Should Hosts Charge Customers for DMCA Notices?

Limestone Networks LogoRecently, as I was doing a series of DMCA takedown notices and landed on the site for Limestone Networks, a Web host specializing in dedicated servers and higher-end hosting packages.

However, when I looked at their Terms of Service, I noticed something unusual. Under their DMCA policy, the company laid out financial fines and penalties for those who were the subject of a DMCA notice but failed to respond.

According to the policy, a customer who is notified via a ticket of a DMCA notice and does not resolve the situation or respond in 48 hours will have their connection cut off at the IP address level and may be assessed a $25 fine. After 72 hours the service is suspended and, after seven days of being suspended without a resolution, the account will be cancelled and the client may be hit with a $200 Abuse Charge. All data will be destroyed after the cancellation date.

In addition to the above fees, clients that don’t resolve or respond to situations will also pay “research fees” up to $50 per hour that Limestone must spend to investigate the matter. Those fees, however, are only charged if the claims are found to be valid.

This policy raises some very interesting questions, namely whether it is appropriate for the host, which is the body receiving protection under the DMCA, to charge customers for processing DMCA claims?

Caveats About the Policy

To be clear, this policy isn’t targeted at everyone who has a DMCA notice filed against them. There is no automated charge for simply having a DMCA noticed filed against you if you’re a customer, merely one for customers who don’t respond nor resolve the situation within 48 hours of being notified.

Even then though, it’s not necessarily a guarantee that you would be hit with the charge. The policy allows Limestone to issue these charges at their discretion.

It is also worth noting that Limestone Networks specializes in unmanaged (unsupported) dedicated servers and routinely charge extra for either managed plans (plans with support) or for technical support. They also charge fees for other forms of suspension, including lack of payment, and excessive abuse reports resulting in a termination, both of which are also $200.

In short, Limestone is charging the customer for the time it takes their employees to resolve the issue, something that they do in other areas as well.

Also, given the pricing of Limestone’s products, which start at $120 for the lowest-end server, the amounts involved aren’t likely as huge of a burden as they would be for someone paying only $10 per month for a shared hosting account.

However, this still raises questions as to whether this is appropriate. Limestone is the one being protected by the DMCA (the law provides the host with safe harbor, not the customer) and the host obtains all of the legal benefit from complying. Is it appropriate to pass along this cost to their customer?

Also, it raises questions about whether or not customers acting in good faith could still get hit with the charges. For example, what if a DMCA notice arrived right as the customer left for vacation and they were unable to respond? These aren’t easy questions to answer.

How Other Hosts Handle It

Limestone is a rarity in this area, even among higher-end hosts.

Cheaper hosts, such as most cloud hosts and shared hosts, don’t charge for DMCA notices because there isn’t much effort in dealing with them. They have a set process in place and are able to quickly forward the notice on to the client and, if there is no resolution, suspend the account.

But while you may not be charged for a DMCA notice at these companies, they aren’t likely to stand up for you either. The few bucks per month doesn’t give them much motivation to defend you or give you a second chance. Since your account takes only a minimal amount of hardware, there’s not much burden in leaving it suspended and, if you leave, they can easily fill what you left behind with another customer.

This system of charging for DMCA notices is, largely, a product of the realities of higher end hosting where support and hardware costs are spread out across fewer customers. This can make a DMCA notice much more burdensome, especially if it requires suspending an account.

But since they can’t pass on the costs to the DMCA filer, at least in Limestone’s case, they seem to pass on at least some of the costs to the affected customer.

Truth be told though, we don’t know for certain how many hosts do that in DMCA cases. The reason is that copyright issues are often included in a host’s TOS and many higher-end hosts have charges for investigating cases of abuse. Limestone may only be unique in that it has a separate price structure for DMCA cases.

Bottom Line

In the end, this all comes down to the delicate balancing act of keeping the rights of the customer, hosting company and the copyright holder in check. Customers need to be reasonably protected against false notices, hosts need to not be unduly burdened by DMCA notices and copyright holders need to be certain that they can get infringements of their work removed swiftly.

Striking this balance is never easy and some hosts do it better than others. But hopefully this issue will re-spark that debate and encourage discussion on how it can best be maintained.

Note: I contacted Limestone over 24 hours before the publishing of this article via their web form, reaching out to both sales and marketing, but received no comment from them. I will update this piece should they respond.

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