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Contents
- Agenda
- List
of attendees
- Minutes
Introduction
from chair, Peter Walker, Oftel.
Peter welcomed
speakers and delegates to the 9th meeting of the OIF. Peter introduced
the morning's topic of discussion - 'ISPs' Terms and Conditions'.
Terms and conditions
make up the sharp end of the issue of 'customer service standards'
(and codes of practice) as mentioned in the Communications White
Paper. Peter explained that Maeve Gallagher and Chris Rowsell would
say a little more about this later on in the morning.
Terms and conditions
and quality of service were also highlighted as key issues in Oftel's
2000/01 Effective Competition Review of Dial-up Internet Access.
Peter said that Oftel was currently consulting on it findings -
the deadline for comments was 30 October 2001. Attendees were invited
to take a hard copy of report. [These are currently available from
Lucy Rhodes]
Peter stated
that the meeting would be held under Chatham House rules. A note
of the meeting would be available on the web site.
Oftel's
role - Maeve Gallagher and Chris Rowsell, Oftel.
Maeve explained
that Oftel's Consumer Representation Section (CRS) receives complaints
from consumers about various aspects of ISPs' services including
their contracts with consumers. Although Oftel has no power to get
involved in consumer contracts as such, if the contract terms are
unfair, it will try to remedy the situation with the ISP. Oftel
has powers under the Unfair Contract Terms Act [UCTA] 1977. Oftel
has received very few complaints of this nature but will continue
to look into cases when they arise.
Questions
Do Oftel's
powers under UCTA refer to consumer contracts, or do they include
commercial contracts too?
- UCTA refers
to service providers contracts with consumers - not contracts
for wholesale services.
Does Oftel
work with the Office of Fair Trading on unfair contract term issues?
- Oftel and
the OFT have concurrent powers under the UCTA. In most cases,
the OFT will refer to Oftel issues associated with telcos and
ISPs. There will always be borderline issues which could fall
under either Oftel or the OFT (for example domain name services)
- in these cases the organisations look to each other for advice.
Chris reminded
the Forum that the Communications White Paper called on industry
to develop codes of practice covering the relationship between themselves
and consumers. It was hoped that these codes would be put in place
before legislation to show that self-regulation was a preferred
and workable option.
Codes of practice
are closely linked to terms and conditions as a means of ensuring
that consumers have clearly explained to them their rights and obligations.
These terms undoubtedly have legal connotations, however it is important
that they are written in a consumer-friendly manner.
Oftel is currently
raising awareness of the need to establish the sort of codes and
standards outlined in the White Paper.
ISP
Terms and Conditions - A Nominet UK Perspective. Eleanor Bradley,
Customer Support Manager at Nominet UK Click
here for presentation.
Eleanor described
Nominet UK's not-for-profit status and outlined the body's main
functions as the central registry for domain names under .uk:
- To maintain
the integrity of the database for .uk
- Perform transactions
in a fair and efficient manner
- Provide information
to the public ("Whois" service)
- Provide a
dispute resolution service
More than 90%
of consumers register their domain name through a member of Nominet.
97% of Nominet's membership (it does not have 'shareholders') are
ISPs.
There is a three
way relationship between Nominet UK (the registry), ISPs (the domain
name sellers/agents) and registrants (the consumers/buyers of domain
names). This results in three separate contractual relationships.
Nominet UK relies on the ISP (domain name seller) to ensure its
terms and conditions are upheld with the consumer.
Disputes arise
between consumers and ISPs when, for example, a consumer wanst to
change their hosting service provider but the ISP believes they
owe outstanding payments. Terms and conditions are essential to
help solve disputes such as this. Increasingly, ISPs are drafting
effective terms and conditions.
Nominet UK understands
that ISPs' terms must be in plain English, not a complex legal language.
Terms must be properly incorporated - not on the back of a receipt
after a contract has been agreed. Terms must 'empower the consumer'
and service providers must be aware of changes in law and practice.
ISPs should
be aware of other issues affecting their terms and conditions, such
as data protection laws, consumer protection legislation, libel
and intellectual property rights.
Promoting
Good Practice in Domain Name Registration, Fay Howard, Manager of
INCOP.
Click here for presentation.
Nominet UK is
the third largest domain name registry in the world and has registered
over 3 million domain names. In response to the extent of Nominet's
task, Nominet UK's Policy Advisory Board took forward initial discussions
to establish an Internet Code of Practice (INCOP) for domain name
registration. Nominet UK is currently seed-funding the project.
The code will help improve quality of service and credibility of
the industry, whilst limiting possible regulatory intervention from
government.
In particular,
the code will help improve the efficiency of Nominet's service.
Nominet UK's customer support desk receives over 500 calls a day
from consumers. This indicates that consumer expectations far exceed
reality. More clarity down the line (i.e. from the ISPs selling
domain names) would help avoid this situation and would mean fewer
dissatisfied consumers complaining to Nominet.
INCOP will be
independent of Nominet UK and will operate as an accreditation body.
The code will
ensure that ISPs' advertising is not misleading. It will also require
that ISPs provide sufficient information about their business -
many web-based companies have no means of contact other than a mailbox
number. INCOP believes that these types of company should in fact
have a registered address and VAT number.
In addition,
ISPs will be required to explain Nominet's role to its customers.
Consumers ultimately receive a certificate from Nominet UK stating
ownership of the domain name. At present, consumers are worried
when they receive this certificate because it states that they are
bound by Nominet UK's terms and conditions - and they have no knowledge
of who Nominet UK is!
The code will
require ISPs to work within agreed time scales for tag changes.
Tag changes require the cooperation of the tag holder - who will
be losing a customer to another service provider. It is important
that the intellectual property of the domain name is not mixed up
with the intellectual property of the web design. Clear terms and
conditions and time scales should avoid the delays currently associated
with these issues.
The code of
practice will also require data protection standards beyond the
minimum requirements established by law. This will help stop ISPs
checking what domain names consumers might want to register by looking
at recent 'WHOIS' inquiries. The code would help foster greater
integrity among ISPs and ensure that WHOIS data is only used for
the correct purpose.
Draft code content
is now published and the official consultation period is open (to
16 November 2001). INCOP is currently investigating options on implementation,
funding and sanctions for noncompliance.
Fay invited
attendees to visit INCOP's web site - www.incop.org.uk
- and urged ISPs to complete the online questionnaire as part of
the code's consultation process.
The
AOL View. Phil Whall, Legal Counsel, AOL UK. Click
here for presentation.
Phil
introduced AOL's legal team as being at the sharp end of the interface
between AOL and the consumer. ISPs' terms and conditions represent
a huge range of services. AOL is a large ISP with millions of subscribers.
It also hosts a lot of third party content. Phil suggested it was
worth noting the size of ISPs like AOL and the extent of their role,
when considering the obligations placed on them.
All
AOL terms and conditions are drafted with a background of consumer
protection and other law. There is no reason why general legal concepts
cannot be explained in plain English.
Terms
and conditions form the backbone of the relationship between the
ISP and consumer. AOL's combinations of terms and conditions/community
guidelines let users know what is and is not acceptable behaviour,
for example, the type of material that can be posted.
Current
legal issues faced by ISPs:
- Are
the terms incorporated? Has the consumer agreed to them as part
of the contract? ISPs need to get their consumers to read the
member agreement and explicitly accept or reject the contract
- the more evidence an ISP can give that the consumer willfully
agreed to the terms, the better incorporated the terms are. It
is not necessary for consumers to print out the contract - in
the off-line world, consumers are not given a copy of their terms
and conditions when buying something in a shop, so why should
this happen on the Internet?
- Distance
selling regulations require a cooling-off period for distance
sales (where there is no face-to-face communication). Some ISPs
believe these regulations apply to them, however AOL disagrees:
it would be ill-conceived if a consumer was able to use AOL's
service for 7 days and then decide to pull out. In any case, AOL
lets its consumers cancel within up to 30 days. ISP online shops
are a different case - the consumer has to wait for the product
to arrive and has time to repent!
- Data processing
- ISPs can use consumers' personal data for a number of legal
requirements and also if the consumer has given their freely informed
consent. Terms and conditions should make clear what uses will
be made of consumers' data and give them the opportunity to opt-out
of any data sharing practices. AOL providesinformation to its
in consumers up front in the terms and make it easy for consumers
to change their minds.
- Limitation
of liability clauses. A failure of ISP services could result in
potentiallly huge losses for the consumer (e.g. lost emails, inabilty
to access services). Consumers can make two types of contractual
complaint - claims for either direct losses or indirect/consequential
losses. It is important that ISPs decide what their responsibility
and legal position is and incorporate this in their terms to avoid
confusion and offer transparency in dealing with complaints. Niche
ISPs need to be able to restrict/limit their liability in certain
areas. ISPs also need to consider tortious claims - such as defamation
(e.g. Godfrey v Demon). This has ramifications for ISPs who provide
a large amount of content. It is difficult for ISPs to decide
whether to take down content (reasonable care versus freedom of
speech) and how to manage risks - this is where community guidelines
(like those used by AOL) are extremely useful.
- E-commerce
directive - AOL's initial view is that it includes lots of undefined
terms. However, it will limit ISPs' liability for unknown activity/information
and where it is merely acting as a pipe for that data.
Questions
Even if a
service provider is merely acting as a 'pipe', don't they still
need to deal with liability issues?
- If an ISP
is made aware of illegal content, it will need to decide whether
to hide the content and give the owner fair warning that it is
not acceptable. If it does not receive an adequate response from
the owner, the ISP could then take it off its service.
What obligations
would AOL have if junk e-mail was sent by a non-AOL user, not over
AOL's network but about a web site hosted by AOL?
- AOL would
refer to its community guidelines.
Open
discussion
Is there
a need for a different code of practice for every service provided
by ISPs?
- ISPs do provide
very different services, for example domain name registration,
e-mail, e-commerce and content. There are many specialist ISPs.
Certain standards apply to all ISPs - codes of practice generally
have a lot in common with each other, regardless of the specific
area they intend to help regulate. All codes of practice should
require similar minimum standards.
- Codes of
practice should not just be about legal obligations but good practice
and community guidelines too. The big ISPs are almost certain
to have well-incorporated terms and conditions. It is the smaller
ISPs who may fail on this account, having much smaller resources
and lacking legal advic.. Incop is a good example of a Code that
brings all sizes of ISPs together under a single standard. The
function of an accreditation body such as Incop is not just to
police service providers but also to provide then with advice
and information.
How can we
encourage small ISPs to take up codes of practice?
- Oftel is
currently raising awareness of the need to establish the sort
of codes and standards outlined in the White Paper, although it
will be impossible to force every ISP to adopt these standards.
However, Ofcom may be given powers to recognise certain codes.
Ofcom may be 2 years away but it is not too early for industry
to start. This will affect parliamentary counsel drafting of the
Bill.
- ISPA is currently
updating its code of practice - its members include a number of
SMEs
Are residential
and business consumers caught by the same terms?
- ISPs' terms
need to be flexible and need to reflect the differences in bargaining
power held by consumers and businesses.
- One ISP said
that they defined residential and business consumers upfront in
their consumer contracts. This enables consumers to define their
status and understand which specific terms apply to them.
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