Mobile operators not liable for forced shutdown

Neither mobile operators nor users are entitled to legal recourse when service providers are forced to shut down or disrupt services by authorities in the markets they operate in, according to lawyers.

The scenario played out in the recent protests in Egypt against now-ousted President Hosni Mubarak. Mobile network operators in the country were ordered by the government to shut down all their network services on Jan. 28, according to the Wall Street Journal.

Two foreign-owned telcos, Vodafone of the United Kingdom and France Telecom, also claimed the authorities forcibly used their text messaging networks to send out pro-government and army-endorsed SMSes to their citizen subscribers, a separate report by the Journal stated. Vodafone said the Egyptian government utilized the emergency powers provisions of the Telecoms Act to send out the messages.

Rajesh Sreenivasan, head of technology, media and telecoms practice at Rajah & Tann Singapore, told ZDNet Asia in a phone interview that telcos are able to operate in a particular jurisdiction because they are issued a license by the government. Because of that, they will have to comply with the terms of that license; if the telco chooses not to comply, it could face "the wrath of regulation breach", he pointed out.

The same exclusion of operator liability via a license clause can also extend to the sending of pro-government text-messages to citizen subscribers, added Sreenivasan. When a government invokes emergency powers, it covers a broad spectrum of what they can do, from shutting down places to imposing curfews; hence, it is a "non-issue" for telcos to comply with the authorities' requests, he explained.

That same power, he said, is used to issue tsunami warnings, for example, because SMS is the easiest way to get the message across.

Bryan Tan, director of Keystone Law, held a similar view. "Under normal circumstances, the government would have covered themselves with the ability to order the shutdown of services for national interests.

"This would be covered by legislation or under the licenses granted to the mobile network operators," he said in an e-mail.

No need for operators to claim damages
Rajah & Tann's Sreenivasan also pointed out that in the case of Egypt, it would be "unnecessary" for a telco to claim for damages as losses have curbed due to the restoration of most services. Revenue from text messages, he added, is not as high as voice and data.

A statement from Vodafone indicated that the operator's services for voice and data were restored on Jan. 29 and Feb. 3, respectively.

At press time however, there were no updates on the restoration of text messaging services, even though the end to the hostilities came into sight on Friday, when the country's leader decided to end his 30-year reign.

If there were no clauses in the telco's license and the emergency powers are not wide enough to cover the activities the government carries out, there is ground for telcos to claim that they were obligated to carry out actions that caused them to suffer losses, Sreenivasan added.

Mobile users can't sue
Similarly, it is common for telcos to have a general exclusion of liability in the event of a government request to suspend their services, according to Sreenivasan.

Keystone Law's Tan noted that the network operators would themselves be covered by the service contract in the event of a shutdown due to government orders. "As the [telcos] really don't have a choice or discretion, mobile subscribers may have little recourse."

There is typically a provision in the service contract that if an operator cannot fulfill their service agreement because of a government order or a force majeure, natural disasters such as floods for example, they would not be held liable, Tan said.

Asked about managing customer relations in the event of an authority-backed service shutdown, Ivan Lim, deputy director of corporate communications and investor relations at M1, said in an e-mail statement that the telco will focus on minimizing subscriber anxiety by keeping their customers notified of the latest developments.

"Should the situation arise where the authority informs of the shutdown of network operations for the sake of national interests and security, we will ensure that our customers are consistently and adequately provided with up-to-date information on the [situation, and] supported with a readied business continuity plan," he said.