Esther Dyson makes some good points about emerging email services intended to address the spam problem by charging senders a fee for guaranteed delivery of emails. Though her opinion piece in the New York Times focuses mainly on a company called Goodmail Systems, which she says is proposing “a sort of FedEx for e-mail,” it also addresses broader issues about this type of approach to the spam problem.
Dyson’s piece also reminded me of the interactions between different layers of the Internet and how a lack of competition at the access layer could eventually put at risk the competitive innovation she convincingly argues can best address “market failures” at the application and service layer.
There’s no question that we need to try some new approaches to e-mail. The current situation—where the Internet is ridden with spam, most mail is unwanted and some is objectively dangerous—illustrates a market failure.
Spam filters are imperfect, partly because the senders of “bad” mail are getting better and better at defeating them. And those who take advantage of the Internet aren’t paying for the costs of their abuse. Instead, the recipients’ Internet service providers are paying the cost of spam filtering, and recipients are paying when legitimate messages get caught in those spam filters.
What shocks me most about the opposition to Goodmail is that people who claim to believe in the free and open Internet, with its welcome attitude to innovation, want to shut down an idea. That’s wrong.
AOL has plans to offer a service using Goodmail, a move that was decried as an “email-tax” by more than 50 groups, many of them non-profits:
AOL’s “email tax” is the first step down a slippery slope that will harm the Internet itself…On a free and open Internet, small ideas can become big ideas overnight. As Internet advocacy groups, charities, non-profits, businesses, civic organizing groups, and email experts, we ask you to reconsider your pay-to-send proposal and to keep the Internet free.
A pay-to-send system won’t help the fight against spam - in fact, this plan assumes that spam will continue and that mass mailers will be willing to pay to have their emails bypass spam filters. And non-paying spammers will not reduce the amount of mail they throw at your filters simply because others pay to evade them.
Perversely, the new two-tiered system AOL proposes would actually reward AOL financially for failing to maintain its email service. The chief advantage of paying to send CertifiedEmail is that it can bypass AOL’s spam filters. Non-paying customers are being asked to trust that after paid mail goes into effect, AOL will properly maintain its spam filters so only unwanted mail gets thrown away.
Dyson disagrees:
Senders should bear the costs of sending mail, and it should be the senders’ duty to figure out whether each piece of mail is wanted. Ultimately, I believe, Goodmail or its successors will develop a mechanism to rebate some of the fees to the senders whose mail is wanted. That’s why I don’t worry about individuals and nonprofits being squeezed out.
In the short run, AOL and others will serve as the recipients’ proxies. If they don’t do a good job of ensuring that customers get the mail they want, even from nonpaying senders, they will lose their customers. And in the long run, recipients will be able to use services like Goodmail to set their own prices for receiving mail.
In my case, I’d have a list. I’d charge nothing for people I know, 50 cents for anyone new (though if I add the sender to my list after reading the mail, I’ll cancel the 50 cents) and $3 for random advertisers. Ex-boyfriends pay $10.
One of the things that struck me about Dyson’s argument is that it’s dependent on healthy market forces being brought to bear on the problem. It speaks to a fundamental virtue of the Internet at the application and service layers—that it’s awash with competitive innovation. In that key respect, the spam problem appears to be fundamentally different than the one driving the net neutrality debate. In the latter case, it is the lack of vibrant competition at the local-access level that makes market solutions very questionable.
Where there’s not enough competition, the “invisible hand” Dyson puts her faith in cannot work. In fact, one of the dangers of relying on a vertically-integrated duopoly Internet access market is that pipe-owners’ market power will migrate up the stack into application and service markets, squeezing out the competition-driven innovation that can efficiently develop the kind of flexible, user-driven e-mail service Dyson eloquently envisions—along with many other valuable innovations that can efficiently address demand in an economy built on the foundation of an open Internet.
Do we really want to risk sticking the monkey-wrench of excess market power into the gears of the Internet’s hyper-competitive and hyper-efficient market machinery—a machinery that arguably works better than any other yet conceived to maximize the value created by Adam Smith’s “invisible hand?”
There are already signs that the market-power monkey wrench is beginning to prod and poke around the Internet’s mechanisms, looking for highly leveragable points of control.
Policymakers in Washington have it relatively easy this time. They don’t have to pick winners and losers, or revamp the hopelessly complex and inefficient regulatorium that’s been created around the telecom and media industries. What they should focus on instead is a simpler question, though one that takes some vision and courage to address (and I’d like to believe there’s still some of both in Washington)—the question of which policies can most reliably facilitate the migration of everything we know as telecom and media to the open Internet.
To do that, policymakers—and the rest of us interested parties—need to step back from the cable-telco franchising debate, and even the details of the net neutrality debate, and recognize that the best way to realize the dream of a free, open and vibrant market economy (and one that can help us solve many of our social and political problems) is to invest as a society in an ultra-high capacity, ubiquitous, open-access Internet…one that would make Adam Smith proud.
When I have more time I’ll be discussing some proposed approaches to achieving this goal that are making increasing sense to me as I consider the alternatives.
Mitch Shapiro at 8:38 PM|Comments(0)
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