Cox Communications has asked the Supreme Court to overturn a lower court’s ruling that held the company liable for its’ subscribers' copyright infringement.

The Supreme Court’s review “is needed to restore a uniform, nationwide copyright damages regime,” the company said.

The case, which began in 2018 when Sony Music Entertainment, Universal Music Group, Warner Music and other music giants sued Cox, aims to make it so internet service providers including Cox are accountable for piracy committed by their subscribers.

Also Read: Cox Moves to Overturn $1 Billion Music Suit 

The music companies argued that the privately held cable company “knowingly contributed to, and reaped substantial profits from massive copyright infringement committed by thousands of its subscribers.”

In 2019, a Virginia jury found Cox liable for a total of $1 billion in damages for its customers’ violations of over 10,000 music copyrights.

The Fourth Circuit of Appeals tossed the $1 billion in copyright damages against the company in February, ordering a new trial to determine damages.

However the court did find Cox liable for copyright infringement if it failed to terminate service for subscribers who pirate music.

The only way to avoid liability under the lower court decisions, according to Cox, would be terminate internet service for large groups of people, including public facilities like “coffee shops, hospitals and universities.”

“This ruling, should it stand, would force ISPs to terminate internet service to households or businesses based on unproven allegations of infringing activity,” Cox wrote in a statement. “The accounts that continued to rack up notices without termination were regional ISPs, universities, hotels, military housing, and other business accounts used by hundreds or thousands of individual users.”

Cox insists that it should not be liable for infringement at all, and warns that the decision might cause ISPs to increase surveillance on customers.

“This would result in a fundamental change to how ISPs must manage their networks,” wrote Cox. “Many may feel that the only way to avoid liability is to monitor the activity of their subscribers to ensure no one is engaging in potentially unlawful conduct.”

The company also stressed the potential impact to rural communities— many of whom lack access to an alternate internet offering, should they come under suspicion and have their service discontinued.

“At a time when the U.S. is spending billions of dollars to ensure that every American has access to the internet, the idea that homes could so easily lose that access goes against the goals of getting everyone connected,” wrote Cox. “Termination would leave a household with no viable access to the internet.”

Cox says that less than 1% of its subscribers were accused of music piracy during the period in question in the court trial.

Currently, the provider has approximately 6.5 million total residential and commercial customers. 

Tomorrow (March 9), lawyers for Cox Communications will begin oral arguments in the appeal of a $1 billion copyright infringement award that it says is not only wrong on a legal basis, but could upend the entire broadband industry if it is allowed to stay. 

A Virginia federal court awarded 53 music publishers, including Sony Entertainment, Universal Music Group, Warner Music and others, $1 billion in December 2019, agreeing with claims that despite complaints and warnings from the music publishers, Cox continued to allow its broadband subscribers to illegally download music. All in all the publishers found 10,017 instances of infringement by Cox customers, and a jury assigned a value of $99,830.29 to each one, for a total of $1 billion. 

Cox immediately appealed the decision, but that was rejected by another federal court in Virginia in June 2021, which upheld the verdict. The latest appeal is before the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, with oral arguments set for March 9. A decision is expected sometime this spring.

Cox had originally hoped that it would be protected by the Digital Millennium Copyright Act, the federal law that protects internet-service providers from liability for content that its subscribers put on the web. An earlier court ruled that Cox wasn’t protected by the DMCA because it didn’t terminate enough customers who had been accused of the infringement. According to court filings, the DMCA requires ISPs to terminate subscribers that repeatedly infringe copyrights under appropriate circumstances. 

The suit centered around about 58,000 of Cox’s estimated 6 million broadband customers who, according to the publishers, were suspected of downloading copyrighted material without permission. The plaintiffs claim they sent Cox about 163,000 notices concerning those subscribers (about 2.8 notices for each customer) regarding 10,017 individual sound recordings and compositions over Cox’s network. .

Other MSOs in Crosshairs

 Cox isn’t the only cable ISP facing a potentially crippling lawsuit regarding illegal downloading of content. In August, Sony Entertainment, Universal Music Group, Warner Music and their subsidiaries sued Charter Communications in U.S. District Court in Colorado, claiming the cable company failed to terminate “tens of thousands” of subscribers who were allegedly downloading music illegally, and claimed the company profited from those downloads by selling higher speeds of service. Last June, the record labels sued Frontier Communications, claiming similar copyright violations. 

While Cox doesn’t deny that some of its broadband subscribers illegally downloaded music during the period in question, it does take issue with the extent of the punishment — about $100,000 per song that typically retails for $1 each — and the idea that ISPs are supposed to immediately disconnect subscribers at the mere hint they are downloading something they aren’t supposed to. 

The Recording Industry Association of America, the trade group that represents record labels and distributors in the music business and who in 2019 said the original verdict sent a message to ISPs concerning their obligations to stop piracy, declined to comment on the appeal.

But in a brief filed in June, attorneys for the plaintiff record companies said the court had already correctly determined that Cox repeatedly allowed copyright infringers to remain on the service, creating a “safe haven” for them as the company collected millions of dollars in fees for broadband service. 

“During the time period at issue here, Cox terminated over 600,000 subscribers for not paying their bill,” the plaintiffs said in the filing. “It terminated 32 for copyright infringement.”

While Cox has argued that it has no financial incentive to allow its customers to illegally download copyrighted material — it charges the same amount no matter the usage — the record companies argued that music pirates tend to subscribe to higher-speed service, which does carry a higher retail price. 

“By not terminating known repeat infringers, Cox received subscription revenues it would not have otherwise obtained, and avoided costs it would have otherwise incurred,” the plaintiffs wrote. They pointed to one Cox residential customer who was the subject of more than 100 infringement notices and was billed $8,594 between February 2013 through 2016, after Cox received at least 13 infringement notices for that subscriber. The plaintiffs also claimed that two Cox Business customers were billed $706,434 and $12,525, respectively, after receiving 13 infringement notices. 

“Between February 2013 and December 2016, Cox received $208 million in revenue from subscribers caught infringing three or more times,” the plaintiffs wrote. “Cox thus demonstrably and consistently prioritized cash over copyright.”

According to Cox’s arguments, it had issued warnings to subscribers that they were illegally downloading music in three phases. In phase one, Cox sent subscribers automated email warnings concerning the complaint that they were illegally downloading music, demanding removal of any material that infringed on copyrights, and providing educational resources on infringement. Cox’s Abuse Tracking System (CATS) repeated the warnings after the cable operator received a second notice of infringement and repeated them again for the next five notices. Those warnings ended the infringement 78% of the time, Cox said in court filings. 

If that wasn’t enough, Cox moved to the second phase, automatic suspension of internet service. According to the filings, Cox suspended thousands of subscribers during the period and refused to restore service until the subscriber promised to stop the infringement, either via an online form or, if the violations continued, in a conversation with Cox investigators who would determine how the infringement started, and how it could be stopped. According to Cox, phase 2 increased the success rate to 95%. 

Phase three was termination, a measure that Cox said it rarely had to resort to. According to the filing, Cox determined a few dozen customers — out of about 6 million total broadband subscribers — were terminated in 2013 and 2014. “[U]ltimately, the only accounts that continued to rack up more and more notices were all business accounts or regional ISPs, termination of which would have carried especially devastating consequences,” Cox said in the filing. 

Cox tried to have the $1 billion award reduced in 2021, but was rejected by the court in June. But the company, in its latest appeal, tells the court that upholding the verdict will have a devastating effect on the broadband industry as a whole.

ISPs Left Exposed

“It would effectively make ISPs strictly liable for every act of infringement on the internet, from downloads to social media posts,” Cox said in the filing. “And given the threat of crushing liability, ISPs would have no choice but to terminate subscribers the moment they are accused of a single infringement, stranding countless subscribers in an internet exile.”

Other ISPs believe so as well. At least four amicus briefs were filed with the court in favor of Cox’s position, by 17 distinguished university intellectual property law professors and industry organizations like the Electronic Frontier Foundation, and The Internet Association (which represents 40 leading tech companies). All said upholding the ruling would result in massive terminations of internet subscribers. 

“Consumers, whether they personally engage in infringing conduct or not, could be subject to wholesale termination of their internet access based on unproven allegations of infringement occurring at the IP address through which they connect to the internet,” the law professors said in their brief. “And entities through which multiple users connect to the internet via a single IP address could lose internet access entirely due to alleged infringement by a single user.”

They argued that Cox did not receive any benefit from allowing the illegal downloads — it got paid a flat monthly for service either way — which is a key part of the law. According to the professors’ brief, in order for Cox to benefit from the illegal activity, the “infringing activity must constitute a draw for subscribers.“

“But no evidence on the record shows that customers purchased Cox’s internet service because of the ability to infringe,” the brief continued. 

And terminating one individual because of a single act of infringement, or just the suspicion of such an act, could mean that every member of a household loses service. 

“The harm of cutting off an entity, in this case, could greatly outweigh the harm of a single infringing act,” the brief said. “And because 40% of Americans have only one option for broadband internet service, being terminated by one provider is not just an inconvenience, but can mean the loss of internet access altogether.”

With broadband subscriber growth dwindling, and cable companies relying more and more on broadband service to survive, the outcome of the case could have a chilling effect on the industry. With the federal government pumping billions of dollars into programs to encourage expansion of broadband service to rural areas, the 4th Circuit may well hold the fate of high-speed internet connections for all in its hands. ■

Alaska-based GCI has teamed with CSG to introduce an automated processing system that notifies subscribers of alleged copyright infringement complaints.  

CSG has partnered with Yaana, a provider of compliance solutions, on the copyright complaint system now in place at GCI that notifies and educates customers on alleged complaints and what measures they should take to rectify them.  

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CSG, which counts customers such as Charter Communications, Comcast, Dish Network, Telfonica, Telstra and Verizon, is an authorized reseller of several Yaana products, including legal compliance solutions.  

“As consumer appetite for digital content continues to grow, GCI is making sure that our subscribers can easily access the content they want, while also having the right processes in place to address subscribers who are repeat infringers,” Susannah Scholl, vice president of Information Technology at GCI, said in a statement. “The copyright complaint system will help us meet our compliance goals and free up valuable resources which we can devote to growing our business and satisfying our customers.” 

“The copyright complaint system is the latest step we have taken to help our clients better manage complex processes such as lawful compliance, subpoena search and data infringement requirements,” added Ian Watterson, head of Americas for CSG. “Local and national law enforcement communications requests are growing daily for service providers worldwide and CSG helps our clients respond to requests efficiently, securely and quickly.”