ISPs can profit from busting file sharers

Jerry Scroggin, the owner of a Louisiana Internet Service Provider, says he's skeptical of a service that proposes to pay ISPs to police their networks for pirated music and movies.

I wrote about Scroggin last month following the music industry's announcement that it would scale back a longtime strategy of suing individuals suspected of music piracy, and instead enlist the help of ISPs to thwart copyright violations.

Scroggin argued that the Recording Industry Association of America (RIAA) should help pay the costs incurred when they ask ISPs to chase down suspected music pirates. Days after the story was published, antipiracy firm Nexicon contacted Scroggin about a plan to share money collected from accused file sharers with ISPs.

In theory at least, paying ISPs could sway the balance of power in copyright enforcement. Up to now, ISPs have shied away from helping content creators protect intellectual property. There hasn't been much to motivate them, said Scroggins.

Film studios and the major music labels frequently ask ISPs to crack down on copyright violators. They expect this done free of charge, Scroggin said. Under the RIAA's new plan, ISPs would also be asked to suspend the accounts of chronic offenders. That means an ISP might be forced to wave bye-bye to paying customers without receiving any compensation. If ISPs could somehow be compensated, it might encourage them to become copyright enforcers.

The RIAA has said it wants ISPs to do nothing more than honor their own user agreements, which have long prohibited illegal acts, such as unauthorized file sharing.

On Thursday, I talked to Kyle Reed, the Nexicon sales associate who contacted Scroggin. He confirmed for me that Nexicon claims it can help ISPs automate and reduce the costs of chasing down file sharers, cut down on false positives and will share revenue collected from suspected copyright violators with ISPs.

He said previous antipiracy services have alienated ISPs and Nexicon wishes to avoid that.

Nexicon offers a variety of antipiracy services. One offering tracks those people who infringe on intellectual property and sends take-down notices to their ISPs. Reed said the company has the ability to distribute 95 million of these notices per day. That could prove helpful, according to Reed because the company plans to announce more customers soon. As of right now, Reed said Nexicon has only disclosed the name of one customer of this service: the family of rocker Frank Zappa.

As part of Nexicon's "Get Amnesty" service, the company tries to obtain fees from those it claims are guilty of violating copyright law. Nexicon sends e-mails to those accused notifying them that they must "settle" with the copyright owners, which typically means paying a fee. "After opening the email, the infringer clicks a link to visit GetAmnesty.com, where they can settle their infringement to avoid legal action and receive a legal release from the copyright owner," according to a statement on the company's site.

Nexicon then offers to help ISPs manage the take-down notices they receive from, well, Nexicon and competitors. The company's Envoy system uses a combination of automated and human systems to flag copyright violations and send take-down notices--saving ISPs time and money, Reed said. He added that the system is less likely to accuse someone by mistake.

"The user is presented in real-time a complete inventory of infringements processed by Nexicon on behalf of its copyright owner clients," the company wrote on its site.

Scroggin said he hasn't heard Nexicon's entire pitch but wasn't impressed with the overall approach.

"I would still wind up losing customers," Scroggin said. "I would also have to pay Nexicon for this...I have to survive in this economy but I don't have the big marketing dollars that bigger ISPs have. I have to fund 401(K)s and find ways not to lay off people. Giving free rein to the RIAA is not part of my business model."