ISP CEO Slams Copyright Law and Outdated Business Models

As New Zealand braces itself following the introduction of a 3 strikes-style scheme for dealing with online copyright infringement, the CEO of one of the country's largest ISPs has slammed the legislation. TelstraClear chief Allan Freeth says that punishing consumers isn't the answer and that business models requiring new legislation in order to function are flawed and need to be changed.

Although New Zealand’s Copyright (Infringing File Sharing) Amendment Act 2011 doesn’t come officially into force until 1st September, last week saw the beginning of P2P network monitoring which can be backed up by action under the new legislation.

As should be clear by now, those who are found to be uploading copyright material are first sent two warnings via their ISP. After a third, copyright holders are able to take Internet account holders to the Copyright Tribunal where they will face fines of up to $15,000 and disconnection.

The legislation has been widely opposed, but complaints have fallen mostly on deaf ears. Today the head of one New Zealand’s largest ISPs added his personal dissenting voice to the mix in an announcement which criticizes the legislation, the outdated business models of the entertainment industries and lack of consumer choice.

“TelstraClear respects copyright and supports the ability of rights owners to realise value from their intellectual property. But a business model that has to be propped up by specific legislation in this way is flawed and needs to change,” Freeth begins.

TelstraClear has been opposing the 3 strikes legislation for some time. In 2009, TelstraClear said that following “an unprecedented large reaction from customers” it would not support a code of practise designed to support a “guilty upon accusation” law with which the company didn’t agree. The legislation was subsequently softened.

But Freeth says that today, even with 3 strikes on the table, the legislation will fail to produce the effect required by copyright holders.

“It may encourage parents to take more notice of what their kids are doing online, and that’s a good thing,” he says. “But it won’t stop those who really want content from getting it.”

The problem, he notes, isn’t so much stopping piracy by force, but by giving customers the content they want.

Freeth says that a 2009 TelstraClear survey showed that customers who download copyright content were not only “tired of paying too much, and waiting too long”, but viewed physical distribution models as outdated and out-of-touch.

“These are the opinions of the ‘now’ generation, and the growing population that has never experienced the world without a TV, the internet, and the freedom this offers,” he says.

“New Zealand’s distance from the source of much content has been conquered by online access, but simply making it available online while retaining old price structures and wait times doesn’t work.”

Freeth highlights some interesting points from the survey which are potential positives for artists but not necessarily good news for their gatekeepers – the rights holders and distributors.

“Respondents suggested building a stronger direct connection between the artist and end-user to reduce the old-world overheads and online purchase price,” says Freeth.

Building stronger connections between artists and consumers is indeed an effective way to cut out the ‘middle-man’. But of course, it’s the middle-man that aggressively lobbied for this new legislation in the first instance in order to protect his business models.

Freeth adds that their survey respondents were also keen to alter the focus of copyright law, to punish those who try to profit from infringement instead of targeting the consumer.

“As stated, TelstraClear respects copyright, but we respect the ever-changing needs of our customers too. At present, they are being denied the freedom to choose by companies intent on propping-up old world business models.

“Rather than investing in innovative ways to legally provide people with the content they want, whether music or movies, pictures or programmes, these companies choose to pressure governments into legislating.”

In summing up, Freeth says that instead of bringing in useless laws the New Zealand government “should be breaking monopolies”, thereby creating an environment where citizens of the country can legitimately obtain content in a timely and cost-effective manner.

“Instead,” he concludes, “it has chosen to introduce a law that could turn ordinary Kiwis into law-breakers.”

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