Ofcom's proposal to exclude small ISPs from the Digital Economy Act 3-strikes measures is not quite what it seems. One interpretation is very interesting in the context of  the online service provider ‘policy' provision in ACTA.

More information is now appearing about how the UK's Digital Economy Act 3-strikes provisions will work in practice. Reports from the  discussions with the regulator, Ofcom, on 3-strikes measures suggest that small ISPs will be exempted.  On the surface, this would be a good thing. However, when one examines the detail, there is a caveat -  the exemption will only apply if they do not carry infringing traffic.

This caveat should be carefully assessed.

Ofcom has already determined that it will go after ISPs which carry traffic from alleged infringers. Exactly how it will decide which ISPs are

doing so  is currently open to question, but it  does appear that Ofcom plans to monitor traffic from all ISPs and will somehow keep an eye on the levels of ‘infringers' on each one.

The idea is that alleged copyright  'infringers' will migrate to those ISPs which are exempt, therefore one by one, those ISPs that are attracting the 'infringers' also need to be brought within the remit of the law, and Ofcom will call them in as it sees their 'infringing' traffic rising. 

 Therefore, the exemption can only apply if  an ISP does not have any alleged 'infringers' as customers.

 How does a small ISP ensure that it does not carry traffic which the rights-holders will allege is ‘infringing'?  It may be able to limit itself to business users - and pass the liability on to its customers, which means that the overhead also passes to UK businesses.  Otherwise, and possibly as well as, it has to install deep packet inspection equipment to check traffic passing over its network, and block certain types of  traffic -  which may be  a hinderance to its business users.

If Ofcom's proposal is considered in light of the ACTA, it becomes even more interesting :

 ACTA Article 2.18 Option 1

: condition the application of the provisions of subparagraph (a) on meeting the following requirements:

(i)                 an online service provider adopting and reasonably implementing a policy[58] to address the unauthorized storage or transmission of materials protected by copyright or related rights [ except that no Party may condition the limitations in subparagraph (a) on the online service provider's monitoring its services or affirmatively seeking facts indicating that infringing activity is occurring];

This provision would exempt ISPs from liability for copyrighted content only if they implement a policy in respect of copyright enforcement. 

Thus, under ACTA,  a small ISP  may not be told to monitor traffic. However,  perhaps it can be told to ensure that  it is not carrying infringing traffic?  Or it could be told  that the regulator is checking  up on the number of times IP addresses allocated to the ISP appear on the P2P networks?

The ISP  could therefore develop a 'policy' to comply with the regulator's instruction, which might be 3-strikes, but it could be something else.

The legal language would -  on the surface  - be compliant with EU aquis communitaire although it is questionable whether they would be compliant with the intent of aquis , specifically the E-commerce directive. 

The assumption until now, has always been that this ACTA refeference to ISP ‘policy' means 3-strikes. It may do, but perhaps the Ofcom proposals point to some alternative and additional  interpretations.

Either way, it  looks as though small ISPs in the UK, far from being exempt, will have the onerous condition placed on them to police their networks, or have the equally onerous regulatory overhead of dealing with rights-holder allegations  that Ofcom is developing.

Note: The discussions are being held at Ofcom whilst it is drawing up the implementation code for the UK's 3-strikes /graduated response copyright enforcement measures. This is the so-called Initial Obligations Code.

The Initial Obligations Code will deal with the warning and notification process for Internet users;  cost-sharing between ISPs and rights-holders;  and the "appeals process".   Effectively, this is Ofcom - the regulator - making the law -  the Act passed by Parliament only sets out the concepts, and this is the detail of how it will work.

See also:  Trefor Davies , of the small ISP Timico, concerning  the Ofcom discussions.

This article is licensed under a Creative Commons Attribution Non-commercial-Share Alike 2.5 UK:England and Wales License. http://creativecommons.org/licenses/by-nc-sa/2.0/uk/ It may be used for non-commercial purposes only, and the author's name should be attributed. The correct attribution for this article is: Monica Horten (2010) UK regulator plans a taste of ACTA? http://www.iptegrity.com 24 May 2010