Internet providers want a say in spam laws

The debate over how best to crack down on junk e-mail has erupted into brass-knuckle lobbying wars in several state capitals, with some legislators accusing Microsoft Corp. and other Internet providers of sabotaging efforts to craft tough anti-spam laws.

Nowhere is the dust more unsettled than in California, where a bill is pending that could restrict e-mail marketing more than in any other state.

One state senator, who represents several Los Angeles suburbs, accused Microsoft of eleventh-hour arm-twisting to exempt Internet providers from responsibility for being the conduits of spam. Firms such as Microsoft, America Online and Yahoo Inc. market to their own members, and large portions of overall e-mail traffic traverse their systems.

"Microsoft is talking out of both sides of its mouth," said state Sen. Debra Bowen, a Democrat, who points to statements by Microsoft chairman Bill Gates about how much the company is fighting to eliminate junk e-mail. But "their focus has been on getting immunity for themselves and preserving their ability to strike deals to send spam," she said.

A Microsoft spokesman rejected the charge, arguing that an alternative bill the company supports is similar to Bowen's in all key areas. The sponsor of that bill, Democrat Sen. Kevin Murray, disputes Bowen's analysis that the bill would give Internet providers a free pass.

But the final language of Murray's bill, which passed out of committee with a strong push from Microsoft, has not yet been drafted.

In Missouri, Attorney General Jay Nixon said he still has "the bruises" from fighting a losing battle to create a do-not-spam registry.

"Microsoft put their hired guns to work," stripping the registry out of a state no-spam bill, which ultimately passed, Nixon said.

Among other things, Nixon said, the software giant hired the husband of the lieutenant governor's chief of staff and other prominent state Democrats to lobby on its behalf.

Microsoft opposes do-not-spam registries, citing security concerns that if the database were hacked, millions of e-mail addresses could be compromised.

Like other Internet service providers, marketers and retailers, Microsoft argues that spam laws should aggressively target the purveyors of scams and pornography, who would ignore a no-spam registry anyway.

But many consumer organizations, anti-spam groups and state lawmakers make no distinction between unsolicited e-mail from legitimate marketers and those from notorious spammers. A registry, they argue, could provide a simpler way for consumers to tell all marketers not to send them unsolicited advertising.

Nixon said he thinks Microsoft wants to protect its franchise of selling Internet access with advanced spam-filtering features.

"They are attempting to run a protection racket," he said. "'Pay us and you won't get spammed as much.'" An effort to establish a no-spam registry met a similar fate in Michigan, where Republican state Sen. Mike Bishop thought he had sufficient support for the idea after the Senate passed it unanimously.

Then Microsoft's people moved in, said Matt Miner, a Bishop aide.

"They lobbied extremely hard," Miner said. "They presented ideas ... that confused (House) committee members that made our list sound kind of far-fetched and impossible." In California, the saga of the Bowen bill began two months ago. The author of California's current anti-spam law, which requires commercial e-mail to be labeled "ADV" for advertisement, decided that it was not working.

Instead, she drafted legislation that would ban all unsolicited commercial e-mail unless specifically requested by consumers, a process known as opt-in.

Microsoft, America Online and Yahoo all, at various times, lobbied against the bill. They have argued that marketers should be allowed to send advertising until consumers ask for the advertising to stop, which is known as an opt-out process.

Murray's bill, like Bowen's, is based on the opt-in process, making Microsoft's support of it a first for the company. But Sundwall said the company looks at legislation, and the political realities of each state, on a case-by-case basis.

Murray said his bill is unique in targeting the retailer of the product that is advertising via spam, not just the marketers that send out the messages.

In some ways, the state battles mirror jockeying on Capitol Hill, where several bills are pending. Most follow the opt-out model favored by marketers and Internet providers. One, authored by Sen. Charles Schumer, D-N.Y., proposes a no-spam registry. All, however, would supercede state laws.