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Should ISPs Pay for Music Piracy?

The UK’s PRS for Music—formerly the Performing Rights Society or just PRS, a royalty collection agency similar to firms like ASCAP and BMI in the United States—has suggested a new way for the music industry to recoup money lost to online music piracy: make ISPs pay for it. In a nutshell, the proposal (PDF) argues that if ISPs and broadband providers are going to provide consumers the means to pirate music content—and the problem will only get worse as available bandwidth increases—ISPs need to either curtail piracy by “wising up” their pipes to prevent transfer of illegally distributed content, or “pay a fair price” for the copyrighted material traversing their networks.

“Were ISPs required to pay a price for the value of copyrighted media on networks, the mechanism would be in place to encourage a balance between these costs and benefits,” wrote authors Will Page and David Touve. “This balancing act might occur through the incentive to either (a) “wise up” the dumb pipes by cleaning out the unlicensed media files in an effort to avoid paying the real costs of these files, or (b) accepting this payment for media as the cost of doing business while finding new ways to source the value of these creative works.”

The paper also suggests the music industry could adopt a new licensing strategy that would give ISPs blanket licenses to publisher’s content; in the past, such proposals have been dubbed a piracy tax; however, such a license could theoretically shield individual Internet users from piracy claims.

ISPs in the UK and elsewhere around the world have resisted calls that they be required to pay for piracy occurring on their networks, arguing that they cannot be held responsible for their customers’ actions (dubbed “safe harbor” provisions in the U.S.) and urging the media industry to adopt licensing models that enable consumers to get media they want legally. In the United Kingdom, the issue has been brought to a head by the passage of the Digital Economy Act this past May, which deals in part with piracy and assigned Ofcom (the UK’s communications regulator) responsibility for creating a code of practice for ISPs. A draft proposal is up for comment now; it includes language that would have ISPs terminating Internet access for users accused of copyright infringement.