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ALL EYES IN THE WORLD OF commercial e-mail are on the Free Speech Coalition, a trade group for online pornographers, as it takes the state of Utah to court over its so-called child protection e-mail address registry. It's the latest round in a bitter fight over state registries, which are opposed even by the Federal Trade Commission.

The court battle will involve constitutional issues. But as is often the case, the real issue is money.

E-MAIL MARKETERS ARE IN the uncomfortable position of cheering for a pornography trade group as it takes Utah to court over the state's so-called child protection e-mail address registry.

The Free Speech Coalition filed suit against Utah Nov. 17, attempting to get the state's child protection law overturned. The group claims the law is pre-empted by the federal Can Spam Act, and that it unconstitutionally interferes with interstate commerce.

Like Michigan's, Utah's registry allows parents and guardians to opt out of e-mail containing material that's illegal for minors to view or buy; all they have to do is enter children's e-mail addresses and other “contact points.” Senders of such messages are supposed to scrub their lists against these files every month.

State officials see registries as revenue generators, but the fees in the two states that have them are so high they threaten to price some firms out of e-mail altogether. Moreover, the two states allow parents to sue for violations.

This already has had a chilling effect on some e-mail marketers. For example, a well-known cable television entertainment company reportedly suspended e-mailing television-show promotions rather than pay the states to scrub its lists. And in July, Fox News analyst Wendy McElroy stopped publishing her ifeminists.net e-mail newsletter — which often included links to commentary on issues such as abortion and gay rights — fearing that political enemies would use the registries to shut her up.

“I won't take that risk,” she said in an announcement to her readers. “Nor will I turn over addresses to the government, let alone pay for the privilege.”

The Free Speech Coalition claims to represent members with several billion dollars in yearly revenue and more than 1.2 million adult Web sites. The plaintiff's type of business would have no bearing on the court's decision in a perfect world. But the E-Mail Service Provider Coalition (ESPC) and club marketer Beer Across America decided to file an amicus brief in support of the Free Speech Coalition rather than going through with a planned action of its own. (Amicus means “friend of the court” — one that is not a party to the litigation, but believes the court's decision may affect its interest).

“The ESPC made the decision that they didn't want to ‘be in bed with the coalition,’” said Louis Amoroso, president of Beer Across America. “Even if we filed separate suits, there was concern that a private judge would bring the two suits together.”

Amoroso and the ESPC (and the Free Speech Coalition) hope the court will declare Utah's registry unconstitutional and against federal law, and that this will serve as ammunition to get Michigan's law off the books and stop a similar bill expected in Illinois.

Speaking of Michigan, on Nov. 14 Gov. Jennifer Granholm signed a bill that put that state's child protection registry into effect immediately. The law, Public Act 206, corrected a version of a law implemented in July that mistakenly set too low a ceiling on the price Michigan could charge marketers.

Granholm was undeterred by the fact that the Federal Trade Commission, only two weeks before, published a letter attacking the Illinois bill.

“Although difficult to quantify, the risk of a pedophile or other dangerous persons misusing the registry data to discover the contact point of an Illinois minor is certainly real,” the FTC said in response to a request by Illinois state Rep. Angelo Saviano (R-Elmwood Park) to assess a bill that would establish a registry in his state much like the two existing ones. “[I]t is unlikely that the state would be able to perform background checks on every employee of all marketing firms that may potentially misuse their access to the registry.”

Granholm was unconvinced by the FTC's arguments, said spokeswoman Liz Boyd. “We are comfortable with the legislation.”

Boyd added that Granholm viewed the FTC's concern over pedophiles as “an overstatement.”

However, at least one executive who runs a private service akin to Michigan and Utah's registries, believes it isn't remotely stretching things to say the registries put children's addresses at significant risk of falling into the wrong hands.

“The natural result of this is that every company that complies has in its database which [addresses] are used by children,” said Joshua Baer, founder and CEO of Austin, TX e-mail service provider Skylist. “All those people have access to the list. How do you know about all of them? Even with everyone having the right intentions, it is so easy for it to be abused.”

As a result, Utah and Michigan's registries have the potential to result in thousands of lists of children's e-mail addresses landing in thousands of companies' databases, including those of pornographers. And these databases are at risk of being compromised by rogue employees.

“This is the worst public policy I have ever seen in my career,” said Trevor Hughes, executive director of the E-mail Service Provider Coalition.

Matthew Prince, co-founder of Unspam LLC, the company that maintains Utah and Michigan's registries, countered that the arguments in the FTC's letter are almost identical to those it published in a report to Congress in June 2004 and that his company has taken all of them into account.

“We took that FTC report, we sat down with our engineers and we addressed all those issues,” he added. “Some of the things we have done are specific security measures that are not publicly known,” he said, adding, “Utah required us to do a full presentation [on] those concerns.”

But the FTC's criticism hasn't stopped Illinois state Rep. Jack Franks, D-Woodstock, from planning to reintroduce a registry bill in his state's assembly in January.

So rancorous is the registry battle that someone who opposes the ESPC on this issue apparently has been leaking information from conference calls in an attempt to derail the coalition's efforts. Sources told Direct it was apparent in phone calls and meetings that Unspam representatives and Utah officials had foreknowledge of the ESPC's agenda.

Multiple sources, however, said that not every member of the ESPC agrees with Hughes' assessment of the state registries and that anyone could be trying to derail the group.

In any case, Beer Across America had agreed to become the lead plaintiff in a legal challenge against Utah. Days later, Amoroso said he received an anonymous letter purporting to be from “a friend” implying that if he were to go through with the suit, his company would receive terrible publicity and would be alone in its fight.

“I learned recently that Beers (sic) Across America has become ESPC's plaintiff in its attempt to battle the new anti-spam law in Utah,” began the letter. “In the interest of full disclosure, I think you have the right to know that, rather than being just one of many plaintiffs in the action against the State of Utah, Beers (sic) Across America is in fact the only plaintiff.

“None of the other companies approached by ESPC and courted as potential plaintiffs were willing to stick their necks out and risk the inevitable bad publicity the suit would attract (in the form of headlines reading, ‘Company sues for right to sell booze to minors’ — or drugs, or porn, or tobacco — take your pick),” the letter said.

Amoroso said he has no idea who sent the note. “The letter didn't really do anything to deter us one way or the other,” he said. “I just found it interesting that we have a private conversation and within a day or two I get a warning letter.”

Unspam's Prince denied knowing who wrote the letter and said he does not condone the tactic. He also denied having anything to do with maliciously leaking information from the ESPC's conference calls.

“I have never been on an ESPC phone call and no one from our company has ever been on an ESPC phone call,” said Prince. “I don't know of anyone who is actively working against them.”

Finally, there is little doubt that Utah and Michigan officials see money in their new registries.

“Unfortunately, the Internet has become a Superfund site,” said Prince. “The question is who will pay to clean it up.”

Just how much money is at stake? Before Michigan's original child protection law was passed, the state's Department of Labor and Economic Growth sent legislators an analysis of the proposed e-mail registry predicting its fiscal ramifications.

“As a practical matter, the registry would have to be purchased frequently by senders, because it would be illegal to send covered messages to a contact point that has been on the list for more than 30 days,” the department's analysis said. “It is estimated that annual revenue in Utah, a much smaller state, could be in the $3 million to $6 million range.”

Dennis Darnoi, a spokesman for the child protection bill's original sponsor Mike Bishop, R-Rochester, said 85% of the money Michigan gets goes into a child protection fund, and 15% to the Michigan attorney general's office.

Unspam's Prince declined to reveal how much of a cut Unspam is getting from the registries. However, there is maneuvering room in its fees.