In January, a coalition of Canadian companies called on the country’s telecom regulator CRTC to establish a local pirate site blocking program, which would be the first of its kind in North America.

The Canadian deal is supported by FairPlay Canada, a coalition of both copyright holders and major players in the telco industry, such as Bell and Rogers, which also have media companies of their own.

Before making any decisions, the CRTC has asked the public for comments. Last week we highlighted a few from both sides, but in recent days two Internet heavyweights have chimed in.

The first submission comes from the Internet Infrastructure Coalition (i2Coalition), which counts Google, Amazon, Cogeco PEER1, and Tucows among its members. These are all key players in the Internet ecosystem, with a rather strong opinion.

In a strongly-worded letter, the coalition urges the CRTC to reject the proposed “government-backed internet censorship committee” which they say will hurt the public as well as various companies that rely on a free and open Internet.

“The not-for-profit organization envisioned by the FairPlay Canada proposal lacks accountability and oversight, and is certain to cause tremendous collateral damage to innocent Internet business owners,” they write.

“There is shockingly little judicial review or due process in establishing and approving the list of websites being blocked — and no specifics of how this blocking is actually to be implemented.”

According to the coalition, the proposal would stifle innovation, shutter legitimate businesses through overblocking, and harm Canada’s Internet economy.

In addition, they fear that it may lead to broad blockades of specific technologies. This includes VPNs, which Bell condemned in the past, as well as BitTorrent traffic.

“VPN usage itself could be targeted by this proposal, as could the use of torrents, another technology with wide legitimate usage, including digital security on public wifi, along with myriad other business requirements,” the coalition writes.

“We caution that this proposal could be used to attempt to restrict technology innovation. There are no provisions within the FairPlay proposal to avoid vilification of specific technologies. Technologies themselves cannot be bad actors.”

According to the i2Coalition, Canada’s Copyright Modernization Act is already one of the toughest anti-piracy laws in the world and they see no need to go any further. As such, they urge the authorities to reject the plan.

“The government and the CRTC should not hesitate to firmly reject the website blocking plan as a disproportionate, unconstitutional proposal sorely lacking in due process that is inconsistent with the current communications law framework,” the letter concludes.

The second submission we want to highlight comes from the Internet Society. In addition to many individual members, it is supported by dozens of major companies. This includes Google and Facebook, but also ISPs such as Verizon and Comcast, and even copyright holders such as 21st Century Fox and Disney.

While the Internet Society’s Hollywood members have argued in favor of pirate site blockades in the past, even in court, the organization’s submission argues fiercely against this measure.

Pointing to an extensive report Internet Society published last Spring, they inform the CRTC that website blocking techniques “do not solve the problem” and “inflict collateral damage.”

The Internet Society calls on the CRTC to carefully examine the proposal’s potential negative effects on the security of the Internet, the privacy of Canadians, and how it may inadvertently block legitimate websites.

“In our opinion, the negative impacts of disabling access greatly outweigh any benefits,” the Internet Society writes.

Thus far, nearly 10,000 responses have been submitted to the CRTC. The official deadline passes on March 29, after which it is up to the telecoms regulator to factor the different opinions into its final decision.

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The i2Coalition submission is available here (pdf) and the Internet Society’s comments can be found here (pdf).

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‘Set-top’ devices such as Amazon’s Fire TV have sold in their millions in recent years as the stream-to-your-living room craze continues.

Many commercial devices are intended to receive official programming in a legal manner but most can be reprogrammed to do illegal things.

Of course, this behavior has nothing to do with the manufacturers of such devices but a case launched in Mexico last year really took things to the next level.

Following a complaint filed by cable TV provider Cablevision, the Superior Court of Justice of the City of Mexico handed down an order in June preventing the importation of Roku devices and prohibiting stores such as Amazon, Liverpool, El Palacio de Hierro, and Sears from putting them on sale.

The ban was handed down in an effort to tackle the amount of pirated content being viewed through the devices. News circulating at the time suggested that sellers on social media were providing more than 300 channels of unauthorized content for around US$8 per month.

Of course, the same illegal content consumption also takes place via regular PCs, tablet computers, and even mobile phones. No one would consider banning them but the court in Mexico clearly didn’t see the parallels when it dropped the hammer on Roku.

Later that month, however, a light appeared at the end of the tunnel. A federal judge decided to temporarily suspend the import and sales ban, which also instructed banks to stop processing payments from accounts linked to third-party pirate services.

“Roku is pleased with today’s court decision, which paves the way for sales of Roku devices to resume in Mexico,” Roku’s General Counsel Steve Kay informed TorrentFreak at the time.

“Piracy is a problem the industry at large is facing. We prohibit copyright infringement of any kind on the Roku platform. We actively work to prevent third-parties from using our platform to distribute copyright infringing content. Moreover, we have been actively working with other industry stakeholders on a wide range of anti-piracy initiatives.”

But just as the sales began to flow once more, the celebrations were almost immediately cut short.

On June 28, 2017, a Mexico City tribunal upheld the previous decision which banned importation and distribution of Roku devices, much to the disappointment of Roku’s General Counsel.

“Today’s decision is not the final word in this complex legal matter,” Steve Kay said.

Indeed, since that date, Roku and retailers including Amazon, Walmart, Best Buy, Office Depot, Radio Shack and Sears have been fighting to have Roku devices put back on sale again, with several courts ruling against the appeals. Then last week there was another blow when federal judges in Mexico City and Torreón decided to keep the original suspension in place.

Forbidding the “importation, commercialization and distribution” of Roku devices, the judges maintained that Roku devices could be used as an instrument for “dishonest commerce” in violation of Mexico’s copyright law.

The main argument in support of the ban is that Roku devices can still be used by people to gain access to infringing content. As a result, Cablevision believes that Roku should modify its devices to ensure that piracy isn’t possible in the future.

“It is necessary for Roku to make adjustments to its software, as other online content distribution platforms do, so that violations of copyrighted content do not take place,” a Cablevision spokesperson said.

The decision to ban Roku devices can still be appealed. The company informs TorrentFreak that further legal action is on the cards.

“There have been several recent court rulings related to the ban on the sale of Roku devices in Mexico. In fact, a Federal court in Mexico City has already determined that the ban was improper; however, the ban remains in place,” says Roku spokesperson Tricia Misfud.

“While Roku’s devices have always been and remain legal to use in Mexico, the current ban harms consumers, the retail sector and the industry. We will vigorously pursue further legal actions with the aim of restoring sales of Roku devices in Mexico.”

Despite a nationwide sales ban, people who already have a Roku in their possession remain unaffected by recent developments. Since the use of Roku devices in Mexico and elsewhere is completely legal, current users will still receive regular software updates.

In associated news, Mexico’s Telecommunications Law Institute (IDET) reports that the Mexican Institute of Industrial Property (IMPI) has been blocking URLs used to distribute unauthorized content and apps.

While that will undoubtedly prove unpopular with pirates, one hopes that its execution is somewhat more precise than the wholesale banning of the entire Roku platform.

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The “repeat infringer” issue is a hot topic in US Courts, leading to much uncertainty among various Internet services.

Under the DMCA, companies are required to implement a reasonable policy to deal with frequent offenders.

This not only applies to commercial Internet providers, as Cox found out the hard way, but also to websites that host user-uploaded content, such as video and image hosting services.

Last week the United States Court of Appeals for the Ninth Circuit issued an order that provides some further clarification on how a repeat infringer policy should be documented.

The case in question was filed by adult content producer Ventura Content, which accused the adult-themed site Motherless of copyright infringement. While Motherless relies on user-uploaded content, the adult producer argued that it is liable for pirated content on its site.

In a majority ruling, the Court found that Motherless did not know about the alleged infringements before the lawsuit was filed and removed them within a day of being properly alerted.

This means that the site is entitled to safe harbor protection if it implemented a reasonable repeat infringer policy, which brings us to the crux of the case.

The operator of the site, Joshua Lange, is the sole employee who single-handedly deals with all takedown requests. The site also has a page informing users that there is a repeat infringer policy, without providing specific details.

The adult content producer argued that the site had failed to reasonably implement such a policy, but the Court disagreed, noting that the DMCA doesn’t prescribe a written policy.

“The details of the termination policy are not written down. However, the statute does not say that the policy details must be written, just that the site must inform subscribers of ‘a policy’ of terminating repeat infringers in appropriate circumstances,” the Court states.

In this case, the details of the policy were in the mind of the operator, who made his decisions based on a case-by-case evaluation.

“Lange uses his judgment, not a mechanical test, to terminate infringers based on the volume, history, severity, and intentions behind a user’s infringing content uploads.”

The fact that the details of the policy were not spelled out doesn’t mean that Motherless has no safe harbor protection, although this may be different for large companies.

“A company might need a written policy to tell its employees or independent contractors what to do if there were a significant number of them, but Motherless is not such a firm.

“So the lack of a detailed written policy is not by itself fatal to safe harbor eligibility. Neither is the fact that Motherless did not publicize its internal criteria,” the Court adds.

Surprisingly, the site’s operator didn’t keep any written logs of repeat infringers either. He simply kept track of them in his head and terminated more than a thousand accounts this way. This didn’t work flawlessly, as a few repeat infringers slipped through, but the Court believes it was good enough.

“It is tempting, perhaps, to say that a policy is not ‘reasonably’ implemented if it does not include both a database of users whose uploads have generated DMCA notices and some automated means of catching them if they do it again. But the statute does not require that,” the order reads.

Overall, the Court sides with Motherless and its operator and affirmed the summary judgment in its favor.

This case is unique in many ways. Among other things, it shows that written details or logs are not always required for a “reasonable” repeat infringer policy. While this could be different for large companies, it is likely to be referenced frequently in related cases.

This week, hosting provider Steadfast was quick to use the ruling to argue that it sufficiently adopted and informed users of its repeat infringer policy.

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A copy of the Ninth Circuit Court of Appeals ruling is available here (pdf).

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According to the RIAA, ShareBeast.com and AlbumJams.com were responsible for the illegal distribution of “a massive library” of popular albums and tracks.

With a nod to the sensitivity of pre-release piracy, the sites were blamed for offering “thousands of songs” that hadn’t yet reached their official release dates. In September 2015, U.S. authorities shut them down, placing seizure notices on both domains.

The RIAA claimed that ShareBeast was the largest illegal file-sharing site operating in the United States, noting that the site’s IP addresses at the time indicated that at least some hosting had taken place in Illinois.

“Millions of users accessed songs from ShareBeast each month without one penny of compensation going to countless artists, songwriters, labels and others who created the music,” RIAA Chairman & CEO Cary Sherman commented at the time.

Two years later in September 2017, then 29-year-old former ShareBeast operator Artur Sargsyan pleaded guilty to one felony count of criminal copyright infringement, admitting to the unauthorized distribution and reproduction of over one billion copies of copyrighted works.

“Through Sharebeast and other related sites, this defendant profited by illegally distributing copyrighted music and albums on a massive scale,” said U. S. Attorney John Horn.

“The collective work of the FBI and our international law enforcement partners have shut down the Sharebeast websites and prevented further economic losses by scores of musicians and artists.”

The Department of Justice reported that from 2012 to 2015, Sargsyan used ShareBeast as a pirate music repository, illegally hosting music by Ariana Grande, Katy Perry, Beyonce, Kanye West, and Justin Bieber, among others. Sargsyan linked to that content from Newjams.net and Albumjams.com, and granted access to the public.

If Sargsyan had responded to takedown notices more positively, it’s possible that things may have progressed in a different direction. The RIAA sent the site more than 100 copyright-infringement emails over a three-year period but to no effect.

This led the music industry group to get out its calculator and inform the DoJ that the total monetary loss to its member companies was “a conservative” $6.3 billion “gut-punch” to music creators who were paid nothing by the service.

Given the huge numbers involved, it’s likely that Sargsyan hoped his 2017 guilty plea would result in a more forgiving sentence. Yesterday, however, the full weight of the law came crashing down.

California resident Artur Sargsyan was sentenced by U.S. District Judge Timothy C. Batten, Sr., to five years in prison, followed by three years of supervised release. The now 30-year-old was also ordered to pay $458,200 restitution and ordered to forfeit $184,768.87.

“Sargsyan operated one of the most successful illegal music sharing websites on the Internet,” said U.S. Attorney Byung J. “BJay” Pak.

“His reproduction of copyrighted musical works were made available only to generate undeserved profits for himself. The incredible work done by our law enforcement partners and prosecutors in light of the complexity of Sargsyan’s operation demonstrates that we will employ all of our resources to stop this kind of theft.”

David J. LaValley, Special Agent in Charge of FBI Atlanta, said that Sargsyan was warned several times that he was violating the law by illegally sharing copyrighted works, but chose to ignore the warnings.

“His sentence sends a message that no matter how complex the operation, the FBI, its federal partners and law enforcement partners around the globe will go to every length to protect the property of hard working artists and the companies that produce their art,” LaValley said.

Given the music group’s lengthy statements on the Sharebeast topic in the past, thus far the RIAA has been relatively brief. Welcoming news of the sentencing via Twitter, the major labels’ figurehead congratulated the law enforcement bodies behind the successful prosecution.

“Congrats to U.S. Attorney BJay Pak + his team along with @TheJusticeDept CCIPS Division and @FBIAtlanta for their leadership on this important case,” the RIAA wrote.

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After a film first shows up in theaters, movie fans usually have to wait a few months before they can get a DVD or digital download, depending on the local release strategy.

This delay tactic, known as a release window, helps movie theaters to maximize their revenues. However, for many pirates, this is also a reason to turn to unauthorized sites and services.

Many of the most pirated movie titles are not yet available to buy or rent online, but they are on The Pirate Bay, Fmovies, and elsewhere. Perhaps only a fraction of these pirates would pay, if they could, but release windows are not helping.

This critique isn’t new and, according to a working paper published by Pepperdine University researchers, the tide is turning. Movie release windows are shrinking rapidly, for digital downloads at least.

In their paper titled: Popcorn or Snack? Empirical Analysis of Movie Release Windows, the researchers compared the release windows of DVDs to those of electronic sell-through movies (EST) on iTunes, Amazon, and YouTube. EST movies are also called “download to own” and have a comparable release date to rentals, in most cases.

The results show that between 2012 and 2017, the release windows for DVDs remained relatively stable at three to four months. However, for digital downloads there was a sharp decrease over the same period.

“Based on our results, the EST release date has been approaching the DVD release date at a steady and significant average rate of about 23 days per year,” the researchers write.

“Within only two years, we have seen the average EST release window shrink by more than half, from 255 days in the 2nd quarter of 2012 to 114 days in the 2nd quarter of 2014. The EST window has pretty much reached the average 113 day DVD window in our sample.”

Shrinking window

Since 2015, digital downloads actually have a slightly smaller release window than DVDs on average, making it the first release channel after movie theaters.

While this is good news for movie fans, it’s uncertain if this trend will continue. The current release windows appear to be carefully chosen to ensure that they don’t cannibalize box office revenues.

This is nicely illustrated in the figure below, which shows that 95% of all box office revenues are generated in the first two months, and 99% after four months. The optimal release window falls somewhere in the middle.

That would also explain why the DVD release window isn’t shrinking any further.

Cumulative box office revenue

The researchers see room for further improvement, however. Decreasing the video on demand release window can cost a few percents of box office revenue, at most, but it might result in a significant boost in online sales.

And with the piracy rates not showing any decline, movie studios might feel the need to experiment a little.

“Given that most of the theater revenues are captured within the first two months and given that movie piracy shows no signs of slowing down, there will be increasing pressure for studios to release movies earlier in secondary channels to increase revenues coming from these channels,” the researchers write.

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The full paper, written by Dr. Nelson Granados and Dr. John Mooney, is available here.

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