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ICOP Introduction


Background | What it will accomplish | Anticipated Benefits to Consumers | Anticipated Benefits to Business | Anticipated Costs to Industry | Why | Overseas experience | Key areas | Proposed Structure of the Internet Code of Practice | Providing feedback

This working paper has been prepared by InternetNZ to encourage discussion of the Code of Practice for the self-regulation of Internet Service Providers (ISP's) in New Zealand.

InternetNZ is a non-profit organisation fostering coordinated and cooperative development of the Internet in New Zealand. Our mission is to promote and protect the Internet, ensuring that it operates in an open and uncapturable environment.

The working paper seeks to discuss and obtain feedback on the various policy issues which are raised in an Internet Code of Practice. The objective is to ensure that the Code will reflect commercial and legal realities of the Internet industry in New Zealand, and be flexible enough to adapt to the rapidly changing Information and Communication Technology (ICT) environment.

The working paper will outline the issues that an Internet Code of Practice should cover. It will specify possible aims and objectives, and how they could be met through possible provisions in the Code. While discussing the particular provisions of the New Zealand Code, the paper will include extracts from other codes of practice.

Preparing an Internet Code of Practice involves considering a range of complex legal, ethical, structural and technical issues. The working paper is therefore intended to promote discussion and elicit responses from the Internet industry, government, and consumers. These responses will be vital to creating a living code that will encourage good standards of practice from ISP' s, and allow them to serve consumers well and help protect the integrity of Internet use in New Zealand.

For the purposes of this paper:

  • an ISP is defined as a person or organisation, who connects a user/users to the Internet, provides content (electronic commerce or other) over the Internet, or provides access to the Internet.
  • a user or consumer is defined as a person or organisation which has a connection to the Internet, and which may optionally provide content either locally or hosted by an ISP.

The following introductory sections address:

  • the background of industry self-regulation of the Internet;
  • what a Code intends to accomplish;
  • the anticipated benefits to consumers and the industry;
  • the potential costs faced by the industry;
  • why the current legal requirements are inadequate;
  • why a Code is needed;
  • overseas experience with a range of regulatory mechanisms;
  • the key areas proposed to be included in the Code and how it will be structured.
  • This is followed by the draft content of the Code itself for public consideration and comment.
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InternetNZ created an Internet Code of Practice in June 1999. This Code gained thirty signatories, but lacked the support of some of the larger ISP' s. The code was not fully implemented and a complaints procedure was not developed.

InternetNZ still considers that a code of practice is a key milestone for successful self-regulation, and is committed to creating a comprehensive Code of Practice. The Minister for Information Technology supports the creation of a Code of Practice*. (*Communicated through various letters and correspondence with InternetNZ).

Consumer use of the Internet raises a number of issues in regards to the security and safety of their communications and computer equipment. The level of technical knowledge of information and communications technology varies greatly among consumers, and many are not aware of the risks arising from the internet, or do not know how to cope with them. Bad experiences arising from poor use of the Internet will discourage people from using it. The uncertainty inexperienced users may feel also undermines their confidence in the use of the Internet, particularly for family and commercial use. The Code will aim to help educate consumers in how to use the Internet safely, and to increase their trust and confidence both in their own abilities and their interactions with ISP' s.

The role of ISP' s in the response to harmful or illegal content on the Internet is complicated and uncertain. The technical complexity and range of services provided by ISP' s also complicates the responsibility and ability to act against illegal use of the services. One of the objectives of the Code is to outline the responsibility and ability of ISP' s to act to prevent or stop illegal use of the Internet, and to allow appropriate methods of complaint for both consumers and ISP' s.

Government departments have often suggested a need for organised industry action or regulation in relation to certain issues arising from the Internet. The e-Government report on Trust and Security on the Internet* (*Trust and Security on the Internet - 26 November 2004) recommends that action needs to be taken by major ISP' s and InternetNZ to provide assistance and information for Internet users whose computer systems are compromised by hackers or viruses. The report notes that regulation or legislation may be necessary to address the problem. It also recommends a larger involvement by Government in Internet governance through working with InternetNZ.

An Anti-Spam Act is currently being drafted under the auspices of the Ministry of Economic Development (MED). This Act will regulate the sending of unsolicited electronic messages. The Minister of Communications has requested that a code of practice be developed to support the Act. InternetNZ, the Telecommunications Carriers Forum (TCF) and the Direct Marketing Association (DMA) have created a working party to prepare a code of practice. The intention in developing the Internet Code of Practice is that the anti-spam code can be included as a chapter of the Internet Code that can be signed up to either on its own, or as part of the whole Code.

The anti-spam code of practice is not discussed in this working paper, and is part of a different development process. Information on the development of the anti-spam code can be found on the InternetNZ website at

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What the Code will Accomplish - Objectives and Scope of the Working Paper

The costs and requirements of regulation can discourage innovation and new entrants to the industry. A voluntary Internet Code of Practice will set clear standards of commercial behaviour without imposing rigid limits. It also allows consumers to choose to use ISP' s that are not covered by the Internet Code of Practice. This will be valuable for more technically and commercially sophisticated consumers who are confident in assessing the services of non-member ISP' s.

The section for ISP' s will contain a list of mandatory minimum standards for each of the areas covered, but will also contain best practice standards that are recommended but not mandatory. When considering the provisions discussed in this paper, it is important to take into account whether they should be mandatory, or simply recommended best practice. This should reflect the importance of the provisions, and the possible difficulty that ISP' s may have meeting the requirements.

The Internet Code of Practice will also include appendices giving examples of how the requirements of the Code can be implemented. This will include possible wording for terms and conditions, and an example of an acceptable use policy.

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Anticipated Benefits to Consumers

Consumer protection is a key feature of the Internet Code of Practice. Risks from Internet use include computer viruses, computer hijacking, identity theft, phishing, and allowing young and/or vulnerable people to access adult or illegal content. The Code will require ISP signatories to provide their customers with access to appropriate information on how to protect themselves and their computers. This will include information on appropriate software; as well as services that the ISP may be willing to provide to assist their customers.

By informing consumers of the risks involved with using the Internet and the methods to avoid those risks, consumers will gain more confidence. This will allow them to make full use of Internet services while limiting the risk they are exposed to.

The Internet Code of Practice also specifies minimum terms and conditions and standards for the services provided by ISP' s. This will give consumers increased certainty about their relationship with their ISP' s, and ensure that important provisions are included in contracts with customers.

Complaints procedures will be an important part of the Internet Code of Practice, and will assist consumers by ensuring that there are appropriate methods of resolving disputes that they may have with ISP' s. Dispute resolution procedures will be between the ISP and the consumer in the first instance, but the Code will create an alternative disputes resolution process with a complaints panel to hear unresolved complaints.

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Anticipated Benefits to Industry

Consumer confidence and trust in the Internet is undermined by issues such as internet fraud and the safety of young users. The policies of the Internet Code of Practice are intended to provide means to increase consumer confidence and trust in ISP' s, and also to increase their safety and knowledge of the potential risks of the Internet. This will encourage their use of Internet services and aid the development and innovation of new services. If the Code is well publicised, consumers will know that the member ISP' s can be trusted to meet high standards of service.

ISP responsibility for areas of the internet such as unlawful content and spam is currently uncertain. The Internet Code of Practice is intended to give some certainty to their responsibilities, and to outline ways that they should act in relation to their customers and other ISP' s. This includes educating customers on the way that they can protect themselves.

There have been a number of calls from the New Zealand Government to provide some form of regulation of areas of the Internet. This follows the practice of a number of other nations as discussed below. Self-regulation allows the ISP' s to participate in the creation of an Internet Code of Practice that will meet necessary consumer protection requirements in an efficient manner that is appropriate to the practical operation of the Internet.

Following appropriate practices for acceptable use policies will allow ISP' s to work with their customers to prevent unacceptable behaviour, and allow them to take appropriate action where there are breaches of their acceptable use policies. Consistently high standards and effective enforcement of acceptable use policies will help ensure good Internet use practices in New Zealand in general.

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Anticipated Costs to Industry

The Internet Code of Practice is intended to meet its objectives with the minimum level of cost to ISP' s. While the requirements of the Code may impose costs, many of these practices in the Code are already followed, or are an existing legal requirement. Best practice standards are not mandatory, and this allows some ability for ISP' s to determine the level of compliance costs that they are willing to incur to achieve those best practices.

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Why Current Legal Requirements are Inadequate

There is currently very little legislation aimed specifically at the Internet, and generic competition and consumer protection law does not always apply well to information and communication technology industries. Specialised legislation is often required to suit the unique business and technological environment. The Telecommunications Act is an example of such special legislation. An Internet Code of Practice can include provisions that adapt more clearly apply the law to the Internet industry.

A wide range of New Zealand legislation applies to the Internet industry. The Code can highlight the law, while also including minimum and best practice standards that will, in places, provide higher benchmarks for industry conduct. There are also a number of areas that are not covered by legislation, such as assisting consumers to protect their computers from viruses and other threats on the Internet.

The Internet industry has a large asymmetry between the knowledge of consumers and that of ISP' s. In many other industries where this occurs (e.g. the health system) there is heavy government regulation. This often depends on the risk of harm to consumers, and the level of possible harm. Improper use of the Internet poses a high level of serious risks for users, including fraud, damage to computer systems from viruses and computer hacking, and minors having access to offensive or adult material. Self-regulation can help address consumers' needs, and in particular help them to protect themselves and their computer equipment.

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Overseas Experience

The have been a range of approaches to regulation of the Internet in other nations. These have often focused on offensive and illegal content, and the approaches have included legislation, regulated codes, and non-regulated codes.

Malta has a statutorily required code of practice that covers both consumer protection and Internet content issues. Singapore also has a statutorily required code of practice, although it only addresses issues of content on the Internet.

In Australia the Internet Industry of Australia has established a Code of Practice for Internet Content. The code is voluntary, but it is created under the Broadcasting Services Act 1992. The Australian Broadcasting Authority also has the power to compel an ISP to comply with a code, and to create an industry standard if there is no code in place, or if a code is deficient.

Ireland has a non-regulated code of practice introduced by the Internet Service Providers Association of Ireland. Norway has also instituted a voluntary code of practice, although it is limited mainly to content on the Internet.

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Key Areas in the Internet Code of Practice

An executive body is planned to oversee the operation of the Code, including monitoring and reviewing its performance. The proposed membership of this body is to include representatives of InternetNZ, the Consumer' s Institute, and of the ISP industry.

The Working Paper proposes that the code will contain a section outlining the rights and obligations of consumers, and a separate section on the rights and obligations of ISP' s. There will be some replication of provisions in these two sections, as the rights of one group will often be reflected by obligations of the other.

The consumer focused section includes open, honest and understandable terms and conditions. There should also be clear and understandable communication from ISP' s, and consumers should be able to change service providers without unreasonable difficulty or complexity. They should also be provided with information on how to block adult content on the Internet, how to protect minors, and how to ensure the security of their computer equipment.

ISP' s will have obligations to the consumers as described above. There will also be a general requirement not to provide services that will be against the law. This will include hosting content that breaches laws relating to offensive material, privacy, copyright, and defamation. ISP' s must have the ability to prevent inappropriate use of their services in breach of the Internet Code of Practice or New Zealand law where necessary. Consumer information must also be collected and held in accordance with privacy considerations, and with appropriate security precautions.

To ensure the effectiveness of the Code of Practice, there must be effective complaints procedures in place. The working paper proposes that the first venue for complaints should be with the ISP. All ISP' s must have appropriate systems for dealing with and resolving complaints from customers. The Code will include a procedure for those complaints that cannot be resolved between the ISP and their customers. The content of this procedure is expected to include limited investigation of the circumstances of the dispute by secretariat staff of the executive body, and the formation of an ad hoc complaints authority to issue a written decision.

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Proposed Structure of the Internet Code of Practice

The Internet Code of Practice is intended to provide customers of ISP' s with clear information about their rights and obligations, and to give provide ISP' s with information about their rights and duties in relation to both customers and other ISP' s.

Because the Internet Code of Practice will contain complicated technical information, it is proposed that there be a simplified standalone section specifically for the rights and obligations of customers. A separate section will relate specifically to ISP' s. The provisions for the executive body overseeing the code and Complaint handling and dispute resolution will also be included in separate sections.

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Providing Feedback on the Internet Code of Practice Working Paper

Feedback and comments on any or all content of this paper are welcomed by InternetNZ. Input is preferred by email to: Stuart Meiklejohn

You are also able to provide comments in writing to:

PO Box 11-881

Fax: 04 495 2115

Once responses to this paper have been considered, a final draft Code will be circulated for further feedback. InternetNZ anticipates this occurring in March 2005.

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