Intellectual Property Policy
Internet Service Providers Report
Tables:
Table 1: Respondent Firms
| Universe of Subscribers24 |
8,000,000 |
| Sampling Rate of Subscribers |
80.4% |
| |
Large ISPs |
Small ISPs |
| Number of Firms |
8 |
48 |
| Mean Subscribers |
766,000 |
6,400 |
| Median Subscribers |
733,000 |
1,400 |
| Types of Internet Access |
Dial-up, DSL, Cable |
Dial-up, DSL, Cable, Wireless |
| Provinces Served |
All |
AB, BC, NB, NL, ON, QU, SK |
| Total Subscribers Represented |
6,128,000 |
307,200 |
| Universe of Firms23 |
8 |
472 |
| Sampling Rate of Firms |
100% |
10.2% |
Key Implication: Respondent firms represent 100% of the large ISPs in Canada and more than 80% of all subscribers in Canada.
Table 2: Awareness of Copyright Laws & Current Practices
| |
Large ISPs |
Small ISPs |
| |
Yes |
No |
Don't Know |
Yes |
No |
Don't Know |
| Aware of Canadian Law |
100% |
0% |
0% |
46% |
54% |
0% |
| Aware of US Law |
75% |
25% |
0% |
40% |
58% |
2% |
| Aware of EU Law |
63% |
38% |
0% |
21% |
77% |
2% |
| Aware of Australian Law |
50% |
50% |
0% |
19% |
79% |
2% |
| Internal Legal Counsel for Copyright Liability |
88% |
13% |
0% |
2% |
92% |
4% |
| Sought External Counsel for Copyright Liability |
13% |
88% |
0% |
19% |
77% |
4% |
| Copyright Insurance |
25% |
13% |
63% |
15% |
67% |
19% |
| Current Practices |
| Universal Notice and Notice |
75% |
|
|
50% |
|
|
| Selective Notice and Notice |
0% |
|
|
8% |
|
|
| No Answer / Other |
25% |
|
|
42% |
|
|
Key Implication: Large ISPs are more aware of copyright laws and are much more likely to have retained legal advice on copyright issues than small ISPs.
Table 3: Average Number of Copyright Infringement Notices per ISP per Month Large ISPs Small ISPs
| |
Large ISPs |
Small ISPs |
| |
Notices |
Annual
% Change |
N |
Notices |
Annual
% Change |
N |
| 2001 |
443 |
|
1 |
|
|
|
| 2002 |
595 |
34% |
3 |
|
|
|
| 2003 |
2198 |
269% |
4 |
|
|
|
| 2004 |
4372 |
99% |
6 |
|
|
|
| 2005 (Q1) |
4426 |
67%25 |
7 |
18 |
n/a |
47 |
| 2001-2005 Average |
|
77.8% |
|
|
n/a |
|
Key Implication: The number of copyright infringement notices received by large ISPs is increasing at an average rate of 77.8% per year.
Table 4: Variance in Copyright Infringement Notices, Q1 2005
| |
Large ISPs |
Small ISPs |
| |
Mean |
Min |
Max |
SD |
Mean |
Min |
Max |
SD |
| CI Notices / 1000 HS subscribers / month |
7.7 |
1.2 |
15.8 |
5.2 |
2.3 |
0.0 |
51.7 |
8.5 |
Key Implication: Large ISPs receive more copyright infringement notices per high-speed subscriber than do small ISPs (approximately 3.3 times as many).
Table 5: Cross-Sectional Analysis of Copyright Notices, Q1 2005
Dependent Variable: Log Infringement Notices Per Month
Standard errors in parentheses
* significant at 10%; ** significant at 5%; *** significant at 1% |
| |
Model 1 |
Model 2 |
Model 3 |
| Log Dial-Up Subscribers |
0.2811 |
0.162 |
0.1765 |
| |
(0.0743)*** |
(0.0507)*** |
(0.0538)*** |
| Log DSL Subscribers |
0.414 |
0.1782 |
0.1565 |
| |
(0.0751)*** |
(0.0571)*** |
(0.0597)** |
| Log Cable Subscribers |
0.7065 |
0.3497 |
0.3598 |
| |
(0.0657)*** |
(0.0617)*** |
(0.0641)*** |
| Large ISP Indicator |
|
4.7253 |
|
| |
|
(0.5888)*** |
|
| Log Dial-Up Sub * Large ISP |
|
|
-0.2140 |
| |
|
|
(0.1718) |
| Log DSL Sub * Large ISP |
|
|
0.5813 |
| |
|
|
(0.1641)*** |
| Log Cable Sub * Large ISP |
|
|
0.3711 |
| |
|
|
(0.0619)*** |
| Constant |
-3.3171 |
-1.4721 |
-1.4767 |
| |
(0.5376)*** |
(0.4194)*** |
(0.4350)*** |
| Observations |
51 |
51 |
51 |
| R-squared |
0.7200 |
0.8833 |
0.8879 |
Key Implications:
- High-speed subscribers (Cable or DSL) generate more copyright infringement notices than dial-up subscribers.
- Large ISPs receive more copyright infringement notices per high-speed subscriber than do small ISPs.
Table 6: Panel Analysis of Copyright Notices, Large ISPs, 2001-2005
Dependent Variable: Log Infringement Notices Per Month
Standard errors in parentheses
* significant at 10%; ** significant at 5%; *** significant at 1% |
| |
Model 1 |
Model 2 |
Model 3 |
Model 4 |
| Log Dial-Up Subscribers |
-0.0125 |
0.0673 |
0.0016 |
1.0521 |
| |
(0.1537) |
(0.1640) |
(0.0495) |
(0.5223)** |
| Log DSL Subscribers |
1.5609 |
0.4506 |
0.2226 |
-0.9101 |
| |
(0.2046)*** |
(0.3567) |
(0.0885)** |
(0.5030)* |
| Log Cable Subscribers |
1.7191 |
0.5972 |
0.2934 |
0.2010 |
| |
(0.2531)*** |
(0.3977) |
(0.0898)*** |
(0.0918)** |
| Month |
|
0.0377 |
0.0710 |
|
| |
|
(0.0093)*** |
(0.0281)** |
|
| Month Squared |
|
|
-0.0005 |
|
| |
|
|
(0.0005) |
|
| Log Dial-Up Sub * Month |
|
|
|
-0.0244 |
| |
|
|
|
(0.0120)** |
| Log DSL Sub * Month |
|
|
|
0.0278 |
| |
|
|
|
(0.0119)** |
| Log Cable Sub * Month |
|
|
|
0.0035 |
| |
|
|
|
(0.0008)*** |
| Constant |
-14.2616 |
-1.4893 |
1.9458 |
3.4597 |
| |
(3.3461)*** |
(4.8853) |
(1.2051) |
(1.2183)*** |
| Observations |
162 |
162 |
162 |
162 |
| R-Squared: Within |
0.3476 |
0.3578 |
0.3416 |
0.2935 |
| R-Squared: Between |
0.2843 |
0.5926 |
0.6241 |
0.7118 |
| R-Squared: Overall |
0.1682 |
0.4387 |
0.4820 |
0.4960 |
Key Implication: Over the period 2001-2005, the number of copyright infringement notices received per high-speed (Cable and DSL) subscriber increased while the number of notices received per dial-up subscriber decreased.
Table 7: Estimates of Effect Size: CI Notices per 1000 Subscribers, Q1 2005
| Notes: 1. Estimates come from Tables 5 and 6. 2. The effect of the constant terms have been adjusted by 1/2 the squared standard error of the estimate to correct for the bias in log-log estimation. 3. Effect sizes from are evaluated at the mean values of notices and subscribers and "month" set at Jan 2005. |
| |
Cross-Sectional |
Panel, evaluated at Q1 2005 |
| |
Model 1 |
Model 2 |
Model 3 |
Model 1 |
Model 2 |
Model 3 |
Model 4 |
| Small ISPs |
| CI Notices / 1000 Dial-Up subscribers / month |
2.59 |
1.49 |
1.63 |
|
|
|
|
| CI Notices / 1000 DSL subscribers / month |
1.94 |
0.83 |
0.73 |
|
|
|
|
| CI Notices / 1000 Cable subscribers / month |
4.47 |
2.21 |
2.28 |
|
|
|
|
| Constant |
0.04 |
0.25 |
0.25 |
|
|
|
|
| Large ISPs |
| CI Notices / 1000 Dial-Up subscribers / month |
2.59 |
1.49 |
1.63 |
n/s |
n/s |
n/s |
-2.61 |
| CI Notices / 1000 DSL subscribers / month |
1.94 |
0.83 |
3.45 |
12.27 |
n/s |
1.75 |
3.12 |
| CI Notices / 1000 Cable subscribers / month |
4.47 |
2.21 |
4.62 |
14.75 |
n/s |
2.52 |
3.14 |
| Constant |
0.04 |
33.60 |
0.25 |
0.00 |
1.04 |
414.67 |
66.81 |
Key Implications:
- High-speed subscribers (Cable or DSL) generate more copyright infringement notices than dial-up subscribers.
- Large ISPs receive more copyright infringement notices per high-speed subscriber than do small ISPs.
Table 8: Most Frequent Originators of Copyright Infringement Notices26
| Rank |
Source |
Approx % |
| 1 |
US Studios (Movie, TV, Music) |
52.2% |
| 2 |
US Software Publishers |
17.9% |
| 3 |
Motion Picture Association of America (MPAA) |
13.8% |
| 4 |
US Bounty Hunters |
12.4% |
| 5 |
Canadian Software Publishers |
1.8% |
| 6 |
Other |
1.8% |
| 7 |
Canadian Music (CRIA) |
0.1% |
Key Implication: The majority (98%) of copyright infringement notices come from non-Canadian sources.
Table 9: Typical Notice and Notice Process and Associated Costs Large ISPs Small ISPs
| Large ISPs |
Small ISPs |
- Receive notice, extract relevant information — IP address, date, time, infringing content, originator of notice.
- Verify information in notice to see if valid.
- Entry in incident database created to store details of notice.
- Look up IP address lease to identify either MAC address of device or subscriber account ID directly.
- (If necessary) Look up MAC address in modem database, link to subscriber account ID.
- Look up user contact information in subscriber/billing database.
- Email notice prepared from template and sent to subscriber.
- Details stored in incident database.
|
- Receive notice, extract relevant information — IP address, date, time, infringing content, originator of notice.
- Look up IP address lease to identify either MAC address of device or user account directly.
- (If necessary) Look up MAC address in modem database, link to user account ID.
- Look up user contact information in subscriber/billing database.
- Contact customer by email
- Record of notice stored in subscriber account.
|
| |
by ISP |
by Notice |
|
by ISP |
by Notice |
| Average Time Required (minutes) |
12.3 |
12.2 |
Average Time Required (minutes) |
47.4 |
16.8 |
| Average Marginal Cost / Minute |
$0.71 |
$0.72 |
Average Marginal Cost / Minute |
$0.69 |
$0.31 |
| Overhead Cost / Notice |
$3.00 |
$3.00 |
Overhead Cost / Notice |
$ - |
$ - |
| Average Cost / Notice |
$11.73 |
$11.76 |
Average Cost / Notice |
$32.73 |
$5.20 |
| Cost Recovery |
Yes: 0 % No: 100% |
Cost Recovery |
Yes: 0 % No: 100% |
| |
Fixed Costs |
Variable Costs |
|
Fixed Costs |
Variable Costs |
| Administrative |
100% |
14% |
Administrative |
0% |
25% |
| Legal |
57% |
0% |
Legal |
21% |
63% |
| Systems Development |
71% |
14% |
Systems Development |
16% |
0% |
| Systems Integration |
71% |
0% |
Systems Integration |
11% |
0% |
| Data Retrieval |
100% |
100% |
Data Retrieval |
11% |
0% |
| Data Storage |
100% |
100% |
Data Storage |
11% |
0% |
| Record Keeping |
100% |
100% |
Record Keeping |
11% |
0% |
| Postage |
0% |
0% |
Postage |
0% |
0% |
| Other: Labour |
0% |
100% |
Other: Labour (may be owner) |
13% |
100% |
Table 10: Typical Data Sources used in Notice and Notice
| |
Large ISPs |
Small ISPs |
| Data Source |
Used? |
Flat File |
RDBMS |
Used? |
Flat File |
RDBMS |
| DHCP Log File |
83% |
 |
|
60% |
|
|
| RADIUS or similar |
17% |
|
|
13% |
|
|
| MAC Address |
83% |
|
|
29% |
|
|
| Subscriber / Billing Account |
100% |
|
|
38% |
|
|
| Incident Database |
100% |
|
|
0% |
|
|
| Average Number of Data Sources |
3 |
2.2 |
| Average time data retained |
|
|
| Current File |
5.2 months |
9.7 months |
Key Implication: Following the NN practice requires ISPs to integrate data across multiple systems and data formats (on average, 3 different data sources for large ISPs and 2.2 different sources for small ISPs).
Table 11: ISP Pricing
| |
Large ISPs |
Small ISPs |
| |
Yes |
No |
Yes |
No |
| Price Changes |
88% |
13% |
60% |
40% |
| Pricing Close to Competitors |
100% |
0% |
72% |
28% |
| Versions |
88% |
13% |
60% |
40% |
| Three Versions of High-Speed |
100% |
|
59% |
|
| Other |
0% |
|
41% |
|
| Promotions |
100% |
0% |
68% |
32% |
| Bundles |
100% |
0% |
n/a |
Key Implication: The Canadian ISP industry is price competitive, with the majority of ISPs offering promotions to attract new customers and setting their prices to be close to their competitors.
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