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PSINet assailed as spam contract surfaces
November 6, 2000
PSINet came under fire from anti-spam organizations after CNET News.com obtained an electronic unsigned copy of a so-called pink contract between PSINet and Cajunnet, a marketing firm based in Slidell, La., that freely admits its spamming practices.
Pink contracts are addendums Internet service providers sign to permit a customer to send unsolicited commercial email or put up spam-related Web sites. One recent example forced AT&T to pledge an internal crackdown of its own on the contracts.
Cajunnet, which on Monday reviewed News.com's copy of the addendum and said it was authentic, declined to comment Wednesday on its termination by PSINet.
A senior account executive at PSINet had acknowledged Monday the existence of the addendum and confirmed its essential points. But he declined to examine News.com's copy for authenticity.
In its release, PSINet said the pink contract in question "was handled by a junior lawyer in PSINet's commercial contracts group who was handed a proposed addendum by a commercial marketer setting forth what purported to be stricter rules for compliance with our Net Abuse Policy."
PSINet on Monday had described the addendum as a "draft" but would not say whether it differed in material respects from another addendum that was signed by the companies.
In the release, PSINet said its spam policy was "not negotiable" and pledged to educate its sales force to make sure the policy was enforced in the future.
"PSINet will now take additional steps to reinforce the message internally--within what has become a 9,000-person strong organization--that we do not provide services of any kind to spammers," the company said. The ISP added that it would amend its abuse policy to outline behaviors forbidden by its customers and train its sales force to recognize provisions "that might weaken or undercut our Net Abuse Policy."
News.com's copy of the addendum stipulated that PSINet would permit Cajunnet to send unsolicited email "in mass quantity" through PSINet's lines. It went on to say that PSINet would receive a nonrefundable, up-front payment of $27,000 "for PSINet's increased risks associated with this agreement."
Cajunnet general manager Eugene Wanless on Monday said his company had paid that fee.
PSINet recently has come under increasing pressure to boost revenue. The struggling ISP last week reported losses greater than analysts had expected, and has lowered its expectations for the fourth quarter. Subsequently, a dozen equity analysts downgraded the company's stock.
The company has announced a corporate restructuring that included the resignation of chief operating officer Harold Wills, and has said it would examine "strategic alternatives."
The company also became the target of a class-action investor lawsuit alleging misstatements to the market.
The company's stock is down more than 90 percent for the year. The issue trades around $2, down from a 52-week high of $61.92.
