Ofcom Proposes to Fight Digital Piracy With Notices But Not Internet Cutoff—Yet

The Digital Economy Act (DEA) 2010 set new responsibilities on Ofcom to administer measures aimed at cutting down on online copyright infringement, the document on obligations (http://xrl.us/bncxzu) said. They're part of a multi-pronged government effort to reduce piracy through enforcement, consumer education and encouraging industry to develop and promote legal online services, it said. The measure creates new obligations for ISPs, it said. They must notify subscribers if their Internet Protocol addresses are reported by copyright owners as being used to infringe; keep track of the number of reports received on each subscriber; and keep an anonymized list of those subscribers for whom there are reports above a certain threshold number, it said.

The May 2010 draft code, written pursuant to the DEA, proposed that the rules apply only to fixed ISPs with more than 400,000 subscribers, Ofcom said. It also called for copyright owners to self-certify their evidence-gathering systems. It gave content owners 10 working days from gathering the evidence to submit it to ISPs, which would then have 10 working days to identify the subscriber and send a notification if appropriate. The original version also called for a three-stage notification process with at least a month between each notice, and for subscribers to go on a copyright infringement list if they received three notices within 12 months, Ofcom said. The first draft also provided for an independent appeals process to allow subscribers to challenge notices on grounds specified in the act or on any other ground, it said.

Much of the code remains the same, Ofcom said. It clarified that only providers of fixed Internet access supplying services over more than 400,000 broadband-enabled lines will be subject to the initial requirements. “Qualifying ISPs” now are BT, Everything Everywhere, O2, Sky, TalkTalk Group and Virgin Media, the agency said. Access providers that don’t meet those criteria, such as mobile network operators and Wi-Fi services providers, are outside the scope of the code, it said.

Other key changes include: (1) Requiring that copyright owners’ evidence-gathering systems be approved by Ofcom before they send any reports of apparent violations to ISPs. (2) Clarifying that copyright owners may only send a copyright infringement report if they have collected evidence in accordance with approved procedures which give reasonable grounds to believe that a subscriber has infringed the owner’s copyright by means of an Internet access service, or has let someone else use the service who has then infringed. (3) Limiting appeals to grounds set out in the act.

In a second document, on cost-sharing (http://xrl.us/bncx2n), Ofcom said copyright owners should bear all the costs incurred by the regulator, the majority of costs incurred by the appeals body, and 75 percent of the expenses “efficiently and reasonably incurred” by qualifying ISPs. Each copyright owner’s share of the costs should be proportionate to the number of notices it proposes to send during a notification period, the first of which it proposed running from March 2014-March 2015. ISPs won’t be reimbursed for individual actual costs, it said. The consultation document proposed setting fixed costs for processing notices, including capital and fixed operating costs, at £1.4 million ($2.2 million) per qualifying ISP, of which 75 percent will be charged to copyright owners through the notification fee. It calls for the variable cost to ISPs of processing the notices to be set at £0.80 per notice, 75 percent of which will be paid by copyright owners. Ofcom said it will set two notification fees, one for the larger ISPs and the other for the two smaller ones.

The DEA also calls for further “technical obligations” designed to cut down on online infringement, Ofcom said. Such measures include bandwidth throttling, limiting or blocking access, or temporary account suspension, it said. Those obligations can’t be imposed on ISPs until the code’s been in force for at least a year and Ofcom gauges which technical measures should be imposed, it said. “While the imposition of technical measures could ultimately form part of the framework,” they're not part of the current discussion, the regulator said.

The Internet Services Providers’ Association welcomed the fact that copyright owners will have to have their procedures approved by Ofcom before they send reports of suspected infringements to ISPs. It’s disappointed, however, that account holders will still receive a copyright notice regardless of who carried out the alleged infringement. ISPs are also unhappy that they're being forced to pay any of the costs, the association said. Its view that “a beneficiary pays principle should be followed is unchanged,” it said.

"Ofcom are being asked to put lipstick on a pig with this code,” Open Rights Group Executive Director Jim Killock wrote on ORG’s blog (http://xrl.us/bncx4r). The appeals are a joke, he said. The government has decided that “I didn’t do it” isn’t a defense, so some people will almost certainly end up in court having done nothing wrong, he said. ORG is upset that consumers will have to pay £20 to appeal, and that the grounds for appeal have been narrowed, Killock said. Though commercial Wi-Fi operators have been excluded from the code, libraries, hotels and bars sharing broadband connections over Wi-Fi will have to rebut accusations relating to their customers, he said.

"It’s time to get down to business and start implementing the law to educate consumers about illegal downloading, so that artists and creators are fairly rewarded for their hard work,” British Phonographic Industry CEO Geoff Taylor said. Comments on the draft code are due July 26; on the proposed cost-sharing arrangements, Sept. 18. Ofcom said it expects the code to be in effect by January.