Internet Economy ISP

BPI to meet with David Cameron in attempt to resurrect controversial Digital Economy Act

By Mark Leiser, Research Fellow

September 2, 2013 | 6 min read

Record companies are upset that the Digital Economy Act, designed to help combat piracy, has yet to be implemented despite becoming law in 2010.

In a move seen as an attempt to resurrect the Digital Economy Act 2010, the British Phonographic Institute (BPI) will meet with David Cameron on 12 September to ask for help forcing the country’s major Internet Service Providers like BT, Virgin, and Sky to sign up to a scheme that would ultimately create a database of illegal downloaders and to implement a the controversial ‘three strikes’ policy that could ultimately lead to a number of actions/sanctions including users finding their connection throttled, further implementation of 'site blocking' , complete disconnection from the internet altogether and “ultimately prosecution”.The meeting comes after Ofcom put off implementing the most draconian of measures after an unsuccessful (in part) challegenge to the legality of the Digital Economy Act. The Act came after a long heavy lobbying from rights-owners. In 2009 the Department of Business, Innovation, and Skills (DBIS) published a paper entitled Digital Britain: Interim Report that proposed to enact legislation requiring Internet Service Providers (ISPs) to notify alleged infringers of copyright as to the illegality of their conduct. Furthermore, it recommended that ISPs collect ‘anonymised’ information on serious repeat infringers which could be made available upon production of a court order. This was followed by a series of proposals by the DBIS with the ostensible purpose of moving the UK to the “forefront of the global move towards a digital economy”. The resulting Digital Economy Act (DEA) was passed by the last Parliament during the ‘wash-up’ period with minimal scrutiny from the Houses of Parliament and received royal assent on 8th April 2010. (Strictly speaking, ss3-15 of the Digital Economy Act amends the Communications Act 2003 to add new sections 124A to 124M, while Section 16 amends the CA by adding definitions to Section 124N)Contrary to popular opinion at the time, the DEA did not contain ‘Henry VIII’ powers giving the Secretary of State power to modify substantive copyright law; but the Secretary may make regulations about “blocking injunctions in respect of a location on the internet”. The explanatory notes of the DEB state that these provisions “impose obligations on Internet Service Providers.” As stakeholders were unable to reach a consensus to an industry code, Ofcom drafted an ‘initial obligations’ regime for ISPs. The resulting ‘code’ requires ISPs to receive and process Copyright Infringement Reports (CIR) prepared by copyright owners.

BPI get meeting with the Prime Minister. Do file-sharers?

This process involves an owner of a right sending a CIR to the ISP that hosts the IP address alongside evidence of alleged copyright infringement, and the time of the alleged infringement. ISPs may send their account-holder a notice of alleged infringement, and additional information on the “purpose of copyright” to either their registered email or their postal address. The Act did not require a notification for each CIR, so notifications may be based on multiple CIRs. The Act also allows for a rights-owner to notify an ISP of an infringement if it appears to the rights-owner that the ‘subscriber’ “allowed another person to use the service and that other person has infringed.” Section 124G, together with 124H and 124J allows for repeat offenders, already on a CIR, to be placed on a Copyright Infringement List (CIL), and given to rights-owners. This is the database that the BPI wants the government to implement. Rights-owners would then be able to cross-reference users for repeat infringement. After matching repeat offenders, the Rights-owners can apply for Norwich Pharmacal orders to learn the alleged infringer’s identity with "evidence and information from an innocent third party that is connected to the wrong”. Alleged infringers would not be able to rely on the DPA for protection, as Section 35 allows disclosure of personal data without consent “where disclosure is required by any rule of law or by order of court.

Report claims the shut down of Kim Dotcom's Megaupload hurt small film makers.

The result of this is that the copyright owner has a list of subscribers accused of repeatedly infringing copyright. In order to take any action against them the rights-owner still needs to take the ISP to court to obtain the subscriber's details and identity. The Ofcom regulations were never implemented after a court ruled that the entire cost of the program should be paid for by rights-holders and several ISPs questioned the legality of providing users’ details to record and film companies for private prosecution. Talk Talk’s concerns were that such data collection is questionable activity under the Data Protection Act. “We are involved in discussions about measures to address illegal file-sharing and ultimately would like to reach a voluntary agreement. However our customers' rights always come first and we would never agree to anything that could compromise them.” A spokesperson for Virgin added, “Music and film companies are speaking to broadband providers about how to address illegal file-sharing but what they're currently proposing is unworkable.” A recent Ofcom report claimed that between November 2012 and January 2013, Internet users in the UK downloaded 280 million music tracks, 52 million TV shows, 29 million films, 18 million eBooks and 7 million computer games illegally. The data also revealed that around 18 per cent of UK internet users admit to recently downloading pirated files but only 9 per cent fear getting caught.There was no comment from the BPI on a report that downloading pirated films increase profitability for studios, especially for smaller, low-budget films. The report, from researchers by economists at the Munich School of Management and Copenhagen Business School, claims social media often acts as a mechanism to spread information about a pirated film. This results in a shift in the categorization of consumers with a low willingness to pay to consumers with a high willingness to pay. This effect seems to be especially important for films with smaller audiences.

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