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How Proxied Torrents Could End ISP Subpoenas
Now, I'm not advocating the creation of software that enables piracy. And I don't mean that in a nudge-wink kind of a way, I'm serious: I think people should reward movie studios for making content that they like, if only because that means studios will make more of that type of content. For my last cross-country flight I paid an honest-to-God four dollars to download a movie from Amazon Unbox to watch on the plane, even though I fondly like to think of myself as smart enough that I could have figured out how to find and download the movie for free. (Well, not all that smart; the movie was Lockout.)
However, the idea of users anonymizing each others' downloads is so elementary, that I literally mean it's inevitable that we will see the rise of such software. Whether I'm in favor of it or not, it's going to happen. In fact, under certain assumptions, there's really only one logical direction that it can evolve in.
First, some background. Under the current BitTorrent protocol -- with no built-in support for anonymization -- some server S makes a large file available for download. When the first downloader, say user D1, requests a copy of the file, they have to begin the process of downloading it from S. But when the next downloader, say user D2, requests a copy of the same file while user D1 is still downloading, the BitTorrent server S tells D2 to start downloading the file from D1 instead of from S directly. (D1 is required at this point to share out the file for download, in order to earn enough "credits" to continue downloading from S.) Subsequent downloaders are similarly told to download from other downloaders instead of from the original server S. In this way, the server S avoids incurring massive bandwidth charges (since S only actually served the file one time), and each user on average only has to share out the file once in return for downloading it themselves.
Note that this still means that in order to initiate the download, the server S has to serve out the whole file at least once, to the first downloader -- and if the file is being distributed without the copyright owner's permission, then the operators of server S can be taken to court. This legal pressure was the reason that the Pirate Bay switched from serving BitTorrent files to serving magnet links, which enable users to download content purely from each other, without the Pirate Bay ever actually serving the content themselves. But with both BitTorrent and magnet links, users who are downloading content from other users, can see those other users' IP addresses -- and they know that those other users are serving the content from files stored on their own hard drives. This means that if you're the copyright owner of that content, you can subpoena the identities of the users behind those IP addresses, and taken them to court for unauthorized possession and distribution of copyrighted material.
So what would a protocol look like with built-in support for anonymization? In my first draft of an idea, I thought that each download could take place using one intermediate user as a proxy, so that instead of server S telling D2 to download from D1, the server would tell D2 to use download D3 as a proxy, and tell D3 to proxy the connection from D1. (As with BitTorrent, the downloader D3 would be required to allow their machine to be used as a proxy, in order to earn credits to continue with their own download.) So D1 would not be able to see the IP address of user D2 downloading from them, and D2 would not be able to see the IP address of user D1 that they were downloading from. Both of them would be able to see the IP address of user D3 which is acting as the proxy between them, but as long as it's not against the law to simply proxy a connection for someone else, that would not be grounds to subpoena the user D3's identity. And D3 would be able to see the IP address of D1 and D2, but if the D1 and D2 are communicating using a shared encryption key, then D3 would have no idea what content is flowing between D1 and D2, even as it proxies the connection between them. So even if one of D1, D2 or D3 were an "adversary" (i.e. a copyright holder intent on suing illegal file sharers), none of the three would be able to see the IP address of another user that they knew was either downloading particular content, or serving it out.
Of course you could also argue that if D3 is among the users that server S is making available to others as an anonymizing proxy, then that constitutes proof that D3 must be downloading something else from S (otherwise, D3 wouldn't need to earn credits by acting as an anonymizing proxy), and if either D1 or D2 is an adversary, they can see D3's IP address and reason that D3 must be guilty of some copyright violation. Similarly, if D3 is the adversary, they can see D1 and D2's IP addresses and reason that both of them are probably guilty of some copyright infraction, even if D3 can't actually see what they're trading. Basically, anybody could be considered "guilty by association" simply by virtue of being in the community of users being coordinated by server S. But (1) that accusation could be deflected if some of the files being served by S were in fact legal and being distributed with the copyright holder's permission; and (2) in any case, the Digital Millennium Copyright Act requires you to claim that your specific copyrighted content is being distributed by a user, before you can unmask that user's identity; it's not enough to claim that the user is part of a network that distributes "some" copyrighted content illegally. D3 may be proxying a connection between D1 and D2 in order to earn credits so that D3 can download some content for themselves, but even though D1 and D2 can both see D3's IP address, there's no way for them to know what D3 could be downloading.
Unfortunately, this three-user-chain idea is not secure, because an adversary could still create a large number of users co-ordinated through server S, and sooner or later, a chain would arise where both the proxy and the downloader controlled by the adversary, and at that point, they would know the IP address of the user serving out the copyrighted content. In other words, eventually you'll get a situation where D2 is downloading content from D1 by going through proxy D3 -- but where D2 and D3 are both controlled by the adversary. So D2 knows the content that's being downloaded via D3, and D3 knows the IP address of D1 that's actually serving out the content -- at which point they can subpoena the identity of user D1, and sue them.
So consider this idea instead: When user D1 sends a request to server S to download a file, server S gives them the IP address of another user, D2, from which they can download the file. Now, 40% of the time, user D2 actually does have the file on their hard drive and is serving it to user D1, with no proxying. The other 60% of the time, user D2 is told by S to proxy the connection from D1 and connect to a third user, D3. Now in 40% of these cases, D3 actually does have the file and is serving it out directly; the other 60% of the time, D3 is proxying the connection for yet another user, D4...
So you end up with chains of varying length, with longer chains having a progressively smaller probability of forming:
40% of chains will be of length 1 (one user downloads directly from another)
60% x 40% of chains (24%) will be of length 2
60% x 60% x 40% of chains (14.4%) will be of length 3
60% x 60% x 60% x 40% of chains (8.64%) will be of length 4 etc.
These proportions of course sum to 1, and a little math shows that the length of the average chain is 3.5 nodes. The number of downloads in a chain -- the connections between users -- is one less than the number of nodes in the chain, so this means that to complete one download, the content will have to be transferred an average of 2.5 times -- compared to being transferred only once, when one user downloads from another directly. In order to ensure that users contribute enough to the system as they take from it, that means that in order to download a file, users would be required to provide enough "proxying" to support the equivalent of 2.5 full downloads of that same file.
These chains have a useful property: any time you're downloading content "from" another user, there's only a 40% chance that user is serving content off of their own hard drive, and a 60% chance that they're proxying the connection from somewhere else (another node that may in turn be proxying the connection from yet another node, etc.). So even if the adversary controls three nodes D1, D2, and D3, and D1 is downloading from D2 who is downloading from D3 who is downloading from D4 (and D4 is not controlled by the adversary), from the adversary's point of view there's only a 40% chance that D4 is actually originating the content. This is always true no matter how many nodes in the chain the adversary controls -- in the end, if they want to nail someone for serving out copyrighted content, they have to download the content from some node that they don't control, and there will only be a 40% that user is actually serving the content from their hard drive.
And the 40% number was deliberately chosen in order to weaken the adversary's legal grounds for subpoenaing the identity of the user they're downloading from -- even if they can show that they downloaded content from another user's IP address, it's more likely than not that the other user was not actually hosting the content. (Of course, there might be other details in context that render that probability calculation useless. For example, if the server S only links to one downloadable file, then all users coordinated by that server S are presumably downloading that same file, and anybody that server S connects you to, can be presumed guilty of downloading and sharing that file, 40% figure be damned.)
At this point you might also wonder: Why not just connect over a protocol like Tor, which provides secure anonymity for all transactions, and then use BitTorrent or some other file-sharing system on top of that? The answer is that Tor's connection is likely to be much slower, for at least two reasons. First, Tor servers are a limited resource, and the more people use them (especially for large file trading), the slower they are likely to become. (By contrast, in the peer-to-peer proxying model outlined above, every new downloader can also be made to act as a proxy for other users, so additional users don't slow down the system because they contribute as much as they take out of it.) Second, Tor always routes your connection through multiple servers to guarantee secure anonymity, which means it would be slower on average than the variable-length chains described above, where only about 20% of chains are of length 4 or more.
The key difference is that Tor provides true anonymity whereas the protocol above only provides plausible deniability. In high-risk settings where Tor is often used, it would not be acceptable if there were a 40% chance of your IP address being revealed to your adversary. But for file sharing, the 40% figure might be acceptable if it's just low enough to stave off a subpoena. This trade-off makes it possible to use shorter chains, resulting in faster downloads and less total bandwidth consumption.
You also already have the option today of using a VPN service to download files through an anonymous third-party connection, which renders the rest of these issues moot. But users have to jump through several hoops (and pay some money) to set this up as an option, which means that most users will not be using VPNs any time soon, leaving plenty of naive users for the RIAA and MPAA to go after. The use of peer-proxying links would mean that all users downloading through the system would be protected.
At the moment, the major impediment to a peer-proxying system like this would be that the chained downloads would still consume an average of 2.5 as much bandwidth as direct peer-to-peer downloads. Even with today's high-speed connections, this increase in inconvenience is great enough that some users might just prefer to use plain old BitTorrent to download files directly from peers, and run the (admittedly small) risk of getting in trouble. But as bandwidth speeds continue to grow literally exponentially, eventually the difference in inconvenience will be so small, that users would be foolish not to use proxified downloads if it provided free legal protection.
Note that the viability of this system does depend on the ISP's attitude towards it. In particular, if your ISP only goes after pirates because of legal pressure from content holders, then if the ISP's users are using this peer-proxying protocol instead of a direct download protocol like BitTorrent, then the ISP can quite truthfully claim that they don't have any hard evidence to disconnect any particular users or turn over their identities (because the ISP doesn't know which users are actually storing pirated files and which users are just acting as proxies). On the other hand, if your ISP sincerely wants to stop piracy because your ISP is also a content company (Comcast, for example), then they might also try to squelch the use of any protocol that enables piracy, even if they can't prove that any particular users are using it for anything illegal. Thus Comcast might try to slow the use of the peer-proxy protocol. But in that case they could be forced by Net Neutrality regulations to stop throttling it, in the same way that the FCC ordered Comcast to stop throttling BitTorrent.
As long as those conditions hold true -- content owners continue cracking down on file sharers, but proxying remains legal and bandwidth keeps getting cheaper, and ISPs are restrained from blocking the protocols themselves -- I think that p2p will have to evolve into something like the chained-download system described above, to provide plausible deniability to users, without resorting to the long chains (and subsequently slower downloads) provided by full-anonymity systems like Tor.
But again, I'm just saying it's inevitable, not that it's right. I actually do wish that people would pay the studios' prices for the movies that they watch; part of it is that I think most blockbusters are actually pretty good and deserve to make money. When you refuse to pay for movies, you're casting a vote against fun, big-budget movies that are made for the purpose of getting lots of people to come see them and enjoy them, and instead voting in favor of excruciatingly boring low-budget films that are made primarily so that the director could whine that the cheese-puff-snarfing American public wouldn't know great art if it bit them on their big bloated behind and subsequently didn't even buy enough tickets for the director to pay off the lien he took out on his Honda Civic to get the movie produced. Forget prosecution and civil suits; just make movie pirates sit through The Brown Bunny.
Retro share: http://retroshare.sourceforge.net/ friend to friend private open source file sharing.
Everyone that disagrees with me is a paid shill
Why you're posting information about breaking the law. Are you not ashamed of yourself? Have you no dignity or self-respect?
How would you like it if people stole all of your stuff and left you destitute, raw, and living in a VAN down by the RIVER!?!?!!!
No - you wouldn't like it. So if you would quit it with the criminal thoughts and play by the rules like any other decent human being would you won't have to resign yourself to that fate.
If you are "proxying" connection, then you are downloading from user D1 and uploading to D2. It does not matter if you are not retaining that data, you are still copying stuff illegally. So in the end if content owners are unable to determine identity of actual downloaders, they can go for proxying users and hit them with exactly the same lawsuit.
Didn't they already try to sue the proxy user for something like this. You aren't off the hook legally just because you disguise who you are dealing with. All I see this doing is having them shifting from suing the download'er to the proxy'er.
I have a feeling this is a nuclear option.
If this is implemented, then pro-copyright extremists will argue that running or using a proxy is prima facae evidence of criminality and then lobby hard to make it illegal. Result? Anybody with a legitimate (or illegal but ethically necessary) reason to use a proxy will lose out.
The OPs' hope that the pro-copyright extremists won't fight back hard, with legislation to ban proxies, or force China-style "real ID" laws on Internet users, is naive at best, and ultimately, dangerous.
If it starts seeing widespread use, they'll probably just buy another piece of legislation in order to let them bring lawsuits against the users anyway.
This sounds like anomos: http://anomos.info/
I was researching this weekend, I can't seem to find out if the project is still alive. It looked well designed in 2010, and I'm not sure if it's using the Tor network (bad), or just the Tor protocol for its own network( good).
Seedboxes have been around for years, they solve this problem too.
What'll happen is the studios will continue to sue and subpoena the information for the machines that they see connecting to the torrent. They'll argue that it's the owners of those machines responsible for any use of their machines by others. They'll continue to use these tactics as long as the courts make it cheap for them to file and lose. That won't end until the courts start ruling that the studios know they don't have grounds for these suits and start dismissing them with prejudice and sanctioning the plaintiffs without a defendant having to do anything. Maybe the courts starting to refuse to let the plaintiffs withdraw their claims after a defendant's responded, forcing the plaintiffs to face an adverse judgement and sanctions, might stop them too, but my money's on the studios in that case betting that too few defendants will have the resources to gamble on winning that show-down.
All the studios need to do to quash this idea is to successfully argue in court that volunteering to act as a proxy host is comparable to hosting the file yourself. That does not seem like a hard argument to make. Don't the copyrighted bits have to pass through the proxy host's machine? That sounds like "distribution" to me.
Yet another half-baked idea from frequent contributed Bennett Hasselton.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
Pedos are already using Tor and Freenet to exchange their filth online. I suppose they might take advantage of it, but I don't think it's nearly as safe as Tor or Freenet are for staying anonymous.
What I would worry about is having my IP associated with child pornography, terrorism, or whatever due to proxied content being chained through my home connection. People have been raided for hosting Tor exit nodes before.
Maybe someone creates a malicious software targeted @ Verizon customers.
It would download RIAA monitored torrents at very low bandwidth in order to be unnoticeable to the average user.
It could download at least 6 torrents in 1 month which would result in disconnection of service.
Lets say the attackers have a database of Verizon customer e-mails and a good method for exploitation of Windows O.S.
Seems like one could put Verizon out of business if they are so keen on upholding their 'Six Strikes' plan.
You mean make everyone responsible for everyone's downloading. You wouldn't be eliminating the lawsuits, you'd just enable them to sue everyone who was in the proxy pool, for much higher amounts than they can even now.
It's better to vote for what you want and not get it than to vote for what you don't want and get it.
- E. Debs
This sounds too much like, "it's OK to rob a bank, because you're just taking the bank's money. You're not stealing from any people."
the ISP can quite truthfully claim that they don't have any hard evidence to disconnect any particular users or turn over their identities
Does it work that way? I mean, my ISP can tell I'm sharing something that under current law I do not have a right to share. Is my 'get out of jail' card really as simple as, yes, but I don't know who I'm sharing it with?
On the other end, my ISP can tell I'm downloading something that under current law I do not have a right to download, but it's all good, because no one can say for sure who I'm downloading from?
To go back to the bank robbing analogy--and I don't mean to equate copyright infringement with stealing,but--let's say I bust my way in to a bank, crack open the safe, and the next day money is missing. Would I feel comfortable going to court with the defense, "yes, I got in to the bank, and in to the safe, and the money is missing, but you can't prove I took the money?" I don't think I like that defense.
So in this case, "yes, I uploaded your movie, but you can't prove who I uploaded it to." I don't think so. I also don't think not being able to prove who received the bits I sent is the same as not being able to prove that someone received those bits.
a little math shows that the length of the average chain is 3.5 nodes
The average length of such a chain is 2.5, not 3.5
(defun p (n)
(let ((p 0.4)
(l 1)
(tot 0))
(dotimes (ii n)
(setf tot (+ tot (* p l)))
(setf p (* 0.6 p))
(setf l (+ 1 l)))
tot))
(p 100)
This is the kind of talk that will spur DMCA2. Where only authorized computers with sufficient limitations, forced ISP activity reporting and government backdoors will be allowed to connect to the internet.
Because the current markets and business models developed around our old IP laws are more sacred than the natural development of technological innovation.
We should learn what we need to know about issues, before we decide what we need to feel about them.
When you refuse to pay for movies, you're casting a vote against fun, big-budget movies that are made for the purpose of getting lots of people to come see them and enjoy them, and instead voting in favor of excruciatingly boring low-budget films that are made primarily so that the director could whine that the cheese-puff-snarfing American public wouldn't know great art if it bit them on their big bloated behind and subsequently didn't even buy enough tickets for the director to pay off the lien he took out on his Honda Civic to get the movie produced.
Firstly, this.
Secondly, I'm casting a vote against not being able to use the media I purchased in the manner I want, on whatever device I want for as long as I want.
I buy DVDs (okay, usually on sale) and rip them, because all of the legal digital versions available suck lame sauce in terms of DRM crap. If I'm feeling too lazy to rip it myself, I have no compunctions about grabbing a torrent.
In conclusion, I would like to refer you to this handy illustrated guide.
Oh, and this one too.
"I love animals! Some are cute, others are tasty, what's not to like?" - Betsy Schroeder, Jeopardy contestant
First let me say that I legitimately use Bit torrent and similar programs to download (and reshare) perfectly legal things like Knoppix and other open sores software. I have had to limit my use, being a victim of the AT&T monopoly I'm subject to the data caps even for my DSL land line, so no more leaving the torrent up for a month to help share new software after it is released.
I sure don't want my IP address associated in any way with crap like copies of the latest jar-jar movie from the hack who lied to us about Lost (illegal or legal copies). And I don't want my traffic to skyrocket to move that junk even when I didn't download it myself, just so some warez freaks can try to hide from the entertainment mafia. And if I chose to run software that knowingly routed such traffic through my computer, then I completely expect that the courts owned by the entertainment mafia would decide that I acted in collusion with the people who uploaded and downloaded the questionable files and that I was an accomplice.
I'm an American. I love this country and the freedoms that we used to have.
Note that this still means that in order to initiate the download, the server S has to serve out the whole file at least once, to the first downloader -- and if the file is being distributed without the copyright owner's permission, then the operators of server S can be taken to court. This legal pressure was the reason that the Pirate Bay switched from serving BitTorrent files to serving magnet links, which enable users to download content purely from each other, without the Pirate Bay ever actually serving the content themselves.
This shows a basic misunderstanding of how BitTorrent works.
TPB never had any copyrighted content files on their servers ever. They served up .torrent files which were files that pointed to trackers for the content files being shared.
Now they use magnet files, which allows users to get .torrent files from other users instead of from TPB.
Wax on, wax off baby!
You're going to deploy a technology that will threaten the profits of the corporations that can can get statutes enacted definining "securing for limited Times to Authors and Inventors" as "the entire life of the author plus 75 frikkin' years to an estate" - and you expect the government they own won't come down on you like a ton of bricks? You expect technical merit and plausible deniability to even be a factor here?
Please donate to the guy who's being prosecuted for kiddie porn for running a Tor exit node while you think about it.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Then you want everything in the same encrypted network and the lion's share of the usage of that network to be legitimate. Although BitTorrent over TOR is currently abusive of the TOR network, it would be better to find a means of making BitTorrent tolerable to TOR (or vice-versa) than to create a separate encrypted filesharing network.
When this all gets tested in a courtroom, it is far better for an encrypted network to appear to be protecting privacy than to enable lawbreaking. The difference between the two is just how closely the type of data over the encrypted network matches the type of data sent over the unencrypted Internet. Better to encourage the use of TOR to everybody than to have one encrypted network for privacy advocates and another made 99% of pirates -- the latter service lowers the bar for legal decisions and laws to be made that can then ruin all encrypted networks in general.
Try not. Do or do not, there is no try.
-- Dr. Spock, stardate 2822-3.
Actually how the Disney party is bought and paid for by the MPAA, creation of such software will be a TERRORIST act and allow them to do Drone strikes inside the USA against Internet Terrorist suspected locations.
Do not look at laser with remaining good eye.
Freenet is safe from that: It's got no connectivity outside the network, so anyone able to connect to your node has to be familiar enough with the network not to make such an easy mistake. Tor exit nodes are the really risky things to run.
I doubt they would even need new legislation. They will just argue that all the nodes are participating in sharing copyrighted works and will sue random people they manage to identify. They do not even need a good case since defending yourself is generally cost prohibitive anyway.
This whole idea is a non-solution.... it is kinda like those guides for 'why you do not have to actually pay taxes' or 'you are not technically a citizen of the US and thus the law does not apply'... even if mathmatically the logic might make sense, once it hits actual courtrooms it falls apart.
you lose a lot of your ability to catch certain elements of "crime" when you introduce any form of anonymity. Anonymity will be used by people that want privacy, people that are paranoid, people that want to whistleblow, harass, defraud, threaten, etc. You will get the good with the bad.
Unfortunately, we seem to be headed in the direction that NO bad is allowed, so we are supposed to be OK with giving up all the good.
As a basic example, you can't punish or prevent all slander while allowing whistleblowing. The concept of allowing truly anonymous good behavior while preventing anonymous bad behavior is an impossible goal.
Normally one would expect "innocent until proven guilty" to take precedence and allow anonymous behavior while tolerating difficulty in catching criminals, but there are currently just too many well-funded groups with a stake that push the legislation in the other direction.
I work for the Department of Redundancy Department.
I am surprised no one mentioned I2P earlier as it does things very similarly to how the writer describes.
Ultimately though, the solution is to stop giving people money who will turn around and use that money to enslave you, threaten you, or coerce you. A dollar not spent on the movie or music industry is a dollar spent for freedom.
It's two issues.
First - I am the 'responsible party' for my ISP connection. Regardless of whether I'm proxying for other people or doing the torrenting myself, they still come to MY house to ask questions. Just ask any TOR exit node operator.
Second - in the obligatory car analogy, if my car is seen as the getaway car from a bank robbery, they're going to come talk to me about where I was at the time. If I had reported my car stolen or I have a rock solid alibi to my whereabouts I'm not going to be charged.
I'm responsible for the actions of something under my control, be it a car or an internet connection. The key question is am I LIABLE for those same actions.
A license plate like an IP address alone is not enough to identify an individual. The circumstances become very very important. Most specifically the obvious differences between civil crimes like most copyright infringement and criminal ones like the above bank robberies.
People in cars cause accidents....accidents in cars cause people
You're more correct than the OP, in pointing out that The Pirate Bay only transfers metadata. However, The Pirate Bay hasn't run a tracker since 2009: http://torrentfreak.com/the-pirate-bay-tracker-shuts-down-for-good-091117/
I honestly don't see how this would even evade the copyright laws and DMCA (however, IANAL, so I may be missing something). .torrent he wants to download, and server S directs him to D3, which acts as a proxy to download it from D1. Well D1 is probably safe, since D3 is covering for him, and D2 (the agent) can't see D1's IP address. However, D3 is not safe! Sure, he's passing the data in encrypted form so that only D1 and D3 can see what it really is, but does that really matter? He's still aiding and abetting copyright infringement, and he's distributing copyrighted material. I don't see how D3 can get out of that just because he doesn't know exactly what it is.
One big problem with this scheme is that it isn't really anonymous. Let's suppose D2 is an MPAA/RIAA agent: he finds a
If someone (who you know has a criminal history) gives you some goods in an envelope, and asks you to go visit someone at a particular place and get $50 from them, and give them the envelope in exchange for the money, and bring the money back to him, I'm pretty sure you're liable for "aiding and abetting" in that crime, even though you didn't open the sealed envelope to see that it had some marijuana in it.
People have been convicted of murder for lending their car to someone going to the store. I think your faith in the level of proof required is excessive.
Learn to love Alaska
It wasn't circumstantial. It was a confession that the car was lent, and an ironclad alibi for the time of the robbery that got him the murder conviction. Felony inclusion rule. He was liable enough for his car that lending it got him a murder conviction. So yes, liability follows objects in some pretty absurd ways. http://en.wikipedia.org/wiki/Ryan_Holle
Learn to love Alaska
"Holle, who had given the police statements in which he seemed to admit knowing about the burglary, was convicted on August 3, 2004, of first-degree murder under a legal doctrine known as the felony murder rule." - wikipedia
SO, he didn't "lend his car to someone going to the store", he lent his car to someone going to a burglary.
Just a tiny difference.
This is true enough, but your "car fleeing a bank robbery" example is a criminal case with police investigating.
Copyright (when it comes to music/movies, at least) tends to be a civil case against the MPAA/RIAA members and the individual who is accused of infringing the copyright. You could be totally innocent of infringement, but the MPAA/RIAA sees you as guilty and is willing to pay the legal fees to make an example of you. You, on the other hand, have limited funds and time. So if you are sued and face a multi-million dollar fine (plus legal fees) after months of courtroom battles, you might just take the offer of a $3,000 settlement and admission of guilt (even if you aren't guilty).
This won't change with the new proposed system. They would identify people running proxied torrents and would sue them. Sure their evidence would be flimsy (as if their current evidence of IP address screenshots is solid), but it already is. If they saw the case going against them, they will drop the suit (to avoid setting a precedent against them), but the defendants would have already spent a lot of legal fees and time/energy defending themselves. The RIAA/MPAA will make running a proxied torrent a legally risky proposition even if you don't have any copyrighted materials passing through your system. (That's not even bringing up them lobbying Congress to declare such systems illegal entirely.)
My sci-fi novel, Ghost Thief, is now available from Amazon.com.