netflix-cuffs Tennessee has passed a law making it a crime to share your Netflix password with anyone else, not the guys on your dorm floor or your housemates or even your immediate family, upon fear of prosecution.

Ostensibly designed to protect these services against hackers who steal passwords in bulk and attempt to sell them elsewhere, it has the potential to disrupt the lives of normal, law abiding citizens. I’m still not quite sure why this addendum was necessary, considering that said hackers should already be thoroughly punishable for fraud.

Here is a link to the bill, but below you see the part that bothers me the most:

(2)  A Class E felony if either:
(A) The value of the property or services obtained is more than five hundred dollars ($500) but less than one thousand dollars ($1,000), or
(i) The value of the property or services obtained is five hundred dollars ($500) or less; and
(ii) The offense is the offender’s second or subsequent offense after July 1, 2011, which involves theft of entertainment subscription services.
SECTION 4.  This act shall take effect July 1, 2011, the public welfare requiring it.

It was signed by Governor Bill Haslam after being passed by the House and Senate. It is the first bill like it of any kind to be passed in the United States, and happened in Tennessee due presumably to the great influence of the music industry in the state. The part that worries me the most is the bolding above. Basically, if you hand your password to a friend and get caught, it’s a misdemeanor. If you do the same thing just one more time, it is by statute a felony. That’s right. It’s a Class E felony. That’s the same level in Tennessee as committing a hit and run where a death occurs. That scares me.

Now, Tennessee police have no plans at the moment to devote any resources to proactively cracking down on violators. According to their office, the policy of the Nashville Metro police will be to investigate only when they receive a complaint from a subscription service who feels their rights have been infringed. The Nashville Assistant District Attorney’s office concurred that complaints would be the only impetus for investigation, and that the subscription services themselves would be the ones providing most of the documentation indicating infringement. Senator Jim Tracy, co-sponsor of the bill, said that the primary reason for his sponsorship of the bill was to protect the individual subscribers. Presumably, multiple-account users have the effect of driving up prices on the individuals that do pay for subscriptions, much as the prices of procedures in a hospital are artificially inflated across the board to cover the hospital’s losses from emergency room patients without insurance. Congressman Gerald McCormick, house sponsor of the bill, could not be reached for comment..

As of the publication of this article, Netflix had not responded to questions about how they will decide who to file complaints about, but it is entirely within their rights to do so at any time. I think it is very unlikely that Netflix would start doing so for minor cases because of the risk of generating negative customer feedback. However, law enforcement may elect at any time to change their policy and go after violators, pressure they may feel, not from the subscription services, but from the content creators themselves, the music and film industries. It makes sense that cracking down on multiple account users might lead to a dramatic increase in subscriptions and revenues for the services as well as higher prices the content creators could demand for their product. I have no data on the rate at which people share accounts, so it’s difficult to speculate there.

We will be watching this situation as the law is implemented and look to see if any other states follow in Tennessee’s footsteps. But for now, if you have ever signed into Netflix or any other subscription services on another friends computer or peripheral device, or ever shared your password with anyone, you may as well change your password. There’s no sense in losing the right to vote and writing down “felon” on your job applications to let your old college roommate catch up on LOST. Trust me, the ending sucks anyway.

UPDATE: The bill passed with an amendment removing the felony charge for repeat offenders, reducing each instance to a misdemeanor. You can no longer commit a felony by giving out your password, but you can still serve jailtime and be subject to hefty fines. It seems that the general assembly was troubled by the same passage I was, and had it struck from the bill. The original language of the bill had been provided by the music industry, let us hope that other legislatures passing such a bill also recognize this alarming possibility and remove it.

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