NZ – AFACT Demanding That ISPs Should Pay for Enforcing Three Strikes Law

New Zealand is one of the countries that have the oppressive three strikes law. It hasn’t taken effect yet, but AFACT, a local copyright lobby, is demanding that ISPs pay for all of the enforcement costs.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

There was an interesting development that occurred in New Zealand recently. If you remember, New Zealand was one country that was considering a three strikes law. The the law was financed and written by American corporate interests. Unsurprisingly, the idea that corporations from another country are writing your laws became a political fumble for some politicians in the country. The revelation, which was brought to light by Wikileaks diplomatic cables, sparked outrage by members of the political opposition – the Green Party to be more precise.

Regardless of the political questions a law that was financed, pushed and passed mainly because of foreign interests, the legislation was, in fact, passed in spite of major opposition and protests.

There was a particularly notable thing that happened recently. ZDNet is reporting that questions are being raised over who pays for the enforcement. AFACT, an organization that no doubt pushed for this law, is saying that the costs should be put to ISPs, and not rights holders. From the report:

“AFACT notes the New Zealand Government’s approach of a rights holder fee per notice, which is out of step with the more common and preferred practice in other jurisdictions where right holders and ISPs bear their own respective costs,” AFACT said in a statement.

“For example, we note that in last week’s voluntary agreement in the United States between the movie and music industry and the country’s largest ISPs that each party agreed to bear their own costs.”

AFACT has recently been trying to get Australian ISPs to act on their users who are allegedly infringing copyright, recently sending a letter to providers saying that they should act, or expect action. Although it lost its appeal in the Federal Court where it tried to show that iiNet had authorised its users to infringe copyright, lawyers have said that the judgement provides a legal avenue for the federation to have providers aid rights holders in policing copyright infringement.

This is interesting for two reasons.

The US Connection

The first reason is the fact that AFACT is latching on to what is going on in the United States – that is, the 6 strike agreement. It’s really an absurd position to say that ISPs should bear the costs because of what is going on in the United Stats, then go on to say that New Zealand is out of step with international practices. If New Zealand was out of step because of this, then AFACT should expect to have total disconnection completely removed from the process. New Zealand is out of step because they disconnect users.

Moreover, if one want’s to look at the US case on whether or not ISPs bear all of the costs, then one might like to look at the Hurt Locker Case. When ISPs were inundated with copyright complaints, American ISP Time Warner Cable resisted. The relevant section is here:

TWC and the U.S. Copyright Group came into an agreement a few months ago to limit requests to 28 per month in exchange for limiting the cost per IP address requested to $32.50. But since then, TWC has been served with more subpoenas, which TWC says was a breach of its agreement. Now, TWC wants to limit its exposure and make the plaintiffs pay the full cost in advance.

It’s relevant when you compare the cost to the Ars Technica report on the case which makes the following comment on the case:

The company says that it has the capacity to handle 28 subpoenas from the US Copyright Group per month. Instead, TWC was hit with a request for 809 names within 30 days. In addition, the company has received two other subpoenas, both from the same law firm, asking for another 398 and 224 IP address lookups. Each lookup costs TWC $45.

So, in other words, the normal cost is higher than an agreed upon cost – insinuating that rights holders, in fact, bore some of the costs. So, if AFACT is suggesting that the common practice when it comes to ISP lookups is that ISPs always bear all of the costs in question, this insinuation is wrong. It is not unprecedented for others to at least bear some of the costs of lookups – others being entities outside of the ISPs in question. In fact, one can look at the Hurt Locker case and say that if ISPs are dealing with an increase in IP lookups, that rights holders now bear the responsibility of shouldering some of the costs of enforcement. In fact, if New Zealand wanted to have a regime more in line with the US, the first logical step is to completely scrap the three strikes law entirely – after all, the 6 strike agreement in the US isn’t actually a law in the books in the first place.

I would argue that it is unfair to force ISPs to get an increase in the number of lookups by, say, 100-fold, and then expect them to eat all of the costs as a result. At that point, ISPs more or less become a service to these rights holders and since it deals with a business to business service, I find it shocking that one business is expecting free, no strings attached services from another.

The French Connection

The other interesting way to look at this move is that this seems to follow along what France deals with. This is good news, in a way, for the people of New Zealand because they can actually look at another case to get a good idea of what is likely going to happen.

France passed a three strikes law and costs was a major controversy in France with regards to this law. In September of last year, after HADOPI passed, questions were being raised over who was going to shoulder the costs of enforcing copyright infringement. It came down to a battle between the government and the ISPs who rightfully noted that this increase in cost of doing business was simply unfair. Not only that, but this cost was government mandated – hence the idea of hiding behind constitutional jurisprudence at the time.

Ultimately speaking, the government won out on this and forced ISPs to pay for the look-ups. It was at that point that the costs went straight to the consumer. ISP rate hikes ensued.

In retrospect, you have this absurd thing happen where consumers are paying for an industry’s failed business model. It’s pretty much the equivalent to demanding that all being sold have a levy weighed on them. That levy would then go to subsidize the horse-drawn carriage industry because the horse drawn carriage industry isn’t making the profits they once did when horse drawn carriages where the main form of transportation. It’s a bit like that kind of absurdity we saw in France.

It is not to say that the events will unfold in New Zealand the same way they did in France, but disturbingly, they are so far.

If consumers hope to not have a rate hike in ISP rates in New Zealand, then they might want to find ways to make sure rights holders pay for the services they are demanding. Clearly, they are demanding that others work for free for them.

Drew Wilson on Twitter: @icecube85 and Google+.

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