Progressive Response in the UK? November 19, 2009

Many observers of copyright developments in the UK expect Parliament to pass legislation instituting a so-called progressive response program for thwarting illegal uploading of content, in which repeat offenders would have their Internet connections suspended or even eventually revoked.  Such schemes are the law in Taiwan, South Korea, and (in attenuated form) France.

Even the Economist recently predicted that such legislation is forthcoming in the UK.  We advise against holding your breath.

Yesterday’s Queen’s Speech set out the legislative agenda for the next parliamentary session; it contained a piece on copyright in the Digital Economy Bill.  This essentially codified what’s emerged in the reports that have been published so far:

“The plans for tackling illegal file-sharing, detailed earlier this year, will be a two-stage process. Initially the government will aim to educate consumers and, those identified as downloading illegal content, will be sent letters.  If this proves insufficient, technical measures which will include the powers to disconnect persistent pirates, will be introduced in the spring of 2011.”

There will be scant more detail than this, since all the Queen and Government do is to get the headline intent into the process for detail to be worked out later. The Queen would only have read out “my government intends to pass legislation on…”  But the Digital Economy Bill will be much broader than this and contain many other contentious issues.  Copyright will be only be a minor component of the Bill.

The trouble is that the coming parliamentary session is now only 70 days in length for the House of Commons and 30 days for the House of Lords , because an election must be held by June 6th of next year.  The perception is that very little of the substance of this Queen’s Speech will make it through to legislation, because there isn’t enough time left.  The government (executive arm) will have to determine the priority that this bill will have within its apparently overburdened legislative program. Additionally, the House of Lords is likely to delay politically contentious issues to thwart the incumbent Labour party, which according to opinion polls and commentators is destined to be replaced by the Conservatives.”

Thus it’s unlikely that any progressive response legislation will pass in the UK until at least 2011.  By that time we should have enough data from countries with progressive response laws on the books to determine the effectiveness of such a scheme.

Bill Jones is CEO of Global Village Ltd.

UK Government Releases Digital Britain Report June 19, 2009

The UK Government yesterday launched its long-awaited Lord Carter’s Digital Britain Report.  It spans a wide industrial cluster, from media to broadband, mobility, etc.

Minister Ben Bradshaw, in the launch statement to the House of Commons, said that theft of intellectual property is nevertheless theft, and is not to be condoned. The report has a robust legal and regulatory framework to combat Digital Piracy, and it indicates that the government will do all it can to protect Intellectual Property as a cornerstone of a strong economy.

The report itself states that “unlawful downloading or uploading, whether via peer-to-peer sites or other means, is effectively a civil form of theft. This is not something that we can condone or to which we can fail to respond. We are therefore setting out … a clear path to addressing this problem.”

The report is 245 pages long, is ambitious and is detailed. Yet many say it is not detailed enough. It tacitly acknowledges that it is building on prior reports, that the economic circumstances have changed since those reports, and that we now know more since the Caio and Gowers Reviews were published.

And whilst the devil is in the details, the report outlines further work that must be done before primary legislation can be brought forward. (The UK government’s normal process is to undertake “consultations” and “analysis” to guide it towards policy recommendations, initiatives, and drafting of primary legislation.)  The Recommendations section of the report includes six on further analysis and one for further review. The interim report recommended 8 consultations, whilst this report introduces 12 consultations, including one on P2P.  Nevertheless, the report contains 72 action points.  In that sense, it’s not a finished piece of work. It also falls short, in many instances, of indentifying who will pick up the costs of these interventions. It wills the end but not the means.

The huge amount of detail in the report indicates how difficult and challenging it is for governments to deal with this whole area. It is creating a new industrial sector, in which most parties, including consumers, are to some extent legally illiterate.  That is, the government has to create new laws and conditions on behalf of its citizens, within which the newer economy can thrive and for which the instruments of orderly commerce are known, understood, have respect and are obeyed; in the meantime, government also does all it can to create the conditions for the UK to be a global leader in the digital industries.

The significance of this report is not in the detail, rather it is in the way in which it has emerged, the audience that it will have, and the ramifications beyond the shores of the UK.

One should not underestimate the international significance of this report.  Governmental financial intervention is controlled by European Union “state aid” rules.  In this report, state aid components have been cleared with the EU, the IPR components have been discussed at length and therefore probably tacitly endorsed by the relevant international IPR agencies.  The UK’s approach to regulatory and legal developments are copied internationally.  In short, the UK has not produced this report in isolation.

As the EU’s Lisbon agenda, which includes aspects of Information Communications and Telecoms (ICT), moves towards its 2010 conclusion, the EU can be viewed as “in stasis” on these topics, until it develops a new agenda. Sweden and Spain will hold the next presidencies of the EU; both have taken a keen interest in the report’s development and may view it as an opportunity to create a new agenda. The Digital Britain report may be a basis of such an agenda.

At the same time, one should be aware of the EU’s “water bed effect,” i.e., that initiatives by one nation may bring countervailing movements or initiatives in other parts of the EU.  For example, some nations are developing new or alternative proposals on P2p following the French moves in that area.

Many view the implementation and delivery plan detailed in Chapter 9 as the key section of the Digital Britain report. That a government report (white paper) focuses on detailed implementation is interesting on a number of levels. It indicates a government willing to move from macro economic policy to micro economic policy to deliver economic outcomes — i.e. it’s more interventionist than is customary in these areas. It also recognises that detailed intervention is required to ensure law and order and balance among the various stakeholders.

In effect, the government is creating a new economic sector comprised of old industrial silos which it will now nurture and govern in the round. It is creating a new government agency to do this. Media, telecoms, content, IT, etc., are being addressed as a single industrial sector. This may make it easier to address copyright and technology issues. But of course the laws and regulations have to move on to the statute books, and in that sense it’s an uncertain path forward.  Nevertheless, the ambition is clear.

Proposals to Change Rights Management in Britain. Where Will It End Up? March 30, 2009

By Bill Jones 

The UK government has initiated a new consultation in a paper entitled “Copyright in a digital world – what role for a digital rights agency”. It wants to gather inputs through submitted responses, “town hall” meetings and government committee evidence on the role that a Digital Rights Agency should play in protecting and promoting the legal use of copyrighted content on line.  The overall goal is to make the UK the world’s favored destination for creative companies to grow and invest – i.e., a business-oriented goal.

This consultation is taking forward Actions 11, 12, and 13 in the Digital Britain Interim Report (November 2008).  This drew together various initiatives including the Gowers Review, which the government said it would implement completely. It is being promoted by Lord Carter, the recently appointed and created role of Minister of Communications, Technology and Broadcasting in the Department of Business and Enterprise and Regulatory Reform, and David Lammy, Minister of State for Higher Education and Intellectual Property. Both were appointed last October. Carter’s appointment is designed to bring governmental coherence to his topic areas. Many reports had been written, but there was no focal point for delivery.

This latest action brings focus on the recommendations to make sure that “something is being done,” i.e. delivery against policy recommendations. That it is being taken forward by two ministers under the aegis of three different departments is perhaps indicative of the difficulty government has in dealing with these areas, particularly when the law is somewhat clear but people ignore it, making enforcement difficult in a democracy where philosophical premises are regularly tested in political rhetoric, e.g. citizen’s rights.

Action 11 is about exploring the potential for a Rights Agency.  Action 12 is about distributors and rights holders funding a new approach to civil enforcement of copyright.  The 29 page consultation paper does not deal with specific legislative proposals under Action 13 to deal with unlawful P2P activity. Perhaps one role for the consultation would be to re-evaluate the validity of the recommendations, given that many viewed the Gowers report as flawed and that government rushed to accept the report in its entirety. We now know that it is creating headaches for those engaged in delivery.  

Meanwhile, in contrast to the shorter term nature of this consultation (2-3 years), the UK Intellectual Property Office has launched its own strategic consultation on the future of copyright.

In essence, this new governmental consultation is about finding a new boundary between consumers and rights holders, such that consumers have new and more fuzzy “rights”: they expect to be advised and educated on copyright, they aren’t immediately treated as criminals but persistent offenders are denied services (restrictions of their network access); and that the creative industry continues to get incentives to create content.

So it’s potentially a new regulatory approach that has to sit alongside the courts even though the government has stated that it is not a new regulator. It states that the agency should deliver a robust self-regulatory framework, including action to prevent and reduce online piracy. In effect, this moves the compliance and enforcement burden from the government and consumer to industry. The process mapping behind this must be quite complex, as must the feedback loops for appeals, countersuits, etc.

The specific narrowly drawn legislative proposal (Action 13) to significantly reduce unlawful P2P file sharing activity will be complementary to the rights agency.

This consultation looks at how a rights agency can help create an environment in which the creation of digital content is rewarded and innovation is encouraged. In doing so, it observes that changing business models are unclear and that few new models have gained significant traction.

Yet a very significant component of UK content is sourced from US and other countries. Interestingly, the example it quotes is that consumers are no longer prepared to be told when and where they can access the content they want (e.g., view a film at home after it has passed through cinemas), and why a TV show aired in US should not be available in UK today. So this UK consultation may attempt to deal with US business models as they operate in UK.

The consultation observes that consumers’ reaction to the facilities offered by technology has been to bypass commercial channels and go for free pirated routes, which the consumers regard as acceptable behaviour. So it makes it clear that for content markets to flourish stakeholders should come together to work out how to move forward.

It recognizes that it’s not up to Government to mandate how rights are traded or used. It also does not propose that Government should set up and run such an agency and states emphatically that it is not a proposal for a new government regulator.  Yet elsewhere it states that it could be a self regulatory body to be funded by industry contributions, and may have regulatory powers answerable to OFCOM (the UK telecommunications regulator). However, it believes that government can facilitate a market space where it would be simpler and easier for commercial and free negotiations to take place.

So it’s an invitation for industry to come together to create a body that deals with issues that is for industry to deal with… and that government will stay clear of intervention. This is at a time when increasing intervention in the economy is the order of the day.

The tacit suggestion is that it wants to encourage the market to develop in a way it wouldn’t develop of its own accord, in the same time scales. Part of that is to encourage rights owners to deliver to the consumer “inexpensive (or apparently ‘free’) and easy and legal” content.

So this consultation is about working out where the boundaries are (or finding new boundaries) between consumer needs and a flourishing industry.

They see this working alongside specific legislative proposals yet to emerge. That should create interesting process mapping and decision trees regarding copyright infringement particularly wide-scale peer-to-peer.

At its most ambitious, the government’s vision for the Rights Agency is that it will facilitate a major change of approach as to how content is provided packaged and sold to consumers.

The paper sets out the kinds of things which may be done, but emphasizes that it’s for industry to decide, since for those to work, they must be owned by industry.

So the key objectives of the rights agency are:

1. Building digital content markets
2. Changing the way that businesses work
3. Educating consumers
4. Reduction of online piracy

1 and 2 are for industry, government will plays its part in 3, and 4 is for industry to agree on its own mechanisms. In other words, this is an industry based agency, facilitated by government, in which all of the agency’s apparent tasks are about dialogue and communication. It’s a dialogue about a possible new body which will have dialogue at its heart.

One wonders how “industry” is defined and what the motivations will be for those players to finance, participate and deliver. But at least the government has delivered on its commitment by creating a space in which the prior actions may be taken forward. 

Bill Jones is CEO of Global Village Ltd.

Digital Britain Report Calls for ISP Antipiracy Levy January 30, 2009

One of the many proposals in the Digital Britain report that was released yesterday under the aegis of Lord Carter, UK Minister for Communications, Technology and Broadcasting, is for setting up a government Rights Agency to track suspected online copyright infringers and report their activities to copyright owners.  The government would impose a £20 (US $29) per subscriber annual levy for this on the ISPs.

As an idea for addressing the actual economics of online copyright infringement, this is one of the most retrograde I have ever come across.  

Currently a number of private sector companies offer services similar to those that the proposed UK Rights Agency would provide — examples being MediaSentry (SafeNet) and MediaDefender.  Media companies pay them (millions of dollars per year) for these services.  The proposed Rights Agency would essentially shift the burden of paying for those services to ISPs, which would then shift them to consumers.  That’s a tax of £1.67 ($2.40) per month on ISP subscribers for their fellow users’ alleged misbehavior.

Contrast this idea with its converse, the blanket licensing fee (a/k/a flat tax) being proposed by various quarters, including Warner Music Group, and being considered by the UK’s diminutive neighbor in the Irish Sea, the Isle of Man.  The Manx proposed scheme would charge users even less — as little as £1 ($1.45) per month — for the right to share content online without limitations.  Admittedly, the numbers being tossed around for blanket licensing schemes elsewhere are higher, but you get the idea.

The Rights Agency is an idea for government regulation of digital copyright that actually makes even less sense than blanket licensing.  If governments are going to insist on redirecting money for use of online content, it should at least be done so the money is used to encourage content use, not punish people for it.