Digital Economy Act – And so it begins

Today, OFCOM issued a press release entitled “New measures to protect online copyright and inform consumers”. According to the announcement, internet users will be encouraged to download music and films through legal channels under the measures.

Ofcom has published a draft code for consultation that would require large internet service providers (ISPs) to inform customers of allegations that their internet connection has been used to infringe copyright. There does seem to have been a number of concessions made, which is welcome, but I do still have a number of concerns.

The code ‘only’ covers ISPs with more than 400k fixed lines – BT, Everything Everywhere, O2, Sky, TalkTalk Group and Virgin Media. This covers about 93% of the UK retail market. If an allegation of copyright infringement is made, the ISP would need to write to the customer with notice that an infringement has occurred, and in a new change, the number of copyright infringement reports connected to their account. If more than three letters are received in a year, anonymous information may be provided on request to copyright owners showing them which infringement reports are linked to that customer’s account. The copyright owner may then seek a court order requiring the ISP to reveal the identity of the customer.

Two more changes have been implemented:

  • Copyright owners’ procedures for gathering evidence of infringement must now be approved by Ofcom, rather than by the copyright owners themselves.
  • Ofcom has decided that subscribers should have 20 working days to appeal an allegation of infringement, but only on grounds specified in the Digital Economy Act.

Obviously the former of these will require further scrutiny, but I’m happier that this is not with the vested interest themselves.

As for the latter, this gets a bit interesting.

The Act states that

an appeal on any grounds must be determined in favour of the subscriber unless the copyright owner or internet service provider shows that a) the apparent infringement was an infringement of copyright, and b) the report relates to the subscriber’s IP address at the time of that infringement.

This is good as it puts the burden of proof on the copyright owner, although it still uses IP addresses which is problematic. For example, New York Judge Gary Brown has ruled IP addresses are insufficient evidence to identify pirates, and has provided a lengthy and thoughtful explanation in his ruling.

There has also been a consultation published on the how to share costs costs. The suggestion is fairly simple:

“Copyright Owners should bear all of the costs incurred by Ofcom, the majority of costs incurred by the appeals body, and 75% of the costs efficiently and reasonably incurred by Qualifying ISPs in carrying out their obligations.”

This has the risk of driving up internet access prices as ISPs have to recover the costs of these notifications.

Additionally:

“Under the Order, subscribers will have to pay a £20 fee to make an appeal against a report of infringement, which will be refunded in the event the appeal succeeds; the remaining costs of determining an appeal will be met by the Copyright Owner who submitted the CIR which has been appealed.”

I disagree with the concept of having to pay for an appeal in this way. If accused, someone should be able to refute the argument without cost. This will introduce a barrier to entry, and even if it is refundable is something I believe should be avoided.

Finally, the exact costs of implementing this have been set out. It looks like the Copyright Owners would have to pay 60p per letter (with the ISPs shouldering the remaining 20p), a similar split around capital costs – which are the ones that are actually significant.

Taking the above, it seems that in total that content owners will have to shell out £15M to use the DEA scheme. The cost seems to be more or less fixed which could encourage content owners to send out frivolous accusations. There’s an iterative process which will run to determine the estimated number of notifications, and if eventually the Content Owners don’t agree with the pricing, they will have elected not to take advantage of the provisions of the Initial Obligations Code, as they have not been able to make binding commitments to fund CIR processing.

So, in summary, this is something to keep an eye on. It certainly hasn’t gone away, it’s due to start in March 2014.

The revised draft code and consultation, which closes on 26 July 2012, can be found here, and the sharing of costs consultation runs until 18th September 2012, found here.

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2 Responses

  1. Taneli says:

    FYI, a Finnish court has also decided in a piracy case that IP is not sufficient identification: http://www.turre.com/2012/05/finnish-court-open-wifi-owner-not-liable-for-file-sharing-copyright-infringement/ (Finland is in EU, so I guess this might be relevant).

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