Tuesday, June 01, 2010

Digital Economy Act developments


Last Friday Ofcom commenced a consultation (closing on 30th July) on how the code of practice governing the implementation of the Digital Economy Act should operate.

The headline is the proposal to limit initial application of the code to the seven UK fixed ISPs with more than 400,000 subscribers: BT, O2 (taking into account its fixed internet access subscribers only), Orange (taking into account its fixed internet access subscribers only), Post Office, Sky, TalkTalk Group and Virgin Media.

I think this would be a positive outcome, given the concerns that have been expressed across the education sector and elsewhere, particularly in relation to the implications of the Act on the provision of open access wi-fi in public spaces. The question is whether copyright owners (the driving force behind the Act) are prepared to accept this and whether Ofcom's proposal gets agreed as a result. Further analysis of the consultation on Andrew Cormack's excellent blog and also on dot.Rory, the blog maintained by the BBC's Rory Cellan-Jones.

But it's very important not to interpret this as being "let off the hook" - a range of steps need to be taken (and communicated) if the education sector wishes to remain outside the implementation of the code. In the main, this is likely to mean continuing and consolidating existing good practice (technical measures, user education, AUPs, effective and enforced sanctions etc), as well as maintaining a regular review of activities and developments. So definitely not an opportunity for complacency.

Some key extracts from the consultation...

On whom the code initially applies to:

1.6 As regards those ISPs to whom the Code should apply, the guidance from Government on how we should implement the measures is very clear. The intent is that small and medium sized ISPs should not initially fall within the scope of the Code. However, should evidence be presented that infringement was a significant issue on those ISPs then we will consider bringing them within the scope of the Code. Our proposal is that fixed ISPs with more than 400,000 subscribers should initially be subject to the Code. We believe this approach to be appropriate because it focuses the obligations on the major ISPs who provide internet access to more than 96% of the UK market, it is consistent with the Government’s intentions and, based on evidence received from copyright owners, the vast majority of alleged infringement is amongst subscribers of those ISPs. Mobile operators are initially excluded, due in part to current mobile technologies being less conducive than fixed for copyright infringement. However, we will review, on a regular basis, whether to extend coverage of the code.

3.14 On the second question, relating to the potential coverage threshold for ISPs, we propose that, for the first notification period, Qualifying ISPs should be those which provide a fixed internet access service to more than 400,000 subscribers. Currently there are seven fixed ISPs that meet this criterion: BT, O2 (taking into account its fixed internet access subscribers only), Orange (taking into account its fixed internet access subscribers only), Post Office, Sky, TalkTalk Group and Virgin Media.

On what might happen in future:

3.24 When Ofcom reviews the criteria for qualification as a Qualifying ISP, we will need to carefully consider whether such operators should be brought within the scope of the Code. We will take into account all relevant factors in deciding upon this, including the extent to which consumers would be prejudiced by their inclusion, the level of online copyright infringement occurring through such networks and the cost to such operators of being subject to the scheme. ISPs who may become subject to the Code, particularly those whose business model would be severely affected by the obligations, may wish to consider whether they can reduce or avoid the possibility of being brought within the scope of the scheme by controlling the incidence of infringement on their networks.

On the definition of subscribers under the code:

3.30 The critical question, in relation to subscribers, is the position of an individual or undertaking which both receives internet access as an end-user, and also makes it available to others. Some businesses provide access in their public areas, and some consumers may also run unprotected Wi-Fi networks to allow others in their community free access to the internet. We consider that a person or an undertaking receiving an internet access service for its own purposes is a subscriber, even if they also make access available to third parties.

3.31 Those who wish to continue to enable others to access their service will need to consider whether take steps to protect their networks against use for infringement, to avoid the consequences that may follow. The advice which ISPs are required to provide to subscribers on protecting their networks (as part of the notification letters) may help in this objective, as may more general information which we hope will be provided by stakeholders. (Though it should be acknowledged that it will be more challenging to support subscribers to protect their networks against use for infringement while offering open access to a local community)

On when the code may come into effect:

9.11 There are two final steps in the overall process for bringing the initial obligations into effect. The first is approval from the European Union (Standards and Technical Regulations Committee).

9.12 If this approval is given, the code will need final approval from the UK Parliament. It is possible that the UK Government could seek to obtain Parliament’s approval soon after EU has given its authorisation and if this transpires to be the case, the Code could come into force in early 2011.

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