Both cases have been brought by the Australian Communications Authority against small New South Wales-based Internet Service Providers for not joining the TIO. The cases are considered to be the first muscle-flex for the TIO, membership of which is mandatory for carriers and ISPs, who face fines of up to $10 million for not joining.
But is that membership of a scheme or company? And when ISPs sign-up, are they joining an ombudsman-operated scheme or a company called Telecommunications Industry Ombudsman Limited?
It may sound like a definition debate, but these questions are pivotal to separate cases involving Albury Local Internet Pty Ltd, which has a customer base of under 5000, and Viper Communications Pty Ltd, which has about 1000 customers. The answers may also unveil significant legal issues involving the watchdog's legitimacy.
Director of Albury Local Internet, Ross Wheeler, said the distinction between the TIO being a scheme and a company is -not pedantic".
-I am happy to join a customer protection scheme, but the TIOL is a company and we have no say in it, no appeal to frivolous or vexatious claims," Wheeler told ZDNet Australia.
-Part of the membership application says that they will charge us what they like in fees and there's no avenue of appeal. Under the Corporations Law I as a director cannot agree to such terms and conditions. If I suddenly got an enormous fee I would be out of business."
Wheeler's argument hinges on legislation in section 128 (3) of the Telecommunications Consumer Protection and Service Standards Act, which says ISPs are required to join the scheme, as operated by the TIOL. Wheeler says the Act implies that the watchdog scheme and TIOL are two separate entities.
However, on TIO membership application forms, it states that in accordance with the legislation ISPs -are required to become members of the Telecommunications Industry Ombudsman Limited (TIO) (ACN 057 634 787)."
Wheeler previously amended the membership documentation, crossing out the word -Limited" where it appeared after Telecommunications Industry Ombudsman and replacing it with the word -Scheme". The application was rejected.
Albury Local Internet's case had its initial hearing yesterday with Justice Moore, via telephone conference to Wheelers's Albury-based office. Listening to the public forum via speakerphone, was Viper Communications MD Mark Russell whose initial hearing ran last month. Also listening was consultant Adam Todd.
Both ISP operators are representing themselves in their cases, but both have called upon the advice of Todd who, despite a lack of formal legal training is a veteran of several court battles and an outspoken member of a number of industry groups.
Todd told ZDNet that he and Russell communicated over Internet Relay Chat with Wheeler, during yesterday's phone hearing, passing notes as a McKenzie Friend might.
-The statement (on the membership application forms) is obviously misleading because the Act says you don't have to join TIOL, and if, according to the argument of the ACA, the scheme and the TIOL are the same thing, then (Wheeler's) amended application form should have been accepted," Todd said.
He also added that if the TIO was a government-run body it would be protected by the Judiciary Act, but as a company the watchdog is exposed to legal action. Depending on the outcome of these cases, he warned there could be future litigation, but next time directed at the watchdog itself.
Both cases have been adjourned to May 12.
The Australian Communications Authority declined to comment for this story.
