Coalition must face up to tackling illegal file sharing

BUSINESS OPINION : Legal complexity and stout opposition frominterested parties are no reason for inaction

AMONG THE many items sitting in Minister for Enterprise RichardBruton's in-tray is the mess that is illegal file sharing, or ascopyright owners prefer to call it, "theft".

Last November, the High Court found that there was a gap in Irishcopyright law that prevented the courts from compelling internetservice providers such as UPC and Eircom to shut down or blockillegal file-sharing sites from which people download millions ofeuro worth of music and movies each year.

The gap can apparently be closed through a statutory instrumentand indeed reports circulated in the last days of February thatsigning such an order would be one of the final acts of the outgoinggovernment.

In the end, they didn't, but not before the opponents of anyattempt to restrict illegal file sharing had got hot under thecollar once more.

The opposition to any attempt to reign in the illegal downloadingtends to fall into one of two camps.

The first can be characterised - perhaps unfairly - as the geekswho still hold fast to the notion that the internet is some sort oficonoclastic force for good and any attempt to regulate its is partof the wider fascist/breadhead conspiracy.

The recent Arab revolts aside, it's harder and harder tosubscribe to this view, particularly as the leitmotif of theinternet in recent years has been that big brains equals easy money;think Mark Zuckerberg and the whole social media phenomenon.

The other - and more significant - grouping are the "disruptive"businesses that prosper in the unregulated web environment, in partat the expense of other business in the regulated world.

They include some of the biggest names in the internet, such asGoogle.

Prospering alongside them are the internet service providers whodon't care much what goes through their infrastructure as long asthere is plenty of it.

They will use every argument they can muster to try and preventthemselves becoming the nexus of efforts to prevent the use of theinternet to facilitate illegal activities such as copyright theftand illegal downloading.

Hence the stout and ultimately successful defence mounted by UPCwhen five record companies sought orders compelling it to blockaccess to file-sharing sites for subscribers who were downloadingillegally.

Lots of other businesses were watching from the sidelines, hopingto ride on the coat tails of the music industry.

Among them Xtra-Vision, the video-rental business bought fromBlockbuster by businessman Peter O'Grady Walshe and members of theFurlong family in August 2009 for a reported [euro]20 million withbacking from NCB's Ulster Bank Diageo Venture Capital Fund.

Xtra-Vision has now entered the fray writing to the Taoiseach andRichard Bruton, pointing out that 1,400 jobs and [euro]20 million ayear in tax revenues to the State are at risk if something is notdone to prevent the illegal downloading of the movies and games theysell and rent.

They have adopted a less confrontational approach than the musicindustry and arguably a more persuasive one.

Rather than go after individuals they want the service providersto be compelled to take the same sort of "reasonable steps" that anyother business would be expected to take to ensure that they are notdealing in counterfeit goods.

The situation for UPC should be no different to a large retailersuch as Eason, argue Xtra-Vision.

They are not expected under the law to check that every thingthey sell does not infringe someone else's intellectual propertyrights, but if it is brought to their attention that something theyare selling is counterfeit, they are expected to remove it.

The extension of this principle into the online sphere would meanthat if it is brought to the attention of a service provider that aparticular site is facilitating illegal downloading, the providershould block it.

There would appear to some basis for believing this would beeffective.

DVD rental rates jumped in Sweden after the Government stampeddown on illegal downloading in April 2009. There was an equallyabrupt fall-off in internet traffic, down 40 per cent according to aresearch by media consultancy IHS, which goes some way to explainingthe service providers' lack of enthusiasm for something similar inIreland.

However, the Swedish government's legislation was challenged andthe whole thing has been kicked off to the European Court of Justicerendering the law ineffectual, say IHS.

Not surprisingly the sales of DVDs have started to fall again.It's clear then that Ireland is not the only country struggling tofind a workable solution to this complex problem.

However, this should not dissuade the Government from making it apriority.