Major ISPs Ponder ‘Postage’ To Stem Spam

Yahoo! and Microsoft are giving serious thought to the idea of e-mail “postage” that costs senders a small fee, company officials said.

The admissions come in the wake of Microsoft founder Bill Gates’ January comments in Davos, Switzerland suggesting the spam problem will be defeated by a number of different solutions, but “in the long run, the monetary method will be dominant.”

The monetary approach, known as “sender pays,” has different variations and is currently being used by several anti-spam companies, including IronPort and Vanquish. The latest company getting buzz for advocating such an approach is a Silicon Valley start-up called Goodmail. Under Goodmail’s model, bulk e-mail senders pay outright for “postage” that guarantees their e-mail will be delivered to participating ISPs, who are paid for accepting the mail. Understandably, ISPs are interested in exploring this idea, as it helps them defray the soaring costs of handling e-mail.

Microsoft hasn’t committed to any particular company’s approach, a spokesman said, “We continue to look at these and other innovative approaches that help change the economic model for sending spam.” Its partner in an anti-spam coalition, Yahoo!, is also investigating a number of different options, including the solution Goodmail offers, the start-up’s CEO confirmed.

“We are in talks with various ISPs. Obviously, Yahoo! has made comments about us and is one of the companies we’ve engaged with,” said Richard Gingras, CEO of Goodmail. “We’ve had good constructive discussions with most of the major ISPs.”

According to Gingras, there is “tremendous benefit” in the idea for ISPs, particularly in enabling them to come up with a spam-fighting approach that minimizes false positives. A false positive is when a message welcomed by a user, or at least not qualifying as spam, is wrongly blocked or dumped in a spam filter. The cost of blocking such legitimate e-mail is expected to soar to $419 million in 2008 from $230 million in 2003, according to Jupiter Research, which shares a parent company with this publication.

Yahoo! is intrigued with the idea of postage because it would force mailers to send only those offers a significant number of people might accept. Spammers would not be able to behave without regard for the Internet providers’ or end users’ interests, according to Brad Garlinghouse, VP of communications products at Yahoo!

“The problem is there is not enough friction in sending bulk e-mail,” Garlinghouse said. Garlinghouse says Yahoo! is interested in imposing economic consequences only on bulk e-mailers, not Yahoo! users who send mail to friends or family.

The “sender pays” idea makes sense to executives at other ISPs as well, including Dale Malik, director of product management for BellSouth.

“Anything we can bring to bear that solves the economics piece of the puzzle is a good idea,” said Malik. “It [e-mail postage] is certainly a sensible idea. Say you’re a large clearinghouse for legitimate direct e-mail. You may pay a form of bulk delivery to deliver your messages appropriately. That way you don’t get caught in the spam filter and you’re behaving in an acceptable fashion.”

Malik said cooperation in the industry and a combination of approaches is necessary to lick the spam problem, which he believes can be done in two years. Momentum in the industry seems to be shifting away from a simple spam-filtering approach, and moving toward ideas for wholesale overhauls of the e-mail infrastructure — including changing the economic model that makes spamming a lucrative business.

Companies that currently use a postage system or a similar monetary incentive (or dis-incentive) include IronPort and Vanquish. With Vanquish, the recipient of an e-mail can trigger a payment from the sender if he or she finds the message undesirable. IronPort has a “bonded sender” program whose participants must adhere to a set of e-mail standards, undergo a qualification process and guarantee the legitimacy of their e-mail by putting their own money at risk.

“We would like to create a class of trusted e-mail and restore trust in a medium where trust has been damaged,” said Goodmail’s Gingras.

With the Goodmail system, only high-volume mailers need pay postage at first, at the rate of one cent per message. Goodmail collects the payments and delivers them to the ISP, after taking its cut.

Goodmail works even if all ISPs and senders don’t participate. A mass e-mailer would sign up with Goodmail, buy a block of stamps, and send out its mailings. The “stamps” are really encrypted numbers in the e-mail header screened by the receiving ISP.

If a message comes in without the stamps, it will still be accepted, but will be subject to the same filters in use now. This might cause legitimate e-mails to be diverted to spam filters. Stamped mail would go through without being filtered.

In a way, Goodmail will be doing a preemptive filtering by screening the mailers who buy stamps. “We will make great efforts to make sure the entity [sender using the stamps] is real. You will not be able to use a credit card and walk away with a million stamps. We want to make sure you are who you say you are,” Gingras said. Though not yet in operation, the company’s stamp program will be up and running this year, he said.

Not every entity in the equation finds the idea of electronic postage a good one.

“I hate the idea. The Internet won’t be fully accessible to all,” said Amika Antoniades, co-list moderator for San Francisco Women on the Web, a 1,387-member e-mail list dealing with the Internet and technology mostly populated by women. Antoniades is concerned about the extra costs, which may prove difficult for smaller, non-commercial organizations.

“We are considering discounts for nonprofits. We do recognize there are entities that may be more budget-conscious and nonprofit,” Gingras said.

“All the volume marketers we’ve talked to about this thought it was a good idea,” Gingras commented.

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