Archive for the ‘piracy’ Category

3 weeks to go to an election announcement is bad news for ISPs and democracy #DigitalBritain

Friday, March 12th, 2010

It might be my naivety but I was surprised nay shocked at the ISPA Council meeting today. You must read all this post.

The informed betting is that the General Election is going to be on May 6th. The betting for the dissolution of Parliament is either the 1st or 8th April. Normally notice given is 6 weeks but I’m told that because the Labour Party is (allegedly) short of funds they only want a 4 week election campaign –eat yer heart out US of A. My bet is the 8th because they will all want a nice Easter break before the pitched battle to come.

The Government has confirmed that the Budget will be on 24th March (at 12.30pm for the detail minded – warm the TV up soon). Normally we might expect a week to be given for the media to digest and comment about what will presumably be a budget pitched to give us all as much of a feelgood factor as possible after the last year or two of financial hell/instability/crisis/disaster/nightmare/worry/prosperity (delete as appropriate).

That means that our rulers will have one week, the week in the run up to Good Friday (2nd April) to finish the business of the House.

The way it normally works is by the ”washup” process. This is where you should prepare to be shocked.

The whips of each party get together in a room and go through each Bill negotiating a quick settlement. Big decisions are made with no serious debate or technical consideration of the consequences.

The Labour Party will trade broad brush issues with the Conservatives and the Lib Dems based on the need for speed.

Unfortunately this means that Laws dear to our hearts (not) such as the Digital Economy Bill will live or die based on some horse trading done in a rush in a darkened room, somewhere in Whitehall, for the sake of expediency. We have run out of time for this legislation to be properly processed. It has only been debated in the House of Lords!!

This is a disaster for democracy. It is a disaster for you and me and every man woman and child in the UK and to be honest is something that someone should be brought to account for.

I realise this will happen automatically to many of the individuals involved because they won’t be re-elected. Lords of course will be unaffected. It is also highly unlikely that you or I can do anything about it in any other way and that most people in the UK will not understand the likely implications (regardless of which Bill we are talking about). It won’t play a part in the Election process.

So the process of Lawmaking, which can rightly take long months, nay years is going to be short-circuited because of the political manoeuvring before an election.

Mistakes are going to be made that will affect us all.

Now one of the main subjects of discussion on this blog over the last few months has been the Digital Economy Bill/aka Digital Britain. This is hugely important to UK plc. The way the Bill has been put together is a testament to the political skills of those in power. In fact you cannot but admire the political adroitness of Peter Mandelson et al. I wouldn’t want to come up against him in a life or death debate (which actually is where we are in some respects).

The Digital Economy Bill contains many sections covering a wide range of “digital” subjects. They are all important and some individual sections re variously more important to different political groupings.

The upshot is that whilst no single party agrees on all the aspects of the Bill they all want different bits of it to succeed and are therefore generally supportive of it as a whole.

It isn’t possible to say “we don’t like this bit, lets just do away with it and pass all the good bits”. It either all gets passed or none of it. That’s the way the system works and this Bill has been cleverly put together knowing this.

This is not good because some aspects, such as the reform of the radio airwaves, are eminently sensible and that no sane person would want to kybosh.

Unfortunately because of this rush some of the ill considered legislation such as that concerning online copyright protection will potentially be swept through, like lint sticking to a Parliamentary clothes brush. Fingers crossed!! Roll that dice!!! Not the way I run my business!!!!

Bad news all round. Bad news as well really, if they but realised it, for the rights-holders pushing hard for some kind of legal protection against copyright piracy (illegal downloading). The legislation will not work and the need to provide emphasis on reform of the business model of the creative industries will be missed in the fog of the election .

There is nothing you can do about this other than to vote with your heart. We are stuck with this system. A fixed term parliament along American lines might be the answer.

In the meantime the ISP industry, within which I and many readers of this blog work, has to get its act together. ISPs are key to the prosperity of the UK they need to work out a strategy for a Digital Britain that will be effective.

This strategy needs to be communicated to the Government of the day in a coordinated manner and not in the reactive way we have responded to the Digital Economy Bill. ISPs need to be driving legislation not scrabbling around defensively on the back foot.

My own views are that the Digital Economy Bill should be scrapped now but I need all the signatories to Wednesday’s letter to publicly say so as well and I doubt there is time left to do it.

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Industry unites against 120A #DigitalBritain

Wednesday, March 10th, 2010

News is distributed so quickly these days (thanks to us ISPs) that by the time us ISPs finish doing the day job and get around to writing up the blog it almost seems like old news already. However in the interest of completeness (ish) of content on trefor.net on the subject of the Digital Economy Bill I’m going to post it anyway.

Following on from my comments last week regarding the outrage amongst ISPs over clause 120A the industry has united and written a letter published in the FT this morning.  The signatories are a roll call of the heaviest hitters in the internet in the UK and include ISPA – drafts were circulated to us for comment on Monday.

It will be simply scandalous if 120A proceeds after this. Coincidentally and as a bit of an aside one of the consequences of 120A would be potentially to slow down the aforementioned lightening distribution of said news.  Half the websites concerned could be blocked!

To the letter:

Sir, We regret that the House of Lords adopted amendment 120A to the digital economy bill. This amendment not only significantly changes the injunctions procedure in the UK but will lead to an increase in internet service providers blocking websites accused of illegally hosting copyrighted material without cases even reaching a judge. The amendment seeks to address the legitimate concerns of rights-holders but would have unintended consequences that far outweigh any benefits it could bring.

Endorsing a policy that would encourage the blocking of websites by UK broadband providers or other internet companies is a very serious step for the UK to take. There are myriad legal, technical and practical issues to reconcile before this can be considered a proportionate and necessary public policy option. In some cases, these may never be reconciled. These issues have not even been considered in this case.

The Lords have been thoughtful in their consideration of the bill to date. It is therefore bitterly disappointing that the House has allowed an amendment with obvious shortcomings to proceed without challenging its proponents to consider and address the full consequences. Put simply, blocking access as envisaged by this clause would both widely disrupt the internet in the UK and elsewhere and threaten freedom of speech and the open internet, without reducing copyright infringement as intended. To rush through such a controversial proposal at the tail end of a parliament, without any kind of consultation with consumers or industry, is very poor lawmaking.

We are particularly concerned that a measure of this kind as a general purpose policy could have an adverse impact on the reputation of the UK as a place to do online business and conflict with the broader objectives of Digital Britain. This debate has created tension between specific interest groups and the bigger prize of promoting a policy framework that supports our digital economy and appropriately balances rights and responsibilities. All parties should take steps to safeguard this prize and place it at the heart of public policy in this area.

Tom Alexander, Chief Executive, Orange
Richard Allan, Director of Policy EU, Facebook
Neil Berkett, Chief Executive, Virgin Media
Matt Brittin, Managing Director, Google UK and Ireland
Charles Dunstone, Chairman, Talk Talk Group
Stephen Fry
Jessica Hendrie-Liaño, Chair, Internet Services Providers Association
Jill Johnstone, International Director, Consumer Focus
Jim Killock, Executive Director, Open Rights Group
Mark Lewis, Managing Director, eBay UK
Ian Livingston, Chief Executive, BT Group
Sarah Oates, University of Glasgow
Jenny Pickerill, University of Leicester
Mark Rabe, Managing Director, Yahoo! UK and Ireland
Paul Reilly, University of Leicester
Jess Search, Founder, Shooting People independent film makers
Ian Walden, Queen Mary, University of London
Tom Watson MP

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Cisco drives nail in music industry coffin with CRS-3?

Tuesday, March 9th, 2010

Most people won’t have given much thought as to how their email gets from A to B or how that video arrives from YouTube.  It just comes down the broadband connection which is plugged into the router next to the phone (or somewhere like that). Right?

Well today the worlds biggest router manufacturer, Cisco, announced their latest and greatest product.  It isn’t something that you will want to plug into your phone line though because it would take up most of the living room and there wouldn’t be enough room left for the sofa.

It would also be a bit of an overkill because this router, the CRS-3, is powerful enough to handle up to 322 Terabits1 per second, which  is roughly a hundred million times faster than the average UK broadband connection speed!

Cisco claims that the CRS-3 enables the entire printed collection of the Library of Congress to be downloaded in just over one second; every man, woman and child in China to make a video call, simultaneously; and every motion picture ever created to be streamed in less than four minutes2.

Uhuh do I hear you say?  So What??

Well you know everything has to progress and in fact regular readers of trefor.net will have occasionally picked up some relevant trends.

The first 100Gbps network rollout was covered here

News of the London Internet Exchange (LINX) carrying 2.5Tbps capacity here

Operators of 100Gbps networks will want to invest in this type of kit.  There aren’t many yet – in fact I only know of two but I’m probably wrong.

As more people do more with the internet the “network” has to “grow”.  The CRS-3 represents a $1.6Bn investment by Cisco to stay at the top of the tree – most of the equipment that powers the internet is manufactured by them. A lucrative spot that it won’t want to lose.

Who would buy it do you ask?  Well the CRS-3’s predecessor is the CRS-1 and Cisco claims to have sold almost 5,000 of these around the world.

As technology advances the rule of thumb is that the next generation gives you 10x the speed at 4x the price.  This is how costs come down in the long term.  Of course usage must grow to justify the spend but that it is doing.

So the owners of 5,000 boxes out there will at some time want to upgrade and with the starting price at $90,000 Cisco doesn’t have to sell many to start racking up the dollars. And you probably get barely more than the actual box for that starting price. You can bet that the high end version will approach seven figures (I’ll see if I can find out for later).

Anyway the CRS-3 announcement is an exciting one for geeks and if Cisco wants Timico to evaluate one I’d be happy to devote an engineer to it – try before you buy of course :-) News about the CRS-3 on the Cisco website is here.

1 Tbps = 1000,000Mbps (ish)

2 Bad news for the rightsholders trying to prevent illegal online copyright infringement.  Is this a huge nail in the coffin of the old business model of the creative industries?

Photo below is a CRS-3 – note no sofa in sight! 

Cisco CRS-3 - world's fastest router

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Is Pre-Release killing the music business? #Digital Britain

Tuesday, March 9th, 2010

In the context of the debate going on over copyright protection in the Digital Economy Bill there is an interesting event happening tomorrow night at the Performing Rights Society in London.

Entitled  ”Is Pre-Release Killing Our Business?” tomorrow’s discussion is centred around the fact that in order to raise awareness the music industry conducts promotional campaigns for up to three months before a CD is released.  This stimulates demand for a product that is not yet available and it only takes one promo copy of a CD to be pirated and loaded onto a P2P network for that CD to be freely available which of course eats into sales at launch.

Because of this industry bodies including ERA and the MMF are calling for abolition of pre-release windows in their entirety. Tomorrow night’s speakers including the BBC’s Head of Music for Radio 1 George Ergatoudis, Martin Talbot, MD of the Official Charts Company, Ben Drury of 7 Digital and Emily MacKay of the NME.

It just goes to show that the whole fight against music piracy is something that has to be conducted across many fronts.

More details on the Music Tank website here.

It strikes me that there are so many discussion points/arguments surrounding the Copyright aspects of the Digital Economy Bill that it will be worth collating them all in an easy to access format – watch this space.

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Houston we have a problem – Digital Economy Bill amendment 120A #Digital Britain

Thursday, March 4th, 2010

The ISP industry is up in arms today as the House of Lords yesterday rushed through ill considered amendment 120A to the Digital Economy Bill proposing to allow rights holders to serve notice on ISPs to block access to sites considered by them (rightsholders) to have illegal content – music, movies, software etc.

This is a huge issue.  Rightsholders would be able to ask ISPs to block sites without a court order. If an ISP refuses and the rightsholder subsequently succeeds in getting a court injunction then the ISP will have to pay costs.

In this way the onus is on the ISP to determine guilt and not the court which ain’t right.

Courts in fact already have the power under 97A of the Copyright, Designs and Patents Act to grant an injunction requiring ISPs to block access to sites that contain unlawful copyright content.

97a strikes an appropriate balance between the interests of different parties and leaves the court free to consider each claim on its merits and independently of other factors.

Amendment 120A, however, abandons this balance, introduces a bias in favour of one party (rightsholders) and limits the court’s discretion to judge each case on its merits. There would appear to be no “equality before the law” under this amendment.

During the amendment debate comparison was drawn with the Internet Watch Foundation and the blocking of illegal child pornography sites. No sensible person would suggest that independently-assessed illegal child sexual abuse content can be compared with alleged unlawful breaches of the copyright of commercial companies.

Moreover the IWF blocking list is small and relatively cheap to operate. Amendment 120A could see the list of blocked sites grow to enormous proportions. Furthermore there is no mechanism in the Amendment to take sites off the list. The costs of operating this filtering will astronomical and it is fair to say will “break” the internet in the UK.

Another point is that there is no clarity here whether it is infringing content that will be required to be blocked, or whether it is an entire website. New market entrants that are involved in user created content of any type will be liable to being blocked if some of the user generated content is deemed to be illegal. Goodbye  innovation, it was good to know you.

Potentially this is the thin edge of the wedge. Once copyright breaching content filtering is required by law then it becomes a defacto mechanism for ‘other’ content to be blocked.

ISPs currently have the defence of “mere conduit” under which they cannot be liable for illegal content provided they take action as soon as they are aware of the illegality. This amendment chips away at that defence.

If Amendment 120A makes it into law it is going to cause real issues. The longer it goes on the more problematic the Digital Economy Bill appears to be. The industry Trade Association ISPA has put together a very strongly worded resonse to the Government on this which can be found here.

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Digital Economy Bill, hotels and Andrew Dismore MP on human rights

Friday, February 5th, 2010

The Digital Economy Debate has generated a flurry of responses today – no doubt people getting messages out of the way before the rugby this weekend!

Firstly the UK hotel industry, via its mouthpiece the British Hospitality Association, has issued a press release expressing grave concern that their members could have their internet access cut off because of the illegal activities of naughty guests.

The miscreants will of course have long checked out by the time the long arm of the law reached out to behind the reception desk.

From personal experience (of having hundreds of hotels as customers and not of Torrenting whilst staying at them) hotels are particularly prone to guests taking advantage of the internet in the room to download material via P2P.

A long long time ago, way before Timico, I worked for Mitel who had at that time something like 80% of the UK hotels using their phone systems. Research in those days suggested that 90% of all internet surfing out of hotels was to pornographic websites. It was more unusual for people to have broadband at home and access from the office was strictly filtered.

So the BHA now joins the Educational system in wanting immunity from prosecution under the Digital Economy Bill. McDonalds will be next. At this rate a large part of the UK broadband estate will be seeking immunity from the Bill.

Also speaking out today is Parliament’s own Joint Select Committee on Human Rights which says the Government’s response to the problem of illegal file-sharing in the Digital Economy Bill may have created over-broad powers.

Andrew Dismore MP, Chair of the Committee, said: “Illegal file sharing is itself a breach of important rights, but the concern we have with this Bill is that it lacks detail. It has been difficult, even in the narrow area we have focussed on, to get a clear picture of the scope and impact of the provisions. The internet is constantly creating new challenges for policy-makers but that cannot justify ill-defined or sweeping legislative responses, especially when there is the possibility of restricting freedom of expression or the privacy of individual users.”

At least people are starting to shout louder. Andrew Dismore MP seems to have his head screwed on.

If you want to keep up to speed on the debate in the Lords go here.

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I don’t need broadband – I use my neighbour’s WiFi – problems with Digital Economy Bill

Tuesday, February 2nd, 2010

I was talking to some people today about what type of broadband they had.  One of them surprisingly said she didn’t have broadband. I found this astonishing.  However the truth came out when she told me she just used next door’s which was unsecured.

Whatever you think of the morals of this it is a real life pointer as to the problems of proof when it comes to accusing a broadband owner of illegal downloading. 

I present here, for your delectation, the winner of the “dontdisconnectus” “Sing our Petition” competition.  The opposition to the Digital Economy Bill is building but it has some way to go yet I feel.

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You’re nicked son – Big Brother aka Digital Economy Bill

Friday, January 29th, 2010

Not plagiarism, just admiration. A guide to illegal music downloading for the non technical.

Thanks to boggits for the lead.

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Digital Economy Bill – printer accused of illegal downloads

Wednesday, January 27th, 2010

The cogs of Government continue to grind. I know many of you yawn at some of these regulatory posts but man cannot live on network diagrams alone. The 5th day of the Digital Economy Bill House of Lords Committee stage was held yesterday.

No non-Government amendments made it through but a number of important concessions were made.

Clause 11 in particular concerns “Obligations to limit internet access”. The brakes are being put on this in that no order to cut off someone’s internet access could be made until 12 months after Ofcom has looked at this issue and come up with a Code of Practice.

It is now also proposed that it becomes a requirement, as opposed to an option, for the Secretary of State to request a report from Ofcom on the “suitability of a technical obligation”, ie whether a consumer gets cut off in a particular instance (I assume).

There will also be full appeals process which could be heard by a tribunal before any technical measure is imposed. It will still lead to a pretty messy situation downstream even if it delays the day of reckoning.

Note this is still not backed up by any sign of copyright licensing reform that will make it easier to download music in a legal manner.

There is a lot more to read about but you can do that yourselves here - if you have a few hours to spare and don’t mind finishing up with a headache. Despite all the glamour and the luxury expense fuelled living  :-) a lot of what MPs do is deadly boring and is reported in such technical legalese as to make it often undecipherable to the “man on the street”.

It is worth noting something else. ISPs regularly receive “abuse” reports from Rights Holders. These letters informing an ISP of supposed illegal downloading activity from one of their customers’ IP Addresses

At last week’s UKNetwork Operators Forum (UKNOF) meeting a representative of Janet, the UK Education network, said that of the ‘abuse’ reports they received last year, 10% turned out to be for the IP addresses of printers, 15% were address space that wasn’t actually being used and 50% only had a 0 second interval for the time that material was being offered for download.

By this token, and I admit only in this anecdotal case, 75% of the supposed illegal activity would never pass scrutiny. This suggests that it is going to be very difficult for anyone to determine the validity of such an assertion by a Rights Holder, be they a judge, ISP or anyone else. There is no way an ISP would want to get involved with this without someone picking up the costs and being fully indemnified.

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The difficulties of licensing music for legal download

Tuesday, January 19th, 2010

In the middle, as we are, of the birthing process of the Digital Economy Bill it is interesting to see how laborious this can be (and I have 4 kids!).

One of the gripes the ISP industry has (regular visitors to trefor.net will have become familiar with a few of them) is the fact that when it comes to copyright protection and the move to kill off illegal downloads there is too much stick and not enough carrot.

The big concern is that the Bill as proposed helps to compensate the music industry for losses incurred to an outdated business model and therefore removes the incentive for rights owners to embrace new business models.

ISPs are extremely frustrated by the difficulties in securing the licensing that is needed to offer consumers legal alternatives to illegal downloading. It has always been our view that a voluntary or legislative commitment to enforcement should only be introduced on the condition that rights-holders also commit to significant licensing reform.

Moreover there is a particular concern that some rights-holders are purposefully resisting reform of the licensing framework because they view legal models of online content distribution as a threat to their own existing revenue.

Lets take a look at some of the difficulties. These are some examples compiled by the Internet Services Provider Association as part of an as yet unpublished paper. There is some brain work involved here though I have tried to simplify it, largely so that I can understand the problems myself.

Existing problems
Taking a fully licensed music service to market is lengthy and onerous. Even if all the rights owners offered easy ways to access their catalogues, the complex contractual obligations wrapped around Intellectual Property rights in the reproduction, performance, and ‘making available’ of both musical works and sound recordings means that there is no guarantee of ending up with a fully licensed service.

Consumer expectations for online music are sky high. Given that many of them share a significant volume of unlawful music over P2P networks consumers are used to being able to download any track. Gaps in the available legal alternatives caused by licensing problems are not well looked upon and legal music services that attempt to offer incomplete catalogues are viewed as uncompetitive when compared with unlawful file-sharing.

Direct licensing or withholding
There are also additional obstacles to efficient music licensing which add cost and risk to the emerging digital entertainment industry.

Rather than using collective or wholesale clearing houses most music rights owning parties insist on licensing the use of their catalogues directly.

This means that direct licensing multiplies cost and difficulty for the licensee and allows each licensor the ability to set terms and rates that could critically damage the viability of a service. Licensors can also choose to withhold the catalogue required to offer a compelling customer proposition.

Ensuring that licensors negotiate through a collective or wholesale clearing house would assist licensees in securing the licenses that are required to offer a service that is attractive to consumers.

Territoriality
Rights-holders are currently able to limit the operations of music services to specific countries which enables them to introduce price discrimination from country to country. Also a single piece of music may well have different owners in different countries which adds cost and complexity to the initial rights negotiations and to the ongoing payment systems.

Advances
The larger rights owners usually demand advance payments and deal and delivery fees. These can be many times the expected royalty payments for the use of the music during the term of the agreement. This introduces a financing risk as well as adding a start-up cost to launching a new service. Often these will be staged as quarterly payments, with the threat of catalogue withdrawal or even insolvency proceedings should they not be met.

These advances are likely to be prohibitive to a provider launching a service. Advances also reduce transparency to other music stakeholders as they break the relationship between sales and royalty payments.

Short-term deals
Many deals have a one-year term with no obligation on the rights holder to renew. This will in almost all cases be considerably shorter than the planning horizon for a large operator and makes a business case more of an act of faith rather than a serious basis to roll out services. It also makes it difficult for a service provider to guarantee that it will be able to fulfil contracts with its own customers.

For example if half way through a one year contract with a consumer a service provider has a certain catalogue withdrawn from its own deal with the rights-holder then that SP is going to be unable to fulfil its own obligations. It could also turn a profitable service into a loss making entity completely outside the control of the service provider if the rights holder decides to jack up the cost.

Minima
Rights owners use contractual minimum payments in order to inflate their revenues over and above the value of the music that is actually sold by a service. In some cases this is relatively benign, such as setting a minimum wholesale price per track and taking the greater of that or a percentage of retail price.

It can, however, be used to set a price per subscriber that is higher than the licensor’s pro-rata revenue share or it can be set across an entire service so that the rights-holder receives a fixed percentage even when their pro-rata share drops. The effect of this is to compel the licensee to pay out over 100% of the royalty pool, eating into margins or operating costs.

Customer proposition approval
Rather than set wholesale pricing and allow operators to develop compelling services, music rights owners seek control over most aspects of the consumer offering and look to insert conditions in contracts that require any changes to be agreed in advance. This would seem to be an anti-competitive measure and detrimental to the creation of alternative models of distribution.

Arbitrary conditions
Rights holders can sometimes put pressure on music services to accept arbitrary conditions, such as using a preferred provider for some aspect of the service, or committing to a guaranteed placement for priority releases. Some other arbitrary conditions might include action against piracy either as a pre-condition of licensing or a commitment included in a contract. It might also include access to a large amount of consumer behaviour data including data that does not relate to the music included in the contract.

All this, and I’m sure the experts can probably dig out more examples, adds up to an extremely difficult environment for the creation of legal music download services.

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