Digital Economy Bill - P2P Plans Amended by the House of Lords

The Digital Economy Bill is designed to implement several disparate strands of Government policy arising from the 'Digital Britain' white paper published in June 2009. These include imposing new obligations upon Ofcom to report on the state and development of electronic communications infrastructure. The Bill grants the Secretary State new powers in relation to internet domain registries, empowers Ofcom to appoint and fund providers of local news services and provides for the regulatory framework necessary for the delivery of a switchover of radio services to Digital Audio Broadcasting. It also empowers Ofcom to oversee the allocation of freed-up spectrum available for next generation mobile broadband services, known as the 'Digital Dividend'; it requires video games to be classified with age restrictions and introduces new copyright provisions relating to exploitation of orphan works (works whose owners cannot be identified).

The Bill also includes controversial provisions to punish and prevent peer-to-peer (P2P) file-sharing and these include sweeping powers for the Secretary of State to amend copyright law and to require Internet Service Providers (ISPs) to impose “technical measures” on their customers. The Bill has been read and debated in the House of Lords and recently, a new version including those agreed amendments was published on the parliamentary website.

Initial Obligations

The Bill imposes two initial obligations upon ISPs:

• ISPs must respond to copyright owners' requests to write to subscribers informing them that their accounts have been identified as being associated with P2P file-sharing;
• ISPs must keep lists of alleged copyright infringements reported by particular rights holders in relation to each subscriber account and provide rights holders with these lists on request;

There is no requirement for notifications to identify the particular rights holder who alleges an infringement has occurred. However consumers should be entitled to know where a request has originated from, especially if such requests could later culminate in technical measures being taken against them, and ISPs would rather share or minimise the reputational damage of sending such letters.

As for the monitoring obligation, it seems onerous and duplicative for ISPs to store information provided by rights holders in order to give it back to them later at their request.

Technical Measures and Enforcement

The Bill also provides the Secretary of State with the power to direct ISPs to take “technical measures” against their customers, including cutting them off their Internet connections, if he considers it appropriate to do so. The House of Lords have recently introduced an amendment to the Bill which requires the Secretary of State to lay any orders under this power before Parliament as secondary legislation. We prefer the view that any new law which may result in innocent people being cut off from the Internet ought at least to be debated and given due consideration as primary legislation.

“Technical measures” will be governed by a separate code, which will allow subscriber appeals on the grounds that a decision to impose a technical measure was based on an error of fact, or was wrong in law or unreasonable. Subscribers accused may themselves need to pay for all or part of the costs of such an appeal. Internet users may be concerned that the onus would be on them to appeal after the event at their own cost, rather than have the presumption of innocence and the benefit of a fair trial before being disconnected.

Bizarrely the Bill does not specify that for a technical measure to be implemented, the subscriber against whom such a measure would be taken must be shown to have infringed copyright.

There has been some doubt for some time whether the imposition of technical measures, and requiring ISPs to determine when to apply them, would be compatible with Human Rights and European law, including, in particular, the provisions of Article 1(b) of Directive 2009/140/EC of the recently approved Telecoms Package.

The Telecoms Package provides support for arguments that any attempts to cut customers off should require a prior, fair and impartial procedure including the right to be heard. The Government appears to take the view that access to an appeals tribunal would satisfy this requirement. Opponents would question whether this can be right and whether the plans would satisfy the legal requirements of due process and proportionality. The explanatory notes to the Bill indicate that once the power is exercised it is the Government's intention that it will be left to ISPs to determine when to apply technical measures, creating a quasi-judicial role they are neither willing, nor well suited, to perform.

Rewriting Copyright Law

As reported in November 2009, the Bill allows the Secretary of State to alter copyright law if he believes it is not up to the task of preventing infringements in the digital age. Again, latest amendments mean that any draft orders exercising this power must be laid before Parliament, but as above, we consider that any new law rewriting copyright laws ought to be debated properly and given due consideration as primary legislation.

Come what May

Various considerations (such as the numbers of notifications ISPs must deal with, the allocation of costs, the levels of evidence required, and who determines whether infringements have occurred,) have all been left to be determined in industry codes subject to the approval of the Secretary of State. Much of the Bill is drafted in permissive, not mandatory terms. For example, the code relating to technical measures 'may' provide for copyright owners to indemnify ISPs and ‘may’ include provisions suspending technical measures against a subscriber who wishes to appeal, but both of these important safeguards are further caveated with the wording 'unless the Secretary of State requires otherwise'. Under the legislation, the vast majority of the key matters relating to due process, evidence or costs have been left unresolved, and rights holders do not seem to be legally obliged to comply with any of the codes.

Picking up the Bill

ISPs may be fined up to £250,000 for non-compliance with any relevant codes. Particular cost sharing arrangements will be determined at a later date. General provisions have been amended to specify that costs may be shared by the following only: copyright owners, Internet service providers, and surprisingly, subscribers. Uncomfortable choices are still to be made as to who pays what, although recent Government statements have indicated that the Government wishes ISPs to bear the bulk of the costs, and that customers will have to pay to appeal against decisions to cut them off. The first day of report stage, which involves a further line-by-line examination of the Bill in the House of Lords, is scheduled for 1 March.