Language In The DMCA Limits How ISPs Can Cache Content On Their Network

While most ISPs have been slow to build and deploy their own CDNs, we all know that it's only a matter of time before many of them bring content delivery in-house, especially for video. While third party CDNs still get most of the press, there are quite a few vendors with solutions in the market that are enabling telcos and ISPs to become their own content delivery network. To date, we've seen very few ISPs and telcos in North America spend the time and money to build out their own CDN, yet in Europe and Asia, many ISPs are well on their way to having completed their initial build out.

Talking to many of the vendors who supply hardware and software solutions to the ISPs, the vast majority of their revenue comes from Europe and Asia, not North America which validates the trend that so far, ISPs in the U.S. have been slow to adopt an in-house model. While discussing these trends with a supplier yesterday, it was pointed out to me that the Digital Millennium Copyright Act (DMCA) includes language that tells service providers exactly how they can and can't cache third party content on their network, without the need to have any kind of deal with the content owner.

I had not looked at the DMCA in many years, but sure, enough, section 512b entitled "Limitation for System Caching" outlines the rules ISPs must follow. The limitation applies to acts of intermediate and temporary storage, when carried out through an automatic technical process for the purpose of making the material available to subscribers who subsequently request it. It is subject to the following conditions:

• The content of the retained material must not be modified.
• The provider must comply with rules about “refreshing” material—
  replacing retained copies of material with material from the original
  location— when specified in accordance with a generally accepted
  industry standard data communication protocol.
• The provider must not interfere with technology that returns “hit”
  information to the person who posted the material, where such
  technology meets certain requirements.
• The provider must limit users’ access to the material in accordance
  with conditions on access (e.g., password protection) imposed by the
  person who posted the material.
• Any material that was posted without the copyright owner’s
  authorization must be removed or blocked promptly once the service
  provider has been notified that it has been removed, blocked, or
  ordered to be removed or blocked, at the originating site.

In a conversation I had with two ISPs this morning, both of them stated that the language in the DMCA does not deter them from building their own CDN, but does create an additional headache for them when they do decide the market is big enough for them to bring video delivery in-house. While every company has their own interpretation of what is considered a "big" market and the right time to enter it, one has to think most ISPs won't be able to wait too much longer.

Outside of the U.S., European based ISPs also have to follow a set of rules as set forth in the EU European E-Commerce Directive which also lists specific rules pertaining to caching systems.

While I don't think the DMCA is stopping ISPs from building and deploying their own CDNs, some of them clearly see it as another headache to bringing content delivery in-house and putting the systems in place that are necessary to comply with the DCMA. As more ISPs build and deploy CDN systems, it's going to be interesting to watch what impact the DMCA could have since the ISPs will be taking content from third parties, without their permission, and caching it on their network.