BILL ANALYSIS                                                                                                                                                                                                    



                                                          AB 1629  
                                                         Page 1

CONCURRENCE IN SENATE AMENDMENTS
AB 1629 (Miller)
As Amended August 20, 1998
Majority vote 

  ASSEMBLY: 70-3  (May 18, 1998)  SENATE: 38-0   (August 26, 1998)     


Original Committee Reference:   CONPRO  

  SUMMARY  : Prohibits the unauthorized use of electronic mail  
networks to send unsolicited e-mail advertisements (spam) and  
exempts specified non-profit organizations from the state's  
telemarketing regulatory scheme.

  The Senate amendments  clarify the existing spamming provisions of  
the bill and add a new component related to exemptions from  
telemarketing regulation. Specifically, the amendments:

1) Exempt specified non-profit business organizations (chambers of  
   commerce, business leagues, real estate boards, and boards of  
   trade) that have an established history in the state from the  
   registration and bonding requirements for telemarketing  
   sellers.

2) Increase the maximum daily civil damages for spamming  
   violations from $15,000 to $25,000.

3) Establish a specific penalty for domain name forgery with a  
   fine of up to $5,000 and/or imprisonment of up to one year.

4) Clarify that the spamming provisions apply only to networks  
   located in this state.

  AS PASSED BY THE ASSEMBLY  , this bill:

1) Prohibited the practice of sending unsolicited advertising by  
   electronic mail, which commonly is known as "spamming", by  
   clarifying that electronic mail service providers control the  
   use of their services and equipment.

2) Allowed for the recovery of civil damages against spammers,  
   either for actual monetary damages or liquidated damages of $50  
   per spam, up to $15,000 per day, whichever is greater, and the  
   recovery of reasonable attorney's fees.

3) Prohibited the unauthorized use of computer domain names by  
   adding domain name forgery to the list of computer crimes  
   punishable by a fine of up to $10,000 and/or imprisonment for  
   up to three years.

  FISCAL EFFECT  :  No significant state costs.

  COMMENTS  :

1) According to the author's office, this measure is intended to  







                                                          AB 1629  
                                                         Page 2

   prevent spamming and domain name fraud.  Domain names, such as  
   , can be considered the addresses of the paths  
   used to transmit e-mail via the Internet.  This bill seeks to  
   stop spamming by: a) allowing electronic mail service providers  
   to sue spammers for damage they cause to electronic 
mail networks; and b) criminalizing unauthorized domain name use.

   Supporters argue that Internet users face a daily onslaught of  
   unsolicited e-mail from Internet businesses advertising goods  
   and services.  Known as spamming, the practice of sending mass  
   e-mails often imposes a significant time burden on Internet  
   users and often can slow down or disrupt on-line service. 

2) AB 1676 (Bowen), pending on the Senate Floor, is also an  
   anti-spamming bill.  AB 1676 takes a different, but  
   complementary, approach to the junk e-mail problem by: a)  
   allowing consumers the option of opting-out of spam  
   distribution lists; and b) making spamming a misdemeanor  
   punishable by a fine and/or imprisonment.

3) Opponents claim that this bill may be an unconstitutional  
   infringement on free speech and that any government regulation  
   of the Internet may have a dampening effect on Internet  
   commerce.  Additionally, some opponents argue 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.

4) The California Chamber of Commerce (Chamber) is the sponsor of  
   the provisions added in the Senate exempting specified  
   non-profit business organizations from California's regulatory  
   scheme aimed at fraudulent telemarketing sales practices.  The  
   Chamber argues that an implied exemption has been in place  
   since the inception of telemarketing regulation for  
   organizations like itself.  The Chamber further states it is  
   seeking relief from the administrative burden of the  
   registration requirements since it does not engage in  
   activities that are the primary target of the law.   
   Additionally, the Chamber suggests that a sufficient level of  
   consumer protection would be retained for its members since: i)  
   exempted organizations would have to demonstrate a history of  
   incorporation in the state; and ii) existing law's underlying  
   enforcement mechanism for unlawful advertising would continue  
   to apply to Chamber telemarketing activities.


 Analysis prepared by  :  Sailaja Cherukuri / aconpro / (916)  
319-2089 
                                                                     FN  
043132