A Penny for Your Thoughts

A New York Times article Postage is Due (by way of Kevin Drum's Political Animal) notes plans by Yahoo and AOL to work with Goodmail Systems to provide companies with a class of premium mail that will -- for a price -- bypass their spam filters.

One small concern I have is that this creates a divergence between my interests as a user and Yahoo's interests as a company regarding what constitutes spam. Bear in mind half the money goes to Yahoo. A hoodia peddler or mortgage seller may be a "legitimate" company in the Goodmail world (e.g., they agree to a code of conduct and their checks clear), but I consider them spam. Can I opt out or blacklist them from appearing in my inbox? Probably, but if it's too easy for me, such companies may be less willing to cough up money to Goodmail / Yahoo. Note that the US Postal Service would be a lot smaller organization without junkmail.

A bigger question is whether this will be a way to collect more revenue across the board. Email has been treated as a free good, but it's a fairly straight path from this to a model where every email has to have a postage stamp. The certification costs mentioned in the article are 1/4 to 1 cent per email with the lower price going to high volume senders. The graphic accompanying the original article shows the daily volume of mail as 25 billion a day. Assuming a half cent each, that's $125 million a day or $45 billion a year globally. For scale, that this nearly equal to what the USPS collects for first class and standard mail in a year. Those kind of bucks mean big service providers will quickly disintermediate Goodmail.

Yahoo, AOL, BellSouth, and AT&T can get together and ratify a standard. They could create a company to pass out the e-stamps or trust each other to generate them. The originating and receiving ISPs get to split the price of the stamp and a small residual goes to the issuing org, if necessary. No point stopping there, of course, they can tack on a penny for attachments under a meg and a penny per meg after that. The oligopoly gets to set the price.

The easy way is just do it like bandwidth -- provide a base level say sending 10 emails a month and then have premium levels above that. In reality, competition would probably force the pricing below the list price and potentially back down to the original levels, but the best part would still remain. That would be companies paying for access to their users -- not preferred access, but any access. Of course, governments can get into the business, too. They can collect the postage directly or add a postage tax.

Perhaps network neutrality will prevail, but given the sums involved for businesses and the government and the ease with which it can be spun as a necessary evil to fight spam / terrorism, I'm dubious. Plus it's market solution! How can we say no to that?