ISPs now working with RIAA to catch downloaders?

Nothing is official, but it appears that the RIAA has enlisted the group that can best help them fight music piracy — the internet service providers (ISP).

It’s important to note that none of the half dozen or so ISPs involved has signed agreements. The companies are “skittish” about negative press and could still back out, said the sources. But as it stands, AT&T and Comcast are among the companies that have indicated they wish to participate in what the RIAA calls a “graduated response program.”

Typically, ISPs have stayed away from getting involved in copyright enforcement. The ISPs working with the RIAA will forward take-down notices to network users accused of illegal file sharing and in an unprecedented move, will establish a series of responses for chronic copyright violators.These responses will gradually grow in severity as the number of violations go up and may include suspension of service or even service termination. Each ISP will decide its own response.

There are still plenty of details left to work out, the sources said. The RIAA has yet to address how it would help ISPs make up for the revenue they would lose by kicking people off their networks or who would pay the costs of sending take-down notices. The RIAA may disclose participating ISPs as soon as next month, according to a music industry source, adding that AT&T and Comcast are expected to be part of the group.

If AT&T and Comcast do join, the RIAA will have plenty of muscle to wage a new assault on piracy. The music industry said last month that it would no longer battle piracy by filing lawsuits against individuals. Instead, the big recording companies seek to create a new line of defense at the network level. And at least on paper, the plan is a potent one.

This move has always made sense for the RIAA, but it’s ironic how the ISPs built their broadband business on the backs of music and movie downloaders and now they’re going to turn around and punish their customers for doing just that. There is likely some very negative press once the full list of cooperating ISPs is revealed. And I wouldn’t be surprised if there are a few ISP holdouts that use their status of non-cooperation as a marketing tool to attract downloaders (or customers that just want as much privacy as possible).

I’m still confused about the digital music business model. I can buy a hard copy of a CD for around $10 if I go to a discount seller. I can buy a digital copy of the same album at iTunes for the same price. The difference is that the hard copy of the CD still holds value. I can resell it for $3 or $4 if I stop listening to it. That’s not possible with the digital copy. So, to me, the digital copy should be discounted ahead of time to account for that loss in value. Digital albums should be $5 or $6, not $10. There are no CDs to be burned or shipped, jewel cases to be bought or assembled, or artwork to be printed, so the digital copy should be far cheaper to produce and distribute.

Unfortunately, it appears iTunes is actually raising the price of (some) songs to $1.29.