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Given at a Full Committee Hearing:
Thursday, May 20 2004 - 10:15 AM - SR - 253

The Testimony of The Honorable John McCain
Chairman, U.S. Senator (R-AZ)

Today, the Committee will examine the effectiveness of the CAN-SPAM Act of 2003 at curtailing the proliferation of spam in America. Since our review of this issue last May, the volume of spam received by American consumers has risen unabatedly. Spam now accounts for anywhere from 64% to 83% of all e-mail traffic on the Internet. Just a year ago, spam constituted only 45% of e-mail traffic. Additionally, a Pew survey on Internet & American Life released this past March found that 77% of e-mail users are receiving the same amount or more spam since the law was passed. As a result, 30% of those surveyed have reduced their use of e-mail, up from 25% last year who did the same. The rising tide of spam is driving nearly a third of consumers away from using e-mail, a result that could well impact Internet usage and, consequently, the future financial health of our telecommunications, online retail, and information technology industries.

· I am reminded of Commissioner Swindle’s apparently prophetic testimony before us last year, when he said, “I am concerned that spam is about to kill the ‘killer app’ of the Internet, specifically consumer use of email and e-commerce. If consumers lose confidence in web-based services and turn away, tremendous harm will be done to the economic potential of information technology.”

· Fraud and the decline of e-commerce are not our only concerns with spam. Because spam is used as a delivery mechanism for pornography, viruses, and applications enabling identity theft and the hijacking of consumers’ computers for malicious purposes, every percentage increase in the volume of spam in turn increases the risks and prevalence of cybercrime, as well as cybersecurity threats to our nation’s critical infrastructure. I thank the FBI for appearing today to discuss its efforts to combat these dangers.

· While I voted with other Senators to unanimously pass the CAN-SPAM Act by a vote of 97-0 last fall, I remind my colleagues of my repeated statements last year that legislation alone would not solve the problem of spam. But the fact that there is no silver bullet to spam does not mean we should stand idly by and do nothing.

· We should, at the very least, enforce the Act by the most effective means possible. If spammers continue to win a technological game of hide-and-seek with ISPs, the FTC, and the FBI, then the law will have little effect at stopping spam. I do not believe, however, that authorizing broad private rights of action will improve enforcement efforts. If industry and government authorities spending vast resources in this effort can only muster enough evidence to bring a grand total of 8 spam cases over the past 5 months, then private rights of action will produce little more than expenses for legitimate businesses to fend off opportunistic trial lawyers. Spammers will remain at large.

· If the FTC can’t find the spammers, it should do the next best thing: go after the businesses that knowingly hire spammers to promote their goods and services. The Act gives the FTC the tools to do so in Section 6 – the FTC should use them. The businesses promoted by spammers take credit cards; they are established businesses; and they are liable under the Act for using falsified e-mail to promote their sites, even if what they sell there is not fraudulent or otherwise illegal. At a minimum, the FTC could put thousands of businesses – many of them online pornography retailers – on notice that using anonymous spam is an illegal means of driving consumer traffic to their websites. Using its authority to get out this message, the FTC could help dry up the market for the use of deceptive spam as a marketing tool, and thereby reduce the amount sent to consumers.

· In the long run, though, I continue to believe that dynamic, market-based efforts have a far better chance at defeating the ever-changing, global technological maneuvers of spammers than anything we can write into our static laws. I thank the witnesses for being here today and look forward to their testimony.