Carphone Warehouse stares down BPI and UK.gov on three strikes

Carphone Warehouse has called the government's bluff by stating that it will not cooperate with the record industry to clamp down on copyright infringement over peer-to-peer networks.

In a statement today, CEO Charles Dunstone said: "Our position is very clear, we are the conduit* that gives users access to the Internet, we do not control the Internet nor do we control what our users do on the Internet."

Carphone's refusenik stance comes as a surprise at this stage. The government has been piling pressure on ISPs for several months, demanding they voluntarily work with rights holders to warn customers against sharing copyright music, films and software.

Dunstone continued: "I cannot foresee any circumstances in which we would voluntarily disconnect a customer's account on the basis of a third party alleging a wrongdoing. We believe that a fundamental part of our role as an ISP is to protect the rights of our users to use the Internet as they choose. We will fight any challenge to the sanctity of this relationship with every legal option available to us."

Many Register contacts in the industry have been saying privately that some sort of disconnection regime is now inevitable. In a bid to concentrate minds, ministers have said that legislation could be drawn up in time for the Queen's Speech in November if no voluntary progress is made.

A spokesman for Carphone Warehouse told The Register: "We don't believe legislation will be forthcoming. And we're willing to test that." He said that the firm had taken the stand because it is unwilling to be bullied by a letter from the BPI that threatened court action if it didn't agree to comply, in writing, within 14 days. "There's a difference between that and the BPI's public statements on cooperation," he said.

The BPI replied today: "We passionately believe that working in partnership with ISPs to develop first class, safe, legal, digital music services is the way forward.

"Talk Talk claims it is their role to 'protect the rights of their customers to use the internet as they choose'. We strongly disagree on this point when that usage is illegal.

"Contrary to Talk Talk's claims, passing advice on to their customers is not 'unreasonable' or 'unworkable'. We are not asking ISPs to act as the police. We are asking them to act on information we provide to them."

CPW is the first major ISP to challenge the proposed scheme publicly. Its spokesman said it wants to find a solution, but said: "We're sure the BPI can come up with something better."

Over the weekend Virgin Media agreed to talks with the BPI with a view to trialling a "three strikes" system of written warnings, followed by disconnection for the most persistent infringers. Tiscali, the UK's fourth biggest ISP, implemented similar rules to act on BPI evidence successfully last summer, only for a row over who should pay for it to scupper the relationship.

Dunstone charged today that the record industry needs to adapt its business model to new technologies rather than pass its problems onto ISPs. In fairness to the BPI, the record industry's negotiations with ISPs are running in three strands.

One, the most contentious among the net users, is pushing the three strikes regime. A second plans to change net users' perception of copyright infringement as an acceptable activity. The third - plans to bundle music into ISP subscriptions - is very sensitive for a host of economic reasons, but is under active discussion as a "carrot" to balance the three strikes "stick".

That new joint business model was promoted by artists' rights representative Feargal Sharkey at the recent annual ISPA awards. ®

*The "mere conduit" position taken by Dunstone today has been essential to ISPs' defence against myriad legal threats over the years, including libel claims. To many Reg readers, the credibility of that position is itself now threatened by the deal Carphone Warehouse has made with Phorm to intercept and profile its customers' web browsing.