The end of the Internet's policemen: in losing ISP battle, recording industry is faced with moving beyond strategy of fear

America's Network,  Feb 1, 2004  by Shira Levine

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For Internet service providers, the D.C. Circuit's recent ruling that they are not required to release information on subscribers who may be copying music illegally was an unexpected gift, but the ruling left many speculating on the effect it would have on the already-strained relationship between content providers and service providers.

"The ISPs don't want to be the Internet's policemen, and they didn't think that would ever be imposed upon them," says Tom Lewry, a partner at law firm Brooks Kushman.

The series of events leading up to the December 19 ruling began in the summer of 2002, when the Recording Industry Association of America (RIAA) issued Verizon a subpoena, asking for the identity of subscribers to its Internet service who were allegedly offering free illegal downloads of music. Verizon refused, arguing that under the 1998 Digital Millennium Copyright Act, it was not required to release that information because the pirated songs were not stored on its servers. The U.S. District Court, D.C., sided with the RIAA, and Verizon appealed.

The D.C. Circuit Court ruled that content providers cannot use the subpoena process to obtain subscriber names from ISPs, and said the RIAA's argument that ISPs must turn over customer information--regardless of whether they are actually storing the illegal material--"borders on the silly."

"A subpoena may be issued only to an ISP engaged in storing on its servers material that is infringing or the subject of infringing activity," wrote Chief Judge Douglas Ginsburg in his opinion. "Verizon cannot remove or disable one user's access to infringing material resident on another user's computer because Verizon does not control the content on its subscribers' computers."

RIAA President Cary Sherman called the ruling "a disappointing procedural decision [that is] inconsistent with both the views of Congress and the findings of the district court," but said the association would continue to hunt down online infringers through more conventional--and more cumbersome--lawsuits.

"This decision in no way changes our right to sue, or the fact that those who upload or download copyrighted music without authorization are engaging in illegal activity," he said. "We can and will continue to file copyright infringement lawsuits against illegal file sharers."

FURTHER ACTION?

Sherman declined to say whether the RIAA would appeal the case to the Supreme Court, although the association may be waiting for the outcome of a virtually identical case pending in San Francisco, in which SBC challenged the legality of RIAA subpoenas. But Lewry questions whether the RIAA would even want to take the case further. "The RIAA's main goal always has been publicity--not to shut down individuals, but to put fear in people," he says, referring to the hundreds of copyright infringement lawsuits that the RIAA has filed over the last few months. "I think they've succeeded, in that the average citizen on the street, who downloaded music for recreational purposes, is scared."

At the same time, though, the music industry has managed to alienate many of its consumers, and Deborah Peckham, partner at law firm Testa, Hurwitz & Thibeault, believes it needs to take a different tack. "I'd like to see the RIAA take some other route besides litigation," she says. "It needs to find ways that suit both the music industry and consumers of music that doesn't involve spending $20 on a CD when the songs are easily downloadable for free."

Preventing 'Napsterization' in the film industry

Carriers' fiber-to-the-home deployments mean faster speeds for consumers--which will also likely mean more opportunity for file sharing, particularly as file-sharing tools evolve to enable faster download speeds. The music industry claims it loses $4.2 billion worldwide each year to piracy--and as bandwidth limitations disappear, the film industry could face a similar problem. According to a Yankee Group survey, in 2002, 8% of Internet users ages 13 and up said they had downloaded at least one feature-length movie over the last three months, with college students representing the heaviest downloaders.

The Yankee Group recommends that the film industry develop new content models and partnerships with peer-to-peer networks that encourage consumers to legally download movies, and partner with broadband service providers to develop premium content packages--in other words, not follow in the music industry's footsteps.

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