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Verizon, RIAA Trade Jabs at Senate Hearing

Representatives from Verizon and the Recording Industry Association of America (RIAA) staked out familiar ground Tuesday when testifying before the Senate Judiciary Committee on the subpoena powers of the Digital Millennium Copyright Act (DMCA), but the testimony also provided a sneak preview of next week's court appearance by the two warring parties.

In a case both sides readily agree is ultimately headed to the Supreme Court, Verizon is appealing a January ruling by the U.S. District Court for the District of Columbia requiring Verizon to comply with a subpoena request by the RIAA to reveal the identities of customers who allegedly infringed copyrights using peer-to-peer (P2P) file-sharing networks such as Kazaa and Grokster.

The subpoena was issued through a provision of the 1998 DMCA that allows copyright holders to issue subpoenas that have not been reviewed by a judge and requires no notice to, or opportunity to be heard by, the alleged infringer. Unlike a usual subpoena, which requires some underlying claim of a crime, under the DMCA a subpoena can be issued by a court clerk who only checks to make sure the subpoena form is properly filled out.

The RIAA has not waited for the appeal process to play out, though, instead opting to issue more 1,500 subpoenas since prevailing in the case. Those subpoenas led to 261 civil lawsuits being filed by the RIAA earlier this week against alleged copyright infringers.

The next round of the controversial case comes on Sept. 16, when the appeal will be heard in Washington by the U.S. Appeals Court.

"The answer to the copyright community's present business problems is not a radical new subpoena process, previously unknown in law, that un-tethers binding judicial process from constitutional and statutory protections that normally apply to the discovery of private data regarding electronic communications," William Barr, EVP and general counsel for Verizon, told the committee.

Verizon originally argued that the DMCA subpoena only applied in cases where an Internet service provider (ISP) stored the copyrighted material on its servers. Because people using P2P networks store the material on their own hard drives, Verizon said it was exempt from the DMCA subpoena. Since then, Verizon has expanded its case to the actual constitutionality of the DMCA subpoena, privacy rights violations, the potential dangers of the subpoena being misused by non-copyright holders and even the future growth on the Internet.

"As interpreted by the district court, this subpoena provision grants copyright holders or their agents the right to discover the name, address, and telephone number of any Internet user in this country without filing a lawsuit or making any substantive showing at all to a federal judge," Barr said.

Barr called the court decision a "misreading and misapplication" of the law.

"This reading of the DMCA accords truly breathtaking powers to anyone who can claim to be or represent a copyright owner; powers that Congress has not even bestowed on law enforcement and national security personnel. It stands in marked contrast to the statutory protections that Congress has enacted in the context of video rentals, cable television viewing habits, and even the requirements for law enforcement officers to gain access confidential data associated with electronic communications."

RIAA President Cary Sherman told the committee the DMCA subpoena is perfectly legal and was agreed to by ISPs during the 1998 negotiations over the DMCA. One of the central issues then was the liability of ISPs for the possible copyright infringements of their customers.

The DMCA gives ISPs liability protections in exchange for assisting copyright owners in identifying and dealing with infringers who misuse the service providers' systems, including complying with an expedited subpoena process for copyright owners who want to pursue legal action against infringers.

"Keep in mind that absent the broad liability limitations of the DMCA, ISPs could face enormous monetary liability for the actions of their subscribers. With the current levels of piracy that liability could translate, at a minimum, to hundreds of billions of dollars," Sherman said.

Sherman added the liability limiting provision of the DMCA was why Judge John Bates, the federal district judge who presided over the enforcement proceedings between RIAA and Verizon, concluded, "It would not serve the public interest for Verizon to continue to receive the benefits of the (DMCA provision) -- liability protection -- without the concomitant obligations of disclosing the identity of an alleged infringer."

Sherman said Verizon's position reminded him a law school adage: "When the law is not on your side, argue the facts; when the facts are not on your side, argue the law; and when neither the facts or the law are on your side, pound the table. In this case, Verizon risks breaking the table with its argument."