Editorial: Weighing up the consequences

Editorial: Weighing up the consequences

One of the key industry concerns ARN touched on this week is parallel importing. It's an issue which affects the entire IT channel. As readers may see from Cellnet's Nokia settlement (see page 1 of ARN March 29 edition), even the big guys can get burnt by stepping outside regular channels and buying from non-authorised global suppliers.

Although pointing out it's perfectly legal to source product internationally, Cellnet managing director, Adam Davenport, was quick to admit dabbling with an unauthorised provider had caused the distributor harm. In its case, the problems came to the fore when several Nokia-branded handset batteries it had procured proved counterfeit.

Not only were the batteries a concern for reseller partners, but they resulted in a long-running legal dispute with Nokia. As a result of the newly struck settlement, Cellnet has promised not to source Nokia items from unauthorised channels in future. After that experience, I wouldn't either.

Technology vendor, Sun Microsystems, also told ARN it is making a concerted effort to stop grey marketing in its tracks (see the story on page 4). The company is considering legal action against two unnamed local resellers. This push comes off the back of successful court cases against UK dealers who imported its products from Israel. Resellers who stick to legitimate channels have often complained that parallel importing, while not necessarily illegal, has a massively negative effect on the channel. Those that bring in products more cheaply and without vendor authority can often sell items at prices that other above board players cannot match. This then forces market prices down, slicing margins and making it harder to bring in those extra couple of bucks. With the ever-decreasing price points we are seeing today, this kind of pressure is unnecessary, to say the least.

It can also negatively impact end-users, who wind up with a dodgy handset battery, or find out too late that the product they thought was legitimate doesn't have vendor warranty support.

On a different front, ISPs have reacted strongly to the latest Australian Labor Party proposal calling for them to block inappropriate traffic to subscribers (page 6). Many were adamant current laws were sufficient in monitoring the distribution of content over the Internet. We do have a code of conduct for ISPs on banned content, which is upheld by the Australian Communications and Media Authority. Several companies also provide control buttons or functions with their Internet services. A couple of ISPs also pointed out parents should be the ultimate content controller.

But there is a much larger issue at the heart of the matter. The biggest implication is that if ISPs are responsible for controlling the flow of traffic, they're also responsible for the consequences of any inappropriate content that reaches the family computer. And once the responsibility is on them, they are liable - legally.

We saw the same concern come up a couple of years ago in the debate on how far ISPs should go to help police investigate potential cases of cybercrime. This debate resulted in a code of conduct for ISPs on things like maintaining customer records for 12 months, while abiding by the Privacy Act.

ISPs are there to bring the Internet to their customers. Should they be responsible for what's coming down the pipes? I don't believe so. Let us know your thoughts.

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