29 November 2009

What’s wrong with the Digital Economy Bill?

An updated version of this article appears in the February 2010 edition of .NET magazine.

The Digital Economy Bill is made up of a wide range of actions that were recommended in the recent Digital Britain report – the government’s strategic vision for the future of the digital economy.

The bill’s stated intentions are to “strengthen the nation’s communications infrastructures” as well as “equipping the UK to compete and lead in the global digital economy”. So far so good, but the bill is being criticised on the basis that some of the measures are unworkable, impractical and potentially draconian.

Given the alarm being raised in some parts of the blogosphere, the bill does not seem to have the support of the much of the industry that it is trying to sustain.

A major concern of the bill is securing public investment for Britain’s digital infrastructure, including a commitment to ensure that all households have access to 2Mbps broadband connections by 2012. How the government plans to ensure and pay for broadband connectivity to the furthest reaches of the country is unclear, and the bill does not make any reference to the “Next Generation Levy” – or broadband tax – which is expected to be part of next year’s budget.

Given that Digital Britain’s minimum standard for this universal broadband is only 2Mbps, the government has been accused of setting their sights too low. This target certainly does not put Britain at the forefront of digital expansion, as the Australian government has announced investment plans to deliver 100Mbps connections to 90% of homes over the next eight years and these speeds are already available in Japan, South Korea and Hong Kong.

The most controversial aspects of the bill are in its’ tackling of online copyright. The stated aim is to “support copyright holders” by “making it easier for them to enforce their rights”. This could be seen in the context of protecting the UK’s economic interests, particularly in the creative industries.

The measures are aimed at illegal file-sharers, but many people are concerned that they also represent a threat to internet freedoms. Just how big a problem is illegal file-sharing? Reliable figures are hard to come by, and even the government are unclear as to how prevalent illegal file-sharing is and how it can usefully be measured.

The BPI, the music industry trade organisation, is particularly vocal about how illegal file-sharing is undermining revenues. They claim illegal downloads cost the music industry £180m a year and point to a recent study by Harris Interactive that implies there are more than eight million active file-sharers in the UK. The BPI has also been quick to highlight the recent example of Sweden, where a legal crackdown on illegal file-sharing has coincided with rising music industry revenues.

One of the key criticisms of the proposed measures concerns the difficulties in accurately identifying offenders. The bill implies that internet service providers (ISPs) will be forced to bear the brunt of the responsibility, with a number of new obligations proposed for ISPs that will require them to maintain detailed records of the content their subscribers are accessing. This burden may prove to be costly and impractical for the majority of ISPs.

There is also ambiguity over how persistent offenders would be dealt with under this legislation. The bill clearly intends to use the “carrot” over the “stick” with education and warnings favoured over punishment. However, the bill does come equipped with some teeth as potential penalties could include fines of up to £50,000 and provision for enforced disconnections.

The bill does suffer from a lack of clarity, typified by the increasingly notorious Section 17. This allows the Secretary of State – currently Peter Mandelson – to introduce new measures in response to “technological developments that have occurred or are likely to occur” without the need for new legislation.

In effect, this means a government can introduce new penalties for digital copyright infringement without having to consult parliament. This power is intended to future-proof the legislation allowing it to respond to a fast-changing technical landscape, but there is concern that this could be open to abuse. The power to introduce new procedures and penalties without any parliamentary scrutiny could result in arbitrary and ill-conceived measures.

There are a number of problems with the Digital Economy Bill and with six months at most before the next general election, the bill is unlikely to make it onto the statute book in its current form. The combination of dwindling parliamentary time and rising controversy may well serve to scupper the legislation. The Conservative party do not support the bill and are unlikely to regard it as a priority if they take office in 2010.

The intention of the Digital Economy Bill is a noble one. It recognises the digital economy as a vital part of future economic growth and seeks to support it by strengthening the digital architecture and protecting online business. However, it’s been undermined by a lack of ambition, vague definition and muddled thinking.

Filed under Rants, Strategy.