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Copyright Infringement: a New Worry for ISPs

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In decisions that should trouble every ISP, multiple Courts in the United States have ruled that ISPs are liable if they don’t disconnect customers accused of copyright infringement.

The U.S. Court of Appeals for the 5th Circuit ruled against Grande Communications, a subsidiary of Astound Broadband. The courts sided with three record companies, Universal, Warner, and Sony, stating that Grande had failed to disconnect customers from broadband who engaged in copyright infringement by downloading illegal copies of music. Grande might have been singled out because it had a firm policy since 2010 that it wouldn’t disconnect customers over the infringement issue. The appeals court upheld a lower court ruling that Grande is liable for copyright infringement. The appeals court said it would consider lowering the original award of $46.8 million.

This is the second major lawsuit on the issue. In 2018 the major record labels sued Cox Communications over its copyright policies. The labels accused Cox of refusing to disconnect customers who repeatedly broke copyright rules by downloading music without paying for it. In 2019, a court in Virginia found Cox liable for both contributory and vicarious copyright infringement and awarded the music labels an astounding $1 billion in damages. Cox appealed, and the Fourth Circuit U.S. Court of Appeals upheld the charge of contributory infringement but reversed the charges for vicarious infringement and vacated the $1 billion in damages.

Cox asked the Supreme Court in August to decide whether the 4th Circuit erred in deciding that an ISP can be held liable for copyright infringement without proof that the company fostered or promoted copyright infringement. The record labels are asking the Supreme Court to reinstate the original $1 billion award.

This has to concern all ISPs because if these two cases are resolved in favor of the record industry, then all ISPs are vulnerable. Altice USA, Frontier Communications, Lumen, and Verizon filed a brief with the Supreme Court saying that the 4th Circuit ruling imperils the future of the Internet by making ISPs liable for huge damages if they don’t carry out mass Internet evictions.

Folks might have a visceral reaction thinking that copyright offenders should be punished. There is some needed context to fully understand the issue. Complaints of copyright infringement are rarely made directly by record companies or others who hold copyrights. There is an entire industry of companies that makes a living by issuing takedown requests for infringements of copyrighted materials. These companies get paid by issuing huge numbers of takedown requests. Social media companies are inundated with these takedown requests every day to remove posts that link to copyrighted music, movies, and other materials.

The takedown process is completely one-sided and there is no appeal for a broadband customer who is unjustly accused of bad behavior. The music companies expect ISPs to cut off subscribers after only a few claimed violations of copyright.

This is also troubling to broadband customers. Any home with teenagers will have to worry if teens will download copies of games, movies, or music. People could hit a link on social media that downloads copyrighted material without even realizing they did something wrong. The bad behavior doesn’t even have to be done by a family member. Losing an essential broadband connection because teens, roommates, or visitors violated copyright laws seems like an extreme penalty. If ISPs start cutting customers dead for violating copyrights, I have to imagine that people are going to be a lot more cautious against giving visitors or even family members the WiFi password.

Copyright holders want ISPs to act as judge, jury, and executioner and unilaterally punish customers without a trial or hearing by taking away their Internet access. Like many other problems in the industry, the only real fix for this is to have Congress update or replace the Digital Millennium Copyright Act (DMCA), which was adopted in the 1990s when we were all still using dial-up access.

The recording industry has a legitimate gripe, but their complaint is against the folks who steal copyrighted materials. They should be required to pursue a law enforcement solution like is done for folks who violate other laws. The solution is not to turn the intermediate ISP into a policemen on the issue. This goes down an ugly and slippery slope. What’s next, forcing ISPs to turn off broadband for customers who break myriad other laws?

By Doug Dawson, President at CCG Consulting

Dawson has worked in the telecom industry since 1978 and has both a consulting and operational background. He and CCG specialize in helping clients launch new broadband markets, develop new products, and finance new ventures.

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Thanks for posting this - but it raises even more questions Karl Auerbach  –  Nov 19, 2024 12:38 PM

Your post is useful.  There are, however, some additional observations:
Why should an ISP be more liable for carriage of improperly copied materials than, say, the electrical utility that provides the power to move those bits, or Cisco [or Juniper or ...] who builds the equipment that carries those bits, or the owner of the fiber and copper wires that are used (and perhaps leased to the ISP)?  Should Corning be liable because they make the glass that goes into those fiber optic cables?

If someone puts the copied tunes onto an iPhone and plays them in their car are Apple, Ford, Toyota, and Tesla also liable under this bizarre theory of liability through conveyance?

In addition copying of copyright material is often quite proper under defenses such as Fair or Transformative use.  So a court to calculating damages would need to evaluate such defenses on each and every accused copying event.  Because each case is different this would mean making a discovery inquiry to every person who made a copy to ascertain whether there was a fair use defense.

Moreover, has the plaintiff jumped though the procedural hoops by having a copyright registration for every work that is being counted in the damage calculation?

U.S. courts forget they have no authority outside the U.S. Colin Sutton  –  Nov 21, 2024 11:35 PM
Jurisdiction of US courts can be quite broad Karl Auerbach  –  Nov 22, 2024 10:14 AM

The span of jurisdiction of a US court can be quite geographically broad, even encompassing actors one might normally think are outside of the US.

The rules of that jurisdiction are complicated - they make many heads spin in confusion.  However, one of the basic principles is that if one has sufficient contacts in the US that person or company can be subject to US jurisdiction.  What is “sufficient” is a complicated question, but one of the hooks is whether one is doing business in the US or has various forms of presence such as, perhaps, a peering or transit arrangement with a clearly US based carrier via a physical exchange point inside the US.

All of this is to say that the reach of US law and policy over people and companies seemingly outside of the borders can be longer than one might think.

The reverse is also true - Foreign courts can sometimes have power over seemingly US based defendants.

Of course there is also the fact that the applicable copyright, data privacy, and defamation laws vary from country to country.

There are often procedures, sometimes based on treaties, through which foreign courts can “domesticate” a judgement made elsewhere.

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