Cable Operators

Charter Prevails Over RIAA

1/04/2005 9:44 AM Eastern

A Federal Appeals Court ruled Tuesday that Charter Communications Inc. was served with illegal subpoenas as part of an effort by the music industry to obtain the names of high-speed-data subscribers suspected of illegally swapping songs over the Internet.

The decision was handed down by a divided three-judge panel of the U.S. Court of Appeals for the Eighth Circuit, which held that Charter was not required to comply with the subpoenas because the cable company had acted as a disinterested conduit that file swappers utilized allegedly to exchange copyrighted material.

“With its ruling, the [court] has concurred with our belief that no statutory basis exists for the issuance of subpoenas requiring the disclosure of customer information to the RIAA [Recording Industry Association of America] by Charter,” Charter spokesman David Andersen said in a prepared statement.

The decision will allow Charter to protect customer privacy until served with a legal subpoena, he added.

“Charter takes its responsibility to protect the private information of our customers very seriously. Our customers place their trust in Charter, so we took all appropriate legal measures in this matter to fulfill this responsibility. This said, our actions in this case should assure them that this trust is justified,” Andersen said.

Charter had been forced to surrender the names of more than 200 subscribers after the RIAA obtained subpoenas from a district court clerk pursuant to provision of the Digital Millennium Copyright Act.

Although Charter tried to protect the names, it lost in lower court and failed to obtain an injunction from a district judge and the Eighth Circuit.

But on appeal, the Eighth Circuit found in a 2-1 ruling that a provision of the DMCA did not authorize the issuance of subpoenas against Charter when the operator was not in a position to “remove the infringing material from its system or disable access to the infringing material.”

The court ordered the RIAA to provide Charter with all information obtained from the subpoenas.

Popular file-swapping Web sites, such as Grokster (www.grokster.com) and Morpheus (www.morpheus.com), allow for the exchange of music files stored on PCs and generally do not store copyright material for illegal distribution -- a distinction that so far has shielded peer-to-peer (P2P) sites’ copyright liability. The U.S. Supreme Court has agreed to decide later this year whether Grokster can be held liable.

RIAA spokesman Jonathan Lamy said the ruling was largely insignificant because the music industry changed tactics last January after a different appeals found that similar subpoenas had been illegally served.

Instead, the RIAA has filed more than 7,000 so-called John Doe cases, which begin the process that may result in a judge issuing subpoenas to cable companies to reveal subscriber names and addresses.

“It’s a little more time-consuming, but the result is the same,” Lamy said.

Rampant Internet piracy has troubled the music industry for years. The movie industry is feeling the same anxiety as faster broadband Internet connections become the norm and make it easier to download large files that contain TV shows and films over the Internet.

In-Stat/MDR, an affiliate of Multichannel News, released a survey Tuesday showing that 27% of those polled indicated that they had “already lost revenue due to the illegal theft or reproduction of their intellectual property.”

The survey sample included 1,806 readers of Variety, Broadcasting & Cable and Multichannel News who are involved in the entertainment industry.

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