In the course of setting up my reseller business, I am thoroughly investigating the competition to understand their policies & see what I can do to better my business and address potential customer concerns.

My competition, who happens to be the area's "oldest and only all in-county internet service provider" (the founder was partly responsible for setting up today's online access, hence his head is a tad swollen) :D has the following "Website" policies:

=====QUOTE=====
"Websites

Website registration fee is $49.00. If you host your site with us for a minimum of 1
year, the registration fee will be waived. The charge for hosting a Domain/Website is
$300.00 per year. Charges start the day WEB files are placed on the site, and will be
prorated through the end of the 1st year. All renewals are billed in December for
January through December of the following year. Renewals are for a full year only.
There will be no credit if you quit or move your site before the end of the year.
Moving sites before files are posted will be charged a $49.00 service fee. Moving
sites after a complete setup with statservers before one year will be charged a
$149.00 service fee. To move a site we need written notice 30 days in advance from
the billing contact registered with Internic. Sites must be paid up to date before they
will be released."
=====END QUOTE=====

My question to you all:

I know these "service fees" are unethical (at least I think so... if you disagree, I welcome your opinion as to why). I know these policies are not the industry standard.

Granted it's legitimate to not get a credit if you move to a new host before your annual contract is up. But is it LEGAL to also charge a $149 "service fee" in penalty for the simple act of exercising a person's right to choice? As consumers, we have the right to end a contract, say for our webhosting -- but can a business legally assess a penalty for choosing to do business with someone else? Isn't this an anti-trust or unfair competition thing, or???????

What about the event (and this is very common) where a website is registered to the business; the administrative and billing contacts are the web designer; and the tech contact is this fruit-loop web host with the above policies? Note that last line... if the web designer and the web host are in cahoots with each other and decide that this business doesn't know what they're doing -- OR WORSE YET that they haven't paid this $149 service fee for moving -- what's to keep the host from holding out for $$? Is there any law here?

I have been all over the BBB and the FTC and the fed docs page and my state's consumer protection area -- all for naught -- So I ask you in the hopes that maybe someone out there has dealt with this... or heard about it... or maybe has a better understanding (even layperson's would be great) of the topic(s). Heck, if you have a problem with his policies, please post it -- I would like your opinion as maybe it will help me develop another tact to use with my customers.

Many thanks! :D
>Bailey<

if you agree to these policies when you sign up for the servive, you're bound to abide by them. at least that's what i believe. i'm not saying that it's right, but i do think that it's perfectly legal. if you don't like it, just don't sign up with it.

In my eyes this is a very interesting topic. One I think all consumers that sign up for any service should listen to.

There are a number of arguments that can come to the surface when talking about online agreements. One being, are they considered to be legal in the first place. In the Good old days a contract was signed with Paper and Ink, you could not deny signing that contract, after all your signature is on it. Online agreements are of course very different, all you have to do is simply "click" and away you go.

Second, the Internet is international. Does this online agreement become invalid when someone is signing up from China? Does the argument "I no speak English" Work in a court of law. Does the company provide translated copies of their contract?


Third, What stops someone from phoning up their credit card company and telling them they no longer authorize the company in question to bill there credit card. American Express for example is one of the easiest companies to call up and say "I didn't buy this, don't bill me".

Now lets say it's a perfect legal world on the Internet, and all documents we agree to be legal. In that case you and apply current legal cases to this. I'll try and make a valid example here.

-------

You're a very respected businessman, and you sign a contract with out reading it. Two weeks later your in court because the contact you signed says you need to pay $5000.00 to someone you have never met.

--------

Does this mean you don't have to pay it? Of course not, they have a signed contract in their hands. You can go ahead and tell the court that you didn't mean to sign it. And you would lose the case.

So in that light, if a user has the chance to read the hosting sites terms and conditions and does not. Which states that they need to pay service fees if they cancel early and that they cannot get a refund if they drop out of the contract. Then whose fault is it?

Yes it may not be ethical, but at first glance it appears legal. And rightly so in my opinion. Do we really want any government or government services stepping in and policing the Internet for these laws?

Now, on the topic of web hosting companies owning client domains. This even comes up in my own company. The big question is should hosting companies turn over domains to clients even if all contacts are under the company in question. Yes, of course. Do companies always turn them over, no.

One option people have is to report the problem to internic and get it investigated. If the site in question owns the trademark or even a copyright certificate to prove that the domain belongs to them, then all they need to do is pay a mere $2000.00 US to get it investigated :). This works for large or mid-sized companies, however it does not work for a single person. So, here is where the question comes up. What does one person do that just wants to run a personal website, and their host owns the domain and will not hand it over. Well unfortunate, not much can be done. The person in question can try and drag the companies name through the mud. But that does not work that well against large hosting companies, or even against small hosting companies if the person does not have a lot of Internet know-how.


To sum up this little blurb.

I strongly believe that hosting companies should be ethical, they are providing a service to the general public. And in doing so, should abide by the industry standards. Having large service charges hidden in the fine print is not right.

bailey,

It's a good question regarding domains. Here's how we do it.

If someone comes to akashik.net looking for hosting and domain registration we refer them to our partner site who we *know* will register their domain name under the customer's name. How? The guy who runs it is a client of mine and we have a good working relationship. This way should an issue such as this arise the admin contact is the client, so they have the say on where that domain goes - no question.

In regards to hidden fees and policies, we got out of that one easy *lol* Just didn't charge any. Anyone who charges a setup fee for hosting, or cancellation is just going for a few extra bucks. In my opinion it's all a part of the service - just as much as the pre-sale chatter we all do. I know one one webhosting company who charges support at $150 an hour!! They even state that clearly on their support page too which amazes me.

Your terms and conditions should be used as a place to clarify your position, not a hoarding ground for extra fees. With luck you'll never need to pull it out, and it's used by us as a last resort concerning clients who are obviously doing something they shouldn't.

**Might add we're yet to need to use this btw**

Ours is growing slowly, but not in regards to adding conditions, but rather fleshing out existing ones to cover different situations. I'd rather not have one at all, but the world doesn't work like that anymore, sad to say.

The section you highlighted of that TOS seems excessive, and more the product of a poor business model than anything else. People try to over complicate this business sometimes when a few simple rules of thr road suffice for most situations.

Greg Moore

First, thanks for the feedback. ;) Your thoughts are very similar to what I was thinking.

Of course any agreement that a customer enters into is binding just by the nature they agreed to it. I believe this ISP gets all his stuff in writing, or the designer gets the hosting services put through in written contract form ~ these two companies appear to be "tight." At any rate, there are signatures.

I already went through the BBBs website... anybody know of any consumer resources or business ethics policies/guidelines (voluntary) on the internet that address web hosting or internet services in general?

I really want my ducks in a row on this one. I doubt that people really read that closely, especially with how he has stuff laid out. And besides he has them all snowed into believing he is The Answer to Anything Internet, it woudl never occur to clients when such a fee structure would apply -- or why. How many times have we all looked at something and thought, "well that's not my case..."

Please keep the comments coming!!!
:D
>Bailey<

So long as they are stated up front and not hidden in any way, the policies are both legal and ethical. Some are just overpriced. Lots of hosts have terms that are ethical yet not fair to the consumer.

As far as the domaina name, contrary to what opthers have said, there is something that could be done. Internic's UDRP Uniform Dispute Resolution Policy should be able to handle it easily enough as the ownership of the domain is not in question. It may take a little while. though it would ultimately be resolved.

This scenario is a perfect example of why a domain owner should always be listed as either the administrative or billing contact, or both.

Originally posted by baileysemt123
Of course any agreement that a customer enters into is binding just by the nature they agreed to it.
Actually, that's not accurate. In fact most contracts and many of the more detailed terms of service statements typically include a clause stating that should any part of the agreement be found to be unenforceable, the rest of it still applies. Including something in a contract, even if both people agree to it, doesn't necessarily mean it's enforceable.


Specifically for the example you're talking about, and speaking only from my opinion, I don't see how their policies could be considered either illegal or unethical. If anything, their policies are stupid from the marketing standpoint, because they are so far from -- and so much less attractive than -- the industry norm.

If I were in the position of competing with someone like that, the last thing I'd want to do would be to entice them to change their policies. Seems like a perfect competitor: just make clear, on your site, to make the point that you require (assuming this is your intent) no long term commitments and have no "penalties" for moving sites to other hosts. Depending on how aggressive you want to be, consider adding some vague statement to the effect of "unlike other local providers," or even doing a straight-up comparison specifically between your competitor and yourself.

This scenario is a perfect example of why a domain owner should always be listed as either the administrative or billing contact, or both.
[/B]

Duster,

Exactly. Personally I'd suggest anyone looking at domain name's should consider registering their domain name separately from getting hosting. While many hosting companies provide quality registration services, There is a 'piece of mind' knowing you've been the one to register your own domain name with the correct details. With services like Dotster or LowestDomainRates around now, domain registration is pretty easy. It also allows you better access to your domain name details when it comes to change addresses or nameservers.

And, probably most importantly, you often get a better deal on price from someone who deals directly in domain registration

Greg Moore

As above a lot of companies will register a domain for free for you if you sign for a certain period. Any decent company would list you as the owner and the admin contact for the domain. Most hosts or registraars will want to be the technical contact on the domain though.

Look at cell phone services. It's the same thing there your signing up for a 1 year contract. You can break that contract but you'll have to pay $<insert fee's here>.

Originally posted by KDAWebServices
As above a lot of companies will register a domain for free for you if you sign for a certain period. Any decent company would list you as the owner and the admin contact for the domain. Most hosts or registraars will want to be the technical contact on the domain though.

At the same time, with scam artists out there doing chargebacks on one month of hosting, I can see why a host that includes a free domain with a package might want to be the registrant/admin for a few months at least.

It isn't what 'should' have to happen, but it might be needed to protect the host a bit.

What means "move a site"?

Move may be a bit of a mis-nomer.

What it means in this case if when someone wishes to change their hosting services from one provider to another. To use the same domain name they need to have it transfered from one host to another.

Once the transfer is done they can access their site at the new hosting service with the same domain name. The site itself is generally cancelled and deleted at the first provider and re-uploaded to the new one.

Just think of it as moving from one apartment block to another. You don't move the apartment, just your furniture and the cat. If you want people to call you on the phone using the same number, you get the phone company to transfer the number to the new apartment. :) The phone number is basically the same thing as a domain name in this case.

Umm... I hope that made sense.

Greg Moore

Moving a site means moving a web site, often including moving a domain name as well, from one host company to another.

Example: first host is dewey_cheatem_and_howe_hosting.con, which the customer discovers is a terrible host. The customer moves the site (transfers files) to honest_abe_hosting.com and arranges to have the domain name transferred to their servers via their registrar (i.e. Network Solutions, 000domains,com, et al).

[Edited by Duster on 02-19-2001 at 11:45 AM]

OK, I see... It's bad terminology. For this host it doesn't matter if I move the site to another host, or if I simply take it down. He wants to charge the "service fee" in either situation.

Therefore, if ever you want to use something like this, talk about "Cancel the account" and not "Move the site".

The "149$ service fee" clause is unusual and therefore unlikely to be valid if only mentioned in a TOS attachment. But if you put the clause in the actual contract (the form with the "Buy Now" button) it's a valid clause. That's how I would see it.

Also for sure, I would never ever sign up under such conditions ;)

Or how about the telecom industry, where they have folks locked into long terms with a sizable penalty for cancelling that account. The long term contract is necessary to get any sort of decent price for services.

This practice has generated thousands of consumer complaints and some states have stepped in to intervene (even make it illegal) due to its anti-competitive nature.

In some industries the cancel fees are legitimate... DSL contracts... car leases... cell phones... phone company. For the hosting industry -- no.

There are some people who are properly registered to their domains -- admin & billing at the very least -- so what I was thinking is, how exactly would this host achieve NOT "releasing" a site, if he doesn't have the contact e-mails locked up? *wink*

Of course what bites is that the web design company, and the host, both use Internet Domain Registrars for their registered domains -- heh -- so how do you log ino to IDR to change your nameservers? A customer can't, of course, b/c this stuff is registered in the designer's or host's account. And if the host tells the designer these people still owe money, be it these bogus fees or not, the customer is stuck

My problem is educating these people that they are TRAPPED. They don't even realize it!!! They think everything is ducky and they think that this host's policies are "standard" because he is Mr. Internet in these parts. *rolls eyes* Big fish in little bowls really grate on my nerves. ;)

Best to all! :D
>Bailey<

Up to now, we've discussed the legal and ethical issues about what we all seem to agree is a poor busiess model. I'll address a practical view now.

If a customer wishes to leave them (and they seem to give plenty of reasons why some would), they'll get the full value of their money if they give notice in November that their last day will be leaving December 31. Outside of that time frame, they can abandon that host if conditions are such that they feel an immediate move warranted.

The idea of charging people a termination fee of $149 is ludicrous for hosting. With a bit of planning, it can be avoided.

The first thing a customer needs to do is make sure they are registered as the administrative and billing contact. They may need to insist on it and it is within their rights. No host has a legitimate claim to be listed as either of those (meaning they have no right to be listed as such, even if they handle domain renewals for their customers).*

Once the contacts are properly listed, I would move to another registrar as a precaution, one where the host has no access to changing the registrants. With the contacts properly listed, the host won't even be notified of the change in registrars.

With that change in effect, the host no longer has the ability to change any information for the domain names in question, nor will they be notified of any changes. Now would be the time to set up an account with a new host, transfer the domain, and abandon the old host. Of course, a customer would also be abandoning any unused time at the old host.

That way, even if the host has a customer's credit card number, they have no reason to charge a termination fee as they won't know that the account has been abandoned.

When the old host sends their renewal notices in December, a polite reply of "no thank you, I have decided not to renew" will suffice.

Another way, which is impractical for some, is to use a new domain name with the new host and transfer the old name upon the expiration of the term with the old host.

Either way, there is a way around these ridiculous charges for leaving a host. I've always felt that the best way to keep a customer is to provide good service. While that won't keep every customer, in the long run, I feel it is the best policy.
___________________
* I mean right in its truest sense. I've had local customers (that I knew personally) where I was the billing contact after renewing their domain names when they failed to and their sites went down. They knew about it and agreed to it. We later agreed to making them responsible for the billing (and one of them just had his domain suspended again briefly for non payment -- chuckle). However, they were always listed as the administrative contacts. In either case, I would never abuse them by using it as a means of controlling their domains.

In some industries the cancel fees are legitimate... DSL contracts... car leases... cell phones... phone company. For the hosting industry -- no.

I understand it normally is ok, except for states where particular regulations have been adopted to prevent it.

There are some people who are properly registered to their domains -- admin & billing at the very least -- so what I was thinking is, how exactly would this host achieve NOT "releasing" a site, if he doesn't have the contact e-mails locked up? *wink*

I agree the host shouldn't normally be able to prevent a domain registrant from changing his DNS entry. I think a registar only accepts instructions from the registrant, never from the host.

Therefore: A host never "releases" a domain, because he has no control over it. A domain is released by the Registar if you want to transfer it to another registar. That's something different.

I suppose this is where my ethics stumble. :D

Picture John Newbie who owns a gift shop or an inn. His kid has internet access in Rural, USA, but John isn't into this internet stuff himself. His customers have been asking him about for the last year or two though. Can we e-mail you... can we see your new things on your website... will your new addition be online?

So John figures it's time to get with it. He asks his buddy who owns a B&B and his buddy says everyone seems to go with Design Inc., the local print-design company who's now seized the day and designs websites too. (Design Inc uses templates and charges $600 to design a site with one main page, a simple contact page, and oh yeah they'll do you a "custom logo" and a couple of pictures too. They _do_ do nice work... but all their sites look essentially the same..)

John calls Design Inc. They meet, he hands over his brochure, some stills, and a business cards. He tells them what he wants on it and they tell him what the other shops/inns have done. They also tell him it will cost $200 to have his website hosted, or $300 if he wants the "domain name" to go to his files at johnsinn.com. Of course this is more professional so $300 is the way to go. Oh and if he wants scripts, a secure server, or any interactivity it will be extra, both for the design and the web hosting.

John signs on the dotted line and writes the necessary checks. The site is designed and uploaded to the internet. John thinks he is Mr. Cool. He still isn't on the internet himself, but he's Part Of It. He tells all his friends and his kid to look it up. Everyone says how nice it looks.

In the mail he gets a bill from the ISP/web hosting company for the pro-rated web hosting fee, which is paid through the end of 12/2001. It costs (picking figure out of air) $240. Also included with the bill is a double-sided typed sheet which outlines all these policies and rules. Well... John skims... he doesn't have a dial-up account, so never mind that... Websites... he reads the first couple of lines and thinks, "yep, that's what I paid, the rest doesn't matter, I'm on the internet, I'm not moving anywhere... Oh look, if there are billing problems they'll hold my site 'til they're resolved... okay well there won't be, I pay my bills."

-- * -- * --

You know there's no such thing as "releasing." I know this too. But for John Newbie out there whose only Version of the Internet is that which he is pumped through this isp/host, There Is a Such Thing. And John Newbie will not even know that he can fight for it.

In my opinion this isp/host is taking advantage of people by feeding them misinformation. He is leading them to believe they have no rights and penalties are not only acceptable, but are the norm. (As a former customer of this man I can tell you how rude he is in his system-wide e-mails, telling people how dumb they are for not understanding how to set up their computers... how as their ISP he can and does make the rules and don't question him or he'll pull them offline, etc.... when people are asked, "so why do you stay with him?" they reply, "well, he's local... and he IS pretty smart with computers and all." ------- I sit there dumbfounded, thinking HUH?????)

This blatant practice of, well, lying to people, through assumption or inference of inaccurate information, is in my book, unethical. I just can't get past that, I guess. It's wrong, to me. :(

So far as educating the Local Consumer then... yes, this is my job now. And yes, I am naturally coming on the scene about 4 months too late... guess if I want to lure anybody away, I'll need to start my campaign in July or August. Of course we're in a tourist area and everyone's busy 'til 10/25. So November written notice doesn't leave a lot of leeway.

Ahhhhhhh... how fun. At least I no longer think that I am going crazy. ;) It's not just me, what I am reading in his policies IS out of line...

:D >Bailey<

Originally posted by baileysemt123
This blatant practice of, well, lying to people, through assumption or inference of inaccurate information, is in my book, unethical. I just can't get past that, I guess. It's wrong, to me. I see your point, and even though I said earlier that I didn't think this was "unethical" I was speaking of the practice of employing that kind of fee on its own. In another thread there's a discussion of a host with some outrageous monthly fees -- hundreds of dollars -- for virtual hosting; I don't think that's unethical either. I just think it's stupid.

But if the existence of those fees is not made clear up front (and I didn't get that from your original post), that's a different issue.

In any case, I still think it's a great marketing opportunity for you. Put on your white hat and go save those people!

I don't see where it is unethical. It is up to John Newbie to read the contract. Not reading it is not a defense. In a court of law, a signed contract carries with it the presumption that the parties agreed to all conditions stipulated therein.

I don't see where that host has been lying to people or supplying misinformation.

It is up to the consumer to check for better deals, fairer terms, etc. Expecting the business to do it is like the adage about putting the foxes in charge of the hen house. I know of a couple of businesses that were being charged $750 monthly (each) for hosting, along with some outrageous design fees. Their "host" was someone using FP and a $10.95 reseller account.

There was nothing unethical about it (from a certain perspective), although it was outrageous to do so. Of course, both businesses have been wised up and no longer use him. In fact, he was even intercepting their e-mail. That was unethical, and possibly illegal.

There's lots you can do marketing wise to educate potential customers in your area. I've got information on my site that points out the pitfalls of hosts that require payment by the year and having themselves registered as other than technical contacts. Putting similar information on your site can only help.

Since it seems there is little competition in your town, there is something else you can do to ease the loss of people switching to you. You might offer a certain amount of time for free, up to the balance of their term, for those customers who are presently with that other host. Unless they are high bandwidth users, you would have little or nothing to lose and everything to gain. The new business you might pick up in referrals from new customers (no current web sites) could easily make up for any short term losses from no income switch over customers.

That's what I would do in a similar situation.

What a hell of an idea... free for the duration... yow-zah............

***** <----- five gold stars for Duster


:D >Bailey<

Considering how few resources most sites use, you probably wouldn't lose anything at all and would only gain. You can always charge for any excess bandwidth, as many hosts do.

The easier you make it for people to do business with you, the better you are likely to do.

The $25 monthly average he charges is fair enough. Those fees and terms are ridiculous, though. he must have a Bill Gates/Microsoft complex. They do serve one purpose, they create an opportunity for you to do better.

Well now, here's the funny part.

$25 is fair in theory, yes. But allow me to share what, exactly, $25/month buys a client:
• 10 megs disk space
• unspecified transfer (you know where that will end up)
• Frontpage Extensions -- no mention of which version
• Statistics reporting
• the ability to run Perl
• Active X
• One e-mail addy
• One IP addy
• FTP access only if you request it, and it must be specially set up for you. He makes it sound like it's a military issue.

I have been unable to determine how one runs perl, as there is no mention of a cgi-bin or cgi access. Most sites hosted by him who do use forms have tied their sites into a "blahcommerce.com" blanket site on which a specially-formatted form is hosted -- you got it -- for an extra fee. :) I have played dumb and asked if I get cgi-bin access and if there are preinstalled scripts but it's been 5 days with no response. I'll take that as a no, then.

That is everything you get.

There are no multiple POPs, autoresponders, e-mail features, subdomains, control panel, SSL, MySQL, Real Technologies, Mailing Lists, Anon FTP, Shopping Cart, etc. etc. I mean, well. You all have shopped around. You know what $25/mo. CAN buy the shrewed and intelligent consumer.

He is running Win98/NT4 IIS-4.0. Half the time I call up his site it won't load. The regional service provider he works with requires 5 hops to even get to the bbnplanet backbone, and the bbnplanet backbone is very unreliable (in our area anyway). When I run tracerts on various sites he hosts, I average 10-30% packet loss. That's average, that's not the bad ones. And that's at night.

I have been developing my site tonight, writing pages and building graphics. You guys are right, with the right explanation, it is not hard to show people how alternatives are superior to this guy's system. And without naming names! The contrast is that stark. I have tried to implement some of your suggestions. You guys had lots of good ones! :)

This is getting exciting! :D >Bailey<

Bailey,

Good luck on the project. I'm sure you'll succeed beyond expectation. You have one thing in your favour there, and it's your competition. If you go head to head, with no other player in the game locally, you're home already.

Just remember, professional, courteous, honest. You might not make a million overnight but you'll be in there for the long haul :)

Greg Moore