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Telstra argues against compliance costs for piracy website blocking

The cost of complying with court orders to block The Pirate Bay and other piracy websites -- which TPG put at AU$50 per DNS block, and M2 put at AU$800 maximum in total -- is being disputed by Telstra.
Written by Corinne Reichert, Contributor

As Australian pay TV provider Foxtel and media company Roadshow Films continue their bid to get several internet service providers (ISPs) to block access to five foreign piracy websites through an Australian Federal Court order, Telstra has stepped forward to argue against the costs of compliance for such a block.

Foxtel and Roadshow in February applied to block various websites under the piracy site-blocking legislation that both houses of parliament passed in mid-2015; under Section 115A of the Copyright Amendment (Online Infringement) Act 2015, rights holders may obtain a court order to block websites hosted overseas that are deemed to exist for the primary purpose of infringing or facilitating infringement of copyright.

Prior to the passage of the law, however, the government did not specify whether it would be a single blocking page redirected from all blocked sites or many landing pages, who would host such landing pages, who would contribute to the cost of hosting those landing pages, or how long a block would need to be in place.

Costs were also not determined, with the government not ordering a cost-benefit analysis nor detailing who would bear the costs of implementing the scheme. It has since been projected to cost ISPs more than AU$130,000 per year to implement.

While Telstra said it is not going to contest -- or agree to -- any issues concerning copyright infringement as it is by definition an "innocent party", it argued against the high costs of compliance inherent in implementing such website blocks.

Telstra said it would need between four and six weeks to come up with the evidence needed to prove compliance costs, with Justice Nicholas asking for broad estimates of monetary figures from all ISPs in regards to costs, rather than "mountains of evidence".

TPG, on the other hand, gave a concrete monetary figure: AU$50 per domain name to implement a domain name server (DNS) block. According to TPG's figures, just in blocking Foxtel's targets -- four sites involving 61 domain names, with its primary objective being The Pirate Bay -- this would amount to $3,050 per ISP, not including Roadshow's target, the lesser-known Solarmovie.ph.

M2, meanwhile, said it disagreed with the perspectives of the other ISPs, pointing to the "modest amounts" put forward in its own written submissions as being between AU$400 and AU$800, plus some overhead costs, for all of the blocks.

Counsel representing both Foxtel and Roadshow, Richard Lancaster, said that since there is no agreed position for the ISPs in relation to compliance costs -- with such disparity between TPG's figures and M2's figures -- Roadshow's preference is for the court to make an "early listing and determination of all issues other than costs".

"Our concern is that the length of time that's been flagged to us by the respondents ... would push this many months into the year," Lancaster argued on Friday.

Justice Nicholas, however, said that the evidence of compliance costs is directly relevant to the discretion of making any orders, adding that he would have "difficulty" in going to a hearing when left with this question.

The Foxtel and Roadshow hearing has been set for June 23-24, giving the ISPs time to put together evidence on their costs analyses, and Foxtel and Roadshow time to respond to this evidence.

In court in March, counsel for TPG Chris Burgess had advocated DNS blocking rather than IP address blocking, because, as he pointed out, "IP addresses change very rapidly".

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.

The federal government's own guidelines for agencies to block unlawful websites through Section 313(3) of the Telecommunications Act 1997 also now specify that blocks are to occur through URLs rather than IP addresses.

"When making a request, agencies should endeavour to make it as targeted as possible. This usually means requesting that a Uniform Resource Locater (URL) -- the specific address of a website -- be blocked, rather than Internet Protocol (IP) addresses," the guidelines say.

"IP addresses generally host multiple websites; requests to block these risks disrupting access to non-target websites."

Last month, Universal Music Australia, Sony Music Entertainment Australia, Warner Music Australia, and J Albert & Son similarly filed a joint Federal Court application against Australia's major internet service providers (ISPs), as well as pay TV provider Foxtel, in a bid to get them to block Kickass Torrents and its related proxy sites.

The full list of respondents subject to the action involves Telstra, Optus, iiNet -- now owned by TPG -- Foxtel, Virgin Mobile Australia, Vividwireless, Pacnet, Alphawest, and Uecomm.

A case-management hearing for the music studios' case against the ISPs has been scheduled for June 6 in the Australian Federal Court.

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