We've been covering the Anti-Counterfeiting Trade Agreement (ACTA) for two years now, and in that entire 24 month period no official text of the agreement has been released. Remarkable, really, given the intense scrutiny, but there you have it.

Today, that all changed as the countries behind ACTA finally released a consolidated draft text (PDF) of the agreement. Though billed as a "trade agreement" about "counterfeiting," ACTA is much more than that: it's an intellectual property treaty in disguise.

New to this draft is an option, clearly targeting European law, that would explicitly allow Internet disconnections

Tucked inside the draft are provisions that will prevent people from bypassing digital locks on the items they buy, that will force ISPs to shoulder more of the burden in the fight against online piracy, and that bring US-style "notice-and-takedown" rules to the world.

Well, not to the world, exactly. ACTA is more like a select club of countries: Australia, Canada, the European Union countries, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States of America. But the treaty it develops is really just the next rung on a ladder stretching back to 1886, and it will certainly be wielded like a weapon on the rest of the world in the future.

The text is not final—that is due to happen later this year—so if you want to see changes made, the time to act is now. After a year of partial leaks and finally complete leaks, ACTA's basic outlines are familiar.

We'll start our ACTA deep dive with an overview of the key provisions, especially as they relate to the Internet. Stick around afterwards to understand how and why we have ACTA at all, some likely effects of the treaty, and thoughts on the negotiating endgame.

A quick word of thanks to the negotiators who finally heard the dull but growing roar of a disenchanted public and released the ACTA text: it's too late to qualify as "transparency," exactly, but it does inaugurate a new stage and a new start. It's now time for the real arguments to begin.

The EU has already made its case that ACTA won't affect ordinary citizens. And it takes particular aim at the groups which have loudly condemned ACTA: "The negotiation draft shows that specific concerns, raised in particular by the civil society, are unfounded. No party in the ACTA negotiation is proposing that governments should introduce a compulsory '3 strikes' or 'gradual response' rule to fight copyright infringements and internet piracy. Similarly, ACTA will not hamper access to generic medicines."

Our own investigation shows that several of the most controversial provisions have been tweaked for the better, though problems remain. Let's take a look.

ISP immunity/three strikes

Under ACTA, ISPs are protected from copyright lawsuits as long as they have no direct responsibility for infringement. If infringement merely happens over their networks, the infringers are responsible but the ISPs are not. This provision mirrors existing US and European law.

Two key points need to be made here, however. First, the entire ISP safe harbor is conditioned on the ISP "adopting and reasonably implementing a policy to address the unauthorized storage or transmission of materials protected by copyright." (This is much like existing US law.)

An earlier footnote found in a leaked draft provided a single example of such a policy: "Providing for termination in appropriate circumstances of subscriptions and accounts in the service provider's system or network of repeat infringers." In other words, some variation of "three strikes." That footnote is now gone from the text entirely.

While the ACTA draft adopts the best part of the DMCA (copyright "safe harbors"), it also adopts the worst: making it illegal to bypass DRM locks.

New to this draft is an option, clearly targeting European law, that would explicitly allow Internet disconnections. Countries will be allowed to force ISPs to "terminate or prevent an infringement" and they can pass laws "governing the removal or disabling of access to information. So, basically, Internet disconnection and website blocking.

The option also allows rightsholders to "expeditiously obtain from that provider information on the identity of the relevant subscriber" and it encourages countries to "promote the development of mutually supportive relationships between online service providers and right holders." This option has not been approved by all ACTA members.

The ACTA draft also makes clear that governments cannot mandate Internet filtering or affirmative action to seek out infringers.

Second, the ISP immunity is conditioned on the existence of "takedown" process. In the US, this is the (in)famous "DMCA takedown" dance that starts with a letter from a rightsholder. Once received, an ISP or Web storage site (think YouTube) must take down the content listed in order to maintain its immunity, but may repost it if the uploader responds with a "counter-notification" asserting that no infringement has taken place. After this, if the rightsholder wants to pursue the matter, it can take the uploader to court.

This will strongly affect countries like Canada, which have no such system.

Anti-circumvention/DRM

While the ACTA draft adopts the best part of the DMCA (copyright "safe harbors"), it also adopts the worst: making it illegal to bypass DRM locks.

ACTA would ban "the unauthorized circumvention of an effective technological measure." It also bans circumvention devices, even those with a "limited commercially significant purpose." Countries can set limits to the ban, but only insofar as they do not "impair the adequacy of legal protection of those measures." This is ambiguous, but allowing circumvention in cases where the final use is fair would appear to be outlawed.

Fortunately, a new option in this section would allow countries much greater freedom. The option says that countries "may provide for measures which would safeguard the benefit of certain exceptions and limitations to copyright and related rights, in accordance with its legislation."

iPod-scanning border guards?

Early ACTA commentators often complained that the agreement might give customs officials the right to rifle through your bags and search your iPod, confiscating it if they determined that it contained any infringing songs. Border guards might become copyright cops, turning out the bags of anyone who has visited China, say, to see if they might be bringing home any illicit copies of movies or software.

This was always a strange idea; ACTA's backers are hunting bigger game than iPods. The draft text contains a "de minimis" provision that allows countries to exclude from ACTA enforcement "Small quantities of goods of a noncommercial nature contained in travelers' personal luggage."

The real copyright cops

ACTA contains "ex officio" language that allows customs officials and border agents to hold infringing shipments of goods without needing a rightsholder to complain first. Several options are still being considered in the draft, but all give the authorities the right to "act upon their own initiative" in releasing suspected goods at customs checkpoints.

Camcording rips

Think twice about camcording a movie off the big screen. ACTA now requires all signatories to make this practice a criminal act, not merely a civil matter. The draft does note that "at least one delegation has asked for the deletion" of this section, though, so it may be an easy target for removal before the final version.

Imminent infringement

Several sections of the ACTA draft show that rightsholders can obtain an injunction just by showing that infringement is "imminent," even if it hasn't happened yet.

P2P without financial gain

ACTA requires criminal penalties against "willful copyright infringement" when done "on a commercial scale." Early drafts explicitly mentioned online piracy, and that still seems to be in view. Though this section remains under negotiation, the draft shows that this may apply to infringements "that have no direct or indirect motivation of financial gain."

In other words, P2P distribution, where this exact issue of financial gain has come up in numerous court cases.

Proportionate penalties

At least one enterprising ACTA country has managed to insert this interesting line into the section on "enforcement procedures in the digital environment":

"Those measures, procedures, and remedies shall also be fair and proportionate." A dig at Internet disconnections and three strikes remedies, which are often criticized on these grounds? Who knows—and it's still under debate.

Now: how did we get here?