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Monday, July 19th, 2010
The Economics of Spam
Tennessee resident KC "Khan" Smith owes the EarthLink Internet service provider $ 24 million. According to CNN, last August he was slapped with a lawsuit accusing him of violating federal and state Racketeer Influenced and Corrupt Organizations (RICO) statutes, the federal Computer Fraud and Abuse Computer Act of 1984, the federal Electronic Communications Privacy Act of 1986 and numerous other state laws. July 19 – which did not appear in court – the judge ruled against him. Mr. Smith is a spammer.
Brightmail, a vendor of email filters and email anti spam applications warned that nearly 5 million spam "attacks" or "bursts" occurred last month and junk that has grown 450 percent since June last year. PC World agrees. Between the seventh and one-half of all emails are spam – unsolicited and intrusive commercial ads, mostly related with sex, scams, get rich quick, financial services and products, health and articles of dubious provenance. Messages are sent from fake email addresses or false The electronic. Some spammers hack into unsecured servers – mainly in China and Korea – to relay their missives anonymously.
The spam is one industry. Mass e-mailers maintain lists of email addresses, often "harvested" by spamware bots – specialized computer applications – from Web sites. These Lists are rented or sold to marketers who use bulk mail services. They come cheap – c. $ 100 for 10 million addresses. offer bulk mailers servers and bandwidth, charging c. $ 300 per million messages sent.
As recipients of spam used increasingly less tolerant ISP and the more litigious – spammers multiply their efforts to maintain the same response rate. Spam works. It is not universally unwanted – which makes it tricky to outlaw. It produce between 0.1 and 1 percent in positive follow ups, depending on the message. Many messages now include HTML, JavaScript and ActiveX coding and thus resemble viruses.
Jupiter Media Matrix predicted last year that the number of spam messages annually received by a typical Internet user is required to duplicate to 1400 and spending on legitimate e-mail marketing will reach 9.4 billion U.S. dollars in 2006 – compared to $ 1 billion in 2001. Forrester Research in the number of pins on 4.8 billion U.S. dollars next year.
More than 2.3 million spam messages are sent daily. eMarketer puts much lower numbers at 76 million messages of this year. In 2006, daily spam output will rise to c. 15 billion missives, says Radicati Group. Jupiter projects a more modest 268 billion messages per year by 2005. An average communication costs the spammer 0.00032 cents.
PC World quotes the European Union Linking the European and the bandwidth costs of spam worldwide at $ 8-10 billion annually. Other damages include server crashes, time spent purging unwanted messages, lower productivity, aggravation, and increased cost of Internet access.
Inevitably, the spam industry gave rise to an anti-spam industry. According to a Radicati Group report titled "Anti-virus software, anti-spam and content filtering market trends 2002-2006", anti-spam revenues are projected to exceed 88 million dollars this year – and more than double in 2006. List blockers, the report charges and generators, advocacy groups, registers of known spammers, and spam filters all proliferate. The Wall Street Journal in its June 25 issue about a resurgence of anti-spam startups financed by eager venture capital.
ISP are engaged in the prevention of drug use – reported by victims – by compacting the accounts of spammers. But the latter simply switch ISP or signing with free services like Hotmail and Yahoo! Barriers to entry are getting lower for the day as the costs of hardware, software, and communications plummet.
The use of e-mail and broadband connections by the general population is spreading. Hundreds of thousands of tech-savvy operators have joined the market in the last two years, as the dotcom bubble burst. Still, Steve Linford of the UK-based Spamhaus.org insists that most spam comes from c. 80 large operators.
Now, according to Jupiter Media, ISPs and portals are ready to begin to charge advertisers in a system based on dual, full of premium services. Writing in 1998, Bill Gates described a solution also exposed by Esther Dyson, chairman of the Electronic Frontier Foundation:
"As I first described in my book" The Way Forward 'in 1995, hopefully with time will be paid to read e-mail unsolicited. You tell your mail program to discard all unsolicited messages that do not offer an amount of money you choose. If you open a message of care and discover it's a long-lost friend or any other person having a legitimate reason to contact you, you can cancel the payment. Otherwise, you will be paid for your time. "
Subscribers can not be recognized by the joint ventures between gatekeepers and inbox Clutterers. Moreover, dominant ISP such as AT & T and PSINet have recurrently been accused of collaborating with spammers knowledge. ISP trust the data traffic that spam generates for their revenues in a business environment hard history.
The Financial Times and others described how WorldCom refuses to ban the sale of spamware through its network, arguing that regulates content. When "pink" (the color of canned spam) contracts came to light, the ISP involved blaming the whole thing to dishonest employees.
PC World begs to differ:
"Ronnie Scelson, a self-described spammer who signed a contract with PSINet (says) that backbone providers are more than happy to do business with bulk e-mail clients. "I signed with the largest 50 companies or twice" three, says Scelson …. The Louisiana-based spammer intends to send 84 million e-mail marketing messages per day in three megabits per second-45 DS3 circuits. "If you were receiving $ 40,000 per month for each circuit, Scelson asks, "Do you want to close?"
The line between permission-based or "opt-in" e-mail marketing and spam is getting thinner by the day. Some list resellers guarantee the consensual nature of their wares. According to Direct Marketing Association guidelines, cited by PC World, not responding to an unsolicited e-mail amounts to "acceptance" – a marketing strategy known as "opting out". Most experts, however, emphatically not the victims of spam to respond to spammers, lest their email address is confirmed.
But spam is crossing technological boundaries. Japan has just legislation against wireless SMS spam targeted at hapless mobile phone users. Four states in the U.S. and the European Parliament are following suit. Expensive and slow connections make this kind of spam particularly resented. However, according Mobile Channel to Britain, a mobile advertising company quoted by "The Economist", SMS advertising – a novelty – attracts a percent response rate 10-20 – compared with 3.1 percent of direct mail.
Net identification systems – like Microsoft Passport and Liberty Alliance proposed – will it even easier for marketers target prospects.
The reaction to spam can only be described as mass hysteria. Reporting someone as a spammer – even when it is – has become a favorite pastime for vengeance, self-appointed, vigilante "cyber-police." Perfectly legitimate opt-in, e-mail marketing firms often find themselves in one or more black lists – their reputation and business in ruins.
In January, CMGI-owned Yesmail received a temporary restraining order against MAPS – Mail Abuse Prevention System – the prohibition to place the e-mail marketing reputation in its time black-listed Real. The case was settled out of court.
Harris Interactive, an online opinion poll to large companies, sued not only MAPS, but ISP blocking messages e-mail when it was included in MAPS blackhole. Their CEO accused one of its competitors, the accusations that led to the "inclusion Harris on the list.
Together with other pernicious phenomena, such as viruses, the very foundation of the Internet as a fun, relatively safe, mode of communication and data acquisition is at stake.
Spammers shows have their own organizations. NOIC – the National Organization of Internet Commerce threatened to publish on its Web site e-mail address of millions of AOL members. AOL has aggressive anti-spam policy. "AOL is blocking email massive, and he wants the advertising revenues for itself (by selling pop-up ads) "the president of NOIC, Damien Melle, complained to CNET.
Spam is a classic "free rider" problem. For any given individual, the cost of blocking a spammer far outweighs the benefits. It is cheaper and easier hit the "delete". Individuals, therefore, prefer to let others do the work and enjoy the results – the public good of a spam-free Internet. You can not leave out the benefits of these consequences – public goods are, by definition, "non-excludable. Nor is a public good diminished by a growing number of "non-rival" users.
This situation resembles a market failure and requires government intervention through legislation and enforcement. The FTC – U.S. Federal Trade Commission – has taken legal action against more than 100 spammers for promoting scams and property and fraudulent services.
"Project Mailbox" is a anti-spam collaboration between agencies in U.S. law enforcement and the private sector. Governmental organizations have not entered the fray, as lobbyists, such as CAUCE – the Coalition Against Unsolicited Commercial Email.
But Congress is curiously reluctant to enact stringent laws against spam. The reasons cited are freedom of speech, limits on state powers to regulate commerce, avoiding unfair restrictions on trade and the interests of small business. The courts also wrong. In some cases – for example, Missouri vs. American Blast Fax – U.S. courts found "that the provision prohibiting the sending of unsolicited advertising is" unconstitutional.
According Spamlaws.com, the 107th Congress discussed these laws but never had enacted:
Unsolicited Email Trade Act of 2001 (HR 95), Telephone Wireless Spam Protection Act (HR 113), Anti-Spam Act of 2001 (HR 718), Anti-Spam 2001 (HR 1017), Who Is E-Mailing Our Kids Act (HR 1846), protect children from email Coal Act of 2001 (HR 2472), Internet Protection Act of 2001 (HR 3146), "CAN SPAM" Act of 2001 (S. 630).
anti-spam laws fared no better in the 106th Congress. Some states have been higher. Arkansas, Colorado, Connecticut, Delaware, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, Minnesota, Missouri, Nevada, North Carolina, California, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Virginia, Washington, West Virginia and Wisconsin.
The situation is no better across the pond. The European Parliament last year, decided to allow each member country to enact its own spam laws, thus avoiding a continent-wide directive and directly confronting the communications ministers of the union. Paradoxically, also decided, three months ago, to restrict SMS spam. Confusion reigns clearly. Finally, last month, it adopted the anti-spam strength within a directive on data protection.
About the Author
Sam Vaknin ( http://samvak.tripod.com ) is the author of
Malignant Self Love – Narcissism Revisited and After the Rain -
How the West Lost the East. He served as a columnist for Central
Europe Review, PopMatters, and eBookWeb , and Bellaonline, and
as a United Press International (UPI) Senior Business
Correspondent. He is the the editor of mental health and Central
East Europe categories in The Open Directory and Suite101.
Alex Jones Tv {Sunday Edition} 5/5: Chinese-Style Censorship of Infowars.com by Asia Netcom!
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