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FTC Pulls Plug on Vile ISP

By Erika Morphy E-Commerce Times ECT News Network
Jun 5, 2009 11:44 AM PT

The Federal Trade Commission has shut down an ISP that it painted as the worst of the worst in cyberspace.

FTC Pulls Plug on Vile ISP

Pricewert, which has done business under a variety of names including "3FN" and "APS Telecom," is accused of actively partnering with criminals seeking to distribute illegal -- and downright stomach-turning -- electronic content including child porn, violent porn and depictions of bestiality.

'Abundant Evidence'

This is the first time the Federal Trade Commission has taken an action against an ISP, said Ethan Arenson, staff attorney and FTC spam coordinator.

The FTC asked a state court in California for a temporary restraining order compelling the upstream data centers to disconnect Pricewert from the Internet, he explained -- a relatively simple procedure, technology-wise -- once the legalities had been put in place.

"There was abundant evidence that Pricewert was engaged in both recruiting and hosting malicious content, as well as other activities," Arenson told the E-Commerce Times.

The complaint was filed in the U.S. District Court for the Northern District of California, San Jose Division.

The FTC alleged that Pricewert not only aggressively advertised its services to criminals, but also established a forum to facilitate communications with them. The company ignored take-down requests and shifted its criminal content to other Internet protocol addresses to evade the law.

Botnet Army

The ISP also maintained an active virus and malware portfolio, the FTC charged. It hosted spyware, viruses, trojan horses, phishing exploits and botnet command-and-control servers, and it engaged in the deployment and operation of botnets.

The FTC claimed in filings with the district court that more than 4,500 malicious software programs were controlled by command-and-control servers hosted by 3FN, compromising thousands of computers.

The temporary restraining order that required the upstream data centers to turn off Pricewert's power also froze its assets. The court will hold a preliminary injunction hearing on June 15, 2009.

The Commission vote to authorize staff to file the complaint was 4-0.

FTC Mission

Consumer protection and related statutory enforcement authority is shared between the Department of Justice and the FTC, with the two agencies often overlapping. Arenson said he didn't know if the FTC's investigation and subsequent prosecution of the ISP would lead to opening a new front at the agency.

"First let's take care of this one," he said.

It may be that Pricewert's purported abuses were so extreme that the FTC made a point of acting, instead of leaving it to state enforcement agencies or the DoJ.

The FTC has a huge job monitoring and prosecuting those companies that cross the societal line between appropriate and inappropriate or illegal uses, said Raymond Van Dyke, a partner with Merchant & Gould.

"That line is often a delicate one, but here the players are extreme and the abuses clear," Van Dyke told the E-Commerce Times. "ISPs must monitor -- and, to some extent, control -- what they host."

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