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ISPs could face piracy sanctions

Andy Burnham

The proposals are part of a strategy on the creative industries

Internet service providers must take concrete steps to curb illegal downloads or face legal sanctions, the government has said. The proposal is aimed at tackling the estimated 6m UK broadband users who download files illegally every year.

The culture secretary said consultation would begin in spring and legislation could be implemented “by April 2009”.

Representatives of the recording industry, who blame piracy for a slump in sales, welcomed the proposals.

“ISPs are in a unique position to make a difference and in doing so to reverse a culture of creation-without-reward that has proved so damaging to the whole music community over the last few years,” said John Kennedy, head of the International Federation of the Phonographic Industry (IFPI).

A spokesperson for the Internet Service Provider’s Association (ISPA) said that creating appropriate legislation would be very difficult.

“Any scheme has got to be legal, workable and economically sustainable,” the spokesperson told BBC News.

He also said that ISPs were already pursuing self-regulation, which was the government’s preferred route.

Privacy issue

“The government has no burning desire to legislate,” Andy Burnham, culture secretary, told the Financial Times.

However, he said that the proposals signalled “a change of tone from the government”.

Its intentions are outlined in a creative industries strategy paper called Creative Britain: New Talents for the New Economy.

The document is a broad ranging paper that sets out government support for the creative industries.

The document commits the government to consulting on anti-piracy legislation this spring “with a view to implementing it by April 2009”, according to the FT.

“We’re saying we’ll consult on legislation, recognising there are practical questions and legitimate issues,” Mr Burnham told the paper.

In particular, any legislation would have to take account of the 2002 E-Commerce Regulations that define net firms as “conduits” which are not responsible for the contents of the traffic flowing across their networks.

European laws on online privacy could also create problems for any new legislation.

Earlier this year it was reported that the government was considering a “three strikes” approach to tackling persistent offenders in the report.

But Mr Burnham denied this was the case and told the FT that the strategy had “never been in the paper”.

If the government goes ahead, the UK would be one of the first countries to impose sanctions.

“This is a sea-change in attitude and I believe it is now up to governments elsewhere in Europe and further afield to follow their example,” said Mr Kennedy.

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By Mayumi Negishi and Kentaro Hamada

TOKYO (Reuters) – Toshiba Corp (6502.T) is planning to give up on its HD DVD format for high definition DVDs, conceding defeat to the competing Blu-Ray technology backed by Sony Corp (6758.T), a company source said on Saturday.

The move will likely put an end to a battle that has gone on for several years between consortiums led by Toshiba and Sony vying to set the standard for the next-generation DVD and compatible video equipment.

The format war, often compared to the Betamax-VHS battle in the 1980s, has confused consumers unsure of which DVD or player to buy, slowing the development what is expected to be a multibillion dollar high definition DVD industry.

Toshiba’s cause has suffered several setbacks in recent weeks including Friday’s announcement by U.S. retailing giant Wal-Mart Stores Inc (WMT.N) that it would abandon the HD DVD format and only stock its shelves with Blu-ray movies.

A source at Toshiba confirmed an earlier report by public broadcaster NHK that it was getting ready to pull the plug.

“We have entered the final stage of planning to make our exit from the next generation DVD business,” said the source, who asked not to be identified. He added that an official announcement could come as early as next week.

No one answered the phone at Toshiba’s public relations office in Tokyo.

NHK said Toshiba would suffer losses running to tens of billions of yen (hundreds of millions of dollars) to scrap production of HD DVD players and recorders and other steps to withdraw from the business.

Hollywood studios had initially split their alliances between the two camps, meaning only certain films would play on any one DVD machine.

The balance of power tipped decisively toward the Sony camp in January after Time Warner Inc‘s (TWX.N) Warner Bros studio said it would only release high-definition DVDs in Blu-ray format. With that, studios behind some three-quarters of DVDs are backing Blu-ray, although some release in both formats.

Toshiba responded by slashing prices of HD DVD players, but the loss of retail support has hurt.

In addition to Wal-Mart, consumer electronics chain Best Buy Co Inc (BBY.N) and online video rental company Netflix Inc (NFLX.O) also recently signed up to the Blu-ray camp.

The exclusive backing of Microsoft Corp (MSFT.O) was also put in doubt when the software giant said in January that it could consider supporting Blu-ray technology for its Xbox 360 video game machine, which currently works only with HD DVD.

Sony has spent large sums of money to promote Blu-ray in tandem with its flat screen TVs and its PlayStation 3 game console, which can play Blu-ray movies.

The Toshiba source said the experience would not be a total loss for the sprawling conglomerate, whose products range from refrigerators to power plants, which would learn valuable lessons.

“Marketing was a weak point for Toshiba. We learned a lot from HD DVD. Strengthening marketing will continue to be an issue for us going forward,” the source said.

(Reporting by Mayumi Negishi, Kentaro Hamada and Nathan Layne, editing by Mike Peacock)

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Internet law professor Michael Geist examines the shift from locking down content to locking down the network.

A padlock and key

ISPs are increasingly adding content filtering software to their networks

As digital technologies and the Internet began to emerge in the mid-1990s, many content companies responded by betting on the ability of technological protection measures to re-assert the control that was rapidly slipping from their grasp.

The vision of control through technology required considerable coordination – the insertion of encryption on content distributed to consumers, cooperation from electronics makers to respect the technological limitations within their products, and new legal provisions to prohibit attempts to pick the new digital locks.

A decade later, the strategy lies in tatters. Many content owners have dropped digital locks after alienating disgruntled consumers fed up with their inability to freely use their personal property.

Electronics manufacturers have similarly rebelled, frustrated at the imposition of artificial limitations that constrain their products and profitability.

To top it off, the US architect of the legal strategy last year acknowledged that the legislative initiatives to support the digital lock approach have failed.

Network police

Prof Michael Geist (Michael Geist)
Large US ISPs such as AT&T have inexplicably promised to develop new content filters on their networks.
Michael Geist

In recent months, a new strategy has begun to emerge. With the industry gradually admitting that locking down content does not work, it has now dangerously shifted toward locking down the Internet.

The Internet locks approach envisions requiring Internet service providers to install filtering and content monitoring technologies within their networks.

ISPs would then become private network police, actively monitoring for content that might infringe copyright and stopping it from reaching subscribers’ computers.

The support for locking down the Internet revives an old debate – the appropriate role and responsibility of ISPs for the activities that take place on their networks.

French filtering

Nicolas Sarkozy, French president

French president has plans for country-wide ISP filtering

As the content owners were promoting legal protection for digital locks in the 1990s, the ISPs were supporting legal frameworks that treated them as the equivalent of common carriers that transferred data across their networks without regard for the content itself.

While that approach ensured that ISPs did not take an active role in monitoring or filtering Internet-based activity, the recent move toward a two-tiered Internet – one in which the ISPs themselves dream of distinguishing between different content as a new revenue source – revived the notion that ISPs could be called upon to play a more active role in monitoring and blocking content.

With content owners frustrated at the failure of digital locks, last year they seized on this by renewing their focus on the role of the ISP. This movement has been most prominent in Europe, where last summer a Belgian court ordered an ISP to block access to a site alleged to contain copyright infringing materials.

More recently, French President Nicolas Sarkozy unveiled a plan that would mandate country-wide ISP filtering of copyright infringing content.

Although a similar pan-European proposal was defeated earlier this month, few believe that the issue is dead, particularly given the International Federation of the Phonographic Industry’s claim last Thursday that 2008 will be the year of greater ISP responsibility.

Content filtering plans have also begun to emerge in North America. Large US ISPs such as AT&T have inexplicably promised to develop new content filters on their networks and are discussing an implementation plan with content owners.

In Canada, some cultural groups are openly eyeing content filters as a mechanism to adapt Canadian content rules to the online environment, while others have expressed strong support for legal rules that force ISPs to accept heightened “responsibility” for the conduct of their subscribers.

In light of this pressure, some fear that mandatory content blocking could sneak into domestic legislation, despite the likelihood that such laws would face free speech challenges and run the risk of creating a locked-down, censored Internet.


Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at http://www.michaelgeist.ca.

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