Soak the ISPs

New York–While France, Great Britain, New Zealand and other territories grapple with efforts to make ISPs liable to one degree or another for copyright infringement occurring on their networks, broadband providers in the U.S. may soon find themselves dragged into the center of the debate as well. Speakers at a lively copyright panel here during the Digital Music Forum East Thursday focused on the potential role of ISPs in a system of blanket licenses and revenue collection aimed at turning currently illegal file-trading into a money maker.

“ISPs are the elephant in the room in the discussion of copyright,” attorney Mark Fischer of Fish & Richardson said. “I think you’ll see ISPs dragged more and more into the discussion of payment for copyright and I think it will happen fairly soon.”

Jonathan Potter, executive director of the Digital Media Association, which represents Webcasters, thought that was a terrible idea.

“I don’t know what the ISP business model is supposed to be,” Potter said. “The music companies are basically telling ISPs, pay us and we won’t sue you, or we won’t sue your customers. If that’s the business model I think it’s going to be very difficult to get it to fly. I know a lot of ISPs who would say, bring it on.

“It’s one thing for the record companies to be suing college kids,” Potter continued. “But when you’re talking about ISPs, you’re talking about AT&T and Comcast and Verizon. They’ll eat the record companies for lunch and come looking for dessert.”

Potter noted that the RIAA’s recent announcement that it was dropping its policy of filing individual lawsuits against alleged downloaders in favor of working with ISPs on a system of graduated response to repeated file sharing was apparently made without the concurrence of major ISPs.

“I don’t know which ISPs they were referring to but I haven’t heard one say they’re ready to go along,” he said.

Jay Rosenthal of the National Association of Music Publishers, however, said access to broadband networks could be a more effective point of leverage in curbing illegal file-sharing than litigation.

“There have been studies done that show that a lot of people, especially the kids, they’re much more afraid of getting kicked off their networks than they are of being sued,” he said. “I think something like three-strikes is the way to go.”

Part of the disagreement, of course, was the result of different goals. Fischer was talking about enlisting ISPs to collect a blanket royalty from their subscribers, to be dispersed to copyright owners, in exchange for the right to share music over the network.

Rosenthal was focused on enlisting ISPs–voluntarily or otherwise–in stopping illegal file-sharing period, so that users would be forced to turn to paid services.

Jim Cooperman, COO of Wind Up Records, was non-committal. “I think the RIAA lawsuits really did raise awareness,” he said. “I think they served their purpose and now they’re winding down. But in terms of the future, yes it’s working with the ISPs, no doubt.”

If Fischer is right, and ISPs do get dragged into the middle of the file-sharing debate in the U.S., the resulting fight is likely to be fierce. Everywhere else it has been tried–either to license of police file-trading–it has become hugely controversial.

Just this week, the government in New Zealand postponed implementation of what would have been the world’s first mandatory three-strikes system in the face of nationwide protests.

In France, where a three-strikes law is poised to go into effect, several major ISPs, including France Telecom/Orange, SFR and Numéricâble said this week they have no intention of cutting off Internet access to their subscribers. Among other objections, the ISPs noted that, in France, most Internet access comes as part of a “triple-play” of phone, video and Internet. Cutting off Internet in many cases would also mean cutting off phone access, which they called a threat to public safety.

In the U.K., the government has backed off a planned mandatory three-strikes system in favor of a”voluntary” system to be negotiated between content owners and the ISPs.

No reason to think things would go any more smoothly in the U.S.