Small Businesses Should Take Precautions to Avoid Allegations of Online Piracy

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Small businesses that offer Internet access to their customers should take steps now to avoid allegations of online piracy, according to the Virginia office of the National Federation of Independent Business.

Record labels, movie studios and other industry groups struck a deal this month under which participating Internet providers will issue warnings to customers whose accounts are allegedly used to steal content. NFIB is not a party to the agreement.

¬†“Small businesses that offer Internet access, such as a coffee shop or a hotel or even a car mechanic with a waiting area, should be aware of the industry’s crackdown on piracy and take steps to ensure their customers aren’t using the service to steal content,” said Nicole Riley, state director of NFIB/Virginia, the commonwealth’s leading small-business association.

 Under the deal, customers whose accounts are allegedly used for piracy will receive at least five alerts from their Internet provider.

Upon sending the fifth notice, the Internet provider may implement certain “mitigation measures” to stop the alleged piracy, including reducing Internet speeds or redirecting traffic to a special landing page until the customer contacts the Internet provider to discuss the issue.

“Internet service providers wouldn’t have to pull the plug on a customer after the sixth notice, but that’s a possibility, and that’s where businesses have to watch out,” said Beth Milito, senior executive counsel for NFIB.

“Small businesses rely on their Internet connections the same way they do the telephone,” she said. “It’s how they communicate with customers and vendors. It’s where they do business.”

Businesses can challenge a notice by paying a $35 filing fee and requesting an independent review, or they may challenge any action in court, but doing so would be time-consuming and take resources away from the business, Milito said.

“That’s why small businesses need to take precautions to prevent customers or even employees from using their Internet connection to steal content,” she said.

One easy way to discourage abuse is for businesses that offer Wi-Fi can prevent people who aren’t customers from using their Internet connection by requiring a password, Milito said.

“For example, they could print a password on the receipt and change it periodically, to prevent non-customers from using the service,” she said.

Businesses can also block access to certain websites and types of websites, Milito said. “This requires a little bit of know-how on the part of the small-business owner, and it may accidentally block access to legitimate websites, but it also can discourage people from using a business’ network to steal content,” she said.

“With more and more people carrying smartphones and even tablets, free Wi-Fi can help a small business attract and keep customers,” Milito said, “but unless a business owner uses commonsense and takes precautions, those customers could come at a hefty price.”