Weighing the heavyweights

Who’s better for catalogers: Bush or Gore? It’s that time again – time to hit the voting booths, pull the lever, and (hopefully) elect the officials who will benefit you most. This year is particularly noteworthy. Not only is there a presidential election, but issues key to multichannel marketers – at the forefront, the fate of Internet taxation – could be affected by a new political regime. On the following pages, Catalog Age looks at the presidential campaign, the effects of a possible shakeup in control of the House, recently passed and pending legislations, and more – all with catalog marketers in mind.

When it comes to looking out for their companies’ best interests, catalogers have to dig deep to figure out which presidential candidate will be best for them. Vice President Al Gore and Texas governor George W. Bush are making their differences on such front-page issues as abortion, taxes, crime, and healthcare reform known. But their stands on issues relevant to running a catalog – privacy, use taxes and Internet taxation, postal reform – are not in the forefront of their campaigns.

The Gore camp has been touting an Electronic Bill of Rights, an initiative that Gore presented to Congress more than two years ago. It includes the right to “choose whether personal information is disclosed; the right to know how, when, and how much of that information is being used; the right to see it yourself; and the right to know if it is accurate.”

But beyond Gore’s “bill of rights,” as of press time both major-party candidates had shied away from discussing Internet privacy. For instance, the word “privacy” was mentioned just once during the August Democratic convention in Los Angeles, according to eWeek, and that was during a speech by Caroline Kennedy Schlossberg, who said the party would keep people’s private information from being “up for grabs.”

Bush, who has said he favors some form of privacy legislation, hasn’t gotten specific during the campaign. The Republican platform, however, does state that online privacy is the “single greatest concern Americans now have about the information revolution.” Although the Bush campaign literature specified that online customer profiling was one of the governor’s concerns, it also said Bush had no plans to discuss the issue in any upcoming speeches.

Taxing matters While Bush has laid out a bold five-year, $460 billion tax relief plan, he has made little, if any, mention during the campaign of where he stands regarding the current ban on Internet sales taxes or of possibly overturning the landmark 1992 use-tax case Quill v. North Dakota, which makes it unlawful for a state to collect local sales tax on goods sold to residents by companies that do not have a physical presence, or nexus, in that state.

GOP members of the Advisory Commission on Electronic Commerce (ACEC), however, were critical to the “business caucus’s” recommendation of an extension of the current moratorium on Internet sales taxes for five years beyond its scheduled October 2001 expiration. Following the recommendation, the House in May voted on H.R.3709, which would extend the moratorium through 2006; that bill is now in the Senate. (For more on H.R.3709, see p. 86.) The commission and the original moratorium were created as part of the Internet Tax Freedom Act, approved by the Clinton administration in 1998.

For his part, Gore hasn’t commented on the issue one way or another since the recommendation. But earlier, Gore had spoken out in favor of keeping Internet sales taxes out of international e-commerce exchanges. And in a recent posting on the Q&A section of his official Website, Gore said that internationally, he wants to make cyberspace “a permanent `duty-free zone,’ so that U.S. companies can sell digital goods, around the world, via the Internet, without duties.”

Does anyone care about postal? While versions of the Postal Modernization Act (H.R. 22), sponsored by Rep. John McHugh (R-NY), have been kicked around the House postal subcommittee for more than four years now, it has yet to come anywhere close to the president’s pen. And though subcommittee members, congressmen, mailers, and U.S. Postal Service management have all tried to rewrite the bill during the 106th Congress so that it would appeal to all mailers, H.R.22 isn’t expected to make it to the House floor this year.

But even if a new postal reform bill is introduced and somehow makes its way to the House or Senate floor next year or in 2002, postal affairs are still not a campaign issue for the presidential candidates.

“When it comes to postal, the presidential candidates are lucky if they know where to stick the stamp,” says Gene Del Polito, president of the Arlington, VA-based industry group Association for Postal Commerce (also known as PostCom). As for party lines, “Republicans have a history of favoring the privatization of the Postal Service, while Democrats are more concerned with [postal] employee-related issues,” he says. “But both sides have to realize that without postal union support, they won’t be able to privatize the USPS.”

But that’s not to say that Gore and Bush – or their party platforms – don’t have views on at least some key postal- and catalog-related issues. “The Democrats have been more hot on privacy than the Republicans have been, so that would mildly concern me,” says Marcus Smith, editor of the Rockland, MD-based Postal World newsletter. Smith is concerned about the effect that Gore or a Democratic-led Congress could have on the Postal Service’s National Change of Address (NCOA) system. Through the late 1980s and the early ’90s, Smith notes, before the Republicans took control of Congress in 1994, House Democrats routinely scrutinized the new-movers database, alleging misuse by direct marketers and the USPS itself. NCOA, which catalogers can use to update mailing addresses, has been suspected of being used as a potential prospecting database. But no specific wrongdoings by mailers were ever found, and no action has been taken.

As for other matters concerning the Postal Service, rather than worry about which candidate will be better for the future of the USPS and its ability to serve catalogers while keeping rates down, PostCom’s Del Polito says the best thing mailers can do is try to educate whichever candidate gets elected. “A lot of people in our industry don’t view postal affairs as being central to their business, even though postal hits as much as 40% of their budget,” he says. “Catalogers need to do a better job educating their local congressmen. That’s a start.”

JEANNE MILLER, president of $18 million-plus Canton, OH-based children’s products cataloger Kids Stuff, plans to vote for Gov. Bush for president, “because the Republican Party is better for business overall, regardless of how individual politicians vote on individual issues.” Calling herself a “die-hard Republican,” Miller notes that her politics “aren’t influenced by the fact that I’m a direct marketer.”

As far as the presidential election goes, “personal issues are of far greater concern to me than anything that would affect my business,” says WENDY LAZAR, president of Northvale, NJ-based Glendale, a cataloger of parade equipment and uniform accessories. Although greater military spending, which would be more likely under Bush, would boost her company’s sales, Lazar supports Gore.

LILLIAN VERNON, president/CEO of Rye, NY-based general merchandise cataloger Lillian Vernon Corp., is a longtime Democratic Party contributor: “We’ve had eight incredible years of prosperity and the strongest economy since the end of World War II,” she says. “It would be silly to change administrations, given the economic track record of the past eight years. Gore, who I personally feel is a good, decent man, will continue this prosperity if he’s elected.”

KEVIN PLANK, president/founder of Baltimore-based athletic apparel manufacturer/cataloger Under Armour, says he will vote for Bush because of the Republican candidate’s proposed tax cuts. He says Bush’s tax plan proposes giving dollars back to the individual businesses; Plank says his company could set up foundations for community programs with the money.

Unsolicited e-mail has few friends on Capitol Hill. The U.S. House of Representatives voted on July 18 to make spam illegal. By a nearly unanimous vote – 427 to 1 – it passed the Unsolicited Commercial Electronic Mail Act, which prohibits the transmission of e-mail without a valid return e-mail address. The bill, H.R.3113, was sponsored by Rep. Heather Wilson (R-NM) and has been received in the Senate.

The House bill gives the Federal Trade Commission jurisdiction to track down spammers who break the law. While the bill would still allow direct marketers to send unsolicited e-mail, it would punish those who fail to offer an opt-out. Under the bill, the intentional use of fraudulent return addresses or routing information, including domain names, headers, and date and time stamps, would fetch the offenders a misdemeanor criminal offense.

While the vote is clearly a victory for anti-spam advocates, the future of the bill remains in the hands of the Senate. A similar bill, S.759, was introduced by Sen. Frank Murkowski (R-AK) in March 1999 but so far has made little progress in the Senate. S.759, which has yet to be scheduled for a hearing, seeks to regulate the transmission of unsolicited commercial electronic mail on the Internet.

The White House e-mail scandal behind him, Vice President Al Gore has yet to take an official position on H.R.3113. Ditto for Gov. George W. Bush.

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