Ministers have given a concession over what critics claimed were draconian powers which would enable them to crack down on online content in the name of copyright infringement.

A clause in the Digital Economy Bill would have allowed ministers to amend existing internet control laws without the need for further legislation.

Google and Facebook were among firms to complain about the measure, saying it would hamper digital innovation.

Officials said they were refining the proposals after heeding concerns.

Section 17 of the bill, which has attracted the most anger, would give ministers reserve powers to draft fresh laws to tackle net-based copyright infringement without needing parliamentary approval.

Ministers argued that such powers were needed to support copyright laws against future, more technically advanced forms of piracy. But Conservative and Lib Dem peers had both threatened to vote against the measure when it is considered next in the House of Lords.

In response, the government has tabled several amendments.

These would mean existing copyright laws could only be amended by statute if there was a significant new threat of infringement and would provide for more parliamentary scrutiny before this happened.

The Department for Business said it was not backing away from the controversial clause and its core objectives but had listened to concerns about how it was being targeted.

Controversial proposals that would give Lord Mandelson unprecedented powers to amend censorship laws will be jettisoned next week when the Government suffers the first large defeat of its flagship media plans.

Conservative and Liberal Democrat lords will unite to vote down Clause 17 of the Digital Economy Bill, which has been criticised by internet giants such as Google and Yahoo!, when the Bill is put to vote in its report stage.

The Government maintains that the plans are necessary to future proof the Bill against emerging methods of piracy.

But internet firms and the Opposition said that despite attempts by Lord Mandelson to water down the proposals and increase parliamentary scrutiny of any fast-tracked legislation, via measures such as a 60-day consultation period, the proposals still allowed ministers to impose arbitrary measures.

Jeremy Hunt, the Conservative Shadow Culture Secretary, said his party will vote against the clause next week. He added: The Government has failed to address any of the concerns we raised with them. They still want a wide ranging and unconstitutional power yet can't tell us what they want to use it for.

The government will not exempt universities, libraries and small businesses providing open Wi-Fi services from its Digital Economy Bill copyright crackdown, according to official advice released earlier this week.

This would leave many organisations open to the same penalties for copyright infringement as individual subscribers, potentially including disconnection from the internet, leading legal experts to say it will become impossible for small businesses and the like to offer Wi-Fi access.

Lilian Edwards, professor of internet law at Sheffield University, told ZDNet UK that the scenario described by the Department for Business, Innovation and Skills (BIS) in an explanatory document would effectively outlaw open Wi-Fi for small businesses, and would leave libraries and universities in an uncertain position.

This is going to be a very unfortunate measure for small businesses, particularly in a recession, many of whom are using open free Wi-Fi very effectively as a way to get the punters in, Edwards said.

Even if they password protect, they then have two options — to pay someone like The Cloud to manage it for them, or take responsibility themselves for becoming an ISP effectively, and keep records for everyone they assign connections to, which is an impossible burden for a small café.

In the explanatory document, Lord Young, a minister at BIS, described common classes of public Wi-Fi access, and explained that none of them could be protected. Libraries, he said, could not be exempted because this would send entirely the wrong signal and could lead to 'fake' organisations being set up, claiming an exemption and becoming a hub for copyright infringement.

Young added that free or coffee shop access tends to be too low-bandwidth to support file-sharing and, under the bill, such a service is more likely to receive notification letters as a subscriber than as an ISP. He recommended that they secure their connections and install privacy controls, to reduce the possibility of infringement with any cases on appeal being considered on their merits.

Not So Liberal Democrat peers have proposed a new clause for the Digital Economy Bill that sets the ball rolling for state internet filtering:

Lord Razzall and Lord Clement-Jones have proposed the following new clause

Preventing access to specified online locations

In Part 1 of the Copyright, Designs and Patents Act 1988, after section 97A insert—

97B Preventing access to specified online locations

(1) The High Court (in Scotland, the Court of Session) shall have power to grant an injunction against a service provider, requiring it to prevent access to online locations specified in the order of the Court.

(2) In determining whether to grant an injunction under subsection (1), the Court shall have regard to the following matters—

(a) whether a substantial proportion of the content accessible at or via each specified online location infringes copyright,

(b) the extent to which the operator of each specified online location has taken reasonable steps to prevent copyright infringing content being accessed at or via that online location or taken reasonable steps to remove copyright infringing content from that online location (or both),

(c) whether the service provider has itself taken reasonable steps to prevent access to the specified online location, and

(d) any other matters which appear to the Court to be relevant.

(3) An application for an injunction under subsection (1) shall be made on notice to the service provider and to the operator of each specified online location in relation to which an injunction is sought.

(4) Where—

(a) the Court grants an injunction under subsection (1) upon the application of an owner of copyright whose copyright is infringed by the content accessible at or via each specified online location in the injunction, and

(b) the owner of copyright before making the application made a written request to the service provider giving it a reasonable period of time to take measures to prevent its service being used to access the specified online location in the injunction, and no steps were taken, the Court shall order the service provider to pay the copyright owner's costs of the application unless there were exceptional circumstances justifying the service provider's failure to prevent access despite notification by the copyright owner.

(5) In this section—

copyright owner includes a licensee with an exclusive licence within the meaning of section 92 of this Act,

infringing content means content which is produced or made available in infringement of copyright,

online location means a location on the internet, a mobile data network or other data network at or via which copyright infringing content is accessible,

operator means a person or persons in joint or sole control of the decisions to make content accessible at or via an online location, and

service provider has the meaning given to it by section 97A(3) of this Act.

Update: Shared Interests

5th March 2010.

Lord Clement-Jones one of the proposers of the  new clause became the talk of the internet when it was noticed that he receives significant money from a law firm standing to gain from measures in the Digital Economy Bill

See Register of Interests from publications.parliament.uk

CLEMENT-JONES, Lord

Partner of DLA Piper (international law firm) and adviser to its global government relations practice.

The member is paid £70,000 in respect of his services as Co-Chairman of DLA Piper's global government relations practice

Update: Amendment Passed

5th March 2010. Based on article from guardian.co.uk

One of the most contentious parts of the controversial digital economy bill was voted down by the House of Lords last night – only to be replaced by a clause that campaigners say is even more draconian.

The Liberal Democrats forced through a surprise amendment to the bill's notorious clause 17 on Wednesday – in a move that dealt a defeat to the government but troubled critics, who suggest it will have the opposite effect that its creators intend.

Instead of sweeping new powers that threatened sweeping alterations to British copyright law, the Lib Dems added a clause that gives extra oversight to the high court.

The new proposal – which was passed in the House of Lords by 165 votes to 140 – gives a high court judge the right to issue an injunction against a website accused of hosting a substantial amount of copyright infringing material, potentially forcing the entire site offline.

Putting forward the amendment, Lib Dem peer Lord Clement-Jones said that it would placate concerns over the so-called three strikes rule – which could see those accused of sharing files illegally online having their internet connections cut off – and added that it was a more proportionate, specific and appropriate way to approach infringement than the previous proposals made by the government.

But instead of making the proposed system more transparent and accountable, critics say it will simply leave it open to abuse.

This would open the door to a massive imbalance of power in favour of large copyright holding companies, said Jim Killock, executive director of the Open Rights Group. Individuals and small businesses would be open to massive 'copyright attacks' that could shut them down, just by the threat of action. This is exactly how libel law works today: suppressing free speech by the unwarranted threat of legal action. The expense and the threat are enough to create a 'chilling effect'.

In particular, there are concerns that the amendment could follow in the footsteps of America's controversial Digital Millennium Copyright Act, which has been accused of encouraging companies to file bogus copyright claims to block material they dislike.

The high costs and dangers of dealing with copyright claims in court mean that many web hosts simply take down the material in question without checking whether the copyright case is legitimate – even going as far as shutting down entire websites in some cases.

The new amendment could also have dire implications for websites like YouTube, where users can upload copyright-infringing material without the knowledge of the site's owners.

Update: A Good Summary from Metro

6th March 2010. Based on article from metro.co.uk

Video-sharing websites such as YouTube could be blocked in Britain after a last-minute change to a new law

They are facing a major clampdown on using copyright material under an amendment passed by the House of Lords.

The change grants TV and music companies the right to demand their material is taken down. If the request is refused, they can take their challenge to court, where high legal costs will make it pointless to launch a defence.

Under the new law, copyright holders must ask ISPs and the website itself to remove the material or any links to other sites hosting it. If it is not taken down, a court order can force the ISP to block the site.

The amendment is aimed at websites with substantial amounts of copyrighted material. However, critics say the law, which is set to be passed in April, is unclear about what substantial means and that it is unfair to block an entire site over a few minor breaches. They say ISPs would simply shut out a site rather than risk the high legal costs of defending a case.

Nicholas Lansman, secretary-general of the Internet Service Providers Association, said: Our members are extremely concerned that the full implications of the amendment have not been understood.