Cable's Win Is Consumers' Loss

How comforting to know that linguistic obfuscation is all it takes to get the court to wash its hands of this case. On a less facetious note, the decision also affirms the FCC's progress under the Bush administration toward deregulating the Internet and telecommunications markets.

Saul Hansell at The New York Times explained more about the genesis of the case: "The case turns on a rule adopted in March 2002 that called cable Internet service an 'information service' rather than a 'telecommunications service.' The Telecommunication Act of 1996 calls for strict regulation of telecommunications services, subjecting them to taxes and calling them 'common carriers.' Telecommunications services are required to sell access to their networks on a nondiscriminatory basis. Information services, by contrast, are largely unregulated and untaxed. In a case brought by Brand X Internet Services, a small provider in Santa Monica, Calif., the United States Court of Appeals for the Ninth Circuit rejected the commission's interpretation. The appellate court said that part of what cable Internet services provide could be considered telecommunications, and that portion could be regulated separately from the portion that is an information service."

Hansell also wrote about Justice Antonin Scalia's dissent. Scalia wrote that the decision allows the FCC to exceed the authority that Congress gave it in such situations. And for one of the first times in my life, I found myself wishing Scalia were nearby so I could shake his hand.

News.com's Marguerite Reardon included this quote from Jim Pickrell, president of Brand X: "The Bush administration has made it clear that they are hostile toward small, independent service providers like us. And we think that is a big disaster for consumers, and a huge win for the monopolistic phone and cable companies, which spend millions of dollars on lobbying efforts." Pickrell also was quoted in the Los Angeles Times, where he said that it seems like "the people in charge of regulation are planning to put us out of business, not 10 years from now but right now."

I can't say that I'm unhappy with Comcast's service, now that I have it. I know that unless the power goes out, it'll be there almost all the time. Still, it's disappointing to know that if Pickrell or someone like him is out there near where I live, he'll need to be as rich as Comcast to give me a better deal. That's not likely to happen any time soon.

Are You Hep to the Jive?

"This s--t's going to be litigated for another 15 years!" So said Wayne Rosso, the not-so-secret agent provocateur of the file-sharing business.

He was answering my question yesterday about what he thought would be the long-term effects of the Supreme Court's 9-0 decision that P2P networks like Grokster and StreamCast can be sued for allowing people to pirate music, movies and software.

Not surprisingly, entertainment industry types hailed the ruling as a victory, while Adam Eisgrau, an attorney who represents Grokster and other file-sharing companies, told me that his group will continue to fight for "exoneration."

A fight is what the file-sharing firms are likely to have. The court, as the New York Times editorial board put it, held that "actively encouraging copyright infringement is illegal, but merely creating new technology is not." Such a ruling is an invitation to the entertainment industry's attorneys to sue anew.

Here's how The Washington Post put it: "The decision hands movie and recording studios a sharper legal weapon in their campaign to try to shut down file-sharing systems that enable hundreds of millions of consumers around the world to bypass retail outlets by electronically swapping music, videos and software programs."

Justice David Souter fueled the fire when he wrote, "The record is replete with evidence that from the moment Grokster and StreamCast began to distribute their free software, each one clearly voiced the objective that recipients use it to download copyrighted works, and each took active steps to encourage infringement."

File-sharing companies insist that their software is used for exchanging freely available works as well, but Souter sounded the get-real call with a surprising reference to a pop group that showed up on the charts long after Tommy James and the Shondells: "While there is doubtless some demand for free Shakespeare... users seeking top 40 songs, for example, or the latest release by Modest Mouse, are certain to be far more numerous than those seeking a free Decameron, and Grokster and StreamCast translated that demand into dollars."

Souter ... Modest Mouse ...? Anyway ...

The Los Angeles Times in its editorial fretted over the court's decision: "Proving whether someone induced someone else to do something wrong is never easy. ... It is entirely possible that, with this case, the court has just exchanged one difficult question for another. It is also possible, however, that the court has found a way forward in a debate that means so much to California. Instead of suing anybody who comes up with a technology with the potential for illegal use, Hollywood will have to prove that the main purpose of that technology is piracy. And instead of defending innovation at all costs, Silicon Valley will have to show some responsibility."

The San Jose Mercury News picked up on that last thought: "In America's litigious world, the decision could give pause to some innovators. Indeed, the court did not say what conduct would amount to inducing copyright violations. Entrepreneurs treading on technology's leading edge will need to have their inventions checked by lawyers -- at least until courts further clarify the issue."

But here's the irony: Despite the court's ruling, online piracy will continue. The Dallas Morning News offered up this expert view: "The ruling ... doesn't mean the death of pirated music, movies and video games. 'Piracy is still thriving,' said American Technology Research analyst P.J. McNealy. He said peer-to-peer file-sharing companies can easily relocate outside the U.S., beyond the reach of American law enforcement. 'It's hard to truly suppress piracy on a global level, and there will always be a market for pirated content,' he said."

Mitch Bainwol, head of the Recording Industry Association of America, said in a neww conference yesterday that this is inevitable. Containment, he said, is the goal, not elimination. After all, without a little piracy, there'd be no one left to sue.

Send links and comments to robertDOTmacmillanATwashingtonpost.com.