ISPs pose daunting hurdle to third prong of music industry downloading strategy

Despite a brief court delay, the music industry could see the third prong of its attack on downloading proceed more quickly than either its private copying efforts or seeing a result in the Tariff 22 case now before the Supreme Court of Canada. On February 16, the Canadian Recording Industry Association (CRIA) fired its first salvo against individuals who share music online by requesting a Federal Court of Canada order that five Internet service providers divulge the identity of 29 subscribers currently identified only by an IP address. The court adjourned until March 12 to determine the privacy considerations of such a request. The case is being presided over by Judge Konrad von Finckenstein, the former head of the Competition Bureau of Canada until he was recently replaced by former BCE Inc. executive Sheridan Scott. Insiders have so far been unwilling to speculate on whether the man on the bench might refuse CRIA’s request for the court orders and there is little public record of where von Finckenstein might stand on the issue of privacy and copyright, though previous comments while at the bureau indicate he has a strong understanding of communications technologies and of the potential they have to disrupt current business models. He has, for example, publicly questioned the protectionist regulatory model embodied by the CRTC in light of broadband technologies and new content delivery platforms. His decision will be a crucial one as the music industry struggles to fight its way out of downward spiralling sales and a public backlash against what some perceive as the association’s heavy-handed tactics. Without a court order, the recording industry will have no access to those users it accuses of being pirates. That would be a devastating blow given that music rightsholders seem poised to lose at the Supreme Court in their attempt to charge ISPs a blanket royalty to compensate for download-related losses (CNM, Dec. 4/03), and as the Copyright Board of Canada’s recent private copying decision is challenged on constitutional grounds in front of the Federal Court of Appeal (CNM, Jan. 26/04). It is likely frustrating to CRIA that ISPs could again be a hurdle to collecting revenues on downloaded music. On February 16, the same day as it filed its motions with the court, CRIA issued a media release in which general counsel Richard Pfohl commented, "While the court has decided to adjourn for a couple of weeks, we see this as progress in due legal process that will in the end allow us to file suits against flagrant copyright infringers." Despite the public optimism, however, CRIA desperately needs the court orders to succeed on at least one front against losses due to file sharing. Armed with those court orders, CRIA would likely succeed in prosecuting its case against the 29 identified users given the apparently open-and-shut provisions of the Copyright Act, and the recent private copying ruling by the Copyright Board (CNM, Dec. 19/03). ISPs including Shaw Communications Inc., Access Communications, SaskTel, TELUS Corp., Rogers Cable Inc. and others have already indicated, however, that they have broad concerns about privacy rights. Von Finckenstein may prove amenable to arguments that a decision favourable to CRIA has the potential to damage the ISP industry in Canada as users reduce their usage of or shun ISPs as they perceive their privacy being compromised. Having a former top bureaucrat from Industry Canada – rarely an ally of the music business and its protectors at Canadian Heritage – judging the merit of the court order requests is likely to prove at least unnerving to CRIA. Observers should also be cautioned, however, that the Competition Bureau is often asked to weigh several business interests against each other, and von Finckenstein’s professional background is not necessarily a precursor to one decision or another. If von Finckenstein rules that the court orders are valid, however, it should prove clear sailing for CRIA as it quickly pursues those sharing music online and attempts to make an example of them.

ISPs pose daunting hurdle to third prong of music industry downloading strategy

Broadcast | February 20, 2004

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