Three-strikes piracy code should be shelved for a year: Comms Alliance CEO

In the wake of streaming services launching in Australia and piracy numbers going down, the three-strikes code should be shelved, Comms Alliance has recommended.

Communications Alliance CEO John Stanton has said that internet service providers (ISPs) and copyright holders are working together to suggest that the Australian government shelve the controversial three-strikes piracy code for 12 months while it considers whether piracy is already being solved by streaming services.

"What we're looking at doing is making a joint approach to the minister [for communications] with rights holders to say, 'well, given the focus is on website blocking at the moment, let's put that [three-strikes] draft code into abeyance, and not have the ACMA seek to further examine it for possible registration, and we'll come back in 12 months and see whether it makes sense to try and reinvigorate those commercial discussions'," Stanton, speaking at the CommsDay Summit on Monday morning, said.

"So hopefully that will give us at least a good holding position until we see in a year's time whether there really is a problem of scale that needs to be dealt with by a costly and complex scheme."

Australia's three-strikes policy was released in the form of a draft code [PDF] by ISPs and rights holders last year, which were asked to collaborate by Attorney-General George Brandis and Communications Minister cum Prime Minister Malcolm Turnbull in late 2014.

Under the regime, rights holders were to send reports to ISPs identifying IP addresses that have allegedly infringed on copyright, with the ISPs to then match IP addresses with account holders and send the associated customers infringement notices. Customers can be warned three times over a 12-month period in escalating education notices, warning notices, and final notices, after which the ISP involved must make a user's details obtainable through a Federal Court order.

The regime was originally set to be implemented from September 1, 2015, but had to be pushed back due to stalling negotiations over the costs imposed by instituting the scheme, and whether the 70 ISPs involved will receive any compensation for being required to enforce copyright on behalf of rights holders.

Stanton pointed towards subscription video-on-demand (SVOD) services, such as Netflix, Presto, and Stan, as providing a natural alternative to preventing piracy by making content available in a timelier and cheaper way.

"With the advent of SVOD services, ISPs are seeing reductions in peer-to-peer traffic," he claimed.

"I'm not surprised; this is what happened in the US as well. The figures aren't public as yet, but it's a very interesting indication that, as some of us have been saying for a long time, the key to solving this problem is availability and value -- not punitive actions."

Turnbull also conceded last year that "rights holders' most powerful tool to combat online copyright infringement is making content accessible, timely, and affordable to consumers".

Despite this, the government provided the Copyright Amendment (Online Infringement) Act 2015, which passed both houses of parliament in mid-2015, to rights holders as a mechanism for preventing piracy.

The website-blocking legislation, which Stanton called "a blunt tool", is currently being used by Australian pay TV provider Foxtel and media company Roadshow Films in their bid to get several ISPs to block five foreign piracy websites through the Australian Federal Court.

"Many of you will be familiar with the whack-a-mole phenomenon, where a blocked website resurfaces very quickly," Stanton said in regards to the ineffectiveness of website blocking.

"We've also had demonstrations in Australia of the unintended consequences that can flow if there is imprecision around the way websites are blocked, which can see legitimate sites inadvertently blocked."

IP address blocking has been fraught with difficulties in the past; when the Australian Securities and Investments Commission (ASIC) used its power to compel ISPs to block websites under s313 of the Telecommunications Act in April 2013, it accidentally blocked 250,000 websites.

"Our internal review identified that the ASIC teams requesting s313 blocks were not aware that a single IP address can host multiple websites," ASIC later stated.

As a result, Chris Burgess, counsel representing TPG in the present case, advocated domain name server blocking rather than IP address blocking, because "IP addresses change very rapidly".

As Stanton said, counsel representing both rights holders and telcos appear to be cooperating in the court case, simply ironing out various terms in the new legislation -- although while Burgess said that TPG is happy to confer directly with the rights holders, Optus said it would prefer a third-party mediator be appointed.

Under the legislation, whenever a website is blocked by the Federal Court, a landing page will need to be hosted informing any would-be copyright infringers about the block, and providing information on where legitimate content can be found.

Again, costs were not determined prior to the passage of the law, with the government not ordering a cost-benefit analysis nor detailing who would bear the costs of implementing the scheme.

It has been projected to cost ISPs more than AU$130,000 per year to implement, however.