Pay-per-email and the "Market Myth"

Bennett Haselton has written a thoughtful piece on the latest developments in the pay-for-email schemes making the rounds from some of the big players in the world of AOL. This one is really worth your time, so please click on and read what he has to say.

AOL created quite a stir in February when they announced that senders would soon be able to bypass the company's junk mail filters by paying a quarter-penny per message to a company called Goodmail, which would split the revenue with AOL. EFF and MoveOn.org argued, in an open letter posted at DearAOL.com and co-signed by many groups including Peacefire, that once the big players were able to bypass AOL's mail filters for a fee, there would be less pressure on AOL to fix problems with non-paying senders being blocked, and that the quarter-penny would become a de facto "e-mail tax" for newsletter publishers if other ISPs followed suit.

At the N-TEN conference last Thursday in Seattle, I had the chance to talk to Charles Stiles, the AOL postmaster, and Richard Gingras, the CEO of Goodmail, after a panel discussion about Goodmail's system, where they clarified some issues. First, if you pay for a GoodMail stamp, your mail not only bypasses AOL's junk mail filters, it also gets displayed to the user with a blue ribbon indicating "This mail has been certified" -- which is a promise to the user that GoodMail has actually done a "background check" on the organization and found them to be a "good actor". (So it's mainly useful for banks, as a way of saying "This is not a phishing attack", and for charities, as a way of saying "We are a legitimate charity".) Stiles said that AOL will continue offering a free whitelisting program for people to bypass the filters, where anyone can apply to join the whitelist (even though this can be easily abused by spammers as well, but AOL offers it anyway because most spammers don't bother). If you're on the whitelist, you don't get the little blue "Certified Email" ribbon, but you do get past the junk mail filters.

So, what's everyone so worried about, if anyone can bypass the filters for free? Well, one problem is that this is where Hotmail used to be, before they started requiring senders to pay a fee to bypass their filters. At one time, if your newsletter was being wrongly blocked by Hotmail, you could fill out a questionnaire with some verification information, and they would add you to the whitelist, which is what we once did to get the Peacefire newsletter un-blocked. However, once Hotmail started using Bonded Sender, a third-party company that requires you to post a $2,000 bond in order to get on their whitelist, Hotmail revoked the free whitelistings that had been given out in the past. If your newsletter is being blocked by Hotmail's filters, no matter how many people vouch for you as a non-spammer, the only way to make sure you get past the filters is to pay the $2,000 to Bonded Sender. (I refused to pay the fee, and of the last seven messages that I sent to our press list, all of them got labeled by Hotmail as "Junk Mail".)

Charles from AOL seemed sincere in saying that AOL's free whitelisting won't go away. But he can't promise or guarantee anything, and someday it'll be someone else's decision. And other ISPs, most of which do not have free whitelists, will be tempted to use GoodMail as a de facto whitelist, such that senders that don't pay will have a greater chance of being blocked.

But I think there's a bigger problem underlying all of this. It's not about specific problems with GoodMail's or AOL's or Hotmail's system. The problem is that many advocates of these systems say that any flaws will get sorted out automatically by "the market" -- and in this case I think that is simply wrong. And in fact the people on Thursday's panel can't really believe it either, because one thing we all agreed on was that Bonded Sender sucks. But has the marketplace punished Hotmail for using it? Have people left in droves because non-Bonded-Sender e-mail gets blocked? No, because if they never see it getting blocked they don't know what happens. Free markets only solve problems that are actually visible to the user.

And this is why groups like EFF and Peacefire are rallying against pay-per-mail. We don't protest bad ideas. We protest bad ideas that could cause harm because by their nature, the marketplace will not kill them. Think about it: if AOL announced that they were going to start charging $100/month for dial-up, would we care? Would MoveOn send out e-mail warnings to its AOL subscribers? Would the EFF start a coalition against it? No, because users will abandon AOL over something like that, and the marketplace will kill it. But people don't abandon their provider over wrongly blocked e-mail if they don't even know it's happening. And thus pay-per-mail could become a de facto standard because it's invisible to customers.

If Microsoft released a new version of IE with huge ugly buttons that were hard to understand, would civic-minded groups and public advocates complain? No, because that problem will sort itself out through browser competition. It's when Microsoft releases features that have bad implications for user privacy and security, that civic groups and experts complain loudly -- because most people can't assess the privacy and security risks of using their browser, and so the marketplace alone won't solve that. (Microsoft knows this, of course, which is why they have sometimes released features that have bad implications for users' privacy and security, but they never made the buttons big and ugly.)

This is what I think people like Esther Dyson don't understand, when she wrote her editorial in the New York Times: Partly she wrote why she thought GoodMail was a great idea, but mainly she wrote that she didn't see why EFF and other groups were so upset, when if the idea turns out not to work, it will die in the market. "If they [AOL] don't do a good job of ensuring that customers get the mail they want, even from nonpaying senders, they will lose their customers." But that's simply not true. Hotmail subjects anyone to random blocking who doesn't pay the $2,000 Bonded Sender fee, and there's no evidence that it has caused them to lose customers.

Private companies do not have the absolute right to do whatever they want with your mail. If you sign up to receive mail from someone, and they send you an e-mail, then that e-mail is your property; if your ISP knows that the sender is almost certainly not a spammer, then they are violating the sender's and receiver's rights if they block the message. (Not First Amendment rights -- those only apply to government laws -- but rights based on contracts and implied warranties, since I think an e-mail address comes with an implied warranty that your contacts will be able to send you mail for free. So stop composing your -- yes, this means YOU -- stop composing your message saying that First Amendment rights don't apply to private companies.) EFF and other advocacy groups are working on anti-spam solutions that respect these rights, and you may agree or disagree with their proposals. But the point is that they should be commended for realizing that the marketplace will not preserve these rights "automatically".

After the N-TEN panel on Thursday, since I had sent a "communication" to Richard Gingras from Goodmail by asking him a question, I handed him a penny and reminded him that, per his agreement with AOL, he had to give half of it to them. I hope I never have to pay Goodmail anything again to get my message through, and I hope you never have to either.

Two dots not connected

[Southpaw018]

There are two dots that are not connected in this article: the little "blue ribbon" thing and the de facto tax. The author claims that the fee would become a de facto tax due to less pressure on AOL itself to fix problems.
The connection not made is that there is another reason it would become a de facto tax. I work for a nonprofit organization. If an AOL user knows that organizations and companies who have become certified get a blue ribbon, and we don't pay up, then the customer's question becomes this:
Why don't you have a blue ribbon, too?
That hurts us. And it's yet another reason this amounts to extortion.

Phew the junk will be marked

[wile_e_wonka]

At least we know now that we'll be able to easily recognize junkmail that paid its way passed the filter--it'll have a "blue ribbon." Blue ribbon=certified junk mail.

Thoughts

[The MAZZTer]

I see several possibilities:
- Spammers copy and paste the blue ribbon into their spam templates in 1/100th of the time it took Goodmail to come up with and implement it.
- Spammers sign up for Goodmail to send some of their spam out, in quantities that will allow the cost to be worth it. The spam folder in your e-mail just became worthless.
- I refuse to use Goodmail, and my legitimate e-mails start ending up in Spam. I encourage users of services that do this to switch to "a better e-mail service with better filters", namely one that does not support Goodmail.

Re:Market Solutions

[Daniel_Staal]

They gave an example in the article of an email you want but aren't expecting: anouncement newsletters that you've signed up for.

I'm on the OpenBSD-security-announce list for example: Where OpenBSD announces when they've found a security bug. I never expect an email from them, but if they send one I want it.

The problem, as they see it, is that if I didn't get an email sent by that list I'd never know. I don't know when or if it was sent. But I still want the email.

This is one of the most common uses of email. It is something spam tries to hide as. A good spam-fighting solution must be able to handle it. Sender-pays doesn't, espcially for small/free projects.

Re:Market Solutions

[Anonymous Coward]

Except that if you don't get emails you're expecting, it's always the sender's fault.

I work with a clinic that does email notifications of appointments, and when someone signs up for our email and doesn't get their reminder, it's never their fault for forgetting to whitelist us, it's always our fault for typing in their address wrong or forgetting to write them their email.

Fortunately, when people are barfing all over the floor or their baby's got a fever of 105, they don't get so pissy when you tell them to look in their spam folder because it was their fault for forgetting to whitelist us.

Re:Market Solutions

[Mr Guy]

This is obviously spoken as someone who has never had to manage a mailing list. Having helped my father, a missionary, in touch with his supporters has caused me no end to heartache and heartburn as people on AOL and Hotmail have constant trouble with everything from opt-in confirmations to receiving the letters, to casual communication between them getting blocked because the mailing list was already blocked. Then you have the idiots that opt-in and decide they don't want it anymore and actually do hit the "Spam" button.

The users just don't understand that their ISP is hiding their email from them. For whatever reason, they are convinced their email is just fine, it's got to be a problem with the list.

Re:Market Solutions

[Tony Hoyle]

It's not just an assertion it's an observation - hotmail is doing just fine.

A lot of the time legitimate email is unexpected.. sales and support queries for example. And their replies... if an aol customer sends you a sales query and aol blocks the reply it has cost *you* money as you have lost a customer. AOL user thinks you didn't bother replying and buys from someone else. It's worse with support - AOL user things you can't be bothered replying, tells all is friends that you suck because you never reply to support queries and you lose multiple potential customers. None of this hurts AOL - the market does *not* kill it off.

E-Mail protocol needs to be redesigned

[LinuxDon]

As I've written before, the only way this spam stuff will be sorted out is when they redesign the SMTP protocol. All the legislation and 'pay-per-email' stuff won't solve anything. What e-mail requires is authentication in the protocol combined with black/whitelisting.
They should have the domain registrars hand out domain certificates with which e-mail communication has to be signed. In which case domain spoofing will be impossible and you could create domain block lists that work.

Re:Market Solutions

[djmurdoch]

The obvious solution is to refuse to add hotmail or AOL addresses to the mailing list. Explain that hotmail wants to charge missionaries $2000 (or whatever) in order to accept their mail, start a letter writing campaign, etc.

If enough people do that, well that's a market solution.

Re:Real mail

[robertjw]

This fictional scenario, I think closely (but not perfectly) mirrors the current email system. The whole spam problem should have been forseen.

That is a great analogy but I'm not sure your conclusions are right. As the price has went UP over the last 15 or so years I have noticed that the concentration of legitimate letter mail I get has went down. Bulk advertising or 'Spam' mail has actually increased in percentage. Individuals and companies I actually do business with have started using email rather than pay high postage rates. Many companies offer incentives so you can get your bills deliverd in email format.

If postage and paper was free we might get significantly more advertising, but we also might see more people drop a card in the mail once in a while with a written note. Cost is a significant factor for me in wanting to pay bills online and send email to friends rather than written notes.

The USPS has done exactly what AOL is trying to do. They have catered to big business that can see an ROI on their investment. Everyone else that sends letters 'First Class' and isn't trying to spam postal patrons gets screwed.

I call BS, not all legit mail is expected

[gentimjs]

College room mate from 10 years ago finds you online and decides to say hi, City hall emails you a reminder to re-register your car, there are plenty of examples of unexpected emails that are legit and could be blocked.
From my own personal experience, I recieved unexpected email in 2002 from my father whom I had not heard from in almost 12 years.... I'm kinda a little happy that "the market" wasnt the arbitrating factor if I recieved that mail or not ....

People are forgetting...

[casualsax3]

... that it costs $.39 now to send a letter in the mail, but countless companies are willing to send thousands of pieces junk mail at a price MUCH steeper than a quarter of a penny. E-mail tax is a silly idea with nothing to offer.

Re:Real mail

[giorgiofr]

You cannot compare the two things. E-mail is more akin to an extremely decentralized mail system where everyone can turn into a postman at their whim. The absence of a huge central infrastructure makes it so that the cost of delivering your mail does not fall on the system itself; rather, on your own mailservers. If my ISP asked me for money to send email, well 1. I'm already paying a flat fee for always-on and 2. I'd set up my own server and be happy with it. Actually... I'd probably do it even if nobody forced me.

The most important question wasn't answered.

[merc]

HOW DOES THIS HELP YOUR CUSTOMERS?

The problem wasn't that your customers are receiving advertisements that weren't blessed by AOL -- it's that they were receiving too much junk mail -- PERIOD. Your clientele are already paying AOL their hard-earned money for connectivity, how does stuffing their $INBOX full of junk mail help them?

Wasn't this one of the things your customers originally whinged about a few years ago?

The good news is that the market will address this issue and correct itself.

Transport vs Content

[Anonymous Coward]

The problem is that we can't afford to have transport providers selecting content if we have any expectation of maintaining open communications. As soon as transport providers are allowed to define the type of content, their self-interest, typically monetary but frequently political, overrides any other concern.

This isn't to say that content can't or shouldn't be 'regulated'. There are situations where this is clearly desireable, however, the providers themselves should not be allowed make those decisions.

Living in a time when communications is so widespread, not only amplifies it's effect, it also makes it's antagonists more desperate. Governments, corporations and numerous other groups have repeatedly demonstrated their intolerance of open communications. Combine this with the temptation to profit by creating classes of service within the transport system and you have an ugly mix.

Classes of service are a de facto process of discrimination. Build the features to support classes of service for profit, and their use for information suppression will not be far behind.

Do you really want AOL or News Corp deciding what contetn is fit for your consumption?

Re:Market Solutions

[An Onerous Coward]

So, your definition of "spam" is "any e-mail I wasn't expecting to get?" I won't belabor the ridiculousness of that argument, but lots of people get lots of valuable, "unexpected" mail all the time.

But I will belabor the wastefulness of trying to use a phone as a substitute for e-mail. Say my organization wants to announce an event. Instead of using e-mail (and ignoring cases where I have an e-mail address but not a phone number), I have to spend days calling people up, determining whether they're interested, waiting while they run and get a pen, dictating all the information that they need to get to the event, etc. That is time and energy my preferred non-profits shouldn't have to waste. They could just write up the info, choose a good heading that lets me decide within two seconds whether I'm interested, and send it to everyone.

There are organizations I'd like to hear from, who will have a great deal of trouble using e-mail to reach me if this goes into effect.

They don't get it.

[Maximum Prophet]

I run the email relays for a large financial institution. Spam is a bigger problem than they realize. If my users don't get an email, they let me know about it.

The example given that you might not get some important email that announces some security issue is bogus. If you are expecting to get your security announcements through *AOL*, you get what you deserve. AOL's service level agreement with its customers basically says that if we're unavailable, we won't charge you for that time, you have no other rights than that.
Email in general is not reliable enough for important stuff. Normal email filtering systems catch legitimate email all the time.

The market *will* sort this out. I don't know anyone who has a hotmail account, let alone considers it important.

premium ad delivery

[Anonymous Coward]

Maybe I'm just paranoid, but it seems to me that certified email is the first step in legitimizing email marketing so that AOL and Yahoo can eventually tap into this revenue stream in a much bigger way. In fact, the pay-to-send fee revenue is tiny in comparison to what will be possible when AOL and Yahoo start providing insight into users' demographics and habits so that "certified" marketers can deliver high-value (i.e. high revenue) advertisements to mail boxes of the AOL and Yahoo customer base.

Re:Market Solutions

[Daniel_Staal]

Promise me it will stay that way. Forever.

Systems like this tend to creep, and creep in the very directions I don't like. Given that sender-pays this way doesn't really do that much to actually stop spam, I'd rather it wasn't used at all. (Then it can't creep.)

You are going to ask me what I think will work. I think good filtering is already working. It decreases the ROI of sending spam, and there are costs to sending it. In the meantime a good filter means I don't have to see spam. I get 120+ spam emails a day. My filters assure that I only ever see 1-2 spam emails a month. And they don't increase the cost of sending email one bit. The ammount of spam I recieved (before the filter) has actually dropped on occasion as I implemented better filtering and reporting of spam.

Re:Market Solutions

[crabpeople]

Well when you dont get a message for several months, you will undoubtably check their webpage and see all these alerts you are missing. Then you are free to email aol tech support and bitch at them/cancel your service. The grandparent was right. People know when they are not reciving legit mail. Time will pass, you wont get mail, and youll start complaining.

Honestly, if you go with a service like aol people expect you to have your hand held. Thats what aol is doing here so i dont know why its surprising or contridictory to any past behavior of that company.

Re:Market Solutions

[monkeydo]

The EFF and moveon are barking up the wrong tree (that's not really news). They complain that the market won't correct this, because it's "invisible" to the users. But they've pierced the veil, they've made it visible, they've alerted their members and the media, and this is still going to happen. Oops. It looks like the market heard about it and didn't care. Yeah, it sucks when you throw a party and no one comes. If it makes you feel better to believe that the invitaions got lost in the mail, fine. But it's more likely that people just don't like you.

Re:Market Solutions

[hurfy]

Sure, I'll know i didn't get all the legit email when someone asks me why i wasn't at our 25-year reunion :(

Sorry that really isn't the way I want it to work.

(that was my filtering, but on criteria likely to be used elsewhere...luckily my work ISP doesn't dump anything themselves)

My home ISP is annoying enough with dumping attachments, quarantining pictures (interesting way to combat spam tho, you never hit their server for the pic to confirm receipt) but i think they let them all thru. Oddly enough my home ISP is mostly techies/gamer/business VERY few Average Joes on it.