Major Labels, RCN Ordered Into Mediation in High-Stakes Piracy Liability Lawsuit

RCN mediation piracy
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RCN mediation piracy
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Photo Credit: Amy Syiek

Internet provider RCN and several major music labels are exploring their options to settle their high-stakes piracy liability lawsuit.

Several major music labels and internet provider RCN are exploring options to settle their piracy liability dispute, with a mediator assigned this week to help the parties reach a deal. Four years ago, RCN was sued by major music industry companies, including Arista Records, Sony Music Entertainment, Universal Music, and Warner Records.

The music companies alleged in their filing that RCN wasn’t doing its diligence as an internet provider to stop subscribers from pirating on its network. Rather than terminating the accounts of persistent offenders, the company looked the other way, the labels posited.

Initially, RCN responded to the allegations with a counterattack, accusing the RIAA and its anti-piracy partners of sending “false and fraudulent” DMCA notices and arguing that such notices should not serve as evidence to warrant disconnection.

But this countersuit failed, with a New Jersey federal court concluding in two instances that RCN failed to show that it was financially affected by any erroneous or incomplete DMCA notices. Thus, the music labels’ case continued.

While the stakes are high in these liability lawsuits, with RCN facing potentially hundreds of millions in damages claims and tens of thousands of internet subscribers at risk of account termination — both parties are exploring options to settle out of court before it leads to a high-profile trial. 

“More recently, the Parties have communicated directly about the possibility of settlement but are not currently engaged in settlement discussions. The Parties are open to discussing potential settlement avenues with the Court,” they wrote last week.

To help the process along, U.S. District Court Judge Robert Hirsch appointed a mediator this week, writing, “Counsel and the parties (including individuals with settlement authority) shall attend mediation sessions as requested by the Mediator.”

But a settlement in this lawsuit will not end the piracy-related problems at RCN, as the provider is embroiled in a similar case with several movie companies, with a new law firm and additional evidence providers joining the fray.