MR. BORGIDA:
Now with us to discuss this interesting issue, Clyde Wayne Crews of the Cato Institute, and J. Howard Beales. He’s the Director of the Federal Trade Commission's Bureau of Consumer Protection.
Mr. Crews, let's begin with you. Your view about spam?
MR. CREWS:
Well, we face a big problem here. And the question is, are we going to deal with it legislatively or technologically? And there are a number of legislative proposals to deal with spam. There are technological ones. One way or another, we've got to shift the cost of spam back to the sender. And that's going to probably be in terms of technology, a combination of filtering, certification of e-mail, challenge-and-response kinds of systems that get in between.
MR. BORGIDA:
Mr. Crews, you see obviously the cost, but do you see it as a problem or part of the American business landscape?
MR. CREWS:
Well, there are free speech issues with regard to sending e-mail. And that's the problem. On an Internet system in which we can contact anyone we want, anyone can contact us. And that's the source of the problem. And we have to go after it, one way or another. I happen to think technological solutions are going to be the way we ultimately do it, although I think what the FTC is doing in going after fraudulent spam is right on target as well.
MR. BORGIDA:
Let's let the FTC speak for it- or himself. Mr. Beales, your thoughts about this? Do you see this, does the government see this, as a problem, an infringement on people's ability to go to the Internet site and do what they want without being bombarded?
MR. BEALES:
I think there's no question that it's a problem. It has reached a level and a volume, and with an amount of fraud embedded in it, that it simply cannot be ignored. We really need to address the problem.
We've really tried to launch the first systematic attack on false and deceptive spam. What we found in the study that we released before our workshop last week was that approximately two-thirds of all spam was, just looking at the message itself, was false. It either had a false statement in the "from" line, it had a false claim in the "subject" line, or there was something obviously false in the message of the spam itself. So, it's not like most of this is messages that might actually be good for something. They are lies. And that is a big problem.
MR. BORGIDA:
And interestingly, from what I read about this issue, up to 50 percent of the people who are working through their Web site actually click on the spam items and they want to know what's in there. They don't seem to be ignoring them very much, do they?
MR. BEALES:
What we have typically found in spam cases is usually they are small. They haven't gotten a lot of sales in the cases that we've brought. There are some exceptions to that. But usually they haven't been able to sell a lot. And that's a good thing, because most people see through it.
MR. BORGIDA:
But what I mean is that people seem to be unable to not click on those. They seem to be quite interested in them, don't they? There is something about them that when you see that on the screen, you want to open it?
MR. BEALES:
They definitely open the messages, and that's part of the reason for deceptive subject lines is to try to get people to open the message and see what happens. And that actually is a way a lot of the click-throughs are counted is based simply on somebody opened the message and that's what reports as a hit, that the message was actually opened. It's not necessarily that somebody actually bought something, because I don't think the response rates are anywhere near that high for actual purchases.
MR. BORGIDA:
Mr. Crews, jump in.
MR. CREWS:
There were a number of folks, I guess, who bought that little world's smallest radio-controlled car at Christmastime that we were all getting the spams about. But, apart from that, going after the Miss Cleos of cyberspace is the right thing to do. There are a number of legislative proposals that do worry me in terms of giving a false sense of security, like mandating "adv" in the subject line, for advertisement, or mandating that the spammer remove somebody from a list. I think the bad guys are just going to carry this offshore, and the spam might still come in, even if we have these kind of things.
MR. BORGIDA:
There is a malicious and evil side to this, in terms of young people on their computers and seeing pornography sites and so on.
MR. CREWS:
If you're worried about protecting kids, spam is almost the least of your problems, because of the Web sites that are there and because of peer-to-peer networks, in which you can go on and download anything you want. So, a parent has really got a problem on their hands there. It may even require watching what the child does or setting up white list e-mail accounts, where the child can only get e-mail from people that you approve, from neighbors and relatives and people you approve of.
MR. BORGIDA:
An interesting discussion and one we hope to have more and more on our program, because this is one of the battlegrounds, commercially and ethically, of the future. Clyde Wayne Crews of the Cato Institute, and J. Howard Beales of the Federal Trade Commission. We appreciate you both having this discussion with us.
