Down by Law: HADOPI's diluted graduated response, iiNet's battle with Big Content

Coordinated opposition had defanged the final version of Anti-Counterfeiting Trade Agreement (ACTA), and will continue attacking other supra-national digital enclosures such as the Trans-Pacific Partnership (TPP). Hence powerful copyright advocates including the International Federation for the Phonographic Industry (IFPI) and the International Intellectual Property Alliance (IIPA) have concurrently operated outside such treaty frameworks to pressure individual governments in an ‘especially aggressive’ way to force ISPs to police copyright infringements (Bridy 2010: 2). To date Britain, France, South Korea, and Taiwan, have incorporated various forms of graduated response into their domestic copyright enforcement systems (ibid.). Furthermore, other countries are exploring ‘private ordering’ options to enforce online copyright (Bridy 2010: 11-15; Toner 2011). These range from ‘cooperative relationships’ between major content distributors and broadband providers in which Internet Service Providers (ISPs) suspend repeat infringers’ accounts (in the United States), to ISPs being the ‘sole arbiter of the customer’s innocence or guilt’ terminating accounts without court orders (in Ireland). In Australia, the ISP iiNet after winning a precedent-setting law suit brought against it by an alliance of mainly US content owners proposed a graduated response model in which an ‘independent body’ meeting ‘community standards’ mediates the interests of all parties (posting by Steve Dalby in 'iiNet vs AFACT Federal court judgment - part 2' 2011 forum). Evidently ACTA at least has convinced many governments, their judiciaries, and technical facilitators that Big Content is boss (see, for example, EMI Records (Ireland) Ltd & Ors v. Eircom Ltd & Anor, [2005]).

Anachronistic Romantic and Modernist arguments spotlighting the struggling lone artist are frequently used to justify the the State’s protection of transnational corporate interests, as demonstrated by the High Court of Ireland’s decision that ISPs must implement the ‘phased disconnection’ method of copyright control (See EMI Records & Ors v. Eircom Ltd., [2010]). The judgement concentrated on the rights of individual creators to ‘keep body and soul together’ by exploiting the ‘fruits of moments of inspiration worked out through weeks of endeavour and representing, sometimes, the distillation of some fundamental experience of life’ (ibid. para. 1). In the internet age these singular geniuses must contend with a medium ‘thickly populated by fraudsters, pornographers of the worst kind and cranks’ (ibid. para. 2). Clearly, the invisible hand of the market cannot control those ‘younger people’ so habituated to downloading that a ‘claim of entitlement seems to have arisen to have what is not theirs for free’ (ibid. para. 3). The libertarian market always requires force to ensure it does not disadvantage the powerful. Yet corporate might coupled with State paternalism has not produced docile acquiescence as the French experience demonstrates.

In May 2009 the French Parliament passed the Création et Internet law requiring ISPs to undertake a ‘graduated response’ or ‘three strikes’ protocol against customers allegedly infringing copyright (Yu 2010).1 Under the so-called HADOPI2 law ISPs were obligated to issue two warnings to such customers, and upon the third alleged infringement the customers' internet accounts would be terminated immediately (Bridy 2011: 52-56). Moreover, the guilty parties would be placed on a national ‘no Internet’ blacklist to prevent them from switching ISPs (Anderson 2009b, np). The law also enabled ISPs to block popular file-sharing sites, and could penalise people for not securing personal internet connections against illicit uses especially via wireless networks. Although other countries including the United States, Italy, and Ireland had discussed similar legislation, France was the first to write it into law (Anderson 2009, np).

Just as file-sharing’s technological battlefields continually shift, the law similarly reflects the fluid nature of the ongoing struggle. HADOPI’s six year passage into legislation had propelled ‘intense online collective action by movements endowed with a high level of knowledge and skills’ in the use of ICTs (Breindl & Briattey 2010: 2). The bill already contravened a 2009 European Parliament decision preventing member states from implementing three-strikes on the basis that ‘disconnecting alleged file-sharers based on evidence from anti-piracy lobby groups restricts the rights and freedoms of Internet users’ (Ernesto 2009, np). Intellectual property activists, free software supporters, and consumer rights groups built an ‘authoritative online source of public information,’ deconstructing legal and technical jargon to communicate the law’s essence through ‘telling metaphors’ (ibid. 11). They explained how the ‘digital guillotine’ would produce dramatic consequences for file-sharers—for those who earned their living from internet-based activities account termination would be death (Yu 2010: 1380).

HADOPI ‘spiralled into legislative hell’ as France’s highest legal authority, the Constitutional Council, ruled that the enforced loss of Internet access was unconstitutional as it violated the ‘fundamental tenets of presumption of innocence’ (Breindl & Briattey 2010: 12). Henceforth HADOPI could warn downloaders but not disconnect their internet accounts. Although HADOPI’s second iteration was passed into law in September 2009, its implementation was a slow, ‘serpentine’ process (ibid. 13). Internet security company Trident Media Guard (TMG) was contracted by content owners to detect infringements using network monitoring software. This software becomes another battle field in which hackers discover vulnerabilities and code ways around them, so yet again a social ordering attempt via technology generates more social disorder. TMG would inform copyright owners of the ‘IP address from which the files in question were available, the ISP of the alleged infringer, and the date and time of the alleged infringement,’ and then the rights owners refer each instance to HADOPI (Yu 2010: 1380). HADOPI could disclose an infringer's identity to the ISP but not to rights owners. The ISP must then issue a warning to the customer within 24 hours. As no minimum volume threshold exists, an infringement covers the exchange of even just one file. If three alleged infringements occur within a year HADOPI organises a prosecutor to bring the matter before a judge who, without undertaking any investigation, can ban a person from the internet for up to twelve months, although people may appeal the decision (Anderson 2009d, np; Bridy 2011: 54-55).

What were the effects of these exceptionally harsh laws? In October 2010 a French music industry body claimed that their members were sending around 25,000 music-related copyright infringements notifications to HADOPI each day (Pichevi 2010, np). However the implementation process was ‘plagued’ with ‘incessant failures’ as Hadopi and ISP computer systems had not been interconnected, and uncertainty existed about who would foot the bill (Breindl & Briattey 2010: 12; 'Hadopi? Not Even Scared!' 2010). In this scenario bureaucratic disaster is imminent: information overload, communication breakdowns, and not enough prosecutors and judges to process cases rapidly Meanwhile file-sharing had increased by 3 per cent since HADOPI, researchers from the University of Rennes in Brittany suggested (Anderson 2010, np). Fifty per cent of 2,000 digital music and video online purchasers admitted to illicit downloading. Ironically, by banning people from using the internet for any purpose HADOPI might ‘eliminate 27 percent of all Internet buyers of music and video’ (ibid.). Small activist groups had sabotaged HADOPI by derailing parliamentary debates, influencing parliamentarians’ votes, catapulting ACTA into the news cycle, and building ‘further suspicion over state-led attempts to enforce “graduated response” procedures’ (Breindl & Briattey 2010: 12-13). Is it a coincidence that to date other national jurisdictions have retreated from the ‘three strikes’ model, with Germany, Spain, Sweden, Hong Kong, and New Zealand rejecting similar laws (ibid. 5).

In Australia the graduated response model has not yet found its sea legs. Firstly, the left-wing Labor government continues to be consumed by two contentious plans for internet regulation and modernisation: internet censorship via a mandatory software filter implemented at ISP level, and the National Broadband Network (NBN) (Bambauer 2008; Gerrand 2010).3 Secondly, the government had been awaiting the outcome of a precedent-setting court case centred on file-sharing (Leonard 2010: 272-273). And thirdly, ISPs remained unconvinced about the merits of the model, producing their own detailed critiques (see, for example, iiNet’s Industry Position Paper, 'Hollywood Dreams: a ‘three strikes’ policy put to the question' 2010).

In Roadshow Films Pty Ltd v iiNet Limited (No. 3) [2010], thirty-four film industry companies represented by the Australian Federation Against Copyright Theft (AFACT) had argued that the ISP iiNet ‘by failing to take any steps to stop infringing conduct, authorised the copyright infringement of certain iiNet users.’4 The much-awaited judgement by the Full Court of Australia (upheld by majority on appeal in February 2011), determined that the ISP was not responsible for their customers’ actions (Roadshow Films Pty Limited v iiNet Limited [2011]).5 The unexpected result was a blow to both copyright holders and government. This legal action costing iiNet AUD $6.5 million had not stopped even ‘one customer from downloading in Australia,’ according to its chief executive Michael Malone (Grubb & Moses 2011, np). On 24 March 2011 AFACT announced it was seeking special leave to challenge the decision in the High Court, its last avenue of appeal (Freri 2011). Meanwhile, iiNet reiterated that such legal challenges were pointless, urging content owners instead to work with ISPs to make their material ‘legitimately available’ ('Another court challenge won’t stop illegal downloads: iiNet calls on Hollywood studios to work with industry' 2011).

Previously, in a 96-page report entitled Australia's Digital Economy: Future Directions (2009: 20) the Australian government had signalled it would undertake a major review of those regulatory frameworks ‘most pertinent to the digital economy,’ that is, copyright law and convergence. It queried whether existing ‘safe harbour’ provisions in existing copyright law were adequate enough to ‘deter unauthorised instances of copyright infringement,’ singling out ISP’s ‘key role’ within ‘online activities’ (ibid. 21). On 2 March 2011 the Department of Broadband, Communications and the Digital Economy released the final Terms of Reference (TOR) for the Convergence Review in which a committee would assess Australia's communications and media legislation (Convergence Review Terms of Reference 2011). It would then advise the government in early 2012 on potential amendments to ensure that the nation’s regulatory framework was appropriate for the new environment in which media and communications technologies converged.6 Subsequently, it is probable that the government will draft three strikes legislation, using recent industry-sponsored reports presenting the standard economic loss arguments to support their case.7

In anticipation of the global battle opening up its next front on the Australian legislative territory, on 15 March 2011 iiNet released the discussion paper ‘Encouraging legitimate use of Online Content: an iiNet view’ (2011). Central within its schema is the ‘impartial referee’ who will resolve disputes between content owners and consumers, and issue penalties to ‘offenders’ (ibid. 8).8 ISPs will provide identifying details of their customers only to this independent body, who in turn provides the customer in the first instance with ‘educative information,’ and later with escalating penalties including demerit points, scaled fines, notices to attend court appearances, and possibly ‘shaping of peer to peer traffic’ (ibid. 9,11). Significantly, the onus is on the ‘Content Owner’ to undertake their own ‘detective work’ and provide ‘cogent and unequivocal evidence’ of infringement (ibid. 9). Thus all internet users are accorded the presumption of innocence. And if they are found guilty, then, as iiNet’s Chief Regulatory Officer Steve Dalby commented on a Whirlpool technology forum, ‘A fine turns up in the mail. No lawyers, no court, no long winded, two year process with lots of hearings and appeals’ ('iiNet vs AFACT Federal court judgement - part 2' 2011). Yet regardless of its merits in comparison with harsher three strikes protocols elsewhere, this model ignores the imminent administrative problems if the arbitrator received anything like the 25,000 notices a day HADOPI generates. Perhaps the more rational the solution, the greater the potential is for mounting chaos. Possibly the ISP industry cares little for the logistics, as long as the responsibility to make it work rests with the arbitrator, and Big Content and government pick up the tab.

The iiNet court cases also revealed the scope of the ‘sophisticated information’ content owners could now collect via network monitoring software (ibid.). Prior to commencing legal action AFACT failed to make all their information ‘available to iiNet (or anyone else),’ but now the law has determined what is required for the future. As Dalby warned, if content owners ‘want to go after infringers’ they have enough evidence ‘to nail them, according to the courts’ (ibid.). Defending iiNet’s model he asked, ‘So – do you want to be chased by someone that doesn't mind overkill (and makes movies about it), or would you rather have an independent body that has community standards to meet?’

As the legislative apparatus becomes less ambiguous in Australia and jurisdictions around the world, cloaking systems that mask IP addresses such as TOR will likely become more widely used. And so new cycles of ordering/disordering regimes continue throughout the interconnecting layers of informational capitalism.

Writer's Note
This is another section of a longer text I am working on.

Bibliography

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• 1. The French version of this protocol first had been seeded in a 2004 report by France's High Council of Literary and Artistic Property, was then ignored when France amended laws in 2006 to comply with an EU directive requiring ‘harmonisation’ of copyright law, and subsequently resurfaced in a 2007 French Ministry of Culture report recommending the establishment of an administrative body to oversee a ‘system of warnings and sanctions’ (Bridy 2011: 52). Hence, Création et Internet had been preceded by a five year period in which the basic idea of ISP involvement in direct punishment of file-sharers had been socialised via policy papers and commissioned research.
• 2. The law was commonly referred to as HADOPI after the administrative body which would implement it, the High Authority for the Distribution of Works and the Protection of Rights on the Internet.
• 3. The proposed Cleanfeed filter has spawned ‘street protests, on-line petitions, opposition from Internet industry groups, and critical press coverage,’ with polls and fora commentary consistently demonstrating the majority of the population (and virtually all geeks) to be against the reviled mechanism (Bambauer 2008: 3; 'All Content Related to Australia' 2011). In contrast, opposition to the NBN is more partisan, coming mainly from supporters of the right-wing Liberal party (Gerrand 2010).
• 4. The applicants in the main were movie industry Leviathans who had chosen Australia (out of many possible countries) as the localised staging ground for a globalised battle. Amongst the 34 plaintiffs taking on the one ISP were Universal City Studios, Paramount, Warner Bros, Disney, Columbia Twentieth Century Fox, Buena Vista Home Entertainment, Dreamworks, Sony, and a single Australian free-to-air television company, the Seven Network (Roadshow Films Pty Ltd v iiNet Limited (No. 3) [2010]).
• 5. The 2011 appeal judgement (paras 122-124) revisited some interesting observations about P2P software dynamics the primary judge had made in the first case. Rejecting the appellant’s ambit claim that each file chunk transmitted within a swarm represented an ‘individual example of an electronic transmission,’ he had observed that the ‘BitTorrent System does not exist outside the aggregate effect of those transmissions,’ and hence the swarm was an ‘entity in itself.’ Therefore acts of electronic transmission occur between the ISP user or peer and the swarm, and not between each individual peer. Moreover, in this context ‘electronically transmit’ did not involve a ‘series of single acts’ but rather the ‘BitTorrent System’ was an ‘ongoing process of communication for as long as one wishes to participate.’ In short, the judge concluded that each user ‘electronically transmits each Film only once’ even if they transmit ‘more than 100 per cent of the Film back to the swarm.’ Had such a precedent been applied to the Jammie Thomas-Rasset case, the damages would have been far less.
• 6. Potential policy and legislative changes were framed as being in the best interest of all parties, fostering ‘continued technological change and innovation,’ ensuring ‘protection of Australian content and cultural values,’ reflecting ‘community standards and expectations,’ and safeguarding ‘privacy and other citizens' rights’ (ibid. 2). Furthermore, the TOR stated that the Review Committee ‘may offer views on copyright and the ongoing protection of content in a converged environment, noting that ultimately the Attorney General will determine these matters’ (ibid.). Interestingly, the review’s Background Paper itself does not mention copyright (Convergence Review Background Paper 2011).
• 7. The Economic consequences of movie piracy – Australia study alleged that thirty percent of Australian adults had ‘participated in movie piracy’ in 2010 (IPSOS MediaCT & Oxford Economics study 2011: 5). The somewhat rubbery projections about revenue and jobs losses based on extrapolating data from 3,500 telephone interviews nevertheless provide more evidence that file-sharing has become a mass phenomenon. The Impact of Internet Piracy on the Australian Economy is even more contested research. Commissioned by the Australian Content Industry Group it transposed findings of an already controversial European report onto the Australian digital landscape with little regard for local data or the complexities of digital culture (Ferrer 2011). Predictions such as over 48,000 jobs to be lost by 2016 in the content industries sector along with $5.21 billion lost sales as a result of file-sharing are not substantiated credibly (ibid. 10). When a mainstream weekend newspaper featured the summarised report, reader responses were mostly negative (McMahon, N. 2011).
• 8. Responding to forum queries from the P2P community about funding of the proposed independent body, iiNet Founder and Managing Director Michael Malone suggested it could be funded by fines imposed on file-sharing offenders, a position many disagreed with ('iiNet Framework For Content Provision' 2011, np). Key reasons why Australians download were summarised by iiNet’s Matthew Jones: ‘“staggered” worldwide releases, regional coding and paying $89.95 AUD for a digitally delivered video game when [it] sells in the USA...for $49.95 USD.’ (ibid.). Furthermore, forum participant Matt11 noted that ‘Amazon do not sell MP3s in Australia’ and ‘many video games are not released here forcing people to resort to unauthorized mod chips/hacks just to play (imported) legally purchased software etc. The list goes on. This kind of thing makes people resentful which ultimately leads to more piracy (ibid.). Such comments suggest that reasons for file-sharing might be more spatialised than generally assumed, and hence Big Content’s strategies to curtail or manage the phenomenon might also need to be localised. This runs contrary to the totalising approach of the supranational treaties.