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Biz, ISPs unleash piracy crackdown pact

Groups team to tame copyright infringement

Hollywood studios and record labels have unveiled a landmark agreement with Internet providers to send consumers “copyright alerts” when their accounts have been used to access pirated content, with subscribers who repeatedly download or share infringing movies, TV shows and music facing slowed Internet speeds or other measures.

The industry views the agreement — akin to the system of credit card fraud alerts — as giving them a potent tool to tame the anything-goes flow of infringing content online.

The long-in-the-works pact (Daily Variety, June 22) comes after years of efforts among the Motion Picture Assn. of America, the Recording Industry Assn. of America and the Independent Filmand Television Alliance and other orgs to secure greater cooperation from Internet providers in rooting out content theft online. The ISPs involved are AT&T, Cablevision, Comcast, Time Warner Cable and Verizon. Those five have a share of approximately 50% of the market, according to research firm Stat Owl. Not included in the deal are such companies as Cox Communications, Charter Communications and Qwest.

Many ISPs already send notices to subscribers after getting specific complaints from content owners about alleged content theft. But the agreement sets a framework of “best practices” to do so, and is being put in place on the notion that the vast majority of consumers either don’t know that they are viewing pirated content or will halt once they are educated about it.

In a conference call with reporters, industry officials said the intent of copyright alerts was to educate, not to punish, and that consumers would be given up to five or six notices before more serious steps are taken. They cited a 2007 study that showed that only 40% of Americans “understood the serious legal consequences associated with online content theft,” and other data that suggest that a “large majority” of those who receive alerts stop the activity.

While many in the industry have called for legislation that would require Internet providers to send out the alerts, a system that is in place in other countries and is commonly called “three strikes,” telecom and cable companies have been resistant to mandatory measures and have long been worried about the potential liability.

By contrast, the agreement announced on Thursday is voluntary, and while some of its toughest measures involve slowing a user’s Internet speeds, it does not include termination. However, separate from this agreement, the Digital Millennium Copyright Act, passed in 1998, requires that ISPs have a policy in place that can result in a subscriber being cut off for the repeated downloading of infringing content.

It will be up to content owners to identify the infringing material, and then to inform an Internet provider of pirated content linked to IP addresses, which is something they already do. Studios and record labels are able to obtain IP addresses of peer-to-peer users, but not the identities of subscribers. The ISPs will not provide subscribers’ names to copyright holders, unless directed by court order.

Public Knowledge and the Center for Democracy and Technology, two groups that have been wary of industry efforts to combat piracy as too heavy handed, said the agreement “has the potential to be an important educational vehicle that will help reduce online copyright infringement.”

But they said they are concerned that it could ultimately lead to suspension of a user’s Internet service, even temporarily, “based on allegations that have not been tested in court.” “Close ongoing scrutiny will be required to ensure that the agreement achieves its purpose without unfair or disproportionate consequences for Internet users,” they said.

Under the system, when an ISP gets a notice from a copyright holder, it will send an alert to a subscriber informing that person that their account has been used for content theft, that it is illegal, and that it is a violation of the terms of service and other policies, and the consequences that could result.

If the theft persists after one or more “educational alerts” are sent, then an additional alert will be sent that asks a subscriber to acknowledge the receipt, via some “conspicuous mechanism” like a click-through pop-up notice or landing page. Another one or two alerts will be sent to a subscriber if they continue to use infringing content.

If the problem persists, it will be up to the Internet provider to take one of several steps, called “mitigation measures,” that include temporary reductions in Internet speeds, or redirection to a landing page until the subscriber contacts the ISP to discuss the problem or responds to some educational information about copyright. Internet providers will not be required to undertake a “mitigation measure” that hobbles voice telephone service, e-mail accounts or any security or health service. All of the steps that an ISP can take will be specified in their published policies.

If a subscriber’s account still appears to be engaged in content theft, the ISP will continue to undertake the mitigation measures, but studios and Internet providers say they do not expect that many subscribers will persist in consuming pirating content to that point. “I tend to think that people want to do the right thing,” said Michael O’Leary, exec VP for government relations at the MPAA,

Before any mitigation measure is imposed, a subscriber also can request an independent review, for a $35 fee, in which a neutral party will look into whether they got an alert by mistake or whether they were viewing content that was lawful. Consumers also can still challenge any action in the courts.

Cary Sherman, president of the RIAA, said they anticipate asking the American Arbitration Assn. or some other entity to conduct the independent reviews.

The agreement is aimed at illegal file sharing, and does not include mobile content or streaming. Other Internet providers also could join at some future date. “We rule nothing out, but basically we have to take it one step at a time,” Sherman said.

The agreement also establishes a Center for Copyright Information to help implement the system and educate consumers about copyright, as well as measure progress.

The companies credited then-New York attorney general Andrew Cuomo for launching the negotiations that led to the agreement, and also said that White House officials played a role in encouraging them to come up with a plan. Vice President Joseph Biden and Victoria Espinel, the administration’s intellectual property enforcement coordinator, have held several summits with industry officials. Espinel said that the administration believes the agreemment “will have a significant impact on reducing online piracy.”

Hollywood will keep pushing for legislation aimed at shutting down so-called rogue websites that are devoted to infringing content. A bill recently passed the Senate Judiciary Committee unanimously, but the legislation was put on hold by Sen. Ron Wyden (D-Oregon), who raised concerns that the legislation was too broad in scope.

Record labels and studios have moved away from suing consumers who download infringing content, a costly process that involves a legal tangle as well as an onslaught of negative publicity. New system still leaves that option open, and some producers, like the makers of “Hurt Locker,” have pursued individual users on their own.

Jean Prewitt, president of the IFTA, called the agreement “unprecedented” and said that it could prove particularly beneficial to independent producers especially pinched by piracy. DGA national execuitve director Jay Roth said that the pact “has the potential to open new lines of communication with consumers that will directly impact the fight against Internet theft.”

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