ISPs gird for copyright fights

Record companies and movie studios have long turned to Internet service providers for help in their battle against online piracy, but ISPs are beginning to balk at what they see as increasingly onerous demands to step up pressure against online copyright infringement.

Last month saw a two-pronged expansion of that strategy, resulting in separate legal skirmishes between the record labels' trade association, Verizon Communications and a handful of large backbone service providers. Internet service providers now say they're increasingly concerned that their hard-won position of neutrality in the copyright wars is being undermined.

"It's absolutely worrisome," said Robin O'Reilly, congressional affairs adviser for Cable & Wireless, a large Internet backbone company. "This is not a role we want to get into."

The budding conflict will ultimately help determine how much anonymity ISP subscribers can expect, as well as potentially shape new copyright laws and Net anti-piracy practices. In past policy battles, telecommunications companies have been among the only political forces powerful enough to push back against the entertainment industry and win.

The ISP community has largely stayed out of recent copyright battles aimed at reining in upstart file-swapping services such as Napster. But the ISPs are beginning to mobilize now, with plans to file a "friend of the court" brief Monday supporting Verizon in its legal dispute with the record industry trade group.

"The stakes are high," read an e-mail sent out by the United States Internet Industry Association late Friday, soliciting support for the brief from other ISPs. "If this court battle is lost, you may expect to see lawsuits launched against ISPs large and small across the nation and around the globe."

That doesn't mean ISPs are on the side of the peer-to-peer and technology advocates who view entertainment companies as adversaries. Telecommunications companies have their own business goals, focused largely around avoiding potentially expensive liability for subscribers' actions. They have little direct interest in shielding copyright infringers on their networks.

But the last thing they want is to become an enforcement arm for copyright holders. While it's hard to say this is now the case, ISPs say they're increasingly worried that's the direction entertainment companies are headed.

"We fully support the rights of the RIAA (Recording Industry Association of America) or any other organization to protect copyright holders," said Dave Baker, an attorney for EarthLink. "But the thing is, if there is an infringer, they should be going against the infringer, not holding ISPs responsible or trying to get ISPs to enforce property rights."

Compromise and discontent
The balance between the two industries resulted from tense negotiations in the mid- and late 1990s, which led to today's set of Internet and copyright laws. In a series of political compromises, ISPs and telecommunications companies successfully warded off attempts to make them liable for illegal or pirated works sent using their networks. (Under a legal concept known as contributory infringement, parties can be held responsible for aiding an infringer, even if they do not actively infringe themselves.)

What the ISPs accepted instead, among other provisions, was a process by which copyright holders can notify an ISP when a subscriber is using its facilities to distribute illegal content. An ISP can remove access to the content without incurring liability or being required to monitor subscribers' activities.

The limits of that provision, and others that involve ISPs' responsibilities to react to copyright infringements, are now being tested thanks to the rise of peer-to-peer networks, which fundamentally changed the technical requirements for widespread copying of digital works online.

Under the Digital Millennium Copyright Act, copyright holders assumed that massive piracy would require content to be hosted on equipment operated by the ISPs--upon notice, ISPs are required to take that content off their network. In a peer-to-peer system, however, the end user rather than the ISP hosts the content, creating unforeseen problems for the wording in the old law.

That doesn't mean that copyright holders have had no recourse to go after alleged peer-to-peer infringers.

For the last year, copyright holders have routinely been notifying ISPs that their subscribers have been making copyrighted files available online. For the most part, ISPs have passed these notifications on to subscribers, warning them that they are violating their terms of service and must stop.

But copyright holders have recently begun to ask for more.

On July 24, the RIAA instead asked Verizon for the direct contact information of a subscriber allegedly distributing many files using the Kazaa software. RIAA attorneys haven't said exactly what they want with the information, other than to ensure the individual stops. But record industry sources have indicated that lawsuits against individual file-swappers are being considered, and the contact information could be used to identify a potential target.

Verizon demurred, saying that the hard-won copyright compromises of the late 1990s did not extend to peer-to-peer systems. The RIAA could sue the individual as an anonymous "John Doe" and get a subpoena for the information that way. But because the person was not storing anything on Verizon's network, the ISP was not automatically required to give up the person's contact information, the company argued in its legal briefs.

The RIAA argues that the company is badly misinterpreting the law and that the individual's storing of files at home, instead of on a Verizon Web server, has nothing to do with the process. The issue is still being fought in court.

Just a few days earlier, the RIAA had sued a handful of American backbone Internet companies, including AT&T, Worldcom, and Cable & Wireless, on a separate issue. The record industry was asking that the Net providers block U.S. Web surfers from a Chinese Web site that had hidden its tracks well and had been impossible to shut down otherwise.

While this was envisioned to some extent in copyright law, it was the first time backbone Net providers had been asked by labels to block ordinary surfers' access to a given Internet address. Needless to say, they didn't like it.

For the most part, the Internet companies didn't say much--although like O'Reilly, they're beginning to express their concerns now. The suit ended before a real conflict point a few days later, after the site's operators pulled the site down and the RIAA withdrew its legal request.

RIAA executives are aware that they're putting their relationship with ISPs and telecom companies at risk and are doing what they can to rebuild bridges. The double lawsuits last month were "unfortunate timing," said RIAA President Cary Sherman.

"We've had a good working relationship with the ISPs," Sherman said. "We certainly don't want ISPs to think they are being asked to play some new role here."

Desperately seeking Switzerland
This isn't the first time that Internet providers have been fretting about being sued--or prosecuted for criminal violations.

Internet service providers got a first serious wake-up call on the issue nearly a decade ago, when the Church of Scientology sued then-prominent ISP Netcom for providing access to copyrighted Scientology documents. The suit was filed in 1995, before any of the ISP "safe harbors" laws had been passed, and Netcom ultimately settled. The incident helped spark many of the political discussions that came later.

ISPs lobbied to ensure that the 1996 Telecommunications Act said they would not be "treated as the publisher or speaker" of sexually explicit material that their subscribers distribute. In 1998, the DMCA said ISPs "shall not be liable" for copyright violations as long as they act quickly to limit infringements when notified.

ISPs got a bad scare in 1999, when the House voted on the Internet Gambling Prohibition Act, which didn't receive the two-thirds majority necessary under a special voting procedure used for that bill. The proposal, backed by Rep. Bob Goodlatte, R-Va., would have required Internet providers to "disable access" to offshore gambling sites after being contacted by police.

Now the threat has returned.

"The current situation is probably more politically challenging for the ISPs than anything since the DMCA," said Ed Black, the president of the Computer and Communications Industry Association, whose members include AOL Time Warner, Covad Communications and Nortel Networks. "The content community is making unreasonable claims in threatening ISPs. The real story is that you have seen an unbelievable new fear and resulting aggressiveness out of the content community. It's fear that their business model is obsolete."

"Think of the parallels," Black said. "It's like making the Postal Service liable for someone shipping pornography. What are they supposed to do, open every package? We don't want that. The costs are too great."

Dave McClure, president of the U.S. Internet Industry Association, says the political outlook is about the same as the mid-1990s.

"Very clearly this is a second wave of efforts to apply random liability to Internet service providers," McClure said. "This is very similar to the initial environment of the Internet circa 1995 and 1996. The underlying philosophy is that if it is too difficult or expensive or inconvenient to determine who's actually breaking the law, it's easier to assign liability to someone else in hopes of making money from them. It's not a serious effort to combat criminal activity since it doesn't target the criminal."

Because the federal government's fiscal year begins Oct. 1, and because not one of the 13 necessary appropriations bills has been signed into law, McClure said he's concerned about possible last-minute amendments using spending bills as a vehicle.

"In any or all of those bills, it's possible to insert amendments that have nothing to do with appropriations. It's a favored way for Congress to pass unpopular legislation. It's passed both houses of Congress, and on the president's desk for his signature before it's even been discovered," McClure said.

Uncertain future
At this point, it's up to the courts to decide whether the ISPs or the RIAA is right in their interpretations of copyright law. But in a large sense, the legal gyrations are secondary to the increasingly widespread perceptions that ISPs are in fact under fire.

"They're trying to stretch the (DMCA) to do something it wasn't designed to do," EarthLink's Baker said.

It's too early to tell just what the consequences might be, however. While Verizon appears to be actively opposing many of the controversial bills supported by the entertainment companies in Washington, few of the other ISPs say they're willing to take a direct lobbying stand yet.

Instead, they're studying the issues and engaging in technological soul-searching, trying to figure out what their role is and should be.

"We're all taking a look back at the (copyright law) and seeing what the intent was and talking to the technical folk to see what's possible," said Cable & Wireless' O'Reilly. "In the future we are going to have to deal with these issues. But it's something at this point that we're not just going to accept and agree to."

News.com's Declan McCullagh contributed to this report.