The Digital Economy Act 2010 – what happens now?

10 May 2010

Graham Smith

Having been rushed through the scrag end of Parliament before the Prime Minister announced the General Election, the Digital Economy Bill is now the Digital Economy Act 2010 - including the controversial online copyright enforcement provisions.  What will these provisions mean in practice?  Here is a quick guide to the proposed implementation timetable.

The Initial Obligations Code

The most immediate impact is likely to be through the Initial Obligations Code.  This will impose on many internet access providers the obligation to act on copyright infringement reports from rights owners.  They will have to send infringement notifications, containing education and warning material, to the ISP’s subscribers who correspond to the IP addresses contained in the rights owners’ infringement reports.  The ISP will also have to send to rights owners periodic lists of subscribers to whom it has repeatedly sent infringement notifications.

OFCOM, the communications regulator tasked with this responsibility, has kicked off the process of creating the Code.  Although the Act envisages that industry may come up with its own code and submit it to OFCOM for approval, OFCOM’s working assumption seems to be that this is unlikely to happen and that OFCOM itself will have to make the Code.  OFCOM envisages being ready to consult on a draft Code in May 2010, with a view to a soft launch of the Code in January 2011.  In the meantime, it will be liaising with stakeholders through stakeholder liaison groups to obtain input on the draft Code.

Anyone who provides an internet access service to a subscriber is potentially affected by the Code.  However there are subtleties in the definitions of ‘internet access service’ and ‘subscriber’ which mean that some ISPs may not be affected, at least for some of their services.  Furthermore, as was pointed out on numerous occasions during the passage of the Bill, there are grey areas with the position of universities, libraries, community Wi-Fi services and others under the Act. 

The Code itself may introduce further exceptions, since it may specify conditions that have to be met for the Code to apply in a particular case.  These are likely to include a threshold for the number of copyright infringement reports received before the Code applies to a particular internet access provider.  The exceptions will be significant, since an internet access provider covered by the Code will be faced with incurring significant time and expense in setting up systems to implement the Code, including maintaining a database of reports, notifications and subscribers.

In parallel with writing and consulting on the Code, OFCOM will be preparing and consulting on the provisions for allocating costs between internet access providers and rights owners, and on the creation and appointment of the subscriber appeals body.

Website blocking injunctions

The Act provides the Secretary of State with power to make regulations about the granting by a court of an injunction against a service provider requiring it to prevent its service being used to gain access to a location which the court is satisfied has been, or is likely to be used for or in connection with, an activity that infringes copyright.   ‘Service provider’ is broadly defined and would cover most online activity, including the provision of search services, hosting of discussion forums and blogs, as well as internet access provision.

Any regulations made under this power are likely to go into considerable detail, for instance about when a location is, or is not, to be treated as being used to facilitate access to another location.  The Act also requires the Secretary of State to be satisfied that the use of the internet for activities that infringe copyright is having a serious adverse effect on businesses or consumers before he can make any regulations; and to go through a consultation process before proposing regulations to Parliament.

Technical Obligations Code

One of the most controversial aspects of the Act is the power for the Secretary of State to order introduction of a Technical Obligations Code, following an assessment by OFCOM of whether technical measures obligations should be imposed on internet access providers.  OFCOM are also required, once the Initial Obligations Code is in force, to make progress reports to the Secretary of State about the infringement of copyright by subscribers to internet access services.  No order imposing technical obligations can be made until after the Initial Obligations Code has been in force for 12 months.

Under this Code internet access providers could be required to take technical measures against subscribers whose internet connections had allegedly been used for repeat infringements.  Technical measures include limiting the speed or other capacity of the service; preventing a subscriber from using the service to gain access to particular material, or limiting such use; suspending the service provided to a subscriber, or limiting the service in another way.

OFCOM are understood to be starting the process of preparing a baseline report against which to measure the impact of the Initial Obligations Code.