Ofcom’s draft code on illegal downloading: Managing IP's guide

What’s the background?

The Digital Economy Act 2010 was introduced, in part, to curb online copyright infringement. As part of that, it included measures designed to force internet service providers (ISPs) to do more to help copyright owners find out who is breaching their rights. In particular, it requires ISPs to notify subscribers if their IP addresses are reported by copyright owners as being used to infringe copyright; and to keep track of the number of reports about each subscriber and compile an anonymous list of those subscribers who are reported to have exceeded a certain threshold.

The Act also required Ofcom to produce a code setting out how these two obligations must be implemented and regulated.

How will it work in practice?

If a customer receives three letters or more within a 12-month period, copyright owners can ask the ISP to provide them with anonymous information showing them which infringement reports are linked to that customer’s account. The copyright owner may then ask a court to force the ISP to reveal the identity of the customer so they can sue under the Copyright Designs and Patent Act 1988.

Copyright, downloading, the internet ... was it a big political issue?

Of course. The Act pitted well-organised copyright campaigners against well-funded copyright owners over controversial issues relating to online freedom and privacy. In 2010 Ofcom published an initial draft of the code but many people who responded to it criticised the draft as being weighted too heavily in favour of copyright owners.

So what does the new draft say?

The new code says that Ofcom itself – rather than copyright owners – must approve the procedures they use to gather evidence of infringement; and ISPs must now include in their letters to subscribers the number of copyright infringement reports connected to their account.

Did copyright owners manage to claw back anything?

Yes. The new draft code makes it harder for alleged infringers to appeal by limiting the grounds on which they can do so. It clarifies that they can only appeal on reasons set out in the Act itself. The cost of appeal is to be £20.

What will happen to infringers?

That’s the big question. The Digital Economy Act mentioned further measures which the government minister in charge of the rules might consider to help reduce online copyright infringement. These would require ISPs to take steps such as reducing infringers’ internet bandwidth, blocking their internet access or temporarily suspending their accounts.

Ofcom says that the potential measures will only be considered after the Code has been in force for at least 12 months. They will also need more laws (which must be passed by Parliament) and require Ofcom to set up another independent appeals process with judicial oversight.

The UK government last year dropped measures to introduce site blocking in the Digital Economy Act, after they were dismissed as cumbersome and unworkable.

What about the tricky issue of wifi? Who takes the blame for illegal downloading?

Today’s draft Code says that Wifi operators have been excluded, but libraries, hotels and bars sharing broadband connections over Wifi will have to refute accusations relating to their customers.

Are there any other unresolved issues?

Yes. The new code will only apply to ISPs which offer broadband services to more than 400,000 subscribers. That still leaves 7% of the retail broadband market. Nor is it clear whether subsidiaries of large ISPs which are bound by the code will also be caught by it, although Ofcom says that the code will apply to businesses that have structured their operations in groups to try to avoid the 400,000-subscriber threshold.

What’s the reaction so far?

Jim Killock of the Open Rights Group isn’t impressed. “Digital revenues are going up, the music and film industry are moving in the right direction, yet this cumbersome policy is still lumbering forward,” he said. “Ofcom are being asked to put lipstick on a pig with this code.” He added that the new, tighter appeals process will mean that some people will “almost certainly” end up in court having done nothing wrong.

How long is the consultation on the code open?

One month. Comments must be in by July 26.

Any other consultations?

Yes. Ofcom is also seeking views today on its draft rules setting out how ISPs and copyright owners should split the cost of putting the notification requirements into practice. Although two ISPs that had challenged the Act lost their judicial appeal earlier this year, the Court backed their complaints on the issue of cost sharing, saying that case fees in appeals by ISP subscribers should be considered as administrative charges.

Ofcom’s proposed code on cost sharing is open for consultation until September 18.