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Current as of 25/05/17 07:40PM NZST

Copyright controversy - under the bonnet of the TCF code of conduct

By Pat Pilcher

Amidst much heated debate and controversy, Section 92A of the Copyright (New Technologies) Act finally comes into force at the end of the month. This requires that ISPs "adopt and reasonably implement a policy that provides for termination, in appropriate circumstances of the account of a repeat infringer".

Over recent months, The Telecommunication Carriers Forum, an industry body who represent telcos and ISPs, has been quietly beavering away in the background to formulate a code of conduct that'll assist ISPs who've signed up as members to the TCF to enforce the new laws.

The first draft of the code has been released and gives some interesting insight into how the new laws may work in practice.

At this stage, the proposed code is still a draft and is will most likely incorporate changes after submissions have been taken into account. A copy of the draft code can be found here and should you want to have your say, submissions can be made via email to

Don't download at work

There's an old saying that goes "when it rains lemons, make lemonade" and this is precisely what the TCF has managed to do, making the best of what can best be described as an unattractive situation, by performing the delicate balancing act of complying with the legal requirements of the act whilst allowing ISPs to be as fair as the act allows.

Under the Act, the term ISP (internet service provider) encompasses any person, business, organisation or institution who provides connectivity. Non-traditional ISPs are referred to as "downstream ISPs" in the Code. Whilst ISPs are exempt from any liability resulting from copyrighted materials being transferred over their network, they do have to take responsibility for policing copyright infringers.

Internet service providers may pass copyright infringement notices to downstream ISPs for enforcement. The key out-take of this is that while some businesses and other institutions may escape disconnection, downloading tunes, TV shows or movies at work won't go down too well with your employers.

Pre-approved and not pre-approved

The TCF Code proposes two classes of copyright holders (that's the folks who own the copyright to movies, music and TV shows). Firstly there are those that have been pre-approved (e.g. who have been audited by the TCF to ensure their copyright infringement detection capabilities are fair and robust).

Then there's non pre-approved copyright holders whose systems haven't been verified. Both will have to pay fees on sending a notice to an ISP, which is both good and bad news.

Charging copyright holders a fee can only be a good thing as it not only provides a strong disincentive for making malicious complaints, but will also make copyright holders more likely to chase large scale copyright infringers rather than smaller downloaders.

Better still, it also means that internet users are unlikely to wear the cost of policing the act (unfortunately it appears that local copyright lobbyists are already pushing for ISPs to investigate their copyright infringement complaints for free.)

The bad news however, is that large scale copyright infringers also tend to be more tech savvy than the average internet user and as such are better placed to circumvent any detection methods used by the copyright police, meaning that casual downloaders are more likely to feel the force of the new laws.

Of equal concern, small scale copyright holders (e.g. small independent production companies etc.) are unlikely to be pre-approved copyright holders and as such are likely to be at a significant disadvantage when it comes to policing their copyright. This isn't good news for struggling local TV and film production companies.


The ISP will receive a copyright infringement notice from a copyright holder. Whilst this may provide robust proof of any alleged infringement, genuinely innocent internet users with unscrupulous flatmates, teenagers or even neighbours stealing from a wireless connection will still struggle to prove their innocence. Either way, the accused is labelled guilty unless they're able to prove otherwise. Not exactly a high point for a western democracy like New Zealand.

Under the proposed code, accused infringers will be handled using a "three warning" system that is expected to consist of three notices and a final disconnection notice for the fourth infringement. Only one warning/disconnection notice will be able to be served on a customer per month.

The first two warnings are to be called "education notices", and will act to not only inform accused infringers that they have been accused of breaching copyright, but also what constitutes copyright infringement and what the appeal processes are for the accused internet user to contest the accusation.

Should it be needed, a third (final) warning will be issued, and finally should the internet user again be accused, a final disconnection notice will be served. Throughout the entire process, accused internet users will be given the option to appeal the accusation, and the final disconnection notice is expected to also include a 48 hour notice period to give the accused the option of overturning the disconnection penalty. Vulnerable customers (e.g. those who require internet access for health, disability or safety reasons) may be exempted from disconnection.

Interestingly, there will be no centralised database maintained for listing repeat copyright infringers. In essence this means that short of the disconnected internet subscriber having to wait for a spare port in their local exchange, there's nothing stopping them from reconnecting with the ISP that disconnected them in the first place.

Whilst the TCF's proposed approach is as reasonable as it is possible to be under the dictates of Section 92A, it's unlikely to stop repeat copyright infringers who'll simply re-connect after they've been disconnected. This of course makes a nonsense of the whole concept of penalising repeat copyright infringers.


Whilst the TCF has done its best to make unworkable legislation as practical and fair as possible, there's still no hiding from the fact that Section 92A is fundamentally flawed. Rather than bowing to panicked lobbyists and throwing fundamentally flawed legislation at a largely ignorant public, some patience and forethought could have delivered significantly better results for everyone.

Blanket Copyright

Take the Isle of Man as an example: Instead of going down the guilty until proven innocent path, their local government has opted for a different approach that could see internet users and copyright holders both emerging as winners.

The proposed approach would see the 80,000 Isle of Man residents being able to download music to their hearts content, after paying a blanket copyright royalty fee (which is expected to be between one and two pounds per month) as part of their internet subscription.

The money collected by ISPs would be distributed to copyright holders, based on how often their music, movies or TV shows were downloaded, working along similar lines to existing royalty payment systems used for music broadcast over TV and radio.

Instead of focusing on disconnecting internet users to staunch losses to piracy, the Isle of Man's blanket copyright license shifts the focus onto helping copyright holders make money, potentially making the concept of piracy a thing of the past.

Whilst the Isle of Man's approach is significantly less harsh than the looming legislation about to hit New Zealand, it isn't perfect. For a start bundling a blanket license into the cost of an internet connection will see copyright holders loosing a sizeable chunk of their royalties.

Another issue with a blanket copyright license approach is that it effectively penalises internet subscribers who aren't interested in downloading copyrighted music, movies or TV shows by forcing them to pay for a service they don't use.

Last but by no means least, ISPs would also need to invest costly and resource intensive monitoring capabilities to keep track of subscriber downloads in order to fairly distribute royalties between copyright holders.

If history is anything to go by, the Isle of Man's blanket copyright license approach is most likely to fail. The idea isn't new and was even tabled in the French Parliament in 2006, but was dropped after lobbying from copyright holders. The French government has now adopted a similarly draconian approach to that about to be used in New Zealand.

Legitimise Bit Torrent

Another alternative that could resolve the issues associated with a blanket copyright license approach would involve legitimising the popular BitTorrent download application by adding a pay per download capability. Understanding how this would work requires a closer look at just what motivates most downloaders.

While music hogs the limelight as the biggest victim of piracy, statistics from popular torrent sites reveals otherwise as television episodes lead all other downloads by a massive margin. Although figures tend to vary owing to the highly dynamic nature of the BitTorrent community, the figures are still compelling. Even though TV shows only make up only 10 per cent of the total downloads on major torrent sites, they represent anything up to 46 per cent of all downloads.

With music, fully functioning software and new release movies easily obtainable using BitTorrent, why are TV shows making up such a large amount of downloads? Not only does this show that the majority of internet users are not interested in committing piracy, but that many are simply sick of the out-of date drivel being dished up by New Zealand's second rate TV broadcasters. Simply put, the rise and rise of downloaded TV-shows is a clear signal that traditional TV networks are simply not meeting viewer demands.

According to Torrent Freak over 90 per cent of TV show downloads come outside the US. New Zealanders often have to months for a show to get to air, if it airs at all (as for sci-fi shows broadcast in New Zealand...). BitTorrent however provides a zero-wait and add-free alternative to the stale dross featuring adverts every 6 minutes being delivered by the networks. I'd be willing to wager that most TV show downloaders would be more than happy to pay a few bucks per episode rather than being disconnected.

Even more importantly, BitTorrent is one of the most efficient methods for transferring large piles of data across the internet. Traditional online content stores operate out of vast data centres housing tens of thousands of servers from which you download music, movies or TV shows.

Data centres are hugely expensive to run and their maximum download speeds are constrained by the amount of network and server capacity available. BitTorrent on the other hand uses peer to peer technology which lets you download chunks of files from other downloaders. Not only is there no need for a massive data centre, but network capacity is used as efficiently as possible to deliver content as fast as possible.

Rather than disconnecting internet users, or forcing everyone to pay a blanket copyright license fee, a pay per download approach would give copyright holders control over what is charged for their content. The 170,000 plus dial up users (most of whom are likely to be uninterested in downloading 350Mb TV shows), and other subscribers who simply want to surf email or game online needn't be penalised either.

For this method to work it would have to adopted as a global initiative. Getting the ISPs, copyright holders and governments of the world to all agree would be a Herculean task bordering on impossible. Unfortunately, the movie, music and TV copyright lobbyists appear to be more interested in protecting an increasingly out of date and creaky business model and as such are unlikely to warm to a more radical approach such as a pay per download version of BitTorrent. Adding a micropayment capability to BitTorrent clients would also introduce a lot technical complexity, not to mention security issues.


Whilst the TCF has done its best to make what is essentially unworkable legislation as fair as possible with the proposed code of conduct, internet users are still the big losers, with many likely to unintentionally run afoul of the new laws.

Ironically the music, movie and TV are also losers by choosing to protect unsustainable business models in the face of a fundamental technology shift as we transit from the post industrial age to an information centric society when they should be embracing change with a view to long term survival.

Regulators also stand to lose as the new laws look set to drive large scale downloaders underground and other internet users begin to deploy easily available circumvention measures.


1 Lost 5,730,000 downloads
2 Heroes 4,400,000
3 Prison Break 3,840,000
4 Terminator The Sarah Connor Chronicles 2,240,000
5 Desperate Housewives 1,990,000
6 Stargate Atlantis 1,810,000
7 Dexter 1,660,000
8 House 1,520,000
9 Grey's Anatomy 1,380,000
10 Smallville 1,150,000


Disclosure: Pat Pilcher is an employee of Telecom. However his views do not represent those of Telecom.

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