Partner Denton Wilde Sapte
Abstract: The world’s first copyright law was passed in 1710 as “an act for the Encouragement of Learning”. The Digital Economy Act 2010 (DEA) became law on the final day of the 2009-10 parliamentary session, and is intended to update enforcement of copyright in an online world.
The DEA was steered through the Houses of Commons and Lords by Ben Bradshaw (Secretary of State for Culture, Media and Sport) and Lord Mandelson (Secretary of State for Business, Innovation & Skills) respectively. The DEA implements some of the policy aims set out in Lord Carters’ Digital Britain Report, including in new provisions designed to enhance copyright protection against illegal file-sharing and on-line piracy. This article explains the key anti-piracy provisions of the DEA and considers its impact for content owners, internet service providers and individual internet users.
An act for the encouragement of … enforcement
A controversial Act
The road to royal assent for the Digital Economy Act (DEA) of 2010 was controversial. Only a series of trades on contentious issues allowed the Labour government to secure passage of the DEA at all. Bradshaw and Lord Mandelson had to give up provisions dealing with the funding of Channel 4, local news provision and super-fast broadband networks to achieve the intended copyright reforms. And critics voiced procedural concerns over the lack of detailed scrutiny of the legislation resulting from the use of parliament’s pre-election ‘wash-up’ procedure, and practical concerns over the influence of lobbying from the music industry in the forming of policy and the drafting of the DEA.
Although the DEA deals with a range of digital economy issues (including Ofcom’s role, internet domain registries, Channel Four’s future, regulation of TV and radio, spectrum use, and public lending) most attention has focused on provisions dealing with online copyright infringement. Media interest was spiked by a war of words between representatives of rights holders (supportive of the DEA) and ISPs and internet freedom pressure groups (who oppose its provisions).
Cutting off broadband for persistent copyright pirates
Although opponents secured limited concessions as the DEA ping-ponged between Lords and Commons, rights holders scored a key victory with the introduction of a new framework to establish anti-piracy measures. Depending on the extent of online copyright infringement in the next 12-18 months, further legislative action under that framework could ultimately lead to ISPs having to take technical steps (including bandwidth throttling and account suspension) against subscribers whose internet connections are persistently used for copyright infringement.
This framework is established through a series of amendments to section 124 of the Communications Act 2003. The amendments allow rights holders to make reports to ISPs detailing suspected copyright infringement by ISPs’ subscribers. On receiving a report an ISP must notify the affected subscribers. Rights holders can require ISPs to provide them with anonymised lists showing which of their infringement reports relate to which subscribers (thus highlighting persistent infringement).
These actions will have to be in accordance with an ‘initial obligations code’, agreed by the industry or, in default of industry agreement, created by Ofcom and approved by the Secretary of State. Some of the content of this code of practice is specified, at a high level, in the DEA. For instance, the code must include details of robust appeal mechanisms, costs allocation between rights holders and ISPs and a requirement for a court order before infringing subscriber details are passed to an ISP. Once the code is in force, Ofcom will have to prepare quarterly and full annual reports detailing the extent of online copyright infringement. If the first annual report shows online copyright infringement is not reducing as a result of the ‘infringement notification’ mechanism set out in the code the Secretary of State will be able to direct Ofcom to assess whether “technical obligations” should be imposed on ISPs to take “technical measures” (such as bandwidth throttling or service suspension) against subscribers who persistently infringe copyright. Following that assessment the Secretary of State will be able, by order, to impose such “technical obligations” on ISPs. That order will have to be approved by both Houses of Parliament after at least 60 days for review. If such obligations are put in place Ofcom will have to put in place a code to regulate their exercise.
Although Ofcom could wait to see if industry puts in place an “initial obligations code” it appears to consider this unlikely with good reason, given past experience. It has already indicated that it will draft parts of the code and consult on the draft. Ofcom also plans to establish the methodology it will use to estimate levels of online copyright infringement and so set the benchmark against which to assess whether infringement notifications are successful.
Preventing access to locations on the internet
As well as for measures to cut off broadband access, vociferous criticism was levelled at sections 17 and 18 of the DEA. Those sections create the possibility of courts ordering the take-down of websites that might be used for copyright infringement.
The provisions allow the Secretary of State, by regulation, to put in place measures under which a copyright holder will be able to obtain a court injunction requiring ISPs to block access to a “location on the internet which the court is satisfied has been, is being or is likely to be used for or in connection with an activity that infringes copyright“.
The Secretary of State will only be able to put in place such measures if satisfied that they are a proportionate way to deal with the problem of online copyright infringement, and the regulations will have to contain detailed tests for the courts to apply before granting an injunction. Further, the Secretary of State will have to consult widely before presenting its reasons for thinking regulations are necessary, and there will have to be a 60-day period for parliamentary review before the Secretary of State can issue the regulations.
These provisions have raised fears that rights holders might seek injunctions to close popular websites such as Google and Wikileaks. Both of those websites, on a broad interpretation, are locations on the internet which might be used in connection with an activity that infringes copyright, and therefore could be within the scope of regulations. While legislators have said the intent is not for those sorts of websites to be shut down, and any regulations put before Parliament will include protections, critics have suggested the better way to avoid secondary legislation that risks such intrusive results is not to create broad enabling primary legislation in the first place. Perhaps the most significant voice in the debate is that of Google itself. The search giant reacted to the DEA by saying: “we absolutely believe in the importance of copyright, but blocking through injunction creates a high risk that legal content gets mistakenly blocked, or that people abuse the system.”
The copyright holder’s view
Unsurprisingly, representatives of rights holders have expressed strong support for the copyright infringement measures contained in the DEA. The BPI commented that “the measures to reduce illegal downloading will spur on investment in new music and innovation in legal business models“, while the Publishers Association said “as publishers are increasingly investing in the creation and delivery of digital content, so the measures passed will help to secure that investment“.
Giving effect to the DEA has practical difficulties acknowledged by rights holders. In particular, methods for measuring the extent of illegal filesharing will prove difficult. Technology recently implemented by Virgin Media to track illegal filesharing is the subject of an EU investigation into claims that it breaches privacy law, following a complaint from Privacy International. That suggests finding a legitimate way to obtain the data necessary to determine whether illegal filesharing reduces is not an easy technical question. If Ofcom is not able to obtain the data then the Secretary of State will presumably struggle to justify exercising the power to make an order requiring ISPs to implement technical measures against persistent illegal file-sharers.
Criticism of the DEA has come from privacy and internet freedom pressure groups, and some ISPs and major websites. The Open Rights Group called the DEA an “utter disgrace“, arguing that it constitutes “an attack on everyone’s right to communicate, work and gain an education“. Talk Talk said the DEA contained “many draconian proposals” and criticised the lobbying effort and the parliamentary procedure: “this is made all the more appalling by the ability of big music and film companies to influence government and the absence of any proper debate or scrutiny by MPs“. And O2 has suggested the DEA does not address the problem of the lack of innovative business models to tempt users away from illegal file-sharing, saying: “new products and services should be developed to give consumers the content they want, how they want it, and for a fair price“.
A different angle of attack has focused on possible unintended consequences of broadband account suspension. Critics of the DEA have argued that it risks punishing libraries, schools, and other institutions that make wi-fi available publicly, and that those bodies should not be expected to track and manage the activities of all possible users of their connections.
Critics have also made pragmatic objections. They point to a study by the BI Norwegian School of Management which suggests those who download music illegally are ten times more likely to be legal purchasers of music than those who don’t. Journalists have questioned the accuracy of some of the statistics used by the music industry in calling for the implementation of the anti-piracy measures of the DEA: one set of figures effectively ascribes a value of £25 to each individual illegal download in assessing the cost to the industry. The point they make is that illegal downloaders are among the best customers for music and their download activity does not displace sales to the extent claimed.
Any assessment of the DEA is academic at this stage. The DEA puts in place a framework for future action, rather than bringing immediate change. The anti-piracy provisions of the DEA are unlikely to have direct impact on individuals until 2012 at the earliest, and might not come into force if illegal file-sharing falls (or cannot be measured accurately). And it is unlikely that doomsday predictions of Google being blocked and businesses ending public wi-fi provision will come to pass any time soon, if at all.
The political dimension is also significant. During the election, the Conservatives made it clear that any legislation agreed in the wash-up (as the DEA was) will be subject to review if they win power, and may be repealed. The Liberal Democrats called for the DEA during the election campaign, saying: “it was far too heavily weighted in favour of the big corporations and those who are worried about too much information becoming available. It badly needs to be repealed, and the issues revisited“.
Significantly, many of the most controversial aspects of the DEA require secondary legislation to become effective. Whether the Conservative-Liberal Democrat coalition has the inclination or appetite to bring in these secondary measures remains an open question.
Even if the measures become effective, the impact on file-sharing is uncertain. Sweden recently enacted similar legislation to cut-off broadband access for illegal file-sharers. Internet traffic fell by more than 30% after enactment of a anti-piracy law, reflecting a drop off in illegal file-sharing. However, subscribers quickly learnt to bypass detection of illegal file-sharing. Internet traffic exceeded the pre-legislation levels within 3 months of the anti-piracy law, only with subscribers encrypting their traffic to avoid prosecution.
30 June 2010
Roderick leads the Communications group in the Technology, Media and Telecoms department of Denton Wilde Sapte. He provides commercial and regulatory advice to suppliers, operators, online service providers and users of fixed and mobile communication networks. He has particular experience of internet and on-line services, mobile networks, telecommunications and online regulatory law and electronic cash payment systems. He has considerable experience in large international internet and communication projects and regularly works for clients in Europe, Africa and the Middle East.
Partner at Denton Wilde Sapte