news The Federal Government has revealed it denied requests by consumer organisations to attend a secret meeting held between the content and telecommunications industries to address the issue of illegal file sharing through avenues such as BitTorrent.

The meeting, held on 23 September, saw major Australian ISPs sit down with the representatives of the film, television and music industries with the aim of discussing a potential industry resolution to the issue of online copyright infringement. The issue has come to the fore over the past several years due to the high-profile court case on the matter ongoing between iiNet and the Australian Federation Against Copyright Theft.

However, in documents released today under Freedom of Information laws to the Pirate Party Australia, the Federal Attorney-General’s Department, which hosted the meeting, revealed a representative of several public interest groups — the Australian Communications Consumer Action Network (ACCAN) and the Internet Society of Australia (ISOC) had requested to attend the meeting and been denied.

On the 8th of August this year, following media reports that the meeting was to be held, an individual representing both groups requested to participate in the 23 September meeting, the briefing documents revealed. The individual’s name was censored in the FoI documents. The documents are available in full at the website of the former president and current treasurer of the Pirate Party Australia, Rodney Serkowski, who issued the FoI request for the documents. Delimiter has also issued a similar FoI request and was advised this week that many of the same documents would be released this week to the Pirate Party.

“However, [AGD staffer Peter Treyde] advised that the upcoming roundtable will be an initial meeting to gauge the Internet service provider and copyright owner positions and obtain an update on the progress of their discussions to date,” the briefing notes state. “Mr Treyde advised that the Department will consult with relevant consumer groups once industry discussions have reached an appropriate stage.”

“Consumer representatives were not invited to the upcoming meeting as it will be an initial meeting to assess the industry’s progress toward a solution,” the document added. “This was not an oversight.”

The FoI documents did go some way towards revealing the identity of the organisations which attended the September meeting, although the department redacted the names of the individuals who attended.

The majority of the organisations who attended were from content industry organisations, including the Asia-Pacific branch of the Motion Picture Association, the Australian Federation Against Copyright Theft, Foxtel, the Australian Home Entertainment Distributor’s Association, the Media, Entertainment & Arts Alliance, News Limited, Music Industry Piracy Investigations, the Australian Recording Industry Association, the Interactive Gaming and Entertainment Association, the Australian Publishers Association and the Australian Performing Right Association.

On the ISPs’ side, only Telstra, Optus, the Communications Alliance (which represents telcos), the Internet Industry Association and networking vendor Ericsson attended — although Telstra and Optus both sent a number of staff to the meeting. It is not clear whether iiNet attended. All up, about 25 industry representatives attended.

The briefing also discussed solutions in other countries, but the documents also revealed that the Attorney-General’s Department hoped to frame the discussion on the day through the lens of the so-called “six strikes” policy to tackling online copyright infringement agreed between the content and ISP industries in the US this year.

Under the deal, major US ISPs — including AT&T, Verizon, Comcast, Cablevision, and Time Warner Cable agreed with the film and music industries to forward copyright infringement notices from content owners to alleged Internet pirates. After five or six of these notices, ISPs have agreed to institute certain punitive measures, including, for example, temporary reductions in Internet speeds, redirections to educational pages and pages to discuss the problem.

There is speculation in the industry that one potential resolution to the issue of online piracy could be the implementation of a so-called ‘strikes’ system, which would see internet users disconnected after content owners had complained a certain amount of times and provided evidence that a certain user was committing copyright infringement online. Such systems have already been implemented in countries such as New Zealand and France.

So far, the ISP industry has resisted implementing such a system in Australia, although a number of ISPs — such as Exetel, for example — have already voluntarily implemented a system whereby the receipt of a certain number of complaints will eventually lead to a request for a customer to churn to another ISP. AFACT has signalled to ISPs that it wants an “automated processing system” for copyright infringement notices to be distributed to ISP customers.

A copy of the US memorandum of understanding, as well as briefings about how other jurisdictions handle the issue, was circulated in detail to participants before the meeting.

Although the various positions of the different groups espoused at the meeting appeared to have been detailed in the FoI documents but redacted in full by the department. In documents detailing its reasons for doing so, the department noted in general material from the documents had been deleted or not released because of the early stage of the discussions. The Attorney-General’s Department has previously declined a Freedom of Information request for the minutes of the meeting, stating that no minutes of the event exist.

“At this preliminary stage of the process, discussions are taking place, discussions involving various stakeholders with competing interests,” the department wrote. “It is worth noting that these discussions have not yet been completed … The discussions, therefore, are at a very delicate, sensitive and important stage.”

“Disclosure of documents while the negotiations are still in progress would, in my view, prejudice, hamper and impede those negotiations to an unacceptable degree. That would, in my view, be contrary to the interests of good government — which would, in turn, be contrary to the public interest.” Some information was also redacted because it might lead some parties concerned to not disclose information to the Government in future, or to protect individuals for personal reasons.

In general, the information released in the documents was consistent with the statements by former Federal Attorney-General Robert McClelland (the post is now held by Nicola Roxon following a cabinet reshuffle) that the government preferred an industry-based solution to the issue of online copyright infringement. In addition, speaking notes by both McClelland and departmental secretary Roger Wilkins for the event emphasised that consumer groups and interests should be paramount in any such industry solution.

However, the documents also emphasised a desire for copyright infringement issues to be addressed through societal change. The issue is particularly contentious at the moment due to the ongoing court case between iiNet and the Australian Federation Against Copyright Theft, which is slated to hit the High Court, in AFACT’s second appeal following unsuccessful rulings, later this year. AFACT is attempting to hold iiNet responsible for the piracy actions of its users.

“Regardless of the High Court outcome in Roadshow Films Pty Ltd v iiNet Limited, illegal file sharing will continue,” speaking notes prepared for McClelland for the event state. “Practical steps must be taken to educate and deter people from accessing unauthorised content. Any solution should “be educative and aim to change social norms”.

AGD’s FoI document detailing the attendees at the meeting (individual identities have been redacted):

news Serial acquirer TPG has significantly upped its stake in fellow national broadband provider iiNet, with the company now owning a total of 7.24 percent of Michael Malone’s baby.

TPG disclosed in mid-October this year that it had quietly bought about 4.4 percent of iiNet’s shares, a figure which it subsequently updated to 5.14 percent following the purchase of another parcel of stock. At the time, TPG said it had “no specific intention regarding iiNet” other than to own the shares as “a strategic investment”.

This afternoon, Delimiter received an anonymous tip to the effect that TPG had bought another parcel of iiNet shares. We were unable to immediately verify the information, with neither iiNet nor TPG commenting on the issue. However, late this afternoon TPG filed an updated statement (PDF) with the Australian Stock Exchange noting its stake had been upped to 7.24 percent of iiNet.

TPG’s statement revealed it has been buying iiNet shares more or less continuously since mid-October, with trades generally being worth in the tens of thousands up to more than a hundred thousand, and several large trades of $825,000 and $6.2 million. iiNet has been invited to comment on the stock purchases tonight but has not yet responded.

If TPG’s share of iiNet approaches 20 percent, the company will become subject to Federal Government rules which would likely require it to make an offer for the rest of the company; although it is believed that companies can acquire more than that percentage through small ongoing trades without the rule being triggered. It is common for large stakeholders in Australian companies to keep their share below that figure in order to avoid triggering the takeover rule.

Any move by TPG on iiNet would likely be viewed by iiNet’s board as a hostile takeover attempt. The two ISPs have radically different corporate cultures and market approaches, with iiNet being viewed as a very open and friendly company which tends to target mid-level broadband consumers with premium customer service and a quality broadband network, and TPG having a more cut-throat internal corporate culture and a market focus which sees it positioned as one of Australia’s discount kings of broadband.

If an acquisition of iiNet by TPG did occur, it would see Australia’s telecommunications sector drastically consolidated in the arena of fixed-line broadband into just three major players — current incumbents Telstra and Optus, with TPG taking third, or possibly second (above Optus) place. Other rivals like Internode and Primus currently have a reduced market share compared with the existing top four players (including iiNet).

However, iiNet chief executive Michael Malone several weeks said a public inquiry would need to be held if TPG decided to extend its stake in his company to the point where an acquisition was on the cards — and the issue could become a policy question to be decided by the Federal Government. It is believed Malone as referring to the levels of competition in the broadband sector.

opinion/analysis
And now we come to it.

There is now absolutely no doubt that TPG has long-term designs on iiNet. And why not? iiNet is believed to have frustrated an attempt by TPG’s to buy AAPT’s consumer division, and I’m sure the pair have been involved in other efforts to buy out the same assets in Australia’s telecommunications sector. The last shot pays for all, and by acquiring iiNet TPG would be able to roll in a stack of assets, a stack of customers and a stack of fantastic staff into its stable.

Plus, its share buyback scheme notwithstanding, iiNet’s shares have been pretty cheap of late, hitting $2.20 several times over the past six months and staying below $2.40 for most of that time. I am betting that the company’s recent spike (iiNet closed today at $2.69) is due to TPG’s efforts and the share buyback scheme combined.

Now, there is no doubt, as Michael Malone made clear several weeks ago, that iiNet would fight to the last breath to avoid being taken over by TPG. The two companies couldn’t be more different. They have radically different corporate cultures, radically different approaches to the market, radically different structures … TPG and iiNet are chalk and cheese.

Plus, Michael Malone is not done yet with his great dream of building a great Australian telecommunications company to rival the likes of Telstra and Optus. It’s a dream he’s been pursuing for twenty years and he’s not going to let TPG chief David Teoh buy his baby, gut it for costs and start pushing customers onto low cost plans with TPG’s famously low levels of customer service.

I wouldn’t put it past Malone himself to be rapidly buying up shares in iiNet himself at this point. He already owns a substantial chunk of the company — I believe it’s something like 12 percent — and with enough of his own shares, he will easily be able to convince many iiNet shareholders not to sell out to TPG’s ongoing raid. I would bet quite a few iiNet shareholders will be an idealistic lot who’ve been holding onto their shares for many years; they won’t be likely to quickly sell them off for a modest offer from TPG.

In any respect, TPG has now signalled it’s game on. Five percent is a strategic investment. Seven percent and higher is more than that; it’s a shot across iiNet’s bow.

Two further things do really interest me about this whole process. Firstly: David Teoh’s sense of timing. He must know that iiNet’s in the High Court in Canberra this week with the Australian Federation Against Copyright Theft. Malone’s actually personally stuck in the courtroom with no access to his smartphone or communications of any kind (something he is pretty frustrated by). Is David Teoh consciously screwing with his iiNet counterpart? I wouldn’t put it past him.

Quietly buying up iiNet stock over the past month? A bit over a million. Picking up a slab this week? $6.2 million. Thinking about the look on Malone’s face when he exits the courtroom to find out? For David Teoh: Priceless. Probably I’m going a bit too far here. But it’s certainly interesting to think about.

And secondly, there is the irony of Malone’s personal situation at the moment. Could the executive lose his company to a corporate raider, just months after he has been awarded not only the Communications Alliance industry Ambassador of the Year but also the Ernst & Young Entrepreneur of the Year? This would indeed be irony writ large.

Image credit: Delimiter

opinion Over the past few months, I have alternately been appalled, disgusted, saddened and ultimately bored at the degree to which naked self-interest is ruling the ongoing debate about how Australia will deal with the issue of online copyright infringement (Internet piracy).

Now, there is no doubt that the debate has been a vibrant one. There have been strong opinions from multiple sides. There have been complicated legal, commercial and ethical arguments presented ad nauseum. There have been many speeches made, public discussion papers issued, off the cuff comments thrown into the ether and the overall entertainment factor has been extremely high; worthy, almost, of its own reality show on prime-time TV.

However, what has been lacking from the debate at its core has been any real consideration for the underlying factors underpinning the growth of Internet piracy and how they might be addressed. Unfortunately, but perhaps predictably, the major players in the debate — the ISP and content industries and the Government — appear to be almost purely engaging in this dialogue out of their own self-interests; nothing more, and nothing less.

Let’s take last week’s release of a discussion paper by a number of Australia’s major ISPs and representative group, the Communications Alliance, on the issue.

On the face of it, as many commenters agreed over the weekend, the paper sounds pretty good. It avoids unsavoury approaches to dealing with Internet piracy such as disconnecting users’ broadband connections, includes significant avenues for appeal and independent oversight and works within the boundaries of Australia’s existing law on a predominantly education-based approach to dealing with the issue. However, when you dig a bit deeper into the rationale underpinning the paper, it becomes clear it has broader aims.

Ask yourself: What does Australia’s ISP industry really think about the issue of Internet piracy? Well, the answer to this question is clear: It wants the issue to go away. Australia’s ISPs want their users to continue to funnel money into their revenue trough for broadband connections with big quotas, and they don’t want to be on the receiving end of lawsuits such as AFACT’s action against iiNet while they’re doing it. Australia’s ISPs primarily see the issue of online copyright infringement as being one between content producers and content consumers; they want no part of the whole shebang.

The discussion paper released last week reflects this belief. It positions ISPs as outside the cycle of online copyright infringement by having them passively pass on educational and warning notices to users whose activities will in turn be tracked by the content industry; then, when users don’t listen, the ISPs again step out of the way and pass their details back the other way. There’s also a limiting factor on how many notices they’ll pass on. It’s all quite neat and clean — and predictable.

The response from the content industry (film, TV, video game and music studios and distributors) has also been predictable.

Ask yourself: What does the content industry think about the issue of Internet piracy? Well, the answer to this question is also clear: It wants to hold onto existing business models. The content industry wants its consumers to continue to funnel money into its revenue trough, forking out for pay television, DVDs, sitting through ever-increasing amounts of advertisements on free to air TV, buying video games at full prices, buying whole albums of music and more. The content industry has a whole superstructure set up which has been custom-designed to part you from your money, and it doesn’t want to migrate to a new system.

Hence, the content industry primarily sees the issue of online copyright infringement as being one between users and ISPs. They can’t control what users download, but ISPs can, so they want ISPs to take responsibility for undercutting their existing business models. The content industry’s response to the ISPs’ discussion paper released last week reflects this belief. When the Australian Content Industry Group’s Vanessa Hutley says the proposal “falls short”, she means that there’s no responsibility in the ISPs’ model which would require them to take any enforcement action against their users.

Then there’s the Government.

Governments are a complex beast. Beset by a thousand different competing political and bureaucratic demands, Ministers such as Federal Attorney-General Robert McClelland are positioned at the heart of a huge spider web with a thousand different cords pulling on them simultaneously.

Consequently, they don’t pay attention to industry lobby groups such as the Internet Industry Association, Communications Alliance, Australian Information Industry Association, Australian Content Industry Group, Interactive Games & Entertainment Association and so on unless there is clearly an issue which the industry can’t resolve itself.

When this happens — as it clearly has in the case of online copyright infringement — the Government will normally order a public enquiry to get all sides of the story, and try to get the warring sides to sit down around a table to negotiate under its steely gaze. This is precisely what has occurred in this case as well. Closed door discussions about Internet piracy are being held by the Attorney-General’s Department, and a number of public consultations are under way about the issue of the Internet in general.

The Government primarily sees the issue of online copyright infringement as being one between ISPs and content owners. They want these two industries to sit down and work out the issue themselves. If this ultimately fails, the Government will be forced to devote resources to legislating on the matter — something which it wants to avoid.

Now, have you noticed something about all of these approaches? In all three cases, the prime actors (the ISPs, the content industry and the government) have avoided taking any personal responsibility for the issue. None of the major three sides of Australia’s Internet piracy debate fundamentally believe that the issue is theirs to resolve. They want someone else to do it for them.

What this has meant for the debate is that it has constantly gone around in circles, with each side of this odious tri-pointed star constantly evading responsibility and passing the buck. In addition, they have each avoided discussing the real issues underlying Internet piracy.

Now, there are two further parties in the debate which have remained largely silent on the issue of Internet piracy so far: Those who actually create the content — rather than distribute it — and those who consume it. I’m speaking, of course, about artists and the general public.

I was struck recently by a comment which Greens Senator and Communications Spokesperson Scott Ludlam made on this issue in a post on Delimiter. Ludlam wrote:

“This is a complex and opaque clash of commercial self-interest, with old media conglomerates seeking to retain their incumbency in a world which doesn’t need them as much as it used to. Amazing how little we hear from the artists and creative people themselves about how they’d like to be paid for their work.”

That’s right — real artists! What a shocking concept!

As Ludlam rightly points out, it is not film and TV directors, producers or actors, musicians, video game development houses or any other form of artist calling for the issue of Internet piracy to be resolved. These people — artists — do not really care about the issue. Their main concern is that they are allowed to produce their art without gross commercial interference, and that art gets distributed to consumers in a way which allows consumers to get access to it and at a reasonable enough rate of return to allow them to continue making it and even profit a little.

Art has other aims than just profit, although profit is usually mixed in there somewhere. Strange to hear this said out loud, isn’t it?

It is a similar situation with the general public. All Joe Citizen wants is to be able to get whatever content they want, at the same time as everyone else, on whatever device they want to be able to view it on, and at a reasonable price that they can afford to pay. Sounds pretty simple, doesn’t it? The average Australian couldn’t give two hoots about content industry groups, record labels, film and TV distribution networks, television stations (pay TV or otherwise) or video game retailers. What they want is the content, plain and simple.

I was struck by a comment by ABC managing director Mark Scott, who said (as reported by Mumbrella) in a recent speech that the ABC’s iView platform had demonstrated that there is a strong and growing online audience for “great content, well-curated and delivered in an accessible format”. “Our research suggests that when audiences discover iView, they love it — they use it, they keep coming back to it,” Scott added.

Precisely. When the barriers to consuming content are taken away (as they have been on the ABC’s stellar iView app), content consumption explodes. I personally use iView almost every day — on my PC, on my media centre, on my laptop, on my iPad, on my iPhone — anywhere. Sometimes the content isn’t great, but it’s so readily available that I consume it anyway.

Australia’s love affair with piracy is not an effort to gyp content creators of their rightful remuneration for that content — it’s a simple attempt to get at content which is too hard to consume otherwise. Once again, audiences want to be able to get whatever content they want, at the same time as everyone else, on whatever device they want to be able to view it on, and at a reasonable price.

Now the thing to understand about both artists and consumers is that they are absolutely the key stakeholders in this debate — everyone else are just middlemen. In addition, they don’t have many linkages with the other three groups who are driving the debate.

Content consumers primarily see their main relationship as being with artists directly — the film buff who follows a director’s career, the music fan who buys all of a band’s albums, the Gears of War fan who follows every comment Cliffy B makes in public. And on the flipside, the artists see their main relationship as being with their fans — talking to them, producing content for them, performing for them. Neither places ISPs, content industry groups or the Government as stakeholders of high importance in the way they consume content.

And yet it is these middlemen who are driving the debate about online copyright infringement in Australia, who are negotiating behind closed doors on the issue, suing each other in court, and threatening to legislate about it. For self-interested reasons.

When artists and consumers themselves get involved in the debate, a remarkable thing tends to happen: Self-interest largely disappears from the picture. Great art is never created from self-interest. It can only be created when an artist is driven by their creative impulse, and applies discipline to develop their talents. Great art is never consumed from a sense of self-advancement. It is consumed with wonder, for entertainment, to take oneself away from our normal lives. The commercial agenda is present but rarely the most important factor — it is usually the middlemen who tend to bring it into the picture — not the artists, nor the consumers of that art.

Other things happen as well, when artists and consumers take the online piracy debate back into their own hands. Video game developers create their own publishing platforms which users prefer to piracy. Artists call for their fans to pirate their albums rather than buy them from greedy music labels — and then start publishing them online themselves, without the assistance of intermediaries. Internet video platforms arise to stream content when, where and how consumers want. And more. A direct connection is made between artists and consumers without middlemen.

Now, I’m not saying every middleman in Australia’s online piracy debate is purely motivated by self-interest. Some ISP leaders, like iiNet’s Michael Malone and Internode’s Simon Hackett, also have altruistic motives and do care about their customers. And the same can be said of some figures within the Government and content industries.

But what I am saying is that we are letting middlemen rule a debate which should be rightly ruled by Australian consumers and artists themselves. Let’s set self-interest aside from the issue of online copyright infringement and ask consumers and artists what they want. Now that would be the real definition of an “industry solution”.

Note: To show that I am serious about my comments in this article, I’m licensing this article as Creative Commons (no derivatives or commercial uses). This does not include the images used in the article, on which I do not own the copyright. Please replicate this article as you see fit under these terms. Content production is not always about making money.

news Digital rights group Electronic Frontiers Australia has indicated there are both positive and negative aspects to a plan unveiled last week by the ISP industry to deal with Internet piracy.

The proposal is backed by major ISPs Telstra, Optus, iiNet, Internode and Primus, although other major players TPG, Dodo and Exetel have so far declined to back it. If enacted, it would see those pirating content such as films, TV episodes and games online served with warning and educational notices, with their details being provided to content owners through a subpoena legal process as a last resort.

The publication of the proposal represents the latest development in ongoing talks between the ISP and content industries over online copyright infringement in Australia, which have taken place both under the auspices of the Federal Attorney-General’s Department, as well as independently, in the shadow of the trial between iiNet and the Australian Federation Against Copyright Theft, which represents a coalition of film and TV studios.

The principal organisation representing the content industry in Australia, the Australian Federation Against Copyright Theft, has declined to comment on the proposal, being focused on its upcoming High Court legal action against ISP iiNet on the issue of online copyright infringement.

In a comment emailed after the ISPs’ discussion paper on the scheme was published, EFA chair David Cake firstly noted that the paper as honest in “representing this scheme as a response to rights holder lobbying”. Because of this, he said, the proposal had “no real value to consumers”, and limited value to ISPs as a means to demonstrate responsiveness to such lobbying.
“So it is hard to be positive about this scheme,” Cake said.

However, he added that the ISPs’ scheme proposed last week was “significantly less problematic” than similar initiatives which had been proposed by the content industry, and the EFA looked forward to consultation on the proposal.

The EFA strongly agreed with the Communications Alliance (which has acted as a focus for ISPs in developing the scheme) that any anti-piracy scheme must protect consumer rights to privacy, “to the full protection provided by the Australian legal system”, and the right to access the Internet. Notably, the scheme does not propose to terminate users’ Internet accounts, as some other jurisdictions have done internationally.

The EFA, Cake added, agreed that the costs of rights enforcement mechanisms should be borne by the content industry — as they were seeking to commercially exploit those rights — and it also agreed with the scheme’s focus on independent oversight.

Such independent oversight and an appeals process — described in the paper in one form as a panel to oversee much of the workings of the scheme — would, however, need consumer or civil society representatives, Cake wrote, with the model proposed by the ISPs being flawed because it lacked such representation.

The EFA, he added, also looked forward to discussion of funding models for the ISPs’ scheme.

“The funding model proposed by the Communications Alliance assumes that AFACT estimates of lost income represent income that is genuinely obtainable, in effect assuming that those who downloaded material for free in violation of copyright would be willing to pay the market price, which is not always true. It will be interesting to see if rights holders are willing to accept AFACT estimates when it is used to determine their funding contribution.

In a separate statement, EFA secretary Kimberley Heitman agreed that the proposal was “interesting” in that it attempted to change user behaviour through education, and that the EFA agreed with many of the principles. He hoped to see comment from peak consumer groups in submissions to the Communications Alliance on the proposal.

However Heitman added there were also concerns in the proposal which would need to be addressed — such as whether the content industry would itself change what he described as its “anti-competitive behaviour”, to help reduce the drivers for users to infringe copyright, whether the appeals process would be easy and cheap for end users, and whether the scheme would discourage the content industry from litigation.

news The principal organisation representing content owners such as film and TV studios in Australia has declined to express an opinion on a plan unveiled last week by the ISP industry to deal with Internet piracy, stating that it was focused on its piracy lawsuit against ISP iiNet due to kick off next week.

The proposal unveiled last week is backed by major ISPs Telstra, Optus, iiNet, Internode and Primus, although other major players TPG, Dodo and Exetel have so far declined to back it. If enacted, it would see those pirating content such as films, TV episodes and games online served with warning and educational notices, with their details being provided to content owners through a subpoena legal process as a last resort.

The publication of the proposal represents the latest development in ongoing talks between the ISP and content industries over online copyright infringement in Australia, which have taken place both under the auspices of the Federal Attorney-General’s Department, as well as independently, in the shadow of the trial between iiNet and the Australian Federation Against Copyright Theft, which represents a coalition of film and TV studios.

However, this week the anti-piracy organisation declined to react to the ISPs’ move. “AFACT is focused on the High Court case next week and we will not be commenting on anything but the case at this time,” the organisation said in a statement issued late on Friday.

In general, reaction from consumers to the ISPs’ proposed scheme has been broadly positive, with the general sentiment among commenters on sites like Delimiter being that the proposal is a fair and moderate ‘middle of the road’ path that would allow the content industry to penalise repeat infringers under existing law, while avoiding the need to terminate broadband connections – an unpopular step which has been legislated in New Zealand and France, among other countries.

However, many in the industry do not believe the ISP industry will settle for the proposal.

“This will make no difference to rights holders,” wrote former Internode network engineer and outspoken digital rights advocate Mark Newton on Twitter on Friday. “Rights holders will let the scheme bed down for a year, then declare that it has ‘failed’ and demand changes to turn it into disconnection.” The scheme features an 18 month trial period, followed by an evaluation.

Newton added that ISPs were being “completely, utterly outclassed” in the online copyright infringement debate, referencing the ‘Overton Window’, a concept in political theory which describes a range of ideas in a public debate on a certain issue. Policy activists commonly take notice of the theory by attempting to shift the frame of public debate so that previously fringe concepts become more accepted.

In this sense, it could be implied that the perceived need for an online copyright infringement policy in Australia is being driven by a small amount of organisations which owned content. “It’s pretty much what the Occupy protests are about,” wrote another local Twitterer, Dean Rosolen, in response to Newton’s posts. “Rights holders (the 1 percent) heavily influencing policy for the rest of us (the 99%).

opinion/analysis
If I were an AFACT lawyer, the company’s non-response to the ISPs’ piracy proposal last week makes absolute sense.

AFACT is already committed to the High Court process with iiNet. The outcome of that trial, it should be incredibly obvious to everyone at the moment, has the potential to dramatically shift the playing ground which underpins the relationship between Internet users, the content industry, the ISP industry and even the Government.

If iiNet (for the third time) wins the case, then AFACT will likely be forced to negotiate with a great deal more seriousness with respect to the anti-piracy proposal unveiled by the ISPs last week. The ISPs will be in a much stronger position of strength. However, if AFACT wins the trial, then the ISPs will be in a dramatically weakened position – and it would seem likely that they will be forced to take a much stronger role in policing Internet copyright infringement amongst their user bases. AFACT will be in a position to make certain demands, backed by the High Court’s judgement.

In this context, it makes no real sense for AFACT to react to the ISPs’ proposal last week, or even to seriously negotiate. There is a bigger game afoot, and AFACT appears to be the only organisation at the moment to realise that. This is an organisation truly playing for keeps.

Image credit: Jamie Woods, royalty free

opinion The anti-piracy scheme proposed by the ISP industry this afternoon as a response to online copyright infringement through platforms like BitTorrent opens the door for content owners to start taking hundreds of thousands of Australians to court for minor offences such as downloading a handful of films or TV episodes.

In general, the scheme — detailed in full in this discussion paper (PDF) — has much to like about it. In putting the proposal together, the ISP industry has taken great care to avoid many of the really draconian punishments which have been implemented internationally and proposed in Australia over the past few years.

Unlike in New Zealand and France, the scheme does not proposed that Internet users’ broadband connections be shut off after repeated piracy offences. This idea is simply unpalatable in a society which depends daily on access to the Internet for access to basic services such as banking and dealing with all levels of government and business — to say nothing of Australians’ personal lives. It is also, of course, incompatible with the current Labor Government’s vision of universal fast broadband access.

In addition, the scheme avoids the noxious idea that ISPs would simply hand over the details of their customers upon receiving copyright industry demands. That idea represents a clear invasion of privacy and an abrogation of the ISPs’ responsibilities to their customers — not to mention a lack of due legal process.

Furthermore, there are a number of controls placed upon the process as a whole. Copyright owners must be accredited to join it, with the pre-approval process featuring an independent audit of their copyright infringement detection technology. On the Internet user end, Australians affected by the scheme will be given time to query warning notices received, dispute them, or seek further legal notice to protect their own rights.

I like the focus on education; although, it could be argued, education is a two-way process, and the content industry should perhaps be educated simultaneously on how to efficiently and painless make their content available online in the first place. It’s something users have been attempting to do for years.

And I like the fact that a formal legal process is involved — where, should copyright owners want to pursue action against individual users, they will be forced to do so through the courts, which is the appropriate venue for corporations who feel they have been aggrieved by consumers. The legal concept of the need for “evidence” — shocking, I know, in these fast-moving times — will be applied to their claims that certain Internet users have infringed copyright online.

The damage as a whole will be limited — with ISPs committing to each only process 100 maximum infringement notices each month during the 18 month trial period — and the ‘reset’ mechanism, by which users’ register of copyright infringement notices will be set back to zero if no notices are received during a 12 month period — is another worthy control factor.

However, there is one disturbing fact inherent to the scheme proposed today which I personally believe requires a deal of serious consideration.

The scheme as proposed contains a great deal of soft incentive for users to stop pirating content online. Gentle, repeated warnings, educational notices, an overall awareness that Big Brother is ‘watching’; the ISPs’ anti-piracy scheme contains all of these components, and I do expect them to have some impact on the levels of Internet piracy in Australia, if the scheme is enacted as proposed.

However, the scheme also overtly proposes a new and extremely punitive approach to dealing with repeat offenders which I find disturbing.

The ultimate punishment laid out by the ISPs doesn’t seem so bad: You won’t have your Internet connection cut off, and your actions won’t be reported directly to the authorities. Instead, all the ISPs are promising is that they will cooperate with legal demands from the content industry for specific users’ information.

This might not sound all that bad: Until you consider what the film and TV studios can do with that information.

In the US, the ability to source alleged Internet pirates’ details through mass subpoenas has resulted in the content industry sending hundreds of thousands of residents letters demanding that they settle threatened lawsuits for several thousand dollars, or else face fines imposed by the courts for amounts, in some cases of up to $150,000.

Upon receiving such a letter, Internet users face a number of undesirable options. If they simply front up and pay what the film, TV and music industries demand, they’re out of pocket for amounts averaging $3,000 — simply for downloading a piece of content which might have cost $30 to buy as a brand new DVD.

If they resist this legal approach, things quickly get worse. It’s a common tactic for the content owners to immediately up the amount that they’re demanding — for example, from an initial $4,000, to $7,000 or $8,000, in a number of reported Recording Industry Association of America cases.

And they can also face a higher social cost. Wired points out in a comprehensive article on the subject that many of the claimed pirated works are sensationalist in nature — such as the film ‘Nude Nuns with Big Guns’. Would many Australians want to be dragged into court for illegally downloading a slightly unusual piece of pornography? No. Especially if it might cause problems with their relationship or reputation. There is an inherent incentive to settle — despite the fact that the settling cost far outweighs the actual cost of the crime — again, something like $30 per offence.

If you do decide to fight the content industry’s legal threats, things can get pretty insane pretty quickly. In several cases decided in the US, juries have awarded amounts as high as $80,000 per song shared on the Internet. That’s right — $1.92 million for sharing an album with 24 tracks online. $1.92 million in fines. For an album which would probably cost no more than $20 to buy. Does that seem reasonable? Not really.

I’m sure that courts in Australia wouldn’t make such extreme judgements — the US legal system is known to be pretty insane. But you do have to wonder what our local legal system would consider reasonable. Would it levy fines of a few thousand dollars, perhaps up to a few tens of thousands of dollars, for online copyright infringement? What about community service and a public apology? Or could the court rule that infringers should have their Internet cut off for a while? I’m not a lawyer, but it all seems entirely likely.

This is the future which Australia’s major ISPs — with the notable exceptions of cut-rate ISPs TPG, Dodo and Exetel — have just compulsorily volunteered their customers for. In putting forward this scheme, the ISPs have basically proposed that they take absolutely no role in defending their customers from an entire industry which has a comprehensive and well-documented history of hugely unjustified lawsuits against customers who have only committed minor offences.

And before you comment that it won’t happen, remember that it already is. October, it was revealed that a new company — named Movie Rights Group — had approached every major Australian ISP seeking information on users who had allegedly infringed copyright online, initially seeking the details of some 9,000 Australians who it claimed had downloaded the film Kill the Irishman. There were plans to broaden the company’s efforts to other films — and MRG was planning to use the same threatening legal letter approach seen in the US — although the organisation’s future is now in question.

The most ironic thing about this issue is that it should be obvious by now that legitimate commercial models for Internet content exist. In 2011, the music industry is suing less people as it’s making an absolute mint through platforms such as Apple’s iTunes. Digital book publication is booming through Amazon’s Kindle store. And in the US, the incredible success of movie and TV on demand platform Netflix has demonstrated starkly how much Internet users will spend — a lot — if they are able to pay for whatever online content they want, when they want to.

In the face of such an evolving and rapidly growing economy for digital content, the actions by Australia’s ISPs in proposing an anti-piracy model that puts their loyal customers in the hands of a pack of voracious legal wolves constitutes nothing less than impatience and corporate cowardice. If the ISPs were prepared to hold on for a few years, no doubt the evolving digital economy would largely resolve the piracy problem once and for all.

The fact that they are not willing to do so indicates a stunning lack of loyalty to the customers who have earnt them billions of dollars in revenue over the past several decades.

news A coalition of most of the nation’s major ISPs has proposed a scheme for handling Internet piracy which would see Australians issued with warning and educational notices after content holders provided evidence that they had breached their copyright online — and the door opened for ISPs to hand over user details to the content industry if they keep on pirating content online.

The coalition includes Telstra, Optus, iiNet, Internode and Primus, but not TPG, Dodo or Exetel. It is working on collaboration with network equipment manufacturer Ericsson and industry groups the Communications Alliance and the Internet Industry Association.

In a statement released this afternoon by the Communications Alliance, the group noted that the scheme would require ISPs to forward “education and warning notices” to customers whose broadband connections have been detected undertaking activity which “might” infringe copyright laws. Once a customer had been forwarded three warnings and one education notice, ISPs would send what is terms a “discovery notice” to the account holder, warning them that they have apparently failed to address issues set out in the previous notices and their details may be subpoenaed by the copyright holder which had filed the complaint.

The ISP will, at that time, also notify the copyright holder that the Internet user concerned had failed to address the issues of online copyright infringement. The copyright holder may then seek to apply for access to the Internet user’s details and identity through a subpoena or ‘discovery’ application directly with the ISP.

“Should the ISP be served with a valid preliminary discovery order (or subpoena), the ISP will be required to comply with the order, which may require the ISP to disclose the account holder’s details to the rights holder,” the ISPs noted in a discussion paper proposing the scheme. The paper is available in full online (PDF). After they had obtained Internet users’ details, copyright holders would then be able to take legal action directly against the users.

The scheme does not provide for the termination of Internet user’s broadband access, not for any action to be imposed on customers directly by ISPs; in addition, the ISPs notes that it gives consumers the right to appeal warning notices.

In Communciations Alliance’s statement, the organisation’s chief executive John Stanton described the initiative as a positive step by ISPs to address what he said was “a complex and contentious set of issues that society had been struggling with for years”.

“We believe the Notice Scheme can greatly reduce online copyright infringement in Australia, while protecting consumer rights, educating consumers about how to address legal online content and helping rights holders to protect their rights,” Stanton said. “Equally important is the need for Rights Holders to ensure that consumers have access to legal and affordable content online, to reduce the motivation to source content in ways that might be illegal.”

The ISPs are proposing that the scheme would be undertaken on a trial basis over an 18 month period; following this period, an “independent evaluation” would be conducted into its effectiveness, including examining whether it produced a real change in consumer behaviour, and whether it should be continued in its initial form or modified for improvement.

Stanton said the proposal by ISPs would require further consultation with Rights Holders, consumer representatives, the Federal Government and the broader ISP sector before full details and an implementation timetable could be finalised. “We look forward to continuing the discussions with Rights Holders, consumer representatives, the broader ISP community and the Federal Government, then to launching an agreed scheme that is that is efficient, fair and cost-effectivefor all parties, particularly consumers,” he said.

The proposal of the scheme comes as the Federal Attorney-General’s Department has recently been holding talks between content owners and ISPs over the issue of online copyright infringement. However, the talks have been held behind closed doors and few of the parties involved have been willing to reveal what was discussed.

The ‘subpoena’ approach to dealing with online copyright infringement has also been a subject of great debate over the past few months in Australia. The approach is one proposed by a new organisation, Movie Rights Group, a new organisation which was set up in Australia last year with the aim of protecting the copyright rights of content owners in the film industry. In mid-October it was revealed that MRG had approached every major Australian ISP seeking information on users who had allegedly infringed copyright online, initially seeking the details of some 9,000 Australians who it claimed had downloaded the film Kill the Irishman.

However, since that date, Movie Rights Group’s website has been shut down, and the organisation’s vice president of sales and marketing has left the organisation.

Opinion/analysis to follow in a separate article.

fake news The Federal Government today confirmed plans to upgrade its controversial mandatory Internet filtering scheme with the new Stop Online Piracy Act module released in the United States this week, with Communications Minister Stephen Conroy confirming the new functionality would be ready ahead of the next Federal Election.

The Internet filtering technology only stops Australians from being able to access content which has been refused classification locally — such as child pornography or detailed instruction in crime. However, version 2.0 of the system, released in the US this week to great interest from the technology sector, also allows the Government to automatically block materials which infringe copyright, a feature long requested by the film, television and music industries.

In a statement this afternoon, Conroy noted the agreement for Australia to license the module had been one of the key items on the agenda in talks between Prime Minister Julia Gillard and Barack Obama, during the US President’s whirlwind visit to Australia this week. Conroy noted the implementation of the SOPA module would unify the systems of the two nations.

“There’s a staggering number of Australians being in having their computers infected at the moment, up to 20,000 … can regularly be getting infected by these spams or scams, that come through the portal,” Conroy said. “They have exactly the same problem in the US with the series of tubes.”

“Ten movies streaming across that, that Internet, and what happens to your own personal Internet?” asked Conroy. “I just the other day got … an Internet was sent by my staff at 10 o’clock in the morning on Friday. I got it yesterday. Why? Because it got tangled up with all these things going on the Internet commercially.”

“They want to deliver vast amounts of information over the Internet. And again, the Internet is not something that you just dump something on. It’s not a big truck. It’s a series of tubes. And if you don’t understand, those tubes can be filled and if they are filled, when you put your message in, it gets in line and it’s going to be delayed by anyone that puts into that tube enormous amounts of material, enormous amounts of material.”

In the statement, Conroy noted the SOPA module would cost slightly more in Australia than it did in the US, despite it being the exact same technology used in both countries.

The Motion Picture Association of America, which manufactures the SOPA module and sells it on a software as a service basis, stressed that it wasn’t responsible for setting local prices for the technology. In Australia, the SOPA module will be distributed through local reseller the Australian Federation Against Copyright Theft.

“While the MPAA provides guidance on recommended retail pricing, the company itself does not set the final ‘to-the-customer’ price,” the company said. “The market, in the form of its channel and value-added partners who deliver those products to customers, ultimately determines retail pricing.”

However, Conroy’s announcement has already met with criticism from some sections of the industry and the Opposition.

Internode managing director Simon Hackett described the SOPA module’s pricing model as “insane” for small internet service providers, warning that none would survive their walk through the “valley of death” transition from the current Internet filter system to the SOPA upgrade which the Federal Government is seeking to introduce. “At 10,000 customers, it’s insane to connect to this module, as a national provider,” he said. “I just gave you insane.”

Optus chief executive Paul O’Sullivan said the SOPA module didn’t go far enough, arguing it needed to deal with other areas of content available on the Internet.

O’Sullivan noted that companies like Google and eBay had over the past decade achieved a “winner take all” dominance over the internet. He suggested that the SOPA module could be extended so that “hyperlinks” could be placed on the websites of companies like Google and eBay, linking to competitors – or even that the traffic for such sites could be auctioned to provide access for “others who might bid to hold that auction, or for providing that search at a better price”.

His chief political opponent, Shadow Communications Minister Malcolm Turnbull issued a statement slamming Conroy’s plan as not taking advantage of current technologies such as China’s Internet firewall system. Use of China’s system was growing much faster than the SOPA module, the former Liberal leader said. “Everyone who has had even a cursory look at the business case has acknowledged this threat,” said Turnbull. “Perhaps now Senator Conroy can also acknowledge this threat rather than simply accusing every rational telco analyst of not understanding the laws of physics.”

The last word came from maverick Exetel CEO John Linton.

“I have never heard of this proposal,” said Linton in an emailed statement this afternoon. “My personal view is that it is an insanely difficult and expensive process to implement that serves exactly no purpose whatsoever — in other words a nanny state gone totally insane one more time by the current government.”

Note: The above is satire written to keep the author entertained in an extremely slow news week, upon urging from some mischievous readers.

Image credit: Kim Davies, Creative Commons

news The Australian Copyright Council has recommended the Federal Government modify copyright legislation to support a “repeat infringer” industry code to terminate the broadband accounts of those who repeatedly infringe copyright online by illegally downloading content such as films through file-sharing platforms like BitTorrent.

The Australian Copyright Council is an organisation which counts among its members Australian publishers across multiple categories — books, newspapers, film, music and more. It was at the organisation’s annual conference earlier this month that Federal Attorney-General Robert McClelland released a discussion paper on the issue of copyright legislation.

The paper controversially contained a prominent section proposing a “streamlined” legal process to aid anti-piracy organisations such as Movie Rights Group and AFACT to target individuals allegedly downloading copyrighted material online. The section was later deleted, with McClelland’s department citing its publication as a mistake, although not before it provoked outrage from digital rights lobby groups.

The Copyright Council today published a paper (available online in PDF form) which detailed its proposals for reform in the area of copyright, put together by a number of legal academics from universities across the country.

Among other arguments, the paper points out that Australia’s Free Trade Agreement with the US requires that service providers such as ISPs would only be freed from liability for copyright infringement occurring on their networks (the so-called ‘Safe Harbour’ approach) on the condition that they implement a “repeat infringer” policy.

Such a policy, the paper argues, “providers for termination in appropriate circumstances of the accounts of repeat infringers”. “In Australia, there has been an inability of carriage service providers who are currently eligible for the [Safe Harbour provisions] to agree upon a repeat infringer policy with copyright owners within an industry code,” it continues.

The Copyright Council noted that any such code must be developed through an “open, voluntary process by a broad consensus of copyright owners and carriage service providers” and be registered by the Australian Communications and Media Authority, under processes specified in the Telecommunications Act (1997).

The paper agrees with the Federal Government that the Safe Harbour provisions should be extended (McLelland proposed this in his speech earlier this month), but argued that any organisation which wishes to rely on those provisions under the law, should be required to implement a repeat infringer policy as a condition of their use of the provisions.

“The precise terms of those standards – perhaps set out in regulations to the Copyright Act –would be a matter for public law input from interested circles,” wrote the Copyright Council’s expert panel. It noted that in the full Federal Court judgement in the iiNet versus AFACT case, Justice Emmett had acknowledged that account termination might amount to “a reasonable step” by ISPs to as to avoid liability for authorising the online activities of customers.

Currently, the development of an industry code to deal with piracy is in the works — with the Attorney-General’s Department holding talks between ISPs and the content industry on the matter. However, the talks are being held between closed doors with no involvement from consumer representatives on the matter, and few details of the process have made it into the public eye.

Similar ‘strikes’ termination policies have been implemented in other countries such as France and New Zealand, with mixed results.

opinion/analysis
Contained in the Australian Copyright Council’s paper is a sharp reminder of how many aspects of Australia’s legal community (including governments and politicians) views the issue of online copyright infringement: As a legal nicety to be smoothed over.

If you believed the viewpoint put by the Council, the issue of Internet piracy is simply one of bringing Australian law into harmonisation with international standards, as applied through the Australia/US Free Trade Agreement and so on. If Australian ISPs want the benefits of Safe Harbour provisions, the organisation and its panel of independent experts argues, those ISPs should also sign up for a process which would see them disconnect customers if they pirate content one too many times.

However, this legal argument is not only a false dichotomy; it bears no relation to how things operate in the real world. In practice, there is actually no relation between the need for comprehensive Safe Harbour provisions and the content industry’s desire to disconnect Internet users who pirate their content. The only reason these two issues are linked is because the US Government — whose country has the world’s biggest content industry — linked them in the Free Trade Agreement.

The US Government and its stakeholders has an obvious self-interest in doing so. It wants to help preserve the power of its content industries.

But the fact remains that disconnecting people from the Internet for pirating content is not the answer to the issue. Doing so raises a whole heap of other issues. In 2011, in Western democracies, to disconnect someone’s Internet connection is to prevent them from accessing modern media platforms. It will block them from participating in democracy. It will restrict their access to many fundamental services such as Internet banking, email, online lodgement of government information such as their annual tax return, and much, much more.

In an NBN world … it will even restrict their access to emergency services telephone calls.

The Internet is as fundamental to Australian society in 2011 as a public footpath or the right to receive paper mail at your home address. Taking the entirety of it away because someone allegedly — and, I stress, allegedly — infringes a powerful organisation’s copyright — is not the answer.

This article is by Mark Gregory, a senior lecturer in electrical and computer engineering at RMIT University. It originally appeared on The Conversation.

opinion Last week, the English High Court ordered British Telecom (BT) to block access to a members-only website that offers links to pirated films. NewzBin2, the site in question, offers links to pirated films on what’s been described as a “grand scale”.

The ruling – which gives BT just 14 days to act – follows legal action by the Motion Picture Association (MPA) earlier this year. It’s the first copyright infringement case of its kind, legally requiring an internet service provider (ISPs) to deal with the thorny issue of illegal downloads.

The High Court outcome is already being hailed as a major win for movie studio bosses in their ongoing copyright protection battles. Chris Marchich, managing director of the Motion Picture Association in Europe stated: “Securing the intervention of the ISPs was the only way to put the commercial pirates out of reach for the majority of consumers. This move means we can invest more in our own digital offerings delivering higher quality and more variety of products to the consumer.”

BT, which has for some years employed an internet filtering system called Cleanfeed to block access to child pornography, welcomed the High Court outcome. That same system – created in 2003 and live since June 2004 – will now be used to filter NewzBin2.

A spokesperson for BT said it was “helpful to have the order now and the clarity that it brings”.

The ruling may also gives the company an avenue for dealing with an anticipated backlash from rights groups and groups sponsoring freedom online: BT, the company can rightly claim, has been forced to implement filtering, and has no choice in the matter. The MPA has already stated it will likely request other ISPs to block NewzBin2. With or without that, the judgement is likely to have an impact elsewhere in the world, including Australia.

In 2008, the Australian Federation Against Copyright Theft (AFACT) took action against iiNet – a prominent ISP – claiming that iiNet had allowed its users to illegally download copyrighted movies. The Australian Federal Court ruled in February this year that iiNet did not authorise the acts of infringement that occurred on its internet service.

The Australian High Court granted AFACT special leave to appeal the Full Court of the Federal Court in August and it’s likely the matter will return to the High Court later this year. It’s perfectly possible the Australian High Court will take notice of the latest international developments relating to this matter.

In the US, the six largest ISPs have agreed to a voluntary “six strikes” system of copyright notices and mitigation measures, including offender download speed reductions, mandatory copyright education and an appeals process. In New Zealand, a copyright protection system has been in place since 1998, which includes warnings, detection and enforcement notices that ultimately may lead to offenders being fined up to NZ$15,000.

In the UK a similar system was announced last year – it includes detection, infringement notices, a frequent offender register and an appeals body. The English High Court has effectively added to the copyright protection available to movie studios by requiring ISPs to block access to identified websites that permit customers to download copyright material.

Internet filters were introduced in Australia this year by major ISPs including Telstra, Optus and several smaller ISPs. The providers announced they would voluntarily block more than 500 websites. This step has drawn criticism from groups such as Electronic Frontiers Australia and other groups supporting online freedom and no censorship of the internet.

Should we be worried or relieved? That comes down to opinion and personal choice. It’s only a matter of time before the internet is fully regulated in Australia. The English High Court decision brings this reality one step closer.

This article was originally published at The Conversation. Read the original article.