More on Digital Economy Act 2010

Further to my article on Digital Economy Act (Act), which imposes:

1. Obligations on internet service providers aimed at reducing online infringement of copyright.
2. Power for the Secretary of State to block an internet location, that is being used in connection with copyright infringement.
3. New duties for Ofcom to report, every three years, on the UK’s communications infrastructure, internet domain name registration and how media content contributes to the public service objectives.
4. Power of intervention in relation to internet domain registries.
5. Extension of the range of video games that are subject to the classification requirement.
6. Increased penalties for copyright infringement.
7. Changes to the public lending right.

The Act requires Internet Service Providers (ISPs) to undertake an active role to fight online copyright infringement. In particular, the Act requires that ISPs must:

* Notify their subscribers if the internet protocol (IP) addresses associated with them are reported by copyright owners in a copyright infringement report and the information in it (CIR) as being used to infringe copyright.
* Provide, on an anonymous basis, copyright infringement lists (CILs) to copyright owners. This provision will only apply to subscribers about whom the number of CIRs has exceeded a set threshold, agreed in an initial obligations code. With this information, a copyright owner could apply to the courts to obtain the names and addresses of those subscribers on the list.

The costs involved in ISPs’ performing their compliance obligations are to be apportioned between copyright owners and ISPs and, in the case of subscriber appeals, the subscriber concerned are to be determined by an order of the Secretary of State.

As I explained in my previous article, the Act also requires that the initial obligations were supported by a code of practice to be made by industry and approved by Ofcom or, if no industry code was put forward, made by Ofcom. The code had to be made within eight months of the Digital Economy Act Silencil coming into force but this deadline was recently extended by a further three months.

To progress the above points, the government issued a consultation which ended on 25 May 2010. Based on this, the following were agreed:

* Copyright owners would bear their own costs in detecting infringements, sending CIRs to ISPs, and the cost of any legal action.
* The government concluded that there should be no fee for subscribers to appeal against a notification letter. However, the government retains the power to introduce a fee at a later date should it become clear that a large number of vexatious appeals result.
* Copyright owners and ISPs would share the cost of processing the CIRs, maintaining the infringer lists and issuing any notifications to subscribers in the ratio 75:25, via the payment of a “flat fee” payable by the copyright owner for each CIR sent to an ISP.
* ISPs and copyright owners would share the costs incurred by Ofcom in relation to implementation of certain provisions of the Act.

The above were not without controversies:

On the one hand, copyright owners argued in their responses to the consultation, that the costs covered did not take account of the resources they were required to commit in order to investigate and notify infringements, and also ignored the economic benefit to ISPs, for example, in reducing the stress caused to networks through widespread infringement. They also maintained that the 75:25 split was entirely arbitrary. In relation to Ofcom’s costs, they argued that the split should be split 50:50. The copyright owners also contended that a refundable, affordable fee should be charged for a subscriber to appeal against a notification letter, since otherwise there was a real risk of vexatious appeals and campaigns to overload the system.

On the other, most ISPs who responded argued that copyright owners, as “sole beneficiaries” of the initial obligations, should bear all of the costs associated with them since otherwise a “copyright enforcement” tax would be imposed on innocent customers, and cost-sharing could reduce broadband uptake and slow down essential innovation needed to solve the problem of copyright infringement.

Finally, consumer groups felt that there should be no fee for appeals, and two out of the four consumer groups who responded felt that all costs should fall to copyright owners, since most broadband subscribers did not infringe copyright, but any cost to the ISPs would be passed on to all of their subscribers.


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