The new piracy regulations passed last night, coupled with the Dallas Buyers Club court ruling in April, will help offset the threat of virtual private networks (VPN) being used to illegally access content on pirate websites, pay-TV industry body ASTRA has said.

New regulations passed in the Senate have given the all-clear for rights holders to go to court to block overseas websites such as The Pirate Bay, that contain or give access to copyright infringing material.

One major production house, Cordell Jigsaw Zapruder told Mumbrella it would be “lining up at the front doors of the court”.

However, the legislation stopped short of covering VPNs which, while used for a range of legitimate purposes – such as to create secure connections – are also commonly used by pirates to circumvent any system designed to prevent illegal downloading.

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Technology industry observers described the VPN route to accessing illegal content as a “major loophole” in the law.

ASTRA chief executive Andrew Maiden admitted the VPN issues was a “potential” loophole but argued the new laws, coupled with the Dallas Buyers Club ruling which will force internet service providers (ISPs) to reveal the identity of customers who illegally download and share content, will have a “cumulative effect”.

“The truth is, no measure is going to be completely effective and no one pretends this legislation is going to do the job alone,” he told Mumbrella. “But small measures in combination will have a cumulative deterrent.”

He likened the threat of using VPNs as walking out of a supermarket with a tolley full of goods because the checkout register was faulty.

“The VPN issue could be a problem but it’s no different in theory to word getting around that a supermarket has a faulty checkout where you can take goods out without paying for them,” Maiden said. “I’d say that boasting about a potential VPN loophole is like boasting about the ability to steal from a supermarket or a department store. Just because clever people may be able to circumvent the law doesn’t make it right.”

He said research carried out by rights holders indicate the majority of pirates are not aware they are breaching copyright.

“When they are nudged they are happy to give up their criminal ways, as it were, and search for legal ways to access content,” he said. “And now that you can buy a subscription for $10 a month without a contract, and with more content being expressed from US, the justification for piracy is hard to sustain.”

Maiden cited a recent study in the UK which found that in the two months after the introduction of website blocking legislation, traffic to blocked sites dropped 77 per cent.

“We would be de delighted if we replicated the 77 per cent drop but Australians are worse piraters than Brits and the problem is bigger, but any impact is going to be welcomed by the industry.

“Importantly the publicity generated is going to have a sizeable impact and we hope it will address the majority of pirate activity. I’d hope that the volume of piracy would more than half, hopefully more.”

Foxtel last night welcomed the legislation, describing it as “strong action” in the fight against online piracy.

“They [Government and opposition] recognise that not only is piracy theft and therefore morally wrong, it is harmful to Australia’s creative communities and to businesses that employ hundreds of thousands of Australians,” Foxtel chief executive Richard Freudenstein said.

But asked about the potential VPN loophole, a spokesman said this morning it could be a “concern”.

“We didn’t intend this law to be used specifically against VPN because there are many legitimate uses of VPN and the intention of the law is not to stop people using the internet for legitimate purposes,” he said. “But we would obviously be concerned if it meant there was a hole in the law.

“We will be monitoring how things go and see if there is a serious issue in the future.”

According to the recent PricewaterhouseCoopers Australian Entertainment and Media Outlook report, 680,000 Australian households access overseas-based video content via VPN blockers in November 2014.

Meanwhile, the boss of one of Australia’s most prominent independent production houses, CJZ, has welcomed new legislation, saying it fully intends to shut down sites hosting their content without permission.

Cordell Jigsaw Zapruder managing director Nick Murray told Mumbrella CJZ will use the legislation where it can. He urged other Australian producers to do the same thing.

“This legislation can’t come soon enough. It continues to astound me the people who think we should just stand by and let our assets be stolen on the internet,” he said.

“We found a website that has 16 of our shows on it and it charges a subscription. People think it’s a legitimate website because it charges a subscription but it is absolutely not licensed by us.”

Murray declined to name the website but said CJZ will use the legislation to attempt to shut it down.

“We will be lining up at the front doors of the court to get that website shut down and I will take great pride in shutting that website down if I can. It is stealing and profiting from it,” he said.

“If I can use that legislation I will, and I think other Australian producers should think about doing the same thing.”

Murray expressed concerns around the cost of rights holders fighting copyright infringement.

“It’s a pity there will clearly be some expense involved and if the person fights it then it will be a very expensive act,” he said. “In the case of this website, which I won’t name, if they’re receiving income associated with file-sharing they’re going to have the resources to fight being blocked. That’s what worries me.”

Earlier this year Murray argued the government should tighten up regulations around Australians accessing content from overseas using virtual private networks (VPNs) as it is hurting the production sector, an argument that was met with suggestions to update CJZ’s business model.

“People say we should update our business model. I can’t see any way to update a business model to combat stealing when we don’t even know the stuffs been stolen,” he said in response to those comments.

“The people who criticise the big companies for wanting to protect their intellectual property that it’s not just the big companies that are being affected by this, Australian companies are being affected. These are our assets that have been stolen and traded illegally on the internet.”

Village Roadshow co-chairman and co-chief executive Graham Burke said: “The new piracy laws will go a long way to deal with theft. This is not a victimless crime as unless piracy is brought under control, tens of thousands of Australians will lose their jobs. Accordingly we salute the Government’s initiative.”

Maiden said the on-going piracy clampdown will create “more secure employment” for those working in the creative industry.

“Australians employed in the television industry make important contributions to our economy and culture,” he said. “It’s vital their endeavours be supported by laws that help ensure fair reward for their effort.”

Steve Jones and Miranda Ward