Caveats In Reselling DSL Bandwidth To Neighbors?

chrisleetn writes "I'm contemplating getting Slashdot (Speakeasy) 6Mbps broadband or something similar and offering wireless internet access to my neighborhood. Speakeasy even has a plan to allow this. What should I be aware of as far as legal/business/regulatory implications? I know I need to restrict obvious illegal stuff and probably p2p to be safe, but is the local cable modem company going to come after me for competing with them? Has anyone done this who can offer some insight?"

This Is Rather Simple

[Cylix]

This is one of those cases where some simple common sense comes into play.

Alright, so you not going to be an illicit reseller, but an authorized body capable of forming a legal binding agreements with your customers.

ISP's do this all the time... they simple resell bandwidth they have purchased from their providers.

Basically, write out what services you will provide and clearly define what you won't allow. It needs to be clearly written and agreed upon by your clients.

After that, you simply need to track ip addresses (assumming DHCP will be in iuse), keep mail logs (if you provide smtp/pop service) and generally ensure that you can track illicit activity back to the source if requested to do so by a court order.

It's simply a matter of accountability and this is something you can easily do given it is a service you can provide.

Anything else is just extra, but it would probably be a good idea to track bandwidth usage.

Re:This Is Rather Simple

[PhotoJim]

Read your agreement with your ISP. You may be precluded by contract from reselling the service. If you are, you risk being sued for damages by the provider, or having your service outright suspended. If this is the case, don't risk it... just don't do it. If your agreement allows it, then carry on.

No Way

[global_diffusion]

If you go through Speakeasy, they set it up so that the people you sell it to are their customers, and not yours. The deal is that the more you sell, the less you pay. It's a good deal.

Points to consider

[gregwbrooks]

The idea of selling access -- even if it's dirt cheap -- is a good idea and it doesn't make you a blood-sucking capitalist. What it *does* make you is someone who can avoid the "tragedy of the commons," issues that arise when you give away something that people value.

Charging lets you assign value to your service, and assigning value is a key way to keep customers in line while covering your nut.

In terms of the cable modem companies "coming after you," you need only worry about legal competition -- no franchise agreements come to mind that completely lock out all broadband competition. It's worth noting, however, that Verizon has backed legislation in Pennsylvania to prevent municipalities from setting up free broadband services -- a bad step in the direction of market control.

If you *are* going to charge, then you've got some additional costs to consider:

• Business licence, if necessary, or registration as a non-profit if you're pursuing it as such. One way or another, you don't want to get caught running a business in all but the tiniest towns without the right license, because city hall likes to extract its pound of flesh as much as the next guy.
• Insurance and incorporation -- because it's important, i.e., "Little Jimmy viewed Paris Hilton's tits on the DSL leech you sold me, and now I'm going to sue you for everything you've got!" For you, that probably means your house and your stuff UNLESS you're a.) incorporated (to separate your business assets from your personal ones); and b.) insured. (And yes, I know your TOS would limit your liability -- it doesn't matter. People don't have to win lawsuits to leech every penny you have... they just need to file them and force you to defend them.)
• Bulletproof TOS. No matter what you do, give yourself the ability to shut folks down at your sole discretion. Have an attorney who Knows About These Things review your TOS, even if it costs you a few bucks to do so.

Good luck!

RTFA, Idiot

[Anonymous Coward]

The FUCKING ARTICLE SUMMARY says SPEAKEASY ALLOWS THEIR CUSTOMERS TO SHARE THEIR CONNECTION.

The article isn't even about the cable modem company, its about DSL (the submitter was wondering if the Cable Co. would come after him for competing with them, which makes you and the grandparent twice the idiot)

Legal Issues

[Nate75Sanders]

- You're now earning income. You at least have to tack this onto your normal income tax to be legal. If you're making enough money, maybe you also have to get a business license. - If you do have to get a business license, you have to deal with zoning laws. If this is a small business being run out of your home, you can't meet with clients at your home, at least in some states. There's a good chance you don't care about either of those, as maybe you're not going to pay taxes or file for a business license, etc, but you asked, so it's something to consider

Re:Why would the cable modem company come after yo

[iocat]

This [speakeasy.net] should answer your questions. It's all good.

Accountability and risk

[didde]

I am doing this exact thing, except I'm in Sweden. I do not block things like P2P but I do use keyword based filtering through a proxy if the client requests this (usually if it's family computer where they want to keep the kids from visiting Goatse.cx, ;-)

Anyway, I'm no legal expert but I would think it'd help to keep the logs from Squid so you can account for who visited what and when. That way, you can always identify the person responsible if it ever comes to that.

I would not worry about your local ISP coming after you for stealing some of their potential customers as long as _your_ deal with _your_ ISP says that you can share your connection with others.

Oh, one more thing... You might want to looking into putting a contract together for your customers / friends who'll be using your line. You could basically ensure that _they_ are infact resposible for what they're doing on your xDSL.

Re:ianal but..

[AKnightCowboy]

as another poster said, is it really worth the trouble when it comes to billing?

Speakeasy handles the billing and credits your account, you just provide the wireless setup. People need to read about Speakeasy's WiFi Netshare Program [speakeasy.net] before assuming stuff.

Re:Is it really worth the trouble?

[ScrewMaster]

talk to your layer

Let's see ... would that be the transport layer or the protocol layer?

But yeah ... particularly here in the U.S. it would be an excellent idea to seek a good lawyer's advice. Just because you are offering something for free doesn't mean you aren't liable for something. It's pretty much guaranteed that there is a law on the books, somewhere, that makes anything a human being might want to do illegal. It's just a matter of someone deciding to go after you with it. Hell, even one of your erstwhile customers might get pissed off and sue you for something. Actually, I'd be inclined to exclude attorneys from my customer list ... they have no real barrier to filing a lawsuit, which can make them rather dangerous to do business with.

At a minimum, he will most certainly need some way to implement bandwidth caps. Otherwise I guarantee little Tommy next door will hog the whole proceedings downloading by Britney Spears' latest video, or all seven seasons of Stargate SG-1.

This endeavor will probably end up being more trouble than it is really worth, but if the guy gets a kick out of it ... more power to him. We need more neighbors like that.

Unlikely to be legal

[MichaelSmith]

At least here in Australia if you provide communication services which cross a property boundary then you have to be a licensed telecommunications carrier.

I believe that in NZ this is not a difficult thing to do (about as hard as applying for a passport) but the Australian Government is not fond of the idea of administring millions of telecommunication carriers, and has made the process much more difficult.

I think if you dig deeper in your juristiction you will find that similar rules apply. Remember all the regulations which apply to carriers: having to provide wiretap facilities, etc. Legally, this could be quite messy

Re:Why would the cable modem company come after yo

[Chess_the_cat]

Did you even read the submission?

Speakeasy even has a plan to allow this.

Forbidden in Spain

[diegocgteleline.es]

In Spain, sharing your broadband connection (via wireless or with a ethernet cable to your neightbourd) is forbidden by law.

In fact, some small villages had made a public wireless net, so everybody could use internet (we're talking of tiny villages with no access to broadband etc), and they were denounced by some stupid "teleccomunication comission"
The new gobernment told them that they shouldn't have denounced those villages since they were trying to spread internet's access but well...the point is: we have some law that forbids it :(

Re:Here's an idea

[Anonymous Coward]

You cant...first rule of running connections from building to building is dont use twisted pair. The voltage difference between two buildings can cause problems, which is why fibre is used instead (no interference and not suceptible to any of these voltage differences - or what i have experienced at one site in particular is ethershock). In Australia atleast its illegal to do so unless your an approved carrier/installer

http://duxcw.com/faq/network/outside.htm

Daveats

[pvera]

1. You don't have to worry about the cable company. The cable company will only get pissed if the local government tries to provide broadband, because it would be unfair competition.

2. Triple check that the AUP for your DSL allows you to share and resell the service. Then check again.

3. If you are reselling, you will probably have to charge for sales tax, check your local tax authority.

4. There are probably FCC rules about the equipment that you can use and the maximum power that it can irradiate. Of course, if you are using turnkey COTS equipment, the odds are that it is FCC legit.

5. Check your neighbors and see what is the interest in this kind of service. If there is too little interest then you are setting yourself for failure, since your location is fixed and there is only so far you can reach.

6. Write your own AUP and make sure the CYA provisions are in bold, plain english a second grader can understand. Then take the AUP to a lawyer to read and see if he can poke holes thru it.

7. Be prepared for the technical support burden, even if most of your customers are geeks.

I know I need to restrict obvious illegal stuff an

[fred911]

The minute you block anything, you are setting youself up. At that point you are no longer a carrier, you are a content provider.

Re:This Is Rather Simple

[stephanruby]

Read your agreement with your ISP. You may be precluded by contract from reselling the service. If you are, you risk being sued for damages by the provider, or having your service outright suspended. If this is the case, don't risk it... just don't do it. If your agreement allows it, then carry on.

The original poster already said "Speakeasy even has a plan to allow this." He didn't provide a link for it, but apparently they will do the billing for him [speakeasy.net] and surprisingly enough they will even allow him to set his own price [speakeasy.net]. It seems to be a really good move on the part of Speakeasy to do this.

Re:... but the upload sucks

[jonTu]

the parent post makes a very good point, let me add some firsthand experience. I've shared DSL with neighbors in my various apartments over the last couple years; here in NYC where high population density means a 10' patch cable or a single off-the-shelf access point is often all it takes to get your neighbor plugged in, there's no reason not to. After years of sharing DSL lines, I'm about to get a cable modem. The problem is that both my current neighbor and I are content creators of one sort or another, and thus need that upload bandwidth. Because DSL is asynchronous, the uploads DRAG for the uploader and the bandwith chokes for everyone else.

You might figure "hey, whatever, I have 800 up and X megs down, even if one user eats 400 up there's still plenty of bandwidth to go around." That's totally logical in terms of resource allocation, but DSL doesn't work that way: according to Verizon (who had to explain to me why my I wasn't getting my promised bandwidth) half your upload bandwidth is half your bandwidth period. That's why Bittorrent drags so badly on DSL unless you cap the upload with CarraFix or something of that nature. So far as I understand it, this is standard practice for the DSL industry.

So my advice to you is, if possible, share some other sort of connection, because DSL doesn't lend itself to this very well. If that's not possible, just be very clear with all your neighbors before asking them to chip in that this is primarily a down-only network and that upload-intensive activities like Bittorrent or freelance web development won't fly. You can compromise a bit by setting rules. At my last apartment with a shared DSL line, we all agreed that you had to take it easy on bandwidth durring the day so people could work, but that you could do whatever at night. That worked out OK. If you're feeling frisky no doubt you could configure a server or routing device to do this for you, but I lack that sort of expertise and initiative. Sharing broadband is a cool way to do something nice for your neighbors by letting people (including you) get fast web access on the cheap, but if you intend to furnish a connection for any sort of bandwidth-intensive activities, look away from DSL.

Re:Does sharing cableTV hold true for bandwidth?

[gerardrj]

Because the provider says it is. When the provider says you can't then it's illegal to share the bandwidth.

When I tell you to take money from my wallet, it's not stealing; without permission you go to jail.

Re:You need a captive portal!

[kagaku]

Or he might want to check out m0n0wall [m0n0.ch]. It not only has the aforementioned feature, but much more. Traffic shaping/prioritizing, wireless support, along with everything you'd expect a router to have, and more. Not only that, the entire operating system fits onto a 16mb compact flash card, runs off a CD using a floppy disk for settings, or simply runs off a standard hard drive. I'd highly recommend it.

I've been doing this for years...

[maksim2042]

A couple lessons learned:
The DSL connection is shared among 4 apartments, plus my own. Instead of sharing out the bill into monthly payments, I ask the neighbors to pay the entire bill in the round-robin fashion - i.e. they only have to do it once every 5 months.

I operate on an honor system, with a wide-open network. If I notice a new MAC address in the logs (ok, a script does it for me) for more then a week, the next time its user will be presented with a friendly page asking to contribute to the coop and an email address to communicate to me. If no email ensues for a week but the user keeps logging in, the MAC address gets shut off.

This arrangement reasonably handles visitors and temporary users, but restricts freeriding (I've only had to shut off a user once - and then he joined the co-op and now pays his bill on time)

Also, make sure you firewall your private network from the wireless network, and the wireless network from the outside world. People bring in virus-infested laptops onto my wireless net all the time; one NetSky infection was enough for me to go get a second firewall.

Finally, regarding 7am calls to fix the network: all network equipment sits on a UPS and is connected to a little gizmo I picked up on SmartHome.com that lets me turn things on and off from a touch-tone phone. Now if somebody complains of an outage (90% of the time - due to hung DSL modem or primary router - fixed by rebooting), I simply reboot the entire set with my phone and later ping-check it.

I use commodity off-the-shelf routers (Linksys) and access points (D-Link Range Extenders); they are reliable if you don't let them overheat. I usually keep at least 1 spare unit of each kind for a quick replacement (I got 10 D-Links at a fire-sale price, so I'm set for a long long time).

Result: I have a virtually no-headache setup. No moving parts (logs are checked remotely by a linux box), no expensive hardware. I get 4-5 incidents of downtime per year, tops - and most are fixed before I even get a phone call from a user.

I wish the idiots would shut up.

[faedle]

It's absolutely amazing how many people don't RTFA or research anything, making statements like "Check your AUP" and things like that. For those people, I say: he is talking about a specific ISP (Speakeasy) that specifically PERMITS sharing, and even has a program set up (NetShare) to handle billing and such for you. Under this particular program, Speakeasy handles all the billing for you, and even gives you an additional IP address to provide to your "customer".

To answer the question, here are some pointers from somebody who is actually doing Speakeasy NetShare.

You do not need to worry (from a layman's viewpoint, IANAL, so check with your family attorney if you are worried) about filtering access. In fact, if you read the fine print of Speakeasy's documentation, you are not really permitted to do so. I was told specifically by a Speakeasy rep NOT to do this, even though I had the ability to.

Since Speakeasy will provide you with an IP address specifically for that customer, it will be easy (should fit hit the shan) to segregate your traffic from theirs. Speakeasy will be billing them seperately, so they will have their address and contact information should the RIAA/MPAA/LE come around. From a legal perspective (again, IANAL), you are no different than your local phone company.. you are only providing a conduit, passively, between the ISP (Speakeasy) and that ISP's customers (your neighbor using NetShare).

Over here, I have three specific ways of getting access. You can be plugged in to my personal LAN (which, BTW, is hardline). You can be accessing a free and open node (which runs NoCat), which is highly filtered and proxied. Or, you can be on the WPAd side of the house, which is the resale network.

Don't hesitate to participate in NetShare. It's an awesome way of reducing your monthly bill AND helping your less tech-savvy neighbors to get off AOL. Both are very worthy causes.

Be very careful of blocking anything

[sdxxx]

If you are in the united states, you should be extremely careful not to put yourself in the position of judging the legality of what your neighbors are doing. I have operated several open Internet systems, and the lawyers have specifically instructed me not to filter stuff preemptively, becuase this would vastly increasy my liability for anything I did happen to let through.

It does seem to be okay to do things like rate-limit people, or traffic shape so as to prevent one person from DoSing another, and probably to block forged IP addresses (if your ISP doesn't do that already).

However, I think you're in for a world of pain with the RIAA if you assume responsibility for making sure your neighbors don't violate copyright. Sure, you might be able to block P2P traffic, but who knows what other things they'll go after people for in the future. Maybe your neighbor will put up a web page on how to de-copy-protect CDs, and the RIAA will decide this caused them $500,000,000 of damage. Do you really want to be responsible for that?

Do some google searches for "prodigy case". And definitely don't try to institute any kind of blocking without first consulting a lawyer.

Have them sign a contract

[upsidedown_duck]

so you are not liable for their crimes. There is no way for you to compose some magic AI that can detect illegal pornography, so all you can do is make sure everything is in writing with their signatures.

they might be able to harrass you legally

[davidwr]

Unless your reselling violated state, federal, or local law, or violated an exclusive franchise agreement another company had, you should be OK. In theory.

The only direct complaint your cable company might have is if you are laying wire in a way that interferes with their franchise agreement. For example, if you lay coax cable between you and your neighbors's house, particularly if it crosses a cable-company easement, it could be a problem.

If you are doing it wireless using unregulated spectrum, the only way they could shut you down is to get the city to go after you for violating domestic-business laws. This is particularly true if you advertise your business.

Another tack they might try is to get with the RIAA or MPAA and harrass you for copyright infringement every time your neighbors download a song illegally. After you get swamped with enough subpeonas, you may say "this isn't worth the hassle."

PS: Don't forget to comply with IRS rules on business and self-employment taxes.

Re:RTFA, Idiot

[Slipped_Disk]

Assuming the poster lives within the United States, there are no special legal requirements in most cases. Simply declare the income on your tax return, and expect to owe the government some money come April (just like you're SUPPOSED to do when you sell stuff on eBay, or hold a yard sale, etc.).

The caveat here is *you* are the business - which means if someone wants to sue "the provider", they would be suing YOU, and anything you own is fair game in said lawsuit.

There's limits to this

[davidwr]

The University of Texas at Dallas tried to ban WAPs in their non-dormitory housing. They caved when their lawyers told them the FCC would come down on THEM.

Basically, a contract that attempts to regulate what is the FCC's exclusive jurisdiction is probably unenforceable.

Here's what a greedy ISP CAN do:
If an wire-based ISP has a sweetheart deal with an apartment building and they want to lock out WAPs, they can jam those frequencies. It's deregulated and AFAIK there's nothing that can stop them as long as they keep the power level down.

Related Slashdot stories:
University Bans Wireless Access Points [slashdot.org] Sept. 09, 2004
UTD Lifts Ban On WiFi Equipment [slashdot.org] Sept. 18, 2004

DO restrict port 25 though

[davidwr]

If you are going to block any port, limit port 25 to your upstream ISP's mail server and maybe popular spam-protected third-party mail servers like Yahoo's. Make exceptions on a case-by-case basis.

The last thing you want is for one of your non-tech-savvy downsteam customers to get a virus, get you labeled a spammer, AND choke everyone's bandwidth.

Re:RTFA, Idiot - shush ye.. sssh.. calm down buddy

[920]

It is 100% free, he sets the price, Speakeasy bills the neighbors. Speakeasy gets more subscribers for the same bandwidth, the primary subscriber gets money off his bill. That's all there is to this. The person essentially becomes a PoP for the ISP at this point.

Math is your friend

[litewoheat]

To create a usable secure service is going to cost you at least $5k. Do the math. How long will it take at market access rates for you to make that back with the number of subscribers you think you'll get in the best case. After you do that you will change your mind in a heartbeat. If that doesn't scare you, wait until one of your customers sues you for something and you find out none of your various insurance policies cover it. Or if you're even hardened enough to get past that. Do a bit more math and figure out how many concurent users an aDSL line will handle. Refer to the result of your first math forey (see above) then if you are still not scared then you are stupid. In that case, by all means go for it!

Re:not OT, but sorta related

[Roofus]

You're cable company caps your upstream bandwidth so low not because of their cost per megabyte, but because of DOCSIS.

DOCSIS 1.0 and 1.1 define QAM modulation for your downstream, but only QPSK for your upstream. QPSK is much less sensitive to noise than 64/256 QAM is, but as a result, you get less bits/Hz. Not to mention the cable provider can allocate a hundred or more Mhz per node for downstream, but less than 54 MHz upstream. This is due to legacy reasons, most amplifiers only pass upstream up to 54 MHz.

DOCSIS 2.0 will change things, which should be rolled out in the next few year.

Roofus - Ex Comcast Engineer.

Re:Stay away from speakeasy

[Legion303]

Not to spam for speakeasy, but I had to counter Anon Coward with at least a semi-non-anon accounting of their service. I've had speakeasy for a couple of years now, and I'm very happy with their tech skills and customer service. In this area (Colorado), they apparently have to go through Covad for installations, and the only problem I've ever had was with the Covad people when Qwest kept not updating my new address in the vendor database. Covad refused to complete the circuit. Speakeasy's people went out of their way to help me get things resolved. Covad and Qwest's people suck.

it works here

[adeydas]

i am not sure about the US laws but down here in india, it works fine. all you have got to do is get a commercial licence for your business and buy the appropriate package from the provider stating clearly how many connections you have.

Re:RTFA, Idiot

[mp3phish]

Actually, holding a yard sale is not income. In order for the yardsale to become income it would imply you are selling some value added product or manufactured and sold a product. A yard sale is liquidating personal property (which you purchased at a higher price) which means there is a negative cashflow. You cannot be (income) taxed on negative cashflow, even if you have a billion dollars of revenue. So unless you are selling an antique which you bought for 50c and sold for 20$ you DEFINATELY are not required legally to report it on your income tax forms.

Re:Stay away from speakeasy

[phillymjs]

I'll counter this with my experience. I replaced my Comcast cable modem with Speakeasy DSL (via Covad) a few years ago, and it's been wonderful. I've only had two outages in all that time, and only one of those was long enough for me to get internet withdrawal symptoms. They even give me advance notice of maintenance-related outages via e-mail. The few times I've contacted customer service the reps were knowledgeable and helpful. And they police their network-- they test my mailserver every month or so to make sure it's not an open relay, and when I report suspicious activity in my logs from an IP they own, it's taken care of in less than 24 hours.

~Philly

Re:RTFA, Idiot

[m-stitts]

Depends on the goods. Personal property (Stuff you allready paid sales tax on) is usually exempt. It can also depend how often you're doing these types of yard sales (at wich point your city/state may look at it as a business). Some areas require a permit even for yard sales.