Holding Internet Service Providers Accountable

HEADNOTE

Would indirect liability reduce costly cyberspace externalities?

INTERNET SERVICE PROVIDERS (ISPs) ARE LARGELY immune from legal liability for the various forms of online malfeasance to which they contribute.

America Online, for example, paid Matt Drudge $3,000 a month to write an online gossip column; but when Drudge used the column to accuse Clinton appointee Sidney Blumcnthal of spousal abuse, a federal judge ruled that AOL bore no responsibility for the smear. Similarly, Verizon Communications today counts among its subscribers an untold number of peer-to-peer pirates, yet the firm faces no financial liability for copyright infringement online and, indeed, docs almost nothing to help copyright holders defend their work.

This is surprising. After all, while it surely would be unwise to punish ISPs for every bad act committed by their subscribers and it would be equally foolish to force service providers to play policeman in instances where the costs of doing so would overwhelm any plausible benefits, legal liability can take more modest forms. With respect to copyright infringement, for instance, why not require ISPs to deliver warnings to accused subscribers? Infringers are anonymous Internet Protocol (IP) addresses to copyright holders, so copyright holders have a hard time delivering warnings themselves. But an ISP can easily match an accused IP address to a real-world name and billing address, and thus an ISP can easily deliver a warning that would remind an accused subscriber that piracy is illegal and that "the complaining copyright holder might take his evidence to court, where we will be forced to reveal your identity and provide further evidence of your alleged bad acts." Imagine the shiver that would go down an infringer's spine upon finding that note in his mailbox, complete with a specific accusation that he downloaded Madonna last Tuesday at midnight from his bedroom computer.