UK: The New Digital Economy

Last Updated: 17 May 2010
Article by Colin Miller

The Digital Economy Act is now law. It covers a wide range of areas including measures to address web piracy and provision for public-service broadcasting and content and network infrastructure. Given the complexity of the issues dealt with, the Act has made a swift passage through parliament, having only been introduced in the Queens speech in November 2009 and having its second reading, committee stage and third reading within two days. However, in order to ensure that the Bill got to the statute book before the General Election, the government has had to make a number of concessions.

This is a short summary of the Act.

Ofcom's new duties: The government's commitment to providing universal broadband service within the UK was to be supported by a new duty on Ofcom to promote investment in digital networks. This has been shelved, but there are new duties on Ofcom to provide reports on infrastructure, internet domain names and reports on the wider delivery of public service broadcasting by means other than radio and television

Online copyright infringement: Important new provisions are introduced to tackle the ongoing abuses of web piracy. A copyright owner is now entitled to make a so-called copyright infringement report to an internet service provider (ISP) if it appears to him that:

(a) a subscriber to an internet access service has infringed his copyright; or

(b) a subscriber to an internet access service has allowed another person to use the service, and that other person has infringed his copyright.

ISPs will be obliged to notify their subscribers of complaints of copyright infringement. A notification must include specified information including a description and evidence of the infringement, information for the subscriber to enable him to appeal and the grounds on which he may appeal and information enabling the subscriber to obtain advice about how to obtain lawful access to copyright works, e.g. by way of licences.

The ISP will also need to provide the copyright owner with a list of the subscribers to whom the report of infringement has been sent in a form in which the subscriber cannot be identified.

Ofcom will be responsible for the procedural and enforcement aspect of these new obligations through the adoption of a legally enforceable code of practice. The Secretary of State will be required to approve the code of practice and any amendments to it.

Following a report from Ofcom, it will be for the Secretary of State to decide whether any 'technical obligations' should be imposed on the ISP to take measures against subscribers such as limiting internet speed, or limiting or suspending internet access. Any such order by the Secretary of State must be laid in draft before parliament along with an explanation of the proposal, and there will be a 60 day period for making representations or recommendations in relation to the proposed order.

The proposal for the courts to be able to grant an order compelling a service provider to prevent access to certain websites has been removed and instead the Secretary of State is given the power to make regulations to provide for the courts to grant orders blocking access. The Secretary of state may not make regulations under this provisions unless he is satisfied that the use of the internet for activities that infringe copyright is having a serious adverse effect on businesses or consumers and that the making of the regulations is a proportionate response.

Domain Name Registries: The Act extends the powers of the Secretary of State to intervene in the operation of domain name registries where there is a serious failure involving either the registry, or any of its registrars or end-users. This could cover the misuse of internet domain names, or where arrangements made by the registry for dealing with complaints are inadequate.

Television and Radio Services: The Act contains provisions extending the statutory functions of channel 4. There is power for the Secretary of State to alter the conditions of the public service provision of channels 3 and 5. It also introduces flexibility into the licensing process for commercial broadcasters. The proposals for Ofcom to be able to appoint independently funded news consortiums to be the providers of regional or local news have been removed from the Act.

Ofcom is given powers to ensure an orderly switchover to digital audio with provisions for a minimum notice period of two years for the switchover to digital audio broadcasting.

Public Lending Rights: The public lending rights payment regime under the Public lending Rights Act 1979 is extended to include non printed formats such as audio and e books.

Other proposals which had to be abandoned to ensure the passage of the Act include provisions enabling use of so called "orphan works" where the copyright owner cannot be identified or located. This was intended to give more certainty to publishers (particularly online digitising of books which are out of print) who were concerned about threats of being sued for copyright infringement because they had no knowledge of whether the relevant copyright period had expired. Also, the government's 'landline tax' of a 50p per month levy on landlines to help fund the investment in digital infrastructure has been abandoned.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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