In the hotly-contested world of downloadable music, two directors and an employee of ISP Com-Cen are in the crosshairs of the music industry.
The employees – directors Liam Bal and Peter Stevens, along with employee Chris Takoushis – are the latest to be added to a federal suit brought about by six record companies last month for online music piracy. The original suit was launched against Stephen Cooper, the operator of mp3s4free.net and E-Talk Communications (trading as Comcen Proprietary Limited),which hosted the site.
Com-Cen, hatched in 1995, provides dial-up, broadband and Web hosting services to residential and business customers.
On average, record companies claim about 140 million music files were downloaded over the course of a year, said Michael Speck, general manager of Music Industry Piracy Investigations (MIPI), and investigator on the case.
In this particular case, Speck said the plaintiffs were claiming damage for about $300 million for the year.
As part of the case, the plaintiffs went to the Federal Court – sought Anton Pilar Orders, which are equivalent to civil search warrants – and took possession of the computer data in relation to the infringements, Speck told ARN.
“From the data, we could see how much traffic passed through the ISP to the directory, and we could also quantify the downloads,” he said.
Speck said the implications for ISPs were huge.
“This case goes to show that music piracy, in the ordinary course of events, benefits Internet companies," he said. "In that regard, the traffic generated by illegal music sites generates income and commercial opportunities for ISPs.”
Twenty per cent of revenue generated by ISPs was derived from the traffic of illegal sound recordings, Speck said.
“Clearly this is the picture in Australia as well as a trend with ISPs worldwide," he said. "This is the first time that ISPs, in their normal practices as they relate to illegal music, are exposed to the courts, and it’s clear that trafficking in illegal music is an ordinary part of the day-to-day business of ISPs.”
The latest case also cranks up the heat on employees as well as the ISP corporations, he adds. “We’re saying to the Internet industry, you don’t get away with copyright infringement because you’re a corporation. And directors and employees no longer have the luxury of the Nuremberg defence.”
The industry had to start developing viable and legitimate online models, he said, giving the nod to Apple's iTunes.
The iTunes 4 software lets users store 7500 songs and synchronise with an iPod over Firewire.
One of the Con-Cen directors named in the suit, Liam Bal, said the situation for ISPs was becoming tricky, he said, because the plaintiffs were trying to prove a URL, pointing to an MP3, was a breach of copyright.
"ISPs can't protect themselves - you would have to employ people that would check all URLs on every Web page, checking for copyright material," he said.
No program currently existed that could check copyrighted material, he said.
Bal said there was no money in downloads, and Com-Cen watched out for heavy downloaders.
"Ninety-nine per cent of ISPs in Australia charge a flat rate plan [Con-Cen charges charges $24.95], so where's the revenue ... It's in our interest not to have these people."
Com-Cen was in the midst of figuring out its game plan, he said.
"They've picked on a small company and we're trying to defend ourselves ... When you think about it, it's a nightmare," Bal said. "And there are plenty of people worried about it."