You are on page 1of 10

MEMORANDUM

August 18, 2014

To:

Motion Picture Association of America

From:

Kenneth L. Doroshow
Luke C. Platzer

Subject:

Whether ISPs Claim to be Information Service Providers for Purposes of


Common Carrier Regulation Renders the ISPs Ineligible for the DMCA Safe
Harbor

PRIVILEGED & CONFIDENTAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT
This memorandum responds to your request for an analysis of whether the Federal
Communications Commissions (FCC) longstanding position that so-called last-mile
Internet Service Providers (ISPs) do not provide telecommunications service within the
meaning of the Communications Act provides a basis for defeating ISPs entitlement to the
Digital Millennium Copyright Act (DMCA) safe harbor.
As discussed below, although there is a colorable argument that an information service
provider under the Communications Act (such as a last-mile ISP) cannot be a service provider
entitled to the DMCA Section 512(a) safe harbor, the argument is not likely to succeed.
Moreover, even if such an argument were to succeed, the most likely effect would be to open up
only a narrow basis for limiting ISPs immunity when they provide domain name service
(DNS) functionality linking their users to pirate sites, rather than the more drastic consequence
of disqualifying them from DMCA protection altogether.
At the same time, even this narrow limitation on ISPs immunity could have the salutary
effect of requiring ISPs to respond to takedown notices by disabling DNS lookups of pirate sites
through the ISPs own DNS servers, which is not currently a general practice. Importantly, the
argument for such a requirement need not turn on the Communications Act, but can instead be
based on the DMCA itself, which expressly limits ISPs immunity to each separate and distinct
function that ISPs provide. See 17 U.S.C. 512(n). A reasonable argument can be made that
DNS functionality is an information location tool as contemplated by DMCA Section 512(d)
and, therefore, that ISPs are required, as a condition of the safe harbor, to cease connecting users
to known infringing material through their own DNS servers. Should this argument hold and
we believe that it has a reasonable prospect of success copyright owners could effectively
CHICAGO

LOS ANGELES

NEW YORK

WASHINGTON, DC

WWW.JENNER.COM

PRIVILEGED & CONFIDENTIAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT

require ISPs to implement a modest (albeit easily circumvented) form of DNS-based site
blocking on the basis of only a takedown notice rather than litigation.
BACKGROUND
A. Telecommunications Service Under the Communications Act.
ISPs have successfully avoided common-carrier regulation by the FCC under Title II of
the Communications Act which could carry significant regulatory burdens with the position
that their offering of several functionalities, among them DNS service, takes their services
outside the scope of the definition of a telecommunications service under the Communications
Act. A telecommunications service under the Communications Act is defined as follows:
The term telecommunications service means the offering of
telecommunications for a fee directly to the public, or to such classes of users as
to be effectively available directly to the public, regardless of the facilities used.
47 U.S.C. 153(53). This definition, in turn, incorporates the definition of
telecommunications, which the Communications Act defines as follows:
The term telecommunications means the transmission, between or among points
specified by the user, of information of the users choosing, without change in the
form or content of the information as sent and received.
47 U.S.C. 153(50).
ISPs successfully advocated before the FCC, and then at the U.S. Supreme Court (which
upheld the FCCs interpretation of the Communications Act under Chevron deference), that
broadband service does not constitute a telecommunications service within the definition of 47
U.S.C. 153(53) because broadband ISPs offer functionalities such as email and DNS, which are
not telecommunications. See In re Inquiry Concerning High-Speed Access to the Internet
Over Cable and Other Facilities, 17 FCC Rcd. 4798 (2002) (Cable Modem Declaratory
Ruling); affd sub nom. National Cable & Telecommunications Association v. Brand X Internet
Services, 545 U.S. 967 (2005) (Brand X). Instead, services such as DNS and email are
considered information services under the Communications Act:
The term information service means the offering of a capability for generating,
acquiring, storing, transforming, processing, retrieving, utilizing, or making
available information via telecommunications, and includes electronic publishing,
but does not include any use of any such capability for the management, control,
or operation of a telecommunications system or the management of a
telecommunications service.
47 U.S.C. 153(24). Because ISPs offer an intertwined service package that includes both
telecommunications and information services, the FCC held in Cable Modem Declaratory
2

PRIVILEGED & CONFIDENTIAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT

Ruling, and the Supreme Court affirmed in Brand X, that retail ISP service from a last-mile
provider is not an offering of telecommunications to the public within the meaning of the
telecommunications service definition, because the offering includes both
telecommunications and information services blended into the same service. Id.
As a result of these rulings, ISPs have not been subject to the sometimes-substantial
regulatory burdens accompanying common-carrier status under the Communications Act, such
as the obligations to serve all potential customers free of discrimination, to provide just and
reasonable prices and service conditions, and to file tariffs with the FCC setting the prices they
charge for their services. Indeed, much of the net neutrality debate at the Commission has
centered around the FCCs difficulty in trying to enforce nondiscrimination rules on ISPs in the
absence of a holding that they provide telecommunications service to the public, as the holding
that ISPs provide an information service rather than a telecommunications service
substantially weakens the FCCs regulatory authority.
The renewed attention in net neutrality efforts over the past several years has led to
many calls for the FCC to reverse the Cable Modem Declaratory Ruling and declare broadband
ISP service a telecommunications service. The FCC has on two occasions solicited comment on
proposals to do so, but no such action has been forthcoming, and the Commission is not expected
to reverse itself on the question during the current round of net neutrality rulemaking. 1
B. Service Provider Under the DMCA.
The definitions of telecommunications and telecommunications service under the
Communications Act are very similar to the definition of a service provider for purposes of
Section 512(a) of the DMCA:
Service provider
(A) As used in subsection (a), the term service provider means an entity
offering the transmission, routing, or providing of connections for digital online
communications, between or among points specified by a user, of material of the
users choosing, without modification to the content of the material as sent or
received.
17 U.S.C. 512(k)(1)(A). Although the definitions are in different statutes (the
Communications Act and the Copyright Act, respectively), the definition of a Section 512(a)
service provider is almost verbatim of the definition of telecommunications in the
Communications Act. The only differences are that:

Although so-called broadband reclassification is deeply unpopular as a political matter, the Cable Modem
Declaratory Ruling and its reasoning are considered by many to be somewhat shaky and unconvincingly
reasoned.

PRIVILEGED & CONFIDENTIAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT

(1) both definitions refer to the provision of transmission, but only the DMCAs
service provider definition also includes the routing, or providing of
connections as additional functions the service provider may offer, and
(2) both definitions require that the provider be offering the service at issue, but the
Communications Act imposes an additional requirement that such offering be to
the public.
The parallelism between the two provisions was intentional. The 1996
Telecommunications Act, which amended the Communications Act to add the
telecommunications and telecommunications service definitions, and the DMCA were
enacted only two years apart, in 1996 and 1998, respectively. Moreover, the version of the
DMCA that was eventually enacted in 1998 was based on a version of the statute that originated
in the previous (104th Congress), the same Congress that enacted the 1996 Telecommunications
Act. As the Senate Report (from the 105th) Congress noted with respect to Section 512(k)(1)(A)
(which was Section (j)(1)(A) at the time of the report),
[t]his freestanding definition is derived from the definition of
telecommunications found in 47 U.S.C. 153(48) 2 in recognition of the fact that
the functions covered by this definition are conduit activities, but the Committee
has reworked the definition and written subsection (j)(1)(A) to make it
appropriate for the Internet and online media. Thus, the subsection (j)(1)(A)
definition includes the offering of transmission, routing or providing of
connections.
S. Rep. 105-190 at 54.
ANALYSIS
A. Consistency Between the DMCA and the Communications Act.
The initial question presented here is whether an entity (such as a last-mile ISP) that does
not provide a telecommunications service for purposes of the Communications Act can still be
a service provider for purposes of Section 512(a) of the DMCA. To show that it cannot, one
could argue as follows: both statutory definitions are essentially identical (and the legislative
history shows an intent to make them identical), and, having successfully advocated for and
obtained a holding from the FCC that they do not provide telecommunications services for
purposes of the Communications Act, ISPs should not then be allowed to turn around and claim
that they are service providers for purposes of the DMCA. One might further contend that any
specific ISPs 3 that litigated the Brand X case or its progeny 4 should be estopped from taking a
contrary position under the DMCA.
2

The definition of telecommunications later moved to Section 153(50) in subsequent amendments to the
Communications act.
3
The National Cable & Telecommunications Association (NCTA)), of which many of the major cable ISPs are
members, represented the ISP industry in Brand X.
4

PRIVILEGED & CONFIDENTIAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT

The viability of this argument depends ultimately on a contention that the


Communications Act and DMCA must be read consistently and do not permit an ISP
simultaneously to be a service provider for purposes of Section 512(k)(1)(A) and an
information service provider under the Communications Act. This raises three questions of
statutory interpretation:
(1) Whether the subtle distinctions in wording between the two statutes effects a
meaningful distinction specifically, the fact that the DMCA includes
routing, or providing of connections whereas the Communications Act does
not; 5
(2) Whether nearly-identical terms can have different meanings across different
statutory schemes; and, relatedly,
(3) Whether a binding agency interpretation under one statutory scheme (the
Communications Act) can affect the interpretation of the same words in a
different statutory scheme the agency does not administer (the Copyright Act).
The strongest response available to ISPs is under point (1) that the DMCA is
meaningfully broader than the Communications Act because it includes routing within the
functions that a 512(a) service provider may offer. Specifically, ISPs can argue that routing of
communications is the very function of DNS, and that the provision of DNS was the principal
basis on which the FCC deemed last-mile ISP service information service in the Cable Modem
Declaratory Order and a principal basis on which the Supreme Court affirmed the decision.
We are aware of no precedent addressing this question. However, we believe that there is
a good chance that a court would view the inclusion of routing in Section 512(k)(1)(A) of the
DMCA as a persuasive distinction between the DMCA and the Communications Act. At the
outset, any claim that ISPs are not service providers under Section 512(a) would face an uphill
battle against the widely-held perception that Section 512(a) was designed specifically with lastmile, network access ISPs in mind, meaning that many courts are likely to enter any analysis of
the issue highly resistant to the notion that ISPs do not fall within the Section 512(k)(1)(A)
definition. Because the provision of DNS was arguably critical to the Cable Modem Declaratory
Ruling and the Brand X decisions, and the function of DNS arguably involves the routing of
communications, the inclusion of routing in Section 512(k)(1)(A) provides a basis for a court
to conclude that the DMCA is slightly broader than the Communications Act, and broad enough
that DNS remains within the definition of a Section 512(a) service provider irrespective of
4

The Cable Modem Declaratory Ruling initially applied only to broadband provided over cable lines, but the FCC
subsequently extended the same holding to various other broadband technologies in subsequent orders.
5
Although the statutes also differ as to the to the public requirement, that distinction is less relevant for present
purposes (as it pertains principally to ISPs that provide transit on a private/commercial basis, such as to other
telecommunications providers, rather than on the retail market).
5

PRIVILEGED & CONFIDENTIAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT

whether it disqualifies a provider from the definition of a telecommunications service provider.


In addition, the fact that the Cable Modem Declaratory Ruling decision is itself viewed
skeptically in some quarters, at least with respect to its treatment of DNS as an information
service rather than an element of telecommunications, may lessen its persuasive impact in
seeking to convince a court that the DMCA should be interpreted similarly.
To be sure, we would not be without counters to this argument. First, we could argue that
the provision of DNS is not the only reason that the FCC found last-mile ISPs to be outside the
scope of a telecommunications service. The Cable Modem Declaratory Order also pointed to
ancillary services such as email and Usenet newsgroups that many ISPs provide, as well as the
provision of caching services by ISPs to speed Internet browsing. 17 FCC Rcd. 4810, 17 &
4821, 37. We could also point to Brand X itself, in which the majority and dissent argued about
the significance of DNS, with the dissent taking the position that DNS is scarcely more than
routing information and therefore still falls within the definition of telecommunications.
Brand X, 545 U.S. at 1012. Specifically, we could point to the fact that the majority of the Court
considered and rejected the dissents position that DNS was an element of telecommunications.
545 U.S. at 1000 n.3 (the definition of information service does not exclude routing
information.).
Neither response, however, is likely to carry the day. While services such as email and
Usenet access are ancillary to and sold alongside transmission by ISPs, DNS and caching were
the only functions at issue in Brand X that were necessarily intertwined in the service itself.
Even the majority did not dispute that DNS consisted of routing information; it simply
disagreed that its status as routing information was significant for purposes of the
Communications Act. See 545 U.S. at 1000 n.3. As mentioned supra, the DMCA expressly
includes routing among Section 512(a) functions in a way that the Communications Act does
not. 6
ISPs would also be able to make compelling arguments under points (2) and (3)
namely, that the Communications Act and DMCA are different statutory schemes advancing
different policies, and that, as a result, similar terms in the two statutes need not necessarily be
read together, and an FCC interpretation of the Communications Act is thus not binding as to
similar language in the DMCA.
We would have a response here as well: that Congress clearly intended for the two
statutory categories to be highly overlapping (as indicated by the legislative history and statutory
text), and that ISPs would be having their cake and eating it too if they can enjoy the
immunities of the DMCA without subjecting themselves to the common carrier requirements of
Title II of the Communications Act. However, it is not obvious that a court would necessarily
find this equitable rejoinder compelling. It may prove challenging to articulate a case that the
6

As for caching, the fact that the DMCA expressly protects it as a distinct network function with its own safe
harbor, see 17 U.S.C. 512(b), would make it very challenging to argue that an ISP that provides caching as part of
its broadband service thereby loses DMCA protection for its transmission functions, as discussed below.

PRIVILEGED & CONFIDENTIAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT

DMCA protections and Title II common carriage obligations are a unitary statutory scheme in
which ISPs accept common carriage obligations in the communications context in exchange for
copyright protections. Rather, ISPs would have a persuasive argument that they are distinct
statutory schemes, advancing separate policies. For instance, so-called backbone ISPs that
serve as transit providers rather than offering retail service appear to be squarely within the core
of intended beneficiaries of the DMCA Section 512(a) safe harbor (indeed, they do very little
other than provide transit), and yet the FCC does not regulate them as common carriers under
Title II either. Moreover, under neither statutory scheme is the current classification of backbone
providers particularly controversial, a fact that may make it difficult to make a convincing case
that similar legal treatment is inequitable with respect to retail, last-mile ISPs.
B. Consequences of Prevailing on an Argument that ISPs Are Not Section
512(k)(1)(A) Service Providers.
Assuming a Court were to agree that the provision of non-telecommunications services
(particularly DNS) by last-mile ISPs prevents them from being service providers under DMCA
Section 512(k)(1)(A), the question would become what consequences would flow from such a
holding.
At the outset, even a win on this point would not imperil the status of ISPs as service
providers under the DMCA more generally. ISPs would be able readily to fall back on Section
512(k)(1)(B), which is substantially broader than under Section 512(k)(1)(A):
(B) As used in this section, other than subsection (a), the term service provider
means a provider of online services or network access, or the operator of facilities
therefor, and includes an entity described in subparagraph (A).
However, the protection under Section 512(k)(1)(B) is much narrower. A service
provider under Section 512(k)(2)(B) is entitled only to the safe harbors in Sections 512(b)
(caching), (c) (user-stored material), and (d) (information location tools), and not the broad safe
harbor available to transit providers in Section 512(a). The question, then, is whether our
prevailing on the argument about DNS (or any other non-telecommunications functions offered
by ISPs) would relegate ISPs to Section 512(k)(1)(B) for all purposes (in which case they would
lose the 512(a) safe harbor entirely, and have no safe harbor available for transit functions), or
whether it would merely relegate ISPs to Section 512(k)(1)(B) to the extent that they are
providing functions other than transmission.
We believe that a court is substantially more likely to take the second, more limited
approach. However, the practical consequences of even such a limited victory could be
significant with respect to DNS.
1. Total Disqualification.
The most aggressive position we could take is that, if an ISP is providing functionality to
its users that does not fall within the scope of Section 512(k)(1)(A), then the ISP is not a service
7

PRIVILEGED & CONFIDENTIAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT

provider under that section at all, because what they are offering to end users is not
transmission, but rather transmission bundled with DNS, caching, or other information services
(such as Usenet access, email, web browsing, etc.). The appeal of this argument is that it tracks
precisely the reasoning of the FCC, which declined to treat ISPs provision of transmission as a
separate service offering, but rather as a comingled offering containing multiple information
service features alongside transmission, and in which the DNS and caching, in particular, were
inextricably intertwined with transmission such that the ISP could not be said to be offering
transmission to the public. See Brand X, 545 U.S. at 998-1000 (approving reasonableness of
FCCs holding that DNS and caching are necessarily invoked during use of Internet service).
We do not believe that this argument is likely to be successful. First, as noted above,
courts are likely to start any analysis with a degree of hostility to the notion that last-mile ISPs
are beyond the scope of the Section 512(a) safe harbor entirely, because the consequence of that
holding (that there is no DMCA safe harbor for transmission at all, because none of the other
safe harbors cover it) would be quite dramatic and contrary to the perceived policy of the statute
to protect ISPs.
ISPs would also have a structural argument available to them here: that the different
regulatory schemes under the Communications Act and the DMCA suggest that the word
offering should not have the same meaning in both. In the Communications Act context, it
may make sense to categorize services as a whole, rather than in their constituent parts, in order
to systematize the regulatory treatment to which different service providers are subject. In the
DMCA context, on the other hand, the DMCA already expressly envisions carving up the
services provided by online providers into discrete functions such as transmission (512(a)),
caching (512(b)), storage (512(c)), and information location tools (512(d)). The very structure of
the DMCA, ISPs could argue, counsels against the all or nothing approach from the
Communications Act. The legislative history supports this view, with the Senate Report taking
the position that [t]he subparagraph (A) definition of service provider is not intended to exclude
providers that perform other functions in addition to those set forth in subparagraph (A),
including the functions identified in subsection (j)(1)(B). S. Rep. 105-90 at 54. And ISPs could
point to some bizarre outcomes of reading the term offering in the DMCA in the same manner
as the FCC read it in the Cable Modem Declaratory Ruling: even though the DMCA expressly
protects transmission (512(a)) and caching (512(b)), treating a service providers disqualification
from Section 512(k)(1)(A) as total if the provider offers both transmission and caching would
take away the DMCA protection, for transmission, of any ISP that also offered caching even
though both activities are protected by the statute. A sensible policy defense for this outcome
would be difficult to articulate.
For these reasons, we think it extremely unlikely that a court would take the position that
an ISP loses its status as a Section 512(k)(1)(A) service provider with respect to its provision of
services otherwise subject to Section 512(a), such as transmission, merely because it also offers
other features that are not subject to Section 512(a), such as caching, email, Usenet access, or
DNS.

PRIVILEGED & CONFIDENTIAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT

2. Partial Disqualification.
An alternative position and one that has better odds of success would be to concede
that retail ISPs act as service providers for purposes of Section 512(k)(1)(A) when they provide
transmission and Internet connectivity to their subscribers generally, but that their provision of
DNS (like their provision of caching) is a function for which they are service providers only
under Section 512(k)(1)(B), with reduced DMCA protection.
This line of argument finds substantial support in Section 512(n) of the DMCA, which
makes clear that each of the safe harbors describe[s] separate and distinct functions for
purposes of determining whether an ISP is entitled to immunity in other words, that immunity
is not provided on a blanket basis, but instead is limited only to the particular ISP function at
issue. See 17 U.S.C. 512(n); see also Perfect 10 v. CCBill, 488 F.3d. 1102, 1116-17 (9th Cir.
2007) (noting that ISP does not receive blanket immunity for its other services even where one
of its services is entitled to safe harbor). Thus, an ISP would be protected by Section 512(a) to
the extent its liability arises from transmission, but only by Section 512(b) to the extent its
liability arises from caching, and so forth.
The potential opportunity here is to convince a court that the provision of DNS is not
routing under Section 512(a), but is instead an activity addressed by Section 512(d), which
protects referring or linking users to an online location containing infringing material or
infringing activity, by using information location tools, including a directory, index, reference,
pointer, or hypertext link. 17 U.S.C. 512(d). DNS at least arguably fits this description i.e.,
it is referring users to online material by way of a directory or index. To be sure, the
argument is not guaranteed to succeed, as unlike a pointer or hyperlink text, DNS provides a
users browser with specific information (IP routing information) that the user has requested by
other means (alphanumeric internet addresses), as opposed to providing the user with an active
interface allowing the user to request information online, as they might from a clickable page of
search results. But at least in the literal sense, DNS appears to fit within the list of Section
512(d) functions and a reasonable argument can be made that DNS is more like a directory
than the provision of routing and should be treated accordingly under the statute as a Section
512(d) function rather than a Section 512(a) function. 7
Because ISPs must respond to takedown notices to retain their safe harbor liability under
Section 512(d), a finding that ISPs are protected only by Section 512(d), and not by Section
512(a), when they provide DNS service to enable users to communicate with online locations
could be significant in its practical effect. In much the same way that search engines materially
contribute to online infringement, the provision of DNS translation of pirate site names to IP
addresses also can be said to materially contribute to the infringement committed by subscribers
7

As noted in our June 9, 2014 memorandum on site-blocking strategies, consumers can opt to use alternative DNS
services (such as OpenDNS) instead of those of their ISP. See June 9 Memo., Attachment D at 5. The severability
of this function from the ISPs core service of Internet connectivity may further reinforce the argument that DNS is
not routing for purposes of Section 512(a) and is instead an information location tool for purposes of Section
512(d).
9

PRIVILEGED & CONFIDENTIAL


ATTORNEY-CLIENT COMMUNICATION
ATTORNEY WORK PRODUCT
SUBJECT TO COMMON INTEREST AGREEMENT

and the pirate sites and, therefore, exposes ISPs to liability for contributory copyright
infringement. See, e.g., Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1172 (9th Cir.
2007) (accepting that Googles image search engine substantially assists websites to distribute
their infringing copies to a worldwide market and assists a worldwide audience of users to access
infringing materials); see also June 9 Memo. Attachment B at 8-10 (analyzing potential
contributory infringement liability of ISPs). A takedown notice program, therefore, could
threaten ISPs with potential secondary liability in the event that they do not cease connecting
users to known infringing material through their own DNS servers. While not making it
impossible for users to reach pirate sites (i.e., a user could still use a third-party DNS server), it
could make it substantially more complicated for casual infringers to reach pirate sites if their
ISPs decline to assist in the routing of communications to those sites.
*****
KLD/LCP

10

You might also like