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Mr. Chairman, ladies and gentlemen of the Committee, thank you for inviting
me to testify before you today. My name is Garry Betty and I am the CEO of
EarthLink. EarthLink is the nation's 3rd largest Internet Service Provider (ISP)
serving 5 million customers nationwide with dial-up, broadband (DSL, cable and
satellite), web hosting and wireless Internet services. As such, we are on the
front lines every day in the fight against unsolicited commercial e-mail,
commonly known as spam.
As you well know, spam is a growing problem. There are over 70 million American
households and businesses online today and almost every one of them has
firsthand experience with spam. We at EarthLink have seen a 500% increase in
spam over the past 18 months. What was at first an occasional inconvenience grew
to be an annoyance and now threatens to overwhelm online communications. E-mail
is often described as the Internet's "killer app." Left unchecked,
spam threatens to kill the killer app.
Spam creates inefficiency. By some estimates, spam is responsible for $10
billion a year in lost productivity to American businesses. As an ISP,
approximately 50% of all e-mail coming into our servers is spam. AOL estimates
this figure as high as 80% on their network. We are able to filter out 70-80% of
these messages before they ever get to our customers, but the increasing volume
means that lots of unwanted electronic junk mail still gets to user's in-boxes.
Spam costs Internet providers real money. Excess server capacity, an "abuse
team" working full time to ferret out and close down sources of spam on the
internet, internal and external legal fees are all costs we incur because of
spam. While we don't publish exact figures on this, it is fair to say that they
are in excess of $10 million a year for EarthLink alone.
Spam is a pernicious problem. While get rich quick schemes, effortless weight
loss programs and pills that promise to enlarge body parts are nothing new, the
cost burden imposed by spam is. Newspaper and magazines ads, telemarketing
calls, direct mail pieces and signs tacked to telephone poles all require the
sender to pay for their messages. Spam adds insult to injury by shifting this
cost burden. Spam costs virtually nothing to send. (One recent widely circulated
spam message for spammers advertises 20 million email addresses for $149.00.)
Instead, the costs of spam are borne by ISPs which must handle this junk e-mail
and by consumers who get their in-boxes filled with it.
In order to win the fight against spam, we must engage it on several fronts. In
addition to legislation, we must also use litigation, enforcement, customer
education and technology solutions to combat spam. I would like to briefly
address each of these in turn:
Legislation
EarthLink supports legislation to help ISPs and consumers in the fight against
spam. And Congress is clearly engaged in this issue. We count no fewer than
seven bills currently being actively discussed in the House and Senate. Rather
than speak just to any one bill, we would like to note several provisions in
various bills which we think will be helpful to ISPs and consumers, based upon
the experience Earthlink has had in suing some of the nation's most egregious
spammers.
First, we support the provision in several bills which note that they place no
restrictions on an ISP's current ability to block spam on behalf of its
customers. ISPs are
truly the first line of defense against spam for consumers. ISPs that deploy
effective filtering and blocking techniques can spare their customers a good
deal of the aggravation that spam creates. However, since spammers are
constantly looking for new ways to defeat ISP blocking protections, it is
important to ensure that legislation does not limit the ability of ISPs to
adjust and refine their filtering and blocking techniques to maximize their
effectiveness.
Similarly, we support the provision in various bills that note that ISPs have a
right of action to pursue legal action against spammers. As I will discuss in
the next section, ISP lawsuits against spammers are an effective tool in the
fight against spam.
Next, we would urge caution in placing a cap on monetary damages. Based on our
own litigation experience, we believe that large monetary damage awards against
the most egregious spammers send a strong signal about the seriousness of
spamming and have a stronger deterrent effect against other spammers. We would
urge Congress not to impose a damages cap on ISP legal actions against spammers.
Finally, we support requirements for accurate sender, subject line and IP
address information. Consumers must have accurate sender, subject line and IP
address information, and we applaud the legislative efforts to confirm these
basic requirements. For too long spammers have deceived innocent victims with
fraudulent and deceptive "come-ons" in the subject lines, confusing
consumers into thinking that they are receiving e-mails from a trustworthy
entity or friend. These deceptions must be stopped and legislative efforts to
address this are well directed.
Litigation
Another important front in the fight against spam is litigation. EarthLink was
one of the first ISPs in the country to go after spammers in court. Earthlink's
successful 1997 case against Sanford Wallace and Cyberpromotions stopped what
was then one of the most prolific spammers on the Internet. Since that time,
EarthLink has filed lawsuits against over 100 spammers. Most recently, EarthLink
won a judgment in May 2003 against Howard Carmack the "Buffalo
Spammer." It is estimated that Carmack sent out some 850 million spam
messages over an 18-month period, or an average of about 2 million messages a
day.
EarthLink's case against Carmack is illustrative of our lawsuits against
spammers. While we were able to obtain a $16.4 million judgment against Carmack,
we just as importantly obtained permanent injunctive relief, barring him from
spamming again. Furthermore, when EarthLink gets judgments against spammers, it
asks the court to make all other ISPs 3rd party beneficiaries of those
judgments. This bars the defendant spammer not only from sending spam to
EarthLink customers, but also from sending spam to the customers of any other
ISP. We urge other ISPs to do likewise in their suits against spammers.
Obviously, this case was brought successfully without specific anti-spam
legislation. Rather, we relied on a combination of laws including federal
statutes such as RICO and the ECPA, state statutes such as the Georgia Computer
Systems Protection Act, fairly new laws such as the Computer Fraud and Abuse Act
and time-tested notions of common law such as trespass and conversion. In all,
our complaint against Carmack included 14 counts. This is not to say that
federal anti-spam legislation is unneeded, rather that it should supplement and
strengthen the legal recourse available today to ISPs and other parties.
A postscript: Based on information developed in EarthLink's civil case against
Carmack, the New York Attorney General subsequently filed criminal charges
against him for identity theft, landing him in jail. We believe this to be the
first time that anti-spam litigation has also led to a criminal arrest of a
spammer.
Technology Solutions
Perhaps the most promising front in the fight against spam is the implementation
of technology solutions. EarthLink and other ISPs have until now generally
relied on filtering software to limit the amount of spam their customers
receive. EarthLink's filtering systems, known as spaminator, filters out 70-80%
of all junk e-mail before it ever gets to a customer's computer. Spaminator also
provides users with customizable tools they can use to further reduce unwanted
emails in their inboxes. It is possible to increase the sensitivity of filters
such as spaminator, but you then begin to run the risk of filtering out messages
from legitimate senders which an e-mail user wants to receive.
Filtering technology has worked well until recently. Eighty percent (80%)
effectiveness was fine in filtering through a few dozen spam messages a day. But
as the volume of spam has increased 5-fold in the past 18 months, Internet users
are now bombarded with sometimes hundreds of messages a day. An 80%
effectiveness filter therefore lets through an increasingly unacceptable number
of spam messages.
Enter SpamBlocker, EarthLink's new challenge-response e-mail system. Developed
at EarthLink, spamBlocker presents a new way to give customers control over
their inboxes. Unlike filters, which default to letting through email except for
the messages they filter out, spamBlocker keeps all messages "outside the
gate" of a user's inbox, letting in only those messages from recognized
senders. SpamBlocker allows a user to import their address book of valid senders
and to quickly and easily add names to that list. Rather than only eliminating
email from unknown sources it holds these messages in a Suspect E-mail folder
allowing the recipient to review and accept the messages they wish to receive.
SpamBlocker also sends the sender a one-time easy to complete Allowed Sender
Request Form. Able to be completed in several seconds by an actual person, it
will not be usable by an automated email program or be able to be filled out at
all where, as is often the case, a spammer fakes the IP address which is the
source of his spam. SpamBlocker will virtually eliminate spam in a user's in-box
and is available free to all EarthLink subscribers.
Thank you for giving me the opportunity to testify today.
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