AOL, Yahoo to Charge for Email
Net providers want businesses to pay to guarantee email delivery to their members.
February 6, 2006
America Online and Yahoo plan to roll out a certified email service that will charge businesses to send email to members and be assured of delivery.
The two companies partnered last October with Goodmail Systems, a Mountain View, California-based company that offers a CertifiedEmail service that is intended to shield email users from spam, fraud, and phishing attacks.
However, The New York Times reported Sunday that the service will also enable Dulles, Virginia-based AOL and Sunnyvale, California-based Yahoo to recoup the costs of providing email to users by charging even legitimate businesses to send them email.
Companies will have to pay between one-quarter of a cent to a penny for each commercial message they want to send to AOL and Yahoo Mail users. Otherwise, they risk having their emails blocked entirely, delivered late, sent to users’ spam or bulk message folders, or not have the graphics or links in their messages appear.
‘This type of tiered payment structure does threaten the neutrality and the openness of the Net.’
If the companies pay to join the CertifiedEmail service, however, the messages go straight to users’ inboxes. Goodmail said its service helps protect users from fraudulent messages where the sender disguises his or her true email address, and helps guard against identity theft.
AOL and Yahoo also see the service as a way to guard against their members receiving fraudulent emails.
“We believe this new layer of protection will widen the gap between the amount of good email we want our users to get and the dwindling amount of bad emails they might get,” said Barry Appelman, chief web strategist at AOL, last October.
However, the service will also undoubtedly increase revenues for AOL and Yahoo, as well as accelerate the trend of a two-tiered web where services that used to be provided for free are now charging a fee.
Shares of Yahoo fell $0.06 to $33.48 in recent trading, while shares of AOL’s parent company, Time Warner, rose $0.14 to $18.54 in recent trading.
“AOL and Yahoo believe this will help them identify legitimate email and lessen the risk of ‘malmail,’” said Jonathan Spira, chief analyst at Basex, an IT research firm specializing in knowledge sharing and collaboration. “It gives the companies that pay a ‘do not stop, go straight to the inbox’ filter.”
He sees a certain logic in its resemblance to the regular postal system, where the sender, not the recipient, pays, and senders pay more for certified delivery than for regular first-class mail.
It also fits into the concept of the tiered Internet system. Some Internet service providers such as AT&T, BellSouth, and Verizon Communications have recently been calling for services that require heavy amounts of bandwidth to pay them to use their pipes (see Telcos Propose Web Tiers).
“That differs from the basic architecture of the Internet from its inception, which treats all data in the same way,” said Mr. Spira. “Depending on your catbird seat, this type of tiered payment structure does threaten the neutrality and the openness of the Net.”
The Senate Commerce Committee plans to begin hearings Tuesday on legislation calling for so-called “Net neutrality” that would prevent Internet service providers from prioritizing their traffic in this way.
Whether or not they will want to extend Net neutrality to email service providers is debatable, since Congress has also passed laws such as the CAN-SPAM Act to punish senders of spam messages, and that is what AOL and Yahoo claim they will be able to do with the CertifiedEmail service.
Microsoft Chairman Bill Gates has also called for charging email senders as a way to cut down on the volume of spam email, but his proposal did not attract much support. AOL claims to have reduced spam email by more than 85 percent since 2003, so spam control apparently isn’t the only consideration for moving to charge for email delivery.
How long until they start charging for personal email?