Critics rip AOL’s pay-to-send e-mail system

But participating vendor says concerns are untrue

A variety of nonprofit groups today launched a Web site and a campaign to fight America Online Inc.’s plan to add a certified, pay-to-send e-mail program to its infrastructure. Meanwhile, the vendor behind the new system said the concerns are overblown and untrue.

The new site,, was launched to fight AOL’s plans to charge fees to e-mail senders who want to “certify” their mail as pre-accepted by recipients. The fee-based program, which was announced by AOL and Yahoo Inc. in October, will use technology from Goodmail Systems Inc. in Mountain Valley, Calif., to differentiate mail sent by groups or companies that want to assure AOL customers of its authenticity (see "Fee-based e-mail delivery plan raises eyebrows"). The system would only affect e-mail sent to AOL’s approximately 18 million customers.

Critics, however, say that AOL’s e-mail program is the scourge of a free and open Internet and that it essentially creates an “e-mail tax” to be paid by senders who want to send e-mail to AOL user accounts.

In an open letter to AOL on the Web site, the coalition said: “This system would create a two-tiered Internet in which affluent mass e-mailers could pay AOL a fee that amounts to an ‘e-mail tax’ for every e-mail sent, in return for a guarantee that such messages would bypass spam filters and go directly to AOL members’ inboxes. Those who did not pay the ‘e-mail tax’ would increasingly be left behind with unreliable service. Your customers expect that your first obligation is to deliver all of their wanted mail, and this plan is a step away from that obligation.”

A conference call sponsored by San Francisco-based privacy group the Electronic Frontier Foundation and Northampton, Mass.-based Free Press, a national nonpartisan media-reform group, represented some 50 groups whose membership totals about 15 million e-mail recipients (See "Political rivals unite against AOL, Yahoo e-mail plan"). The coalition includes such diverse groups as the AFL-CIO, the Consumer Federation of America, Gun Owners of America, Connecticut Parent Power, Common Cause, the American Academy of HIV Medicine, the Center for Digital Democracy and American Rights at Work.

Yahoo and AOL first signed on to use Goodmail’s CertifiedEmail service last October, but the service has come under scrutiny as the two companies have come closer to deployment, which is scheduled for next month. With CertifiedEmail, senders agree not to send unsolicited e-mail. They pay a fee of between one-fourth of a U.S. cent and one cent for their messages to receive preferential treatment in AOL and Yahoo in-boxes.

The program, critics said, will make it costly for them to communicate with their members.

“AOL’s e-mail tax is a direct threat to a free and open Internet,” said Eli Pariser, executive director of political action group Civic Action. The problem, he said, is that the fees will harm new groups that want to start up but will be discouraged by a lack of funds to send e-mail.

Larry Pratt, executive director of the group Gun Owners of America, said his members who use AOL to access the Internet will be angered by AOL’s move because it will make it more costly for the group to send e-mails to its members.

“Anything that smacks of impairing how we communicate with our members is not something we take lightly,” Pratt said. His group will likely encourage its members who use AOL to boycott the Internet service provider if AOL follows through on its plans, he said. The group has about 100,000 members, about 25% of whom use AOL, he said.

Danny O’Brien, activism coordinator for the Electronic Frontier Foundation, said the program is seen as a new revenue stream for AOL. “Essentially, AOL is using the spam problem here as a stick to encourage people to pay them,” he said. “It turns the in-box into a cash source rather than something to be protected.”

Critics say the fee program will create a two-tier system for e-mail, with unpaid e-mail messages getting short shrift while preferential treatment is given to messages sent by organizations that pay the fees.

In an e-mail statement, AOL spokesman Nicholas Graham called the certified e-mail system “a necessary and natural extension of our ongoing efforts to protect our members’ e-mail safety and security – as we stated clearly in October 2005 when this was first announced.

“AOL is moving from a dual layer of spam and phishing protection for our members to a beneficial tri-layer system of e-mail delivery – with the additional layer being optional, voluntary and at absolutely no cost to the e-mail recipient,” Graham said. “We believe more choices, and more alternatives, for safety and e-mail authentication is a good thing for the Internet, not bad. Everything that AOL has in place today free for e-mail senders remains – and will only improve. We take great pride that AOL’s exceptional, industry-leading e-mail policies have played a key role in helping deliver e-mails that have provided a voice and platform for political discourse and charitable fundraising on the internet – which has included coming to the aid of the sometimes troubled e-mail delivery efforts by organizations like, and many others.”

Such systems are not new to the Internet, he said. In May 2004, Microsoft Corp. announced the use of the like-minded Bonded Sender program for its MSN Hotmail e-mail accounts, Graham said, while other Internet service providers are looking at or using such systems, including Apple Computer Inc., Charter Communications, Covad Communications Co., Cox Communications Inc., EarthLink Inc., Excite, Frontier, Google Inc., Juno, Lycos, and Verizon Communications Inc.

Goodmail CEO Richard Gingras said the critics and the coalition are wrong about the program.

The program will not mean a degradation of service for e-mail senders who don’t participate in the pay-for-service system, Gingras said. Instead, the pay system will drastically improve service for some e-mail senders, such as financial institutions, that want to send e-mail to their customers in a way that better ensures they will be read. Some 30% of e-mails from financial institutions are never read by recipients, he said, because of consumer worries that the messages are from phishers or hackers who are seeking their personal information.

“That is devastating” to banks and other financial institutions because the high number of unopened messages can hurt their businesses, he said.

Senders have to certify that recipients want to receive their e-mails and will be subject to controls that can curtail their ability to send e-mail if consumers complain, he said.

Gingras said the coalition’s descritpion of the program as an e-mail tax and a two-tier system is inaccurate. Instead, he said, all other e-mail to AOL users will continue to be processed using AOL’s antispam controls and other infrastructure and will be deposited in users' e-mail in-boxes, even if the senders don’t participate in the Goodmail system.

“It’s not the truth at all” that nonprofits will be shut out if they don’t participate, Gingras said. Because nonprofits and other groups often don’t have large security needs, the traditional AOL e-mail system will work fine for their messages to their members, he said, without the need for the pay-for-service Goodmail offering.

In a statement today, Yahoo said its program with Goodmail will be tested only for “transactional” e-mail messages such as bank statements and purchase receipts. Identity theft scams, or “phishing” attacks, frequently mimic transactional messages, and by highlighting these types of e-mails, Yahoo hopes to help users avoid these scams, the company said.

"Companies can continue to send e-mail to Yahoo Mail users at no cost in exactly the same way they always have, and we are not planning to require payment to ensure delivery to our users," Yahoo spokeswoman Karen Mahon said in an e-mailed statement.

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Copyright © 2006 IDG Communications, Inc.

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