February 5, 2006

Sender Pays (for Bulk E-mail)

Posted in Software, Spam at 1:38 pm by mj

Over at Rough Type, Nicholas Carr posted a short dicussion on net neutrality in response to the recent moves by AOL and Yahoo to stop whitelisting businesses who send tons of e-mail. What’s more interesting than Carr’s original post, though, is the comment by Daniel Dreymann, co-founder of Goodmail, the service under discussion.

Dreymann’s point is that “sender pays” has won out in all other communications mediums, and that this is really no different. Carr retorts that net neutrality means that every service provider ought to not care what data is flowing through its network, and that this applies just as well to ISPs processing e-mail as it does to ISPs providing net access.

Frankly, I agree with Dreymann, but I am worried about the slippery slope to which Carr alludes.

It’s true that AOL and Yahoo are not requiring every business to pay them to reach their customers. Rather, they’re developing an economic model around “whitelisting” companies whose e-mails might otherwise get flagged as spam. And let’s face it: from a business perspective, whitelisting is an economic burden, unless you can collect money from those who ask to be whitelisted.

But once you start this kind of service, two problems develop.

First, businesses who send questionable e-mails no longer have an incentive to play nice. If the price of admittance to this Goodmail service is low enough, it will make more sense to do that and guarantee delivery, than it would be to either stop sending e-mails, or require double opt-ins, or provide plaintext versions of your e-mail, or…

Second, the ISP loses their incentive to improve the accuracy of their spam filters. In the past, ISPs had a definitive incentive for accuracy. For every legitimate organization that their system classified as spam, it would generate complaints, and the ensuing process cost them money. But now, their incentive is just the opposite: The more organizations their system classifies as spam, the more potential customers they create. Which isn’t to say they will intentionally decrease the tolerance on their filters, but that will likely be the effect, over time.

I’m willing to support AOL and Yahoo (and Goodmail) in their attempts. As long as Goodmail or like services aren’t legislated, the market will eventually decide to what extent it will tolerate “sender pays” for bulk e-mail. This should prove more successful than “bonded sender” and other schemes to implement “sender pays” for 100% of e-mail. But, eventually, the economics of spamming and spam prevention will probably shift so that it produces an inbox that is no better off than it is today.