This has been a discussion item in the Swedish ISP business for quite some time (for a reason). The matter is actually a lot more complex than what you say above.
How ironic, would that be because of Flashback magazine? :)
To some extent, but not recently. Mostly due to child-porn, TV decoder piracy and a number of other issues.
For those who do not know, Flashback is a Swedish e-zine, that had about a million subscribers. It was also one of the first "free isps" before that concept took off commercially, so it allowed people free homepages. At some point some political person had a problem with various rightwing websites hosted on Flashback. Things were even brought into court, where the judge ruled that the material published by those rightwing websites was perhaps not very nice, but it wasn't illegal, so there was nothing the courts could or should do about it. The ISP of Flashback then had to disconnect them because otherwise the ISP itself would get disconnected by UUnet. UUnet also stated that any Swedisch ISP connecting Flashback would itself be disconnected. Flashback then temporarily had to move its hosting to outside Sweden (we did their hosting, ironically with UUnet as our upstream for half of the time) for six months, before it managed to get a local connection again.
In short, UUnet corporate policy stood above Swedisch law........
This is exactly why ISP's should not be allowed to have these "we will disconnect you at our sole discretion" clauses. It makes them stand above the law, and the defense of "you can go to another ISP" is false, because you cannot. Most, if not every ISP has these clauses, and those who don't probably buy transit from those who do. The enduser has no choice. He is simply not protected by law. Welcome to the Corporate Republic.
Just for the record, your story above is far from complete and not true on all accounts. It is also a quite simplified version of what happened. Summary is that no matter what the ISPs (this is not UUnet alone, actually pretty much all ISPs denied service, even those that where not behind UUnet. I am not sure if the UUnet threat story is true. This is quite some time ago) would have done or said they would have got shot down by public opinion. There was quite a lot of press articles on how horrible it was that these neo-nazi sites (which is what they where) was allowed to be on the Internet without action from the providers. This is a discussion you as ISP simply can't win.
First of all, in my opinion (and this seems to be pretty common), a company should be free to choose who they sign contracts and business deals with.
Only within reason. You cannot excludes based on various reasons, such as religion, believes, race, sex, etc. Most countries have laws against such discrimination.
Correct, no objection.
The important thing is to have openly published, clear and non-discriminatory reasons for canceling/denying a contract. As an ISP, you shouldn't discriminate at all, if you ever want to be soon as a common carrier, which is what you want, unless you want to start a lawfirm instead of an ISP business.
Well, I can also see clear business reasons as to why I would deny a client. If I had Coca-Cola as a customer and Pepsi-cola wanted to buy a service, but Cola then threatens to leave, I should be in my full right to deny Pepsi service.
if I believe that having him as a client will harm other business relations (out of competitive claims etc) or similar issues, I should be in my full right to deny signing a contract.
You should not! You will open yourself to threats from all your customers. Your big customers will end up deciding your company's policy. This is BAD!
Well, if that is where the money flows in from, it's not that bad.
As a simple example, say you are hosting www.shell.se, and Greenpeace asks you for hosting. You agree, and then Shell (by far a much bigger and profitable customer for you) tells you it will go elsewhere if you do not cancel your hosting agreement with Greenpeace. Now, your company's reason is VERY valid, it is in the company's financial interest to cancel Greenpeace. And since Greenpeace has done nothing wrong, you can only cancel them based on "in sole discretion".
Yes? See my example above. I see no conflict in this. It's called a free market.
At the same time, I as an ISP do not want to categorically based on content, ethics, morals etc deny customers or disconnect customers. Especially for content that is judged illegal.
As you stated, I doubt it is illegal to judge on content, since ISP's have no offcial common carrier status in Sweden. So, it is legal for you to discriminate, as long as you don't violate general law (eg racism). I'm sure it is legal for you to say you don't accept customers that are for instance, environmentalists, even when you admit that it would be based on hosting oil companies.
The problem comes when you for example enter into content. If I as an ISP removes content based on the assumption it's illegal (let's take TV decoder information as example), I will do the role of the police and courts. I have made the judgement. This in my view requires a request from the police rather than doing this as you go buy. This will otherwise open the pandoras box you describe, where you would have to judge what is illegal political content, child porn, etc.
If content is illegal that is up to the courts and police to judge and take action on.
If you truly believe that, you should incorporate that in the company policy, thereby giving up the right to cancel in your sole discretion, including perhaps giving up some of your biggest customers. You can't have the cake and eat it too.
Notice the difference between judging content and choosing connectivity customers. - kurtis -