The Newest Battle of Copyright Infringement

For years the big ISPs have paid lip service to complaints about customers who violate copyrights by sharing content on the web for music and video. Every big ISP has had a process in place that was intended to police violation of the Digital Millennium Copyright Act (DMCA).

The owners of copyrighted materials have long complained that the ISP response to violators has been weak and ineffective. And they are right in that most ISPs notify customers that they are accused of violating copyrights, but there has been little or no consequences for violators.

However, that might now be changing due to a lawsuit that’s been in the courts for a few years. Music label BMG sued Cox Communications for not providing adequate protection of it’s copyrighted music. Recently the 4th Circuit Court, on appeal, reversed the original verdict against Cox. However, in doing so the court threw out Cox’s primary defense, which was that they were protected by the ‘safe harbor’ laws that are part of DMCA.

The safe harbor rules protect ISPs like Cox against damages from customer theft of copyrighted materials. Removing the safe harbor means that the owners of copyrighted materials can seek and win damages against ISPs if they don’t take adequate steps to protect copyrights. In the specific case against Cox, the BMG issue was that Cox didn’t do anything to deter repeat offenders.

There are apparently a lot of repeat offenders – customers who share a lot of copyrighted material – so this ruling instantly got the attention of other big ISPs. Comcast responded last week by notifying customers of a new policy for repeat offenders of copyright theft. The new policy has several progressive stages of severity:

  • Customers notified of DMCA violations might be forced to log in fresh to their broadband account, and in doing so will probably have to agree to abide by the company’s DMCA policy before getting access. Customers might also have to talk to Comcast customer service before they can log into their broadband account.
  • Customer that continue to violate DMCA policies after this first stage face termination of their broadband and all other Comcast services.

This is going to have a chilling effect on those that share copyrighted materials. A majority of people live in markets where the cable company offers the best broadband, and losing the home broadband connection is drastic. I have to assume that telcos will come up with similar policies, meaning that DSL also won’t be a refuge for anybody who continues to violate copyrights.

There has always been people who share content. The old public bulletin boards were full of copyrighted songs and pictures that could be shared. Over time this morphed into Napster and other file-sharing services. Today there are still a number of sharing sites on Tor and other places on the web. And people have figured out how to use Kodi and other technologies to capture and share copyrighted video files.

Although they don’t want to play the role of policeman, I suspect the big ISPs will be forced to at least somewhat enforce policies like the one Comcast just initiated. There has always been a big tug of war between ISPs and content owners. This new response from Comcast shows that content owners now have the upper hand. It certainly means that those who continue to share copyrighted materials will face eventually losing their broadband. In today’s world that’s a severe penalty.

Smaller ISPs need to pay attention to this and watch what the big companies are doing. I wouldn’t be surprised to see BMG or some other content owner sue a smaller ISPs to make a point that this applies to everybody – and nobody wants to be that ISP. If the big ISPs really enforce this, then small ISPs need to follow suit and figure out an effective way to police and deter repeat copyright violators.


ISP Liability for Customer Behavior

Scales-Of-Justice-12987500-300x300A few weeks ago a judge ordered Cox Communications to pay a $25 million settlement to BMG, the music rights company. This come from a trial last year where a jury decided that Cox was guilty of allowing their customers to pirate BMG music over the web. This ruling is a dangerous precedent in that it holds an ISP liable for behavior of its subscribers – something that should scare all ISPs.

The case has some unusual facts. BMG hired Rightscorp to monitor the Internet for illegal file downloads of BMG music. Rightscorps sent numeous infringement notices to Cox that it wanted forwarded on to customers. These notices told customers that they had done an illegal download of BMG copyrighted material and gave customers the ability to immediately resolve the issue by sending $30 to Rightscorp.

Cox thought these notices smacked of extortion and refused to forward the notices directly to customers. Instead Cox decided to use the same policy as most large ISPs called a three strikes test, meaning that they will disconnect a customer that has been given several notices about illegal downloads. But the suspicion has always been that the big ISPs are somewhat spotty about enforcing copyright violations and don’t want to turn off paying customers.

Cox ended up blocking 1.8 million notices that Rightscorp was trying to directly send to Cox customers, and Cox largely did nothing with those notices. Cox was found guilty by a jury, and the judge set the high penalty because Cox had not done enough to enforce the copyrights of BMG.

Cox was relying on a legal strategy called ‘safe harbor’ where they would have no liability as long as they were using a reasonable set of procedures to stop music piracy. But the judge quickly pierced the safe harbor protection by saying that Cox did not do as much as they should have done to protect BMG.

This case was certainly complicated by the unsavory tactics of Rightcorps. What’s to say that all of those customers actually had violated copyright? But the bottom line is that Cox was held responsible for the supposed music piracy of their customers. That ruling that has to concern every ISP, because this is bound to open up the floodgates of similar suits and similar tactics. And who knows where this stops? Customers can engage in all sorts of illegal activities other than copyright violations.

It’s really hard for an ISP to know what to do following this decision. One strategy would be to just pass on every notice of copyright infringement. The problem with that idea is there is likely to a bunch of scammers that will copy the tactics of Rightscorps but with no real claims against customers. ISPs don’t want to get into the middle of potential scams.

ISPs could also develop and enforce tighter policies against customers that repeatedly download pirated material. The danger of that approach is that the ISP could end up ‘convicting’ a customer with no real proof that they violated copyright. This has been one of the factors that have made ISPs uneasy about getting tough on this.

Finally, I guess ISPs could do deep packet inspection to see what their customers are doing. But most ISPs don’t want to do that. And even if ISPs try this, the FCC is contemplating customer privacy rules where customers can opt out of being tracked or followed by the ISP.

So Cox and other ISPs face a dilemma. We know that the biggest ISPs have all been involved in this issue. I would love to hear from any smaller ISPs who have been involved in copyright issues and that might want to share their experience.

Regulatory Shorts – July 2016

Scale_of_justice_2_newThere are some interesting things happening in courts lately that will be of concern to ISPs.

ISPs Might be Liable for Customer Piracy. In two court decisions, courts have said that ISPs can be held responsible by piracy committed by ISP customers. In the Alexandria, VA district court a jury found Cox Communications liable of copyright infringement from a lawsuit brought by BMG, the music publisher. BMG had argued that Cox should have disconnected customers who violate copyrights. There was a similar ruling in Manhattan district court against RCN, also brought by BMG. Both companies are currently vigorously fighting the rulings. This kind of ruling could have a chilling impact on ISPs. Net neutrality rules would make it hard, and maybe illegal, to block sites like BitTorrent. And yet ISPs might somehow be liable for what customers do on piracy sites.

Internet Firms Not Necessarily Liable for False Information. On May 16 the FCC handed down a narrow victory to The company had been sued by a Virginia resident who said that the site contained errors about his age, education, employment, and marital status. The court said that the plaintiff could not sue without having proven any real damage from the bad information.

The case was watched closely by Facebook, Google, and other internet firms that are worried about a negative impact from having inaccurate data. The court ruling seems to make it unlikely that class action suits could be brought against internet companies, but it did open the door to individual suits when real damage could be claimed.

Fourth Amendment Does Not Protect Home Computers. The federal district court in Virginia ruled that a criminal defendant had no ‘reasonable expectation of privacy’ for information stored on his home computer. The particular case came out of an FBI sting of Playpen – a TOR site on the dark web used to host child pornography. It’s a complicated and unprecedented case where the FBI seized the server and continued to operate the site, and to eventually arrest numerous users.

But the ruling is a bit troublesome because it implies that police have the power to remotely access the files on somebody’s computer without a warrant. That runs contrary to recent rulings about the security of information on a cell phone. Police have searched computers before of people who have been charged with crimes, but the ability to search the computers of people who have not been accused of any crime without a warrant is scary. I expect this to be appealed.

FBI says Location of Surveillance Cameras Must be Kept Secret. The FBI was successful in getting a judge to block Seattle City Light from divulging the location of FBI security cameras. City Light is part of the city government and would normally be required to respond to requests for information like this from the public.

One thing the court process revealed is that the majority of police surveillance cameras are installed without a warrant, which raises the issue of violating the Fourth Amendment. The judge in this case did say that he thought the FBI needed warrants to install cameras.

Europe Proposes Requiring an Online ID. Officials in the European Commission have suggested that European citizens be required to use a government issued ID when online. The purpose of this is supposedly to provide a trustworthy environment online for merchants and people to be able to know who they are dealing with.

The White House had proposed a similar voluntary system a few years ago in response to cyberbullying and other online issues. They suggested that if people adopted a verified and trustworthy identity online that they could be safer by only dealing with others who did the same. There are still a few states considering trials of the idea. But that proposal was very far away from being the mandatory requirements suggested in Europe.

The Best Explanation of Network Neutrality Yet. And finally, Stephen Colbert discusses net neutrality while on a roller coaster.




Metropolitan ISPs

Seattle-SkylineI spend most of my time working with rural ISPs. Even my clients that work in larger cities tend to provide service to residential customers and to small and medium businesses. But there is a very competitive market for larger businesses and for businesses that operate in multiple markets.

My clients often run into this when they realize that they are unable to sell broadband to a local chain restaurant, convenience store, bank or other large nationwide or regional business. I recently poked around to see who the carriers are that are selling to metropolitan or nationwide businesses. Some of those on the list will surprise you with their success and there are carriers on the list that you’ve probably not heard of.

Since most of the ISPs in this category don’t report business revenues separate from other revenues it’s difficult to rank these companies by revenue.  Further, some of the companies on this list are almost entirely retail ISPs while others offer wholesale connections to other carriers. Probably the easiest way to compare these carriers is by looking at the number of buildings they claim to have lit with fiber. Of course, even that is not a very reliable way to compare them since there is no standard definition of what constitutes a lit building. But generally these counts are supposed to represent locations with either one very large customer, like a hospital, or else buildings with multiple business tenants. Some of these companies are also count locations like data centers or large metropolitan cell towers.

Here are the carriers that claim to provide fiber to more than 5,000 business buildings:

  • Time Warner 75,000
  • Level3 30,000
  • Cox 28,000
  • AT&T 20,000
  • Zayo 16,700
  • Charter 13,800
  • Fibertech 10,400
  • Verizon 10,000
  • Lightower   8,500
  • Sunesys   7,200
  • Cablevision   7,000
  • Frontier   6,300

Missing from this list is Comcast. I can’t find any references to the number of lit buildings they are in. They are a major provider of business broadband and reported just over 1 million business customers along with $1.3 billion in revenue for their Business Services division. Also missing from the list is CenturyLink who doesn’t seem to claim lit buildings anywhere that I could find. CenturyLink claims to be selling to more than 100,000 businesses on fiber at the end of 2015.

On the list though are both Charter and Time Warner Cable that just merged, which would put them in 88,800 buildings. Fibertech and Lightower merged in 2015 giving them a total of 18,900 lit buildings.

Level3 and Zayo provide both retail and wholesale fiber products, meaning that they will sell connections into the lit buildings directly to businesses or else to other carriers, and they derive a large portion of their revenues from wholesale sales.

The first thing that surprised me about this list is that the cable companies appear to be in a lot more buildings than AT&T and Verizon. There are two possible explanations for this. One is that each group of companies is counting lit buildings in a different way. For example, the cable companies might be counting buildings like schools while the telcos might only be counting larger multi-tenant buildings. But it’s also possible that the telcos have a strategy of only building fiber to the largest buildings in each market while the cable companies will build routinely to smaller buildings. It does raise the question if this is a reasonable side-by-side comparison.

I would also note that some of these companies are growing rapidly and that most of these counts came from 2014 or 2015. Vertical Systems Group (a research and consulting firm that tracks the metro Ethernet market) says that the percentage of the metropolitan businesses connected to fiber grew from 42% in 2014 to 46% in 2015.