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updated 3/1/2013 4:20:20 PM ET 2013-03-01T21:20:20

Anti- piracy rules are once again threatening the way some companies do business. This time, Wi-Fi is the target.

The issue: businesses such as coffee shops and laundromats that offer public Wi-Fi can't really control what their customers do online over their hotspot. People could simply be reading e-mail or surfing the web -- or they might be downloading pirated movies or music.

A new anti-piracy plan called the "Six Strikes" Copyright Alert System aims to put a stop to this. The plan is expected to go into effect this week. 

But in doing so, the Copyright Alert System could put some business's competitive edge of offering free Wi-Fi at risk. What if that internet connection suddenly slows drastically? Customers may be tempted to switch to the competing business down the street.

Related: Tech Entrepreneurs Urge Presidential Candidates to Consider Internet Freedom

How it works: The Copyright Alert System is the brainchild of the Motion Picture Association of America and the Recording Industry Association of America, which represent big-name movie studios and record labels. They've teamed up with five major U.S. internet service providers (ISPs): Comcast, AT&T, Verizon, Time Warner Cable, and Cablevision. Together, they've formed the new Center for Copyright Information, which will implement this plan.

Participating ISPs have agreed to monitor their customers' internet use for traffic that might be unauthorized content downloading. Whenever they spot such traffic, the ISP will issue a series of warnings to the account holder -- which would be the business owner, not the customer who's doing the downloading.

If the copyright infringement continues, the CCI says the ISPs can "take steps that temporarily affect that subscriber's internet experience." These steps can include:

  • A temporary reduction in internet speed.
  • A temporary downgrade in internet service.
  • Redirection to a landing page for a set period of time, until a subscriber contacts the ISP or until the subscriber completes an online copyright education program.

CCI's website does not specify the number of alerts that would be issued before "mitigation" action would be taken, but early versions of the plan called for six -- hence the nickname "Six Strikes."

Related: 5 Tips for Smarter In-Flight Wi-Fi

While the plan applies to every customer of the participating ISPs, leaked documents reportedly from Verizon confirm that business accounts are not exempt. This wouldn't forbid businesses from offering public Wi-Fi, but it could make that amenity more risky to offer.

What you can do: If your internet provider is one of the five participating in the CCI, ask them for specifics about their "Six Strikes" policy. Details may vary among ISPs and the information may be buried in updates to existing customer agreements.

If you receive warnings, it might be wise to respond or comply as directed as much as possible. Consider posting signs around your business informing customers that if they illegally download movies or music on your premises, that they could be putting your internet access -- and business -- at risk.

If you believe you've received erroneous alerts, the CCI offers an appeal process, but you must appeal within 14 days of receiving a warning. Each appeal costs $35 to file, though you can request what's called a "hardship waiver."

Bottom line: If public Wi-Fi is a key competitive advantage for your business, you might want to switch ISPs proactively. Even if a competing ISP costs a little more, that might be less expensive in the long run than losing customers because your Wi-Fi slows to a crawl.

Related: 3 Technologies That Will Change the Way You Use Wi-Fi

Copyright © 2013 Entrepreneur.com, Inc.

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