SBC, VERIZON COUNTERPUNCH IN BATTLE OVER USER PRIVACY

What started out as a simple lawsuit over the identity of a single DSL customer has turned into legal and legislative bloodsport in Washington, D.C. On the heels of 261 lawsuits filed earlier this month against alleged music pirates, Verizon Communications and SBC Communications last week testified before the Senate Commerce Committee, defending their right to protect users' privacy.

For all the amicus briefs, testimony, lawsuits and counter-suits, the argument boils down to one thing: The telecom industry wants to overturn a provision in the Digital Millennium Copyright Act that gives the music industry unparalleled subpoena power. The Commerce Committee is now considering a bill introduced by Sen. Sam Brownback, R-Kan., that would repeal those powers. And the music industry's champion, the Recording Industry Association of America, is trying hard to keep them intact.

Verizon — the plaintiff in the lawsuit that started it all—is appealing those same subpoena powers from a constitutional angle, trying to convince the U.S. Court of Appeals for the District of Columbia Circuit that RIAA's ability to subpoena names of broadband subscribers without hearing or notice is a gross affront to First Amendment privacy rights.

RIAA's answer in both the courtroom and the committee chambers was the same: The DMCA is the entertainment industry's only tool in protecting its copyrights. Additionally, the telecom industry agreed to the powers when it helped draft the DMCA in 1998. The recording industry has seen annual revenues plummet from $40 billion to $26 billion since digital piracy came in vogue in 1999, RIAA President Cary Sherman testified at the commerce committee hearing. Not only have telecom providers done nothing to stop piracy over their networks, Sherman said, they've actively encouraged it.

“Verizon and SBC have little or no economic incentive to combat piracy,” Sherman told the committee. “SBC and Verizon have a combined 6 million DSL subscribers, more than 65% of the DSL subscribers in the United States. That's over $2.1 billion in revenues per year just from consumer DSL business. Music downloading is driving the business.”

Brownback's bill, however, faces the long process of congressional consideration. Verizon's appeal faces a similar wait as a three-judge panel at the appeals court could take months to render a decision, which, no matter the outcome will be appealed to the Supreme Court.

“The court did agree to see this case on an expedited basis, so we're hoping for a quick decision,” said Sarah Deutsch, Verizon's vice president and chief attorney in the RIAA case.

Until then, RIAA continues to send out more subpoenas. A bigger question mark lies with SBC, which has been the only carrier to flatly refuse to honor the some 300 subpoenas for subscriber information. SBC has challenged every subpoena in dozens of federal courts, but unlike its pursuit of Verizon customers, RIAA has yet to file a lawsuit against SBC.

Though the Verizon case set a precedent for how the DMCA is interpreted, the D.C. Circuit Court that rendered the decision has jurisdiction over Verizon but not SBC. RIAA's subpoenas, and any lawsuits resulting from them, would be considered by other federal courts, which largely act independently of one another, said Sean Sullivan, an intellectual property attorney for the firm of McDonnell Boehnen Hulbert & Berghoff.

“SBC probably thinks it can duke the issue out separately in another federal court,” Sullivan said. “They could be taking the position that until this thing is settled by appeal, they're not going to give in to one district court's decision, especially if they're not even in its jurisdiction.”