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.

ISP owner Jerry Scroggin is skeptical of company that plans to pay ISPs to police networks.

(Credit: Jerry Scroggin)

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."

[ajhoughton]

Scroggin pretty much said it all here. ISPs aren't interested in stopping people from doing anything illegal, because it'd cost them money (conversely, illegal activity is *making* ISPs money). We've known this for a long time, but this is the closest I've seen to a public admission that this is how things are.

That being the case, DMCA and EUCD should be amended to remove the safe harbour that is protecting ISPs from legal action. It was never intended to provide a way for ISPs to be safe from prosecution for deliberately and knowingly profiting from copyright infringement, which is what they're doing.

Moreover, going after ISPs seems a lot fairer than going after individual file sharers. ISPs are directly profiting from infringement (whereas file sharers typically aren't making money from their copyright infringement), and a lot of file sharing is done by teenagers without their parents' knowledge or without their parents realising that there is a risk that they could be sued as a result.

[Binary Minds]

ISPs aren't profiting from copyright infringement - they make their money from (barely) doing their job - providing an internet service. They don't make any extra money from people who infringe copyrighted works, or from letting those people use their networks.

[Grifter02]

Maybe we should also hold the government responsible for building the roads that criminals transport stolen items on. While we're at it, let's punish the phone companies for "allowing" telephone scams to happen. How about the local Parks Commission for paving the pathway that someone got mugged on.

That all sounds ridiculous, doesn't it? Why do you think the ISPs are to blame just because they offer a connection?

[gsboriqua]

Wow, are you for real? Why not come out and say who your working for?

[unknown unknown]

He's made similarly uninformed comments on other copyright issues.

[MythicalMe]

Funny, I didn't get Scroggins making any admission at all, except to say that he's skeptical. I don't have an ISP business, but I like Mr. Scroggins would be very unwilling to change the way I do business if it means losing customers. Internet Service Providers do only one thing, make sure their customers can connect to the Internet. Except as it affects their business, they don't care about the content of their customer's packets any more than the telephone company cares about what is said over the phone.

If I discovered that my ISP was a participant in anything to do with the extortionist RIAA and it's member companies, I would drop that ISP faster than a hot than a hot potato.

[Thomas, David]

ISPs aren't liable for the conduct of users, anymore than the people who built highways are liable for peoples driving habits. What's worse, is this "scare" tactic to force ISPs to eventually employ shady tactics that endanger the use of the internet itself.

The music industry isn't suffering due to piracy, they are suffering for their long vision of "success without change", their own inherent ineptitude, and deep greed. Musicians have long suffered while the big labels seemed to always make ridiculous profits. Time to focus on why that industry is a dinosaur long past its time.

[Sausagebiscuit]

So Nexicon wants to play Private Investigator now? Are they licensed? Don't know if that matters, however. What I do know is that it all comes down to money. What happens when someone (company) offers to pay ISPs for full investigation costs (perhaps to get a percentage of 'amnesty' in return)? They (ISPs) will hop on board like lemmings off a cliff.

[Drazhna]

Thomas, David you hit the mark on this. It's similar to an obese person complaining about their health but not doing anything to help themselves like exercise or change in diet.

For as supposedly a 'forward looking and open minded' industry as they want to be perceived to be, they are truly lacking this in reality

[medezark]

I wonder how much of Nexicon's technology would actually fall under the definition of Illegal WireTap.

They're trying to build a business. They have one customer, Frank Zappa's coffinriders.

[Penguinisto]

Interesting... so "Nexicon" is going to demand money.... through email. Email as in: home of the scam. Home of the fake invoices. Umm, yeah - like that's going to work.

I do agree with at least one idea in the talkbacks... if an ISP is going to profit from becoming a DMCA enforcer, it should no longer be covered under Safe Harbor provisions, for any reason, under any circumstance. If it becomes a party in enforcing the DMCA for one copyright holder, it should become the enforcer for all, meaning it is no longer neutral and therefore open to litigation by any copyright holder who deems a customer to be infringing.

@ajhoughton: ISPs don't really make any money from mass filesharers - they actually lose money from the practice because a massive file sharer uses more bandwidth than a typical user does (though with legit movie downloads and such, this distinction is becoming less clear).

/P

[Renegade Knight]

Good point on the scam comparison.

[ralfthedog]

Penguinisto, that demand for money sounds allot like extortion.

[Renegade Knight]

"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."

This is a good time to for ISP's to modify their agreements to stick to the service of being an ISP. Their own weasel words are starting to bite them.

[ralfthedog]

First, send the RIAA to prison for a very long time under RICO for their illegal influence on the record industry, then you can start taking down file sharers.

[gerrrg]

Nexicon sounds like the red-light photography company of the internet.

[glaven123]

Please read Nexicon, Inc's FAQ.

http://getamnesty.com/index.php?p=help

This is a wonderfull business model that amounts to a scare tactic at best and extortion at worst. If the RIAA/MPAA could settle this "problem" directly, they would. Remember, they both offered amnesty programs also that were based on very flimsy and questionable legal language. This and the lack of ISP's view of there respective obligation, these agencies have all but stopped sueing people individually. If Nexicon can't collect from you, are they going to turn their "evidence" over to the RIAA/MPAA? For free? As the "right" thing to do? I think not. There is no profit in it.

IP's and MAC's are too easily spoofable and sending you a notice that you owe an alledged ammount of money is not a subpeona. You would have no oblighation at that point to 'preserve' and evidence. Further, collections law is pretty speciffic; wording and actions taken by an entity must be direct, speciffic and undersandable by the "lowest common denominator". The language they use is wholly missleading and the tactics they are attempting to use are thuggish. I think a judge would agree.

Where omn their website does it say that they have the cooperation/sanction of the agencies they are collecting on behalf of? Hint hint....they don't.

It's a shame encryted filesharring systems like WASTE and hotline connect are not in fashonable. Breaking a cypher? Wiretap? RICO?

Watchout or the wannabe thuggs of the media indurty will get you!

[Michichael]

What's funny is the RIAA doesn't ever go after real hackers or pirates...

[Fire Balls]

How many poeple don't have secure wireless? and it's not hard to hack WEP or WPA so someone could just come up sit out side the building that wireless is in and download whatever... or just do so at hot spots such as starbucks or mcds. Also we are and will be seeing a higher rate of encrypted torents and I think at some point in time ip filters on the torent trackers as well from sites like the piratebay.org blocking these wanabe cops ip ranges from even being able to connect. much as you can in safepeer. they are fighting a loosing battle.. and for those that don't say that ISPs are profting from people downloading content.. all I have to say is the more they download the faster they want their connection to be so they will buy the faster service so they can cap torrents at a decent speed and still be able to surf the web or play online games as well.

[Sausagebiscuit]

I hate fighting a 'loosing' battle. It only ends up getting tighter.

[unknown unknown]

Another extortion scheme right out of the RIAA's play book. The major problem with these file sharer amnesty programs is that the agreement is only between the accused and Nexicon or whom ever is running it. So, the RIAA or Nexicon might have agreed not to sue but their is nothing stopping the original copyright holder form doing so. They might even be able to use the amnesty agreement against the accused in court as an admission of guilt.

We know one thing about these companies, the evidence is typically pretty weak. The "making available is copyright infringement" legal theory put forward by the RIAA etc hasn't gain much traction with the courts. The RIAA's one conviction was over set aside in favor of a new trial by the judge cause he believed he made a serious error by agreeing to include "making available is copyright infringement" in the jury instructions.

[i_made_this]

The RIAA was formed in 1952 to administer the RIAA "qualization curve" - a technical standard of frequency response applied to vinyl records during manufacturing and playback. The RIAA has continued to participate in administering, though no longer in creating, technical standards for later systems of music recording and reproduction, including magnetic tape, CDs and software-based digital technologies. The RIAA also began to enter such areas of administration of legal areas of copyrights management, artists rights, studios rights, et al starting forcefully in these areas during the early 1970's.

The RIAA's naturally composed of, and or overseen by senior management from, particularly, the major companies in that industry, of which there aren't many today, just like there weren't a half century ago. Of all industries operating in the USA, the record industry traditionally has had one of the shadiest reputations in terms of high pressure distribution tactics, huge sums of graft and various other, far more serious, illegal operations.

The RIAA has failed miserably at its original mission of the maintenance and administration of the highest possible audio fidelity standards. Audio fidelity standards of legal distributions of digital music are abysmal. So, the RIAA has succeeded in taking the quality of recorded music backwards, since RIAA's founding in 1952.

So far as Rights Management, etc, what can we expect of an industry association composed in large part of executives who for the most part have long had as a primary goal the separation of artists from their money?

We really and truly don't want the ISP's playing cop over much of anything. Not only is it not their job, but DRM hasn't succeeded at a thing except encouraging the proliferation of destructive technology like rootkits and increasing the cost of our systems, the ISP industry is an oligopoly where prices are essentially fixed at outrageously high prices for mostly poor service. If we make them play cop, Americans' outrageously high broadband monthly bills will go even higher, using this play cop responsibility as an excuse for doing more of the same old - poor service for even higher prices.

This economy, the worst since the early 1930's, will force lots of useless crap like the RIAA and firms in the larger entertainment / communications industry that don't offer product and service of excellent value, bankrupt .. out of business. It's already started - and it's way overdue.

[hansonme]

Much chat about nothing. Focus people on the legal issues.


1)MEDEZARK ...YOU NEEDED TO FINISH YOUR THOUGHT:

by medezark January 16, 2009 6:10 AM PST
I wonder how much of Nexicon's technology would actually fall under the definition of Illegal WireTap.

2) ISPS USING DPI ON ALL USERS, PRIOR TO A DMCA NOTICE, TO MONITOR P2P.........MAKE MY DAY, DO IT!!!!!

The Electronic Communications Privacy Act (ECPA) is intended to protect the privacy of Internet communications. With certain exceptions, ECPA and its amendments to the federal Wiretap Act, prohibit ISPs from intercepting their customers' communications or disclosing the content of those communications to a third party without the customers' permission.


3) USE OF THE DMCA TO MAKE A CIVIL DEMAND FOR MONEY, AS IT RELATES TO A CRIMINAL COMPLAINT NOT BEING FILED=PRICELESS!!!!!!!

Section 1201 of the Digital Millennium Copyright Act (DMCA) is known as the anti-circumvention provision, and it includes criminal as well as civil penalties.

[jdubow]

The whole anti-piracy efforts have been doomed to failure since they started. They may never have worked, but it would have had a chance had the focus been on anti-piracy and not on combining anti-piracy efforts with making said efforts a profit center and a center to extend control to how and when users can use the content.

A normal human being concerned with piracy would have attempted to marshall support from non-pirate users by, say, notifying infringer's once that they were infringing along with a copy of the relevant law and the specific infringement actions, then a second time noting that if they didn't stop that action would be taken, and on a third instance taking a small action (say a small to moderate fine, being cut off itunes or access to music company sites etc) as well as notification that they would be sued if they continued. If the RIAA legal hit team then sued someone they wouldn't be viewed as vipers and could have had some impact on piracy as it was practiced. Who could defend someone who didn't heed three warnings.

It would have clearly cost more, and some pirates would have "gotten away with it". Yet if we look back over five years, would it have cost more than it already has, would there have been less ill will in the techie and customer base, and would piracy be still be as tolerated as bootlegging in the thirties???.

[sbegic]

Every ISP like any other business depends on clients and in my opinion they should and they will stay away from cutting off their customers for downloading illegal files.Unless somehow it will be forced by some new law in future to do that.On thing every ISP should do is to quickly respond to takedown notice received from copyright holders.If they hosting site which has illegal files or even link to illegal files they have only one right way to deal with that.To remove site if site owner does not remove copyrighted material him/herself after getting warning notice.Every ISP customer agreed to ISP's service agreement not to host copyrighted material so there is no other way to deal with this.
Regarding companies who offer anti-piracy services to copyright holders and now to ISP-s:
It is going too far because it became to much of money making business.Let sue whoever we can sue and try to get as much money as we can.
It should be quite simple:
It is impossible to completely stop copyright infringement but for some companies small improvement in reducing infringement of their IP means a lot in steps to reduce loses.They will hire anti-piracy company which will act in most possible "human" way to address this issue not because hired anti-piracy company expect to make big money on lawsuits but because it is already paid to do their job.
It sounds as civilized way to protect intellectual property on the Internet.

Sam Begic
www.dasintelligence.com

[hansonme]

?Do the math,?:
ISP+DPI+ DMCA + RICO=ECPA.

[rkjoseph]

As a online company that is new to this area, I believe in net neutrality. I hope to sell software for companies to find those that are illegally downloading music. I feel that it is wrong and needs to be stopped.

The remarks by "hansonme" are disturbing. I don't understand the responses,and would request clarification of the remarks. We need to all get together to fight and I hope I can be a part of getting my company into the business side of this fight. I would also like to work with isps on locating those that steal songs.

Hansonme is wrong about many things, and feel free to respond Hansonme to my remarks.

isps have a right to stop all illegal downloads. once a user signs up with an isp then the isp has a right to look at whatever the user is downloading. The user agrees not to download illegal stuff, so the isp can look at whatever the user is searching for, and stop them .The only way to do that is to look at everything they search for and dwonload. Once they go to the isp server then the isp has the right, much like a government in my country, to look at whatever you are looking at. the isp is not invading your privacy because you came to their company. I don't care if they look at your email, bank accounts information, or any persoanl information. If you did not want them to look at it then you should find another isp.

the isp aslo has to help out those that own the songs. In my country they have rights and it doesn;t matter how they find out about it, you have no right to privacy one you go onto the internet. everyone knows that. If the isp can look at all of your searches and personal information then they should be able to sell that information. once you go to the isp then they own your personal information. they should be able to sell it to whoever will pay them money. it is expensive to run an isp and why not make money selling their users personal information. If a user posts personal information that they don't want anyone to see and sends it to friends, the isp should be able to look at it too since it has been sent to the isp. i don't understand what the problem is?

so if the isp can copy and sell their user's information of whatever a users of theirs puts into the system, then why can't a company that thinks people that are stealing songs also get with isp to stop this action?.

if i think someone has stolen songs then i should be able to copy everyone's searches online to find out who is doing it. i know i don't know who is really doing it but good people will understand that i will have to lokk at everyone's searches and downloads. good people are ok with this since they didn't do anything wrong..

once the isp finds out who is downloading songs then they can tell other people. there may be mistake but good people will not mind. this is the good part. now those that want to know will pay us money. we can now tell the people that are downloading the songs that they better pay us or we will turn them in.

get this, we can also copy whatever they are looking at on the internet. wink wink!!. so we will see whatever websites they go to, and can sue them and show everyone, let's see who wabnts to stop us then . if they don't pay us then we can go to the police and turn them in.

i want to know how much an isp will pay me if i can show them ways to copy their user's information whenever they do searches. we don't have top tlel them because then the bad guys will stop . the good people will understand that they may be caught up into the mess, but they will not mind.

hansonme go jump in a lake, your full of it. Isp can use dpi without asking their users to agree to it. the isp has a right to look at their users in case of problems, so that means THEY CAN LOOK AT ALL SEARCHES. why don;t you understand. if they have a rgith to look at it for one reason then they can use that reason for whatever they want, and say that it is for problems. ha ha on you. isp can get away with it and you can't stop them.

DUH, of course they won't tell their users they are copying all of their online searches. DUH!!!. The isp will tell them it's to do maintence!!!!....ha ha on you.

so now the isp can go to the other comapnies and do a deal to get paid for doing it. maybe they can do a deal before they do it.. hansonme , this is not ecpa. that is about wiretapping telephones. it doosn't concern isps. fisa is about telephones companyies, so isp can listen in on everything. ha ha .
so why can't we all get together and try to put together a plan of action and figure out how we can stop this. we can set up a system to get paid money for doing it and have fun. If orgainizing to stop this is wrong, and we don't need to care about that federal law thingeee, the ecpa thingee since we are not telephone companies, , then let's go make money!!!!!!

[rkjoseph]

it's a funny on me. i read my words once i posted,

my company can do this. i am in india. Aami ki korbo?
Aami ki korte pari?

oh, what can i do for this?

[hansonme]

In response to rkjoseph. Please do continue to exchange ideas and coments about ths area. You need to tell us more about any business deals concerning this area that are going on in india that you are involved in, and any concerning other usa companies. I really think you have a wonderful grasp of the legal issues involved, and offer some tremendous new business plans.Tell us more about India and whether any associations from the USA are doing any work in your country on these issues. Is that why you started your company to attempt to share in the market in india for working in this area? Out of curiosity, are any isps allowing any appliances to be attached to their hardware here in the USA and routed to India for "review"? Is that what you meant by your business model discussed in your wonderful explanation of this area? Remember , Please do expain., telling us in detail how it is done, and do note what companies are doing it in india. I would also give you some business advice, in that, you should give details about your company so that USA businesses can contact you. See what a nice guy I am really, so please don't get mad at me, and I now thik that maybe you were right, but I had to read your opinion noted on the subject. Thank you for helping me to understand the issues.