BILL ANALYSIS
SENATE COMMITTEE ON BILL NO: AB 1629
BUSINESS AND PROFESSIONS AUTHOR:
Miller
Senator Richard G. Polanco, Chairman As Amended:
6/11/98
HEARING DATE: June 22, 1998 FISCAL: Yes
SUBJECT: Electronic mail (e-mail): prohibiting unauthorized
electronic mail advertisements ("spam") and the
unauthorized use of Internet
domain names (e-mail user name addresses).
DIGEST:
Existing law:
1.Regulates advertising and provides that any violation of those
provisions is a misdemeanor, as well as subject to injunctive
relief and civil penalties.
2.As part of that advertising law, prohibits a person conducting
business in this state from faxing unsolicited advertising
material, unless certain conditions are satisfied, including
providing a toll-free telephone number recipients may call to
stop such unsolicited faxes ("opt out"), providing notice
thereof in the fax, and makes a failure to comply with a
recipient's request to stop unsolicited faxes an infraction
with up to a $500 fine.
3.Makes unauthorized access and use ("hacking"), modification,
or damage of computer data, a computer, a computer system or a
computer network a crime subject to misdemeanor, felony, or
alternate misdemeanor/felony penalties, and by civil penalties
by a victim (Penal Code Section 502).
4.Is silent on Internet domain name protection.
This bill would:
1.Prohibit a registered user of an electronic mail service
provider (provider), as defined, from using or causing to be
used the provider's equipment in violation of the provider's
published policy prohibiting or restricting the use of its
equipment for the initiation of unsolicited electronic mail
(e-mail).
2.Prohibit any individual, corporation, or other entity from
using or causing to be used, by initiating an unsolicited
e-mail advertisement, a provider's equipment in violation of
the provider's published policy prohibiting or restricting the
use of its equipment to deliver unsolicited e-mail to the
provider's registered users.
3.Make violations of the above two prohibitions a crime
(misdemeanor) by adding them to the advertising regulatory
provisions of law, violations of which are misdemeanors.
4.Authorize any provider whose published policy is violated as
prohibited by the bill to bring, in addition to any other
available legal action, a civil action to recover actual money
damages or liquidated damages of fifty dollars ($50) per each
unsolicited e-mail, up to a maximum of $15,000 per day,
whichever amount is greater, and the recovery of reasonable
attorney's fees (to the prevailing party).
5.In such civil action, require the provider to establish that
its policy regarding unsolicited e-mail advertisements had
been published for at least 30 days preceding the alleged
violation of that policy.
6.Specifies that a provider is not required to create a policy
prohibiting or restricting unsolicited e-mail advertisements.
7.Provide that it does not limit or restrict the rights of an
electronic mail service provider under a specified provision
of federal law, or any decision of a provider to permit or
restrict access or use of its system or its editorial
function.
8.Make it a crime to knowingly and without permission use the
Internet domain name of another in connection with sending an
electronic mail message - by adding that prohibition to the
list of computer crimes (Penal Code Section 502) punishable as
an infraction for the first offense ($250 fine maximum), or a
misdemeanor or a felony (up to $10,000 fine and/or three years
imprisonment) for subsequent and specified serious violations.
9. Define various terms including "unsolicited electronic mail
advertisement," "electronic mail service provider,"
"registered user," and "Internet domain name."
FISCAL EFFECT:
Unknown. According to the Assembly Appropriations Committee
(5/6/98 ), there would be minor nonreimbursable state and local
law enforcement and incarceration costs as no one was admitted
to state prison in 1997 for a violation of Penal Code Section
502.
COMMENTS:
NOTE: This bill has been double-referred to the Senate Public
Safety Committee because the bill's Internet domain name
prohibition is added to a Penal Code computer crime provision
violation of which may be a felony.
1.Sponsorship and Purpose.
This bill is sponsored by its author based on information
provided by a constituent who had his business damaged by
being inundated with unsolicited e-mail advertisements.
According to the author's office, this bill is intended to
prevent the sending of unsolicited e-mail ads ("spamming") and
Internet domain name (user name/address) forgery. Internet
domain names, such as "senate.ca.gov.", are the name addresses
of the computer paths used to transmit and receive e-mail via
the Internet. This bill seeks to stop spamming by: a)
allowing electronic mail service providers (also known as
Internet Service Providers or ISPs) to sue spammers for damage
they cause to their electronic mail networks, and b)
criminalizing unauthorized domain name use.
2.Background.
According to the author, advertisers using e-mail address lists
and specialized computer software are able to transmit
hundreds of thousands, even millions of unsolicited e-mail ads
at virtually no cost to themselves, but instead shift the
costs to the networks that carry the e-mail and the
recipients. Such mass mailings impose enormous costs on the
providers whose equipment and services are used, and can be a
costly and time consuming nuisance for recipients who are a
captive audience. Spammers often use the domain names of
others to disguise the origin and content of their junk
e-mail, which forgery can be extremely damaging to businesses
whose domain names are forged as the originating or return
e-mail address of the spammer.
According to the Assembly Judiciary Committee analysis, a recent
report by America OnLine (AOL) noted that on average about 30
percent of the estimated 30 million e-mail messages
transmitted via its network each day are unsolicited
commercial e-mail.
According to the author, this bill recognizes the existing
rights of ISPs to prevent the abuse of their equipment caused
by spam. The author claims that courts around the country
have recognized that ISPs have a cognizable property interest
in their equipment and service. They have also held that
third party advertisers who use their property without
authorization to deliver unsolicited ads are liable for
trespass. However, the existing legal remedies for ISPs to
control the use of their network are inadequate because it is
virtually impossible for them to calculate their actual losses
or damages from mass-distributed unsolicited e-mail ads. In
contrast, the remedy specified for providers by this bill
would provide for specific monetary penalties for spamming.
The author stresses that the bill does not require an ISP to
restrict the use of its equipment for the transmission of
unsolicited e-mail ads, but rather leaves the decision up to
the ISPs to specify in their contracts with subscribers to
their service what the terms of such use will be and what
actions are contractually prohibited.
3. Related Legislation This Session.
AB 1676 (Bowen), also being heard at today's hearing by the
Business and Professions Committee, is another anti-spamming
bill this Session. That bill takes a different approach to
the problem of junk e-mail - being modeled after the existing
junk fax law. It allows a consumer recipient to "opt-out" of
receiving spam if they contact the spammer and request it,
requires spammers to provide a toll-free telephone number or
valid e-mail return address, requires the use of specified
acronyms in the subject line of advertisements to indicate
content, and makes spamming in violation of its requirements
an infraction punishable by a $250 fine for each violation.
AB 2460 (Bowen), currently in Assembly policy committee, is
another anti-spamming bill that would create additional civil
remedies recoverable by ISPs for unauthorized domain name
usage - allowing recovery of actual damages or an amount
determined as specified.
4. Arguments in Support.
Supporters of the bill argue that Internet users face a daily
onslaught of unsolicited commercial e-mail from businesses
advertising various goods and services. They argue that this
practice of sending mass, unsolicited commerical ads via
Internet e-mail imposes a significant time burden on the
Internet users who receive such e-mail who must read and or
clear it off their computers, and often can slow down or
completely disrupt the use of a provider network preventing its
use by any of the other registered, user subscribers. The
supporters believe that the bill will provide ISPs with an
effective private civil remedy to stop spammers and will extend
the criminal sanctions against unlawful computer use to include
the forgery of Internet domain names as another deterrent.
The ISP Consortium, states that it is the world's largest
industry association of Internet Service Providers, supports AB
1629, stating that it offers Internet users sufficient
protection from unwelcome and intrusive commercial spam.
The Coalition Against Unsolicited Commercial E-mail (CAUCE),
stating it is the Internet's oldest and largest anti-junk-e-mail
lobbying organization with nearly 10,000 members nationwide,
also supports AB 1629. CAUCE states that polls show that the
large majority of Internet users are in favor of legal
protection. According to CAUCE, it is vital that there be some
protection against commercial interests who would drown
personal, political, artistic and religious speech in the
relentless blare of advertising.
International Business Lists (IBL), a for-profit venture which
conducts e-mail advertising, also strongly supports AB 1629.
IBL utilizes only "opt-in" methods, meaning that they send
messages only to users that give prior permission. IBL states
that spam hinders legitimate Internet advertising companies,
which create new jobs, new products, and new technologies. IBL
believes that restricting spam fosters the growth of electronic
commerce, preserving e-mail for legitimate and valuable
communication.
The Packet Clearing House (PCH), which is made up of 24 of the
largest California ISPs, representing nearly 2 million
California Internet users, also supports AB 1619. PCH believes
that the bill is "the only effective anti-spam measure under
consideration." PCH states that the bill will "protect our
networks from the theft of service and electronic trespass which
are the modus operandi of spammers, and to protect our customers
from unwelcome touting of pyramid schemes, pornography, and
illegal gambling."
Zocalo, an ISP with over 100,000 customers in California, also
supports the bill. Zocalo states that "the theft of resources,
network bandwidth, and computer time which spammers perpetrate
both slows down and increases the monthly cost of Internet
access not only for our customers, but for everyone on the
Internet."
5. Arguments in Opposition.
The bill is opposed by Matt Kuzins, a fundraising consultant,
who argues that the bill would unfairly restrict charities from
using the e-mail to raise funds to support many essential
community service programs. He argues that the bill is a
meat-ax approach to the spamming problem and that what is needed
is a more creative approach that distinguishes between
legitimate charitable and other advertising, and that which is a
willful, intentional abuse of e-mail.
6. Policy Issues.
Questions have arisen as this bill proceeded through the
Assembly regarding whether its provisions might be an
unconstitutional infringement against free speech or whether it
would be effective against spam that originates from outside of
California - particularly since the Internet is a world-wide
telecommunications medium. Given the commercial nature of the
communications involved, and the contractual basis for a
spammer's access to the Internet through a provider, there is no
certain answer - ultimately being an issue the courts would need
to decide.
The opposition's concerns appear raise the specter of
unreasonable restriction on access to Internet e-mail
communication by the private Internet Service Provider
businesses that can control access to it via contractual
subscriptions. An analogy for this might be as if access to
telephone service was through private telephone companies that
could prohibit the use of the telephone by telephone service
subscribers to conduct telemarketing. At least currently, the
potential for monopolistic control over e-mail appears to be
offset by the large number of ISPs in competition with each
other for subscribers.
Several of the supporters of this bill are also opposed to the
related legislation, AB 1676 (Bowen) also being heard today.
They believe that the provisions of that bill condone spamming
(allowing it until cessation is requested by the recipient),
impose unreasonable burdens on the recipient computer user, and
will be ineffective in stopping spammers.
7. Assembly Votes:
Assembly Consumer Protection Committee: 13 - 0
(3/31/98)
Assembly Judiciary Committee: 15 - 1 (4/14/98)
Assembly Appropriations Committee: 17 - 0
(5/6/98)
Assembly Floor: 70 -
3 (5/18/98)
SUPPORT AND OPPOSITION:
Support: Consumer Federation of California (CFC)
Coalition Against Unsolicited Commercial E-Mail
(CAUCE)
California Public Interest Research Group
International Business Lists (IBL)
Zocalo (an Internet service provider)
Packet Clearing House (PCH)
ISP Consortium
San Bernadino County Sheriff
California Public Interest Research Group
(CALPIRG)
Dr. Robert Jacobson (former Assembly
Utilities and Committee
consultant)
California Alliance For Consumer Protection
Your A.L.E.R.T. (Adult Liberties and Erotic Rights
are Threatened)
Adult Entertainment Industry's Professional Lobbying
Coalition
California Adult Webmasters Association
Opposition:Matt Kuzins (direct mail fundraising consultant).
American Civil Liberties Union
Direct Marketing Association (DMA)
Consultant: Jay J. DeFuria