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NetServices Response - Garner Digital

Posted: 22nd Jun, 2006 By: MarkJ
The CEO of NetServices, Mark Vickers, has issued us with a formal response to yesterday’s news item concerning ISP Gerner Digital, which recently entered Administration. The piece mainly attempts to clarify their position on migration codes (MAC's):

Dear Sir,

In response to your article ‘ISP Garner Digital Folds’ of june 21st I would like to clarify several points you raised as it is my belief it does not just NetServices but the whole industry a dis-service.

NetServices supplied Garner Digital with wholesale DSL services. Garner Digital in turn entered into its own contractual agreements with end user customers for the provision of various DSL services – the wholesale DSL model in action.

Under both the terms of the agreement between NetServices and Garner Digital and under the Data Protection Act there is, and can be no implied agreement between NetServices and the end user customer. As clearly stated in our MAC Code policy, NetServices provide MAC codes only to reseller customers. Providing MAC Codes to end users customer wouldn’t just breach confidentiality but undermine the entire wholesale model, as well as destroy the confidence our resellers have in us not to deal directly with end user customers. NetServices have always and will continue to stand by this policy.

Garner Digital went into administration on 2 June, an issue NetServices first became aware of on 5 June, and received formal notice from the Administrator on 6 June. Due to the financial position of Garner Digital, the Administrator decided there was no alternative but to make all Garner Digital staff redundant. They sought to maximise the recovery of funds by seeking to obtain buyers for the customer list, but in discussions with NetServices at this time were unwilling or unable to make commitments regarding the continuity of supply to end users. NetServices believed that this position was unacceptable.

Garner Digital owed NetServices a significant sum, and it is expected that we will recover little of this value from the liquidation of this business. Whilst NetServices had no contractual relationship with the end users a decision was taken that, as far as possible, it was in everyone’s best interests to continue service to the end users in the short term.

This was and continues to be at NetServices expense. However we cannot be expected to provide this service indefinitely and as stated we are an ISP wholesaler, not a direct provider. Therefore in order to offer the best solution NetServices arranged for one of its resellers to contact the end users to determine whether service could continue to be provided on the same basis. This was done with the best interests of the end user customers in mind and to minimise the hassle and disruption of losing service which is the alternative for the Garner Digital customers.

Contractually NetServices can only release MAC codes to the resellers, not the end user (again as per our MAC Code policy and the DPA). Therefore any end user affected who wished to migrate their line elsewhere should have contacted the Administrator to arrange for this. The Administrator has made no request to NetServices during the period of administration for the release of any MAC codes. Ofcom are fully aware of our position regarding MAC codes and the dilemma NetServices, as a wholesaler, faces in such situations. Having been pro-active in approaching Ofcom with this issue, we too would welcome some recognition of difference between the wholesale and retail environment with reference to MAC Codes.

Pulse8 are currently in the final process of contacting all end users affected to offer to take over the service. Once this exercise has been completed, expected to be at the end of next week, all users who have not chosen to migrate to them will have their DSL connection ceased. At this point they will be free to re-provision their DSL service with another provider.

It should be pointed out that in continuing to provide service from 2 June NetServices has incurred significant further expense which we will be unable to recover. NetServices cannot be held responsible for our reseller customers going into administration – to do so is the equivalent of blaming Microsoft should one of their reseller partners fail to deliver Microsoft Office! However instead of washing our hands of the situation, we have spent time, effort and our money to investigate alternatives.

NetServices has sought to balance the needs of end users with its own commercial and financial interests, and believe we have acted fairly and appropriately – in fact above and beyond what is contractually required of us. We believe that a more balanced and in-depth analysis of the situation by the press, examining both sides of the coin would better serve the industry.

Kind Regards

Mark Vickers, CEO


NetServices is correct, yet misses our original point - the MAC system as a whole is at fault. Consumers should not be trapped by their provider when situations, such as Garners, crop up. We campaign for a user’s right to choose their ISP free from unfair restraint or financial penalty.

Some of this is technology limited, other times it’s political (Ofcom dragging its feet), yet none of these are impassable and can be solved.
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