Its outward structure is simple. Internet users who are discovered uploading copyright material are first sent two warnings via their ISP. On receipt of a third, copyright holders can take the Internet account holder to the Copyright Tribunal where they face hefty fines.

If entertainment industry lobbyists were to be believed the legislation couldn’t come soon enough since local artists were being seriously hurt by downloading. But it took a full two months for RIANZ – the Recording Industry Association of New Zealand – to deliver their first batch of just 75 warnings. All of them related to international artists and local artists were completely absent.

Now, more than 6 months after the so-called ‘Skynet’ law was introduced, local ISP TelstraClear has confirmed that one of its customers is the unlucky recipient of a third and final “enforcement” warning, delivered on behalf of RIANZ.

The alleged music pirate now has a week from the date of the notice to lodge a dispute. Failure to do so could lead the individual to be referred by RIANZ to the Copyright Tribunal for a punishment which could include a fine of up to $15,000.

TelstraClear, an outspoken critic of the ’3 strikes’ legislation, confirmed that it had been receiving just 15 notices a week from RIANZ. Nevertheless, that’s a significant amount when compared to those sent to any and all ISPs by the movie industry.

The MPAA-affiliated New Zealand Federation Against Copyright Theft (NZFACT) has sent a grand total of *zero* notices since the new law allowed it do so.

There are a couple of theories as to why this is the case. NBR, who spoke with an industry source who did not wish to be identified, said the size of the market in New Zealand meant it was too small for Hollywood to bother sending notices.

The other theory, which is connected to the first, is related to cost. When an ISP sends out a notice they can charge copyright holders a fee of $25. There is a further cost of $200 to take a case before the tribunal. With thousands of notices sent the costs would soon mount up.

There is speculation that to overcome this cost-related problem, RIANZ have been monitoring file-sharing networks in order to work out who is doing the most infringing and targeting those users first. Proportionately, users will download more individual instances of music than they would movies, making them easier to spot on separate occasions.

The $25 fee is currently being reviewed by the Economic Development Ministry which will have to decide if the level should be increased, reduced, or maintained. NZFACT boss Tony Eaton has asked for them to be thrown out completely, which suggests the movie industry might have more interest in sending notices if they become free.

But according to a report out of the TelCon12 telecommunications conference in Auckland today, ISPs have been bemoaning the costs of preparing the system versus how things have turned out.

“It’s more complex than just, ‘receive information, send notice’,” TelstraClear’s Oonagh McEldowney said, adding, “We’re nowhere near recovering our setup costs.”

An industry source told TorrentFreak that the ISPs budgeted for many more thousands of notices to be pushed through in order to ensure their initial outlays on systems implementation were covered. Being left high, dry and out-of-pocket will not have been well-received.

Update: Scott Bartlett, CEO of ISP Orcon, has confirmed his company has also sent out a ’3rd Strike’ notice.

Source: Kiwi ISP Issues First Music Piracy ’3rd Strike’, Movie Biz Can’t Be Bothered

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.

Source: Anti-Piracy Law is ‘Reasonable’ Says Kiwi Music Chief