The Computer Fraud and Abuse Act: Are You Still Watching?

By Samaei, Alex N. | The Journal of High Technology Law, July 2017 | Go to article overview

The Computer Fraud and Abuse Act: Are You Still Watching?


Samaei, Alex N., The Journal of High Technology Law


I. Introduction

New media-entertainment powerhouses, such as Netflix, are beginning to chip away at traditional cable's customer base. (2) In part, this is because up-and-coming technologies strategically offer cheap, convenient access to a large database of quality entertainment. (3) Consumers enjoy the ability to sit down and watch their favorite TV show or movie at their leisure. (4) As a result, more companies have invested in this industry and have created their own media-streaming services in order to capitalize on these potential profits. (5) This makes perfect sense, considering the fact that streaming is one of the "fastest-growing consumer sub-segments" and is projected to reach $10.1 billion in 2018, up from $3.3 billion in 2013. (6)

Albeit, the video streaming industry is burdened with ever increasing expenses such as: data congestion, program updates, software, licensing, security, and advertising costs. (7) While businesses in this industry have had some success, one must wonder if the benefit will always outweigh the annual $500 million dollar cost that these businesses incur? (8) Yes, $500 million dollars is estimated dollar amount that video streaming services are losing each year due to unauthorized use of subscriber account log-in information. (9) Sharing passwords with unauthorized users is "forbidden" by many online company's user agreements, such as Facebook. (10) According to Consumer Reports in January 2015, (11) this did not stop "46% of video streaming users [from sharing] passwords with people outside of their households." (12) This phenomenon however, has not gone unnoticed as jurisdictions have voiced their concerns on the matter and have adopted criminal statutes for unauthorized distribution of more sensitive log-in information. (13) It is clear that companies are suffering from unauthorized users accessing their services for free, but the question is, whether imposing criminal consequences typically reserved for severe computer crimes are a reasonable means to ending this industry's multi-million dollar issue? (14)

This Note will explore the various rationales for applying criminal statutes to the unauthorized use of Netflix account log-in sharing and will determine which solution is the most appropriate given the effect it might have on the market as well as individual users. Part II will discuss the evolution of video streaming services and log-in information technology. Part III will introduce the current perception of password sharing under the law and the business practices in the industry. Next, Part IV will provide support for the conclusion that given the organic development of video streaming services, along with the technology surrounding them, there must be a natural progression in the law that does not include criminal charges for this very common form of password sharing.

II. History

A. The Technology

Today's most popular video streaming services, Netflix, Hulu (15), and HBOGO, (16) have continued the transformation of the entertainment industry which began with cable television in 1948. (17) In the two decades following the creation of cable television, investments by large corporations such as Cox, (18) allowed for the development of new technology to import distance signals which provided users with more programing options in the form of new television stations and shows. (19) The growth in subscribers stalled for several years when the Federal Communications Commission ("FCC") placed restrictions on "importing distant television signals" (20) in metropolitan areas. (21) By the 1970s, this restriction was lifted, and after massive efforts on multiple political stages, industry growth was revived. (22)

In 1972, the Home Box Office (23) ("HBO") became the first pay-tv (24) network and used this success to begin utilizing satellite transmissions in order to increase the reach of cable. (25) "Satellite delivery, combined with the federal government's relaxation of cable's restrictive regulatory structure, allowed the cable industry to become a major force in providing high quality video entertainment and information to consumers. …

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The Computer Fraud and Abuse Act: Are You Still Watching?
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