ISPs wouldn’t be expected to play copyright cops, but instead decisions about disconnections under a 3 strikes regime would be made by the Copyright Tribunal, which would give those wrongly accused a chance to put their side of the story. This was generally accepted as a fairer way of going about the issue.

However, the Federation Against Copyright Theft has indicated that it is unhappy with the proposals and would prefer a “streamlined” process of justice, which would mean people could be disconnected without the full hearing in front of an independent body as suggested by the Economic Development Ministry.

FACT director Tony Eaton says that his organization doesn’t have a problem with judicial process – as long as it’s on their terms.

“The concern is that we send out 1000 infringement notices, and then someone says, `The way to stall this is let’s all go to arbitration’, and a year later we could still be going through that same process,” Eaton said.

“Do we get to the point where we have 1000 cases to be heard by the Copyright Tribunal? If everyone brings their lawyer, we will only do five in a day,” he added.

By anyone’s measurement, even given the lack of accuracy inherent in some anti-piracy evidence, 100% error rate and 100% appeals is a little pessimistic to say the least and to suggest everyone would bring a lawyer is absurd – the cost would be hugely prohibitive. Nevertheless, Mr Eaton said he would prefer to be able to present evidence in bulk to the tribunal – in search of corresponding disconnections in bulk, no doubt.

The discussion document for the amended Section 92a was open for submissions until August 7 and according to Ministry of Economic Development spokesman Joshua Herron, many of those submissions show opposition to disconnecting people from the Internet, period.

InternetNZ, a non-profit organization dedicated to protecting and promoting the Internet, said it is “absolutely opposed to the inclusion of termination of Internet accounts as a penalty for copyright infringement.”

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After outrage in the Internet community coupled with resistance by ISPs led to a failure to reach agreement in the allocated period, Prime Minister John Key announced that the law would be have to be delayed. In the end not even a delay would be enough to reach consensus and it was announced that Section 92A of the Copyright Act 1994 would not come into force on 27 March as scheduled, but instead would be amended to address areas of concern.

Prime Minister Key set Minister of Commerce Simon Power to work on a replacement and today he put those proposals to the cabinet.

The main development is that ISPs will no longer be expected to perform the role of ‘Copyright Cops’ for the entertainment industries. Instead, that role will be performed by New Zealand’s Copyright Tribunal which at least at this early stage appears to offer those accused some kind of due process via an independent body.

The bad news is that the fraught with difficulty and disproportionate response of disconnections – aka ‘3 Strikes’ – is still on the table. The new framework is proposed as follows;

Step 1: In the event that a copyright holder records an infringement of its rights by an Internet user (unauthorized uploading), they will be required to send an initial infringement notice to the corresponding ISP. Once the account holder is identified by matching the alleged infringing IP-address with customer records, the initial infringement notice will be passed to him or her, via the ISP.

Step 2: Should there be another infringement, the above process would be repeated but this time the account holder would also receive a ‘Cease and Desist’ notice. At this point an account holder would have the opportunity to respond to copyright holders.

Step 3: If after issuing a Cease and Desist notice infringements continue, the copyright holders can then apply to the Copyright Tribunal to require the corresponding ISP to hand over the personal details of the account holder. Interestingly copyright holders can already achieve something similar, simply by going directly to the courts.

Step 4: At this stage copyright holders are free to issue a complaint with the Copyright Tribunal, who will in turn notify the account holder that an additional complaint has been made against him or her. The account holder is then given the opportunity to put their side of the story and move to mediation. In this instance costs would be shared and a government-approved mediator would be provided. Should this step fail the Copyright Tribunal would decide from a range of penalties such as fines or ultimately, disconnection.

Of course, the above is not without its issues.

Right now New Zealand’s Copyright Tribunal, a body operating under the Ministry of Justice is a small concern used to dealing with smaller, more manageable copyright disputes. Indeed, currently it has only three part-time staff. It’s going to need more resources if it’s to deal with these cases effectively.

However, Matthew Holloway from The Creative Freedom Foundation believes the tribunal system could be workable;

“It’s not necessarily an unsolvable problem. It could make sense to initially restrict the number of complaints by dealing only with certain scales of infringement. The scale could be adjusted in time. This would be similar to the approach within Canada where the police have said that certain small scales of infringement won’t be investigated because they simply don’t have the resources.”

The discussion document for the amended Section 92a will be open for submissions until August 7.

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However, after much discussion between the parties and outrage in the Internet community, no agreement was reached in the time frame allocated, and Prime Minister John Key announced that the law would be delayed while a solution was found.

Today things have gone stage further. As it became clear that an agreement on a code of practice would not be reached even with a delay, the New Zealand government has scrapped the controversial Section 92A legislation.

“Cabinet today decided that section 92A of the Copyright Act 1994 will not come into force on 27 March as scheduled, but will be amended to address areas of concern,” said Minister for Commerce, Simon Power. “Allowing Section 92A to come into force in its current format would not be appropriate given the level of uncertainty around its operation,” he added.

Prime Minister John Key said that although some progress was made between the entertainment industries and ISPs, there was not enough common ground to reach agreement.

“Section 92A is not going to come into force as originally written. We have now asked the minister of commerce [Simon Power] to start work on a replacement section,” Key said.

Back in February, InternetNZ, the non-profit group responsible for protecting and promoting the Internet in New Zealand, called Section 92A “faulty” and “disproportionate and unfit for purpose” but today they are breathing a sigh of relief.

“Terminating an Internet account was always a disproportionate response to copyright infringement and to force ISPs and other organizations to be copyright judges and policemen was never an acceptable situation,” said InternetNZ executive chairman, Keith Davidson.

Meanwhile, users on Twitter expressed their delight at the news and no doubt the anti-Section 92A people over at ‘Creative Freedom‘ will be delighted that all their hard work has paid off.

The question now remains – will Section 92A be rewritten completely, or will the government stick a couple of Band-Aids on it and hope for the best? Time will tell…

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Around the same time there was an election in New Zealand and a major change in government, with the then-ruling Labour Party losing out to the National Party. One of those losers was the bill’s champion, Judith Tizard.

With a change of government comes a change in views, and late last month New Zealand Prime Minister John Key announced that the law would be delayed until a workable solution is found.

For many thousands of Kiwi’s, however, disconnection upon accusation is already a reality. One ISP, WorldXChange, has already implemented a Secton92-esque policy for its customer base; one it claims might actually be more draconian.

According to the New Zealand Herald, WorldXChange, which has approximately 20,000 customers, has already initiated their own version of ‘3 strikes and you’re out”. The Herald spoke with a WorldXChange customer who said their connection was terminated last year after an allegation of copyright infringement was made to Xnet (WorldXChange’s broadband service). After contacting customer services, they learned that their connection had been terminated because the ISP had received an allegation that the customer’s IP was linked to file-sharing that infringed copyright.

“They said that they’d reinstate my Internet, but that if they got one more [accusation] it would be cut off permanently – two strikes, you are out.”

A spokesperson for WorldXChange confirmed that such a policy was in place, but said it was 3 strikes, not 2. However, WorldXChange will not be terminating commercial customers in this manner, only residential ones – undoubtedly because residential customers are less likely to sue WorldXChange than a commercial concern, who could easily have their business turned upside down by an unwarranted disconnection.

It might be a a different story if media-groups (and their enforcement contractors) could be trusted to make accurate, well researched claims when it comes to allegations of infringement, but we all know that is not always the case.

Meanwhile, the debate amongst other NZ ISPs has stalled with the withdrawal of TelstraClear (NZ’s second biggest telecom company) from talks regarding Section92, stating it doesn’t want to harm customers. The law has generated intense debate all over New Zealand and now has an uncertain future. If the law is repealed, or struck down though, it is entirely possible that Xnet’s policy will stay in effect, at least until the sound of customers flocking to their competitors – voluntarily or after being ‘terminated’ – gets too much to bear.

On a lighter note though, WorldXChange does seem to have mastered irony. WorldXChange states on the ‘about us‘ section of their website “To us, the key stakeholders are our customers”. Meanwhile Xnet has a package aimed squarely at bandwidth-hungry BitTorrent users.

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Considering that the legislation received almost universal opposition from anyone not in the music business, it came as no surprise that the parties involved couldn’t come to an agreement. Prime Minister John Key announced that the law would be delayed while a solution is found, noting that they may have to change the law in order to reach one.

But according to Campbell Smith, CEO of RIANZ (New Zealand’s answer to the RIAA) everyone complaining about the legislation is wrong and the music industry is right. Writing in The New Zealand Herald, Smith says that despite the ‘fact’ that the industry has “transformed its business models”, unlicensed music on the Internet is proving a disincentive to those looking to sell music online.

Smith says that the music industry has been working hard to find “proportionate and reasonable solutions” to tackle illicit file-sharing. Noting that in some countries labels take legal action against those uploading music, Smith says that Section 92A “is a better solution for everyone,” although don’t be surprised if that “everyone” is limited to those in the music industry.

Smith says that after looking long and hard for a solution to the ‘problem’, the industry realized that ISPs are in a “unique position to help us protect creative content online,” and feels that it’s the government’s responsibility to force these negotiations on the ISPs, despite the fact that the ISPs aren’t happy about it at all. Seems everyone has a responsibility to the music industry – like it or not.

Turning to what he describes as “sensational propaganda” surrounding Section 92A in the press recently, Smith says that if the law was half as bad as is being reported, he would vote against it himself. Now that would be a sensation.

Going on to the tracking mechanics, he explained that the process of catching an infringer is simple. The labels will log on to public file-sharing ’sites’ and log the IP addresses of people uploading large amounts of copyright infringing material and report them to their ISP. Further details of how the entire system would operate can be found here.

From a BitTorrent perspective, it will not be as easy to track people sharing vast amounts of music as it is with applications such as LimeWire, since there is no ’shared folder’. It’s doubtful that the labels will be as selective as they are suggesting, though. Many of the infringement notices being sent out in the UK right now are for just one track and if the labels are pinning all of their hopes on this new system, expect there to be lots and lots of them in New Zealand too.

Smith says that consumers need to be reassured that what is being done is “efficient and proportionate” but it’s difficult to see why any ‘consumer’ should appreciate the fact that privately owned businesses should have a veto over their continued Internet access, or feel that such action is “proportionate”.

Content creators do have the right to protect their work, as much is written in law, but threats and disconnections aren’t going to work. Not only are the public annoyed at the actions of the music industry, but ISPs are being dragged into this ‘war’ too. Expect things to get even more messy.

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Earlier this month a code of practice was drafted by the copyright holders and ISPs which should outline the manner in which the new Section 92 ‘3 Strikes’ regime should be handled by the ISPs. However, the parties involved couldn’t agree on the content of the code and Prime Minister John Key has just announced that the law has been delayed until a workable solution can be found. If the parties involved can’t reach an agreement, the law might be changed, he noted.

Most of the opposition is worried about the “Guilty Upon Accusation’ part of the law, and rightly so. Regular readers know how shoddy anti-piracy groups are at accurate take-down notices, either they’re for stuff that you can share, never had, or are incapable of having.

Last week, many people blacked out their profile images on social networking sites such as Twitter and Facebook, and today several bloggers announced a blackout of their entire website. The protest is being spearheaded by Creative Freedom, which was formed two months ago in response to this law – and not without success.

The protest caught the eye of many, including some celebrities. Stephen Fry, author of 7 novels, and a prolific screenwriter, actor, and presenter, is supporting the cause. “My picture is blacked out for good reason,” he twittered last week. The Quite Interesting Fry, ranked second most popular by twitterholic, was one of the first to black out his profile picture.

For now the protests have resulted in a delay of the law, perhaps not directly, but we are pretty certain that it would have been in effect already without all the opposition.

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“The Copyright Act was amended in 2008 to include s92A which requires Internet Service Providers to have a policy to terminate the accounts of repeat copyright infringers in appropriate circumstances,” said TCF CEO Ralph Chivers. “This Draft Code is intended to be a template policy for ISPs, to assist them in meeting their obligations under the Act.”

The draft has been created by a group of New Zealand’s largest ISPs, the Internet Service Providers Association of New Zealand (ISPANZ) and Internet NZ, with input from the entertainment industries. It puts some much-needed ‘meat-on-the-bones’ of how allegations of infringement under Section 92 could be handled in practice, along with clarification of what would constitute someone being labeled as a “repeat infringer” for example.

This is how TCF propose that part of the system will work. First off, a copyright holder would identify an infringement and notify the ISP of the infringing customer immediately. The ISP would check to ensure that the complaint meets the standards required by the draft code and ensure that the evidence provided would be of such a quality that it would stand up in court. If it does not meet the standards, it will be returned to the copyright holder. If it is discovered that the copyright holder hasn’t already been ‘pre-approved’ to participate in the scheme, they are given the opportunity to join by paying a fee. The claim is then processed.

At this point the ISP checks to see if the customer has already been complained about. If they have received less than two complaints already, they receive what is known as an ‘Education Notice’. If they have received two of such notices, the ISP well then active the ‘Termination Process’. In either event, the copyright holder is notified of the action taken.

The definition of a ‘Repeat Infringer’ (and one who will be disconnected) is an Internet user who has received three Education Notices in any given 18 month period. Education Notices expire 18 months after being issued, effectively giving the user a clean sheet again.

There are also systems proposed for dealing with the actual termination of a customer’s ISP account, with provisions for taking extra caution over so-called ‘Vulnerable Customers’ (someone “who for reasons of health, disability or safety, or that of a member of their household, is reliant on their Internet Account”) and ‘Essential Service Providers’ (a “person who requires their Internet Account in order to deliver an essential service referred to in Part A of Schedule 1 of the Employment Relations Act 2000“)

Customers accused of infringement will also have the right to dispute the allegations made against them and the draft details the procedure clearly.

The draft Internet Service Provider (ISP) Copyright Code of Practice is available for viewing here. Submissions to the draft should be emailed to submissions@tcf.org.nz or posted to: Telecommunications Carriers’ Forum, PO Box 302469, North Harbour, Auckland.

The closing date for submissions is 5pm, Friday 6th March 2009.

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While New Zealand’s version of the RIAA, RIANZ, is very happy at the introduction of this scheme, many others are not. Objections from the public have been backed up groups such as The Creative Freedom Foundation, with Co-Founder and Director Bronwyn Holloway-Smith slamming the new section as summary action “without evidence or even a trial.”

Many organizations have been vocal in their opposition, and it had been hoped that the combined pressure of all dissenters could be brought to bear on the government, in an attempt to force them to reconsider implementing the law. Unfortunately, according to a Stuff report, that has failed.

Although the government’s Communications and Information Technology Minister Steven Joyce acknowledged there had been concerns over the legislation, the best he could offer was to look at how the law operates after its introduction.

Jamie Baddeley, the president of ISPANZ, New Zealand’s industry group representing ISPs said, “If Section 92A is allowed to come in, ISPs will have to disconnect organizations such as businesses, public libraries, government agencies etc as a result of accusations that an employee has used their computers for illegal downloading.”

While ISPANZ says the legislation makes New Zealand “a guinea pig for experimental cyberlaw,” their members are equally critical.

Alison Sykora, Vodafone spokeswoman said: “We believe the Government needs to re-examine this as it would be extremely difficult, if not impossible, to enforce.” Mathew Bolland for TelstraClear defined the legislation as “appalling” while noting that although the company will have to follow the law, they “won’t be hammering” their customers.

In November last year, TorrentFreak asked Associate Minister of Commerce Judith Tizard about the rationale behind the law, while pointing out the concerns over reliability of accusatory evidence. She declined to comment, stating she was unable to spare the time to respond, due to defending her seat.

Yesterday we posed probing questions directly to Communications and IT Minister Steven Joyce, but by the time of publication we have received no response.

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However, over in New Zealand a law requiring ISPs to disconnect repeat copyright infringers has been proposed, passed and signed into law. The law, Copyright (New Technologies) Amendment Act 2008 adds a new section to deal with Internet Service Providers and copyright infringement. Yet, opposition from ISPs, and Internet user groups may see it being struck down or modified before it goes into force.

The section in question, 92A reads

Internet service provider must have policy for terminating accounts of repeat infringers
(1) An Internet service provider must adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the account with that Internet service provider of a repeat infringer.
(2) In subsection (1), repeat infringer means a person who repeatedly infringes the copyright in a work by using 1 or more of the Internet services of the Internet service provider to do a restricted act without the consent of the copyright owner.

Opposition to this section of law has been steady, with six industry bodies that have opposed the law meeting with government ministers. Indications from Communications Minister David Cunliffe and Associate Commerce Minister Judith Tizard, are that if the opposing groups and rights holders can come to an agreement by developing a workable code of practice, the law can be reworded. Tizard also reiterated strongly that the law was going ahead, and it would do so because of ‘Internet piracy’, according to one of the meeting’s participants

The issue at the heart of the debate is that of proof. InternetNZ head Keith Davidson told New Zealand’s Stuff, that he wanted to see an element of proof being required before people are cut off. A position understandable with the recent bad press given to copyright infringement allegations in the US, both in studies, and the courtroom. Countering him was the CEO of the NZ Recording Industry Association, telling Stuff that proving the guilt of infringers in a court of law, before any penalty is dealt out would be “impractical and ridiculous”, a sentiment also shared by his American counterparts.

A provision to penalize false or inaccurate accusations was in the bill at one point, after dealings by the group of six with a select committee. However, Tizard stated that it was inappropriate, as the Cabinet had already decided the law was to go ahead as was, and that people shouldn’t be surprised.

New Zealand is also in the middle of an election (voting day is November 8th) so there may be a change of ministers soon. These may be more amenable to changing the wording of the law, to be based on proof, not simple accusations. As always though, nothing is certain for the 3.3 million kiwi’s (around 80% of the population) on the net, except they are considered less important than the greed of lobby groups.

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