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Supreme Court Strikes Blow Against Grokster, Says Cable Cos. May Keep Rival ISPs Off Lines

by , 12:20 PM EDT, June 27th, 2005

The Supreme Court on Monday issued a pair of rulings that will affect many Internet users, according to two Associated Press stories. In one ruling, it said that a trial against such file-sharing services as Grokster may proceed, given that those services' primary use is the illegal distribution of music, movies and other digital content. In another ruling, the justices decided that, unlike phone companies, cable providers don't need to share their lines with rivals offering broadband Internet service.

The Grokster case was a unanimous decision in which Justice David H. Souter wrote: "We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties," noted reporter Hope Yen.

Two lower courts had used a 1984 Supreme Court decision in favor of Sony as the basis for their rulings. Sony had been sued by Hollywood studios that argued VCRs would be used to make illegal copies of movies, an argument rejected by Supreme Court justices who decided that the company couldn't be held liable for its customers' actions. The current Supreme Court, however, ignored warnings that the lawsuits could hamper the development of such technology as the iPod and decided that Grokster and other peer-to-peer file-sharing services hold a greater degree of liability.

Ms. Yen also quoted Mr. Souter as writing: "There is substantial evidence in MGM's favor on all elements of inducement," meaning that Grokster's technology should also be looked at by the way it's marketed and whether the company tries to reduce copyright infringement by its users.

The other decision, which was also reported on by Ms. Yen, was a 6-3 ruling that keeps cable broadband lines from being considered in the same light as phone lines, which must be shared for DSL, long distance and local calling, and other services. Justice Clarence Thomas, writing for the majority, said that final say in the matter should lie with the Federal Communications Commission (FCC), which decided in March 2002 to label cable lines an "information service" different from phone lines.

With over 19 million homes connected to the Internet through cable broadband services, accounting for 60% of those who use high-speed Internet access, cable companies won't have to share lines the way phone companies have to allow Earthlink and other ISPs onto their lines. Ms. Yen reported that phone companies will now lobby the FCC to apply the same standard to their lines.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:Engine Joe Posts: 412 Joined: 29 Jun 2004
Subject: Not exactly...

The article says:

In one ruling, it said that a trial against such file-sharing services as Grokster may proceed, given that those services' primary use is the illegal distribution of music, movies and other digital content.

My understanding is that the holding doesn't go to primary use but to how the company holds its products out for use. That was how the ct. distinguished the VCR case from this one. It isn't primary use - it's the fact that Groakster was essentially advertising its product as a way to (illegally) download copyrighted materials.

Close Name:geoduck Posts: 1721 Joined: 30 Dec 2003
Subject:

Quote
The other decision, which was also reported on by Ms. Yen, was a 6-3 ruling that keeps cable broadband lines from being considered in the same light as phone lines, which must be shared for DSL, long distance and local calling, and other services. Justice Clarence Thomas, writing for the majority, said that final say in the matter should lie with the Federal Communications Commission (FCC), which decided in March 2002 to label cable lines an "information service" different from phone lines.

I wonder if the FCC will change their view if VOIP over cable becomes a major player. This ruling could make things interesting.

Close Name:bryson Posts: 79 Joined: 05 Mar 2002
Subject: What it means

It means that everyone better prepare for higher broadband rates.

Close Name:Billy K Posts: 297 Joined: 06 May 2004
Subject: What's Important

What's important here is not that a million teens are going to be further hampered in their efforts to download the newest Britney song and Herbie movie. What's important is that our judicial system has strongly sided with the forces of copyright exploitation and anti-innovation. The court has basically said that corporations' right to profit trumps everything else.

It's a pretty lousy day.

View Name:Guest
Subject: I don't understand
Close Name:fartheststar Posts: 213 Joined: 04 Jan 2004
Subject: my post above (I don't understand)

I don't understand why Cable doesn't have to play by the same rules as phone, either in your country or mine.

Here in Canada, the Incumbent phone companies are regulated by the CRTC about how much they can charge for VOIP access, and the newcomers (including Rogers, a very huge cable company) are not regulated for price. It's a huge discrepancy. So, Rogers, which just acquired Call-Net (that's Sprint in Canada) now can rock the boat pretty hard in Canada playing by different rules.

Close Name:Billy K Posts: 297 Joined: 06 May 2004
Subject: Here's Why

Quote
fartheststar wrote:
I don't understand why Cable doesn't have to play by the same rules as phone, either in your country or mine.


Cable has better lobbyists and more money.

/Cynicism

Close Name:kenaustus Posts: 601 Joined: 27 Jun 2003
Subject: Not everyone's a major label

My son-in-law is a guitar player in a punk rock band. Been working that for years, played around the world in concerts and they have a stack of CDs out.

While they were with a "major" for a while they have also done indie work and the guitar man now has his own studio.

The fact is that his income has been impacted by P2P. The decision will not mean anything to him now, but it will help a lot of bands that are with indies, especially since the iTunes Store is giving indies a chance on their site.

Close Name:DawnTreader -   TMO Staff Posts: 13786 Joined: 04 Jan 2002
Subject:

It's about time this decision was made. It's a victory for everyone interested in the development of the legal distribution of music via of the Internet.

Contrary to hurting iPod sales as some have suggested, moving the iPod into the relam of a device used for the enjoyment of music legally obtained will spur sales among members of older demographics IMHO.

Furter, with the iTMS holding the #1 spot among legal services, it can only increase sales volume as the resulting law suits begin to put an end to rampant criminal behavior on the part of these services and those who choose to distribute music outside the law.

Close Name:Al Swearengen Posts: 339 Joined: 10 May 2005
Subject: Cable v phone lines

From what I understand the cable companies installed the system with their own money. Phone companies use common carrier system that has public money in it. Probably more complicated than that, but I remember something along those lines dicussed on a business news show.

Quote
fartheststar wrote:
I don't understand why Cable doesn't have to play by the same rules as phone, either in your country or mine.

Here in Canada, the Incumbent phone companies are regulated by the CRTC about how much they can charge for VOIP access, and the newcomers (including Rogers, a very huge cable company) are not regulated for price. It's a huge discrepancy. So, Rogers, which just acquired Call-Net (that's Sprint in Canada) now can rock the boat pretty hard in Canada playing by different rules.

View Name:Guest
Subject: Apple's still safe
View Name:Guest
Subject: For This Debate to Move Forward Meaningfully...
Close Name:Billy K Posts: 297 Joined: 06 May 2004
Subject: For this Debate to Move Forward Meaningfully...

(Dang it. I got logged off)

We really need to get past the notion that bands make money off CD sales. Unless YOU own the label, it's just not the case.

I've been doing this for 15 years. I have 6 CDs commerically produced and distributed that I wrote and performed. I've made exactly nothing on them (I made a lot more doing the artwork, actually). In fact, the CD one of my groups put out last year, my band-mate and friend owns the label. I made nothing. He made nothing. If anybody ever makes a penny on it, it'll be him, but it's still not likely. And if he does make any money, it'll go toward re-pressing the disc.

I'm more likely to believe that a band's income is positively affected by P2P. They were never going to make any money off the CD anyway, but the exposure might get folks to their shows.

It's a well-worn argument that file-sharing advocates continue to use, but only because it's true.*

*For the record I don't condone copyright violation - for music or any other media - however, I am all for reasonable laws and frankly, I think selling CDs is a dead practice. Distribute digitally, and give away content liberally. It's the model of the future. The days of record companies getting rich off naive young bands is over (soon).


Quote
kenaustus wrote:
My son-in-law is a guitar player in a punk rock band. Been working that for years, played around the world in concerts and they have a stack of CDs out.

While they were with a "major" for a while they have also done indie work and the guitar man now has his own studio.

The fact is that his income has been impacted by P2P. The decision will not mean anything to him now, but it will help a lot of bands that are with indies, especially since the iTunes Store is giving indies a chance on their site.

Close Name:Tiger Posts: 937 Joined: 17 Jun 2003
Subject: give it away

well, just because the P2P sites can't give away your music, you still can. And distribute it. Free. You don't ever have to sign with a label. Just give it away. You still won't make any money. But your art will be out there free of charge. And nobody will be making a cent on it.

Close Name:Billy K Posts: 297 Joined: 06 May 2004
Subject: I Forgot

I forgot to mention in my ramble...er, post... I practice what I preach. I do actually give all my recordings away.

Quote
Tiger wrote:
well, just because the P2P sites can't give away your music, you still can. And distribute it. Free. You don't ever have to sign with a label. Just give it away. You still won't make any money. But your art will be out there free of charge. And nobody will be making a cent on it.

View Name:Guest
Subject: Rip, Mix, Burn anyone?
View Name:Guest
Subject: Gulty till proven guilty
Close Name:geoduck Posts: 1721 Joined: 30 Dec 2003
Subject: Re: Rip, Mix, Burn anyone?

Quote
Anonymous wrote:
Read it and weep, iPod users:

"(d) On the record presented, respondentsí unlawful objective is un-
mistakable. The classic instance of inducement is by advertisement
or solicitation that broadcasts a message designed to stimulate others
to commit violations."

Uh, like "rip, mix, burn, perhaps?"


Not even close.
I have nearly 2000 songs on my iPod. With the exception of about 50 I bought off of iTunes all the rest were ripped from CDs I own. No illegality there. Period. Apple goes to great lengths to say not to rip music you don't own. DRM is all about preventing piracy.

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