On 8 April 2010, the government's Digital Economy Act became law. The Act implements a number of the recommendations contained in the government's Digital Britain initiative that require legislation. However, many observers feel the Act is as notable for what it omits as for what it contains.
For example, anyone looking for a meaningful commitment to upgrading the UK's mobile communications infrastructure will be disappointed. The hope had been that the UK could invest in high-speed mobile broadband and other technology infrastructure, but these proposals proved just too controversial and too expensive.
Without doubt, the new regime to address the online infringement of copyright is the single most important aspect of the Act. The amendments to the Communications Act 2003 introduced via the new Act are particularly favourable to copyright holders. In the past, copyright holders were usually prevented from taking meaningful action against infringers due to the complexities inherent in ascertaining the identity of the infringer, and the lack of appropriate, cost-effective remedies.
ISPs are only usually willing to provide their customer's details once directed to do so by a court order. The new regime simplifies matters for copyright holders by requiring ISPs themselves to take action. ISPs' new obligation to penalise subscribers on behalf of copyright holders will be of particular interest to the music, film, video games, and other industries that rely heavily on IP assets.
However, the Act only provides a broad outline of the regime. For example, the precise circumstance in which a copyright infringement notice can be served on individual subscribers is not made clear. How appeals by subscribers will work in practice is also omitted. Such details will only be clarified following the development and implementation of a Code indicating how the 'Initial Obligations' on ISPs will be regulated.
The Act contains high-level descriptions of what the code must contain, but the devil is always in the detail. The code can de developed by third parties (eg, ISPs themselves) and approved by Ofcom (provided that it meets certain requirements). In the absence of an Ofcom-approved code, Ofcom is obliged to develop the code itself.
But party politics could scupper everything. The regime itself will need secondary legislation in order to become effective and the imminent General Election adds another layer of uncertainty. While the Labour party has pledged that it will "update the intellectual property framework that is crucial to the creative industries - and take further action to tackle online piracy", the Conservatives have not made any such commitment.
Thus, like the rest of the proposals originally set out in the Digital Britain Report and those proposals which are implemented by the Act, the likely impact of the regime is difficult to predict. However, the possibility remains that an organisation could be liable in the event that its network is used to download content in breach of copyright. In the meantime, organisations would be best advised to ensure: their networks are secure; the applicable use policies for networks and IT systems are revisited to confirm that they are sufficiently 'tight' and enforceable; all their employees and other internal users are fully aware of the 'acceptable use' policies.
• Chris Coulter is a partner at law firm Morrison & Foerster
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*The purpose of the Digital Economy Act 2010
*Key elements of the Act
*Proposed changes to the role of Ofcom
*Proposals to make Ofcom responsible for policing copyright infringements
*Plans for a statutory maximum fine of £50,000 for illegal file sharing
*Proposals to improve on-line security
*Plans for 90% of next generation fibre-optics for businesses by 2017
*Commitment to make high-speed broadband available across the UK by 2012
*Support for animation, electronic games, and other digital industries
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