Industry, Libertarians Hit Plan to Sic ISPs on File-Sharers

The shift to digital content poses four challenges, the report said. Lower digital distribution and copying costs means smaller revenue from the product or advertising. The rapid growth of digital outlets has “hugely increased” the volume of advertising inventory available. Access to content and the ability to innovate across the growing range of platforms and devices present challenges. And the ease of copying and distributing digital content increase piracy.

The U.K. achieved a first when it brokered a deal between ISPs and content owners on illegal file-sharing (WID July 25 p1) -- but now it needs to continue the discussion to ensure that all that work isn’t wasted, the report said. It proposed setting up a rights agency to help industry work out how to provide incentives for legal use of copyrighted material, prevent unlawful use of content and develop technical copyright protection measures palatable to consumers and content owners, it said.

Before the final Digital Britain report is published, the government will look into having content creators and distributors finance a new approach to civil enforcement of copyright, the report said. A government inquiry into how to deal with illegal file-sharing showed a “marked polarization of views” among rights holders, ISPs and consumers over what action should be taken, and support for the government’s proposed co-regulatory solution was less than enthusiastic, it said. Now it’s ready to legislate, it said.

The plan is to require ISPs to notify subscribers suspected of infringing -- subject to “reasonable levels of proof” from content owners -- that the activity is illegal, the report said. ISPs also would have to gather anonymized information on serious repeat infringers and make it available to a rights holder if ordered by a court. The system would supply evidence making it easier for rights holders to target P2P infringers and would form the backbone of a code on unlawful file-sharing that business would have to adopt under monitoring by the Office of Communications, the report said.

Industry, Digital Rights Groups Wary

UK Music “cautiously” welcomed the report. Government recognition of the scale of the illegal file-swapping problem of the music and other creative industries is encouraging, but suing consumers isn’t the best way forward, said CEO Feargal Sharkey. UK Music represents artists, labels, collecting societies and others in the commercial music sector.

The report fared worse with the British Recorded Music Industry. Measures to stop illegal P2P file-sharing are “a step forward by government, but what we need is a bold stride,” said BPI Chief Executive Geoff Taylor.

Requiring ISPs to notify customers about illegal activity would show that the government wants them to take a more active role in ensuring artists are rewarded for their work on the Internet, Taylor said. But “it is hard to see how letter-sending alone” will significantly reduce the problem given research showing that consumers change their behavior only if they know that a letter is just the first step, he said. “Few people believe that the answer lies in suing consumers,” Taylor said. “Proportionate measures taken by ISPs would be more effective.”

ISPs said they're glad disconnection of P2P users is no longer on the table, because consumer education and alternative legal music distribution models are the way forward. The U.K. Internet Services Providers’ Association expressed concern that the proposed rights agency will increase financial and regulatory burdens on ISPs, raising consumer prices.

The report deals mostly with infrastructure and conventional providers of content services and “falls short” of considering policy issues affecting businesses developing innovative models on online services and content distribution, the ISP group said. The review must take into account the interests of the wider Internet economy, it said.

Digital-rights activists worried that consumers and citizens won’t be represented on the proposed copyright rights agency. “Without our voices, such an agency could easily be dominated by industry’s concerns at the expense of civil rights,” the Open Rights Group said.

And technical solutions to rights enforcement tend to be expensive and to fail, the group said. One by one, digital music providers such as iTunes and Amazon are moving away from digital rights management “and trusting their customers” -- a much better example for the government and industry to follow, it said. The proposal to require content owners to seek court permission before taking action against suspected pirates is welcome, but the rights group said it’s concerned about further erosion of privacy rights.

Broadband, Spectrum Revamps

Government plans also include a detailed analysis of supply, demand and regulatory measures needed to spur next- generation broadband networks. Action may include removing barriers to developing a wider wholesale market in access to ducts and other primary infrastructure, and determining whether public incentives could help deployment.

The proposal also calls for a wireless radio spectrum program to: (1) Resolve the future of current 2G radio spectrum through a new system allowing operators to realign their holdings, reuse the spectrum and move toward next- generation mobile devices. (2) Make more spectrum available for new mobile services. (3) Increase the investment certainty of 3G operators by making some time-limited licenses indefinite.

The government and Ofcom will also consider more network-sharing, spectrum or carrier-sharing proposals from operators, in particular where they can lead to more coverage and are part of the providers’ contribution to a broadband universal service commitment, the report said. And mobile operators will be encouraged to push out mobile broadband coverage eventually to replicate 2G coverage.

The government committed to rolling out digital audio broadcasting as one of the major media for radio. It said it will create a plan for digital migration once specified conditions are met, set up a digital radio delivery group to woo consumers to digital radio, and do a cost-benefit analysis of migration.

There will be a digital universal service commitment by 2012 for fixed, mobile, wired and wireless communications, the report said. In addition, the government will develop proposals for the design and operation of a new, broader scheme to fund the universal service commitment for a fully digital environment, including who should contribute and how it will be managed and be accountable.

Comments on the action plan are due March 12 -- digitalbritain@berr.gsi.gov.uk. The final report will be out in early summer, the government said.