Major ISPs, music and film trade bodies sign up to agreement on illicit filesharing; UK Government issues consultation paper on regulatory approaches

11 November 2008

Graham Smith

The UK government has issued a consultation paper on legislative options to address illicit peer to peer filesharing.  Simultaneously a government-brokered deal has been announced between the recorded music industry, the film industry and six major ISPs. This will initiate a three month trial whereby the ISPs will send informative letters to users suspected of illegal file-sharing on the basis of IP address information provided by rights-owners.

These developments follow a period of intense debate about the role of ISPs after the publication of the Gowers Review of Intellectual Property.  The government has strongly encouraged rights owners and ISPs to come to a voluntary agreement, while reserving the right to legislate to require co-operation.  This has taken place against the background of developments such as the Olivennes "three strikes" agreement in France.  The government's freedom to legislate is however constrained by EU law, in particular the Electronic Commerce Directive.

The memorandum of understanding (MoU) has been signed by the BPI ((formerly known as British Phonographic Industry) and the MPA (Motion Picture Association) on the one hand, by ISPs Virgin Media, Sky, Carphone Warehouse, BT, Orange and Tiscali, and by BERR (Department of Business, Enterprise and Regulatory Reform) for the government.  The stated objective of the MoU is to achieve within 2 to 3 years a significant reduction in the incidence of copyright infringement as a result of peer to peer file-sharing and a change in popular attitude towards infringement.  The approach embodied in the MoU involves the signatories working together to:

  • Engage with and educate users about unlawful file sharing
  • Make material legally available online in a wide range of user-friendly formats
  • Create a self-regulatory environment, with the involvement of OFCOM, including informing consumers of the illegality of file sharing and pointing to alternative legal methods available.

The MoU provides that initially "ISP signatories will each put in place a 3 month trial to send notifications to 1000 subscribers per week identified to them by music rights holders, to agreed levels of evidence, as having been engaged in illicit uploading or downloading. Based on evidence from the trial, which will be analysed and assessed by all Signatories, OFCOM will agree with Signatories an escalation in numbers, widening of content coverage, and a process for agreeing a cap."

ISPs and rights holders will also produce a Code of Practice together on how they will deal with alleged repeat infringers. The Government will consult to give this Code legislative underpinning.

OFCOM will facilitate discussion between the parties and approve the final Code of Practice. OFCOM is also tasked with ensuring that the self-regulatory mechanism is effective, proportionate and fair to consumers.

This is similar to, but does not go as far as, the government's preferred co-regulatory option for the whole industry set out in its consultation paper "Consultation on Legislative Options to Address Illicit Peer-to-Peer (P2P) File-Sharing".  Its preferred option would consist of:

  • A self-regulatory industry approach, designing codes of practice under specified principles, covering both rights holders and ISPs and dealing with education and awareness; making content available to consumers in a choice of formats at a range of prices; and notifications to alleged infringers. This would be overseen by a regulator who would have the responsibility for approving codes of practice;
  • The regulator would invite stakeholders, including ISPs and rights holders to join a group to explore effective mechanisms to deal with repeat infringers. Members of the group would look at solutions including technical measures such as traffic management or filtering and marking of legitimate content to facilitate identification, as well as ways in which rights holders could take action against the most serious infringers. The group would report within 4 months and the Government and OFCOM would consider the findings of the group, leading to a Code of Practice on mechanisms to deal with repeat infringers; and
  • An obligation on ISPs to take action against subscribers to their network who are identified (by the rights holder) as infringing copyright through P2P. This obligation could be fulfilled by compliance with the codes of practice mentioned above, including on mechanisms to deal with repeat infringers.

Expanding further on this obligation, the government states in its consultation paper:

"We anticipate this would take the form of a requirement to have an effective policy in place for dealing with cases of alleged unlawful P2P file-sharing. … This regulatory requirement will be phrased to limit the ISPs obligation to take action to those circumstances where it can be demonstrated that an individual subscriber or account is being used to infringe copyright. It would be designed to apply only to unlawful file-sharing over P2P networks. This will not affect the ISPs' limitation of liability under articles 12 to 14 of the E-Commerce Directive, insofar as ISPs will not be made liable for the illicit content of what they transmit, cache or host. Furthermore, ISPs will not be required to perform any general monitoring of their networks.  ISPs who choose not to engage in the self-regulatory arrangement would remain bound by the underlying requirement to have an effective policy on unlawful P2P filesharing."

Alternative options considered by the government include:

  • Streamlining the existing process by requiring ISPs to provide personal data relating to a given IP address to rights holders on request without them needing to go to Court.
  • Requiring ISPs to take direct action against users who are identified (by the rights holder) as infringing copyright through P2P.
  • Allocating a third party body to consider evidence provided by rights holders and to direct ISPs to take action against individual users as required, or to take action directly against individual users.
  • Requiring that ISPs allow the installation of filtering equipment that would block infringing content (to reduce the level of copyright infringement taking place over the internet) or requiring ISPs themselves to install filtering equipment that would block infringing content.

While consulting on these alternative approaches as well as the recommended approach, the government recognises that some may be difficult to deliver within the existing boundaries of EU law regulating information society service providers.

The closing date for responses to the consultation paper is 30 October 2008.