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Jay's Column October Issue DFW & Houston Editions Computer Currents

                     BBS'ing & THE LAW!
                          Jay Gaines
   In the beginning there was CyberSpace.  Next:  CyberLAW!
   Ok, I'm getting cutesy.  It comes from staring at BBS

screens day and night. I didn't even know what cyberspace was until I called our Chief Honcho-ette, CC Publisher Susan Plonka. As she so succinctly explained, "Cyberspace is the equivalent of Brigadoon." Which is a brilliant definition because the subject of our discussion this month is equally as elusive. Gather 'round, Children, because it's time to discuss BBS LAW.

   To begin with, the days of the free-wheeling, no-holds-

barred, maverick-mentality BBSes are fading away. BBSes and online services are growing up; and, as they wobble through the maturation process, everyone who operates–or calls–an online facility needs to become more aware of the legal responsibilities and liabilities associated with this growth industry.

   There are very few BBS laws, per se.  For the most part,

BBSes, Sysops, Callers, and online facilities are protected by The First Amendment to the United States Constitution: Congress shall make no law . . . abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

   An online service or BBS, by its very nature, is considered

a member of the press in that it is a telecommunications service distributing electronically published material and providing a vehicle for the discussion of viewpoints ("speech"). Therefore, a BBS enjoys the same rights and protection as a magazine, newspaper, cable operation, radio station, and television facility. However, just as a BBS enjoys those rights and protection, it also enjoys certain legal responsibilities and liabilities.

   Furthermore, The First Amendment does not provide carte

blanche permission to ignore any federal, state or local laws not subject to The First Amendment. I'm referring to laws governing privacy, the dissemination of information, copyrights, sexually explicit materials, crime, defamation, and taxes.

   Let's discuss taxes, for example.  A BBS or modem cannot be

taxed. No matter what rumors you've heard, that ain't gonna happen. The city, state, or federal government cannot tax your modem. The telephone company might increase our rates from residential to commercial–and they probably will–but no one can put a tax on our modem. However, any BBS or online service that charges a fee for system access, increased access, or increased privileges is required by Texas law to pay or collect a sales tax.

   In the State of Texas, this has been pretty well ignored by

both the Comptroller's office and BBSes–up to now! According to a spokesperson for the State Comptroller's Office, "Since BBS operators are providing a service whereby data, information, and software can be conveyed and received electronically, these services are taxable telecommunication services. You are required to collect tax on the charge for these services as outlined in Rule 3.344, Telecommunication Services."

   Let me state it again:  If you operate a BBS in Texas and

you charge a membership fee, you are required to collect and/or pay a sales tax on that fee!

   Ah, but you claim your BBS is not a business but a hobby

and all fees go toward the maintenance and upgrading of the system. If you operate a BBS in Texas and you charge a membership fee, you are required to collect and/or pay a sales tax on that fee.

   As one sysop said to me this past month, "I don't charge

membership fees." However, I pointed out that he does take donations and he encourages users to "Adopt a door." Contrary to rumor and popular opinion, neither of these practices exempts the sysop's liability of paying a state sales tax. According to the Comptroller's office, "If money changes hands and within that exchange a user's privilege or access is increased, a sysop must pay a sales tax on the donation or contribution."

   Consequently, if a user "adopts a door" (pays the sysop the

door registration fee), and the sysop grants that user additional time, access, etc., the sysop is required by law to pay a sales tax on the transaction.

   And be forewarned.  The State of Texas will get its money.

Failure to collect and pay the sales tax on membership fees can result in an audit going back four (4) years and a sysop can be liable for not only interest (10%) but a penalty (10-12%) on the unpaid taxes as well.

   Another warning.  Remember last month when we discussed how

Big Brother relies on "tips" from the general public? If you're charging a membership fee but not collecting or paying the sales tax, a disgruntled user or ex-user merely has to call the Comptroller's office and report your neglect. When that happens, someone is going to check it out. If the tip is verified, expect a visit from an auditor with the Comptroller's office.

   Although a sysop is required to pay a sales tax on

membership fees, donations, or contributions, a sales tax need not be charged for BBS advertising. If you post a commercial advertisement on your system and receive financial consideration for that ad, a sales tax is not required.

   For more information, or to obtain a Texas Tax ID and

arrange for collections and payment schedule, call any branch office of the State Comptroller. Or call Austin at 1-800-368- 5505.

   As stated earlier, there are very few BBS laws per se.  But

there are laws that apply to both BBS callers and sysops. For information on this aspect of BBSing, I had no choice–as you have no choice–but to turn to the only game in town: SYSLAW by Lance Rose and Jonathan Wallace, published by PC Information Group, Inc.

   In the more than two years I've written this column, I have

never touted or reviewed either a book or software program. Nothing's changed. This is not a book review. However, you can consider it a tout if you like but if you're into modeming, either as a user or sysop, or both, you need SYSLAW!

   This 336-page book, written by two highly-respected

attorneys with a combined 20+ years of experience in the telecommunications field, addresses every BBSing subject imaginable. It is the most comprehensive legal reference available for BBS sysops and callers.

   Why do you need SYSLAW?  Simply stated, the book will keep

you out of trouble.

   From the sysop's point of view, Rose and Wallace examine

the sysop's rights, responsibilities, and liabilities. They discuss the subjects of "Crime and the BBS," "The Caller Contract and Other Agreements," "Who Owns the Information on your BBS?", "Injurious Materials and Activities on your BBS," "Searches and Seizures," "Viruses and other Dangerous Code," and "Sexually Explicit Materials." Ten appendixes provide additional information on a variety of subjects relevant to the operation of a BBS.

   Space prohibits covering each of the above subjects.

However, a few warrant our attention. For example, did you know that every message on a BBS is in copyright? Yep. And the person who wrote the message owns the copyright.

   Did you know that "if a caller is injured due to activities

on your BBS, a legal claim might follow"? According to SYSLAW, "Such injuries might arise from one caller making repeated defamatory remarks about another without any action by[the sysop]." Or "[The sysop's] accidental public disclosure of a caller's private e-mail," or "the "BBS failing to deliver promised information to callers as contractually agreed."

   Did you know that if you charge a membership fee and then

cease operation, you are legally required to return the unused portion of that yearly fee to the users?

   How liable is the sysop in the case of libel of private

individuals by an online caller? How much control, if any, should be exercised by a sysop over public message areas? If a network forum frequently contains legally questionable materials, at what point does the local sysop become responsible? Read SYSLAW!

   Probably one of the hottest and most controversial areas of

BBSing concerns sexually explicit materials. SYSLAW addresses the problem and provides the criteria by which sysops of X-rated boards can stay out of trouble. According to the authors, as long as certain precautions are taken (outlined in the book), sysops can carry X-rated material without fear of any legal ramifications. However, they candidly suggest, "that pornography will be surfacing as a major BBS legal issue in the future."

   Already several red flags are waving.  The Federal

Communications Act and related FCC regulations provides the FCC with enough authority that if they wanted they could initiate action against X-rated BBS operations. However, the major concern for X-rated BBS'es in Texas rests in the power available to local governing bodies. Communities may still determine whether sexually oriented material is "normal" or "too extreme" and more than just a few Texas towns have begun to look quite closely at X-rated BBSes operating within their communities.

   How, then, does a sysop protect himself?  Very easily,

according to authors Rose and Wallace, if the proper procedures and safeguards are established. Procedures and safeguards include a contract between the caller and sysop. A sample contract is provided and can be re-worded to reflect the particular or specialized interests of any BBS. The sample is, perhaps, a little long and legalistic for my taste but it certainly leaves very little liability for the sysop and serves as an excellent guide in formulating your own contract or agreement.

   From a caller's point of view, what can you do and not do

on a BBS? SYSLAW, in simple lay-language, provides the answers. First, the authors point out that "callers have no First Amendment rights whatsoever against sysops of privately operated BBS's. None." As Lance Rose explains, "Only the U.S. government is required to recognize First Amendment rights, and only U.S. government censorship is illegal.

   Consequently, the sysop of a private BBS is within his

rights to either delete, alter, or censor your posting without fear of violating your "freedom of speech." That should alert you to something I pointed out several months ago: "E-mail is not private." The sysop is prohibited by law from revealing the contents of your e-mail to anyone but no law prevents him from reading e-mail.

   Further, the sysop can establish any rules he so desires,

which means as a visitor to any BBS or online service, you have no alternatives except to follow the sysop's rules. You do, however, have certain rights in relation to other callers. As Lance Rose points out: "Laws apply just as fully to online conduct that may cause injuries as to any physical conduct. . . if you injure somebody severely enough through your actions on a BBS, they can sue you in court for it."

   The most relevant example of "injury" deals with

"defamation." Without going into great detail let me suggest that you be very careful what you say about someone in public message areas. What you say can come back to haunt you in court.

   Space limitations prevent a more detailed discussion of

what you can and can't do as a sysop or caller. I strongly urge you to obtain a copy of SYSLAW. You may order direct from the publisher, PC INFORMATION GROUP, at (507)452-2824. Or, you may call BBS AMERICA and order direct from the publisher with your credit card. It's worth the investment. SYSLAW by Lance Rose and Jonathan Wallace will keep you out of trouble.

                        QUICK BYTES
   MCI now offers a new program which provides modem users

with low long distance rates for telephone calls made to BBSes both in and out of state. The program, called MCI PC CONNECT, requires a monthly fee of $4.50 (For Texas In-State Calls, $6.00 per month). The fee enables BBSers to call other BBSes at a day rate of $.22 per minute, Monday through Friday from 8am - 5pm. Evening rates are considerably lower: $.10 per minute Monday - Friday, 5pm - 8am (24hours Saturday & Sunday).

   The MCI rate, at first glance, is higher than the PC

PURSUIT program. However, MCI PC CONNECT, unlike PC PURSUIT, is not restrictive in the number of cities you can access. In fact, you can access any city in any state, including Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands. Also, unlike PC PURSUIT, no deposit or pay-in-advance program is in effect. Your charges are reflected in your regular monthly telephone bill.

   For more details, or to sign up for the service, call MCI

at 1-800-444-3333 or 1-800-333-2511.

[ Jay Gaines may be reached via FIDO: 124/6506;;

DataWarp BBS - Houston (713-355-6107, or his own BBS AMERICA - Dallas
(214)680-3406 ]
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