Explosives on the Broadband Highway?

Broadband Access Providers Cannot Ignore Content Rules: Copyright Laws Are Key
By Nicholas W. Allard and Kevin P. Black

Broadband service, loosely defined as bandwidth capable of delivering two-way enhanced services, is a boon to e-commerce by improving speed and capacity. Broadband companies increasingly focus on widening the pipeline to the Internet; shifting from the existing fixed P.C. paradigm to mobile, wireless applications; addressing privacy concerns; and on whether access to consumers and end users will be open. These are all significant concerns and will continue to be paramount to the development and success of this nascent technology. Until recently broadband companies have paid relatively less attention to laws governing content. For a variety of reasons most are now keenly sensitive to piracy concerns relating to the collection, use, and dissemination of personal information. They also need to pay close attention to another vital issue: the illegal transmission and use of copyrighted information through the broadband pipeline. Copyright infringement can expose access providers to expensive copyright infringement claims.

What is Copyright Law?

In the United States copyright law a long legal tradition may be traced back to the English, "Statute of Anne," and is in fact mandated by the Constitution (See, Article I, Section 8 of the U.S. Constitution). Congress has passed several Copyright Acts during the 20^th Century, such as the 1909 Copyright Act, the 1976 Copyright Act, and the latest being the Digital Millennium Copyright Act of 1998 ("DMCA"). The DMCA was created in an effort to fit older copyright laws into the modern day realities of the electronic information age. Furthermore, it was passed to correspond with the World Intellectual Property Organization ("WIPO") Copyright Treaty and the WIPO Performance and Phonograms Treaty.

Generally, copyright law protects "original works of authorship." Or put another way, it protects the exclusivity of certain intellectual property for those who "own" the property. To "own" a work in this context, or to have a copyright, means that one can exclude others from reproducing, altering, distributing, publicly performing, or publicly displaying one’s work without their consent. Two elements must be proven to establish copyright infringement: "(1) ownership of a valid copyright; and (2) copying constituent elements of the work that are original." Feist Publ'g Inc. v. Rural Tel. Serv. Co. Inc., 499 U.S. 340, 361 (1991).

Copyrights cover various kinds of both published and non-published information including literature, music, movies, art, and other intellectual property. The expression of

ideas is copyrightable, the ideas themselves are not. Facts, words, phrases, and titles are also not copyrightable. On the other hand, one could argue that just about all online activity is copyrightable because it implicates the rights (reproduction, copying, distributing, etc.) cited above. So even when one views a web page, and prints or saves it to disk or to a computer, this activity may implicate one or more rights bestowed upon the copyright owner. And in fact, most digital information created by an individual such as an online e-mail can be an original work which is protected by copyrights. Copyrights are ubiquitous and broadband access providers need to ensure that they minimize their exposure for claims that may arise from illegal transmission of copyrighted material.

Why Broadband Access Providers Are Susceptible to Copyright Infringement

Why should broadband access providers in particular be mindful of copyright infringement? Individual infringers may be difficult to identify, locate, and may not be capable of paying damages to the copyright owners. Plaintiffs will prefer companies that are more inviting targets because they are easier to find and have deeper pockets. Copyright holders don’t often sue the individual who obtains and misuses the information, instead they go after those who make the information accessible. Such defendants have typically been store owners, print publishers, theaters, etc. Today, because so much information is trafficked electronically, it is those who provide the access to and/or move the electronic traffic (e.g. ISPs such as Broadband access providers) that are increasingly the targets of copyright enforcement.

Second, the risk of infringement increases because broadband technology makes uploading and downloading information extremely easy and accessible. Until recently, the concern over copyright infringement via computers has been a relatively modest one. Initial broadband service, and especially traditional dial-up service, were unable to successfully transmit vast bits of complex data in a manner that would be beneficial to most users - the transmission was too slow. This point was made in a recent speech by Deborah A. Lathen, Chief of the Cable Services Bureau for the FCC when she remarked, "[a] regular dial-up modem (like the one most of us have at home) took over 42 hours to download ‘Titanic.’" However, "the download time [for ‘Titanic’] using a broadband modem was 9 minutes."

In particular, MP3 technology allows endless legitimate users and "pirates" alike to successfully download extremely high quality songs, music videos, and other media clips in seconds. This information can be transmitted to countless other users all over the globe in minutes. An entire industry of manufacturing compact MP3 players carrying anywhere from 32-96MBs of memory has developed for playing customized disks of music. There are also adapters for stereos and DVD players to allow for the playing of downloaded movies and music. Blank CDs are sold, in reality for copying bootlegged music, for about fifty cents a pop. Furthermore, numerous sites exist on the Internet that contain anywhere from a few to thousands of copyrighted works. Some private home pages accessed through these sites have ratio exchanges, where for example, a user can get one song in exchange for uploading four or five songs. This has the effect of expanding the libraries of these sites. Ease of use increases the demand for pirated products and makes copyright infringement feasible. In a sense it has given "pirates" a tremendous tool to achieve their craft much more efficiently and, thus, has in turn created exponentially more infringers.

Third, not only is online information much more easily downloaded, but it can also be altered, distorted, or otherwise misused more readily. Graphics software can allow users to distort and then publicly display copyrighted works in forms their owners never intended or authorized.

Broadband market share is expected to increase from 3% now, to 30% by 2003. Hence, the sheer volume of the problem will likely rapidly increase. All in all, more use and better technology will invariably mean more piracy. Ultimately, it could be the broadband access providers who will suffer the legal consequences. While the law now appears to provide some new protections for broadband access providers from copyright liability, there are ambiguities which are likely to keep broadband access providers as targets of infringement actions brought by copyright owners.

The Current State of Copyright Law — What’s Being Done To Protect Broadband Access Providers?

As mentioned, the DMCA was enacted to fit copyright principles dating from Gutenberg era technology into today’s electronically interconnected world. The relevant portion of the DMCA to broadband access providers is the Online Copyright Infringement Liability Act ("Title II"). Title II grants broadband access providers certain exemptions from liability for copyright infringement. In doing this, Congress’s passage of the Act substantially departed from long-standing principles in copyright law that historically held access providers liable. In what has been viewed as a compromise between broadband access providers and copyright owners, the Act provides for "safe harbors" from copyright liability for broadband access providers. However, as a preliminary matter, broadband access providers must meet two conditions before they can avail themselves of any of the Act’s protections: 1) they must adopt and adequately implement policies designed to terminate the service of users who knowingly infringe on copyrights, and 2) they must allow for, and refrain from interference with, "standard technical measures" designed to detect and protect copyrighted works. It is important to note that the first requirement does not give broadband access providers the express affirmative duty to police their pipeline. In addition, should they choose to seek out copyright infringement on their lines, they do not necessarily waive their right to seek one of the safe harbors.

There are essentially four categories of "safe harbors," any one of which can be used by a broadband access provider seeking protection from copyright liability. The first protects broadband access providers who can demonstrate that they are strictly conduits for electronic traffic. A company that merely provides the pipe through which electronic traffic travels and does not provide any other services or content can fall into this category.

The second "safe harbor" provision protects caching, which is the temporary holding of data for the purpose of transmitting it to another user who requests it at a later time. Several conditions apply before a broadband access provider can gain protection under this provision: 1) the broadband access provider must not alter the data before sending it back out, 2) they must not interfere with the technology implemented by the user to obtain the information, and 3) they must impose the same visitation protocols (e.g. disclaimers, fees, passwords, etc.) as are present on the primary site.

The third provision protects BBSs, chatrooms, e-mail messages, websites, and other ways in which users may post data on their systems that meet several conditions. First, the broadband access provider must have an agent available to receive information about infringing sites and users on its system. Second, a broadband access provider’s knowledge regarding infringement on its lines must not exceed a certain level. Thus, if an access provider has actual knowledge of or ignores obvious copyright infringement on its lines they may not be able to attain protections from liability. Third, the providers must not be financial benefactors of infringing activities on their lines. Finally, a broadband access provider is required to swiftly remove or deny access to users and sites that infringe on copyrights.

The fourth "safe harbor" provision concerns linking. It protects broadband access providers from providing links to sites with copyright infringing works, devices, or activity. However, to gain the protection the access providers must accomplish the linking or access to the information through specified ways, i.e., "information location tools," such as hypertext linking, reference, pointer, index, or by directory.

While the DCMA has gone a long way to relieve the confusion and provide protection for broadband access providers, there are still gray areas that can create exposure to liability for the unwary.

Gray Areas

A quick reading of the Act suggests a few obvious gray areas over which broadband access providers may be forced to do battle to keep their businesses out of harms way.

Perhaps the most foreseeable area of the DMCA for debate is the third "safe harbor" provision that contains the knowledge, financial benefactor, and removal requirements. For instance, it is not at all clear where the Act draws the line for the knowledge requirement. It does state that a broadband access provider must take action against copyright infringement when there is actual or even apparent knowledge of such infringement. But what constitutes apparent knowledge is not clear. Is it the mere knowledge that piracy is widespread and that broadband access is used in the commission of the theft? Admittedly this would be a difficult argument to make, but there are other less extreme arguments that will have to be made before a real benchmark for apparent knowledge is set. Furthermore, the Act states that removal must occur "swiftly" but sets no specific time parameters. Moreover, for example, the financial benefactor requirement is vague, at least in one manner, because it does not address the issue of advertising. If a broadband access provider makes money directly from pirated works there is no challenge in finding them to be a financial benefactor. However, what if, in merely acting as a conduit to MP3 file web sites, the broadband access provider increases the value of its service and sells more advertising (if it has a site) or charges a higher premium for its access service? Does this financial benefit come ultimately from the "piracy?" The financial benefactor provision is also profoundly affected by the fair use doctrine which allows some use for educational purposes and the like. But how far does that go? Obviously many questions remain about the scope of the DMCA defenses and consequently copyright litigation continues to be a real threat to broadband access providers.

What Fuels the Issue?

Both broadband access (regardless of the form it may take in future generations of technological advances) and copyrights are integral and necessary to the economy. The Internet, and therefore access to it, has inextricably woven its way into the economy. Broadband access providers are helping to provide the fuel that will power the new economy. Proponents of a loosely-regulated Internet believe it is better for society for broadband access providers to have very little if any liability for copyright infringement. On the other hand, copyrights are necessary to provide artists of all types with incentives to keep producing works. These works, like the expansion of the Internet, also benefit society. Without adequate copyright protection, an artist will have little or no guarantee of being fairly compensated for her works. Furthermore, without copyright enforcement, there are no guarantees that an artist’s works will not be misused or altered in ways that could threaten the value or intent of the artist herself. These factors could lead to a decline in the production of all types of works including many forms of media to which we in society have become accustomed and from which we have benefited. It is this tension between two social needs and how to prioritize them will keep the age-old debate between creators and distributors of original works alive in the electronic information age.

Where Current Players in the Broadband Market Stand

The broadband market today is principally composed of the cable, telecommunications, satellite, and wireless industries, within which there are some very large and some relatively small companies. The smaller entities include schools and universities, building owners, and Private Cable Operators (PCOs).

Copyright has always been a concern for small access providing businesses, but with new technological advances, universities and colleges have been among the first small broadband access providers to be confronted with the issue. Tony Mordosky, Associate Provost for Information Resources and Technology at Bradley University in Peoria, Illinois is an example of an educator who wrestles with copyright infringement as an issue in providing broadband access service to his students.

"As an academic institution we have always had to deal with copyright infringement as an issue," said Mordosky. "However, with broadband access to the Internet, the effects on the fair use provision are a much different issue. The ease of copying information has made it much more difficult to keep track of all and any copyright infringement. But we have always had a program in place; someone specifically designated on campus to address copyright issues and to ensure that we are taking necessary precautions. But with regard to the Internet, we have had to throw these manual controls out the window."

Mordosky is well aware of the insulation provided to broadband access providers by the DMCA, "the DMCA limits our liability. We have a procedure in place if the Recording Industry Association (an interest group for recording artists) or other owners of copyrighted materials notifies our agent of an infringement concern, typically the pirating of music on our system, we conduct an investigation, and if there is a problem, we will deny access to or remove that site from our system, etc."

Despite having addressed the issue from a responsibility standpoint, all concerns have not been alleviated, "most of the cases we have had have been cut and dry. We get a complaint, find the illegal activity and shut the site down. There have not been any cases we have been exposed to that have been in the gray areas as of yet. But this is the infancy of this issue. We are nervous where we are in the gray areas. From the case law that is out there it appears copyright infringement does not hinge on the volume of material. In some cases courts have found infringement if what was disseminated was the crux of a work, or the surprise ending, etc. Therefore, it is difficult to know what constitutes fair use and what doesn't. Is a professor's use of a 1.5 minute clip of a movie fair use? What about 12 minutes? Where is the magic number? So it is in these gray areas that it appears this issue will go on well into the future."

Educators, in particular have reason to be concerned because of the technical savvy of the student population due to the nature of their purpose. Mordosky notes, "Most students don't think in copyright terms the same way with regard to deriving value and so on. A professor in an effort to educate will see most usage as fair use and not for monetary gain. As an academic institution we try to promote the free exchange of ideas, academic freedom and open access. But we also continue to realize the copyright concerns, and make efforts to try to keep classroom pages on our Intranet and to use passwords, etc. However, it is difficult to control copyright infringement when you have students that are so bright, and who as a part of an almost academic mission try to get around the safeguards that you have just installed. These students are very adept. All of our programs whether it be Business, the Arts, or Engineering, we have computer courses as part of their curriculum, so it is difficult."

There is no question that newer technologies will surface to replace or enhance broadband access but it seems to make this issue more complex. Even the Universities who sit on the frontline of technological change have difficulty viewing the future, but can understand more advancement will only make copyright infringement a more challenging issue. Mordosky states, "It is hard to tell what these new technologies will bring. That remains to be seen. However, it does seem that they are more capable of bringing more and more complex information to the user and that should lead to more consumption of copyrighted information and more questions about where to draw lines, etc."

Broadband access providers such as universities, being the laboratories for technological advancement, appear to understand and to be dealing with the issue of copyright infringement on the Internet, but what about other smaller broadband access providers? Are the "smart communities" and other building developers who provide broadband access service prepared for what lies ahead? What about PCO’s?

How well the DMCA protects broadband access providers remains to be seen.

What is certain is that all broadband operations, large and small, public and private, commercial and public sector, need to make compliance with copyright rules and other laws relating to content a priority.

About the authors

Nick Allard has been counsel to the Wireless Communications Association since it was founded and is a partner in the Washington, D.C. office of the law firm Latham & Watkins. He teaches Law & Order in Cyber Space at George Mason University School of Law in Arlington, Virginia.

Kevin Black is a third year evening student at George Mason University School of Law, currently works with the National Association of Securities Dealers, and has worked at MCIWorldcom, and the Antitrust Division of the United States Department of Justice.