Spam Problem Affects ISPs' Bottom Lines

A study by the Probe Group says dealing with the proliferation of unwanted E-mail has added numerous costs for ISPs.

InformationWeek Staff, Contributor

July 8, 2003

2 Min Read

Spam irritates consumers and annoys IT departments, but the ever-enlarging mass of unwanted commercial E-mail threatens to seriously affect large ISPs' bottom lines.

Dealing with--or attempting to deal with--the sheer volume of unwanted E-mail has added a layer of costs to ISP overhead, according to a report released Tuesday by the Probe Group, a research firm.

The report's title speaks for itself: "Spam: The Problem With No Solution."

Solvable or not, the problem carries a hefty price tag--in fact, more than one for ISPs, said the report's author, research director Alan Mosher.

"ISPs are being forced to spend dollars in several directions to combat spam," Mosher said. "Added expenses include increased server and storage capacity to deal with the unwanted mail. We're also seeing ISPs beginning to contract with third-party services to filter unwanted messages."

The Probe Group report cites figures placing spam at 50% of E-mail. Big ISPs such as AOL and MSN can see spam figures hit 70% to 80%, increasing administrative, storage and management costs. That growth in overhead is unlikely to be offset by passing the costs along to customers, at least in the short term, Mosher said.

"The ISP business is competitive enough without passing filtering charges on to the customer," he said. "This is especially true for the consumer/residential side of the business."

Additional filtering services are likeliest to be presented as optional customer add-ons, in Mosher's view.

Courts and legislators aren't likely to come to the ISPs' rescue any time soon, Mosher said.

The rate of growth in spam volume and the increasing sophistication of spammers themselves make legislative spam-blocking solutions difficult to achieve, Mosher said. "Between free-speech issues and the fact that there's no clear and widely agreed-upon definition of what spam is, and what it isn't, it's going to be a long while before the courts come to any consensus that's likely to offer relief," he said. "And beyond that there's no way of knowing how the courts will rule."

On the technical front, Mosher hopes that spam-blocking developers and services will be moving from a reactive to an anticipatory mode as they develop algorithms and tools for heading off new spam strategies and technologies before they are widely implemented.

"For the near future, though, the industry is likely reactive, responding to spam strategies rather than cutting them off in advance," he said.

Third-party spam-blocking software developers and services will continue to benefit from the size of the problem, both from ISP contracts and investments, as well as consumer purchases of anti-spam software, Mosher said.

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