On 6 March, the Court of Appeal rejected the appeal by BT and
TalkTalk in their judicial review of the Digital Economy Act 2010
(see R (British Telecommunications plc and TalkTalk Telecom Group
plc) v Secretary of State for Culture, Olympics, Media and Sport
and others  EWCA Civ 232).
The Digital Economy Act 2010 (DEA), which came into force on 8
April 2010, introduced several major policies designed to regulate
and stimulate the UK digital economy. The provisions aimed at
curbing file-sharing have been the primary focus of attention. For
rights holders, the DEA is a welcome piece of legislation that sets
out the legal obligations of Internet Service Providers (ISPs),
rights holders and end-users in the bid to stem online piracy. BT
and TalkTalk sought to challenge a number of provisions of the DEA
which pave the way for the introduction of a notification and
enforcement regime for online IP infringement. The regime would
assist rights holders in enforcing their rights against infringers,
in part by obliging ISPs and other service providers to co-operate
with rights holders in the policing of infringement amongst their
subscribers. BT's and TalkTalk's principal concern was that
such a regime would create a new regulatory burden that would
disproportionately impact ISPs and service providers, both
administratively and financially.
Under the DEA ISPs will be required to (1) send warning
notifications and (2) potentially cut off alleged illegal file
downloader's services, which raise concerns regarding privacy
and the costs of this obligation on the providers. However, the
Court stated that ISPs would not be liable for case fees in
relation to subscriber appeals. They will now have to consider how
to deal with the implementation of the DEA and its provisions and
the effect it may have on their business model and customers. If
the ISPs do not adhere to the legislation they face a maximum
penalty of Ł250,000 (although the Secretary of State has
reserved the right to increase this amount).
Most practical details of the DEA's provisions regarding
online IP infringement are not set out in the DEA, but will be
expressed in a series of regulatory codes produced by the Office of
Communication (Ofcom), the UK's independent regulator and
competition authority for the communications industries.
It is likely that the parties will seek leave to appeal the
decision and flowing from this OfCom's promised Initial
Obligations Code for ISPs will probably suffer further delays while
this matter plays out.
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