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Digital Britain: Final submission

ORG submission to Government consultation on strategic vision for digital transition, which mainly addresses the regulation of illicit filesharing networks. PDF (601kb).

03 April 2009

Executive Summary

The Digital Rights Agency discussion paper is a flawed approach to public engagement and undermines the legitimacy of the Digital Britain consultation. The whole process does not engage with the need for copyright reform put forward by the Gowers Report, while being very concerned with copyright enforcement, which is a flawed approach. The make up of such an agency is likely to be dominated by incumbent players and reinforce existing business models rather than encourage innovation. Copyright itself needs urgent reform in order to legitimise consumer practice and foster innovation through new usage rights before further attempts at enforcement and education are made. The government needs to clarify the differences between ISP accounts, users, alleged infringers and infringers, and guarantee basic due process is adhered to before pushing ahead with legislation. This discussion process must not count as consultation on proposed legislation.

Introduction

The Digital Britain consultation process is deeply flawed. By launching this stage immediately after the deadline for comments on the Interim Report, it is clear the initial responses have been not been duly considered.

In our response to the Digital Britain Interim Report, regarding Action 11 and the concept of a Digital Rights Agency, we said:

This action has the potential for much harm. We call on the final Digital Britain report to reject the idea of a ‘rights agency’.

The proposal is at heart a way of extending the MoU process without a clear idea of how to resolve the underlying problems.

We are concerned by the model that a rights agency would adopt, and feel it is somewhat unfortunate to float an idea without a clear idea of what is being proposed.

Overall, we doubt that it would be able to adequately reflect users and citizen’s rights, have a tight remit and offer value for money.

These concerns are confirmed by this discussion paper, which proposes that new body to resolve the tension between emerging technologies and existing business practices. In practice, the body would lock-in failing business models and restrain Britain as the engine of creative business.

In particular, we are extremely perturbed that a Digital Rights Agency would be “an industry owned, industry led and industry run body.”

Just four global recording companies dominate the sale of music, with Hollywood studios similarly controlling film output. As a body the Right Agency is likely to be dominated by these large rights holders. Therefore, it does not require much imagination to envisage the dynamics of their approach to its key objectives of

building digital content markets, changing the ways that businesses work, the education of consumers, and prevention and reduction of online piracy.

Since Government has here set out a

model which allows industry to keep control of how this environment is created

it tacitly admits that the Rights Agency directly opposes healthy competition and the entry of new businesses, which the digital age encourages.

Existing old-model industries must not dictate the future of creative products and services. Nor should Government allow the market distortion that threatens the consumer interests. Indeed, Government should entirely reject the notion of a divide between small ‘consumers’ and large-scale ‘industry’, rather than attempting to institutionalise it.

Approaches to copyright ‘enforcement’

Personal copyright infringement should not be a Government priority. The pervasive culture of copyright infringement does not indicate a revolt against the concept of intellectual property, only discomfort with the maximalist approach that dominates policy formation. That personal copyright infringement has become a Government priority shows there are systemic failings in the mechanism of copyright and the related industries.

Copyright is a mechanism to incentivise production of creative work. If the bargain is to work for for citizens, it needs to be fair, which means guaranteed and clear minimum user rights. When copyright  intrudes into our daily lives, for instance through rights management technologies, or unpleasant legal warnings, it quickly becomes questionable to many users.

Unfortunately, the approaches of rights holders online has focused on ‘enforcement’ regimes, such as DRM or letter writing campaigns. These may appear effective, but are in effect pushing the problems of copyright enforcement onto consumers, which causes discontent and undermines the legitimacy of copyright-based industries.

Similarly, in broad terms, a Digital Rights Agency seems geared to produce ‘solutions’ that emphasise enforcement and attempts to change consumer behaviour. Instead, we should be devising a copyright systems that works better for all sides to the acquis.

It is also worth noting that this ill-conceived body would not progress the positive, flexible recommendations advocated by the Gowers Review, which would have placed Britain as the global leader in intellectual property policy.

The ‘right’ to profit from works of entertainment should not bar  behaviour, such as duplication or format shifting, education, the exercise of free speech or even the making of new works. These behaviours were recognised as legitimate by the Gowers Review, which recommended significantly expanding the scope of exceptions and limitations.

Without these changes copyright will not gain legitimacy in the digital age. Yet as a policy objective, these reforms are barely even on the Digital Britain agenda.
Furthermore, the divisions between large scale producers and consumers have been seriously eroded by the internet and related digital production technologies. The DRA seems rooted in this fading distinction, and as such represents a danger to the new model of legally using, reusing, producing and often monetising copyrighted works.

Rights frameworks have sought since inception to find a balance between rewarding innovators and making available their works as creative fuel for the next generation. This is the time to rethink who is more likely to ensure a thriving Digital Britain - the new innovators that are more interested in and incentivised by the availability of the fuel (the public domain, tools, markets) for their creativity than motivated by a long rights monopoly; or the incumbents struggling to find a sustainable model in a Digital Britain.

The barriers to entry have been significantly reduced thanks to ready access to tools, markets and materials necessary for innovation in the creative industries. This is the time to think about helping incumbents to understand new markets approaches, not to reward their lack of agility or innovation.
Continuing to over value the incumbent players risks curbing precisely the kind of innovation required to grow new creative industries that are fit for purpose in a Digital Britain.

HOW GOVERNMENT SHOULD PROCEED

Government should not get into the business of policing minor copyright infringement. This would be perceived by the general public as a disproportionate and unbalanced approach, confirming  preference for large industries with failing business models over individuals and new businesses.

Nor should Government hand over enforcement to the rights holders, as envisaged in the DRA, which would be perceived as wholly illegitimate.

Government should continue to help older creative industry players rethink their business models, whilst emphasising that making payment for copyright normal and acceptable is a matter for industry. Government should make it clear that citizens need a simple and fair interaction with the law, if copyright is to earn general respect.

Government should state clearly to industry that the divide between large producers and small consumers is over. They should advise the recording industry that embracing user creativity and participation is much more likely to produce profits than attempts to control and strictly enforce copyrights.

The Government should commission studies of consumer behaviour in the digital age, embracing the effects of P2P, and the relative changes in leisure spending between different types of consumer digital products.

Research should include digital subscription services, games, home software, music and video, in order to understand how competition between sectors may be affecting slower-moving industries like the music industry that have not adapted as fast, and determine what approaches work. This would likely indicate that citizens prefer to pay for services than for copyright licenses. Studies may also find that services are increasingly based on participation and community.

This type of research would help the recorded music industry better understand the user participation, user-creation and service elements of the products that are current absent from most commercial offerings.

The negative effects on competition and adaptation of large holdings of monopoly rights should also be studied. Such research would help Government to better understand how Britain can benefit from the digital economy, but also why simply listening to incumbent players could be disastrous for all parties.

Government should furthermore ensure clear exceptions and limitations to copyright as part of the process of bringing creative industries into the digital age. It needs to make clear that these are the safety valves needed for copyright to work, especially in an age where users are also creators.

At a time when creative industries needs fresh thinking, Government should be encouraging and facilitating discussions that include all facets of the creative industries. In particular, dialogue is needed with those already shown to be most innovative and inventive, i.e. the vital, exciting participants in digital creativity previously referred to as consumers.

This strategy should be pursued instead of creating a body that encourages creative industry incumbents to limit the pace and type of innovation. To create a thriving and vibrant Digital Britain, its vital that Government recognises the existing industry that will dominate the agency are the very players in need of the most help and support to change, to adapt and to respond in positive and sustainable ways to the potential of digital. Giving them the power to curb innovation and change is irresponsible at best.


SPECIFIC ISSUES IN THE PAPER

1 Make-up and momentum of a DRA

Our first main concern, as already noted, is the impossibility of adequately representing citizen-producers, small businesses, individual creators and the range of industries renegotiating the rights payments in a digital age. No mention of photographers is made, for instance, nor of the innovative SMEs who are part of the culture of remixing digital content.

No mention is made of the frequent theft of individual’s intellectual property by large companies, a problem made much worse by the cost of accessing the legal system. We are aware of cases being brought in Germany rather than the UK because of the difficulties of using the UK legal system.

The emphasis on industry dialogue, while ensuring a means to “explain to the public” the problems of infringement, is highly problematic. Consumers are producers; old style producers may be infringers. Yet the approach takes the old model and gives it a platform for attempting to replicate itself in the new world, which is bound to fail.

To give an extremely simple example of the problems, you might ask how the DRA represent the users of YouTube, or indeed the platform’s owner. Without allowing the debate to reflect the concerns of a business and community like YouTube, the DRA would not be in a position to support such innovative players.

2 Legal issues

On the legal measures discussed in the Rights Agency report, we would like to highlight a number of points.

  1. Sanctions and judgments are a matter for the courts. Measures should not be imposed on the basis of mere suspicion, which is a simple question of due process. ISPs that take action based on unproven allegations risk breach of contract and alienating their customer base.
  2. Ofcom is not a proper body for what is in effect the creation of legislation. That is the job of parliament, especially for such important legislation.
  3. Protocol blocking poses a dangerous risk of damaging innovation in the UK or making the UK unable to take part effectively in new technologies
  4. All measures to circumvent P2P infringement are likely to push much wider take up of encryption technologies which would, for instance, make the security services job harder.
  5. Governments need to intervene to stop the abusive lawsuits from some companies based on writing letters asking for damages and costs after identifying users' IP addresses via court order. These practices bring the law into disrepute and degrade customer perceptions of the industries involved.

Organisations can work together to fight piracy without  Government interference. Government does need to interfere to stop potentially counter productive legal actions such as those by Davenport Lyons, Baker MacKenzie and Moreton Smith. These actions are damaging faith in the law and consumer perception of the industry

3 Issues in Appendix A

We dispute the thrust of point 4: many studies1 show that in a lot of  industries the effect of piracy is actually not lost revenue but increased purchasing.

An industry-dominated body must not be permitted to guide educational authorities, any more than the sugar industry should write the healthy eating guidelines.

In any case, the public tends to regard these campaigns as a cynical attempt by wealthy industries to protect their interests, especially when the message lacks balance. An independent approach that educated users in rights that do not currently exist to make personal copies or parodies, but not to infringe, might work better.

Encouragement of commercial offerings

We object to the section title’s supposed purpose. We suggest "Encouragement of legal offerings" should be the goal. Whether an offering is commercial is irrelevant, equal encouragement is needed for legal community-created content.

This should be clear as the Government’s objectives in the creative sphere must include a wider cultural perspective. Even from a narrow economic perspective, today’s non-commercial producer may be tomorrow’s best-selling artist.


Culture develops in a continuum, where commercial works draw on a wider pool of creative talent, itself developed by drawing on ideas from others. Commercial offerings are often just the pinnacle of ideas generated by the wider milieu, which must be nurtured if  creative business is to thrive.

Rights clearance

Innovative rights clearance models already exist in the public domain, in the form of music and video distributed through Creative Commons sites and in software repository projects such as Sourceforge. The commercial sector should look at models such as Magnatune, which sells instant public performance and reuse licenses2.

Rights registration

On a Register of Rights, we agree that a fast, efficient model for clearing rights is important, but this is a business problem. Furthermore, other industries with brokerage and agency services are more efficient when there are multiple competing brokerages (such as  insurance) not a single state body which prevents competition.

Multiple brokers catering for different pricing models and service levels would do a better job. Government interference here would  be unnecessary, anti-competitive and against the consumer interest.

We would also like to point out that ‘orphan works’ is not just a "commercialisation" problem. Innovative non commercial use by consumers is also threatened.

Kite marks

Given that the payment for such content is managed by industry, not government frameworks, and guarantee marks (like the bank security marks), it seems likely that businesses can solve this problem, possibly even with competing options without Government help

Self-regulatory Enforcement role

The documents begin by stating that "The rights agency will be industry owned and industry led".
We find this a disturbing suggestion. An industry-owned body cannot administer redress from an industry-managed system of making allegations for the benefit of said industry.
Balance (paragraph 13) would require all parties to be equally represented.

Tackling civil infringement

If the rights body is industry-controlled it cannot be the body which sets policy on what consumers must accept. It cannot claim to be neutral as stated in the paper.

The fact that ‘testing of technical measures’ is the one area where consumer involvement is highlighted again shows the pre-web 2.0 approach of this paper. We welcome openness from industry in looking at their technologies. But an industry controlled body cannot be the body that sets policy on what consumers accept.

There is probably a role for a body to help ISPs to to work together effectively to reliably and accurately identify those accused of infringement.

Dispute resolution

An industry-controlled body would not be acceptable to end users as an arbitration body. It needs to be a third-party, independent body.

Furthermore, since the recent court reforms, there is an existing forum for arbitration and (if need be) small claims is already established in law and legal process.

Representation

Here we see some of the problems inherent in this debate. The paper states that the "problem for software is no less damaging", but the evidence is that the problem is a lot less damaging in this context.
Most profits in the software business are made from service, support and from business software, which is less often pirated.

Software is based around business services and support, to the extent that big, successful companies like Red Hat give away the software (and source) and sell services on top of it.

Even pirated software can add to future business models. The sales of some software are arguably enhanced or even dependent on piracy, as market dominance can depend on ubiquity. Open source service sales models encapsulate part of this model by creating a service market on the basis of software feely tried and installed.
Photographers are perhaps the worst hit. Many musicians generate a lot of live interest and record sales from piracy.

The film industry in part competes with DVD etc on the basis of big screens, big sound and the whole "experience" of cinema going. Some studies show that users of pirated material may actually be spending more, rather than less, on legal material, as they expand their interests and interaction with different artists and offerings.

Essentially, experiences to a very great extent, and encapsulating this in a single ‘agency’ may be difficult, or even promote the wrong kind of solutions. Software may need a very loose right enforcement model, in order to push distribution and ubiquity, and sectors advocating and promoting strict rights models may actually harm business performance.

Membership would have to cover all industries and recognize that many are made up of many small key players: most TV creative is small business; most photographers are single end users; music will increasingly cut out the middle men, so bands will need direct input.

The Government model risks creating a body of the big intermediaries - the very people the creative industry is removing, analogous to creating a "Canal Regulator" in the mid 1800s.

Government needs to decide whether it's helping big old model industry create a trade body, or trying to create a forum for the development of the future of creative media in the UK. The proposal falls between two stools and will achieve nothing good.

Costs and funding

This is the most politically contentious point. We do not believe that users will bear the costs for content owners and service providers to to police their own behaviour. This will make nobody popular. Given that most of the problems could be addressed by other approaches, this seems to make the DRA an unnecessarily fraught proposal.

Appendix B

We must at the outset state that it would be outrageous to base legislation on this faux consultations procedure. We therefore fully expect to see these questions and proposals set out in a full consultation before any further progress.

Notification obligation

There are a number of problems with the proposal outlined here. Firstly, as notification of infringement is here defined as outside of the legal process, we would therefore like to know the impacts on libel law, privacy and

Data Protection.

In section 2.3 an assumption is made that an account holder is responsible for the use of their network. However, an account owner is not obliged to secure their network against third party open use. The reasons in practice are obvious. Many cafés for example would be hard pushed to create a workable model for free wireless on this basis. We would also like to know what occurs if the IP address is owned by a corporation or an ISP outside of the UK.


There are a number of important items that legal threats to alleged infringers should also include, in order that the alleged infringer has full access to their rights. These would include details of who made the allegation; and a sworn affidavit that they are authorised to do so, made in such a way that they can be sued for false statements.

Code of practice

This section again equates an account holder, an alleged infringer and an infringer. Accounts have multiple users, and can allow access to parties unknown. Also, alleged infringement can be mistaken, not least for technical reasons.

Alleged infringers are presumptively innocent and third parties should be punished without the intervention of a court. The proposed methods specifically listed are simply disproportionate in this context. These tactics would likely result in harm to third parties, both business and individuals, whose use of these protocols is entirely legitimate.

Such a requirement to breach contracts has legal implications for the ISP and the accuser.

As we have said, an account owner is not obliged to secure their network against third party open use.

If an account owner is suspected of repeated infringements,  supported by solid evidence, then the courts are the proper place to evaluate claims. Until a court judgement is handed down then alleged infringers are merely suspects and any action would be inappropriate. Once they are found guilty the judge is empowered to create a tailored solution with consideration of the actual case in hand, including the collateral effect on third parties. It might best to use the existing ASBO process, or a small claims court. Certainly, fines and costs commensurate to a second mortgages are usually disproportionate.

The fundamental flaw in this approach is failing to distinguish between

  1. An internet address / account linked with a number of apparent offences
  2. An ISP account owner (which could be a big company, a wifi provider or a home user or many other things)
  3. A person accused of copyright violation
  4. A person found guilty in a court of law of copyright violation

Government, as we have argued in previous consultation responses, needs to appreciate these as different actors, who should be treated on that basis.

The proper distinctions may help understand a better approach to this problem:

  1. Internet account – Should be tagged that associated with repeated patterns of  alleged misuse, which may then help target further investigations.
  2. Account owner – The first contact for reporting allegations (there may be a libel issue if the report is false and concerns a user of the account, rather than the owner). The owner is not necessarily the infringer, and may – for legitimate reasons - not know the infringer, nor are they legally required to control their connection in this way.
  3. Person accused of copyright violation – again, to be clear, the account owner may or may not know the infringer. If the context is a family unit or business then redress may be available, but this will not always be the case.
  4. Person found guilty A person who is found guilty may with proper process have sanctions applied their account, such as bandwidth throttling

Data Protection in the UK suffers from using the same sort of model as is proposed, that is enforcement can only be applied by the regulator rather than the victim. End users should also have powers to act against anyone making false accusations. That should include damages for any loss of business, libel damages for any false allegations that lead to public impressions they were offenders.

Enabling legal action by individuals in the case of false accusations would enforce the code far more effectively than a “light touch” regulator. We would wish this protection to be evident in any future proposals.

ANNEX A: RESPONSE TO BIGITAL BRITAIN INTERIM REPORT

ANNEX B: RESPONSE TO P2P CONSULTATION