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UPD UK Broadband ISPs TalkTalk and BT Mount Digital Economy Act Legal Challenge

Posted: 08th Jul, 2010 By: MarkJ
uk internet lawTwo of the country's largest internet access providers (ISP), BT Retail and TalkTalk UK, which combined account for a staggering 9.3 Million broadband subscribers, have called on the High Court to mount a Judicial Review of the controversial 2010 Digital Economy Act (DEA).

The DEA threatens to identify those "suspected" of unlawful copyright P2P file sharing to Rights Holders for legal action and could lead to the blocking of legitimate websites, service speed restrictions, limits on open Wi-Fi usage or even account disconnection from your ISP.

The act was "rushed" through parliament prior to May's general election this year during the "wash-up" process and many ISPs , not just BT and TalkTalk , believe that this resulted in "insufficient scrutiny" of its far reaching rules and consequences.

BT and TalkTalk have also questioned whether the new laws could damage "basic rights and freedoms" (i.e. contravene the EU's Privacy and Electronic Communications Directive). This is particularly important because the data can be unreliable and only the connection owner would be punished, which is controversial because they might not be the one who has performed the abuse itself.

Gavin Patterson, CEO of BT Retail, said:

"It’s disappointing that we feel the need to take action but we feel we have no choice. We have to do this for our customers who otherwise run the risk of being treated unfairly.

Our dispute is not with the current Government but with the previous administration which pushed this through without due process. We need clarity about whether this legislation is compatible with important EU laws."

Charles Dunstone, Chairman of the TalkTalk Group, said:

"The Digital Economy Act's measures will cost the UK hundreds of millions and many people believe they are unfair, unwarranted and won't work. So it’s no surprise that in Nick Clegg’s call for laws to repeal, this Act is top of the public’s ‘wish list’. Innocent broadband customers will suffer and citizens will have their privacy invaded.

We think the previous Government's rushed approach resulted in flawed legislation. That’s why we need a Judicial Review by the High Court as quickly as possible before lots of money is spent on implementation."

However TalkTalk and BT are also worried about their business. Initially only the seven largest broadband ISPs with over 400,000 subscribers will be covered; Mobile Broadband operators, with their capacity problems and other constraints, have also escaped, at least for now. The BIG ISPs claim this is unfair.

TalkTalk's Executive Director, Andrew Heaney, told the BBC in another story:

"It means we could have huge swathes of customers moving to smaller ISPs to avoid detection."

To be fair, if that really did happen, then it would result in small ISPs becoming big and therefore susceptible to the same rules. Likewise it is a bit unrealistic to expect smaller providers, with their miniscule ARPU and profit margins (these guys could live off the crumbs that BT and TalkTalk leave behind), to manage the costs of such a system. They are already more expensive than the big boys due to simple economics of scale, among other things.

Similarly Ofcom has warned that its Code of Practice (CoP) on Copyright Infringement would follow the flow of illegal traffic, meaning that a small ISP with lots of offending customers probably wouldn't escape punishment for long. Ofcom identified that the DEA would affect the following ISPs, at least initially:
UK ISPs Suspectible to Initial File Sharing Laws
* BT ( PlusNet ) .
* TalkTalk .
* Virgin Media .
* Sky Broadband .
* Orange .
* O2 ( Be Broadband ) .
* Post Office (the PO uses BT's managed platform, like Vodafone UK) .
Both TalkTalk and BT also believe that the act is in conflict with Europe's e-Commerce Directive, which correctly identifies ISPs as being "mere conduits" of content (i.e. they should not be held responsible for traffic on their networks). Indeed several UK laws also recognise that ISPs are not the owners of content posted to the internet by others.

Meanwhile the government doesn't appear to care that its legislation is so blatantly one sided, commenting that it believes "[the] measures are consistent with EU legislation and that there are enough safeguards in place to protect the rights of consumers and ISPs".

However ISPs must share some of the blame. The writing was on the wall for a crackdown on internet copyright infringement some years ago. History has shown that governments do tend to steamroller an issue when the industry cannot reach agreement itself. ISPs failed to reach a voluntary agreement when they had the chance, which is admittedly not entirely their fault, and also failed to collectively lobby politicians as hard as Rights Holders.

Related News:
7th July 2010 - UK Internet Copyright Crackdown Triggers Mass Move to FREE Encrypted P2P VPN
5th July 2010 - Government Your Freedom Site Offers Repeal of UK Digital Economy Act
29th June 2010 - Early Day Motion to Scrap UK Digital Economy Act Receives Tepid Support
25th June 2010 - Journalists Unite to Stop UK Digital Economy Act and ISPs Blocking Legitimate Sites
1st June 2010 - UK Broadband ISPs Respond to Ofcoms Copyright Infringement Code
28th May 2010 - Ofcom UK Publishes Draft Illegal Broadband ISP File Sharing Code of Practice


UPDATE 9:20am

Added some more official quotes from BT and TalkTalk.

UPDATE 11:18am

The ORG has welcomed BT and TalkTalk's challenge to the Digital Economy Act.

Jim Killock, Executive Director of the Open Rights Group, said:

"This is exactly what we and 20,000 supporters warned their MPs. The Act was rushed through and is already working extremely badly. It threatens basic rights and large chunks need to be repealed."
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