According to Slashdot, Cox, Time Warner Cable and Comcast have created a joint venture called PolyCipher. PolyCipher in turn is funding research into a project called BitStalker, which according to the project explanation (pdf) will help copyright holders more effectively identify BitTorrent users trading copyrighted files. The goal is to reduce the number of false positives that pop up (about 11% currently) during efforts to identify pirates on P2P networks. Says the study:According to the researchers, the system could potentially monitor up to 20,000 different peers over a period of five minutes using somewhere between 14.4 and 50.8KB/s of bandwidth. It could also work cheaply -- the researchers claim they could monitor the entire userbase of The Pirate Bay for just $12.40 a month. A little more on how they can reduce false positives:Some ISPs are more willing to become the entertainment industry's content nannies than others. Cox for instance was the first large U.S. ISP to begin voluntarily booting users from their network should they violate copyrights, though Cox tells Broadband Reports only a few users have been kicked. Reducing false positives (like this Qwest using grandmother) is a huge first step if ISPs want to proceed down the road of disconnecting users for copyright infringement (aka "three strikes" or "graduated response").

With companies like Comcast poised to merge with NBC Universal -- that seems like an inevitable outcome. By investing in this technology, ISPs could be looking to limit their legal liability for falsely accusing users. But false positives are only a small part of the issues raised when ISPs begin kicking users off of the network for piracy. Keep in mind not all ISPs and users agree that terminating a user's broadband lifeline is a fair punishment for downloading a handful of LOST episodes, or that ISPs should be propping up struggling entertainment industry business models.

But that aside, there's questions surrounding who tracks users across ISPs, how to treat multi-user homes, or whether small ISPs can afford the cost of such systems. There's still limited transparency into these processes (Qwest for instance absolutely refused to talk to us about any specifics behind their user termination program), no independent oversight, and no recourse for the falsely accused. Meanwhile studies have show that many pirates are also significant buyers of online content, so by kicking them offline -- both ISPs and the entertainment industry are losing potential customers.

Update: Comcast denies to Broadband Reports that they're currently investing in this technology, and claims the Slashdot story is incorrect. According to Comcast, while the cable companies did previously fund PolyCipher, PolyCipher no longer really even exists as an entity -- and this latest research project is not tied to the organization.