Internet Packet Sniffing and its Impact on the Network Neutrality Debate and the Balance of Power between Intellectual Property Creators and Consumers

Abstract

When Internet Service Providers ("ISPs") serve as neutral conduits they qualify for a safe harbor exemption from liability for carrying copyright infringing traffic provided by Section 512 of the Digital Millennium Copyright Act. However ISPs now want to operate non-neutral networks capable of offering "better than best efforts" routing and premium services for both content providers and consumers seeking higher quality of service and more reliable traffic delivery. The ability to inspect specific packet streams also enables ISPs to identify traffic type and routing priority as well as a greater ability to determine copyright compliance.

The debate about Internet neutrality has largely ignored whether ISPs risk losing safe harbors from copyright infringement when they actively manage their networks to offer tiered services. This paper will assess non-neutral network operation in terms of its impact on intellectual property rights, including consumers' fair use opportunities. The paper will assess whether and how ISPs might lose their safe harbor for copyright infringement liability based on new technological means to know about the content they carry. Additionally the paper will consider whether ISPs have an affirmative duty to conduct packet inspection absent a legislative mandate. The paper also will examine litigation over mandatory processing of broadcast television "flags," which specify consumer use options, but which require equipment processing on user premises.

The paper concludes that ISPs regulatory status as information service providers does not provide an absolute exemption from responsibilities to examine the content they carry and to provide reasonable safeguards for protecting copyrights. However such affirmative efforts to operate a non-neutral network may impose greater burdens on ISPs to protect creators' intellectual property rights with the likely reduction of consumers' fair use opportunities.

Keywords: network neutrality, intellectual property rights, Digital Millennium Copyright Act, digital rights management, safe harbors, fair use

JEL Classification: K11, L82, O34