AOL has been on the frontlines of the war against spam for almost two years now. We have implemented some of the most stringent anti-spam policies on the Internet and have deployed a sophisticated set of anti-spam technologies. AOL provides its members with mail controls—a feature that allows them to take matters into their own hands and decide who they wish to receive mail from. Finally, we have been waging a litigation campaign against junk e-mailers and the individuals and companies who seek to profit from this widely detested practice.

Over the past year, the amount of e-mail traffic on AOL has continued to explode as consumers and business subscribers discover the benefits of the online medium, and the utility of electronic messages. We handle some 30 million messages a day, approximately half of those are internal to our system, with the other half coming from the Internet. You may be surprised to learn that from 5 percent to 30 percent of our Internet e-mail traffic is unsolicited bulk e-mail on any given day.

Junk e-mailers make their presence felt in a number of ways. First, Internet users are often barraged with unwanted mail advertising a variety of get-rich-quick schemes and other products and services of questionable value. In addition to annoying Internet users, junk e-mailers misappropriate the resources of service providers, like AOL, to distribute their mail. It is this element that makes junk e-mailing economically viable. A junk e-mailer needs very little in the way of resources to get started—they can purchase bulk e-mailing software and a CD of internet e-mail addresses for a few hundred dollars. Junk e-mailers can send literally millions of messages and still recoup their investment with only a few responses. We believe we would be a long way towards solving this problem if junk e-mailers were forced to be accountable to the recipients of their mail and bear even a portion of the costs associated with their mailing.

In an effort to attack the problem, AOL has filed suit against more than 40 individual and corporate junk e-mailers. So far, we have obtained injunctions barring 16 of those spammers from sending junk e-mail to AOL, we have reached out-of-court settlements with several more spammers and are vigorously pursuing damages claims, which we believe are worth millions of dollars, against the remaining defendants.

Spammers employ a series of tricks designed to defeat the technological counter-measures employed by AOL and other Internet Service Providers and to avoid identification. To that end, spammers use specially designed software to conceal his or her identity, to put false information in the header of the e-mail and to otherwise obfuscate or conceal other transmission data that could be used to locate and identify the spammers. These techniques are constantly changing and our legal efforts against spammers become something of a cat and mouse game.

For these reasons, AOL is willing to work with Congress and other branches of the government to see whether legislation may help remedy this problem that may be beyond the capacity of any single company or industry to address, a problem that threatens the utility and appeal of the Internet, and, ironically, may diminish its potential as a true mass medium. Before I identify those areas in which we believe the government could play a constructive role, however, let me make a few critical points about the risk of over broad governmental remedies.

It is important to draw a distinction between legitimate mailing practices on the Internet and illegitimate activities that make up the bulk of UBE we see today. For example, when AOL or the Red Cross or the American Cancer Society sends email to its members, there a clear incentive to tailor the message to the recipients’ preferences and to respond to recipient requests not to receive additional emails. In addition, many internet users find it useful and convenient to receive updates from merchants with whom they have chosen to do business. But in all of these situations, the recipient of the mail has the ability to choose not to receive additional mailings from an individual, organization or business. We know that spammers are unwilling to honor a consumers choice not to receive junk e-mail. In addition, legitimate businesses and organizations will honestly identify themselves when sending their mail—while junk e-mailers devote a great deal of effort to avoid identifying themselves.

Finally, the global nature of the Internet makes it critical that Congress not attempt to ban unsolicited e-mail completely. Such an approach would not only be unenforceable but would also undermine the U.S. government's policy that country-by-country content-based legislation is inappropriate.

Our campaign against junk e-mail has been predicated on pursuing the illegitimate and unlawful practices that many spammers employ—and are careful to distinguish between spamming and solicited mail from reputable organizations and businesses. We believe that government can help with the problems posed by spam in a number of ways by choosing its approaches carefully and wisely. We believe that restrictions based solely on the content of the e-mail may raise First Amendment concerns. In addition, given the elusive nature of junk e-mailers, and the tremendous effort involved in actually locating them, there is no reason to believe that they would comply with such a requirement.

Specifically, AOL believes legislative action can be taken to:

· Outlaw the forging of sender identification information;

· Strengthen the Computer Fraud and Abuse Act, making it a stronger weapon both against the transmission of junk e-mail as well as against the development and distribution of software that facilitates junk e-mailing; and

· Add statutory civil penalties and the opportunity for ISPs to recover court costs and attorneys fees.

These steps, supported by the industry and internet users will have real benefits for consumers. At the same time, legislation of this scope will not jeopardize legitimate business growth on the Internet and the attendant consumer benefits.

Unsolicited bulk email is a serious consumer and business issue on the Internet. The continued growth of the medium depends, in part, on ensuring UBE does not overwhelm service providers' computer software and consumers' mailboxes. AOL and the rest of the industry are committed to doing everything we can to thwart the efforts of those who abuse the Internet and ignore the clearly expressed desires of Internet users.

Again, thank you for inviting AOL to testify. I'll be happy to answer any questions you or other members of the Committee may have.