Internet service providers almost never terminate their customers’ connections over illegal file sharing. Why would they? It’s bad for business. But a new court ruling this week could make it a lot more common.
On Thursday, a federal jury in Virginia found Cox Communications, the fourth largest internet provider in the U.S., liable for "willfully" contributing to copyright infringement by its users, and ordered the company to pay $25 million in damages.
At issue was whether Cox had adequately responded to notices from music publisher BMG Rights Management, the plaintiff in the case. BMG argued that the law requires Cox to ban users who repeatedly engage in illegal file sharing. Cox did technically have a policy for banning repeat offenders, but BMG argued it was so convoluted as to be essentially toothless.
On Thursday, the jury sided with BMG, finding Cox liable for the illegal file sharing of its users. If upheld on appeal, the ruling will be a major victory for copyright owners, who will have a powerful new weapon in forcing internet providers to battle copyright infringement on their networks.
So if you engage in illegal file sharing: watch out. If media companies catch you, your internet provider may not be able to save you.
Cox let customers re-connect immediately after they got kicked off
Cox claimed that it was complying with the law — specifically, a 1998 law called the Digital Millennium Copyright Act that provides ISPs a "safe harbor" from liability if they terminate the accounts of repeat infringers. Cox claimed they had such a policy. In practice, though, Cox customers that did a lot of illegal file sharing didn’t have very much to worry about.
Jason Zabak, Cox’s Manager of Customer Abuse Operations, laid out Cox’s approach in stark terms in an internal email titled "DMCA terminations" that came up at trial. "As we move forward in this challenging time we want to hold on to every subscriber we can," Zabak wrote. "With this in mind if a customer is terminated for DMCA, you are able to reactivate them after you give them a stern warning."
Zabak added that "We must still terminate in order for us to be in compliance with safe harbor but once termination is complete, we have fulfilled our obligation." Zabak described the re-connection rule as an "unwritten semi-policy" and warned Cox staffers not to talk about it publicly.
Judge Liam O’Grady, who presided over the case, cited this email and others when he refused to dismiss the case against Cox last month, writing that the company’s repeat offender policy didn’t measure up. The jury, it seems, agreed. Cox representatives say the company plans to appeal the decision.
Cox’s refusal to join the copyright enforcement pack was its undoing
The odd thing is that many major ISPs don’t terminate repeat infringers at all. Instead, larger firms such as Comcast and Time Warner signed a kind of detente with major content companies in 2011 and joined a program called the Copyright Alert System. Under this system, ISPs promise to send users increasingly ominous messages when they’re caught engaging in illegal file sharing. But the rules don’t require ISPs to ever fully cut a customer off.
Cox pointedly refused to join the program, angering content companies. Many observers believe that that’s why BMG chose to sue them.
In its defense, Cox argued that its repeat infringer program met the legal requirements for the safe harbor, and that it was therefore entitled to immunity from liability.
The company’s lawyers also questioned the process by which BMG had identified illegal file sharers on Cox’s service. BMG hired a company to scan popular file sharing platforms searching for users sharing BMG-owned music. It would then send Cox lists of thousands of internet addresses and demand that Cox punish their owners.
Cox’s lawyers asserted that this process wasn’t rigorous enough to definitely prove that a particular subscriber had broken the law. Therefore, Cox argued, it was appropriate to treat BMG’s supposed "proof" as a mere accusation, and not enough on its own to obligate Cox to punish users.
The verdict is a major victory for media companies
Peer-to-peer file sharing remains extremely popular online. The total amount of data shared between users in 2014 was 797 petabytes, equivalent to about 70 million HD movies.
The Cox verdict represents a major win for the record labels and TV and film studios that have battled illegal file sharing for over a decade.
If the verdict survives appeal, internet service providers will have a powerful new incentive to work with media companies, either through programs like the Copyright Alert System, or by maintaining more robust termination and repeat-offender programs.
For those engaged in illegal file sharing, that means more scrutiny, and perhaps a higher likelihood of being caught and punished.