On December 16, 1997 Public Law 105-147, the No Electronic Theft Act (NET), was signed into law by President Clinton, making the reproduction and distribution of copyrighted intellectual property, including MP3 files, a criminal offense. It used to be only a civil offense (you could be sued) unless you expected to receive some financial gain (making it criminal). For example, it was criminal if you were trying to sell the copyrighted work. NET changed that by redefining financial gain to also include the expectation of receiving copyrighted material.
Most people engage in peer-to-peer file sharing with the expectation of receiving copyrighted material such as music files. Most peer-to-peer file sharing programs automatically share back to the Internet any file a person downloads. These programs continue to share those files even though the person may not be aware they are running a file-sharing program. This puts users of peer-to-peer file sharing in criminal violation of the law from the first moment they download a copyrighted file.
Because the act is criminal rather than just civil, anyone can cause action to be brought against the violator, not just the copyright owner. The penalty is up to 3 years in prison and $250,000 in fines for a first offense.
On August 20, 1999, Jeffrey Gerold Levy, 22, a student at the University of Oregon was the first person convicted of felony counts under NET. The University of Oregon noticed a lot of traffic to and from Mr. Levy's computer. The FBI was notified; they and the Oregon State Police seized his computer which was being used to share hundreds of copyrighted music and program files. Mr. Levy pled guilty.
The Internet is a shared resource and how well it runs depends on the willingness of its users to share nicely. It is this sharing that makes access to the Internet inexpensive.
Someone might pay an Internet Service Provider $17.45 for an ADSL connection to the Internet that runs at 1.5 Mbits/sec. That bandwidth is shared with other people - it is not a private line to the Internet. They can get a private 1.5 Mbit/sec line to the Internet from most phone companies for around $1800 per month. That's 100 times what they would pay an ISP to share his connection to the Internet.
Most Internet Service Providers, ISP's, do not allow their customers to run servers. The reason is pretty simple. If a customer were to run a server then he or she would be sharing their service with millions of other people on the Internet. This makes less bandwidth available for the ISP's paying customers and can severely degrade the ISP's service. In turn, that makes his customers, including the ones running servers, quite unhappy with the speed of their connection. In fact, it is the people who used peer-to-peer file sharing who complained most, because their share of the bandwidth was actually being targeted by other users of peer-to-peer filesharing from the Internet and they saw by far the greatest degradation of their service as a result.
What we decided:
Less than 5% of our customers are (were) engaged in peer-to-peer file sharing. Yet, because of the way these programs work, they could and did severely degrade our Internet service. Our measurements demonstrated that 5% of our customers used 55% of all incoming bandwidth and 85% of all outgoing bandwidth. We also saw in September 2001, that increasing the amount of bandwidth available to our customers only increased the number of people on the Internet downloading files through our network, negating any possibility of improvement as long as we allowed peer-to-peer file sharing by our customers.
Coupled with the fact that peer-to-peer file sharing as used by the overwhelming majority of these customers is criminal, we could not and cannot find a practical, legal or moral justification to defend this activity on our service.
It is our expectation that people who want to engage in peer-to-peer file sharing will select another Internet Service Provider. If other providers allow their networks to be degraded then the people who select those providers will receive the quality of service that their policies engender (poor). Those who do care about quality of service and do not care to engage in peer-to-peer file sharing (the other 95%) are welcome to join our service with the assurance we will do everything possible to maintain that quality.
Because many P2P programs use evasive protocols to avoid being blocked, we now rely on our customers to remove any of these programs on their computers so they're not stepping all over their neighbors. This is particularly important in any shared service like an apartment building with a single backhaul, where one or two abusive computers can seriously slow the Internet for everyone else in the building.
Our P2P Policy is consistant with our "No Server" rule because in P2P File Sharing, each computer acts as both a server and a client. Today, you should be able to find almost any file you want through legal download services for a small or no fee.