Sharing in the UK

None of the options highlighted in the consultation document won widespread support. Rather there was a marked polarisation of views between the rights holder community and consumers and the ISPs over what action should be taken.

There was a degree of consensus that any solution must involve the provision of new legal sources of attractive content and the need for education on the importance of copyright in the wider economy.

ISPs

No ISP was in favour of any regulatory solution (including co-regulation). Almost all suggested the way to deal with P2P was through the provision of legal offers, education and the use of the existing legal system to enforce copyright holders rights.

Rights holders

Those rights holders that have participated in the MOU process are firmly behind the co-regulatory approach, seeing ISPs as needing to take some responsibility for copyright infringement on their networks. Others were also generally in favour, though sometimes concerned to have been excluded from the process, and over the potential for a 2-tier system with small ISPs being relived of needing to adhere to the Codes of Practice. Some responses to the consultation were in favour of streamlining the legal process to enable personal information to be passed directly from ISPs to rights holders. However, the Information Commissioner expressed concern about any move in that direction.

Consumers and Rights Groups

Serious concerns were raised over privacy and data protection. Significant concern focused on the reliability of the evidence of infringements. This issue was seen as a market failure and not a regulatory one. No support for the co-regulatory option; again education, legal offers and the enforcement of existing rights were identified as the way forward.

Individuals

Over 25% of responses were from individuals. There was no support for a co-regulatory regime with concern raised over privacy and data protection. There was widespread doubt over the ability to solve the issue via technology.

General

Respondents not involved in the MOU process voiced serious concern over the lack of transparency. Many felt unable to fully comment due to a lack of detail in the consultation proposals. Another common theme was the need for a proper impact assessment and CBA before any decision to regulate. There was also some disagreement about the ability of technical approaches to tackle the problem effectively.

Response by HM Government

The Government will respond to this consultation as part of the interim Digital Britain report due to be released later this month.

UK Ministers intend to pass regulations on internet piracy requiring service providers to tell customers they suspect of illegally downloading films and music that they are breaking the law, says the draft report by Lord Carter.

It would also make them collect data on serious and repeated infringers of copyright law, which would then be made available to music companies or other rights-holders who can produce a court order for them to be handed over.

With the creation of a body called the Rights Agency to be paid for by a small levy from the internet service providers and rights-holding organisations, these measures would form the spine of a new code of conduct for the internet industry. The draft report says the code would be overseen by Ofcom, the broadcasting regulator, according to people who have read it.

The guiding philosophy of the report is that the internet and music industries have failed to sort out the problems of illegal downloading between them, and the government sees this as its preferred solution. It says the two sides should share responsibility and hope the new agency will encourage them to find common cause.

The need for government intervention was apparently underlined when the department for business said none of its own proposals for regulation had won widespread support.

Every year, RIAA’s global partner IFPI publishes a digital music report, which can be best described as a one sided view of the state of digital music consumption. For several years in a row the report has shown that the sales figures of digital music have gone up, but still, the industry continues to blame piracy for a loss in overall revenue.

One of the key statistics that is hyped every year, is the piracy ratio of downloaded music. Just as last year, IFPI estimates that 95% of all downloads are illegal, without giving a proper source for this figure. Interestingly, those who take a closer look at the full report, will see that only 10% of the claimed illegal downloads are seen as a loss in sales.

Contrary to the RIAA’s arguments in court, the BPI and IFPI don’t believe in the every pirated download is a lost sale myth. Matt Phillips, BPI’s Director of Communications wrote in an email to TorrentFreak: No, we don’t think every illegal download is a lost sale (and never, ever, have, if my memory serves me correctly). The estimates for lost sales revenue is [sic] not calculated on this basis.

To come up with a ‘best guess’ of the real losses for the UK market, the music industry have commissioned Jupiter Research. For two years in a row, Jupiter estimated the losses are to be about equal to the revenue that comes from digital sales. If we combine this with the only one in 20 downloads is paid for guesstimate, only one in 10 illegal downloads is seen as a loss in sales.

What is clear from the report is that pirates have shown the music industry what consumers really want. The music industry is slowly starting to recognize that they have to compete with piracy, by offering high quality products.

In the report IFPI writes: An important development in 2008 was the licensing of more online stores to sell downloads without digital rights management (DRM). In January 2009, Apple announced it had signed deals with leading record companies to offer eight million DRM free tracks at flexible price points. The move is expected to significantly boost download sales.

The government's interim report on Britain's digital future has proposed a rights agency to combat piracy and support innovations that allow legal content distribution.

Stating that illegal content sharing urgently needs to be addressed, the Digital Britain report identifies a fundamental change in consumer expectation, particularly among young people, that digital content can be found and shared for free.

Firms need to make content available in ways consumers want, and within an effective rights framework that is internationally enforceable, the report said.

The proposed rights agency would bring together representatives from the government, along with production, distribution and technology firms to build on the existing memorandum of understanding on illegal file-sharing to create a framework to discourage piracy, give incentives for legal download services and encourage technical solutions to power legal services.

In a move designed to make it easier for rightsholders to identify and sue illegal content sharers, the report proposes that ISPs would be required to inform copyright infringers of their actions, collect anonymous data on repeat offenders – and make these details available to rights holders if they present a court order.

The agency could also have the power to step in if enforcement measures were not effective or proportionate.

ISPs would work with an industry code on illegal file-sharing that would be supported by Ofcom and could cover practical measures, appeals and cost-sharing principles for cases.

The Department for Business, Enterprise and Regulatory Reform is inviting comments on the report until 12 March.

I got an email from BERR last week about a discussion paper (pre-consultation) on what role a Digital Rights Agency would have. This is in response to the P2P file sharing consultation from the summer 2008 and the Digital Britain report that is being prepared. A few points of interest:

One of the proposals in the document (page 6) is that the DRA would have the following roles (in addition to others):

• A gateway in to the legal remedies being set out in P2P legislation, and to an informed discussion on other potential ways to deal with persistent infringement, such as road-testing technical measures
   
• Development of codes of practice around enforcement measures to prevent and reduce online copyright infringement. These would need to be strong enough to be likely to make a real impact on the problem, and could include, for example, such approaches as protocol blocking or bandwidth

In addition the idea is that the DRA would be industry led (page 16) and work closely with Ofcom. It may also have the right to consider appeals (page 16) to people who think they have been wrongly identified as filesharers.

Alongside the Digital Britain's headline announcement of a £6 tax per year for each landline, there was some more sinister messages concerning digital piracy. It appears as though the mafia are starting to get their own way a bit more with ISPs set to be mandated by Ofcom to provided a substandard service to alleged pirates (shouldn't be too hard for Tiscali to provide such a service!).

So that's the Government forcing individual households to lose a service they pay for due to allegations supported by evidence that almost certainly wouldn't stand up in a court of law. 1984, anyone?

Utter hypocrisy from Labour again. When BT and Phorm broke UK and EU legislation the Government were nowhere to be seen (and even colluded with Phorm in rewriting guidance on the matter), but a few people share some Britney songs and the Government feel compelled to step in and legislate. And we wont even go down the whole "benefit cheats steal money from the taxpayer and we are going to be taught and slap them in jail" quotes from MPs who committed fraud on their expenses.

The rights holders believe that every pirated song is a lost sale. It isn't and been proved as such. Research has shown, the people who pirate the most, also spend the most on music. Techies will move to getting their pirated material across obfuscated or untraced networks.

Basically:

Carter: Rights holders report file sharers, send letters and throttle Internet access. How do you like that?
Pirates: OK we'll use USENET, VPN, Darknets and obfuscated protocols.
Your move Carter.
Carter: Fuck!

Anyway, BIS (formally BERR formally DTI) are running a consultation on this at:
www.berr.gov.uk/consultations/page51696.html

Minister Ed Vaizey has confirmed to Open Rights Group that Government ministers are talking to copyright lobby groups and ISPs about a voluntary “Great Firewall of Britain” website blocking scheme. We need you to act now.

They want to block websites that music and film companies accuse of copyright infringement. 

But a 'self regulatory' censorship scheme places decisions about what you can and cannot look at online in the hands of businesses. It would remove the vital judicial oversight required by existing powers. Inevitable mistakes would lead to the censorship and disruption of legitimate traffic from businesses, publishers and citizens. And there is little evidence it will have any beneficial effects for the creative economy.

The good news is that the Minister has promised to include civil society groups in future discussions. We need to be there to counter the pressure rights holders are exerting on decision makers.

You can do your bit by letting your MPs know that website blocking is not acceptable and that the voice of civil society needs to be part of the discussions. Please email them now to tell them to oppose web blocking.

Read more on the legal and technical background here

The culture secretary, Jeremy Hunt, appeared to have kicked the ball into the long grass when he asked Ofcom to review the workability of the government's controversial web blocking plans earlier this year. In fact, the measures continue to move apace.

Proposals are being mooted on two fronts: one could establish a new version of the Internet Watch Foundation (IWF) to deal with filesharing; the other would put Google and the government on a collision course.

Proposal 1

Rights holders and internet providers are understood to be roughly in favour of an industry-wide voluntary code. This code would govern how and which filesharing sites are censored. Rights holders would likely have to satisfy a number of points before a Pirate Bay-like site would be blocked.

The code could establish a independent third body akin to the IWF that would implement the code and ultimately decide which filesharing sites are censored.

Detractors argue that such a newly created body would simply be too expensive and time consuming.

Proposal 1a

A variant, favoured by the legal professionals, is for a judge to rule whether a site should be blocked after the voluntary code has been satisfied. This would quell ISPs' fears about having to paying compensation to sites that claim to have been wrongly blocked, and also negate the need for a new body.

Proposal 2

Ofcom has been asked to review censorship via website blocking against the backdrop of the Digital Economy Act - in other words, this won't be voluntary, but set in a statutory context.

According to people consulted by Ofcom in recent weeks, the regulator is thought to be leaning down the domain name blocking route. Although Ofcom is not expected to recommend one blocking method over another, it will spell out the pros and cons of each.

Update: Meanwhile

30th April 2011. See article from torrentfreak.com

Following complaints from two of the country's largest ISPs, last month the High Court began its judicial review of the Digital Economy Act, the legislation put in place in the UK to deal with illicit file-sharing.

Both ISPs accused the former government of pushing through the legislation without due process and questioned whether the Act is enforceable under current EU legislation. They also challenged the statutory order, currently in draft, designed to apportion the costs of meeting the requirements of the DEA. Under the law, service providers are required to take action against subscribers flagged as illicit file-sharers and could be required to block domains associated with infringement.

Now the High Court has almost completely rejected the challenge by BT and TalkTalk, with the ISPs winning only a slight concession on costs.

Mr Justice Kenneth Parker upheld the principle of taking measures to tackle the unlawful downloading of music, films, books and other copyright material. BT and TalkTalk had brought the judicial review, claiming that the measures in the Act were not compliant with EU law and were not proportionate. The judge rejected the challenge.

The judge ruled ISPs could be made to pay a share of the cost of operating the system and the appeals process but not Ofcom's costs from setting up, monitoring and enforcing it.

The Government will now consider changes to the statutory instrument.

NUK Culture Secretary Jeremy Hunt has delivered a speech, calling on net firms, advertisers and credit card companies to cut ties with websites that link to unlawful content.

In a speech to the Royal Television Society, he said he wanted to make it harder for such sites to prosper.

Ideally the government would like to see Google remove pirate sites from its search engine completely. But Google's response suggested this was unlikely. Without a court order, any copyright owner can already use our removals process to inform us of copyright infringing content and have it removed from Google Search, the firm said in a statement.

In his speech, Hunt denied that blocking access to pirated content was an attack on net neutrality:

Unlawfully distributing copyrighted material is theft - and a direct assault on the freedoms and rights of creators of content to be rewarded fairly for their efforts

We do not allow certain products to be sold in the shops on the High Street, nor do we allow shops to be set up purely to sell counterfeited products. Likewise we should be entitled to make it more difficult to access sites that are dedicated to the infringement of copyright.

Hunt outlined measures for the new Communications Act which is due to become law towards the end of the current Parliament in 2015.

• A cross-industry body, perhaps modelled on the Internet Watch Foundation, to be charged with identifying infringing websites against which action could be taken
• A streamlined legal process to make it possible for the courts to act quickly
• A responsibility on search engines and ISPs to take reasonable steps to make it harder to access sites that a court has deemed contain unlawful content or promote unlawful distribution of content
• A responsibility on advertisers to take reasonable steps to remove their advertisements from these sites
• A responsibility on credit card companies and banks to remove their services from these sites.

Jim Killock, chief executive of the Open Rights Group, said the proposals set a dangerous precedent:

It is pretty dangerous to ask credit card companies or Google to decide who is guilty.

Once again Mr Hunt has listened to the lobbyists and has made no attempt to work out the scale of the problem. We are back where we were with the DEA, which is proving unworkable and an expensive nightmare.