[House Report 106-700]
[From the U.S. Government Printing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-700
======================================================================
UNSOLICITED COMMERCIAL ELECTRONIC MAIL ACT OF 2000
_______
June 26, 2000.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Bliley, from the Committee on Commerce, submitted the following
R E P O R T
[To accompany H.R. 3113]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, to whom was referred the bill
(H.R. 3113) to protect individuals, families, and Internet
service providers from unsolicited and unwanted electronic
mail, having considered the same, report favorably thereon with
an amendment and recommend that the bill as amended do pass.
CONTENTS
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 6
Background and Need for Legislation.............................. 7
Hearings......................................................... 9
Committee Consideration.......................................... 9
Committee Votes.................................................. 9
Committee Oversight Findings..................................... 9
Committee on Government Reform Oversight Findings................ 9
New Budget Authority, Entitlement Authority, and Tax Expenditures 9
Committee Cost Estimate.......................................... 10
Congressional Budget Office Estimate............................. 10
Federal Mandates Statement....................................... 12
Advisory Committee Statement..................................... 12
Constitutional Authority Statement............................... 12
Applicability to Legislative Branch.............................. 13
Section-by-Section Analysis of the Legislation................... 13
Changes in Existing Law Made by the Bill, as Reported............ 17
Amendment
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Unsolicited Commercial Electronic Mail
Act of 2000''.
SEC. 2. CONGRESSIONAL FINDINGS AND POLICY.
(a) Findings.--The Congress finds the following:
(1) There is a right of free speech on the Internet.
(2) The Internet has increasingly become a critical mode of
global communication and now presents unprecedented
opportunities for the development and growth of global commerce
and an integrated worldwide economy. In order for global
commerce on the Internet to reach its full potential,
individuals and entities using the Internet and other online
services should be prevented from engaging in activities that
prevent other users and Internet service providers from having
a reasonably predictable, efficient, and economical online
experience.
(3) Unsolicited commercial electronic mail can be an
important mechanism through which businesses advertise and
attract customers in the online environment.
(4) The receipt of unsolicited commercial electronic mail may
result in costs to recipients who cannot refuse to accept such
mail and who incur costs for the storage of such mail, or for
the time spent accessing, reviewing, and discarding such mail,
or for both.
(5) Unsolicited commercial electronic mail may impose
significant monetary costs on Internet access services,
businesses, and educational and nonprofit institutions that
carry and receive such mail, as there is a finite volume of
mail that such providers, businesses, and institutions can
handle without further investment. The sending of such mail is
increasingly and negatively affecting the quality of service
provided to customers of Internet access service, and shifting
costs from the sender of the advertisement to the Internet
access service.
(6) While some senders of unsolicited commercial electronic
mail messages provide simple and reliable ways for recipients
to reject (or ``opt-out'' of) receipt of unsolicited commercial
electronic mail from such senders in the future, other senders
provide no such ``opt-out'' mechanism, or refuse to honor the
requests of recipients not to receive electronic mail from such
senders in the future, or both.
(7) An increasing number of senders of unsolicited commercial
electronic mail purposefully disguise the source of such mail
so as to prevent recipients from responding to such mail
quickly and easily.
(8) Many senders of unsolicited commercial electronic mail
collect or harvest electronic mail addresses of potential
recipients without the knowledge of those recipients and in
violation of the rules or terms of service of the database from
which such addresses are collected.
(9) Because recipients of unsolicited commercial electronic
mail are unable to avoid the receipt of such mail through
reasonable means, such mail may invade the privacy of
recipients.
(10) In legislating against certain abuses on the Internet,
Congress should be very careful to avoid infringing in any way
upon constitutionally protected rights, including the rights of
assembly, free speech, and privacy.
(b) Congressional Determination of Public Policy.--On the basis of
the findings in subsection (a), the Congress determines that--
(1) there is substantial government interest in regulation of
unsolicited commercial electronic mail;
(2) Internet service providers should not be compelled to
bear the costs of unsolicited commercial electronic mail
without compensation from the sender; and
(3) recipients of unsolicited commercial electronic mail have
a right to decline to receive or have their children receive
unsolicited commercial electronic mail.
SEC. 3. DEFINITIONS.
In this Act:
(1) Children.--The term ``children'' includes natural
children, stepchildren, adopted children, and children who are
wards of or in custody of the parent, who have not attained the
age of 18 and who reside with the parent or are under his or
her care, custody, or supervision.
(2) Commercial electronic mail message.--The term
``commercial electronic mail message'' means any electronic
mail message that primarily advertises or promotes the
commercial availability of a product or service for profit or
invites the recipient to view content on an Internet web site
that is operated for a commercial purpose. An electronic mail
message shall not be considered to be a commercial electronic
mail message solely because such message includes a reference
to a commercial entity that serves to identify the initiator.
(3) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(4) Domain name.--The term ``domain name'' means any
alphanumeric designation which is registered with or assigned
by any domain name registrar, domain name registry, or other
domain name registration authority as part of an electronic
address on the Internet.
(5) Electronic mail address.--
(A) In general.--The term ``electronic mail address''
means a destination (commonly expressed as a string of
characters) to which electronic mail can be sent or
delivered.
(B) Inclusion.--In the case of the Internet, the term
``electronic mail address'' may include an electronic
mail address consisting of a user name or mailbox
(commonly referred to as the ``local part'') and a
reference to an Internet domain (commonly referred to
as the ``domain part'').
(6) Internet.--The term ``Internet'' has the meaning given
that term in section 231(e)(3) of the Communications Act of
1934 (47 U.S.C. 231(e)(3)).
(7) Internet access service.--The term ``Internet access
service'' has the meaning given that term in section 231(e)(4)
of the Communications Act of 1934 (47 U.S.C. 231(e)(4)).
(8) Initiate.--The term ``initiate'', when used with respect
to a commercial electronic mail message, means to originate
such message or to procure the transmission of such message.
(9) Initiator.--The term ``initiator'', when used with
respect to a commercial electronic mail message, means the
person who initiates such message. Such term does not include a
provider of an Internet access service whose role is limited to
handling, transmitting, or retransmitting the message.
(10) Pre-existing business relationship.--The term ``pre-
existing business relationship'' means, when used with respect
to the initiator and recipient of a commercial electronic mail
message, that either of the following circumstances exist:
(A) Previous business transaction.--
(i) Within the 5-year period ending upon
receipt of such message, there has been a
business transaction between the initiator and
the recipient (including a transaction
involving the provision, free of charge, of
information requested by the recipient, of
goods, or of services); and
(ii) the recipient was, at the time of such
transaction or thereafter, provided a clear and
conspicuous notice of an opportunity not to
receive further messages from the initiator and
has not exercised such opportunity.
(B) Opt in.--The recipient has given the initiator
permission to initiate commercial electronic mail
messages to the electronic mail address of the
recipient and has not subsequently revoked such
permission.
(11) Recipient.--The term ``recipient'', when used with
respect to a commercial electronic mail message, means the
addressee of such message.
(12) Unsolicited commercial electronic mail message.--The
term ``unsolicited commercial electronic mail message'' means
any commercial electronic mail message that is sent by the
initiator to a recipient with whom the initiator does not have
a pre-existing business relationship.
SEC. 4. PROTECTIONS AGAINST UNSOLICITED COMMERCIAL ELECTRONIC MAIL.
(a) Requirements for Transmission of Messages.--
(1) Inclusion of return address.--It shall be unlawful for
any person to initiate the transmission of an unsolicited
commercial electronic mail message to any person within the
United States unless such message contains a valid electronic
mail address, conspicuously displayed, to which a recipient may
send a reply to the initiator to indicate a desire not to
receive any further messages.
(2) Prohibition of transmission after objection.--If a
recipient makes a request to a person to be removed from all
distribution lists under the control of such person, it shall
be unlawful for such person to initiate the transmission of an
unsolicited commercial electronic mail message to such a
recipient within the United States after the expiration, after
receipt of such request, of a reasonable period of time for
removal from such lists. Such a request shall be deemed to
terminate a pre-existing business relationship for purposes of
determining whether subsequent messages are unsolicited
commercial electronic mail messages.
(3) Accurate routing information.--It shall be unlawful for
any person who initiates the transmission of any unsolicited
commercial electronic mail message to any person within the
United States to take any action that causes any Internet
routing information contained in or accompanying such message--
(A) to be inaccurate;
(B) to be invalid according to the prevailing
standards for Internet protocols; or
(C) to fail to accurately reflect the routing of such
message.
(4) Inclusion of identifier and opt-out.--It shall be
unlawful for any person to initiate the transmission of any
unsolicited commercial electronic mail message to any person
within the United States unless the message provides, in a
manner that is clear and conspicuous to the recipient--
(A) identification that the message is an unsolicited
commercial electronic mail message; and
(B) notice of the opportunity under paragraph (2) not
to receive further unsolicited commercial electronic
mail messages from the initiator.
(b) Enforcement of Policies by Internet Access Service Providers.--
(1) Authority to establish policies.--A provider of Internet
access service may enforce a policy regarding unsolicited
commercial electronic mail messages, but only if such policy
complies with the requirements of paragraph (3).
(2) Prohibition of transmissions in violation of posted
policy.--It shall be unlawful for any person to initiate the
transmission of an unsolicited commercial electronic mail
message to any person within the United States in violation of
a policy governing the use of the equipment of a provider of
Internet access service for transmission of unsolicited
commercial electronic mail messages that meets the requirements
of paragraph (3).
(3) Requirements for enforceability.--The requirements under
this paragraph for a policy regarding unsolicited commercial
electronic mail messages are as follows:
(A) Clarity.--The policy shall explicitly provide
that compliance with a rule or set of rules is a
condition of use of the equipment of a provider of
Internet access service to deliver commercial
electronic mail messages.
(B) Publicly availability.--The policy shall be
publicly available by at least one of the following
methods:
(i) Web posting.--The policy is clearly and
conspicuously posted on a World Wide Web site
of the provider of Internet access service,
which has an Internet domain name that is
identical to the Internet domain name of the
electronic mail address to which the rule or
set of rules applies.
(ii) Notification in compliance with
technological standard.--Such policy is made
publicly available by the provider of Internet
access service in accordance with a
technological standard adopted by an
appropriate Internet standards setting body
(such as the Internet Engineering Task Force)
and recognized by the Commission by rule as a
fair standard.
(C) Internal opt-out list.--If the policy of a
provider of Internet access service requires
compensation specifically for the transmission of
unsolicited commercial electronic mail messages into
its system, the provider shall provide an option to its
subscribers not to receive any unsolicited commercial
electronic mail messages, except that such option is
not required for any subscriber who has agreed to
receive unsolicited commercial electronic mail messages
in exchange for discounted or free Internet access
service.
(4) Other enforcement.--Nothing in this Act shall be
construed to prevent or limit, in any way, a provider of
Internet access service from enforcing, pursuant to any remedy
available under any other provision of Federal, State, or local
criminal or civil law, a policy regarding unsolicited
commercial electronic mail messages that complies with the
requirements of paragraph (3).
(c) Protection of Internet Access Service Providers.--
(1) Good faith efforts to block transmissions.--A provider of
Internet access service shall not be liable, under any Federal,
State, or local civil or criminal law, for any action it takes
in good faith to block the transmission or receipt of
unsolicited commercial electronic mail messages.
(2) Innocent retransmission.--A provider of Internet access
service the facilities of which are used only as an
intermediary, retransmitter, or relay for unsolicited bulk
commercial electronic mail messages transmitted in violation of
subsection (a) shall not be liable for any harm resulting from
the transmission or receipt of such electronic mail unless it
permits the transmission or retransmission of such electronic
mail with actual knowledge that the transmission is prohibited
by subsection (a) or subsection (b)(2).
SEC. 5. ENFORCEMENT.
(a) Governmental Order.--
(1) Notification of alleged violation.--The Commission shall
send a notification of alleged violation to any person who
violates section 4 if--
(A) a recipient or a provider of Internet access
service notifies the Commission, in such form and
manner as the Commission shall determine, that a
transmission has been received in violation of section
4; or
(B) the Commission has other reason to believe that
such person has violated or is violating section 4.
(2) Terms of notification.--A notification of alleged
violation shall--
(A) identify the violation for which the notification
was issued;
(B) direct the initiator to refrain from further
violations of section 4;
(C) expressly prohibit the initiator (and the agents
or assigns of the initiator) from further initiating
unsolicited commercial electronic mail messages in
violation of section 4 to the designated recipients or
providers of Internet access service, effective on the
3rd day (excluding Saturdays, Sundays, and legal public
holidays) after receipt of the notification; and
(D) direct the initiator (and the agents or assigns
of the initiator) to delete immediately the names and
electronic mail addresses of the designated recipients
or providers from all mailing lists owned or controlled
by the initiator (or such agents or assigns) and
prohibit the initiator (and such agents or assigns)
from the sale, lease, exchange, license, or other
transaction involving mailing lists bearing the names
and electronic mail addresses of the designated
recipients or providers.
(3) Coverage of minor children by notification.--Upon request
of a recipient of an electronic mail message transmitted in
violation of section 4, the Commission shall include in the
notification of alleged violation the names and electronic mail
addresses of any child of the recipient.
(4) Enforcement of notification terms.--
(A) Complaint.--If the Commission believes that the
initiator (or the agents or assigns of the initiator)
has failed to comply with the terms of a notification
issued under this subsection, the Commission shall
serve upon the initiator (or such agents or assigns),
by registered or certified mail, a complaint stating
the reasons for its belief and request that any
response thereto be filed in writing with the
Commission within 15 days after the date of such
service.
(B) Hearing and order.--If the Commission, after an
opportunity for a hearing on the record, determines
that the person upon whom the complaint was served
violated the terms of the notification, the Commission
shall issue an order directing that person to comply
with the terms of the notification.
(C) Presumption.--For purposes of a determination
under subparagraph (B), receipt of any transmission in
violation of a notification of alleged violation 30
days (excluding Saturdays, Sundays, and legal public
holidays) or more after the effective date of the
notification shall create a rebuttable presumption that
such transmission was sent after such effective date.
(5) Enforcement by court order.--Any district court of the
United States within the jurisdiction of which any transmission
is sent or received in violation of a notification given under
this subsection shall have jurisdiction, upon application by
the Attorney General, to issue an order commanding compliance
with such notification. Failure to observe such order may be
punishable by the court as contempt thereof.
(b) Private Right of Action.--
(1) Actions authorized.--A recipient or a provider of
Internet access service may, if otherwise permitted by the laws
or rules of court of a State, bring in an appropriate court of
that State, or may bring in an appropriate Federal court if
such laws or rules do not so permit, either or both of the
following actions:
(A) An action based on a violation of section 4 to
enjoin such violation.
(B) An action to recover for actual monetary loss
from such a violation in an amount equal to the
greatest of--
(i) the amount of such actual monetary loss;
or
(ii) $500 for each such violation, not to
exceed a total of $50,000.
(2) Additional remedies.--If the court finds that the
defendant willfully, knowingly, or repeatedly violated section
4, the court may, in its discretion, increase the amount of the
award to an amount equal to not more than three times the
amount available under paragraph (1).
(3) Attorney fees.--In any such action, the court may, in its
discretion, require an undertaking for the payment of the costs
of such action, and assess reasonable costs, including
reasonable attorneys' fees, against any party.
(4) Protection of trade secrets.--At the request of any party
to an action brought pursuant to this subsection or any other
participant in such an action, the court may, in its
discretion, issue protective orders and conduct legal
proceedings in such a way as to protect the secrecy and
security of the computer, computer network, computer data,
computer program, and computer software involved in order to
prevent possible recurrence of the same or a similar act by
another person and to protect any trade secrets of any such
party or participant.
SEC. 6. EFFECT ON OTHER LAWS.
(a) No Effect on Criminal Law.--Nothing in this Act shall be
construed to impair the enforcement of section 223 or 231 of the
Communications Act of 1934, chapter 71 (relating to obscenity) or 110
(relating to sexual exploitation of children) of title 18, United
States Code, or any other Federal criminal statute.
(b) State Law.--No State or local government may impose any civil
liability for commercial activities or actions in interstate or foreign
commerce in connection with an activity or action described in section
4 of this Act that is inconsistent with the treatment of such
activities or actions under this Act, except that this Act shall not
preempt any civil remedy under State trespass or contract law or under
any provision of Federal, State, or local criminal law or any civil
remedy available under such law that relates to acts of computer fraud
or abuse arising from the unauthorized transmission of unsolicited
commercial electronic mail messages.
SEC. 7. STUDY OF EFFECTS OF UNSOLICITED COMMERCIAL ELECTRONIC MAIL.
Not later than 18 months after the date of enactment of this Act, the
Commission shall submit a report to the Congress that provides a
detailed analysis of the effectiveness and enforcement of the
provisions of this Act and the need (if any) for the Congress to modify
such provisions.
SEC. 8 SEPARABILITY.
If any provision of this Act or the application thereof to any person
or circumstance is held invalid, the remainder of this Act and the
application of such provision to other persons or circumstances shall
not be affected.
SEC. 9. EFFECTIVE DATE.
The provisions of this Act shall take effect 90 days after the date
of enactment of this Act.
Purpose and Summary
The purpose of H.R. 3113, the Unsolicited Commercial
Electronic Mail Act of 2000, is to prohibit the initiation and
transmission of unsolicited commercial electronic mail
messages. The legislation is narrowly drawn to protect the
freedom of speech on the Internet and to protect legitimate
commercial uses of electronic mail messages.
H.R. 3113 prohibits the transmission of unsolicited
commercial electronic mail messages unless the initiator of
that message provides a valid return electronic mail address
and provides the recipient of such messages the opportunity not
to receive future mailings. In addition, the bill allows
Internet Service Providers (ISP) to enforce their own policy
against unsolicited commercial electronic mail messages. Under
H.R. 3113, the Federal Trade Commission is authorized to bring
action against initiators of unsolicited commercial electronic
mail messages who operate in violation of the legislation's
provisions. Further, State or local laws that are inconsistent
with section 4 of H.R. 3113 are preempted, except in the case
of any civil remedy under State trespass or contract law or any
Federal, state or local law relating to acts of computer fraud
and abuse arising from the unauthorized transmission of
unsolicited commercial electronic mail messages.
Background and Need for Legislation
The creation and growth of the Internet has been one of the
most important developments of the second half of the 20th
century. From its origin as an academic research tool in the
1960's, the Internet today has become a global communications,
information, entertainment and commercial medium.
The use of the Internet to conduct commercial activities,
often referred to as ``electronic commerce,'' has experienced
enormous growth. In 1996, consumers spent just $2.6 billion in
online transactions, compared to more than $50 billion in 1999.
Because of the tremendous efficiencies gained from electronic
transactions, and the enormous reach of the Internet, the
Internet is now used to supplement, or in some cases replace,
traditional commercial methods.
In one area in particular, the sending of electronic
commercial solicitations (either requested or not requested by
a consumer), the Internet has brought tremendous efficiencies
of scale. Unlike traditional commercial solicitations delivered
via mail, electronic solicitations delivered via electronic
mail cost almost nothing to create and transmit.
Given its ability to quickly and efficiently disseminate
multiple electronic messages, the Internet has heightened
consumer anxiety over unwanted commercial solicitations, and
led many consumer groups to ask Congress and the States to
enact restrictions on unsolicited commercial electronic (UCE)
mail messages, more commonly known as ``spam.''
There are a number of consumer concerns regarding
unsolicited commercial electronic mail messages. First, a
substantial portion of those messages contain solicitations
that are false or misleading. In discussing the use of
unsolicited commercial electronic mail messages to mislead
consumers, Eileen Harrington, the Associate Director of
Marketing Practices at the Federal Trade Commission testified
that:
* * * UCE has become the fraud artists' calling card
on the Internet. Much of the spam in the Commissions's
database contain false information about the sender,
misleading subject lines, and extravagant earnings or
performance claims about goods and services. These
types of claims are the stock in trade of fraudulent
schemes. * * * The Commission believes the
proliferation of deceptive bulk UCE on the Internet
poses a threat to consumer confidence in online
commerce and thus views the problem of deception as a
significant issue in the debate over UCE.
(Written testimony at the November 3, 1999 hearing before the
Subcommittee on Telecommunications, Trade and Consumer
Protection, Serial No. 106-84, pp. 25-26.)
There are also concerns that many unsolicited commercial
electronic mail messages contain material of an adult nature,
and can easily be accessed by children from the family
computer.
The issue of unsolicited commercial advertisements has been
the subject of much debate in the United States over the past
decades. From in-person solicitations, to phone-based
telemarketing, to junk-faxes, and now to Internet-based
solicitations, consumers have historically complained that
these unwanted solicitations violate their privacy.
The intrusion on an individual's privacy, and the time and
financial burdens of deleting unwanted messages is the driving
concern behind the proposed legislation to regulate the
practice of spamming. Case law has developed the notion of
``privacy rights'' of recipients establishing limits on
unsolicited commercial solicitations. But First Amendment
rights of commercial speech to individuals who wish to receive
such solicitations have led courts to find differing levels of
regulation permissible, depending on the medium. In determining
the appropriate level of regulation, the Court considers the
amount of control individuals can exercise over the content and
the medium's invasive nature.
In 1991, Congress passed the Telephone Consumer Protection
Act (P.L. 102-243) to restrict the use of automated, pre-
recorded telephone calls and unsolicited commercial fax
transmissions. Congress found that such unsolicited faxes and
automated telephone calls were a nuisance and an invasion of
privacy. The constitutionality of the Telephone Consumer
Protection Act was upheld in Destination Ventures Ltd. v. FCC,
46 F. 3d 54 (9th Cir. 1995), and Moser v. FCC, 46 F. 3d 970
(9th Cir. 1995), cert denied, 515 U.S. 1161. In these cases,
the courts concluded that Congress had accurately identified
automated telemarketing calls as a threat to privacy (46 F. 3d
at 974) and that the banning of unsolicited commercial fax
solicitations was a reasonable means of reducing cost shifting
(46 F.3d at 56).
There is also concern about the burden bulk unsolicited
commercial electronic mail messages place on the Internet
infrastructure and on companies providing Internet access
services. Unlike traditional commercial solicitations made by
mail, the cost of unsolicited commercial electronic mail
messages is shifted from the sender to the recipient and the
recipient's ISP.
Most ISPs claim to incur significant costs from unsolicited
commercial electronic mail messages, such as the costs involved
with network bandwidth, processing e-mail, and staff time. ISPs
must also address the ongoing relationship with its customers
and its reputation in the marketplace for fostering an
environment where spamming is prevalent. In response, many ISPs
have enacted spamming policies to affect the level of blame (or
credit) that is attributed to them regarding the unsolicited e-
mails their customers receive.
To date, sixteen States have enacted laws to prohibit or
restrict the transmission of such messages. Generally, these
laws prohibit the transmission of bulk unsolicited commercial
electronic mail messages that do not contain a label
identifying the message as advertising or which contain
misleading or false routing information. Many laws also require
senders of unsolicited commercial electronic mail messages to
provide recipients the opportunity to opt-out of the receipt of
future mailings. This year, courts have found the anti-spam
laws of California and Washington to be in violation of the
Commerce Clause of the United States Constitution. Although
both cases are still pending, these events show the need for
this issue to be addressed by the Congress.
Hearings
The Subcommittee on Telecommunications, Trade and Consumer
Protection held a hearing on H.R. 3113, the Unsolicited
Electronic Mail Act on November 3, 1999. The Subcommittee
received testimony from the following witnesses: The Honorable
Heather Wilson; The Honorable Gene Green; The Honorable Gary G.
Miller; The Honorable Christopher H. Smith; Ms. Eileen
Harrington, Associate Director of Marketing Practices Bureau of
Consumer Protection, Federal Trade Commission; Mr. John Brown,
President, iHighway.net Inc.; Mr. Alan Charles Raul, Sidley &
Austin; Mr. Michael Russina, Senior Director Systems
Operations, SBC Communications Inc.; Mr. Charles H. Kennedy,
Morrison & Forester LLP; Mr. Jerry Cerasale, Senior Vice
President, Direct Marketing Association; and, Mr. Ray Everett-
Church, Chief Privacy Officer and Vice President for Public
Privacy, Alladvantage.com.
Committee Consideration
On March 23, 2000, the Subcommittee on Telecommunications,
Trade and Consumer Protection met in open markup session and
approved H.R. 3113, the Unsolicited Electronic Mail Act for
Full Committee consideration, amended, by a voice vote. On June
14, 2000, the Full Committee met in open markup session and
ordered H.R. 3113 reported to the House, amended, by a voice
vote, a quorum being present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 3113 reported. A motion by Mr. Bliley to order H.R. 3113
reported to the House, without amendment, was agreed to by a
voice vote, a quorum being present.
The following amendment was agreed to by a voice vote:
An amendment in the nature of a substitute by Mrs.
Wilson, No. 1, making various changes to the bill as
approved by the Subcommittee on Telecommunications,
Trade, and Consumer Protection.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held a legislative
hearing and made findings that are reflected in this report.
committee on government reform oversight findings
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, no oversight findings have been
submitted to the Committee by the Committee on Government
Reform.
new budget authority, entitlement authority, and tax expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
3113, the Unsolicited Electronic Mail Act, would result in no
new or increased budget authority, entitlement authority, or
tax expenditures or revenues.
committee cost estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
congressional budget office estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 26, 2000.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3113, the
Unsolicited Commercial Electronic Mail Act of 2000.
If your wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Ken Johnson
(for federal costs), Shelley Finlayson (for the state and local
impact), and Jean Wooster (for the impact on the private
sector.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
H.R. 3113--Unsolicited Commercial Electronic Mail Act of 2000
Summary: H.R. 3113 would enact new restrictions on the
transmission of unsolicited commercial electronic mail (UCE).
Under this bill, consumers would have the right to file a
complaint with the Federal Trade Commission (FTC) if they
receive UCE after previously opting not to receive such
electronic mail. Also, the bill would require that all UCE
messages identify themselves as UCE, explain how the consumer
could discontinue receiving UCE, and contain accurate
information about the senders and how to contact them. The FTC
would be required to issue compliance orders to persons who
violate these provisions. H.R. 3113 also gives consumers the
right to initiate private action to prohibit violations of the
bill and recover damages. Finally, the bill would direct the
FTC to issue a study within 18 months on the effectiveness and
enforcement of these provisions.
CBO estimates that implementing H.R. 3113 would cost about
$13 million in 2001 and about $60 million over the 2001-2005
period, assuming appropriation of the necessary amounts. The
cost of implementing the bill could decline over time if it
discourages UCE. H.R. 3113 would not affect spending or
receipts; therefore, pay-as-you-go procedures would not apply.
H.R. 3113 contains intergovernmental mandates as defined in
UMRA, but CBO estimates that complying with these mandates
would result in no direct costs to state and local governments
and thus would not exceed the threshold established by that act
($55 million in 2000, adjusted annually for inflation). The
bill would preempt certain state and local laws to regulate
UCE, and certain state and local liability laws. Tribal
governments would not be affected.
H.R. 3113 would impose private-sector mandates, as defined
by UMRA, on senders of unsolicited commercial electronic mail.
CBO estimates that the direct costs of those mandates would not
exceed the annual threshold established by UMRA for private-
sector mandates ($109 million in 2000, adjusted for inflation).
Estimates cost to the Federal Government: The estimated
budgetary impact of H.R. 3113 is shown in the following table.
The costs of this legislation fall within budget function 370
(commerce and housing credit).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------
2001 2002 2003 2004 2005
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level...................................... 13 11 11 12 12
Estimated Outlays.................................................. 13 11 11 12 12
----------------------------------------------------------------------------------------------------------------
Basis of estimate: CBO estimates that the FTC would spend
about $13 million in 2001 and $11 million to $12 million
annually in subsequent years to implement H.R. 3113, assuming
appropriation of the necessary amounts. (Annual cost would rise
slightly to cover anticipated inflation.) However, the total
costs of implementing H.R. 3113 could decline if the bill is
effective in reducing the amount of unlawful UCE over time.
The FTC's administrative costs would increase primarily
because H.R. 1331 would require the agency to notify senders of
UCE when they violate provisions of the bill. The FTC currently
receives an average of about 10,000 complaints per day
regarding UCE. Based on information from the FTC, CBO estimates
that the staff costs of responding to these complaints would be
$6 million to $7 million a year. We estimate that purchasing
new computer equipment to handle UCE cases would cost $5
million in 2001 and $2 million a year in subsequent years.
For those violators who continue to send unlawful UCE after
they have been notified of violations, H.R. 3113 requires that
the FTC send a complaint by certified mail. CBO estimates that
the cost of sending these formal complaints would be $2 million
a year.
If the complaint fails to end the violations, then H.R.
3113 requires that the FTC issue an order to the violator. The
FTC also has the option of referring the case to the federal
courts. CBO estimates that these costs would not be significant
because of the limited number of cases that would reach this
stage in the enforcement process.
H.R. 3113 also requires the FTC to complete, within 18
months, a study of the effectiveness and enforcement of the
bill. Based on information from the FTC, CBO estimates that the
costs of this study would not be significant.
Pay-as-you-go considerations: None.
Estimated impact on state, local, and tribal governments:
H.R. 3113 would preempt state and local regulation of UCE to
the extent that such laws exist and conflict with this bill's
requirements. In addition, the bill would preempt state and
local liability laws as they apply to Internet service
providers (ISPs) in certain instances. These preemptions would
be intergovernmental mandates as defined in UMRA, but CBO
estimates that complying with these mandates would result in no
direct costs to state and local governments and thus would not
exceed the threshold established in that act ($55 million in
2000, adjusted annually for inflation). Tribal governments
would not be affected by these provisions.
Estimated impact on the private sector: H.R. 3113 would
impose private-sector mandates as defined by UMRA on senders of
UCE. The bill would require senders to identify their messages
as UCE, and provide a valid return electronic-mail address and
an accurate routing number within their messages. The bill also
would require persons who send UCE to provide the recipients of
their messages with an option to discontinue receiving UCE from
the sender, and to notify recipients of that option to
discontinue in each UCE message.
In addition, H.R. 3113 would make it unlawful for any
person to initiate the transmission of an UCE message to any
person within the United States in violation of a policy
developed by an ISP governing the use of its equipment for
transmission of UCE messages based on the guidelines outlined
in the bill. However, this would have only a limited effect on
the private sector because the Computer Fraud and Abuse Act of
1986 currently prohibits some forms of UCE transmissions.
Nonetheless, it is not clear that existing federal law
prohibits all transmissions of UCE in violation of an ISP
policy against such transmissions.
Based on information from government and industry sources,
CBO estimates that the direct costs of those mandates would not
exceed the annual threshold established by UMRA for private-
sector mandates ($109 million in 2000, adjusted for inflation).
Estimate prepared by Federal Costs: Ken Johnson; Impact on
State, Local, and Tribal Governments: Shelly Finlayson; Impact
on the Private Sector: Jean Wooster.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
federal mandates statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
advisory committee statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
constitutional authority statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
applicability to legislative branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
section-by-section analysis of the legislation
Section 1. Short title
Section 1 establishes the short title of this Act as the
``Unsolicited Commercial Electronic Mail Act of 2000.''
Section 2. Congressional findings and policies
Section 2 lays out Congressional findings and general
policy on the issue of unsolicited commercial electronic mail.
Section 3. Definitions
Section 3 defines the following terms: ``children,''
``commercial electronic mail message,'' ``Commission,''
``domain name,'' ``electronic mail address,'' ``Internet,''
``Internet access service,'' ``initiate,'' ``initiator,''
``pre-existing business relationship,'' ``recipient,'' and
``unsolicited commercial electronic mail message'.
The concept of unsolicited commercial electronic mail plays
a key role in the understanding of H.R. 3113. As used in the
bill, the term unsolicited commercial electronic mail means any
commercial electronic mail message that is sent to an
individual with whom the initiator of the electronic message
does not have a pre-existing business relationship.
H.R. 3113 provides for two types of business relationships
that may qualify as a pre-existing business relations: (1) When
there has been a business transaction between the initiator of
an electronic message and the recipient in the past five years
and the recipient was provided a clear and conspicuous notice
of the opportunity not to receive further electronic message
from the initiator and the recipient has not exercised that
option, or (2) When the recipient has given permission to the
initiator to send electronic mail messages and has not revoked
such permission. The Committee intends that business
transactions involving the provisioning of information, goods
or services free of charge also qualifies as a business
transaction, such as a subscription to a free Internet access
service or a free newsletter.
Section 4. Protections against unsolicited commercial electronic mail
Section 4(a)(1) provides that it is unlawful for any person
to initiate the transmission of an unsolicited commercial
electronic mail message to any person within the United States
unless that message contains a valid, conspicuously displayed
electronic mail address to which a recipient may reply
requesting not to receive any further messages.
Section 4(a)(2) prohibits the transmission of an
unsolicited commercial electronic mail message after the
recipient has objected to the receipt of further unsolicited
commercial electronic mail messages. A request not to receive
further unsolicited commercial electronic mail messages is be
deemed to terminate a pre-existing business relationship for
purposes of determining whether subsequent messages are
unsolicited commercial electronic mail messages.
Section 4(a)(3) prohibits the transmission of unsolicited
commercial electronic mail messages that contain inaccurate or
invalid routing information or any routing information that
fails to accurately reflect the routing of that electronic mail
message.
Section 4(a)(4) prohibits the transmission of any
unsolicited commercial electronic mail message to any person
within the United States unless the message clearly and
conspicuously provides identification that the message is an
unsolicited commercial electronic mail message and notice of
the opportunity not to receive further unsolicited commercial
electronic mail messages from the initiator.
Section 4(b)(1) permits a provider of Internet access
service to enforce a policy regarding unsolicited commercial
electronic mail messages, but only if that policy complies with
the requirements of section (4)(b)(3).
Section 4(b)(2) prohibits the transmission of an
unsolicited commercial electronic mail message to any person
within the United States in violation of a policy governing the
use of the equipment of a provider of Internet access service
for transmission of unsolicited commercial electronic mail
messages.
Section 4(b)(3) establishes the requirements for an
Internet access provider policy regarding unsolicited
commercial electronic mail messages. The requirements are--
The policy must explicitly state that
compliance with the rules is a condition of use of the
equipment of a provider of Internet access service to
deliver commercial electronic mail messages;
The policy must be publicly available by the
clear and conspicuous posting on a World Wide Web site
of the provider of Internet access service or the
policy is made publicly available by the provider of
Internet access service in accordance with a
technological standard adopted by an appropriate
Internet standards setting body (such as the Internet
Engineering Task Force) and recognized by the Federal
Trade Commission by rule as a fair standard; and,
If the policy of a provider of Internet
access service requires compensation specifically for
the transmission of unsolicited commercial electronic
mail messages into its system, the provider must
provide an option to its subscribers not to receive any
unsolicited commercial electronic mail messages, except
that such option is not required for any subscriber who
has agreed to receive unsolicited commercial electronic
mail messages in exchange for discounted or free
Internet access service. The Committee intends that for
purposes of subparagraph (C) an Internet access
provider must receive compensation specifically for
transmission of unsolicited commercial electronic mail
messages, not merely compensation for the transmission
of any mail messages, whether commercial or non-
commercial or solicited or unsolicited.
Section 4(b)(4) clarifies that nothing in H.R. 3113 is to
be construed to prevent or limit, in any way, a provider of
Internet access service from enforcing, pursuant to any remedy
available under any other provision of Federal, State, or local
criminal or civil law, a policy regarding unsolicited
commercial electronic mail messages.
Section 4(c)(1) provides that a provider of Internet access
service is not to be liable, under any Federal, State, or local
civil or criminal law, for any action it takes in good faith to
block the transmission or receipt of unsolicited commercial
electronic mail messages that are sent in violation of this
section.
Section 4(c)(2) provides that a provider of Internet access
service, whose facilities are used only as an intermediary,
retransmitter, or relay for unsolicited bulk commercial
electronic mail messages transmitted in violation of subsection
(a), is not to be liable for any harm resulting from the
transmission or receipt of such electronic mail unless it
permits the transmission or retransmission of such electronic
mail with actual knowledge that the transmission is prohibited.
Section 5. Enforcement
Under section 5(a)(1) of the bill, the Federal Trade
Commission (the Commission) is to send a notification of
alleged violation to any person who violates section 4 if: (1)
a recipient or a provider of Internet access service notifies
the Commission (in a for and manner as determined by the
Commission) that a transmission has been received in violation
of section 4, or (2) the Commission has other reason to believe
that such person has violated or is violating section 4.
Section 5(a)(2) requires a notification of alleged
violation to: (1) identify the violation for which the
notification was issued, (2) direct the initiator to refrain
from further violations of section 4, (3) expressly prohibit
the initiator (and the agents or assigns of the initiator) from
further initiating unsolicited commercial electronic mail
messages in violation of section 4 to the designated recipients
or providers of Internet access service, effective on the 3rd
day (excluding Saturdays, Sundays, and legal public holidays)
after receipt of the notification, and (4) direct the initiator
(and the agents or assigns of the initiator) to delete
immediately the names and electronic mail addresses of the
designated recipients or providers from all mailing lists owned
or controlled by the initiator (or such agents or assigns) and
prohibit the initiator (and such agents or assigns) from the
sale, lease, exchange, license, or other transaction involving
mailing lists bearing the names and electronic mail addresses
of the designated recipients or providers.
Section 5(a)(3) provides that upon request of a recipient
of an electronic mail message transmitted in violation of
section 4, the Commission must include in the notification of
alleged violation the names and electronic mail addresses of
any child of the recipient.
Section 5(a)(4) provides that if the Commission believes
that the initiator (or an agent or assign of the initiator) has
failed to comply with the terms of a notification issued under
this subsection, the Commission shall serve upon the initiator
(or such agents or assigns), by registered or certified mail, a
complaint stating the reasons for its belief and request that
any response be filed in writing with the Commission within 15
days. Further, if the Commission, after an opportunity for a
hearing on the record, determines that the person upon whom the
complaint was served violated the terms of the notification,
the Commission must issue an order directing that person to
comply with the terms of the notification. For purposes of a
determination under subparagraph (B), receipt of any
transmission in violation of a notification of alleged
violation 30 days (excluding Saturdays, Sundays, and legal
public holidays) or more after the effective date of the
notification creates a rebuttable presumption that such
transmission was sent after such effective date.
Section 5(a)(5) provides that any district court of the
United States within the jurisdiction of which any transmission
is sent or received in violation of a notification given under
this subsection has jurisdiction, upon application by the
Attorney General, to issue an order commanding compliance with
such notification. Failure to observe that order may be
punishable by the court as contempt.
Section 5(b)(1) provides that a recipient or a provider of
Internet access service may, if otherwise permitted by the laws
or rules of court of a State, bring in an appropriate court of
that State, or may bring in an appropriate Federal court if
such laws or rules do not so permit, (1) An action based on a
violation of section 4 to enjoin such violation, and/or (2) an
action to recover for actual monetary loss from such a
violation in an amount equal to the greatest of the amount of
such actual monetary loss or $500 for each such violation, not
to exceed a total of $50,000.
Section 5(b)(2) provides that if the court finds that the
defendant willfully, knowingly, or repeatedly violated section
4, the court may, in its discretion, increase the amount of the
award to an amount equal to not more than three times the
amount available under section 5(b)(1).
Section 5(b)(3) provides that in any such action, the court
may, in its discretion, require an undertaking for the payment
of the costs of such action, and assess reasonable costs,
including reasonable attorneys' fees, against any party.
Section 5(b)(4) provides that at the request of any party
to an action or any other participant in such an action, the
court may, in its discretion, issue protective orders and
conduct legal proceedings in such a way as to protect the
secrecy and security of the computer, computer network,
computer data, computer program, and computer software involved
in order to prevent possible recurrence of the same or a
similar act by another person and to protect any trade secrets
of any such party or participant.
Section 6. Effect on other laws
Section 6(a) clarifies that nothing in this is to be
construed to impair the enforcement of section 223 or 231 of
the Communications Act of 1934, chapter 71 (relating to
obscenity) or 110 (relating to sexual exploitation of children)
of title 18, United States Code, or any other Federal criminal
statute.
Section 6(b) provides that no State or local government may
impose any civil liability for commercial activities or actions
in interstate or foreign commerce in connection with the
sending of an unsolicited commercial electronic mail message
that is inconsistent with the treatment of such activities or
actions under the bill. However, this Act does not preempt any
civil remedy under State trespass or contract law or under any
provision of Federal, State, or local criminal law or any civil
remedy that relates to acts of computer fraud or abuse arising
from the unauthorized transmission of unsolicited commercial
electronic mail messages.
Section 7. Study of effects of unsolicited commercial electronic mail
The Federal Trade Commission is directed, within 18 months
after enactment, to submit a report to Congress that provides a
detailed analysis of the effectiveness and enforcement of the
provisions of this Act and the need (if any) for the Congress
to modify such provisions.
Section 8. Separability
Section 8 provides a separability clause.
Section 9. Effective date
The effective date of the bill is 90 days after the date of
enactment.
changes in existing law made by the bill, as reported
This legislation does not amend any existing Federal
statute.