textfiles/bbs/jaycol93.oct

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







                       BBS'ing & THE LAW!

                               by

                            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; jaygaines@u2u.lonestar.org;
  DataWarp BBS - Houston (713-355-6107, or his own BBS AMERICA - Dallas
  (214)680-3406 ]