Time to start paying for email, says Forrester

18 Dec 2003

Charging companies to send large volumes of email is the most effective solution to counter the rising tide of spam, the industry analyst firm Forrester has recommended. Email is in danger of losing its reputation as the internet’s killer application, as volumes of unwanted messages clog networks and users’ inboxes.

In the face of choking ISP infrastructure, loss of consumer confidence in email and ineffective legislation, the only effective deterrent is to make senders pay for email, Forrester has said.

In a TechStrategy briefing note, the company stated: “Current solutions for spam still have one big problem: they put the burden of cost on the receivers of email – ISPs, businesses, and consumers. This is the wrong approach – and it won’t work. The best solution to spam is not legal, technical, or regulatory – it’s economic. It’s time to charge for email, making those who send bulk email volumes pay for the resources their campaigns use.”

Email has reached a breaking point in spite of improved spam filtering techniques, new legislation and legal action, the company noted. Forrester cited figures from the internet security service Postini, which revealed that more than three quarters of the messages it processes for customers qualify as spam, or unsolicited email.

Forrester’s proposed solution addresses business and technical issues, as well as the cost. It recommends a structure similar to Visa’s credit-card payment system. A member-owned association, comprising ISPs, marketers and email marketing service providers, would operate the network managing transactions among card issuers, cardholders and merchants. A governance board would then establish the technology standards, set the rate marketers would pay for email, and oversee the registries’ operations.

A system of secure, verified identities would make it possible to know who to charge, Forrester suggested. High-volume emailers would attach their identity to each message and a central registry would then validate for ISPs and companies that the message comes from a legitimate sender. According to Forrester, this identity validation system would also lay the groundwork for the accounting system.

Bulk email senders need only be charged a minimal amount per message – as little as US$0.01 – which would accrue as volumes increase. This would “crush spammers’ business model,” Forrester believes. The money generated from such a scheme should then be redirected to ISPs and webmail services such as Hotmail, which have been investing to date in storage and filtering technology to cope with ever greater amounts of email.

Under Forrester’s proposed model, charges are not incurred for low levels of email correspondence. For example, a company sending less than 1,000 emails per month would not have to pay. If it exceeds a certain limit, then a payment system would apply, in the same way that it does for using extra storage space on web-based email accounts such as Yahoo! or MSN.

“The savings and improved response to email campaigns will more than make up for the costs,” Forrester pointed out, adding that other benefits would quickly be seen. Levying a cost on bulk email would force many spammers out of business. “A charge of $2.50 per thousand messages would add $2,500 to the cost of a 1 million-message campaign, seriously undermining spam’s economics in which names are acquired free through harvesting and sending email costs as little as $0.10 per thousand.”

Legitimate businesses would ultimately see their email costs decrease, Forrester claimed. Although standard business emails would be tracked in the same way as marketing messages, companies would be able to recoup that cost elsewhere by reducing their investment in anti-spam technology, internet bandwidth and data storage capacity.

By Gordon Smith