ISP issues
This guide is based on UK law. It was last updated in
May 2005.
Overview
ISPs play
a central role in the development of e-commerce and use of the
internet. Presently, the majority of people use an
ISP
to access the internet. For some time
ISP
s have been
arguing that they should be treated as 'common carriers', i.e. that
they should not be held liable for the content which merely passes
through their systems. As we shall see from this guide, the law is
moving towards granting
ISP
s this protection, subject
to certain obligations which will need to be satisfied.
This guide is intended to provide an overview of some of the
issues which face
ISP
s, V
ISP
s (Virtual
ISP
s) and web hosts in respect of their day to day
business. For ease of reference this guide will only refer to
'
ISP
s', although the same issues will apply to all
three. The guide will look at issues relating to connectivity, an
ISP
's relationship with its customers, third party
content, spam and data protection. Where there are other related
guides, you will find links to them within the text.
Connectivity
The main business of an
ISP
is to provide its
customers with a connection to the internet. So far as the customer
is concerned, he or she wants to be able to dial into the
ISP
and get connected without getting an engaged tone.
They also want a fast service and will not necessarily recognise
that the speed with which they can download information will be
governed by their own connection and equipment.
No one can control all of the interconnections between the
various networks, and any network failure may be outside the
control of the
ISP
. An
ISP
needs to make
sure that in its terms and conditions it makes it clear that it
does not give any guarantee that the service it provides will be
uninterrupted or error-free. Where the services are being provided
to consumers free of charge or for only a relatively small fee,
then such a clause will probably suffice.
However, when an
ISP
is hosting a commercial web
site and is being paid to do so, its customers will often expect
some form of service level agreement. Typically this will be
expressed as being the percentage of time which the server on which
the web site is hosted will be available for access via the
internet.
When considering a service level agreement, it is particularly
important to bear in mind two things. First, that allowance should
be made for any planned downtime for maintenance of the server
which should be excluded from the calculation of the time during
which the server is unavailable. Second, it is not possible for
anyone to guarantee a 100% connection success rate. However,
depending on the period over which the availability is to be
calculated, the percentage will most likely be in the range of
98%-99.9%. It is also necessary to consider what "teeth" (if any)
the service level agreement is to have. An effective service level
agreement will usually contain a provision for a rebate of part of
the fees paid to the
ISP
and the right to terminate
the agreement if the service levels are not achieved.
Another big issue for
ISP
s is that of bandwidth. At
the moment bandwidth is very expensive. It is important that in its
terms and conditions an
ISP
limits the amount of
bandwidth that its customers can use at any one time. Where an
ISP
is providing a free service, it will want to be
able to restrict the availability of bandwidth for any particular
customer. Where a customer is paying an
ISP
to host
its web site, it is essential that the
ISP
clearly
sets out in its agreement how much bandwidth will be available for
that customer and reserves the right to charge for any additional
bandwidth which is used over and above that provided for in the
agreement.
Dealing with customers
Most
ISP
s will have two distinct categories of
customers, namely consumer and business customers. In many
respects, the issues which arise in relation to each category are
the same, although it should be borne in mind that consumers have
additional layers of protection under English law, Scots law and
European legislation. See our guide on Dealing with Consumers.
The basis of the relationship for doing business with a customer
is contractual. It is important that the customer is made aware of
the provisions of the relevant terms and conditions before the
ISP
begins providing its services. If no terms are
agreed with a customer, then it may be possible to imply certain
terms into the agreement. However, it is much better for all
concerned for there to be certainty as to the terms upon which the
services are to be provided.
A typical
ISP
will need to ensure that it has clear
terms and conditions for one or more of the following services:
- Dial-up accounts for consumers (this will often be a free
service including the provision of e-mail services and free web
hosting);
- Dial-up accounts for businesses;
- Leased line services for businesses; and/or
- Web hosting services for businesses.
An
ISP
's terms and conditions need to be clear,
need to deal with all the necessary issues and be properly
incorporated into any agreement that it enters into with its
customers. For further information with regard to incorporation of
contractual terms see our guide, Online
Contract Formation.
In addition to provisions dealing with bandwidth and
availability, you will also need to ensure that you have clear
terms limiting your liability and also incorporating an authorised
use policy. The purpose of the authorised use policy is to ensure
that, so far as possible, all of the obligations to ensure that a
site is lawful and complies with all necessary regulations are
placed on the owner of the site. The authorised use policy will set
out the basis upon which an
ISP
is willing to provide
a service and will be used to protect the
ISP
against
liability for third party material and for any loss of data. The
authorised use policy will impose certain obligations on users, for
example, to ensure that they have obtained all necessary third
party consents and licences for the material which they include on
their web site (see our guide on Branding
and Intellectual Property) and to ensure that all the material
on their site is lawful. With regard to the difficulties which an
ISP
may be faced with regard to unlawful material, see
our guide on Defamation.
An
ISP
may wish to include terms relating to the
e-mail accounts and, in particular, what such accounts can be used
for and whether the
ISP
may remove emails stored on a
server from time to time in order to free up space on that
server.
As the world of the internet is moving so quickly, it is
sensible for an
ISP
to include a provision in its
terms and conditions allowing the
ISP
to amend its
terms and conditions from time to time. However, a mechanism will
need to be included so that any such amendments are clearly bought
to the attention of the customer and are properly incorporated into
the agreement with the
ISP
before taking effect.
Liability for third party content
ISP
s need to ensure that they do not incur
liability for any of the material which they host on their servers.
There have been a number of cases over the years both in the UK and
in the US where third parties have sought to make an
ISP
liable for material which has been hosted on its
server. The position, broadly speaking, is that an
ISP
should not perform any editorial function. If an
ISP
monitors and removes unlawful material from its sites on its own
initiative, then it will run the risk of being seen as a publisher
of any material which remains on its servers.
In order to protect itself, an
ISP
must remove any
unlawful material from its servers as soon as it has been advised
of its existence. In this respect, an
ISP
must do two
things:
First it must have a clear contractual term, which has been
brought to the attention of its customer giving the
ISP
the right to remove material without incurring any
liability for loss of data or loss of profit etc. The right to
remove material should not be limited solely to unlawful material,
as on occasions it may be difficult to determine whether material
is lawful or unlawful. There may be situations where the material
is not necessarily unlawful but is certainly distasteful and
something which the
ISP
wishes to distance itself
from. The reason that it is important that such a term is included
is to ensure that the
ISP
is not put in the unenviable
position of either facing a claim for damages for breach of
contract or prosecution and/or a claim for damages for hosting
unlawful or defamatory material.
Secondly, the
ISP
must also make sure that it has
in place proper procedures to ensure that if a complaint is
received it is dealt with immediately. This is a lesson that Demon
Internet Limited learnt to its cost in relation to an action
brought by Dr. Laurence Godfrey. Demon Internet failed to deal
promptly with a complaint that it had received from Dr. Godfrey.
The material in question remained on the relevant newsgroup hosted
by Demon Internet for a period of 10 days after the complaint had
been received. Demon Internet was liable for the 10 day period
during which the newsgroup posting remained on its servers. The
parties in that case agreed an out of Court settlement. Whilst the
damages element was not huge, Demon Internet Limited reportedly
ended up paying Dr Godfrey's costs which were in the region of
£250,000.
For further information with regard to unlawful material, see
our Guide on
ISPs' Liability for Third
Party Content and also our guide on Defamation.
Spam
Spam is unsolicited commercial e-mail and has been the subject
of debate for a number of years. In the UK, we are seeing our first
spamming legislation coming through in the Consumer Protection
(Conclusion of a Contract by Means of Distance Communication)
Regulations 2000. The Regulations will provide that anyone
receiving junk mail will be able to tell the person who sent it to
them that they do not wish to receive such mail in the future. A
central register will be created whereby people will be able to opt
out of receiving junk mail. It will be unlawful for anyone to send
junk mail to anyone who has requested that you do not send junk
mail to them or whose name appears on the central register.
The EU Directive on certain legal aspects of electronic commerce
in the internal market also deals with spam. The EU Directive
tackles the problem in a different way. Anyone sending commercial
e-mail will be required to include within the e-mail header a
statement that the email consists of an advertisement. The EU
Directive also imposes obligations upon businesses in respect of
the content which must be included within such communications.
Data Protection
Data Protection legislation is a particularly important issue
for an
ISP
. As an
ISP
will inevitably be
dealing with personal data, it is essential that it has properly
notified the Data Protection Commissioner under the Data Protection
Act 1998, and that it trains its staff to ensure that personal
information is kept confidential at all times. For further
information, you should refer to our
Data Protection guide.
Any questions? Please contact struan.robertson@out-law.com
/ 0141 249 5422 or one of our other
contacts.
