The Copyright Alert System: A useful tool in the war on piracy, or another demonstration of the power of the ISPs to avoid responsibility for copyright infringement?

The new Copyright Alert System, a voluntary arrangement announced earlier this month by Internet service providers (ISPs) and the representatives of the record and motion picture industries (RIAA and MPAA), will not have a significant impact on copyright piracy. In fact, this arrangement’s only true significance may be to demonstrate the relative strength of the ISPs compared to the music recording and movie industries, and the ISPs continuing power to evade responsibility for the grievous damage inflicted by pirate websites and file sharing.

AT&T, Verizon, Comcast, Time Warner Cable and Cablevision have agreed to implement a six-stage notification system that will electronically alert users whenever their ISP account is used for illegal downloading of music, movies or TV shows. This system will work similarly to a credit card fraud alert system, whereby an account holder will receive an email in the event their account is being used for illegal downloading. One inspiration for arrangement is the fact that many parents have no clue what their kids or the kids’ friends may be doing on their computers, and this system will help parents tame their children’s nasty habit of downloading free songs and movies. Upon instances of illegal behavior the ISP is allowed, but not required, to implement “Mitigation Measures “ which could include sending the subscriber to an “educational” webpage that explains the economic damage piracy does to copyright owners, or temporally reducing Internet speeds. The accounts of users who do not curtail their illicit use of their Internet after six notifications may have their accounts suspended, but not terminated.

If this is the best the copyright community, including Hollywood can do to get the ISPs to crack down on piracy, it’s pathetic. There is no law backing up this voluntary arrangement, and the ISPs have no obligation to terminate a subscriber’s account or provide the subscriber’s names to rights holders.

It should be pointed out that there is little incentive for ISPs to crack down on piracy. After all, free content is one of the biggest draws for high speed Internet service from which the ISP’s make a fortune in subscription fees. The ISPs have no interest in terminating paying customers even if those customers are downloading unauthorized free music and films. The power of the ISPs to block the copyright owners’ attempts to combat piracy first became manifest in the Digital Millennium Copyright Act of 1998 (DMCA) which provided them a “safe harbor.” Under the DMCA, ISPs are immune from copyright liability so long as they promptly block access or remove infringing from their systems if they receive a notification claiming infringement from a copyright holder. Many copyright holders have complained that these guidelines do not provide sufficient protection for their works because infringers quickly replace the works that have been taken down, but so far they have been unsuccessful in repealing the safe harbor, or getting courts to interpret the DMCA more strictly.

In contrast to the Copyright Alerts System, the French equivalent seems like a much more powerful weapon against piracy. As I wrote in the forthcoming third edition of the Future of the Music Business (Hal Leonard, fall 2011), under the Hadophi statute, better known as “the 3 strikes law,” ISPs are required to provide the personal contact information for IP addresses found to be file sharing, and face fines of 1500 Euros a day for failing to provide this information. After that the ISP must invite the owner to install a filter on his or her own connection. If a repeated offense is suspected by the copyright holders within 6 months following the first step, a certified letter is sent to the connection owner with similar information sent in the first mail. On failure to comply, the ISP is required to suspend the user’s Internet service for 2 months to 1 year. The connection owner is blacklisted and third party ISPs are prevented from providing him or her Internet access. And this service suspension doesn't interrupt billing. Notwithstanding the draconian nature of Hadolphi compared to the Copyright Alert System, there have been recent reports that the law isn’t helping solve the infringement problem in France because the ISPs have not been fully cooperative. The ISPs in France have only sent 470,000 “1st warnings” in response to 18 million complaints about infringement and only 10 of those users from the 470,000 received “3rd warnings.” It has also been reported that the French ISPs do not want to prosecute people and have been holding off on sending 2nd and 3rd warnings in order to avoid losing customers.

The alleged policy and objective behind The Copyright Alert System is to educate the public about the damage to the creative community and to “direct subscribers to legitimate sources of content.” But its difficult to comprehend how this will help parents or their kids’ reform their habit of file-sharing and illegal downloading. Indeed, the true educational element in the Copyright Alert System is that even when Hollywood studios join forces with the big record companies, they are still not collectively strong enough to force the ISPs to take meaningful action against copyright infringement.

The real answer to copyright infringement on the Internet is to force the ISPs to police infringing behavior or make them pay a royalty to the copyright holders to compensate for lost sales. But so far the copyright community seems unable or unwilling to make these solutions happen.