunction against one of his
carriers. I do not know if his provider is abiding by the injunctions
Evidence suggests that the ISPs think they are above the law and
can sue us for failure to abide by the law while they simply ignore
All the large companies like AOL, Hotmail, Yahoo, Msn, Charter,
and others are working together on an anti-spam system, while they
continue to send email advertisements. If bulk mailing is so bad
and so wrong, why are they engaged in it?
Is it bad and wrong as they say or is it merely that we needed
to curtail fraudulent practices? If the problem was that of fraudulent
practices, then that problem was solved with the new law. Yet ISPs
stop our compliant mailings while they mail themselves. Begins
to look like small business against big business . . . It has long
been said that the internet is the first place where small business
had the opportunity to play in the same field as big business .
. . perhaps this is the threat?
President Bush is sending non opt-in bulk email, abiding by the
new laws, into Hotmail and AOL. His message ended up in the bulk
folder at hotmail and the spam folder at AOL. In my mind, a message
from the president should be given a level of courtesy and respect
in keeping with his position. Apparently, AOL and Hotmail do not
hold the same respect.
BONDS DO NOT SOLVE ANY PROBLEMS A new trend is popping up for
companies like Hotmail and Yahoo. They are contracting with third
party companies such as Habius, and Bonded Sender. These third
party companies are charging as much as 25,000.00 a year, non refundable
to bond your IP addresses. However, there is no guarantee other
than to take your money with only the possibility of allowing your
It seems no different than paying the mafia for protection to
do legitimate business (legal definition of racketeering and fraud).
TRUTH IN REPORTING – TRUTH
IN DELIVERING Although we have a law against fraudulent practices
on the internet, it seems, that
this law is not written well enough to include those who are using
automated systems to identify, and file multiple complaints anonymously
(often with proxies) against people who are sending email. Also,
with ISPs any complaint is taken as a good reason to shut down
services. Following are some recommendations of what could be done.
should be limited to being classified as valid only if they come
from the intended recipients. 2. Automated
reporting systems should be limited to one complaint and not sent
with the use of proxies. Complaining Agency should be clearly identified.
3. ISPs and their providers should show respect toward the CAN
SPAM law by only classifying as a valid complaint those which do
not comply with the law. 4. Those Agencies or individuals doing
the complaining or with any kind of ability to interfere with legal
mail should have to fully identify themselves just like we have
to identify ourselves. Appropriate email address should be provided
for removal. 5. ISPs should not be allowed to filter what is required
by law to be in our email advertisements. 6. ISP’s should
not be allowed to shut our circuits down and discriminate against
us when we send legal mail.
The CAN SPAM Act of 2003 has brought promise and hope to the internet,
yet adjustments still need to be made:
1. Rapid implementation of a Global removes system, which ISPs
are required to add chronic complainers to. 2. ISPs to be treated
as common carriers or minimally respect the laws that Congress
has passed. 3. Companies interfering with these laws like Spews,
Spam Cop etc. should be made to file only one complaint and reveal
their identity. 4. People complaining should have to identify themselves
(email address). 5. Mailing companies who comply with the law should
not be at risk of losing their systems or services. They should
not be forced into non-compliance due to instant shutdowns, and
violation of 30-day remove systems.