Out-Law News | 10 Jun 2013 | 8:51 am | 3 min. read
Ofcom outlined a revised draft anti-piracy code, which it is bound to draw up under the terms of the Digital Economy Act, in June last year, with the intention that the new regime – already delayed as a result of a legal challenge by internet service providers (ISPs) – would come into operation from early 2014.
However, the Government has said that "technical changes" need to be made to a draft statutory instrument that would be implemented alongside the new anti-piracy rules. Ofcom's draft shared costs order proposes a "two tariff" system to compensate ISPs for their share of the costs they incur in complying with the new framework.
Out-Law.com understands, though, that the Treasury has raised concerns that requiring ISPs to bear their share of costs in complying with the regime would amount to levying a tax on the providers, which is something it said it would need to sanction.
DCMS told Out-Law.com in May that it needed to make "technical changes" to the draft shared costs order, but said that none of the changes "will have an impact on the overall effect of the legislation". Now it has issued a statement confirming that the new code will not take effect until the end of 2015 at the earliest.
"Various delays, not least a lengthy court case means notifications will not go out until the end of 2015 or later," a spokesperson for the Department for Culture, Media and Sport (DCMS) said in a statement. "This is regrettable, but we are happy to see industry investigating an industry-led alternative."
The Department did not reveal details of the expected timetable it expects to follow in order for the new regime to become operational before the end of 2015. However, a spokesperson for Ofcom said that any changes made to the draft shared costs order it published last summer would need to be the subject of a consultation.
"We will re-consult on the costs order once it has been amended by the Government," a spokesperson for Ofcom told Out-Law.com. "Were those changes to be limited in scope then the consultation would not be substantially different to the one we conducted previously."
Ofcom's code would require ISPs with more than 400,000 broadband-enabled fixed lines – currently BT, Everything Everywhere, O2, Sky, TalkTalk Group and Virgin Media, to send notifications to their subscribers if it is suspected their account has been used to break copyright laws.
Under its plans the ISPs would issue "standard form" notifications to customers on the basis of evidence of alleged online copyright infringement gathered by rights holder groups and compiled in a 'copyright infringement report' (CIR). The evidence gathering procedures must be approved by Ofcom. The infringement reports must set out when the alleged infringement was said to have occurred and when the evidence was gathered. Ofcom's code also sets out the standards that infringement reports must meet.
ISPs that issue subscribers with three letters within the space of a year would add the anonymous details of those customers to a 'copyright infringement list'. Rights holders would be able to request access to the list each month and could seek a court order obliging the ISPs to disclose the identity of the suspected infringers so that they can take legal action against them under the Copyright, Designs and Patents Act. Ofcom has said the code will help rights holders to "focus legal action on the most persistent alleged infringers."
Suspected infringers would generally have 20 working days to challenge warning letters from the moment they receive them. An "independent appeals body" will be appointed by Ofcom to deal with the cases, although the suspected infringers would have to pay a refundable £20 fee to have their appeals heard.
Following criticisms from digital rights groups and a challenge over the lawfulness of the DEA in the UK courts that required changes to be made to how the scheme is to be paid for, Ofcom was forced to establish a cost-sharing regime whereby ISPs were liable for only 25% of the cost of sending out the warning letters to their customers, with participating rights holder groups liable for the remaining 75% of the cost.
A number of ISPs previously expressed concern that Ofcom's proposed tariffs underestimated the extent of the costs they would be liable for in complying with the code.
Ofcom's draft code and costs order have to be approved by both Houses of Parliament before they can be implemented. The draft legislation, originally tabled before the House of Lords last October before being withdrawn, could not be amended at this stage, but only passed or rejected. The instruments would then by subject to scrutiny by the European Commission - a process that could take up to three months.