Internet Packet Sniffing and Its Impact on the Network Neutrality Debate and

the Balance of Power

Between Intellectual Property Creators and Consumers

 

Rob Frieden

Pioneers Chair and Professor

of Telecommunications and Law

Penn State University

102 Carnegie Building

University Park, Pennsylvania  16802

(814) 863-7996; rmf5@psu.edu

web site: http://www.personal.psu.edu/faculty/r/m/rmf5/

Introduction

            Developing information, communications and entertainment technologies have helped discrete markets to converge. [1] Previously stand alone markets for content and the conduit used to transmit content also have become fully integrated into a single medium thereby challenging the assumptions contained in “legacy” regulations and laws, [2] including the treatment of intellectual property. [3]  For example, the World Wide Web [4] seamlessly blends the telecommunications links needed to transmit information bits and packets [5] with the content carried over these links.  However separate laws and regulations apply to operators of neutral networks providing telecommunications services that deliver digital bits versus networks that actively combine telecommunications [6] with the bits that represent information [7] and entertainment content. 

            Some Internet Service Providers (“ISPs”) accrue financial and efficiency gains by engaging in vertical integration of the production, editing, and delivery of content. [8]  Similarly ISPs have upgraded, or soon will upgrade their networks with hardware and software that enables them to acquire some knowledge about what kinds of content they switch, route and transmit. [9] However such active traffic management can disqualify ISPs [10] from safe harbor[11] copyright liability exemptions for infringement occurring as a result of their carriage of

content. [12]

            Provided ISPs do not induce copyright infringement, while feigning no knowledge, case law prior to, [13] and after enactment of the DMCA [14]  has exempted ISPs that operate as neutral conduits.  Courts also have exempted ISPs and other intermediaries [15] for the unknowing carriage of defamatory, [16] or obscene, [17] content.  Conversely ISPs that actively manage traffic have recognized the benefit in attempting to restrain the scope of their traffic management activities to a level below that which would inform them about illegal content. [18] Such safe harbors absolve ISPs of having to invest the time, money and effort need to examine all content.  However, new revenue generating opportunities have become available to ISPs that use equipment and software to examine bitstreams so that ISPs can offer different quality of service levels and otherwise differentiate the treatment of traffic. [19]

            The ventures that manufacture equipment used to switch, route and transmit Internet traffic and the carriers providing these services have a keen interest in shaping a new generation of Internet services that deviates from a “one size fits all,” least common denominator. [20] By offering customized and diversified features, ISPs can create new profit centers while more closely catering to the specific needs of end users and content creators.  Opponents to these initiatives consider them unreasonable price and quality of service discrimination based on the view that “network neutrality” [21] should provide a level competitive playing field for all services carried over the World Wide Web.  Network neutrality opponents claim that limits on service diversification would create disincentives for much needed infrastructure investment as well as foreclose opportunities to customize Internet services, including the offer of “better than best efforts” routing [22] for content providers keen on securing more reliable services than that available from the current, “best efforts” [23] delivery standard.   

            Network neutrality opponents recognize that technological innovations and diversifying Internet user requirements can create new, or more robust revenue streams.  The ability to scan Internet traffic, through instantaneous examination of bitstreams, makes it possible for ISPs to offer premium services to both end users and content providers.  Some consumers may willingly pay a premium for faster, better, and smarter access to content.  Candidates for premium service include users of gaming software, peer-to-peer file sharing [24] and Internet-mediated telephone calls, commonly referred to as Voice over the Internet Protocol (“VoIP”). [25] Similarly some content and service providers may willingly pay for enhancements that provide greater reliability that traffic will arrive in a timely manner to a large, possibly temporary audience of prospective customers.       

            Candidates for premium service typically have higher bandwidth requirements, less tolerance for dropped, lost or delayed packet delivery and generate more traffic volume than typical users.  To accommodate these requirements manufacturers have developed equipment that can examine and prioritize Internet traffic at an increasingly granular level.  While ISPs previously lacked both the technological wherewithal and incentive to deviate from plain vanilla best efforts, [26] they now have the capacity to inspect traffic on a packet-by-packet basis.  The ability to “sniff” packets makes it possible for ISPs to deviate from best efforts routing by discriminating on the basis of price paid for service and as a function of what kind of traffic a bitstream represents.  Deep packet inspection [27] makes it possible for ISPs to diversify service on the basis of allocated bandwidth, routing priority and performance guarantees.  It also may prevent an ISP from turning a blind eye to “red flags” generated by the process of deep packet inspection evidencing obvious infringement even before a copyright holder notifies the ISPs of the infraction. [28]  Likewise Digital Rights Management [29] functions integrated into deep packet inspection may become a standard technical component that ISPs can avoid only at the risk of losing the DMCA safe harbors. [30]

            An ISP able to examine packets for purposes of assigning bitstreams into various tiers of service also provides an ISP with greater knowledge about the nature and type of the traffic it handles.  Arguably an ISP engaging in quality of service (“QOS”) and price discrimination through deep packet inspection no longer operates as a neutral conduit lacking actual or constructive knowledge of what the packets represent.  ISPs that sniff packets actively examine the header of packets that provide traffic routing information, but also can identify characteristics of the content “payload” contained in the packet.  For example, the packet header can identify the payload as a portion of a music file and can specify the intellectual property rights retained by the owner of the content as well as the usage and copying opportunities available to the recipient.

            The output of deep packet inspection readily available to ISPs raises questions whether non-neutral network operation disqualifies ISPs for a safe harbor exemption from liability for carrying copyright infringing traffic provided by Section 512 of the Digital Millennium Copyright Act (”DMCA”). [31]  Operators of next generation Internet networks will have the technological capability and commercial motivation to deviate from operating as neutral conduits, but the possibility exists that they have not fully assessed the legal and financial consequences vis a vis the intellectual property rights of the content creators whose work they carry.

            The sometimes acrimonious debate over network neutrality has largely ignored whether ISPs engaging in packet inspection risk losing a valuable exemption from liability for contributory copyright infringement and vicarious liability.  Likewise the debate has not addressed the impact of non-neutral network operation on the balance of power between consumers and creators of intellectual property.  Arguably ISPs will have much greater capability to protect intellectual property rights in light of the contractual QOS commitments they make to specific customers and the enhanced knowledge of the nature and type of the traffic that traverses their networks.  Such technological capability may further condition or eliminate the DMCA safe harbor, because ISPs may no longer claim the lack of “actual knowledge that the material or an activity using the material on the system or network is infringing.” [32]

This article will examine the current debate about Internet neutrality in terms of its impact on intellectual property rights, including consumers’ fair use opportunities.  The article will assess whether and how ISPs might lose their safe harbor for copyright infringement liability based on new technological means to know about the content they carry.  Additionally the article will consider whether ISPs have an affirmative duty to conduct packet inspection absent a legislative mandate.  The article also will examine the applicability of litigation [33]over mandatory processing of broadcast television “flags”,[34] which specify consumer use options, but which require equipment processing on user premises.  The article concludes that ISPs regulatory status as information service providers does not provide an absolute exemption from responsibilities to examine the content they carry and to provide reasonable safeguards for protecting copyrights including the possible retention and disclosure of logs that can help identify and punish copyright infringement and other unlawful activities.  Such affirmative efforts to protect creators’ intellectual property rights might limit, condition or eliminate consumers’ fair use opportunities and privacy expectations.

I.        Network Neutrality and Digital Rights Management

In quick succession the Internet has evolved from a collaborative project among governments and universities to a commercial medium operated primarily by private ventures. [35]  The first generation Internet used government subsidizes to build a robust medium capable of routing electronic mail around outages to users in widely dispersed locations.  The government agencies, contractors and universities linked via this Internet emphasized expansion and network connectivity with little regard for the cost of service largely because government underwriting obviated close scrutiny of cost causation.  Even if operators wanted to determine measure traffic flows measurement tools lacked sufficient calibration and generated significant costs by reducing the amount of payload traffic that carriers could handle.

Conceptualizing the Internet as a “network of networks” [36] first generation Internet operators cooperated on interconnection arrangements with an eye toward promoting the accessibility and reach of the Internet.  The first interconnection agreements between ISPs refrained from exact route mapping and traffic metering, instead relying on the Transmission Control Protocol to route traffic “on the fly” based on current conditions as opposed to fixed routing used by telephone companies. [37] ISPs initially refrained from metering traffic based on the expectation that traffic volumes were roughly equivalent and the cost of metering was not worth the bother in light of the availability of external government funding.

The United States largely abandoned its underwriter and anchor tenant role in 1995 with the decommissioning of NSFNet, the major backbone network funded by the National Science    Foundation. [38] The ensuing privatization of the Internet forced operators to pay closer attention to infrastructure costs and traffic streams with an eye toward recovering costs from the responsible parties.  ISPs largely abandoned the offer of zero cost network access to other ISPs, known as peering, except for similarly sized counterparts with matching traffic, available bandwidth, and geographical reach.  Smaller ISPs now must pay for “transiting” [39] access to larger ISPs’ networks and the access these ISPs have secured to other ISPs’ networks.

The Internet’s developing third generation [40] appears poised to exploit technological innovations, expanding broadband access and converging markets  with even greater service diversity and market segmentation.  This next generation [41] World Wide Web will not appear as a standard, “one size fits” all medium primarily because consumers will expect more and different features.  For example, on line game players and Voice over the Internet Protocol (“VoIP”) [42] users will require “better than best efforts” [43] routing of bits and presumably will accept the obligation to pay for less delay, jitter [44] and dropped packets. [45]  Already privacy, QOS and other factors support efforts to offer users the benefit of private networking with conditional and managed access via the public Internet.  Similarly content providers can use caching [46] and premium traffic routing and management service to secure more reliable service than that available from best efforts routing.

Service diversification can require many reasonable and lawful types of discrimination between Internet users notwithstanding a heritage in the first two generations of nondiscrimination and best efforts routing of traffic.  Most ISPs offer access on an unmetered, monthly subscription basis, but some ISPs already offer different levels of bit delivery speeds to subscribers.  Likewise ISPs increasingly have the ability to examine individual traffic streams [47] and prioritize them creating a dichotomy between plain vanilla, best efforts routing and more expensive, superior traffic management services.

The potential exists for carriers operating the major networks used to switch and route bitstreams to go beyond satisfying diverse consumer requirements.  Advocates for the principle of network neutrality [48] claim the potential exists for ISPs to engineer a fragmented and “balkanized” next generation Internet to achieve anticompetitive goals. [49] The worst case scenario envisioned by network neutrality advocates sees a reduction in innovation, efficiency, consumer benefits and national productivity occasioned by a divided Internet: one medium prone to congestion and declining reliability and one offering superior performance and potential competitive advantages to users able and willing to pay, or affiliated with the ISP operating the bitstream transmission network. [50] Opponents of network neutrality mandates scoff at the possibility of the worst case scenario, and view government intervention as anathema. [51]

A.        Deep Packet Inspection and Digital Rights Management

            ISPs engaging in price and QOS discrimination must engage in active network management.  Rather than operate as a neutral conduit with no reason to examine the nature and types of traffic that traverse their networks, ISPs keen on taping new service diversification opportunities, have to use technologies that examine the packets the ISPs will switch, route and deliver.  Next generation Internet routing equipment provides operators the ability to “sniff” and inspect specific packet streams so that the ISP can perform a number of revenue generating functions including the assignment of traffic to regular or priority subnetworks, guarding against theft of service and filtering out spam. [52]

            Such packet inspection also provides ISPs with greater ability to determine whether the traffic they carry respects all intellectual property rights of the content creator. In other words packet sniffing provides the means for ISPs to determine whether their network has become a medium for the unlawful transport of files to recipients lacking lawful authority to consume, copy and share intellectual   property.  [53]

            Internet equipment providers recognize the market opportunity created by deeper and more granular traffic inspection:

            In order to deal with the increasingly competitive broadband market, service providers   need the tools that allow them to differentiate services not only by bandwidth tiers, but on application and content bases as well.  And because of the increasing         diversity of stakeholder needs, such as the use of P2P applications . . . they must be able to differentiate the online experience of individual users - not by IP address alone, but through the identification of individual users by name.  . . . 

 

            The Cisco Service Control Engine combines deep packet inspection with specific subscriber identification, allowing the service provider to properly segment its customer base and provide individualized services to differing demographic “clusters”. As a result, the service provider competes on factors other than price, and can generate incremental revenue from application-based services rendered.  [54]

 

Cisco, a major Internet equipment manufacturer also states that its traffic interrogation capabilities offer “the ability to identify traffic streams of individual users, and control application and network use differentially based on assigned ‘online’ rights, [thereby] ensur[ing]  protection of critical applications [and] network fairness.” [55]

B.        Network Neutrality Qualifies ISPs for Copyright Infringement Safe Harbors     

 

            Currently Section 512 of the DMCA [56] provides ISPs with conditional exemptions from direct or secondary liability for copyright infringement that occurs over their networks.  In an effort to balance the obligation to protect copyright holders with an interest in promoting investment in the Internet and its use as an engine for commerce, Congress included in the Digital Millennium Copyright Act  a chapter entitled the Online Copyright Infringement Liability Limitation Act. The DMCA establishes four safe harbor exemptions from liability for online “Service Providers” [57] when they operate as a neutral, transitory conduit for content, engage in temporary caching or storing of content and when they provide search tools that link to information created by others.  The DMCA bars any monetary damages for direct, contributory and vicarious infringements provided the ISP takes down infringing content and terminates service to repeat offenders.  It also restricts the availability of injunctive relief for copyright holders.

            To qualify for these safe harbors ISPs must not have actively participated in the placement and selection of the content, as well as determining who shall receive the content.  The ISP cannot benefit “materially”[58] from the infringement, but courts have differed in their  common law and DMCA interpretations of what ISPs can do in terms of revenue generation without triggering liability for contributory infringement. [59] Of particular importance in light of the network neutrality debate, ISPs cannot know about the infringement [60] and must take affirmative steps to remove offending materials about which it has received notice, [61] as well as terminate service to repeat infringers. [62] ISPs also must accommodate and cannot interfere with “standard technical measures” [63] used to identify and protect copyrighted works.  However the DMCA provides no guidance about technical measures installed and applied by an ISP as opposed to measures embedded in the content by the copyright holder.  A “red flag” standard suggested in the Committee Report on the DMCA [64] would not obligate ISPs to engage in active monitoring of content that ISPs store or provide links, [65] nor would it automatically eliminate the safe harbor whenever the ISP examined content using technical or human resources. [66] On the other hand, when “the infringing nature of such sites would be apparent from even a brief and casual viewing, safe harbor status for a provider that views such a site and then establishes a link to it would not be appropriate.” [67]

            Safe harbors for storage and linking to infringing material emphasize the need for ISPs to lack actual knowledge about infringing activity, including facts or circumstances from which infringing activity is apparent.  Courts found that Internet ventures such as Napster, [68] Aimster [69] and Grokster [70] induced infringing activity and surely knew or should have known that it frequently occurred.  These ventures received a financial benefit directly attributable to the infringing activities and they also had the “right and ability” [71] to control such conduct. 

            ISPs operating in a network neutral environment qualify for the safe harbor exemption from copyright infringement liability.  However it follows that to qualify for the safe harbor ISPs must eschew deep packet inspection, because this process would evidence a non-neutral operating environment where the ISP has the ability to know when copyright infringement takes place.  ISPs may soon view network neutrality obligations contained in the DMCA as providing a less valuable safe harbor if it forecloses their use of deep packet inspection.

C.        Non Neutral Network Operation May Lose the DMCA Safe Harbor

            ISPs deploying deep packet inspection have maximum flexibility to pursue price and QOS discrimination at the likely loss of the DMCA Section 512 safe harbors.  Arguably deep packet inspection constitutes an affirmative effort on the part of the ISP to monitor the flow of packets traversing the ISP’s network.  While monitoring by itself may not eliminate the safe harbor qualification, deep packet monitoring probably does, because the packet header information likely will identify significant information about the nature and type of traffic sufficient to put the ISP on actual notice of any copyright infringement.  While the ISP needs only information about QOS and other features for which a particular user and user generated traffic stream qualifies, the ISPs cannot lawfully ignore copyright status if such information becomes part of the standard header information ISPs routinely inspect and process. [72]

            The header information contained in packets, subject to inspection, can provide information sufficient for automated decision making regarding the QOS and other diversified services available to ISP traffic.  Such automation empowers information processing equipment and software to make binding decisions about the treatment of specific bitstreams quite possibly without any human involvement.  The judgments made by computer chips and code will have a profound impact on how bitstreams are treated during their journey through one or more ISP networks and possibly also what recipients of the traffic can do with the content after receiving it. 

1.         The Significance of Where and Why Packet Inspection Occurs    

ISPs offering tiered Internet services typically will need to inspect packets using equipment located on the ISPs’ premises, as part of the process for assigning traffic to superior or regular treatment.  In other words when ISPs take affirmative steps to operate non-neutral networks they have explicitly decided to probe traffic and to subject them to differential treatment based on what the packet headers disclose.  ISPs can lawfully deploy deep packet inspection, because this functionality occurs at ISP locations, using ISP equipment and most likely with notice, if not express approval by the subscriber. 

Voluntary deep packet inspection contrasts with regulator-compelled examination and processing of similar type header information, e.g,  broadcast “flags,” [73]  using equipment located on end users’ premises.  In American Library Association v. FCC, [74] the Circuit Court of Appeals for the District of Columbia rejected as beyond the FCC’s jurisdiction a mandate for compulsory processing of copyright protection directives by television sets located on consumers’

premises. [75] The court rejected the FCC’s assertion of jurisdiction over any device, wherever located, if that device was needed to process and enforce the copy protection flag:  

            the Flag Order does not require demodulator products to give effect to the broadcast flag until after the DTV broadcast is complete.   The Flag Order does not regulate the actual transmission of the DTV broadcast.   In other words, the Flag Order imposes regulations on devices that receive communications after those communications have occurred;  it does not regulate the communications themselves.   Because the demodulator products are not engaged in “communication by wire or radio” when they are subject to regulation under the Flag Order, the Commission plainly exceeded the scope of its general jurisdictional grant under Title I in this case. [76]

 

            The broadcast flag case prevents the FCC from extending its regulatory authority over equipment that receive or process signals over which the FCC does have jurisdiction.  It follows that the FCC could not extend its jurisdiction over consumers’ computers, including ones that attach to telecommunications links over which the Commission has jurisdiction.  Likewise it follows that should an ISPs elect to activate flag and header processing, ostensibly to have the capability to differentiate traffic streams, the ISP can create a non-neutral network environment either with the express permission of its subscribers, or because it uses its own equipment and does not trespass and take control over subscribers’ equipment.  Just as the FCC cannot effectuate a copyright protection scheme that would require it to extend its jurisdiction impermissibly, ISPs can activate a copyright protection scheme—intentionally or otherwise—when using their own equipment to inspect packet headers without trespassing or otherwise intruding on equipment located on users’ premises.

D.        The Implausibility of Activating a Non-Neutral Network That Ignores Copyright, or Deep Packet Inspection That Retains Network Neutrality.

 

            In light of the value accruing from DMCA safe harbors, ISPs may attempt to claim that deep packet inspection can occur without impacting ISPs’ knowledge whether copyright infringement has occurred.  Similarly an ISP might claim that notwithstanding its use of deep packet inspection, the ISP will continue to comply with the spirit of network neutrality.  In application deep packet inspection appears to offer an all or nothing value proposition: either an ISP has the ability to examine content and to discriminate on the basis of several different QOS variables, or it does not.  To argue that an ISP can discriminate and still qualify for DMCA safe harbors and respect network neutrality would require creative interpretation of what constitutes network neutrality and “actual knowledge” of copyright infringement.

II.        What Constitutes Network Neutrality?

            At it core network neutrality requires ISPs to eschew many types of price and QOS discrimination, on grounds that consumers deserve the right to access any Internet service on equal footing and service providers should have the same technological means for reaching consumers.  In other words consumers and content providers should not have to put up with tactics, such as deep packet inspection, that could identify packets and prioritize them possibly resulting in a superior/inferior dichotomy of packet processing and delivery. 

            However the fairness and nondiscrimination aspects of network neutrality may differ in terms of how ISPs serve end users versus how ISPs process traffic.  Some, but not all network neutrality advocates would accept tiered and differentiated service to end users based on such variables as allocated bandwidth, anticipated bitstream delivery speeds and amount of content that a subscriber can upload and download in one month.  Such “customer tiering” would offer different prices based on legitimate customer differentials thereby eliminating subsidies flowing from low volume users to high volumes when both groups pay the same flat, “all you can eat” subscription rate that ISPs typically offer.

            Network neutrality advocates uniformly oppose access tiering [77] that would use techniques, such as deep packet inspection, to identify the source and type of traffic with an eye toward bifurcating service into superior, better than best efforts service and regular best efforts routing.  Advocates for network neutrality worry that service tiering will create artificial congestion and an inferior Internet service environment for anyone refusing to pay for premium service.

            Incumbent carriers and like minded opponents to network neutrality have characterized their opposition to network neutrality in terms of standing firm against government intrusion, [78] the imposition of a remedy in search of a problem [79] and the need to remedy free ridership of ISP networks by content providers. [80]  Outside the headlines and Congressional committee hearing rooms [81] these carriers object to network neutrality on two more practical concerns: 1) it would foreclose pricing and QOS initiatives, made possibly through new techniques including deep packet inspection,  that can generate new revenues and profits; and 2) it would resurrect some of the regulatory constraints and content scrutiny obligations the carriers thought they had avoided once and for all having qualified for both copyright and information service provider safe harbors. 

A.        Network Neutrality as a Constraint on Price Discrimination

            Network neutrality, whether imposed by law or public interest based FCC regulation, can impose direct restrictions on ISP pricing and diversification of services based on such factors as reliability, allocated bandwidth, performance during network congestion, ability to handle spikes in demand and quality of service.  Not all network neutrality advocates object to “access

tiering” [82] that constitutes price and QOS discrimination on the end user, demand side.  ISPs already offer end users different subscription rates based of bandwidth and bitrates. Additional differentiation could involve variable service quality, based on the ability to handle peak demand bursts as occurs in peer-to-peer networking, video gaming, delivery of large files and real time streaming of video programming.  Deep packet inspection would make it possible for ISPs to identify priority traffic and to provide superior and preferential processing for a premium price.

            Similarly the concept of network neutrality does not foreclose attempts by incumbent carriers to reshape access pricing into a conventional two-sided market [83] where ISPs would demand and receive payments downstream and upstream regardless whether they serve end users.  Under the current pricing arrangement a two sided market already exists for ISPs that can collect an Internet access subscription from end users for DSL and cable modem access to the Internet cloud [84] and also charge fees for providing small ISPs with access to major portions of the Internet population these small ISPs cannot reach via their own networks.

            Former AT&T Chairman Ed Whitacre has objected to the one sided market scenario where AT&T receives subscription payments from end users, but no additional payments from content generators who “use” AT&T networks without making direct payments to AT&T. [85] However, nothing about network neutrality forecloses AT&T from erecting a service so attractive to Google and other heavy users of the Internet as to entice them to opt for a contractual agreement providing for premium carriage of their traffic in lieu of the shared routes made available through the peering [86] and             transit [87] arrangements secured by the ISPs directly serving these heavy users.  For example, Akamai [88] and other network management firms offer clients enhanced Internet traffic routing and content delivery by offloading traffic from best efforts routing options and onto better than best efforts options.  Traffic can reach consumers with greater likelihood of on time delivery and reliability when ISPs and other Internet companies directly manage particular traffic streams with an eye toward reducing the number of routers the traffic has to traverse, avoiding circuitous routing and inserting traffic on the most reliable and least congested networks. 

Many universities, along with corporations, government research agencies, and not-for-profit networking organizations, have agreed to achieve this type of outcome by underwriting superior routing through the Internet-2 network, [89] a series of broadband links not regularly available to non investors.  Internet-2 has links to and from the plain vanilla Internet, but investors have enhanced the likelihood of reliable and qualitative superior routing by creating a direct or near direct links among investing organizations.  The corporate equivalent to this better than best efforts complete link from content source to consumer are virtual private networks and Intranets that carve out a small portion of the overall infrastructure used to provide Internet telecommunications.

            Nothing would foreclose AT&T and other ISPs from engineering a superior and complete Internet routing arrangement using the carrier’s own facilities, or those of other carriers with which AT&T negotiated a special traffic management and routing agreement. [90] Network neutrality only would foreclose AT&T from punishing Internet users who have declined the managed service option with “less than best efforts routing,” i.e., deliberately dropping packets, creating artificial network congestion, violating Service Level Agreements [91]and otherwise deteriorating the quality of service provided by network links that AT&T has agreed to make available to other peers and transit customers, including the ISPs directly serving heavy content providers such as Google.

B.        Does Network Neutrality Impose Common Carrier Responsibilities on ISPs?

            ISPs make a valid point that elements of network neutrality would impose elements of common carrier regulatory burdens that they have managed to avoid while still qualifying for the DMCA safe harbors.  Having avoided compulsory nondiscrimination requirements, ISPs now want to use deep packet inspection and other techniques to engage in selective price and QOS discrimination while at the same time retaining the ISP status that eliminates most regulatory scrutiny. 

            While common carrier regulation imposes some degree of constraints that would not otherwise exist, one should examine closely the nature of common carrier-type restrictions that network neutrality would impose.  Not all common carriers face the same level of constraints, and the Telecommunications Act of 1996 provides a method for selective elimination of common carrier burdens when the public interest supports such a reduction. [92] Technically cellular telephone companies still operate under some of the constraints of common carrier regulation, [93] but one could hardly say such regulation imposes any significant constraint on pricing and operational flexibility including the ability to operate clearly non-neutral networks in terms of content access and limitations on the flexible use of wireless telephone handsets.  Indeed cellular carriers have avoided most common carrier restrictions including limitations on erecting “walled garden,” preferred access to video and Internet-based content accessible on the screens of handsets used by subscribers.

            In other proceedings the FCC has shown that it can and will impose quasi-common carrier responsibilities on non common carriers if the public interest warrants, or Congress requires it.  The FCC has required non common carrier, cable and satellite television companies to carry broadcast television signals as a form of economic and public interest regulation designed to safeguard the continuing viability of broadcast television stations. [94] Recently the FCC has required, non common carrier VoIP service providers to contribute to universal service funding,[95] to support enhanced 911 emergency access[96] and to cooperate with law enforcement officials[97] in much the same way as common carrier regulated telephone companies.

C.        Are Network Neutrality Requirements Confiscatory and a Taking of Property?

            Opponents to network neutrality also imply that network neutrality requirements constitute a “confiscatory” and unlawful “taking” of their property. [98] Having invested in next generation infrastructure at significant expense both incumbent telephone and cable television operators expect to have nearly complete freedom from telecommunications service regulation.  However next generation networks will offer a integrated blend of services, including the functional equivalents of traditionally regulated, legacy voice telephony and cable television. 

The incumbent carriers appear ready to make two key arguments that equate regulation going forward as confiscatory: 1) robust facilities-based competition obviates the need for regulation, including common carrier aspects of network neutrality; and 2) commingling and integrating services that use telecommunications for bitstream transmission converts all retail offerings into information services.  The incumbents have convinced many legislators and regulators that network neutrality requirements do not make sense in a competitive environment where the Internet serves as single medium for convergent information, communications and entertainment services.

D.        The Information Service Classification Safe Harbor

            Major ISPs also have led a successful campaign to qualify as information services their broadband first and last mile links to the Internet cloud, viz. DSL and cable modem access.  This classification qualifies ISPs for an exemption from any common carrier, telecommunications service regulation.  Having classified Internet access as an information service, the FCC will have to resort to clever and probably unsustainable semantic maneuvering to classify as a telecommunications service any software application, riding on top [99] of the information service classified bitstream transmission functionality.[100]  If this scenario plays out the FCC would have to extend its information service classification to other services made available to end users on a retail basis via information service classified DSL and cable modem links, including VoIP and video services delivered via the Internet, commonly referred to as Internet Protocol Television (“IPTV”).  These services compete with and constitute the functional equivalent of legacy services heretofore subject to regulation, common carriage telecommunications service regulation for voice telephony and cable television regulation.  If the information service classification extends vertically up to software applications, then the FCC will have created a deregulated safe harbor for just about any service or software application carried via DSL and cable modem links, regardless of its functional equivalency with legacy, regulated services.

            The FCC already has begun to realize the quandary it has created for itself by fashioning such an elastic and expanding safe harbor.  Now bereft of Title II jurisdiction over Internet access and Internet-mediated services, the Commission has resorted to Title I of the Communications Act, as amended, to retain an “ancillary” regulatory hook if and when necessary.  The Commission already has applied this exception to the information service regulatory safe harbor by requiring VoIP service providers to contribute to universal telephone service funding, to make available emergency 911 access available and to cooperate with law enforcement officials.  The Commission has rationalized its imposition of quasi-common carrier, telecommunications service regulation by invoking broad notions of the public interest, by making a distinction between how different laws define telecommunications [101] and by making a questionable differentiation between the use of telecommunications to transport bits corresponding to an information service and the use of telecommunications to transport bits corresponding to retail telecommunications services. [102]

The FCC may yet again face close judicial scrutiny and reversal for creating a regulatory safe harbor only to chip away at it.  First, the Commission unlawfully may have stretched its general public interest mandate under Title I of the Communications Act.  American Library Ass’n. v. FCC already evidences a court’s unwillingness to endorse the FCC’s unilateral expansion of its regulatory mission absent express Congressional authority.  Second, the Commission may not persuade reviewing courts that ancillary jurisdiction, under Title I, as opposed to conventional telecommunications service jurisdiction, under Title II, should apply to Internet services, such as VoIP, particularly in light of the Commission’s selective imposition of telephone company regulations on VoIP service providers.  Third, the Commission’s telecommunications versus telecommunications service distinction, may not pass muster with reviewing courts in light of the fact that telecommunications bitstream delivery occurs in the very same way for both telecommunications services and information services. [103]

The information service provider classification serves the FCC’s interest in safeguarding the Internet from conventional telecommunications service regulation, despite several instances where the FCC had selectively to re-regulate.  However the FCC’s emphasis on non-regulation results from its conclusion that ISPs do not operate and should not have to operate as common carriers, i.e., that ISPs need not operate as neutral conduits.  ISPs can violate any principle of network neutrality and arguably still retain their largely unregulated status.  On the other hand the DMCA, while not mandating common carriage, does require ISPs to operate in a manner that evidences no involvement with the content they carry.  Accordingly when such traffic management occurs, an ISP may not have crossed the line into regulated telecommunications services, but it still may lose its copyright safe harbor exemption.

III.       What Constitutes Actual Knowledge of Copyright Infringement?

            Common carriers operate as neutral conduits and typically carry content created by others.  Conversely, ISPs can offer varying degrees of neutrality and can readily combine conduit with content the ISPs creates and that created by others.  For telecommunications common carriers actual knowledge about criminal and harmful content cannot exist, because the carrier never examines content absent an external directive such as a court order.  For ISPs actual knowledge can occur when an ISP engages in deep packet inspection.  However the ISP might claim that deep packet inspection provides only information sufficient for the ISP to know how to classify, switch, route and process traffic without actual knowledge of whether by transporting a particular bitsream the ISP has facilitated copyright infringement.

            Answers to questions whether, how and when an ISP acquires actual knowledge of copyright infringement largely depends on what can and will become standard information contained in Internet packet headers.  Arguable ISPs can limit their deep packet inspection to that minimally intrusive level needed to monitor traffic for purposes of “proper” and “routine” classification, switching, routing and processing.  Under this scenario an ISP might ignore copyright information, i.e., take no affirmative steps to protect the copyright holder, and  simply carry packets containing headers that have copyright usage information that may impact how receivers of a file can use, copy and resend the file. 

            Some types of DRM can provide enhanced copyright protection without any affirmative efforts by the ISP providing the link between sender and recipient.  If this type of DRM becomes an industry standard, then ISPs possibly can transmit without any meddling, scrutiny or processing, packets containing DRM instructions for processing by equipment on user premises.  Simultaneously the ISP could use deep packet inspection to act on other information contained in the header to effectuate non-neutral networking.

A.        Do ISPs Have an Affirmative Duty to Process DRM Restrictions on Use and Copying?

 

            The possibility exists that standard DRM techniques may evolve to a point where they require some degree of intervention by the ISPs in advance of, or in lieu of processing by end user equipment.  Contrary to passively transmitting DRM instructions and other types of safeguards, ISPs under this scenario would have to apply deep packet inspection, or some other form of header examination method, to make DRM processing successful.  Such active examination of traffic raises both intellectual property rights and privacy questions.  While an ISP may have a right to control copyright infringing behavior, does this control justify packet inspection to effectuate such a right?  Likewise does deep packet inspection, or other forms of header examination, confer on ISPs the ability to prevent and otherwise control copyright infringement?  Bear in mind that ISPs heretofore have demonstrated the right and ability to remedy copyright infringement only after the fact and in response to copyright holders that have performed the necessary forensic examination to determine who has infringed. [104]  Deep packet inspection might provide the ability to provide some degree of contemporaneous DRM, quite possibly on an automated basis once the ISP detects, or has received notification by copyright holders of infringing activity.

            The DMCA does not require ISPs to monitor their networks, or seek facts indicating the existence of infringement to qualify for the copyright safe harbors.  On the other hand the DMCA also requires ISPs not to interfere with any “standard technical measures” [105] used to identify and protect copyrighted works.  It appears that ISPs may not block or fail to transmit copy protection and other DRM safeguards effectuated once resident on end users’ computers.  However, the DMCA does not appear to require ISPs to deploy deep packet inspection or to retrofit any sort of packet examination they employ to add DRM enforcement and copyright infringement detection capabilities. 

            The absence of an affirmative obligation to enforce DRM may not extend to a scenario where ISPs readily can use deep packet inspection to perform traffic and QOS tiering as well as copy protection as standard operating procedure.  Arguably ISPs satisfy the right to control copyright infringement when they reserve the option of inspecting the traffic of subscribers as well as that transit and peering traffic generated by other ISPs.  ISPs might also have the ability to control such activity in light of the promising array of DRM, traffic management, and service diversification options offered by next generation Internet routers.

IV.       Non-Neutral Networks and Their Adverse Impact on Fair Use

            An ISP deciding to operate a non-neutral network, willingly installs hardware and software that automatic makes binding decisions about how the ISP will manage specific bitstreams.  This traffic management function can include decisions whether to block or complete delivery of packets to an intended recipient.  When network management includes decisions about the use, copying and sharing of content hardware and software substitute for people and impose new ex ante limitations instead of after the use examination whether infringement has occurred.  Using technological intermediaries in lieu of human decision makers risks expanding DRM to a point where hardware and software operate as proxy censors [106] as well as repressors of fair use. [107]

            Fair use in an offline environment involves empirical and value judgments based on somewhat ambiguous criteria:

                        The copyright law, although carefully worded, simply cannot be expressed in the kind of algorithmic language that is required of   computer programs to automate functionality                 like printing or copying.  This is especially true of “fair use”  . . . a deliberately vague exception to the monopoly rights of the copyright holder. [108]

 

Empowering hardware and software to establish and enforce a priori fair use policies usurps decision making by individuals and vests it with an intermediary that has every incentive to take the path of least resistance and lowest cost:

[I]f it is costly to distinguish protected from unprotected speech, the proxy censor if likely to abandon the effort to avoid errors and adopt a conscious policy of prophylactic self-censorship that blocks any content that could precipitate the threat of sanctions. [109]

 

IV.       Conclusion

            In light of the new profit centers available to non-neutral Internet networks, most ISPs soon will acquire and install routers with deep packet inspection capabilities.  Having made the decision to abandon network neutrality, ISPs may have to calibrate their networks with greater precision to block copyright infringing traffic, because of an unintended, but likely collateral consequence: the risk of losing safe harbor exemption from liability.

            Given the risk of losing a safe harbor, ISPs likely will err on the side of accommodating DRM cooperation requests from copyright holders.  ISPs probably will collaborate with copyright holders perhaps going so far as to program hardware with deep packet inspection software that achieve both traffic management goals, to pursue price and QOS diversification, as well as DRM, to mollify copyright holders.  Should this scenario play out the current network neutrality debate will have addressed not only the future accessibility of the Internet to users and content providers, but also the future nature and scope of consumers’ fair use opportunities to access, copy and resend content available via the Internet.

            Some network neutrality opponents reject the likelihood that a non-neutral network will occur, [110] while others claim that the Internet never was neutral in the first place. [111]  Opponents to network neutrality do not appear to have considered whether and how hardware and software, [112] primarily installed to provide tiered and differentiated bit transport services, also will have an impact on consumers’ access to content.  A non-neutral World Wide Web will have substantial and direct impact on both the conduit portion of the Internet and the content traveling via the conduit.  When an ISP chooses to operate a non-neutral conduit, the ISP, internationally or not, should incur greater responsibility for the content it carries. [113]

             

           

 

 

 



[1]           Over the last two decades, the communications industry has undergone rapid technological advancements leading to the convergence of services. New technological capabilities allow companies to compete in markets which previously had no competition. While potentially beneficial to the consumer, convergence within the communications industry has created a regulatory nightmare.” Ryan K. Mullady, Regulatory Disparity: The Constitutional Implications of Communications Regulations That Prevent Competitive Neutrality, 2 U. PITTSBURGH J. TECH. L. & POL’Y 4 (Spring, 2007).  For background on the impact of converging telecommunications and information processing technologies see, e.g., International Telecommunication Union, ITU Internet Report 2006, digital.life; portions available at: http://www.itu.int/osg/spu/publications/digitalife/index.html.

 

[2]           Telecommunications regulation in the United States operates on a medium specific basis with separate rules and policies applicable to broadcasting, cable television, telecommunications services and information services.  See Rob Frieden, The FCC’s Name Game: How Shifting Regulatory Classifications Affect Competition, 19 BERKELEY TECHNOLOGY LAW JOURNAL, No. 4, 1275-1314 (Fall, 2004); Adjusting the Horizontal and Vertical in Telecommunications Regulation: A Comparison of the Traditional and a New Layered Approach, 55 FEDERAL COMMUNICATIONS LAW JOURNAL, No. 2, 207-250 (March, 2003).

 

[3]           With the exception of the Digital Millennium Copyright Act of 1998 Pub. L. No. 105-304, 112 Stat. 2360 (1998) (codified as amended at 17 U.S.C. § § 1201-1205), the United States Congress enacted most currently applicable intellectual property laws prior to the onset of the Internet.   See The Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 (codified as amended 17 U.C.C. § 101 (2007).  For background on the history of copyright law, see Anuj Desai, Big Entertainment Needs a Sequel to the Highly Anticipated Flop: MGM v. Grokster, 41 GA. L. REV. 579 (Winter, 2007).

            “At a basic level, the Internet’s technology requires the insertion of intermediaries between interacting parties in two ways.  First, for all interactions over the Internet, the communication necessarily involves the Internet itself, as well as the parties necessary to facilitate the particular communications . . . [and second] commercial transactions on the Internet require the use of other intermediaries.”  Ronald J. Mann and Seth R. Belzley, The Promise of Internet Intermediary Liability, 47 WM. & MARY L.Rev. 239, 254 (Oct. 2005).

 

[4]           Perhaps the most significant development on the Internet was the World Wide Web, a user-friendly graphic user interface (‘GUI’) and effective means for computers running different operating systems to communicate with each other. The creator of the World Wide Web, Tim Berners-Lee, developed the Web to perpetuate a neutral network built on end-to-end principles. As neutral and therefore uncontrolled platforms, both the Internet generally and the Web specifically have spawned a dazzling rate and range of innovation.” Bill D. Herman, Opening Bottlenecks: On Behalf Of Mandated Network Neutrality, 59 FED. COMM. L.J. 103, 109-110 (Dec., 2006). See Tim Berners-Lee & Mark Fischetti, Weaving the Web: The Original Design and Ultimate Destiny of the World Wide Web by Its Inventor (Harper Collins, New York 1999).

 

[5]           “[T]he Internet is a ‘packet-switched’ network. In such networks, fixed circuits are not dedicated for the duration of a communication. Instead, the data that is transmitted, whether files, email, Instant Messages, voice, is broken into small packets. Each packet travels its own route over the Internet. The entire set of contents is reassembled when it is received at the other end.”

Susan Landau, National Security on the Line, 4 J. TELECOMM. & HIGH TECH. L. 409, 424 (Spring, 2006).

 

[6]           Telecommunications is defined as “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.” 47 U.S.C. § 153(43).  Telecommunications service means “the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.” 47 U.S.C. § 153(46). The Communications Act defines telecommunications carrier as “any provider of telecommunications services, except that such term does not include aggregators of telecommunications services (as defined in section 226).  A telecommunications carrier shall be treated as a common carrier under this Act only to the extent that it is engaged in providing telecommunications services, except that the Commission shall determine whether the provision of fixed and mobile satellite service shall be treated as common carriage.” 47 U.S.C. § 153(44). 

 

[7]           Information service is defined as “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.” 47 U.S.C. § 153(20).  “[T]he language and legislative history of [the Communications Act of 1996] indicate that the drafters . . . regarded telecommunications services and information services as mutually exclusive categories.”  Federal-State Joint Board on Universal Service, Report to Congress, 13 FCC Rcd. 11501, 11522 (1998); see also Vonage Holdings Corp., 290 F. Supp.2d at 994, 1000 (applying the FCC’s dichotomy). 

            While information service providers use telecommunications to transmit bitstreams, the FCC has chosen not to separate this functionality from the information processing that also occurs.  In other words the FCC considers telecommunications to be subordinate to and fully integrated with the predominant information service.

 

[8]           Vertical integration enables a firm to coordinate investment and production decisions across its divisions. A comparison of the costs of contractual exchange with those of internal exchange often reveals vertical integration to be the least-cost method of achieving the desired level of coordination. The minimization of coordination costs is extremely important in a market subject to rapid technical change.” J. Gregory Sidak, A Consumer-Welfare Approach to Network Neutrality Regulation of the Internet, 2 J. COMPETITION L. & ECON. 349, 460 (Sep. 2006).

“Relative to contracting at arm's length for network management and for delivery of Internet content and applications, vertical integration reduces these costs of specifying, monitoring, and enforcing the rules that direct activities required for the coordinated production of services to end users.” Id. at 461. See also, see Joseph Farrell & Philip J. Weiser, Modularity, Vertical Integration, and Open Access Policies: Towards a Convergence of Antitrust and Regulation in the Internet Age, 17 HARV. L. & TECH. 85 (2003).

           

[9]          “Cisco® Service Control technology offers service providers the ability to classify application traffic and identify subscribers while prioritizing and optimizing network resources. Using stateful deep packet inspection, operators can optimize traffic on their networks, thereby increasing efficient use of network resources, reducing costs, and maximizing capital investment. State-of-the-art bandwidth management can be applied to network traffic on a global, subscriber, or individual flow-level hierarchy, helping ensure that operators can better manage network resource distribution.”  Cisco, Optimizing Application Traffic With Cisco Service Control Technology, Solution Overview; available at: http://www.cisco.com/en/US/products/ps6150/prod_brochure0900aecd80241955.html.

 

[10]          The Digital Millennium Copyright Act of 1998, Pub. L. No. 105-304, 112 Stat. 2860 (Oct. 28, 1998) [hereinafter cited as DMCA] applies to “service providers” defined in section 512(k)(1)(A) and applicable to provision of transitory communications services as “an entity

offering the transmission, routing, or providing of connections for digital online

communications, between or among points specified by a user, of material of the user’s

choosing, without modification to the content of the material as sent or received.” For three other safe harbor exemptions from liability for copyright infringement “service provider” is more broadly defined in section 512(k)(l)(B) as “a provider of online services or network access, or the operator of facilities therefor.”

 

[11]          A safe harbor constitutes “[a]n area or means of protection [or a] provision (as in a statute or regulation) that affords protection from liability or penalty.”  BLACK'S LAW DICTIONARY (8th ed. 2004).  The DMCA provides qualified immunity from liability for direct or secondary infringement of copyrighted material that traverses an ISP’s network. “Congress enacted the safe harbors in response to concerns expressed by online service providers about their potentially overwhelming liability for copyright infringement committed by their users.” Mark A. Lemley and R. Anthony Reese, Reducing Digital Copyright Infringement Without Restricting Innovation,

56 STANFORD L. REV., No. 6, 1345, 1369 (May, 2004).

 

[12]          Title II of the DMCA adds a new Section 512 to the Copyright Act, 17 U.S.C. § 101 et seq. to create four new limitations on liability for copyright infringement by online service providers. The limitations are based on the following four categories of conduct by a service provider: 1) Transitory communications §512(a); 2) System caching 512(b); 3) Storage of information on systems or networks at direction of users 512(c); and 4) Information location tools 512(d).  ISPs lose safe harbor liability exemption when they have actual knowledge of copyright infringement.  Each limitation completely bars monetary damages, and restricts the availability of injunctive relief. 

 

[13]          See, e.g., Religious Technology Center v. Netcom On-Line Communication Services, 907 F.Supp. 1361 (N.D. Cal. 1995)(online operator of system for posting comments to multiple recipients held not liable for contributory and vicarious infringement when a subscriber directly infringed copyrights by posting large portions of copyrighted content).

 

[14]          ISPs that financially benefit from infringement about which they know or should know lose the DMCA safe harbor.  MGM studio, Inc. v. Grokster, Ltd. 125 S.Ct. 2764 (2005); In re Aimster Copyright Lttig., 334 F.3d 643 (7th Cir, 2003); cert. denied, 540 U.S. 1107 (2004).

 

[15]          See, e.g., Perfect 10, Inc. v. CCBill, LLC, 340 F.Supp. 1077 (C.D. Cal. 2004) (DMCA insulates payment intermediaries from claims of copyright infringement); Gentry v. eBay, Inc., 121 Cal. Rpt.2d 703 (Cal. App. 2002)(online auction site not liable for sale of counterfeit goods).

 

[16]          See, e.g., Cubby, Inc v CompuServe Inc., 776 F. Supp 135 ( S.D.N.Y. 1991)(ISP that operates as a neutral conduit for over 150 special interest forums deemed not a publisher for content created by others with management, editing and other control functions performed by a third party); Lunney v Prodigy Services Company, 250 AD 2d 230 (N.Y. App. Div. 1998), aff’d, 723 N.E.2d 539 (N.Y. 1999) (ISP not responsible when defamatory comments posted by an imposter). Blumenthal v. Drudge, 992 F. Supp. 44 (D.D.C. 1998) (ISP not liable for defamatory statement posted even when the ISP pays a monthly fee for the content and has the contract right to editorially control it). Section 230(c)(1) of the Communications Act, as amended, 47 U.S.C. § 230(c)(1) (2006) specifies that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” See, e.g., Ben Ezra, Weinstein, & Co. v. Am. Online, Inc., 206 F.3d 980, 983 (10th Cir. 2000) (interpreting §230 as granting immunity for distribution of inaccurate stock prices concerning the plaintiff's business); Zeran v. Am. Online, Inc. 129 F.3d 327, 328 (4th Cir. 1997) (finding that §230 conferred immunity on America Online even though, after several notifications, it did not quickly remove postings falsely portraying Zeran as celebrating the Oklahoma City bombings); Barrett v. Rosenthal, 146 P.3d 510, 513 (Cal. 2006) (finding that §230 creates immunity for a defendant who republishes defamatory speech regardless whether the ISP acted served more than a completely passive conduit); Doe v. Am. Online, Inc., 783 So. 2d 1010, 1017 (Fla. 2001) (affirming on §230 immunity grounds the dismissal of a mother’s complaint alleging tort liability against AOL for retransmitting sexually explicit photographs and a videotape).

 

[17]          See Center for Democracy & Technology v. Pappert, 337 F.2d 606 (E.D. Pa. 2004)(law requiring ISPs to disable access to child pornography sites invalidated as overbroad and ineffective).

 

[18]          “The source ISP, in contrast, may be involved in multiple ways that are relevant both in assessing the ‘fairness’ of ‘blaming’ the source ISP for the misconduct . . . and in assessing how effectively the source ISP can serve as a gatekeeper to stop the misconduct. . . ..” Ronald J. Mann & Seth R. Belzley, The Promise of Internet Intermediary Liability, 47 WM. & MARY L. REV. 239, 256 (Oct., 2005).

 

[19]          New technologies will enable ISPs to operate non-neutral networks in the sense that ISPs will have the capability to examine traffic and assign particular streams to different tiers of service.  Traffic examination of this sort does not examine the content, contained in the “payload” of packets.  Accordingly an ISP would not know whether a particular bitstream contains obscene or defamatory content.  However, examining packet “headers” would enable the ISP to determine what use, copying and retransmission rights recipients have for the traffic managed by the ISP. See Alex Pisarevsky, Cope-ing with the Future: An Examination of the Potential Copyright Liability of Non-Neutral Networks for Infringing Internet Content, 24 CARDOZO ARTS & ENT. L.J. 1359 (2007).

 

[20]          “It comes down to this: the industry needs to put forth meaningful ways to identify, promote and commercialize digital assets while protecting copyright holders.  If it doesn’t, all stakeholders will miss out on the opportunity to generate revenue from IP-based entertainment distribution.” Dr. Matthew Lucas, Peer-To-Peer Networks, DRM and OSS/BSS, BILLING WORLD & OSS TODAY, (March 5, 2007); available at: http://www.billingworld.com/rev2/main/featureArticle.cfm?featureID=7830.

 

[21]          In light of the financial stakes involved in the scope of regulation applied to conventional, so-called legacy services and new information services, numerous organizations have pursued a public policy agenda supporting deregulation and the eradication of government oversight, including traditional regulatory over pricing, interconnection and quality of service. These groups reject any view that even as telecommunications becomes less regulated, a new concept of ‘network neutrality’ should force largely unregulated  Internet Service Providers ("ISPs") to forego the option of offering differentiated and tiered Internet services. Opponents of net neutrality view the concept as jeopardizing operational and pricing flexibility. Net neutrality advocates fervently argue that the Internet cannot achieve maximum contributions to national productivity, economic opportunity and innovation unless government ensures end-to-end connectivity by foreclosing a balkanized or tiered Internet.” Rob Frieden, Network Neutrality or Bias?--Handicapping the Odds for a Tiered and Branded Internet, 29 HASTINGS COMM. & ENT. L.J. 171, 174-176 (Winter, 2007).

 

[22]          See, e.g., T. Randolph Beard, George S. Ford, Thomas M. Koutsky & Lawrence J. Spiwak, Network Neutrality and Industry Structure, 29 HASTINGS COMM. & ENT. L.J. 149

(Winter, 2007); Christopher S. Yoo, Network Neutrality and the Economics of Congestion, 94 GEO. L.J. 1847 (2006). Christopher S. Yoo, Beyond Network Neutrality, 19 HARV. J.L. & TECH. 1, 13-18 (2005); Christopher S. Yoo, Would Mandating Broadband Network Neutrality Help or Hurt Competition? A Comment on the End-to-End Debate, 3 J. on TELECOMM. & HIGH TECH. L. 23, 51 (2004).

 

[23]          TCP/IP routes packets anonymously on a ‘first come, first served’ and ‘best efforts’ basis. Thus, it is poorly suited to applications that are less tolerant of variations in throughput rates, such as streaming media and VoIP, and is biased against network-based security features that protect e-commerce and ward off viruses and spam.” Christopher S. Yoo, Beyond Network Neutrality, 19 HARV. J.L. & TECH. 1, 8 (Fall, 2005).

 

[24]          “Emerging peer-to-peer networks destabilized the equilibrium achieved under the DMCA between copyright owners and ISPs.  Peer-to-peer networks facilitate direct exchange of files among individual users.  While infringing materials distributed on the web involve identifiable websites, the distribution of infringing materials on peer-to-peer networks is difficult to control.  Data is replicated by multiple peers and can be located by peers without relying on a central index server.  The distributed architecture of peer-to-peer networks makes it difficult to identify the source of infringing materials and to locate the infringers.”  Niva Elkin-Koren,  Making Technology Visible: Liability of Internet Service Providers for Peer-to-Peer Traffic, 9 N.Y.UJ. LEGIS. & PUB. POL’Y. 15, 17 (2005-2006).

 

[25]          Voice over the Internet Protocol (“VoIP”) offers voice communications capabilities, much like ordinary telephone service, using the packet switched Internet, for all or part of the link between call originator and call recipient.  VoIP calls originating or terminating over the standard, dial up telephone network require conversion from or to the standard telephone network’s architecture that creates a dedicated “circuit-switched” link, as opposed to the ad hoc, “best efforts” packet switching used in the Internet.  See Mark C. Del Bianco, Voices Past: The Present and Future of VoIP Regulation, 14 COMMLAW CONSPECTUS 365 (2006); Robert Cannon, State Regulatory Approaches to VoIP: Policy, Implementation, and Outcome, 57 FED. COMM. L.J. 479 (May, 2005); Sunny Lu, Note, Cellco Partnership v. FCC & Vonage Holdings Corp. v.. Minnesota Public Utilities Commission: VoIP’s Shifting Legal and Political Landscape, 20 BERKELEY TECH. L.J. 859, 862 (2005); Chérie R. Kiser &Angela F. Collins, Regulation on the Horizon: Are Regulators Poised to Address the Status of IP Telephony?, 11 CommLaw Conspectus 19 (2003); Robert M. Frieden, Dialing for Dollars: Should the FCC Regulate Internet Telephony?, 23 RUTGERS COMPUTER & TECH. L.J. 47, 47-79 (1997).

 

[26]          Prior to 1995 the United States government largely underwrote development of the Internet by funding two major backbone networks, the ARAPANET and NSFNet and by serving as an anchor tenant user of these networks.  The ‘Internet’ is a worldwide system of computer networks and individual computers that are interconnected by communications facilities.  The antecedents of the Internet were systems for two relatively small groups of research-oriented governmental, academic and corporate entities-ARPANET and NSFNET.  ARPANET received its principal support from the Department of Defense and related agencies, while NSFNET's support came from numerous sources, including the NSF and other federal agencies, academic institutions and corporate sponsors.” Island Online, Inc. v. Network Solutions, Inc. 119 F.Supp.2d 289 (E.D.N.Y.,2000)(references omitted).

 

Network operators funded by the United States government and keen on promoting greater accessibility to the Internet and connectivity of networks had little interest in measuring traffic levels and charging network operators that generated more traffic than they received.

 

[27]          Deep packet inspection uses specialized high-speed hardware and software that can identify packets in real-time.  A service provider could use deep packet inspection to distinguish peer-to-peer traffic, or even just traffic from a single peer-to-peer file-sharing application, and either block it or reduce its available bandwidth. Without deep packet inspection, service providers and others could only resort to crude application-level techniques, such as cutting off all streaming video clips using standard formats after a certain time.” Kevin Werbach, Breaking The Ice: Rethinking Telecommunications Law for the Digital Age, 4 J. TELECOMM. & HIGH TECH. L. 59, 92 (Fall, 2005). Depending on how net neutrality is defined, it can be argued that there are widespread violations of the principle. Vertically integrated incumbents are expanding their tactics from the shotgun approach of blocking, to a more nuanced approach. In the United States particularly, incumbents are looking to increase their broadband revenue streams not by blocking, but by discrimination, charging more for faster download speeds or for certain types of traffic sent by unaffiliated parties. This approach is greatly facilitated by new filtering and ‘deep packet inspection network-management tools that allow service providers to determine the types of traffic flowing across their networks. With these tools, network operators can offer improved speeds--and, conversely, to block or degrade the service-- for specific types of traffic.” Mark C. Del Bianco, Voices Past: The Present and Future of VoIP Regulation, 14 CommLaw Conspectus 365, 394-95 (2006).

 

[28]          The Committee Report on the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 512 (2006) provides more expansive insights on the meaning of the language contained in the law.  While the DMCA does not expressly contain a “red flag” test for assessing whether an ISP has actual knowledge of copyright infringement, the Committee Report suggests the reasonableness of such a test when evaluating the appropriateness of safe harbors for ISPs storing and linking to copyright infringing content.  17 U.S.C. § 512(c)-(d).  For example, the Committee Report suggests that Sec. 512 (c)(1)(A)(ii) requiring “the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent” establishes such a red flag test: “if the service provider becomes aware of

a ‘red flag’ from which infringing activity is apparent, it will lose the limitation of liability if it takes no action. The ‘red flag’ test has both a subjective and an objective element. In determining

whether the service provider was aware of a ‘red flag,’ the subjective awareness of the service provider of the facts or circumstances in question must be determined. However, in deciding whether those facts or circumstances constitute a ‘red flag’—in other words, whether infringing activity would have been apparent to a reasonable person operating under the same or similar circumstances—an objective standard should be used.”  United States House of Representatives, 105th Congress, 2d Sess., Committee on Commerce, Rpt. 105-551, Pt. 2, Digital Millennium Copyright Act of 1998 (July 22, 1998); available at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=105_cong_reports&docid=f:hr551p2.105.pdf [hereinafter cited as DMCA Committee Report] Addressing linking to sites probably containing infringing material the Committee Report suggests the reasonableness of a similar red flag test: “a service provider would have no obligation to seek out copyright infringement, but it would not qualify for the safe harbor if it had turned a blind eye to “red flags’ of obvious infringement.” Id. at 57.

 

[29]          Copyright holders increasingly rely on digital rights management “technologies that prevent you from using a copyrighted digital work beyond the degree to which the copyright owner wishes to allow you to use it.” Mike Godwin, What Every Citizen Should Know About DRM a.k.a. “Digital Rights Management,” available at: http://www.publicknowledge.org/pdf/citizens_guide_to_drm.pdf.  See also, Dan L. Burk, Legal and Technical Standards in Digital Rights Management Technology, 74 FORDHAM L. REV. 537 (2005).

 

[30]          17 U.S.C.§512(i)(1)(B) conditions ISP safe harbor eligibility on their accommodation and noninterference with “standard technical measures” to identify and protect copyright infringement.  17 U.S.C.§512(i)(2)(A)-(C) defines these measures as ones that “have been developed pursuant to a broad consensus of copyright owners and service providers in an open, fair, voluntary, multi-industry standards process; are available to any person on reasonable and nondiscriminatory terms; and do not impose substantial costs on service providers or substantial burdens on their systems or networks.”

 

[31]          Digital Millennium Copyright Act of 1998 Pub. L. No. 105-304, 112 Stat. 2360 (1998) (codified as amended at 17 U.S.C. § § 1201-1205).

 

[32]          17 U.S.C. §512(c)(1)(A)(i).

 

[33]          American Library Ass’n. v. FCC, 406 F.3d 689, 365 U.S. App. D.C. 353 (D.C. Cir. 2005).

 

[34]          The broadcast video flag is “a content-protection signal that broadcasters may choose to embed into a digital broadcast transmission as a way to prevent unauthorized redistribution of [Digital Television] DTV content.” Brian T. Yeh, Congressional Research Service, CRS Report to Congress, Copyright Protection of Digital Television: The Broadcast Video Flag (Jan. 11, 2007); available at: http://ipmall.info/hosted_resources/crs/RL33797-070111.pdf.

 

[35]          For background on how the Internet evolved from a government underwritten project to a privatized and commercialized medium, see Rob Frieden, Revenge of the Bellheads: How the Netheads Lost Control of the Internet, 26 TELECOM. POL’Y, No. 6, 125-144 (Sep./Oct. 2002); see also, See, Barry M. Leiner, Vinton G. Cerf, David D. Clark, Robert E. Kahn, Leonard Kleinrock, Daniel C. Lynch, Jon Postel, Larry G. Roberts and  Stephen Wolff, A Brief History of the Internet, Internet Society; available at: http://www.isoc.org/internet/history/brief.shtml.

[36]    By contrast, the Internet is a ‘packet-switched’ network. In such networks, fixed circuits are not dedicated for the duration of a communication. Instead, the data that is transmitted, whether files, email, Instant Messages, voice, is broken into small packets. Each packet travels its own route over the Internet. The entire set of contents is reassembled when it is received at the other end. The technology of packet routing creates some differences with circuit-switched technology.

In particular, the routes packets traverse is dynamically determined through addresses carried in the packets themselves. If a particular communication link is busy, the packet will be routed through a less-congested path. In theory--this occurs much less often in practice--each packet of a communication may travel a different route to its destination.” Susan Landau, National Security on the Line, 4 J. TELECOMM. & HIGH TECH. L. 409, 424 (Spring, 2006).

 

[37]          TCP/IP routes packets anonymously on a ‘first come, first served’ and ‘best efforts basis. Thus, it is poorly suited to applications that are less tolerant of variations in throughput rates, such as streaming media and VoIP, and is biased against network-based security features that protect e-commerce and ward off viruses and spam.” Christopher S. Yoo, Beyond Network Neutrality, 19 HARV. J.L. & TECH. 1, 8 (Fall, 2005).

 

[38]          See, infra n. 26.

 

[39]          Internet transiting refers to a traffic routing arrangement whereby one ISP agrees to accept traffic for onward routing for compensation.  Transiting involves a settlement and payment of funds because one ISP requires access to the links, subscribers and content available via another ISP’s network and its peering arrangements.  “Transit is the business relationship whereby one ISP provides (usually sells) access to all destinations in its routing table.” William B. Norton, Internet Service Providers and Peering, Draft 2.5 (undated)

available at: http://www.equinix.com/pdf/whitepapers/PeeringWP.2.pdf.

 

[40]          The Internet’s first generation emphasized network expansion and efforts to promote connectivity with little regard for cost, because a third party (government) subsidized such efforts.  The second generation marked a migration from government subsidization to private, commercial network operation.  The ongoing migration to a third generation appears to emphasize diversification of services, prices and quality as ISPs pursue price and QOS discrimination opportunities.

 

[41]          See, e.g., International Telecommunication Union, What Rules for IP-enabled NGN?, Workshop (March 23-24 2006); web site materials available at: http://www.itu.int/osg/spu/ngn/event-march-2006.phtml.

 

[42]          Voice over the Internet Protocol (“VoIP”) refers to the use of the Internet to carry and deliver on a real time, immediate basis packets of data that correspond to a voice conversation. VoIP services range in quality, reliability and price and can link both computers and ordinary telephone handsets.   For technical background on how VoIP works see Intel, White Paper, IP Telephony Basics, available at: http://www.intel.com/network/csp/resources/white_papers/4070web.htm; Susan Spradley and Alan Stoddard,  Tutorial on Technical Challenges Associated with the Evolution to VoIP, Power Point Presentation, available at: http://www.fcc.gov/oet/tutorial/9-22-03_voip-final_slides_only.ppt. See also, Jerry Ellig and Alastair Walling, Regulatory Status of VoIP in the Post-Brand X World, 23 SANTA CLARA COMPUTER & HIGH TECH. L.J. 89 (No. 2006); Amy L. Leisinger, If It Looks Like a Duck: The Need for Regulatory Parity in VoIP Telephony, 45 WASHBURN L.J. 585 (Spring, 2006); Mark C. Del Bianco, Voices Past: The Present and Future of VoIP Regulation, 14 COMLCON 365 (2006); R. Alex DuFour, Voice Over Internet Protocol: Ending Uncertainty and Promoting Innovation Through a Regulatory Framework, 13 COMLCON 471 (2005); Stephen E. Blythe, The Regulation of Voice-Over-Internet-Protocol in the United States, the European Union, and the United Kingdom, 5 J. HIGH TECH. L. 161(2005).

 

[43]          “The Internet is a vast network of individual computers and computer networks that communicate with each other using the same communications language, Transmission Control Protocol/Internet Protocol (TCP/IP). The Internet consists of approximately more than 100 million computers around the world using TCP/IP protocols. Along with the development of TCP/IP, the open network architecture of the Internet has the following characteristics or parameters:1. Each distinct network stands on its own with its own specific environment and user requirements, notwithstanding the use of TCP/IP to connect to other parts of the Internet. Communications are not directed in a unilateral fashion. Rather, communications are routed throughout the Internet on a best efforts basis in which some packets of information may go through one series of computer networks and other packets of information go through a different permutation or combination of computer networks, with all of these information packets eventually arriving at their intended destination. 2. Black boxes, for lack of a better term, connect the various networks; these boxes are called ‘gateways’ and ‘routers.’ The gateways and routers do not retain information but merely provide access and flow for the packets being transmitted.3. There is no global control of the Internet.” Konrad L. Trope, Voice Over Internet Protocol: The Revolution in America’s Telecommunications Infrastructure, 22 COMP. & INTERNET L. 1. No. 12, 1,4 (Dec. 2005). 

           

[44]          When you browse the Web, for example, you generate little or no traffic while you’re reading a page, but there is a burst of traffic when your browser needs to fetch a new page from a server. If a network provider is using minimal delay discrimination, and the high-priority traffic is bursty, then low-priority traffic will usually sail through the network with little delay, but will experience noticeable delay whenever there is a burst of high-priority traffic. The technical term for this kind of on-again, off-again delay is ‘jitter.’” Edward W. Felten,  Nuts And Bolts Of Network Neutrality, Practicing Law Institute, 24th Annual Institute on Telecommunications Policy & Regulation, 887 PLI/PAT 317, 326 (Dec. 2006).

 

[45]          For services that need immediate, “real time” packet delivery, e.g., streaming audio and video, any failure to receive packets in time and in proper sequence will result in a noticeable degradation in service quality.  The packets are lost and cannot be resent.

 

[46]          Caching refers to intermediate and temporary storage of data. “Google makes and analyzes a copy of each Web page that it finds, and stores the HTML code from those pages in a temporary repository called a cache.” Field v. Google, Inc., 412 F.Supp.2d 1106 (D. Nev. 2006) (holding that the Digital Millennium Copyright Act (DMCA) provides a “safe harbor” exemption from liability for making cached copies of copyrighted works).

 

[47]          “A packet sniffer (also known as a network analyzer or protocol analyzer or, for particular types of networks, an Ethernet sniffer or wireless sniffer) is computer software or computer hardware that can intercept and log traffic passing over a digital network or part of a network. As data streams travel back and forth over the network, the sniffer captures each packet and eventually decodes and analyzes its content according to the appropriate RFC or other specifications.” Wikipedia, Packet sniffer; available at: http://en.wikipedia.org/wiki/Packet_sniffer.

 

[48]          For links to a representative sample of advocacy papers and analyses of network neutrality see National Regulatory Research Institute, Diverse papers on net neutrality; available at: http://www.nrri.ohio-state.edu/Telecom/hot-topics-links/net-neutrality/papers/.  See also, Rob Frieden,  Internet 3.0: Identifying Problems and Solutions to the Network Neutrality Debate, __INT’L J. OF COMMS. __ (publication pending); Network Neutrality or Bias?--Handicapping the Odds for a Tiered and Branded Internet, 29 HASTINGS COMMS. & ENT. L.J., No. 2, 171-216 (2007).

 

[49]          See, e.g., Brett Frischmann & Barbara van Schewick, Yoo’s Frame and What It Ignores: Network Neutrality and the Economics of an Information Superhighway, 47 JURIMETRICS J. (forthcoming 2007); Barbara van Schewick, Towards an Economic Framework for Network Neutrality Regulation, 5 J. ON TELECOMM. & HIGH TECH. L. (forthcoming 2007); Barbara A. Cherry,  Misusing Network Neutrality to Eliminate Common Carriage Threatens Free

Speech and the Postal System, 33 N. KY. L. REV. 483 (2006); Tim Wu, Network Neutrality, Broadband Discrimination, 2 J. TELECOM & HIGH TECH L. 141 (2005); available at: http://ssrn.com/abstract=388863; Mark A. Lemley and Lawrence Lessig, The End of End-to-End: Preserving the Architecture of the Internet in the Broadband Era, 48 UCLA L. Rev. 925 (2001).

 

[50]          See  Jeff Chester, The End of the Internet?, THE NATION (posted Feb. 1, 2006); available at: www.thenation.com/doc/20060213/chester; Tim Wu, Why You Should Care About Network Neutrality, The Future of the Internet Depends on it!, Slate (May 1, 2006); available at: http://www.slate.com/id/2140850/; Trevor R. Roycroft, Economic Analysis and Network Neutrality: Separating Empirical Facts From Theoretical Fiction (June 2006); available at: http://www.freepress.net/docs/roycroft_study.pdf; Save the Internet; available at: http://www.savetheinternet.com/; freepress, Net Freedom Now!; available at:  http://www.freepress.net/deadend/=neutrality; Common Cause, Net Neutrality; available at: http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=1421497;

Andrew Raff, Net Neutrality Reading List, at IPTA Blog (Feb. 28, 2006); available at: http://www.iptablog.org/2006/02/28/net_neutrality_reading_list.html.

 

[51]          See J. Gregory Sidak, A Consumer-Welfare Approach to Network Neutrality Regulation of the Internet, 2 J. COMP. L. & ECON. No. 3, 349 (2006); Christopher S. Yoo, Network Neutrality and the Economics of Congestion, 94 GEO. L.J. 1847 (June, 2006); Thomas W. Hazlett, Neutering the net, FINANCIAL TIMES, FT.com Online, posted March 20, 2006; available at: http://news.ft.com/cms/s/392ad708-b837-11da-bfc5-0000779e2340.html; Testimony of J. Gregory Sidak, United States Senate, Committee on Commerce, Science and Transportation (Feb. 7, 2006); available at http://commerce.senate.gov/pdf/sidak-020706.pdf;   U.S. Internet Industry Assn. Network Neutrality: Phantom Problem, Unintended Consequences (March 14, 2006); available at: http://www.usiia.org/pubs/NNPrimer.doc; Thomas M. Lenard and, Randolph J. May (Eds.), Net Neutrality or Net Neutering: Should Broadband Internet Services Be Regulated (2006); http://www.springer.com/west/home/economics/r+&+d?SGWID=4-40548-22-166923618-0; Raymond L. Gifford, The Internet Left Gets a Case of the Vapors, The Progress & Freedom Foundation, Progress Snapshot, Rel. 2.15 (June 2006); available at: http://www.pff.org/issues-pubs/ps/2006/ps_2.15_intenet_left.pdf; Adam Thierer, Are ‘Dumb Pipe’ Mandates Smart Public Policy? Vertical Integration, Net Neutrality, and the Network Layers Model, 3 J. Telecomm. & High Tech. L. 275 (2005); Christopher S. Yoo, Beyond Network Neutrality, 19 HARVARD J. L. & TECH. (Fall 2005); Christopher S. Yoo, Would Mandating Broadband Network Neutrality Help or Hurt Competition? A Comment on the End-to-End Debate, 3 J. ON TELECOMM. & HIGH TECH. L. 23 (2004).

 

[52]          “Deep packet inspection (DPI) technology allows service providers to peer inside next-generation network (NGN) packets to see what users are up to – what applications they are using, where their traffic is going, and so on.  It all sounds distinctly Orwellian, but it seems that service providers are embracing the concept with enthusiasm.” Light Reading, Deep Packet Inspection, Introduction (Dec. 14, 2006); available at: http://www.lightreading.com/document.asp?doc_id=111404.

 

[53]          For discussion about the differences between actual knowledge of copyright infringement and notification about the possibility of such infringement, see Emily Zarins, Notice Versus Knowledge Under the Digital Millennium Copyright Act’s Safe Harbors, 92 CAL. L. REV. 257 (Jan., 2004).

 

[54]          Cisco, Cisco Service Control Engine, Questions and Answers; available at:

http://www.cisco.com/en/US/products/ps6151/products_qanda_item0900aecd8041c9d4.shtml.

 

[55]          Id.

 

[56]          17 U.S.C. § 512.        

 

[57]          See, supra n.10.

 

[58]          The DMCA safe harbor for temporary storage of copyright infringing content requires that in addition to no actual knowledge and timely take down of infringing content, the ISP cannot “receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.” 17 U.S.C. § 512(c)(1)(B).

 

[59]          Cf. Costar Grp. v. LoopNet, Inc. 164 F.Supp.2d 688 (D. Md. 2001), aff’d 373 F.3d 544 (4th Cir. 2004)(defendant’s website that permitted real estate brokers to post listings deemed not to accrue direct financial benefit because the defendant did not charge for user access) Perfect 10, Inc. v. Cybernet Ventures, Inc. 213 F.Supp.2d 1146 (C.D. Cal. 2002)(defendant received a direct financial benefit from the infringing activity in light of its revenue accrual based on number of subscribers and visits to infringing sites).

 

[60]          17 U.S.C. §512(c)(1)(A)(i)-(ii).

[61]          17 U.S.C. § 512(c)(1)(C); 17 U.S.C. § 512(d)(3).

 

 

[62]          17 U.S.C. § 512(i)(1)(A).

 

[63]          17 U.S.C. § 512(i)(1)(B).

 

[64]          See DMCA Committee Report supra n. 28.

 

[65]          “Under this [actual knowledge]standard, a service provider would have no obligation to seek out copyright infringement, but it would not qualify for the safe harbor if it had turned a blind eye to ‘red flags’ of obvious infringement.” DMCA Committee Report at 57.

 

[66]          “A question has been raised as to whether a service provider would be disqualified from the safe harbor based solely on evidence that it had viewed the infringing Internet site. If so, there is concern that on-line directories prepared by human editors and reviewers, who view and classify various Internet sites, would be denied eligibility to the information location tools safe harbor, in an unintended number of cases and circumstances.” DMCA Committee Report at 57.

For instance, the copyright owner could show that the provider was aware of facts from which infringing activity was apparent if the copyright owner could prove that the location was clearly, at the time the directory provider viewed it, a ‘pirate’ site of the type described below, where sound recordings, software, movies, or books were available for unauthorized downloading, public performance, or public display. Absent such ‘red flags’ or actual knowledge, a directory provider would not be similarly aware merely because it saw one or more well known photographs of a celebrity at a site devoted to that person. The provider could not be expected, during the course of its brief cataloguing visit, to determine whether the photograph was still protected by copyright or was in the public domain; if the photograph was still protected by copyright, whether the use was licensed; and if the use was not licensed, whether it was permitted under the fair use doctrine.” Id. at 57-58.

 

[67]          Id. at 58.

 

[68]          A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001).

 

[69]          In re Aimster Copyright Litig., 334 F.3d 643 (7th Cir. 2003).

 

[70]          Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005).

 

[71]          17 U.S.C. §512(c)(1)(B).

[72]          17 U.S.C. §512(i)(1)(B) conditions ISP safe harbor eligibility on their accommodation and non-interference with “standard” DRM techniques.

[73]          “The broadcast flag is a digital code embedded in a . . . broadcasting stream, which prevents digital television reception equipment from redistributing broadcast content.”  American Library Association v. FCC, 406 F.3d 689, 691 (D.C. Cir. 2005). “The effectiveness of the broadcast flag regime is dependent on programming being flagged and on devices capable of receiving broadcast DTV signals (collectively “demodulator products”) being able to recognize and give effect to the flag.” Id. at 693.

 

[74]          406 F.3d 689 (D.C. Cir. 2005).

 

[75]          “The broadcast flag does not have any impact on a DTV broadcast transmission.   The flag's only effect is to limit the capacity of receiver apparatus [located on consumers’ premises] to redistribute broadcast content after a broadcast transmission is complete.” Id. 406 F.3d at 693.

“Title I [of the Communications Act of 1934, as amended, 47 U.S.C. §151 et seq.] does not authorize the Commission to regulate receiver apparatus after a transmission is complete.” Id. at 692.

 

 

[76]          Id. 406 F.3d at 703.

[77]          See Net Neutrality: Hearing Before the S. Comm. on Commerce, Science & Transportation, 109th Cong. 5 (2006) (statement of Prof. Lawrence Lessig), available at http://commerce.senate.gov/pdf/lessig-020706.pdf.

 

[78]          See, e.g., Hands Off the Internet, World Wide Web Site; available at: http://handsoff.org/blog/. “Hands Off The Internet is a nationwide coalition of Internet users united together in the belief that the Net's phenomenal growth over the past decade stems from the ability of entrepreneurs to expand consumer choices and opportunities without worrying about government regulation.” http://handsoff.org/hoti_docs/aboutus/.

 

[79]          “Currently there are no principles of network neutrality encoded into law. So ISPs are already free to block or favor content as they please. It’s telling that none of them has. In fact, no proponent of network neutrality can cite an existing problem to which network neutrality is a solution.” Arpan Sura, The Problem With Network Neutrality, FreedomWorks World Wide Web Site, (May 2, 2006); available at: http://www.freedomworks.org/informed/issues_template.php?issue_id=2571; Other web-based organizations hotly dispute this view: “The constant refrain of the Astroturf groups like McCurry’s ‘Hands Off the Internet’ is that Network Neutrality is a solution in search of a problem. They cite the absence of numerous examples of blocking or degradation to back this argument. This is a red herring. There are multiple real-world instances of blocking and impairment.” Save the Internet.com, Big Lie of the Week: No. 3, undated; available at: http://www.savetheinternet.com/=lie3.

 

[80]     “The network builders are spending a fortune constructing and maintaining the networks that Google intends to ride on with nothing but cheap servers,” Arshad Mohammed, Verizon Executive Calls for End to Google’s ‘Free Lunch,’ Washington Post, D1 (February 7, 2006); available at: http://www.washingtonpost.com/wp-dyn/content/article/2006/02/06/AR2006020601624.html.

 

[81]          See, e.g., United States Senate, Committee on Science, Commerce and Transportation, Net Neutrality, Full Committee Hearing, (Feb. 7 2006); available at: http://commerce.senate.gov/hearings/witnesslist.cfm?id=1705; United States House of Representatives, Committee on Energy and Commerce, Subcommittee on Telecommunications and the Internet, Hearings on H.R. ____, Committee Print on the Communications Opportunity, Promotion, and Enhancement Act of 2006 (March 30, 2006); available at: http://energycommerce.house.gov/reparchives/108/Hearings/03302006hearing1823/hearing.htm.

 

 

[82]          Net Neutrality: Hearing Before the S. Comm. on Commerce, Science & Transportation, 109th Cong. 5 (2006) (statement of Prof. Lawrence Lessig) [hereinafter Lessig Testimony], available at http://commerce.senate.gov/pdf/lessig-020706.pdf.

 

[83]          “Two-sided (or more generally multi-sided1) markets are roughly defined

as markets in which one or several platforms enable interactions between end-users, and

try to get the two (or multiple) sides “on board” by appropriately charging each side.

That is, platforms court each side while attempting to make, or at least not lose, money

overall.” Jean-Charles Rochet and Jean Tirole, Two-Sided Markets: An Overview

(March 12, 2004); available at: http://faculty.haas.berkeley.edu/hermalin/rochet_tirole.pdf.

 

[84]          The Internet cloud refers to the vast array of interconnected networks that make up the Internet and provider users with seamless connectivity to these networks and the content available via these networks.

 

[85]          “Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes? The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!” At SBC, It’s All About “Scale and Scope,” BUSINESSWEEK, ONLINE EXTRA (November 7, 2005); available at: http://www.businessweek.com/@@n34h*IUQu7KtOwgA/magazine/content/05_45/b3958092.htm.

 

[86]          Internet peering refers to a reciprocal traffic routing arrangement whereby one ISP agrees to accept traffic for onward routing in exchange for a similar routing commitment by another ISP.  Peering typically involves no settlement or payment of funds as ISPs agree to peer only if they generate and receive roughly the same volume of traffic.

 

[87]          Internet transiting refers to a traffic routing arrangement whereby one ISP agrees to accept traffic for onward routing for compensation.  Transiting involves a settlement and payment of funds because one ISP requires access to the links, subscribers and content available via another ISP’s network and its peering arrangements.  “Transit is the business relationship whereby one ISP provides (usually sells) access to all destinations in its routing table.” William B. Norton, Internet Service Providers and Peering, Draft 2.5 (undated) available at: http://www.equinix.com/pdf/whitepapers/PeeringWP.2.pdf.

 

[88]          “Akamai uses . . . [network]  intelligence to optimize routes and replicate data dynamically to deliver content and applications more quickly, reliably, and securely.” Akamai, Edge Platform, available at: http://www.akamai.com/html/technology/edgeplatform.html.

 

[89]          See Internet2 Network, World Wide Web site; available at: http://www.internet2.edu/network/.

 

[90]          See Craig McTaggart, Was The Internet Ever Neutral?, paper presented at the 34th Research Conference on Communication, Information and Internet Policy, George Mason University School of Law, Arlington, Virginia (rev. Sep. 30, 2006); available at: http://web.si.umich.edu/tprc/papers/2006/593/mctaggart-tprc06rev.pdf.

 

[91]          Service Level Agreements specify network performance commitments typically between ISPs and their customers.  

 

[92]          Communications Act of 1934, as amended, Sec. 10(c), codified at 47 U.S.C. §160(c).

 

[93]          Personal Communications Industry Association’s Broadband Personal Communications Services Alliance's Petition for Forbearance For Broadband Personal Communications Services, WT Docket No. 98-100, Memorandum Opinion and Order and Notice of Proposed Rulemaking, 13 FCC Rcd 16857 (1998); In re Implementation of Sections 3(n) and 332 of the Communications Act, Regulatory Treatment of Mobile Services, Second Report and Order, 9 FCC Rcd. 1411, 1478 (1994).  Orloff v. FCC, 352 F.3d 415, 419 (D.C. Cir. 2003) (noting that although the Commission found that the competitiveness of the commercial mobile radio service  market justified exempting such carriers from the tariffing requirements of section 203 of the Act, the Commission has nonetheless declined to exempt them from Sections 201 or 202).

 

[94]          See Communications Act of 1934, as amended (“Communications Act”), 47 U.S.C. §§ 325, 338-40, 534-35, 543, 548; 47 C.F.R § 76.55-62 (cable must carry); 47 C.F.R. § 76.64 (cable retransmission consent); 47 C.F.R. § 76.66 (DBS signal carriage). Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994) (Turner-I); Turner Broadcasting System, Inc. v. FCC, 520 U.S. 180 (1997) (Turner II).

 

[95]          Universal Service Contribution Methodology, WC Docket No. 06-122, Report and Order and Notice of Proposed Rulemaking, FCC 06-94, 38 Communications Reg. (P&F) 1013, 2006 WL 1765838 (F.C.C.)(rel. June 27, 2006).

           

[96]          IP-Enabled Services, WC Docket No. 04-36, E911 Requirements for IP-Enabled Service Providers, WC Docket No. 05-196,  First Report and Order and Notice of Proposed Rulemaking, 20 FCC Rcd. 10245 (2005). The FCC declined to determine the statutory classification of interconnected VoIP services, but asserted ancillary jurisdiction under Title I of the Act to require interconnected VoIP service providers to supply 911 emergency calling capabilities to their customers.

 

[97]          Communications Assistance for Law Enforcement Act and Broadband Access and Services, 20 FCC Rcd. 14,989 (2005), on partial reconsideration, 21 FCC Rcd. 5008 (2006).

 

[98]          While reviewing courts have questioned the nature, type and rates of the FCC mandated  common carrier interconnection and facilities-leasing requirements, the judiciary has not deemed the requirements confiscatory: “There is no evidence that the decision to adopt TELRIC [i.e., compulsory pricing of local exchange service elements on the basis of quite low Total Element Long Run Incremental Cost] was arbitrary, opportunistic, or undertaken with a confiscatory purpose. Indeed, the indications in the record are very much to the contrary.” Verizon Communications, Inc. v. F.C.C., 535 U.S. 467, 472, 122 S.Ct. 1646, 1652  (2002). F.C.C. v. Florida Power Corp., 480 U.S. 245, 107 S.Ct. 1107 (1987) (rate set by the FCC was not confiscatory and thus did not amount to an unconstitutional taking).

[99]          The FCC uses telecommunications service and information service definitions to establish regulatory classifications, without considering the several layers of functionality involved.  For example companies supplying software, which can be installed for use when initiating an Internet session, properly avoid FCC regulation.  Likewise the FCC can avoid having to regulate the protocols and standards establishing standard operating procedures for switching, routing and managing Internet traffic.  See, e.g., United States Senate, Committee on Commerce, Science and Transportation, Prepared Statement of Vinton G. Cerf, Vice President and Chief Internet Evangelist, Google, Inc. available at: http://commerce.senate.gov/hearings/testimony.cfm?id=1705&wit_id=4958.

“The Internet’s open, neutral architecture has proven to be an enormous engine for market innovation, economic growth, social discourse , and the free flow of ideas.  The remarkable success of the Internet can be traced to a few simple network principles—end-to-end design, layered architecture, and open standards—which together give consumers choice and control over their online activities.”

 

 

[100]         While the FCC also exempts bitstream transmitting carriers from regulation, in light of the information service classification, the Commission could opt to examine separately the different layers combined to support the delivery of a service, such as VoIP.   For background on a revised regulatory regime that applies different degrees of government oversight based on the scope of competition in each layer of service that blends telecommunications packet delivery with intelligent networking , software applications and content see Richard S. Whitt, A Horizontal Leap Forward: Formulating A New Communications Public Policy Framework Based on the Network Layers Model, 56 FED. COMM. L.J. 587 (May, 2004); Yochai Benkler, From Consumers to Users: Shifting the Deeper Structures of Regulation Toward Sustainable Commons and User Access, 52 FED. COMM. L.J. 561 (2000); Scott Marcus, The Potential Relevance to the United States of the European Union’s Newly Adopted Regulatory Framework for Telecommunications, Federal Communications Commission, Office of Plans and Policy Working Paper Series No. 36 (July, 2002); available at: http://www.fcc.gov/osp/workingp.html; Douglas Sicker, Further Defining a Layered Model for Telecommunications Policy (2002); unpublished paper available at: http://intel.si.umich.edu/tprc/papers/2002/95/LayeredTelecomPolicy.pdf; Kevin Werbach, A Layers Model for Internet Policy, 1 J. TELECOM. & HIGH TECH. L., 37 (2002); John T. Nakahata, Regulating Information Platforms: The Challenge of Rewriting Regulation From the Bottom Up, 1 J. ON TELECOM. & HIGH TECH. L., 95 (2002); Phillip J. Weiser, Law and Information Platforms, J. ON TELECOM. & HIGH TECH. L., 1 (2002); Craig McTaggert, A Layered Approach to Internet Legal Analysis (Dec. 21, 2002); available at http://www.innovationlaw.org/cm/ilg2002/reading/layered1.pdf;  Robert Cannon, The Legacy of the Federal Communications Commission’s Computer Inquiries, 55 FED. COMM. L.J. 167 (2003); Rob Frieden, Adjusting the Horizontal and Vertical in Telecommunications Regulation: A Comparison of the Traditional and a New Layered Approach, 55 FED. COMM. L.J. 207 (2003).

 

 

[101]         Section 102(8)(B)(ii) of the Communications Assistance For Law Enforcement Act, PL 103-414, 108 Stat 4279 (October 25, 1994), codified at 47 U.S.C. § 1001(8)(B)(ii) defines a “telecommunications carrier” as “a person or entity engaged in providing wire or electronic communication switching or transmission service to the extent that the Commission finds that such service is a replacement for a substantial portion of the local telephone exchange service and that it is in the public interest to deem such a person or entity to be a telecommunications carrier for purposes of this title.” The FCC has interpreted this section as requiring the Commission “to deem certain service providers to be telecommunications carriers for CALEA purposes even when those providers are not telecommunications carriers under the Communications Act of 1934, as amended.” Communications Assistance for Law Enforcement Act and Broadband Access and Services, ET Docket No. 04-295,   First Report and Order and Further Notice of Proposed Rulemaking, 20 FCC Rcd. 14989, 14993 (2005).

[102]         See Rob Frieden, What Do Pizza Delivery and Information Services Have in Common? Lessons From Recent Judicial and Regulatory Struggles with Convergence, 32 RUTGERS COMPT. & TECH. L.J., No. 2, 247-296 (2006).

 

[103]         In National Cable & Telecommunications Association v. Brand X Internet Services, 125 S. Ct. 2688 (2005) the Supreme Court affirmed the FCC’s regulatory distinction between telecommunications and telecommunications services primarily on procedural grounds that favor judicial deference to expert regulatory agency decision making articulated by the Court in Chevron U.S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778 (1984).  See also Rob Frieden, What Do Pizza Delivery and Information Services Have in Common? Lessons From Recent Judicial and Regulatory Struggles with Convergence, 32 RUTGERS COMP. & TECH. L.J., No. 2, 247, 258(2006). 

 

[104]         17 U.S.C. §512(3) of the DMCA establishes burdens on copyright holders to identify copyright infringers before an ISP has any affirmative obligation to take down infringing content.  See, e.g., Hendrickson v. eBay, 165 F.Supp.2d 1082 (C.D. Cal. 2001)(even though the eBay web site offered sale of pirated video content, the plaintiff’s written notifications deemed not to have complied with all DMCA requirements).

[105]         17 U.S.C. §512(i)(1)(B).

[106]         “To the extent that potential regulators can induce . . . [providers of Internet equipment and services] to disrupt communications, whether by blocking payment to targeted websites, or by embedding obstacles to communications and mechanisms of surveillance in the hardware or software that facilitates communication, they can spawn effective proxy censors.” Seth F. Kreimer, Censorship by Proxy: The First Amendment, Internet Intermediaries, and the Problem of the Weakest Link, 155 U. PA L. REV. 11, 17 (Nov., 2006)[hereinafter cited as Kreimer].

 

[107]         DRM technologies create “a burden of obtaining consent that has no parallel in the offline world.  . . . [E]very permissions-based DRM implementation (in which the user must formally acquire some form of explicit authorization to engage in a particular use of the protected work) simply reproduces a variant of the ‘judge on a chip’ problem.  No such system can ever replicate the experience of fair use in the offline world because the requirement of ex ante authorization by the copyright holder or its designee is a departure from offline practice and statutory requirements.” Timothy K. Armstrong, Digital Rights Management and the Process of Fair Use, 20 HARV. J.L.& TECH. 49, 54 (Fall, 2006).

 

[108]         Id. at 52.

 

[109]         Kreimer at 28.

 

[110]         See, e.g., Netcompetition.org web site; available at http://www.netcompetition.org/.

 

[111]         See, e.g., supra n. 90.

[112]         See Jonathan Zittrain, A History of Online Gatekeeping, 19 HARV. J.L. & TECH. 253 (Spring, 2006)(noting the ability of software and software authors to serve as powerful intermediaries capable of achieving greater regulation and control of endpoint platforms such as personal computers); see also, Jonathan Zittrain, Internet Points of Control, 44 B.C. L. REV. 653 (2003).

 

[113]         Accord David V. Richards, Posting Personal Information on the Internet: A Case for Changing the Legal Regime Created by §230 of the Communications Decency Act, 85 TEX. L. REV. 1321 (April, 2007); Karen Alexander Horowitz, When is §230 Immunity Lost?: The Transformation from Website Owner to Information Content Provider, 3 SHILDLER J.L. COM. & TECH. 14 (Spring, 2007); Doug Lichtman & Eric Posner, Holding Internet Service Providers Accountable, 14 SUP. CT. ECON. REV. 221 (2006); Michael L. Rustad & Thomas H. Koenig, Rebooting Cybertort Law, 80 WASH. L. REV. 335 (May, 2005).