Friday June 6th may well be seen as an important day in terms of government action against ISP's. The reason for this is that the US Federal Trade Commission (FTC) had a US ISP thrown off the Internet for allegedly actively engaging and consorting with criminals. This is not the first time a company has had its Internet privileges revoked but this one has seen a significant contribution from non governmental agencies.

The allegations are that the ISP Pricewert LLC acted as a hosting centre for criminals who ran botnets, distributed spyware and other malware and, the most serious charge of all, hosted child pornography. The evidence used to get Pricewert thrown off the net was gathered by the National Security Agency (NSA) and several other organisations such as Symantec, Spamhaus, The Shadowserver Foundation and the National Center for Missing and Exploited Children.

The indictment is not only against Pricewert LLC but also against a number of other trading names that the FTC believes are all part of the same organisation. The FTC has also alleged that while the company hosted its servers in San Jose and was registered in Oregon as a limited liability company, its principal place of business was Belize and its employees lived in Eastern Europe.

As part of the action launched by the FTC, it has had an order issued that forces anyone providing services to Pricewert to cease and desist immediately. What is not known yet, is if the FTC has asked the FBI to seize all the hardware inside the Pricewert datacentre. It would certainly make sense to do so as the data on the servers would be needed as evidence but neither the FTC or Pricewert have said if anything has been taken.

Pricewert has responded through an article published in Network World. Max Christopher as a spokesman for Pricewert, claims that there was no contact between the FTC and Pricewert until after the company was disconnected from the Internet. Christopher also says in the article that "Pricewert objects to the blaming of providers for bad customers." and that he hopes Pricewert hasn't been penalised for its associations with Ukraine.

Christopher also said in the article that he felt the investigation was, in part, a flawed process due to poor translations of Russian. It is also claimed that although the FTC had not contacted Pricewert before disconnection there had been previous communication between both parties with Christopher claiming Pricewert had tried to work with the FBI over other issues.

Despite the protestations from Christopher, in the Network World article, the FTC is claiming that it has evidence of Pricewert actively recruiting bot herders - people who organise and manage large botnets. Part of that evidence is said to be transcripts of conversations between senior employees at Pricewert and bot herders.

Why should this be of concern to you?
At this moment in time, whether Pricewert is guilty or not, the situation should cause many companies to think about where their data and websites are hosted. Among Pricewert's customers are apparently a number of legitimate companies that have been affected by this action. For many of them, this disruption will cause significant harm as their systems get unwound from the apparently illegal systems.

Getting caught up in other people's troubles on the Internet is part and parcel of doing business and it doesn't matter how large or small your company is. Unless you own your own datacentre, you are always at risk. Other recent problems have included the seizure by the FBI of equipment in two US datacentres. Both cases were triggered by AT&T resorting to wire fraud allegations over unpaid VoIP charges.