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Review of Parts of UK Digital Economy Act

April 12, 2010

The Digital Economy bill finally passed in the UK Parliament by 4:1 majority and received Royal Assent last week as part of the “wash up”. (As predicted by user astro-tboy, the UK ISP “Talk Talk” run by Car Phone Warehouse has announced its support of theivery and its desire to distinguish itself in the marketplace of ideas.)

The Digital Economy Act takes a number of encouraging steps toward establishing market rules for the digital society, and thanks largely to MPs Jeremy Hunt and Ed Vaizey, the more onerous broadband tax and orphan works clauses were removed to the great relief of the creative community everywhere, particularly illustrators and other visual artists.


The process for handling alleged stealing is quite reasonable and is settling into what is becoming the customary stepwise pattern: Within a month after an independent artist or other copyright owner identifies an apparent theft, they can send a “copyright infringement report” to ISPs with their evidence. The ISP must notify its subscriber within a month after that and let the subscriber know of the evidence against them and their legal rights. If requested by the copyright holder, ISPs must provide a list of each infringement by a subscriber. This list does not disclose the identity of the user. In any event, ISPs need not notify subscribers of alleged thefts over 1 year old.

Best Practices

The creative community will be able to put forward its own best practices to implement these procedures, or failing that, Ofcom will need to devise its own code of practice to implement this practice (“initial obligations code”), which in turn will likely need to receive Parliamentary approval.

Repeated Theft

The Secretary of State for Business will be able to require ISPs to limit internet access for repeated stealing, including suspension, or bandwidth capping or shaping, if the stealing continues for 12 months after the implementation of the Ofcom initial obligations code.

It is unclear (at least to me) if the “subscriber” who can be dealt with under the initial obligations code includes web site operators (such as the Pirate Bay) who reach UK users through a network. This issue is also dealt with in Clause 17, which seems better suited to blocking locker service thieves such as Rapidshare and I believe would enable a court to order the ISP to block. (An interesting twist on this is whether an ISP would need to even allow a recidivist service to get or maintain a hosting account in the first place, as well as the reciprocal treatment in other EU countries.)

Licensing Solutions/Reporting of Volume of Notices

The Digital Economy Act has a good deal of incentive built in for copyright owners to find licensing solutions (often focused on the music industry, but not limited to us), as Ofcom has to report to the Secretary of State (and ultimately to Parliament) on the state of online license as well as levels of theft, education on copyright theft, and the volume of “copyright infringement reports.”

This last report on the number of notices received by ISPs is something we have advocated on MTP for quite some time in the context of DMCA notices (See How Many DMCA Notices are Too Many?). Hopefully, the Congress will take note of this very good idea coming from the UK as right now no one in the Congress has any idea of the sheer volume of DMCA notices—hence, also has no idea that they have essentially created three classes of artists: those who would like to use them, and can afford them; those who would like to use them, but can’t afford them or can’t figure out how to do it; and those lost in despair as their life’s work is ripped off effectively without the recourse contemplated by a number of human rights documents to which the US is a signatory. (See Artist Rights are Human Rights.)

It also appears (and I am seeking confirmation on whether I am reading this correctly, that clause 10 allows the government to order Ofcom to seek consultation with industry to determine whether wholesale ISPs can sanction speed blocks, bandwidth shaping, site blocking, account suspension or other limits against an ISP customer. Under clause 11, the government could then effectively degrade or shut down an ISP for promoting theft if approved by both houses of parliament.

Who Pays?

Ofcom can create its own code to cover enforcement procedures, subscriber appeals and costs. Users can appeal to an independent ombudsman-type person designated by Ofcom and eventually to a “first tier” tribunal. This sounds like it is intended to be what we would call a “trial de novo” in a court following the exhaustion of administrative remedies. Costs would be met by the ISP, copyright holder and subscriber.

Ofcom’s costs of enforcement are borne by copyright owners; both copyright owners and ISPs pay for implementing technical measures; and accused users share in the costs of appeals of their cases. ISPs that fail to apply technical measures against stealing can be fined up to £250,000.

Copyright owners must pay Ofcom’s costs; both copyright owners and ISPs must pay costs of implementing technical measures; accused subscribers must also share appeal costs.

As I read the Act, the first alleged theft notifications can be sent as early as January 2011, and the more stringent technical measures could start in 2012. It should be noted that the Act covers both p2p-type, hosted or other forms of theft, including a provision that allows the UK Secretary of State for Business to promulgate regulations to permit courts to block any site 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”.

In my view, this last is the most important. It could, for example, be used against both the Pirate Bay, Isohunt and Google.

There is more to the Act than I covered, but I think we discuss the most important parts for the creative community. You can find the Act discussed on the Parliament website. The UK now joins France in having taken concrete steps to protect its professional creative community. More than you can say for the US and Canada.

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