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92A a step closer to becoming law

On Wednesday the person who allegedly uploaded the workprint of Wolverine was arrested in New York. Here, the government released the latest round of thinking on 92a, in the form of a Cabinet Paper from Simon Power, Minister of Commerce, and a collection of submissions made on the issue.

It’s hard to argue that there shouldn’t be some version of clause 92a in the copyright legislation, although the NBR had a go in an article How to Morally Justify Illegal Downloading.

The article didn’t promote illegal behaviour per se, but argued a couple of points coherently, both of which – in various forms – were referred to in the submissions to the Cabinet Paper.

One point made was that the immediacy of the internet has gone a long way to eliminating NZ’s isolation in the world, practically if not geographically. Returning the country to a situation where content that we all know about, courtesy of the internet, is not available in NZ until and unless a cinema or broadcaster decides to show it to us represents a backward step is not a desirable step.

In the digital age, we are encouraged to expect immediate availability. One of the arguments against a return to putting all the power back in the hands of the US studios (who are the prime movers behind lobbying for such legislation, here and overseas) is that it discourages them from developing new business models that take advantage of digital distribution. Apple has done it with music, with some success.

When digital natives expect everything ‘on demand’, and TV networks here acknowledge and respond to that expectation, it’s hard to argue that people shouldn’t have access to that product because a distributor or broadcaster has chosen not to schedule it here. It’s so easy to download (illegally) a DVD or Blu-Ray rip or to buy (legally) a DVD of a film or TV series before it has screened here, something has to change.

However, it is illegal to take product that someone else owns, be it hard copy such as a DVD, or virtual copy such as a download. The problem that 92a seeks to address is how to police that and how to enforce the law.

NZFACT’s Tales from Terror Byte City achieved some cut-through when it was distributed through cinemas during the school holidays earlier this year, but most advertising/education around the issue has not been successful and is now the subject of humour.

The arguments in favour of 92a come in two flavours, broadly representing the stakeholders’ interests. The studios, represented here by NZFACT, supported the original version of the 92a clause that was dumped in March. The focus of the objections to that version of the clause was the guilt-on-accusation situation it created, and the fact that the punishment demanded (termination of internet service) was open to abuse.

The ISPs opposed the original version for three reasons: the cost to themselves of operating the system; the financial burden of lost business; and the fact that they themselves were placed at risk being considered responsible for their customers’ illegal behaviour. The situation was likened to taking a car manufacturer to court because a driver of a vehicle supplied by the manufacturer had broken the law.

The current proposal, as outlined (pp4-5) in the Cabinet Paper, returns the responsibility to the parties involved in the dispute: the owner of the material who alleges it has been stolen and the person who allegedly committed the theft, with the Copyright Tribunal as the adjudicator.

The Cabinet Paper proposes a graduated response to allegations. In the first instance, an education notice would be sent to the alleged infringer by the ISP, noting the allegation, explaining the law and containing information on securing wireless networks.

If a second allegation was made against the same user, by the same or a different copyright holder, within a fixed period of time, a second notice would follow, this time a cease and desist notice.

If a third allegation is made, the copyright holder will be able to seek an order to deny internet service to the user for an as-yet unspecified period of time.

The problems centre around the fact that in all likelihood the vast majority of complaints against users will come from overseas, which potentially raises issues both under the Bill of Rights, Human Rights and Privacy legislation.

Rights holders have sought the identification of users as early as possible in the process. Locally, that has been resisted because it’s very hard to control how user information is used once revealed to an organisation not bound by NZ law.

ISPs also resist the release of this information for their own reasons – because the contact details of their users are regarded as commercially sensitive information.

Not helping the studios’ case is the fact that research on the value of lost business is hard to quantify and some results are regarded as scaremongering. Figures have been quoted from research that estimates the number of illegal downloads and extrapolates those as lost sales although, given the ease of illegal downloading, it is more likely that people download some percentage of material that they would not choose to pay to watch. International studies, two of which are cited in the Cabinet Paper, estimate the loss as 2-9%. Although substantial, those figures are nowhere near the 25% suggested by studio-funded studies.

Also, given that teenage males are alleged to make up the highest number of illegal downloaders, one has to wonder whether their disposable income could stretch to paying for what they download, however much they want to see it.

This also creates a quandary for the legislators in that, under proposals to introduce fines as punishment, the law might well target and impose fines on those least able or likely to pay them, adding hugely to the cost of operating the system.

The figures contained in the Cabinet Paper assume annual costs of over $800,000 to operate the legislation with 1,800 cases going to the tribunal, which is at best a guess. NZFACT estimates that there are 2,400,000 illegal downloads a year in NZ.

SPAD and SDGNZ both made submissions, which are paraphrased in the summary of submissions. Both were (unsurprisingly) generally in favour of the proposed legislation, although their submissions took differing positions on some matters, such as to the question: Should a subscriber be required to supply their contact details to rights holders in a response notice? SPADA supported this, SDGNZ didn’t.

All the submissions generally aligned with expected positions; ISPs opposed bearing any additional costs of operating the system, and any responsibility for making judgement calls; rights holders and those aligned with them supported suggestions as close as possible to the original version of 92a.

The individual submissions claimed access to the internet as “a basic human right”, that “draconian laws protecting a dying business model are not appropriate” and generally opposed termination of service.

A complication to introducing and passing legislation at present is that NZ is a party to the governmental level Anti-Counterfeiting Trade Agreement (ACTA) and Trans-Pacific Partnership
Agreement (TPPA) negotiations. Once those negotiations are complete, the government will have the choice of not signing the agreements or having to align whatever requirements are contained within the agreement with NZ law.

Since ACTA has chosen to be very secretive about its deliberations, fuelling suspicion that US copyright law will be imposed internationally, there is opposition to that. The recent Google Books court cases, in which Google was accused of essentially appropriating copyright to written works by US and non-US authors in a take-what-we-offer or get-nothing-at-all deal, don’t inspire confidence that rights holders, especially those outside the US, would be any better protected by ACTA than they are now.

It’s also unlikely, given that the US is a party to both sets of negotiations, that there will be any discrepancy between the copyright infringement requirements of ACTA and the TPPA.

The real test of any legislation won’t come until someone is accused and opts for a court trial, rather than a copyright tribunal hearing. At that point, the burden of proof becomes higher (“beyond reasonable doubt” rather than the tribunal’s “balance of proabability”) and the systems studios use to track internet activity and ISPs use to monitor dynamic IP addresses come under scrutiny.

As some p2p sites apparently report false IP addresses, in an effort to deny accurate information to authorities, there exists the possibility that allegations could be based on false information. Imagine the shame of your number coming up incorrectly and being hauled before the courts for downloading Witless Protection, Epic Movie, Daddy Day Camp or anything featuring Lindsay Lohan. “I have better taste” won’t be an allowable defence.

For the sake of the industry, here as well as overseas, we should all support 92a in some form or other. Money that should be going to rights holders to compensate their efforts, and also to support new work, is not being collected.

However, as some of the submissions point out, we should also encourage rights holders to explore methods of exploiting their content that take advantage of the digital environment. Much of the research around the issue suggests that if there were easy and legal ways of paying for content, there would be higher take-up of that option. Which, at the end of the day, is a better solution: people being paid for their work rather than people being fined for stealing it.