Offering free Wi-Fi may be illegal

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Wi-Fi Warning: Small Businesses Take Note
New copyright deal could nail firms providing free Internet access
Oregon NFIB

SALEM, Ore., July 18, 2011— America’s leading small-business association issued a warning to Main Street entrepreneurs who offer Internet access to their customers: Take steps now to avoid allegations of online piracy.

Record labels, movie studios and other industry groups recently struck a deal where participating Internet providers will issue warnings to customers whose accounts are allegedly used to steal content. (The National Federation of Independent Business, which issued today’s warning, 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 Jan Meekcoms, NFIB’s Oregon state director. “Some people don’t want to pirate music from home, because they’re afraid of getting caught, so they’ll use the Wi-Fi connection of a neighbor or the coffee shop down the street.”
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. 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 added. “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 for businesses offering Wi-Fi is to prevent people who aren’t customers from using their Internet connection by requiring a password. “For example, they could print a password on the receipt and change it periodically, to prevent non-customers from using the service,” Milito said. Businesses can also block access to certain websites and types of websites, she added. “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.”

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NFIB is the nation’s leading small business advocacy association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small- and independent-business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists send their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system.  

National Federation of Independent Business/Oregon
3340 Commercial Street SE, Suite 210
Salem, OR 97302
503-364-4450
www.nfib.com/oregon