Emails to be classed as goods

By MICHAEL FOREMAN

Residential internet users who suffer email delays, network outages or slow connection speeds will gain the right of redress against service providers under a proposed law change.

The Consumer Protection (Definition of Goods and Services) Bill, being considered by a select committee, will effectively extend the scope of the Consumer Guarantees Act to cover telecommunications and computer software.

The bill has been designed to clear up a legal anomaly caused by a 1998 court ruling in a case between the Electricity Supply Association and the Consumers' Institute which held that electricity network services were neither goods nor services.

If the bill passes into law this year it will class telecommunications signals as goods.

The distinction has alarmed internet service providers (ISPs) because it means telecommunications signals, which may include almost all electronic data, will be subject to consumer protection legislation.

"We think it's an excellent development," said Consumers' Institute chief David Russell.

"It's been a long time coming but now it is here we are very pleased.

"The Consumer Guarantees Act was supposed to cover all goods and services that were sold to residential consumers. We are delighted that it's being extended to include telecommunications and consumers will be given full protection under the law."

Mr Russell did not believe the legislation would lead to a rash of court cases.

"It's not a question of suing. It's about redress, like money back or remedies such as restoring service, but consequential losses can be claimed," he said.

"Undoubtedly there will often be debate about who is to blame. But if you are buying a service that is at fault due to a problem further down the line that is not your problem."

But InternetNZ vice-president Rick Shera said the bill would make ISPs responsible for network problems that were out of their control.

"We support the intention of the bill but the problem comes when connections fit into the goods classification," he said.

"If someone sends me an email and it doesn't get through because of a problem on an overseas network my ISP could be liable."

Mr Shera said that, in the case of lost or delayed emails, users would be able to seek compensation based on the value of the message.

"For example, if I am selling a painting, and an email offering me a price for that painting is held up, I might be able to sue for the difference if I sold that painting to another bidder at a lower price in the meantime," he said. "ISPs shouldn't be put in that position."