[House Report 107-41]
[From the U.S. Government Publishing Office]



107th Congress                                             Rept. 107-41
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
           UNSOLICITED COMMERCIAL ELECTRONIC MAIL ACT OF 2001

                                _______
                                

                 April 4, 2001.--Ordered to be printed

                                _______
                                

 Mr. Tauzin, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 718]

  The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 718) 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........................................................     1
Purpose and Summary..............................................     8
Background and Need for Legislation..............................     8
Hearings.........................................................    10
Committee Consideration..........................................    10
Committee Votes..................................................    10
Committee Oversight Findings.....................................    11
Performance Goals and Objectives.................................    11
New Budget Authority, Entitlement Authority, and Tax Expenditures    11
Committee Cost Estimate..........................................    11
Congressional Budget Office Estimate.............................    11
Federal Mandates Statement.......................................    11
Advisory Committee Statement.....................................    12
Constitutional Authority Statement...............................    12
Applicability to Legislative Branch..............................    12
Section-by-Section Analysis of the Legislation...................    12
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 2001''.

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) Affiliate.--The term ``affiliate'' means, with respect to 
        an entity, any other entity that--
                  (A) controls, is controlled by, or is under common 
                control with such entity; and
                  (B) provides marketing information to, receives 
                marketing information from, or shares marking 
                information with such entity.
          (2) 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.
          (3) 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.
          (4) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
          (5) 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.
          (6) 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'').
          (7) FTC act.--The term ``FTC Act'' means the Federal Trade 
        Commission Act (15 U.S.C. 41 et seq.).
          (8) Initiate.--The term ``initiate'', when used with respect 
        to a commercial electronic mail message, means to originate 
        such message or to procure the origination 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, or any other person, 
        whose role with respect to the message is limited to the 
        transmission, routing, relaying, handling, or storing, through 
        an automatic technical process, of a message originated by 
        others.
          (10) 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)).
          (11) 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)).
          (12) Recipient consent.--The term ``recipient consent'', when 
        used with respect to a commercial electronic mail message, 
        means that--
                  (A) the message falls within the scope of an express 
                and unambiguous invitation or consent granted by the 
                recipient and not subsequently revoked;
                  (B) the recipient had clear and conspicuous notice, 
                at the time such invitation or consent was granted, 
                of--
                          (i) the fact that the recipient was granting 
                        the invitation or consent;
                          (ii) the scope of the invitation or consent, 
                        including what types of commercial electronic 
                        mail messages would be covered by the 
                        invitation or consent and what senders or types 
                        of senders, if any, other than the party to 
                        whom the invitation or consent was communicated 
                        would be covered by the invitation or consent; 
                        and
                          (iii) a reasonable and effective mechanism 
                        for revoking the invitation or consent; and
                  (C) the recipient has not, after granting the 
                invitation or consent, submitted a request under 
                section 5(a)(1) not to receive unsolicited commercial 
                electronic mail messages from the initiator.
          (13) 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--
                  (A) within the 5-year period ending upon receipt of 
                such message, there has been a business transaction 
                (including a transaction involving the provision, free 
                of charge, of information, goods, or services, that 
                were requested by the recipient) between--
                          (i) the initiator or any affiliate of the 
                        initiator; and
                          (ii) the recipient; and
                  (B) the recipient was, at the time of such 
                transaction or thereafter or in the transmission of the 
                commercial electronic mail message, provided a clear 
                and conspicuous notice of an opportunity not to receive 
                further messages from the initiator and any affiliates 
                of the initiator and has not exercised such 
                opportunity.
          (14) Recipient.--The term ``recipient'', when used with 
        respect to a commercial electronic mail message, means the 
        addressee of such message. If an addressee of a commercial 
        electronic mail message has one or more electronic mail 
        addresses in addition to the address to which the message was 
        addressed, the addressee shall be treated as a separate 
        recipient with respect to each such address.
          (15) Unsolicited commercial electronic mail message.--The 
        term ``unsolicited commercial electronic mail message'' means 
        any commercial electronic mail message that is sent to a 
        recipient--
                  (A) without prior recipient consent; and
                  (B)(i) with whom the initiator does not have a pre-
                existing business relationship;
                  (ii) by an initiator or any affiliate of the 
                initiator after the recipient requests, pursuant to 
                section 5(a)(1), not to receive further commercial 
                electronic mail messages from that initiator; or
                  (iii) by a person or any affiliate of the person 
                after the expiration of a reasonable period of time 
                after the recipient requests, pursuant to section 
                5(a)(2), to be removed from the distribution lists 
                under the control of a person.

SEC. 4. CRIMINAL PENALTY FOR UNSOLICITED COMMERCIAL ELECTRONIC MAIL 
                    CONTAINING FRAUDULENT ROUTING INFORMATION.

  Section 1030 of title 18, United States Code, is amended--
          (1) in subsection (a)(5)--
                  (A) in subparagraph (B), by striking ``or'' at the 
                end;
                  (B) in subparagraph (C), by inserting ``or'' after 
                the semicolon at the end; and
                  (C) by adding at the end the following new 
                subparagraph:
          ``(D) intentionally initiates the transmission of any 
        unsolicited commercial electronic mail message to a protected 
        computer in the United States with knowledge that any domain 
        name, header information, date or time stamp, originating 
        electronic mail address, or other information identifying the 
        initiator or the routing of such message, that is contained in 
        or accompanies such message, is false or inaccurate;'';
          (2) in subsection (c)(2)(A)--
                  (A) by inserting ``(i)'' after ``in the case of''; 
                and
                  (B) by inserting before ``; and'' the following: ``, 
                or (ii) an offense under subsection (a)(5)(D) of this 
                section''; and
          (3) in subsection (e)--
                  (A) by striking ``and'' at the end of paragraph (8);
                  (B) by striking the period at the end of paragraph 
                (9) and inserting ``; and''; and
                  (C) by adding at the end the following new paragraph:
          ``(10) the terms `initiate', `initiator', `unsolicited 
        commercial electronic mail message', and `domain name' have the 
        meanings given such terms in section 3 of the Unsolicited 
        Commercial Electronic Mail Act of 2001.''.

SEC. 5. OTHER PROTECTIONS AGAINST UNSOLICITED COMMERCIAL ELECTRONIC 
                    MAIL.

  (a) Requirements for Transmission of Messages.--
          (1) Inclusion of return address in commercial electronic 
        mail.--It shall be unlawful for any person or affiliate of such 
        person to initiate the transmission of a 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 from the initiator and any affiliates of the 
        initiator.
          (2) Prohibition of transmission of unsolicited commercial 
        electronic mail after objection.--If a recipient makes a 
        request to a person to be removed from all distribution lists 
        under the control of such person, after receipt of such 
        request--
                  (A) it shall be unlawful for such person or any 
                affiliate of such person to initiate the transmission 
                of an unsolicited commercial electronic mail message to 
                such a recipient within the United States after the 
                expiration of a reasonable period of time for removal 
                from such lists;
                  (B) such person and affiliates (and the agents or 
                assigns of the person or affiliate) shall delete or 
                suppress the electronic mail addresses of the recipient 
                from all mailing lists owned or controlled by such 
                person or affiliate (or such agents or assigns) within 
                a reasonable period of time for such deletion or 
                suppression; and
                  (C) it shall be unlawful for such person or affiliate 
                (or such agents or assigns) to sell, lease, exchange, 
                license, or engage in any other transaction involving 
                mailing lists bearing the electronic mail addresses of 
                the recipient.
          (3) Inclusion of identifier, opt-out, and physical address in 
        unsolicited commercial electronic mail.--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;
                  (B) notice of the opportunity under paragraph (2) to 
                decline to receive further unsolicited commercial 
                electronic mail messages from the initiator or any 
                affiliate of the initiator; and
                  (C) the physical mailing address of the initiator.
          (4) Treatment of internal opt-out lists.--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, it shall be unlawful 
        for the provider to fail to provide an option to its 
        subscribers not to receive any unsolicited commercial 
        electronic mail messages, except that such option shall not be 
        required for any subscriber who has agreed to receive 
        unsolicited commercial electronic mail messages in exchange for 
        discounted or free Internet access service.
          (5) Affirmative defense.--It shall be an affirmative defense 
        in any action or proceeding brought for a violation of any 
        paragraph of this subsection that the violation was not 
        intentional.
  (b) Conditions for Enforcement by Providers of Internet Access 
Service.--
          (1) Authority to opt out.--After the expiration of a 
        reasonable period of time for taking any action necessary to 
        comply with a request under subparagraph (B) that begins upon 
        the receipt of such a request, it shall be unlawful for a 
        person or any affiliate of such person to initiate the 
        transmission of an unsolicited commercial electronic mail 
        message, to any recipient within the United States, that uses 
        the equipment of a provider of Internet access service to 
        recipients of electronic mail messages for such transmission, 
        if such provider--
                  (A)(i) has in effect a policy that meets the 
                requirements under paragraph (2); or
                  (ii) has received a significant number of complaints 
                from its bona fide subscribers that they have received 
                unsolicited commercial electronic mail messages from 
                such person; and
                  (B) makes a request to such person by means of an 
                electronic mail message not to use the equipment of the 
                provider for the transmission of any unsolicited 
                commercial electronic mail message.
          (2) UCE policy.--A policy of a provider of Internet access 
        service to recipients meets the requirements under this 
        paragraph only if--
                  (A) it is a policy regarding the use of the equipment 
                of the provider for the transmission of unsolicited 
                commercial electronic mail messages that prohibits the 
                transmission, using such equipment, of all such 
                messages;
                  (B) the provider of Internet access service is making 
                a good faith effort to block the transmission of all 
                unsolicited commercial electronic mail messages that 
                use the equipment of provider for such transmission;
                  (C) the policy is made publicly available by clear 
                and conspicuous posting 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 
                prohibition referred to in subparagraph (A) applies; 
                and
                  (D) the provider of Internet access service informs 
                each subscriber to such service of the policy.
  (c) Rule of Construction.--Nothing in this Act shall be construed--
          (1) to prevent or limit, in any way, a provider of Internet 
        access service from adopting a policy regarding commercial or 
        other electronic mail, including a policy of declining to 
        transmit certain types of electronic mail messages, and from 
        enforcing such policy through technical means, through 
        contract, or pursuant to any remedy available under any other 
        provision of Federal, State, or local criminal or civil law; or
          (2) to render lawful any such policy that is unlawful under 
        any other provision of law.
  (d) Protection of Internet Access Service Providers 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.

SEC. 6. ENFORCEMENT.

  (a) Enforcement Through FTC Act.--
          (1) Enforcement.--Except as otherwise provided in this Act, 
        section 5 shall be enforced by the Commission under the FTC 
        Act.
          (2) Unfair or deceptive practice.--Any violation of section 5 
        shall be treated as a violation of a rule under section 18 of 
        the FTC Act (15 U.S.C. 57a) regarding unfair or deceptive acts 
        or practices.
          (3) Scope of commission enforcement.--The Commission shall 
        prevent any person from violating section 5 of this Act in the 
        same manner, by the same means, and with the same jurisdiction, 
        powers, and duties as though all applicable terms and 
        provisions of the FTC Act were incorporated into and made a 
        part of this section. Any person who violates section 5 of this 
        Act shall be subject to the penalties and entitled to the 
        privileges and immunities provided in the FTC Act in the same 
        manner, by the same means, and with the same jurisdiction, 
        powers, and duties as though all applicable terms and 
        provisions of the FTC Act were incorporated into and made a 
        part of this section.
          (4) Prohibition of regulations.--Neither the Commission nor 
        any other Federal department or agency shall have any authority 
        to issue any regulations to implement the provisions of this 
        Act.
  (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 5 to 
                enjoin such violation.
                  (B) An action to recover for actual monetary loss 
                from such a violation in an amount equal to the greater 
                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 or repeatedly violated section 5, 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) Prohibition of class actions.--A private action arising 
        under this subsection may not be brought as a plaintiff class 
        action pursuant to the Federal Rules of Civil Procedure nor as 
        a plaintiff class action pursuant to the law or rules of 
        procedure of any State.
          (5) 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.
  (c) Enforcement by States.--
          (1) In general.--
                  (A) Civil actions.--In any case in which the attorney 
                general of a State has reason to believe that an 
                interest of the residents of that State has been or is 
                threatened or adversely affected by the engagement of 
                any person in a practice that violates section 5 of 
                this Act, the State may bring civil action on behalf of 
                the residents of the State in an appropriate court of 
                that State, or in a district court of the United States 
                of appropriate jurisdiction for any or all of the 
                following relief:
                          (i) Injunction.--To enjoin that practice.
                          (ii) Compliance enforcement.--To enforce 
                        compliance with the provisions of section 5.
                          (iii) Damages.--To recover actual monetary 
                        loss or receive $500 in damages for each 
                        violation, except that if the court finds that 
                        the defendant willfully or repeatedly violated 
                        section 5, the court may, in its discretion, 
                        increase the amount of the award to an amount 
                        equal to not more than 3 times the amount 
                        otherwise available under this clause.
                  (B) Limitation on monetary damages.--All monetary 
                amounts recovered or received by settlement or judgment 
                in an action under this paragraph shall be paid 
                directly to the persons who incurred losses or suffered 
                damages as a result of the violation under section 5 
                for which the action was brought, and no such amounts 
                may be retained by the State or may be used directly or 
                indirectly to offset the cost of such litigation.
                  (C) Notice.--
                          (i) In general.--Before filing an action 
                        under subparagraph (A), the attorney general of 
                        the State involved shall provide to the 
                        Commission--
                                  (I) written notice of that action; 
                                and
                                  (II) a copy of the complaint for that 
                                action.
                          (ii) Exemption.--
                                  (I) In general.--Clause (i) shall not 
                                apply with respect to the filing of an 
                                action by an attorney general of a 
                                State under this subsection, if the 
                                attorney general determines that it is 
                                not feasible to provide the notice 
                                described in that subparagraph before 
                                the filing of the action.
                                  (II) Notification.--In an action 
                                described in subclause (I), the 
                                attorney general of a State shall 
                                provide notice and a copy of the 
                                complaint to the Commission at the same 
                                time as the attorney general files the 
                                action.
          (2) Intervention.--
                  (A) In general.--On receiving notice under paragraph 
                (1)(B), the Commission shall have the right to 
                intervene in the action that is the subject of the 
                notice.
                  (B) Effect of intervention.--If the Commission 
                intervenes in an action under paragraph (1), it shall 
                have the right--
                          (i) to be heard with respect to any matter 
                        that arises in that action; and
                          (ii) to file a petition for appeal.
          (3) Construction.--For purposes of bringing any civil action 
        under paragraph (1), nothing in this Act shall be construed to 
        prevent an attorney general of a State from exercising the 
        powers conferred on the attorney general by the laws of that 
        State to--
                  (A) conduct investigations;
                  (B) administer oaths or affirmations; or
                  (C) compel the attendance of witnesses or the 
                production of documentary and other evidence.
          (4) Venue; service of process.--
                  (A) Venue.--Any action brought under paragraph (1) 
                may be brought in the district court of the United 
                States that meets applicable requirements relating to 
                venue under section 1391 of title 28, United States 
                Code.
                  (B) Service of process.--In an action brought under 
                paragraph (1), process may be served in any district in 
                which the defendant--
                          (i) is an inhabitant; or
                          (ii) may be found.

SEC. 7. EFFECT ON OTHER LAWS.

  (a) Federal 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 law or any State criminal law regarding obscenity or 
the sexual exploitation of children.
  (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 
5 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 action under--
          (1) State trespass or contract law; or
          (2) 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. 8. STUDY OF EFFECTS OF UNSOLICITED COMMERCIAL ELECTRONIC MAIL.

  Not later than 18 months after the date of the enactment of this Act, 
the Federal Trade 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. 9. SEVERABILITY.

  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. 10. EFFECTIVE DATE.

  The provisions of this Act shall take effect 60 days after the date 
of the enactment of this Act.

                          Purpose and Summary

    The purpose of H.R. 718, the Unsolicited Commercial 
Electronic Mail Act of 2001, is to prohibit the initiation and 
transmission of unsolicited commercial electronic mail 
messages. The legislation is narrowly drawn to protect freedom 
of speech on the Internet and legitimate commercial uses of 
electronic mail messages.
    H.R. 718 prohibits the transmission of unsolicited 
commercial electronic mail messages unless the initiator of 
such message provides a valid electronic mail return address 
and provides the recipient of such messages the opportunity not 
to receive future mailings. In addition, the bill allows 
Internet access service providers (ISP) to decline further 
unsolicited commercial electronic mail (UCE) messages, if the 
ISP has a policy of no UCE or the ISP has received a 
significant number of complaints from its customers. Under H.R. 
718, the Federal Trade Commission is authorized to enforce the 
Act. Further, State or local laws that are inconsistent with 
the Act are preempted, except in the case of any civil remedy 
under State trespass or contract law, any State or local law 
relating to acts of computer fraud and abuse arising from the 
unauthorized transmission of unsolicited commercial electronic 
mail messages, or any State criminal law regarding obscenity or 
risk of injury to children.

                  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 has become today 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 significant 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, 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 the postal system, the marginal cost of electronic 
solicitations approaches zero.
    Given its ability to quickly disseminate multiple 
electronic messages, the Internet has heightened consumer 
anxiety over unwanted commercial solicitations. This has 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 contains 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's 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 
that can be easily accessed by children from the family 
computer, and in many instances these mail messages are 
intentionally sent with incorrect routing information.
    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, phone-based 
telemarketing, junk-faxes, and now Internet-based 
solicitations, consumers have historically complained that 
these unwanted solicitations are an incredible nuisance.
    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 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 electronic 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 electronic mails their customers receive.
    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 
messages containing 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.

                                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 21, 2001, the Subcommittee on Telecommunications 
and the Internet met in open markup session and approved H.R. 
718, the Unsolicited Electronic Mail Act of 2001 for Full 
Committee consideration, as amended, by a voice vote. On March 
28, 2001, the Full Energy and Commerce Committee met in open 
markup session and ordered H.R. 718 reported to the House with 
a favorable recommendation, as 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. 718 reported. A motion by Mr. Tauzin to order H.R. 718 
reported to the House, as amended, 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 offered by 
        Mrs. Wilson, No. 1, (1) provides the ISP with the 
        option to ``opt-out'' of receiving unsolicited 
        commercial electronic mail if: (a) they have a publicly 
        available policy against receiving unsolicited 
        commercial electronic mail and make a good faith effort 
        to block it, or (b) a significant portion of its 
        customer base complains to the ISP about receiving the 
        spam, (2) clarifies that the initiator must be the 
        actual person that ``originates'' the message to 
        address ISPs that may facilitate e-mail lists, (3) 
        defines how corporate affiliate relationships will be 
        treated, (4) clarifies that opting out of unsolicited 
        commercial electronic mail does not ``terminate'' the 
        business relationship, (5) gives marketers a reasonable 
        amount of time to suppress the names of consumers 
        opting out of spam, (6) deletes notification process by 
        Federal Trade Commission (FTC) to alleged spammer, (7) 
        allows FTC to enforce and seek redress under the 
        process they currently use under the Fair and Deceptive 
        Practices Act, (8) prohibits the damages received from 
        a State Attorney General case from going to anyone but 
        the aggrieved plaintiffs, including to fund the 
        litigation costs or for other state programs, (9) 
        explicitly prohibits the FTC from promulgating any 
        rules under this Act, (10) retains explicit prohibition 
        against Class Actions, and (11) does not preempt a 
        state's ability to enforce any law regarding obscenity 
        or the sexual exploitation of children was agreed to by 
        a voice vote.

                      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.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that this 
legislation does not authorize funding, and therefore no 
statement is required.

   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. 
718, the Unsolicited Electronic Mail Act of 2001, would result 
in no new or increased budget authority, entitlement authority, 
or tax expenditures or revenues.

  Committee Cost Estimate, Congressional Budget Office Estimate, and 
                       Federal Mandates Statement

    The Congressional Budget Office estimate required pursuant 
to clause 3(c)(3) of rule XIII of the Rules of the House of 
Representatives section 402 of the Congressional Budget Act of 
1974, and the estimate of Federal mandates required pursuant to 
section 423 of the Unfunded Mandates Reform Act were requested 
from the Congressional Budget Office, but were not prepared as 
of the date of filing of this report. The Congressional Budget 
Office estimate and accompanying materials will be contained in 
a supplemental report.

                      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 2001. ''

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: ``affiliate,'' 
``children,'' ``commercial electronic mail message,'' 
``Commission,'' ``domain name,'' ``electronic mail address,'' 
``FTC Act,'' ''initiate,'' ``initiator,'' ``Internet,'' 
``Internet access service,'' ``recipient consent,'' ``pre-
existing business relationship,'' ``recipient,'' and 
``unsolicited commercial electronic mail message.''
    The definition of affiliate requires both that (1) 
different entities are controlled by, or under common control 
and (2) that the entity provides marketing information to, 
receives marketing information from, or shares marketing 
information with the other entity under common control. 
Affiliates are included within the definition of pre-existing 
business relationship. As a result, if an entity has a pre-
existing business relationship with an individual, then any 
electronic mail from an affiliate of that entity would not be 
considered Unsolicited Commercial Electronic Mail.
    The concept of unsolicited commercial electronic mail plays 
a key role in the understanding of H.R. 718. As used in the 
bill, the term unsolicited commercial electronic mail means any 
commercial electronic mail message sent to an individual with 
whom the initiator of the electronic message does not have 
prior recipient consent and does not have a pre-existing 
business relationship. The Committee wants to clarify that a 
request by a recipient of commercial electronic mail to not 
receive further messages from the initiator and any affiliates 
of the initiator does not terminate the business relationship 
between the initiator and the recipient. In particular, the 
Committee does not wish to limit e-commerce between the 
initiator and recipient for renewal, upgrade or replacement of 
existing service provided by the initiator. In addition, 
electronic mails concerning billing and legal notices shall not 
constitute unsolicited commercial electronic mail messages.
    The Committee changed an element of the definition of 
``initiator'' contained in the Subcommittee passed bill from 
``a message composed and addressed by others'' to ``a message 
originated by others'' in an effort to make clear that only the 
sender of the message is culpable, rather than companies the 
sender may utilize to get the message to the end user. When 
these intermediary companies do not select the lists that are 
used, nor make the decision that the message should be sent to 
a given list of recipients, they should not be considered to 
have originated the message. For example, even if an ISP plays 
a role in facilitating an agreement between a list broker and a 
company wishing to get a message out, it should not be liable 
for any illegal message, unless it actually originates the 
message. The Committee wants to clarify that ISPs will not fall 
into the definition of initiator when acting in capacities such 
as the transmission, routing, relaying, handling, or storing, 
through an automatic technical process, as long as the ISP is 
not originating the message.
    If an initiator has a pre-existing business relationship 
with a recipient and the recipient requests not to receive 
further commercial electronic mail messages, such a request 
would apply only to subsequent messages that advertise or 
promote the commercial availability of a product or service for 
profit. Such a request would not apply to the sending of 
messages for billing, administrative, legal compliance, or 
other communications whose primary purpose is not to advertise 
or promote the commercial availability of a product or service 
for profit.

Section 4. Criminal penalty for unsolicited commercial electronic mail 
        containing fraudulent routing information

    Section 4 amends Section 1030 of Title 18 of the United 
States Code, which encompasses fraud and related activity in 
connection with computers. Section 4 of this Act will add a 
paragraph to the end of subsection (a)(5) of Section 1030 of 
Title 18 of the US Code. The paragraph states that if any 
person intentionally initiates the transmission of unsolicited 
commercial electronic mail with knowledge that any identifying 
information of the initiator or routing information is false, 
such person will be punishable under criminal law. A violation 
of this amendment to the Title 18 of the US Code will result in 
a fine or imprisonment of not more than one year, or both.

Section 5. Other protections against unsolicited commercial electronic 
        mail

    Section 5(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 5(a)(2) prohibits the transmission of an 
unsolicited commercial electronic mail message by the person or 
any affiliates of such person after the expiration of a 
reasonable period of time for removal from such lists. After 
such request is made, such person and affiliates must delete or 
suppress the electronic mail addresses of the recipient from 
all mailing lists owned or controlled by such person or 
affiliate within a reasonable period of time for such deletion 
or suppression. Further, it shall be unlawful for such person 
or affiliate to sell, lease, exchange, license or engage in any 
other transaction involving the mailing lists with the 
recipient's electronic mail address. The Committee intended for 
it to become standard practice in marketing and other 
industries to honor such requests by maintaining a list of 
individuals that have opted-out of the receipt of unsolicited 
commercial electronic mail. Such lists should suppress these 
electronic mail addresses from further solicitation.
    Section 5(a)(3) prohibits the transmission of unsolicited 
commercial electronic mail messages that do not contain a clear 
and conspicuous identification that the message is unsolicited 
commercial electronic mail, notice of an opportunity to decline 
to receive further unsolicited commercial electronic mail, and 
the physical mailing address of the initiator.
    Section 5(a)(4) provides that if an ISP 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 an ISP must receive compensation 
specifically for transmission of unsolicited commercial 
electronic mail messages, not merely compensation for the 
transmission of any electronic mail messages, whether 
commercial or non-commercial or solicited or unsolicited.
    Section 5(a)(5) states that it shall be an affirmative 
defense that an alleged violation of any paragraph of this 
subsection was not intentional.
    Section 5(b) provides the conditions for enforcement by 
providers of Internet access service. Opt-out by ISPs is 
limited to those Internet access services that directly provide 
service to a recipient of electronic mail messages. Electronic 
mail messages typically may cross several Internet access 
services networks, often without the knowledge of the 
initiator, before reaching their destination. Because the 
initiator would have no means of determining the path an 
electronic mail message takes on route to the recipient, the 
opt-out for purposes of section 5(b) applies only to equipment 
of the ISP that delivers messages directly to a recipient.
    Section 5(b)(1) prohibits any person from transmitting an 
unsolicited commercial electronic mail message to any ISP in 
violation of its policy regarding unsolicited commercial 
electronic mail messages. In order to take advantage of this 
provision, the ISP must either (1) adopt a policy that complies 
with the requirements of section 5(b)(2), or (2) receive a 
significant number of complaints from its bona fide subscribers 
regarding unsolicited commercial electronic mail from such 
person. In either case, the initiator is given a reasonable 
period of time to comply with an ISP request not to receive 
further unsolicited commercial electronic messages.
    Section 5(b)(2) establishes the requirements for an ISP 
policy regarding unsolicited commercial electronic mail 
messages. The policy must explicitly prohibit unsolicited 
commercial electronic mail; the ISP must make a good faith 
effort to block the transmission of all unsolicited commercial 
electronic mail, the policy must be publicly available by the 
clear and conspicuous posting on a World Wide Web site with an 
Internet domain name that is identical to that of the 
prohibited electronic mail address, and the ISP informs each 
subscriber about its policy.
    Section 5(c)(1) clarifies that nothing in H.R. 718 is to be 
construed to prevent or limit, in any way, a provider of 
Internet access service from adopting a policy regarding 
commercial or other electronic mail and from enforcing this 
policy through technical means, contract or any remedy 
available under any other provision of Federal, State, or local 
criminal or civil law.
    Section 5(c)(2) clarifies that nothing in H.R. 718 renders 
lawful and such policy that is unlawful under any other 
provision of law.
    Section 5(d) 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. The Committee notes that section 5 is intended to 
primarily establish the unlawfulness of certain acts by 
initiators of unsolicited commercial electronic mail, remedies 
for which are provided in section 6 to the FTC, State Attorneys 
General, ISPs, and recipients. ISPs may elect not to use these 
remedies for a variety of reasons but, with the exception of a 
narrow provision in paragraph (a)(4), section 5 is not intended 
for use as an enforcement or remedial tool against ISPs, and 
does not create any cause of action against an ISP. Neither 
shall it be used as an affirmative defense to any cause of 
action brought by an ISP other than provided for in Section 
5(a)(5).

Section 6. Enforcement

    Section 6(a)(1) provides for enforcement of Section 5 of 
the Act by the FTC under the FTC Act.
    Section 6(a)(2) states that any violation of section 5 
shall be treated as a violation of section 18 of the FTC Act 
regarding unfair or deceptive acts or practices.
    Section 6(a)(3) states that the scope of the Commission's 
enforcement of Section 5 of this Act will be the same manner in 
which they enforce similar violations under the FTC Act.
    Section 6(a)(4) provides for a prohibition of the 
Commission or any other Federal agency to issue any regulations 
in order to implement this Act. This act does not affect the 
existing authority of the FTC or other Federal agencies to 
issue regulations otherwise permitted by law.
    Section 6(b) creates a limited private right of action for 
individuals to recover actual or statutory damages associated 
with receiving unsolicited commercial electronic mail. The 
Committee intends that private actions under this section be 
treated as small claims best resolved in State courts designed 
to handle them, which would allow injured consumers to settle 
claims quickly without incurring attorneys' fees. The Committee 
is concerned that in some instances, class action lawsuits may 
result in injured parties not receiving the maximum 
compensation possible. For this reason, section 6(b) 
establishes that no private action created under this section 
may be brought as a class action.
    Section 6(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 5 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 greater of the amount of 
such actual monetary loss or $500 for each such violation, not 
to exceed a total of $50,000.
    Section 6(b)(2) provides that if the court finds that the 
defendant willfully 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 6(b)(1).
    Section 6(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 6(b)(4) states that a private action that arises 
under this subsection may not be brought as a plaintiff class 
action suit under the Federal Rules of civil procedure nor as a 
class action pursuant to the laws or rules of procedure of any 
State.
    Section 6(b)(5) 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 trade secrets of 
any party or participant.
    Section 6(c)(1) provides for limited enforcement of the Act 
by the States. A State may bring an action for relief of 
violations of Section 5 of the Act on behalf of residents of 
the State subject to certain limitations.
    Section 6(c)(1)(B) expressly bars the State from keeping 
any of the proceeds of any settlement or judgment under such an 
action. The Committee intends this requirement to ensure, 
first, that injured parties are made whole without deduction 
for attorneys' fees and, second, that the State will not have 
its own economic interest at stake in the outcome of the 
litigation. In addition, section 6(c)(1)(B) expressly bars a 
State from using funds related to a settlement or judgment to 
directly or indirectly offset the costs of litigation. The 
Committee intends the term ``all monetary amounts recovered or 
received by settlement or judgment'' should include any direct 
or indirect payment by the State or any other party or its 
counsel or agents to an opposing party or its counsel or 
agents.
    Section 6(c)(1)(C) requires a State to provide notice to 
the Commission of its intent to file an action under the Act.
    Section 6(c)(1)(C)(2) allows the Commission to intervene in 
an action that is subject to the above-referenced notice.

Section 7. Effect on other laws

    Section 7(a) clarifies that nothing in this Act is to be 
construed to impair the enforcement of section 223 or 231 of 
the Telecommunications 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 or any State law regarding obscenity or the sexual 
exploitation of children.
    Section 7(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, 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 8. 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 9. Severability

    Section 8 provides a severability clause.

Section 10. Effective date

    The effective date of the bill is 60 days after the date of 
enactment.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

              SECTION 1030 OF TITLE 18, UNITED STATES CODE


Sec. 1030. Fraud and related activity in connection with computers

  (a) Whoever--
          (1) * * *

           *       *       *       *       *       *       *

          (5)(A) * * *
          (B) intentionally accesses a protected computer 
        without authorization, and as a result of such conduct, 
        recklessly causes damage; [or]
          (C) intentionally accesses a protected computer 
        without authorization, and as a result of such conduct, 
        causes damage; or
          (D) intentionally initiates the transmission of any 
        unsolicited commercial electronic mail message to a 
        protected computer in the United States with knowledge 
        that any domain name, header information, date or time 
        stamp, originating electronic mail address, or other 
        information identifying the initiator or the routing of 
        such message, that is contained in or accompanies such 
        message, is false or inaccurate;

           *       *       *       *       *       *       *

  (c) The punishment for an offense under subsection (a) or (b) 
of this section is--
          (1) * * *
          (2)(A) a fine under this title or imprisonment for 
        not more than one year, or both, in the case of (i) an 
        offense under subsection (a)(2), (a)(3), (a)(5)(C), or 
        (a)(6) of this section which does not occur after a 
        conviction for another offense under this section, or 
        an attempt to commit an offense punishable under this 
        subparagraph, or (ii) an offense under subsection 
        (a)(5)(D) of this section; and

           *       *       *       *       *       *       *

  (e) As used in this section--
          (1) * * *

           *       *       *       *       *       *       *

          (8) the term ``damage'' means any impairment to the 
        integrity or availability of data, a program, a system, 
        or information, that--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) threatens public health or safety; [and]
          (9) the term ``government entity'' includes the 
        Government of the United States, any State or political 
        subdivision of the United States, any foreign country, 
        and any state, province, municipality, or other 
        political subdivision of a foreign country[.]; and
          (10) the terms ``initiate'', ``initiator'', 
        ``unsolicited commercial electronic mail message'', and 
        ``domain name'' have the meanings given such terms in 
        section 3 of the Unsolicited Commercial Electronic Mail 
        Act of 2001.

           *       *       *       *       *       *       *


                ADDITIONAL VIEWS BY HON. JOHN D. DINGELL

    I believe H.R. 718 will go a long way toward eliminating 
the insidious problem on the Internet known as ``spam.''
    There are some who urged this Committee to make certain 
changes that I believe would have seriously impaired the 
effectiveness of this anti-spam legislation. I am pleased those 
efforts to eviscerate key parts of the bill have been rejected 
by the bill's sponsors, Ms. Wilson and Mr. Green.
    Spam is no longer a mere nuisance to the 160 million 
Americans now using the Internet. It has rapidly degenerated 
into an abusive marketing practice. Innocent users are 
constantly bombarded with unsolicited commercial messages over 
which they have no control. Worse, many of these messages are 
pornographic in nature, and include ``teaser'' images inviting 
the recipient to visit one adult site on the Web or another. 
For many families, these spam messages are more than an 
intrusion, they are a personal assault.
    Spam also imposes real economic costs on the public. Some 
users pay metered charges for Internet access; others, 
particularly in rural areas, pay long distance telephone 
charges when dialing-up to the Internet. The time spent 
downloading unwanted messages translates into real dollars and 
cents. And, of course, the slower the Internet connection, the 
greater the tab.
    Perhaps the greatest cost associated with spam is incurred 
by the more than 3,000 Internet Service Providers, or ISPs, in 
this country. These companies have little choice but to expand 
their server capacity to deal with the proliferation of spam. 
Most of these ISPs are small businesses that simply cannot 
afford the additional investment required. Some resort to self-
help methods to delete large volumes of bulk e-mail, but this 
labor-intensive process is also expensive and, unfortunately, 
not very effective.
    H.R. 718 contains several means to eliminate the problem of 
spam, including an opt-out for individual consumers. 
Unfortunately, consumers could spend most of their waking hours 
sending opt-out requests and still not reach every spammer on 
the Internet.
    In my view, the most effective way to eradicate the 
Internet of abusive spammers is to put the matter squarely in 
the hands of ISPs, and this bill provides tools for ISPs to 
deal with the problem directly. ISPs have a direct and 
compelling financial incentive to protect both the integrity of 
their networks and the quality of service provided to their 
customers.
    Section 5(b) of this legislation gives ISPs, in addition to 
individual consumers, the right to opt-out of receiving spam. 
No longer will ISPs have to struggle in vain to rid themselves 
of unwanted spam that is clogging their networks and 
infuriating their customers. They can elect to opt-out of spam, 
and enforce that policy against violators. In my view, it is a 
critical element contained in this legislation to protect 
consumers, once and for all, from the increasing struggle 
against this offensive practice.
    Just as important, the bill preserves a right already 
available to ISPs under existing law. Section 5(c) permits ISPs 
to continue using defensive measures, technical and otherwise, 
to block the unwanted messages that overload their networks and 
outrage their customers.
    The bill also contains important enforcement measures. It 
affords individuals and ISPs a private right of action against 
spammers who do not comply. It also empowers the Federal Trade 
Commission to enforce the bill's anti-spamming provisions, and 
carries steep penalties for violators.
    I would note, however, that an important enforcement 
mechanism contained in the Subcommittee-passed bill was 
weakened when the bill was considered by the full Committee, 
and is the cause of some concern. The Subcommittee originally 
agreed on a compromise that prohibited class action lawsuits, 
and instead authorized State Attorneys General to enforce the 
bill's anti-spam provisions on behalf of aggrieved citizens in 
their respective States. Unfortunately, an amendment at full 
Committee had the effect of weakening the State AGs' ability to 
pursue wrongdoers by expressly prohibiting the recovery of any 
litigation costs associated with an enforcement action.
    In my view, it is simply unfair to require the taxpaying 
public to foot the legal bill for the damage caused by 
spammers. Recovery of reasonable legal fees is properly 
included in damage awards to individuals under this bill, and I 
believe it should likewise be permitted when the State acts as 
an agent on their behalf. If we are serious about putting an 
end to spam, as I hope we are, then we should not be creating a 
disincentive to enforcing the law against it.
    On balance, the bill is a good one, and I was happy to 
support it. However, it is imperative that further attempts to 
weaken the bill's enforcement provisions are rejected as this 
bill moves to the House Floor and thereafter.

                                                   John D. Dingell.

                                  
