On Twitter: @JamesFirth and @s_r_o_c (post feed)

Got a tip? tip@sroc.eu

Friday, 22 July 2011

BT, Talk Talk to appeal Judicial Review ruling on 7th October, Digital Economy Act now unlikely to take effect before 2013

Exclusive: The progress of the UK's three strikes laws to combat internet file-sharing of copyrighted works has been hit by a series of further delays which make it highly unlikely the first infringement warning letters will be received by ISP customers until the very end of 2012 at the earliest.

A second source tells me even this is highly optimistic: "it would need serious political will and hustle [to get warning letters out before the end of 2012]".  A more realistic timetable seeing letters hit doormats in the first few months of 2013 is, reportedly, a whole year behind the "accelerated timetable" (known internally within DCMS as the 'reboot') being pushed by culture secretary Jeremy Hunt 6 weeks ago.

Noting that the primary legislation was passed in 2010, this latest series of delays could see a full 3 years pass between the Queen granting Royal Assent to the Digital Economy Act and the first warning sent out under the act.

It also emerged today that British Telecom and Talk Talk have been granted a hearing for "permission to appeal and expedition" against the findings of a judicial review into the Digital Economy Act earlier this year.  The hearing will be heard at the Court of Appeal on the 7th October 2012 2011.

There has been a fair amount of inaccurate reporting on the process of the appeal against the initial ruling, with the message being pushed out at industry events by officials in the Department for Culture, Media and Sport (DCMS) that they now had the "green light" to move quickly on the measures following a ruling by Judge Sir Richard Buxton at the High Court on 20th June denying leave to appeal the ruling.

In reality the appeals process has multiple stages, with the first stage - usually in writing and decided by a single judge - being followed by an application for a hearing in front of 3 judges at the Court of Appeal.

Even the application for a full appeal involves multiple stages.  First the appellant must request "permission to appeal" - the Court of Appeal granted a hearing for permission to appeal on the 27th June, and resulted in the hearing scheduled for October 7, which is expected to be a short hearing, after which the judges will retire to consider whether to grant a full appeal ("expedition").

Hargreaves and phone hacking behind failure to reboot

Government sources told me the "reboot" plan to stimulate progress on the Digital Economy Act was due to be signed off by Cabinet over 2 weeks ago, however for "one reason or another" this never happened.

I understand from a contact that we can expect an official update on the 1st 3rd [Updated ETA 29/7] August, although it's widely believed that this will be related to the government's response to the Hargreaves review into intellectual property in the digital age.

Sources tell me the response to Hargreaves is an "integral part" of the government's Digital Economy Act strategy, presumably because some in government believe it will temper criticisms of measures in the DEAct if application of copyright protection is seen to be fairer.  It's thought the government will generally support the recommendations made by Professor Ian Hargreaves.

This overlooks the fact that the DEA in its current form pleases no-one.  Rights holder groups think it will be ineffective, civil rights groups disproportionate, and ISPs and tax payer groups costly.

However, failure to get cabinet sign-off on the government's response to Hargreaves in the midst of the News of the World hacking scandal could have lead to a delay of at least 7 weeks due to EC considerations.

Plus, I'm hearing cabinet is yet to sign off on Hargreaves, and since David Cameron is repeatedly questioned in the House of Commons about whether it's right and proper that government policy statements should be made first to the House, there is some scepticism as to whether any announcement will be made during recess.

I put a series of questions to the Department for Culture, Media and Sport, who told me seven times, in seven separate responses (including a response to a question "does the DCMS consider shortly to be more or less than 6 weeks and 5 days"):
"The Government will set out the next steps for implementation of the Digital Economy Act shortly"
Open internet "chill" and cost to rights-holders 

The two delayed pieces of legislation (Statutory Instruments), known as the Initial Obligations Code and the Cost Sharing Order, have been re-drafted following the Judicial Review, although this is not widely known, as only a small number of interested parties have seen the updates.  As far as I can establish, the circulation list does not include any consumer group.

I understand the re-writes cover two key areas:
  • The Initial Obligations Code has been redrafted after a comment made in the ruling of the Judicial Review [paragraph 240] concerning a "chilling effect" on free and open internet access.  I understand the changes make allowances for public intermediaries such as schools, universities and libraries who offer public WiFi access after a report for a group Copyright for Knowledge last year suggested it would cost Universities alone between £24m and £56m over the first 3 years to implement notification procedures and appeals as required under the Digital Economy Act. 
  • The Cost Sharing order has been re-written after the review judge ruled that ISPs under EU rules can't be forced to pay a portion of the estimated £5.9m set-up costs of the anti-filesharing measures.  When I broke the £5.9m costs story, the DCMS were keen to point out that most of the money would still be recouped from the fees paid by rights holders each time they issue a Copyright Infringement Report (CIR).
I heard a whisper that the re-drafting does not make any specific exemptions for hotels and internet cafés, although without visibility of the draft this is impossible to ascertain.  I put this to the DCMS press office, and for once they didn't give the the "response shortly" line:
I cannot comment on what may or may not be in the Initial Obligations Code
I personally find it hard to believe internet cafés won't be covered, since Justice Kenneth Parker mentioned them specifically in his ruling.  It could be rumour, or a misinterpretation.

There is however serious concern in the ISP industry that ISPs will be forced to pay a higher proportion of the "administrative" costs than the 25% required in the earlier draft of the Cost Sharing Order, to "rebalance" the overall cost burden after the ruling that ISPs can't be asked to pay a proportion of the set-up costs.

I also understand that groups representing rights-holders are increasingly wary that the cost of issuing a Copyright Infringement Report (CIR) may become disproportionately high.

Not every CIR will result in a warning letter being issued, since there are sensible rules to filter-out repeat warnings, and give internet users a chance to modify their behaviour before issuing a second warning.  Experience from a similar law in France, known as HADOPI, saw 18 million CIRs issued, resulting in only 470,000 warning letters in approximately the first year of operation.

If a similar ratio of 38:1 is observed in the UK, getting a warning letter to the ISP account holder where infringement is alleged to have taken place using their IP address could be a costly process for rights holders.

I've been told groups representing rights holders have "almost given up" on  the 3-strikes provisions of the Digital Economy Act, and are now focussing their efforts on campaigning for a UK equivalent of the US Digital Millennium Copyright Act (DMCA), a controversial law which resulted in hundreds of Greenpeace videos being erroneously removed from YouTube this month.

I understand the DCMS position was for no further public consultation on the Digital Economy Act.  However, with concerns from all sides of the debate - especially the approximately 200 ISPs operating in the UK - it's clear there are a number of stakeholders interested in the legislation. Let's hope this changes with any forthcoming announcement.  Maybe the DCMS will wisely opt to use the summer recess period to consult on the draft notification?

EC loops of fury - 3-month notification period

Both Statutory Instruments (SIs)  known as the Initial Obligations Code and the Cost Sharing Order, need to be notified to the European Commission under the Technical Standards Directive, designed to allow cross-border competition in the EU telecom sector. 

The notification period is 3 months, effectively delaying progress each time any law that falls under the category of a telecommunications "technical regulation" is redrafted.

I was told last month by a DCMS source that they planned to notify both Statutory Instruments before parliament breaks for the summer recess. However, a contact in Brussels tells me neither Order has appeared in the weekly journal "C series", where all notifications are listed, at the time of inquiry (last Wednesday).

It's unlikely that legislation will be notified to Brussels before parliament resumes on 5th September, as MPs have told me privately they are concerned that legislation could be notified to the EC before parliament has been given visibility of the draft legislation.

An opposition researcher told me:
"Before December [when it transpired an earlier draft of the Cost Sharing Order was sent to Brussels] Many MPs weren't even aware of the Technical Standards Directive and its impact on the legislative process.  It's clearly unacceptable for Parliament to be the last to see government-drafted laws."
Additionally, a source close to Ofcom told me that Ofcom expects to be formally consulted on the re-drafted rules, and they were not aware of the consultation having started.



  1. This is fascinating if slightly perplexing. I can't see what rightsholders get from a "UK DMCA" they don't already have - we effectively have same Notice and Takedown (NTD) rules from E-Comm Directive rules anyway? Only differences are actually *anti* rtsholders - DMCA has rules against abusive (groundless) take down notices, requirement to prove you actually are (c) holder's agent (good against likes of Righthaven/ACS LAw), standardised NTD forms, and safe harbors for platforms who "put back" on protest from the content provider wrongly accused ofinfringement. (cf YT) The DMCA is in fact almost the gold standard for NTD in copyright online - despite some episodes, better than what we now have in UK ..

    I myself wonder if it isn't going more to be abandoning DEA notifications in favour of going straight for "voluntary" extra legal blocking of anything that looks remotely like a torrent site or a "cyberlocker" - which would on current Vaizey proposals lack most vestiges of due process & in fact be even worse from online civil liberties - any views/gossip? This certainly seems the MPAA's current favourite strategy of choice and Newzbin decision coming up next week will be decider ..

  2. Hi Lilian - I think the perceived problem with NTD is the lack of clarity is a 2-way street. There is a large amount of uncertainty within service providers, and no legal precedent aside from Godfrey v Demon - which had nothing to do with copyright.

    So there's no understanding of what penalties service providers might face for failure to act on take-down notices. There's no real understanding as to what steps a service provider should take to ensure a take-down notice is genuine. There's also a lot of confusion as to whether e.g. news aggregators or links farms should be taken down.

    There's also no standardised format for information required, so some material is not being taken down just because the site owners don't have enough information to understand who owns what, and why it is infringing.

    So there's a perception that some sites are not complying, and take-down isn't working - even if in reality this isn't actually the case, and the stuff they want taken down isn't actually classed as infringing under CDPA and related case law.

    I think - and noting this is not a representative study of views by those representing rights-holders, but casual chats over coffee or drinks receptions - there's a feeling that a DMCA which sets out the rules more clearly would help their fight against UK (and EU) based digital locker services, etc.

    I think there's also either a very shrewd move - or a lack of understanding - from rights holders (from the very few people I manage to talk to) as to whether DMCA in the US affects upstream providers.

    "Mere conduit" is seen by some as a barrier to enforcement, and there's a real feeling from some that e.g. ISP subscribers should take some responsibility for what's done under their IP address. Ie vicarious liability on subscribers who've been warned of infringement on their connection and not taken steps to reduce this.

    Have you seen the recent reports of "voluntary" agreement with US ISPs on notification? Essentially the same argument could then be applied to disconnection under DMCA principles.

    The rights holders I've spoken to and heard speak at meetings and events often say they care about civil liberties, yet rarely demonstrate an understanding of the issues; hence why certain individuals see no problem with ISP subscribers being punished for what others do on their network, and the associated open WiFi chill that will ensue.

    I think they might see the DMCA being trumpeted as you say, a "gold standard" that would solve civil liberties complaints and give them a framework for everything they want.


  3. Erm, hello?? Arent you both missing the point? Content protection circumvention laws??? Thatll be why they might want "a dmca"... Also claiming dmca a gold standard? we're only just starting to see how dmca can be abused. Seriously, who'd want to start new content rich services unless you were already a sizeable company to afford the legal bills. Net result has to be eastern countries cloning our sites,.minus takedown. Logical conclusion? Whack-a-mole blocking until we all wake up and realise copyright is dead...

  4. Also, the Initial Obligations Code, itself, could be the subject of a challenge by Judicial Review. In particular, the "standard of evidence" in the draft code is arguably not a "standard of evidence" at all, and therefore does not comply with the requirements of the Act. In any event, that "standard" appears to comprise a list of evidential parameters which, it was said, corresponds to those accepted by the courts in civil claims for copyright infringement.

    It is hard to see that the "claims" they refer to can be anything other than the series of High Court disclosure orders which were behind the flurry of "speculative invoice" schemes that were pursued by a small group of solicitors but which now appear to have been abandoned.

    With hindsight, it is clear that those disclosure applications were uncontested, and the evidence accepted as a formality, and there are now suggestions that the High Court may have been misled over the value and significance of that type of evidence.


Comments will be accepted so long as they're on-topic, do not include gratuitous language and do not include personal attacks or libellous assertions.

Comments are the views of the commentator and not necessarily the view of the blog owner.

Comments on newer posts are not normally pre-moderated and the blog owner cannot be held responsible for comments made by 3rd parties.

Requests for comment removal will be considered via the Contact section (above) or email to editorial@slightlyrightofcentre.com.