Tucows 2012 Annual Report Download - page 29

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• foreign constituents may succeed in their efforts to have domain name registration removed from a U.S. base
d
entity and placed in the hands of an international cooperative; and
• international regulatory or governing bodies, such as the International Telecommunications Union or the
European Union, may gain increased influence over the management and regulation of the domain registration
system, leading to increased regulation in areas such as taxation and privacy.
If any of these events occur, they could create instability in the domain registration system. These events could
also disrupt or suspend portions of our domain registration solution, which would result in reduced revenue.
Governmental Regulation Affecting the Internet
To date, government regulations have not materially restricted use of the Internet in most parts of the world.
The legal and regulatory environment pertaining to the Internet, however, is uncertain and may change. New laws may
be passed, existing but previously inapplicable laws may be deemed to apply to the Internet, or existing legal safe
harbors may be narrowed, both by U.S. federal or state governments and by governments of foreign jurisdictions. These
changes could affect:
• the liability of online resellers for actions by customers, including fraud, illegal content, spam, phishing, libel
and defamation, infringement of third-party intellectual property and other abusive conduct;
• other claims based on the nature and content of Internet materials, such as pornography;
• user privacy and security issues;
• consumer protection;
• sales and other taxes, including the value-added tax of the European Union member states;
• characteristics and quality of services; and
• cross-border commerce.
The adoption of any new laws or regulations, or the application or interpretation of existing laws or regulations
to the Internet, could hinder growth in use of the Internet and online services generally, and decrease acceptance of the
Internet and online services as a means of communications, commerce and advertising. In addition, such changes in laws
could increase our costs of doing business, subject our business to increased liability or prevent us from delivering our
services over the Internet, thereby harming our business and results of operations.
We may be subject to government regulation that may be costly and may interfere with our ability to conduct
business.
Although transmission of our websites primarily originates in Canada and the United States, the Internet is
global in nature. Governments of foreign countries might try to regulate our transmissions or prosecute us for violations
of their laws. Because of the increasing popularity and use of the Internet, federal, state and foreign governments may
adopt laws or regulations in the future concerning commercial online services and the Internet, with respect to:
• user privacy;
• children;
• copyrights and other intellectual property rights and infringement;
• domains;
• pricing;