Record Labels, Music Publishers, Internet

The legal battle between the Recording Industry Association of America (RIAA) and Verizon Communications over the pursuit of alleged internet music pirates could have a major impact on cable operators, telecom companies and internet service providers. If the RIAA wins the case, record labels and music publishers wielding broad federal subpoena power could force operators to divulge the names of high-speed data subscribers each time one is suspected of breaking a copyright. RIAA also want operators with high-speed data operations to pay copyright use fees into a new industry-wide ISP pool. The RIAA has proposed that the fund should compensate music companies for the copyright violations which they can’t track down.

The case places the right to fair remuneration for use of copyright in direct conflict with individuals right to privacy, and further, would put an obligation on ISPs to take responsibility for subscribers unauthorised copyright infringements. The cable industry is carefully watching the case. The case also highlights the conflicts within major media conglomerates – AOL Time Warner owns two major ISPs, cable channels and of course a major record label and major music publishing house.

The legal action arose when Verizon refused to comply with an RIAA subpoena seeking information about one online music fan who allegedly broke copyright law using the KaZaA peer-to-peer file-sharing service to download more than 600 songs from the Internet in one day. The RIAA subpoena demanded the identity of the customer pursuant to the USDigital Millennium Copyright Act (DMCA) 1998 which grants copyright owners the right to use information subpoenas to track down alleged violators under certain circumstances. Verizon’s main defence is that the DMCA subpoena provisions cannot apply in this case because it was passively transmitting the offending material over its broadband network, not actively storing it there. The regional phone company also claims that it must protect its customers’ privacy. In January, U.S. District Court Judge John Bates ordered Verizon to comply with the RIAA subpoena. Bates ruled that it didn’t really matter whether Verizon was storing the material or simply transmitting it because the law covers both situations to protect against infringement and Judge Bates also held that consumer privacy and First Amendment arguments do not protect copyright infringement. Verizon is contesting the decision in the federal appeals court in Washington and is seeking a stay of Judge Bates’ order until the appeals court. The appeal is scheduled to be heard in the first week of April 2003.
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