Coalition's copyright ultimatum: The collateral damage of the war on online pirates

The Coalition government has delivered an early Christmas present to the movie studios with its prescribed model to curb online piracy, although the efficacy of the measures announced remains to be seen.

Communications minister Malcolm Turnbull took great umbrage at any reference to the measures as a precursor to an internet filter at the announcement of the government’s plan, but he better get used to the term.

The government’s critics have wasted little time in raising the spectre of Australian consumers chaffing under the twin yokes of an internet filter and an ‘internet tax’.

With the howls of derision ranging from consumer group Choice to conservative think tanks like the Institute of Public Affairs, the toxicity of both the issues could yet provide further headaches for an increasingly unpopular government.

Passing the buck or finding a remedy?

However, that’s for the new year and for a government that has shown a predilection to kicking the can down the road and let the market sort it out approach on a number of issues, Attorney-General George Brandis and Malcolm Turnbull’s joint-statement does serve a very immediate need.

It’s another box for the Coalition to tick off, another policy announcement to rush out the door before the year comes to an end; and effectively put the onus back on internet service providers and the copyright holders to play nice and hammer out an industry code on how to deal with copyright breaches.

After four months of consultation the Coalition has given the ISPs and the rights holders another four months to come up with a code or face the prospect of direct intervention from Canberra.

So what will this code look like?

Well for one thing, it’s not going to see those regularly indulging in online piracy face punitive measures like having their internet speeds throttled. That may well be influence of Turnbull who has evidently managed to pursue a more nuanced approach to the issue, which keeps the rights holders satisfied and gives the ISPs just enough to keep them interested.

Instead, the focus lies squarely on blocking the purveyors of pirated material, the likes of Pirate Bay and BitTorrent, with the ISPs playing the somewhat unwilling role of the middle man turning off the tap.

Sounds easy enough - block the websites, stop the bytes and the pirates will be brought under control.

But there’s an inherent futility to blocking domain names, not to mention the risk involved in stopping all traffic from a given IP (internet protocol) number, where the good inevitably gets stung with the bad.

The Australian Securities and Investment Commission’s (ASIC) faux pas in 2013, where it’s desire to stop three websites hosting investment scams led to the inadvertent demise of around 250,000 legitimate websites hosted on the same address, is a salient example of how website blocking can go wrong.

The government’s prescription also includes a notification system designed to inform consumers when a copyright breach occurs and also provide them with information on how they can access the content legally.

As for the cost of running the proposed scheme, the government expects them to be fairly shared between ISPs and rights holders.

Giving rights holders the whip hand

The likes of Vilage Roadshow may not have had its one wish of seeing the online pirates walk the plank fulfilled but the rest of the measures are spot on. The ISPs have voiced a begrudging acceptance, with the Communications Alliance saying that while website blocking will need to be a carefully controlled exercise, with appropriate safeguards in place, telcos by and large are happy to play the part of educators not enforcers

“The code will not include any sanctions to be imposed by ISPs on their customers — we believe that the copyright holders are the appropriate party to take any enforcement action against persistent infringers,” Communications Alliance chief John Stanton said.

On the issue of cost, Stanton said that ISPs will examine appropriate cost models with right holders.

"Making inroads against internet piracy in Australia will return to rights holders a proportion of the revenue that they are currently losing due to piracy. Thus, it makes sense for the rights holders to reimburse the reasonable expenses that ISPs would incur in operating a scheme -- just as police and security agencies pay for the services that service providers offer them to assist law enforcement," he said.

Stanton also said that he was optimistic that “the sending of notices by ISPs to consumers whose service has apparently been used for improper file-sharing will be a powerful signal.”

Glaring omissions

It may well be a powerful signal but there’s very little from the government on the issue of access and pricing, which has been pointed out by both the Communications Alliance and consumer groups like Choice as key motivator for content piracy.

The one positive on the pricing front is that content providers are taking small steps in making access cheaper, so there’s at least recognition of the issue. The government is no doubt hoping that it’s a trend that continues in the long-term and changing market dynamics prove strong enough to motivate even firmer action on the affordability front from the providers.

However, that’s unlikely to please the vast cohorts out there that are convinced that the prices are never going to be low enough. After years of paying excessive prices this collective angst that fuels the engine of piracy is unlikely to be satiated in a hurry.

Also troubling is the lack of any extension of the copyright safe harbor scheme, which would protect organisations like schools and libraries from copyright lawsuits.

There’s also nothing on fair use exception, an omission that will trouble the likes of Google, which has been pushing for the extension of copyright safe harbours to online intermediaries – like search engines and the introduction of “fair use” copyright provisions, as recommended by the Australian Law Reform Commission (ALRC).

According to Australian National University’s Dr Matthew Rimmer, there’s nothing tangible from the government on how it intends to tackle the issue of access and fair pricing and the April 8 deadline set for the ISPs and rights holders will be challenging.

“Turnbull is very coy about the issue of whether the measures will be effective and what the unintended consequences might be,” Dr Rimmer said.

He added that there will be great deal of scrutiny on the impact of the proposals not just from perspective of costs but also reputational damage for ISPs.

“(Four months) is hardly anytime at all,” he said.

Communications Alliance’s Stanton has also described the timeframe as challenging but said the industry can work with it.

Well, the ISPs don’t really have a choice on the matter and with the rights holders now in a better bargaining position the telecoms industry will have to play its hand carefully.

The idea of both parties working together to find a solution to copyright infringement on the internet isn’t exactly new.

There’s been an open-ended debate on the issue since the commissioning of the Digital Agenda Act in 2000, which has evidently delivered very little.

But with the government’s ultimatum in place, the clock is ticking and the ISPs and rights holders will have to come up with something concrete in the new year.