Actor Roy Billing, left, with executive director of AFACT Neil Gane, centre, and film producer Antonia Barnard, right, announcing a $1.3b loss to the movie industry in a twelve-month period. The report, which Electronic Frontiers Australia chair Colin Jacobs urged people to apply some skepticism to, also claimed that a third of the Australian adult population had participated in some form of movie theft. The analysis was based on the results from a telephone survey of 3500 adults aged 18 and over conducted by Ipsos in July to August 2010. "The industry has a habit of crying wolf with these sorts of numbers, trying to drum up support for tougher laws," EFA's Colin Jacobs said. "But there are many factors they don't take into account. Treating downloads as lost economic activity is flawed, and downloaders are actually some of the entertainment industry's best customers. The study also ignores the effects to the wider economy of money being spent elsewhere at Australian-owned businesses." Of the $1.37 billion, direct losses to the movie industry were divided across three main forms of piracy, with losses from digital piracy at $240 million and secondary (borrowing/viewing) piracy at $225 million, the report claimed. There were lower levels of loss from physical piracy at A$111 million. But the federal government, which in 2009 said it would "facilitate development of an appropriate solution", has yet to enforce any new laws upon Australians or internet service providers (ISPs).

One suggestion highlighted in the 2009 report and suggested by copyright holders was that the ISP industry introduce a "three strikes" or "graduated response" proposal whereby copyright owners work together with ISPs to identify the internet users who are suspected of unauthorised file sharing. The ISP would then send a notice on behalf of the copyright owner to that customer advising of the allegation. If the warning fails, other responses could include disconnecting the customer's account. "Several submissions were received which opposed this proposal for reasons including the lack of judicial oversight of administering sanctions based on private allegations, the lack of public transparency about the process and concern over consumer rights," the 2009 report said. A spokeswoman for Conroy said back then that the federal government was considering the three-strikes system but was awaiting for the iiNet lawsuit to finish in Australia's federal court. The iiNet case has now been decided in the ISP's favour but the film industry is appealing.

The government, however, says that it is not yet ready to act. Communications Minister Stephen Conroy's spokeswoman said that the government would "encourage an industry led solution but if that fails it will examine other options". "The government recognises the serious impacts that copyright piracy has on content producers, distributors, retailers and artists," the spokeswoman said. "This problem is not unique to Australia, it is a problem for many countries." Conroy himself late last week, according to tech site ZDNet Australia, said that people around the world were awaiting the result of the appeal of the landmark lawsuit, which was brought against Australia's second largest ISP iiNet by AFACT to determine a way forward. The film industry, along with the music industry, has spent years lobbying governments around the world to introduce new legislation that would penalise or stop internet users from downloading unauthorised content. But ISPs like iiNet have flat-out refused to police internet users who share unauthorised content and have had a combative relationship with the film industry following the legal action by AFACT, which has argued ISPs should take measures to stop those that share unauthorised content.

Discussions to facilitate a solution were "suspended upon the commencement of litigation against iiNet by a range of film rights holders", a spokeswoman for Communications Minister Stephen Conroy said. "The government is continuing to encourage dialogue between copyright holders and internet service providers on this issue to work towards an industry led solution." Neil Gane, executive director of AFACT, said he wanted the federal government to include "copyright" and "online theft" in its upcoming Convergence Review, which was brought about in response to "ongoing trends in technology that are reshaping the media landscape from how it looked in the 1990s". This is something Conroy appears to have agreed on. "One of the issues I'm sure that will be debated [in the Convergence Review] is piracy ... so I expect that will be a larger part review," ZDNet Australia quoted Conroy as saying last week. "We won't form any policy until after the convergence review is finished." Asked if AFACT believed civilised talks could continue with the internet industry, executive director Neil Gane said that he was "always optimistic" that AFACT could "get some constructive discussions" with ISPs. "Admittedly, it doesn't help that the Internet Industry Association in their principles for the Digital Economy paper ... specifically said in that they oppose 'three strikes' or a 'graduated response' solution.

"That's obviously disappointing but we've always tried to reach out to ISPs to come to the table to discuss what can be done," he said. The final terms of reference for the review are being drafted and will be announced in the first quarter of 2011. This reporter is on Twitter: @bengrubb