Major labels considering ISP surcharge

In an effort to rein in the chaos of online file sharing, the music industry is considering a deal that asks Internet service providers (ISPs) to pay a monthly surcharge for the sharing taking place via P2P servers. Jim Griffin, digital-strategy consultant for three of the four major labels, recently proposed a plan to collect a surcharge from ISPs—about $5 per user every month—and distribute the revenue to producers, artists and songwriters according to their popularity on P2Ps. With this plan, the companies hope to “monetize the anarchy” of music sharing.

The music industry rejected a similar fee-collection plan in 2004, opting instead to target single users. As the Recording Industry Association of America (RIAA), the companies filed several successful lawsuits against “file horders” on P2P servers but not nearly enough to cover the probable damages. To give some perspective, The NPD Group reported that almost 20 percent of U.S. Internet users downloaded music illegally last year.

The music industry's shift to holding ISPs accountable for users' illegal activities has already taken shape abroad in the form of a lawsuit against Irish ISP Eircom. The four major labels charged Eircom with being “well aware” of the “grand scale” music piracy taking place through its facilities, a phenomenon which they say contributed to a “rapid and accelerating” decline in the music industry's revenues.

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