Copyright Alert System Is Working

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The Center for Copyright Information (CCI) released an overwhelmingly positive report regarding the success of its Copyright Alert System (CAS), initially launched in February 2013. Along with its member internet service providers (ISPs), entertainment community representatives, and consumer Advisory board—CCI launched a voluntary initiative designed to engage and educate consumers about the use and distribution of digital entertainment content. 

A tiered notice and response program, the Copyright Alert System aims to reduce copyright infringement over peer-to-peer (P2P) networks. A-first-of-its-kind voluntary collaboration, the program encourages consumers to embrace the growing number of affordable licensed sources of films, music, and television content made available online through a variety of services and formats.   

The expansion of Internet radio and movie streaming services has led to growing copyright infringement cases. A CCI study found that of the U.S. Internet using population, most consumers (65%) believe that it is never okay to engage in infringing activity – but most of them also wanted it to be clearer which sources and activities are/are not legal.

In response, the CAS program works as a multi-level system with three levels of alerts—educational, acknowledgement, and mitigation—with up to two alerts at each stage. Once a case has been verified and a notice generated, it is sent out to the ISP with which the identified IP address is assigned.

Without sharing any personally identifiable information with the content owner or the technology vendor, the ISP then attempts to match the IP address in that notice to a subscriber’s account, generating an alert to the primary account holder if a match is identified and an Alert is warranted.

CCI’s report, “Phase One and Beyond” showed that 1.3 million Alerts were sent out in the initial 10 months of the program, most in the initial educational phases. In return, only 265 challenges were filed, with no findings of false positives. CCI also noted that the CAS is expected to double in size in the second year of operation.

CCI report was written by CCI’s members, advisory board, and technology experts. Other highlights of the report include:

  • The beginning period of launch, “ramp up” and operation for the CAS has been and continues to be smooth and successful.
  • The vast majority of copyright alerts delivered to account holders—more than 70% occurred at the initial educational stages, with less than 3% of the Alerts sent occurring in the final mitigation stage.
  • The program, as designed, protected consumer privacy.
  • The “easy-to-access” independent review process that is manage by the American Arbitration Association (AAA) enabled account holders to challenge alerts they believed were sent in error—not one single case in which an invalid notice, or false positive was identified. 

The Copyright Alert System represents the most comprehensive collaboration between private-market entities against intellectual property piracy to date. Through voluntary efforts, CCI brought together content and tech communities in an effort to combat criminals who continue to download entertainment though illicit means. Intellectual piracy not only harms the property owner, but cost the overall economy thousands of jobs and billions of dollars annually.

A study by the Institute for Policy Innovation found that piracy of music annually cost the U.S. economy $12 billion dollars, 70,000 jobs, and $2 billion in lost wages to the American workers. Likewise, the piracy of motion pictures resulted in $20.5 billion in lost output annually, $5.5 billion in lost earnings for all U.S. workers, and 141,000 jobs. In addition to the music and movie industry, U.S. retailers are losing another $1.04 billion in revenue. According to the study, peer-to-peer networks are increasingly responsible for recent declines in the number of legitimate sales, the same networks CCI has worked to fight.    

U.S companies that have been affected by piracy have extensively sought to increase understanding of the issue and to encourage action to address this threat. However, there are many legitimate concerns that legislative solutions would be too heavy-handed and create unintended problems.  Fortunately, the market responded by developing a voluntary approach.

Although there is no simple answer to piracy, CAS is a step in the right direction.

Thanks to CAS, 70% percent of the Alerts were sent out at the initial stage while only 3% were sent out at the final mitigation stage. This early indication means the system is working at altering the piracy behavior of individuals who might not be aware of their wrong-doings, while at the same time protecting their identity.

On the other hand, the 3% of those individuals who received Alerts at the mitigation stage are likely engaging in willful infringement, denying creators just compensation for their work.  This much smaller group must be dealt with as a law enforcement problem rather than an educational problem.

CAS is an important step towards building future collaborative programs between tech and entertainment industries that are working to protect intellectual property rights of creators and innovators, while also respecting the privacy of consumers.

The Copyright Alert System shows that private-sector collaboration is possible when combating piracy and that the free-market is fully capable of handling that piracy on its own—with limited government interference.