I don't think that the safe harbors for ISPs are under as great of a threat from erosion as the post's author suggests. The more pressing issue left in the DMCA is the notice and takedown practices that occur these days. Ever since the 9th Circuit Rossi decision, protections for end user rights have been left wanting. From both an effort and monetary perspective, end users are usually at a disadvantage when it comes to fighting these erroneous takedown notices.
But, I think overall it's safe to say that the DMCA has certainly injected much more predictability and confidence into the system than there was before.
The notice and takedown system would work just fine if end users were given some protection against abuses of the system by rights holders. One of the sole subsections of the DMCA that deals with redress for such abuses is § 512(f), which creates a cause of action against anyone who knowingly misrepresents the infringing nature of a use. Unfortunately, however, judicial interpretation of the subsection (which is sparse) has resulted in § 512(f) being rendered virtually useless.
I've written an article that is pending publication (read the abstract here) that outlines the abusive practices that people are seeing in the DMCA system. In it, I argue that correct interpretation of § 512(f) would provide proper incentive for rights holders to refrain from sending abusive notices, and to take reasonable steps to ensure that care is used in the process. It is my hope that the adoption of this interpretation would create liability in those who do not conduct due diligence before sending takedown notices (e.g., making sure they own the copyright) and from acting with improper motive (e.g., to silence free speech). The full text of the article in pdf version if you care to read it.
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