Verizon's warning letter it's sending to filesharers  (Source: Verizon via CNET)
RIAA cheers Verizon's decision to cut off pirates

Judgment day has begun for pirates -- at least the ones subscribed to Verizon.  While telecoms internationally in Britain and elsewhere have for the most part vigorously opposed the music and film industry's suggestion that filesharing users be cut after three strikes, Verizon appears to be the first to have actually embraced the idea without any sort of government compulsion.

Verizon Online spokeswoman Bobbi Henson comments, "We've cut some people off.  We do reserve the right to discontinue service. But we don't throttle bandwidth like Comcast was doing. Verizon does not have bandwidth caps."

The decision is a major one as Verizon's wired and wireless broadband internet packages have over 8 million subscribers in America.  The company is likely in a tie for third place with Time Warner, and only trails Comcast and AT&T in terms of number of subscribers.

The big players like Comcast have in the past typically been content with the role of being a mostly "dumb pipe" ignoring what goes through them as long as it is not slowing their network.  Occasionally Comcast and others have argued that high-volume traffic such as peer-to-peer filesharing needs to be throttled to a lower speed to save bandwidth.

Verizon's stand is quite a departure from this mindset as it marks the first time a major U.S. telecom is looking to voluntarily police its customer's activities in mass.  Many are speculating that the Recording Industry Association of America made some sort of deal with Verizon to convince them to adopt the provision.  The RIAA, a notorious anti-piracy agency, in December 2008 announced that it was mostly discontinuing its expensive campaign of suing citizens and instead had "agreements in place" with ISPs to punish filesharers via a "graduated response".  It appears that it may have at last finalized one of those agreements.

Verizon will not reveal how many customers it has axed, though Ms. Henson claims the numbers are relatively small.  She says that the measure is working as the number of subpoenas it's now getting over P2P traffic "are isolated and not at all widespread" (of course this is likely due to the RIAA's reduced litigation campaign).

Ms. Henson also claims that scolding file sharers with warnings is working effectively.  She states, "We've found that we don't have to warn most people a second time.  Most people stop. Or they tell whoever is doing it to stop."

The warning letters were first sent out in April.  Ms. Henson says that it's likely that teenagers were to blame for a lot of the filesharing traffic and the letters revealed their activities to their parents, putting their filesharing days to an end.  She describes, "You get a teenager doing it, and the parent gets the e-mail, and they tell them to cut it out."

The process goes like this -- copyright holders (RIAA, MPAA) monitor user traffic online and identify IPs that are on Verizon's network.  They then get a court order -- basically a formality -- telling Verizon to hand over the user's contact info.  Verizon then sends a warning to the customer.

Of course one major question is whether Ms. Henson's conclusions about efficacy of the warnings are true at all, considering other factors that may be at play.  It's relatively easy to adopt IP-masking technology when filesharing -- warned customers may be wising up.  It is also possible that some of the filesharers switched to a different provider over anger about Verizon's network policing.

Still, her claims do appear to hold true at least in some cases.  States one CNET reader, "[I'm] stopping cold turkey.  With Netflix at $10 a month, it's not worth it for me to risk a possible big fine. I'm going legit."

"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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