Illustration: Matt Golding. "Just as there is no place on the internet for terrorism or paedophilia, there should be no place for theft that will impact the livelihoods of the 900,000 people whose security is protected by legitimate copyright," Village Roadshow argues. "The problem is urgent as piracy is spreading like a highly infectious disease and as bad habits become entrenched, they become harder to eradicate." Attorney-General George Brandis recently described Australia as the world's "worst offender" for illicit downloading and argued action was needed to protect local creative industry. The government has proposed making it possible for rights holders to seek a court order requiring internet service providers (ISPs) to block overseas-based websites - such as the Pirate Bay - whose dominant purpose is breaching copyright.

Consumer group Choice says this would amount to an "industry-run internet filter". The Communications Alliance admitted in its submission that site blocking carries a high risk of "collateral damage": legitimate sites could inadvertently be blocked and blocked sites may also quickly reappear at a new address. Yet "such a proposal might be able to play a useful role in addressing online copyright infringement in Australia" if safeguards are put in place, the telcos argued. Village Roadshow argued in its submission that slowing down internet speeds for repeat copyright infringers was "in no way draconian" and that the mere threat of slower speeds would discourage illicit downloading. It said the government should encourage ISPs to participate in such a scheme by legislating to make them liable for customers' illicit downloads. Village Roadshow said any scheme should include a review mechanism and rights holders should pay a "healthy amount" towards administration costs. Village Roadshow co-chairman Graham Burke said rights holders and ISPs could split the costs 50-50.

Previous negotiations have broken down over who should pay for the scheme. The telecommunications companies say they are willing to negotiate with rights holders on a so-called "graduated response" or "three strikes" scheme. But they are opposed to threatening customers with slower speeds or terminated services. The Communications Alliance said such a scheme would have to include all ISPs, be funded by rights owners and include oversight by an independent arbitration authority. "The internet industry recognises that online copyright infringement is a large and complex problem that needs to be addressed," Communications Alliance chief executive John Stanton said. "The bottom line is that consumer rights should be protected and that law-abiding internet users should not have to pay the cost of doing Hollywood's police work for it." Telcos are strongly opposed to changing the Copyright Act to make it easier for rights holders to confront them for not doing enough to prevent illicit downloading. They prefer a "follow the money" approach, where the government actively discourages advertisers from doing business with sites hosting pirated content. This has reduced advertising by major household brands on identified sites by 12 per cent in Britain, they argue.

In its submission, Choice said the government should publicly report on pricing for digital goods in Australia and overseas to stop price gouging. It said copyright law should also be changed to clarify that consumer circumventing of "geo-blocking" was legal.