Cox successfully overturned a $25 million penalty in the original lawsuit through an appeal, but it didn't regain the safe harbor protecting it against liability for the actions of its customers. It still had a responsibility to take action when subscribers were pirating songs, and music giants clearly feel it was slacking.

The lawsuit is potentially expensive. The labels can legally ask for up to $150,000 per infringement, and they've claimed infringements for over 10,000 pieces of music -- do the math and that's over $1.5 billion, even if Cox is more likely to face a lower penalty in the event that it loses the case. The bigger concern may be for internet providers going forward. They might not have much choice but to permanently disconnect users after a certain point, no matter how much they want to avoid conflict with customers.