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John Heidemann was skeptical about what the movie industry was saying about campus piracy.

A researcher in the Information Sciences Institute at the University of Southern California, Heidemann had heard the film studios' claim that college students downloading movies on campus were responsible for 44 percent of the industry's domestic losses to piracy.

That added up to about $572 million. So, working with a team of researchers last summer--the famous Hollywood sign on the mountain clearly visible from his workplace--Heidemann and the group came up with a way to track file-sharing use on USC's network. Following a 14-hour monitoring of the system, the team concluded that between 3 and 13 percent of those on the school's network (PDF) were using peer-sharing technology and accounted for between 21 and 33 percent of overall traffic, he said.

There was no way for Heidemann to discern whether the information being transferred was pirated. But even in a worst case scenario, 13 percent indicated that only a small minority of USC students were engaged in illegal file sharing. Heidemann's research flew in the face of the MPAA's claims.

This was an example of a university not relying on the Motion Picture Association of America (MPAA) to tell it what was happening on its network. But USC is the exception rather than the rule.

For two years, the film industry has relied on an erroneous figure to persuade the public that college students are thieves. The MPAA acknowledged Tuesday that a survey it released in 2005 overstated the damage caused by piracy at the nation's universities. The MPAA now says that instead of 44 percent, students account for 15 percent of domestic losses, or about $195 million.

But how did the error go unchallenged for so long? Why weren't network managers from UCLA to Harvard the ones to sound the alarm? Observers say that many schools were probably afraid to do their own studies.

"Look at them, the universities were running scared," said Eric Garland, CEO of BigChampagne, a company that tracks peer-to-peer traffic. "They probably didn't do the research because they were afraid about what they would find. (Colleges) have been singled out as the enclave of the most egregious piracy."

If Tuesday's revelation from the MPAA did nothing else, it should serve to teach college presidents that they shouldn't rely on the word of a third-party to say what its students are up to--especially one that has spent the past two years telling Congress that college students are responsible for almost half of all movie piracy in the U.S.

Mark Luker, vice president Educause, an organization representing college information technology departments, said plenty of people were skeptical and asked to see the data. But the schools "did not run their own surveys," Luker acknowledged. He added that college administrators should have at least "insisted that we see the study."

The MPAA has backed proposed legislation that would require universities participating in federal student financial-aid programs to consider offering "alternatives" to illegal downloading or "technology-based deterrents" to piracy.

MPAA Washington general counsel Fritz Attaway told reporters last November: "I think it's perfectly legitimate for Congress to say, 'Wait a minute. If we're giving you money, we don't want it to be used to help college kids infringe copyright.' "

Just what impact the MPAA's goof will have on the proposed legislation remains unclear. A spokeswoman for the House of Representatives Committee on Education and Labor, which has already passed the higher-education bill backed by the MPAA, said Wednesday that the committee has asked the MPAA for more information and "we plan to review it."

In the meantime, perhaps college presidents should chat with their IT chiefs to see what's going on.

Had anyone at the University of California at Berkeley ever asked Vanessa DeGuzman, a technology support manager for a 7,000-person campus dorm, about the MPAA's estimates, she would have told them, "It definitely seemed like their numbers were high."

DeGuzman acknowledges that all she has is anecdotal information, but she's noticed that the number of "takedown" notices she has received from entertainment companies has been falling significantly. The notices are legal documents that typically notify the school that someone on their network is pirating content.

She credits a greater emphasis on educating incoming students about copyright infringement. UC Berkeley has programs called "Learn Before You Burn," and "Think Before You Click." Students who receive a takedown notice are immediately booted from the network for a week. A second notice and the student must appear before a peer-review board before getting their Web privileges back.

In the future, perhaps the universities can add their own notice: learn the truth before you cower.

CNET News.com's Anne Broache contributed to this story.