Archive for January, 2009
Thursday, January 29th, 2009
The Australian Newspaper is reporting that participants in the Government’s controversial ISP filtering trials will commencing in batches, instead of a universal commencement as originally thought.
Of the 16 ISPs that are taking part in the trial, the Australian is reporting that the batches of ISPs will have different start and finish dates for their 6 week trials, which are to either be (a) the black list managed by the Australian Communications and Media Authority (ACMA); or (b) the clean feed option.
Tests of the ISP filtering are to be conducted by Melbourne based Enex TestLab.
Even before the trials have commenced numerous public campaigns against the filtering have emerged, with most experts questioning the effectiveness of ISP filtering, in light of the fact that most material of concern is transmitted through Peer to Peer networks.
Tuesday, January 27th, 2009
The Australian Newspaper is reporting that Australia’s National Australia Bank (NAB) could lose millions of dollars from the Satyam corporate fraud scandal.
It is reported that as part of its international off shoring program designed to save costs, NAB made significant investments into training, transition costs and redundancy.
The Satyam corporate fraud has rocked India and with admissions of exaggerating assets and profitability on the company’s balance sheets.
It may well turn out that NAB’s disastrous foray into off shoring, will actually cost it more than if they had of kept critical IT support and staff in Australia. Qantas is also reported to have been exposed to Satyam via its USD$135 million in contracts.
This case serves as a good example of what can go wrong with off shoring, and what off shoring legal agreements need to accommodate, in this rapidly developing area of IT Law.
Some things that can be included in off shoring agreements to assist customers are:
Performance guarantees – such as security deposits, to assist the transition of services to another provider with reduced disruption; and
Local placement of critical infrastructure in Australia, with some maintenance being provided off shore.
Legal agreements may not provide absolute protection from corporate fraud or failure, but they can go some way to minimising the distruption and loss to business.
Friday, January 23rd, 2009
The Australian Communications and Media Authority (‘ACMA’) after a public consultation process has amended the Mobile Phone Jammer Prohibition on 21 January 2009, which now lifts one of the greatest regulatory impediments to allowing in flight mobile telephone use on aircraft.
The amendment was by way of an exemption allowing for the operation of a device if:
a. the device is designed to facilitate a cellular mobile telephone service onboard an aircraft operating within another frequency; and
b. the device is operated for that purpose.
This is a huge step forward, but don’t expect in flight mobile telephone use anytime soon, as the ACMA must first establish radio communications licensing arrangements to facilitate this.
This comes hot on the heels of in flight wireless internet trials in Europe. Watch this space for more Telecommunications Law updates and information.
Thursday, January 22nd, 2009
In news to hand, the Kentucky Court of Appeal in a 2 to 1 judgment last night overturned the forfeiture order made by the Court at first instance in the long running 141 Domain Names Case in the State of Kentucky.
It is interesting to note that the majority only examined made two primary findings (apart from standing), (a) that domain names were not gambling devices withing the definition of the legislation; and (b) the forfeiture powers of the Court were limited to situations where there is a criminal conviction, and the legislation did not contemplate forfeiture powers in the absence of a criminal conviction for breaching KRS 528 (the section of the anti-gambling statute).
In our last post we raised doubt over whether domain names could be construed as gambling devices within the definition of Kentucky statute, the Court agreed with our interpretation and said:
“…it stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a “machine or any mechanical or other device…designed and manufactured primarily for use in connection with gambling.” We are thus convinced that the trial court clearly erred in concluding that the domain names can be construed to be gambling devices subject to forfeiture under KRS 528.100.”
“If domain names cannot be considered gambling devices, Chapter 528 simply does not give the circuit court jurisdiction over them“.
The dissenting judge took the view that it was best not to look solely at the domains but also the computer systems that were used, and when unified, formed one component of the gambling device. As a consequence the domain names fell within the legislative definition.
In a twist, the State of Kentucky has filed a further appeal against this latest judgment by the Kentucky Court of Appeals. Initial Court documents don’t make it clear what the grounds of the appeal are.
In the meantime, watch this space in one of the most interesting and important domain law cases!
Monday, January 19th, 2009
Telecommunications companies have been the biggest offenders for contacting people on the Do Not Call Register, according to the Australian Communications and Media Authority (ACMA).
The Do Not Call Register was introduced on 31 May 2007 to allow individuals to stop receiving a wide range of unsolicited telemarketing calls. ACMA is responsible for overseeing the register’s operation and for investigating breaches of the Do Not Call Register Act.
In the first year of the register’s operation, telecommunications companies were responsible for 55 per cent of complaints received by ACMA. The complaints have resulted from unwanted calls promoting phone plans and other related services.
The ACMA have signalled a new approach, with ACMA Chairman Chris Chapman stating “Businesses have had ample time to adjust to the new laws and by now should have robust compliance measures in place,”.
We think that this new approach will result in more investigations and potential prosecutions, fines or enforceable undertakings. It is even more reason for business to increase vigilance when planning marketing campaigns in particular.
There are services available to allow call lists to be ‘washed’ against the Do Not Call Register to assist with statutory compliance.
*During 2007–08, there were 28,804 complaints received.
*Of these, 23,336 involved potential breaches of the Do Not Call Register Act.
*Over the past 12 months, ACMA has issued four infringement notices to telecommunications companies. This includes a penalty of close to $150,000 issued to Dodo Australia.
*ACMA has accepted enforceable undertakings from Dodo, as well as Astron Communications and People Telecom. Formal warnings have also been issued to Global Telelinks, Ezycall and m8 Telecom.
*ACMA estimates that 5 per cent of the businesses involved in complaints are responsible for approximately 70 per cent of the total complaints received. ACMA’s formal investigations are focusing on these businesses.
Monday, January 19th, 2009
In a decision that should send a warning to all Australian ISPs and Telcos, Optus Networks Pty Ltd (‘Optus’) has been fined $110,000 for breaching the Spam Act 2003.
The penalties were the result of two infringement notices issued by the Australian Communications and Media Authority (ACMA) after Optus allegedly sent electronic messages without accurate sender identification.
The infringement notices were in relation to 20,000 commercial electronic messages sent by Optus to the carrier’s mobile phones users, to promote its OptusZoo entertainment service. The messages were sent with a sender identification of ‘966’ (these numbers spell out ‘Zoo’ on a phone keypad).
ACMA claims that Optus assumed that recipients of the messages would make the connection between ‘966’ and ‘Zoo’.
As we all know, 966 can represent a number of different words on a key pad, for example Zon or Yon.
Spam Act 2003
The Spam Act 2003 regulates unsolicited commercial electronic messaging in Australia. Commercial electronic messages include emails, SMS messages and MMS messages.
The Act sets outs that commercial electronic messages must involve direct or inferred consent, identify the sender and give the recipient the ability to unsubscribe.
The Spam Act provides a range of enforcement options, including formal warnings, enforceable undertakings, infringement notices and Federal Court proceedings. The legislation sets out penalties of up to $1.1 million a day for repeat corporate offenders.
We think that this will not be the last of the fines in light of a chain of recent investigations in the ISP Telco market, and comes hot on the heels of an enforceable undertaking given by Oxygen8 Communications last month.
It is still surprising to see that many clients still come to us with marketing campaigns for review, which in some way fall foul of the Spam Act – of even more surprise is that simple Spam Act compliance requirements, such as functional unsubscribe facilities, were not included in proposed email campaigns.
Friday, January 16th, 2009
As one of the most important domain law cases of recent times, the Commonwealth of Kentucky v 141 Internet Domain Names 08-CI-1409 case has raised concerns across not only the domainer community, but the broader business world as well.
For those of you who aren’t familiar with this case, it is a judgment of the Commonwealth of Kentucky – Franklin Circuit Court.
The State of Kentucky, USA undertook investigations into online gaming websites accessible to residents of Kentucky to determine if they breached Kentucky law prohibiting gambling. Kentucky made an application to the Court to seize 141 domain names that were used to facilitate residents of the state gambling online; more particularly a state law that allows the state to seek forfeiture of “any gambling device or gambling record possessed or used in violation” of the state anti gambling laws. The investigation also claimed Kentucky bank accounts and credit cards issued out of Kentucky were used in the online gaming.
Kentucky sought on an ex parte (without the defendants having an opportunity to respond or be present before the court at the time) basis (and was granted a seizure order). This case was to review the seizure order granted by the Court in first instance.
Various organizations, including the Internet Commerce Association (ICA) sought leave to be heard by the Court, in opposition to the State of Kentucky.
In the context of our blog post we have identified only the primary issues for consideration by the Court, which is what the case turns on.
Does the Court have subject matter jurisdiction over a civil forfeiture action involving internet domain names ?
The Defendants argued that the Court did not have jurisdiction, and that the statute was only applicable to seizures arising from criminal convictions, and was not intended to apply to civil seizures such as this. Therefore, the Court did not have jurisdiction to grant a civil seizure (and forfeiture) order in reliance on the seizure laws (Chapter 528).
The Court disagreed with this position and found that Chapter 528 was broad and extended to give the Court jurisdiction grant civil seizures and forfeiture.
Does the Court have in rem jurisdiction over the Defendants 141 domain names ?
(a) Are the Defendants 141 Domain Names property ?
The Defendants argued that domain names are not property but rather rights in a contract.
The Court disagreed and found that a bundle of rights (e.g. right to manage, possess and control) to something of value gave domain names the character of property, and therefore allowed the Court to order forfeiture of the ‘property’.
(b) Do the Defendants 141 Domain Names have a presence in Kentucky ?
The Defendants argued that there were no Registrars or other domain name authorities in the state, therefore the domain names were not situated in the state.
The Court cited a number of authorities and stated that all that was required were minimum contacts in the state, and that because the domains were present at every step of the gaming process, they were present in the state, and subject to the law of Kentucky.
(c) Are domain names by reason of their illegal or unlawful use gambling devices?
The Defendants argued that domain names don’t fit the statutory definition of a ‘gambling device’ as they are not a tangible device, which is designed and manufactured.
The Court did not agree and viewed domain names as virtual keys for entering and creating virtual casinos from the desktop in the state.
As a consequence, the seizure and forfeiture order was upheld.
On the face of it, any state could potentially treat a domain name as property located within a state and capable of seizure and forfeiture. This in itself is a great concern, and has the potential to set a dangerous precedent.
It is our view that the Court erred in a number of its findings, for example on a reading of Chapter 528 the law is clear, it is intended that a gambling device is a physical piece of hardware or machinery. A domain name can hardly fall into this category. The Court also made an interesting comment on this point when it said “…..the Court is not persuaded. Like most endeavors, a person who adheres to the literal text of the law, but violates its spirit cannot succeed”. This statement gives us some insight into why the Court deemed a domain name to be a gambling device.
An appeal was filed and heard by an Appeals Court, it is expected that the judgment will be handed down by the Appeals Court in late January 2009. Don’t forget to check out our blog for an update.