In today’s digital world, connectivity is productivity – and the internet is a utility much like electricity and water.
According to the Federal Communications Commission, 80 percent of Americans without access to reliable, affordable high-speed internet live in rural areas. Access to high-speed internet is no longer a luxury – it is necessary to support many industries, as well as to enable communications for schools, healthcare centers, and more.
To address this need, some municipalities across the country have invested in municipal broadband networks or regional broadband authorities.
As HB 1242, Authority of localities to provide broadband service makes its way through the 2020 General Assembly, the Virginia Risk Sharing Association (VRSA) is focused on the potential liability exposures local governments should consider should they consider providing this service.
Building a network or becoming an internet service provider is an operational risk.
Losses from operations often arise from people or a failure in processes, systems or controls. Contracts play a major role in the operations of local government. The greatest source of liability problems with contracts arise not only from breach of the terms, but from agreed contractual provisions that impose responsibilities.
It is critical to understand all these contract provisions. The local government’s attorney should review the contract between the local government and the company or companies leasing the network. Contracts should not extend or assume liability on the local government from the service provider as the local government cannot guarantee the availability of service, service offerings or reliability of the service by the service provider.
Internet Service Providers (ISP) can be proactive at the outset and try to avoid liability through their customer documents. Again, the local government’s attorney should review these documents to ensure protections are in place for the local government.
Liability for the activities of an internet service provider customers or users.
These liability discussions center on intellectual property infringements, such as copyright and trademark, fraud and defamation. ISP liability is generally predicated upon the knowledge of a user’s or customer’s activities.
If the ISP is unaware of its customer’s behaviors, most courts are reluctant to hold ISPs liable for their customer’s behavior. However, once the ISP becomes aware of a customer’s activity, or should have become aware of the customer’s activities, courts are more likely to hold the ISP liable for its their actions.
The ISP may be held liable for copyright infringement if it knowingly hosted copyrighted material and received a direct financial benefit. ISPs should establish policies and procedures to remain only a distributor of information rather than a publisher. In general, it is not possible for an ISP to monitor all the activities of its customers or users.
However, for those ISPs that have greater participation and offer more detailed services, the likelihood of an ISP being found responsible increases as their knowledge and participation increases.
VRSA will continue to monitor this as an emerging issue and provide information to members as it becomes available.