BMG Rights Management and Round Hill Music have sued Cox Communications for copyright infringement, arguing that the Internet service provider doesn't do enough to punish those who download music illegally.

Both BMG and Round Hill are clients of Rightscorp, a copyright enforcement agent whose business is based on threatening ISPs with a high-stakes lawsuit if they don't forward settlement notices to users that Rightscorp believes are "repeat infringers" of copyright.

There's little precedent for a lawsuit trying to hold an ISP responsible for users engaged in piracy. If a judge finds Cox liable for the actions of users on its network, it will have major implications for the company and the whole cable industry. It's one thing to terminate an account on YouTube, but cable subscribers can pay well over $100 per month—and BMG and Round Hill claim that they've notified Cox about 200,000 repeat infringers on its network.

In their complaint (PDF), the music publishers describe the Cox network as an out-of-control den of piracy. "Today, BitTorrent systems are like the old P2P systems on steroids," BMG lawyers write. "Despite its published policy to the contrary, Cox's actual policy is to refuse to suspend, terminate, or otherwise penalize subscriber accounts that repeatedly commit copyright infringement through its network in any meaningful numbers."

Cox has ignored "overwhelming evidence," and the complaint lists a few examples. A "Cox subscriber account having had IP address 70.168.128.98 at the time of the infringement, believed to be located in Fairfax, Virginia, was used to infringe twenty-four particular copyrighted works 1,586 times since December 9, 2013," they note. "Cox subscriber having IP address 24.252.149.211 engaged in 39,432 acts of copyright infringement over 189 days."

BMG and Round Hill, through Rightscorp, told Cox about all these infringements, but to no avail. The complaint states that Cox "actually has taken measures to avoid and stop receiving those notifications," suggesting the ISP was basically treating e-mails from Rightscorp like spam.

Who's a repeat infringer?

The Digital Millennium Copyright Act, passed in 1998, does require ISPs to have a policy to terminate "repeat infringers," but there's not a lot of clarity as to exactly what that means.

Does someone become a "repeat infringer" when a judge rules they have repeatedly violated copyrights? If so, the music publishers and Rightscorp have many more hoops to jump through before they have any hope of beating Cox in court. Conversely, if a judge believes Rightscorp's notifications are enough to find a user is a repeat infringer, then Cox could be in trouble.

It's a question most big rightsholders haven't been eager to resolve in court, because it's a huge gamble. A copyright-maximalist outcome could give them more enforcement tools, but if legal precedent gets set in a defense-friendly way, they could end up with far less leverage over ISPs than they have now. Since most major ISPs are compromising on the issue and slowly moving forward with a "six strikes" system, there've been incentives on both sides not to go to the mat on this issue.

And Cox, which declined to comment for this story, will surely fight back hard. YouTube came under legal fire from Viacom for not doing enough to boot out copyrighted material, and Google spent $100 million defending the case—even though the economic consequences of shutting down YouTube accounts is almost always inconsequential. Cable companies often bundle Internet with television and phone services, and a subscription can cost well over $100 per month. Since BMG and Round Hill have accused 200,000 Cox accounts of being "repeat infringers," the consequences of a loss on Cox's side could be massive.

BMG and Round Hill are seeking damages for contributory and vicarious copyright infringement and a judicial order requiring Cox to "promptly forward plaintiffs' infringement notices to their subscribers."

The lawsuit takes place against the background of serious difficulties at Rightscorp. The company is near bankruptcy, having lost $6.5 million since its founding in 2011. Last week, a proposed class-action suit accused Rightscorp of violating federal law by using "robocall" equipment to demand $20-per-song settlements from Internet users.

Cox is far from alone in blowing off Rightscorp's notices, so it isn't clear why the Atlanta-based provider was chosen as the test case. In a recent earnings call, Rightscorp CEO Christopher Sabec said the 150 or so ISPs that work with Rightscorp cover only about 15 percent of US Internet users.