The controversy over Section 92A of the Copyright (New Technology) Amendment Act is indicative of two trends.
First, a hardening regime of regulating internet use, and secondly, an evolving ability, on the part of internet users and the industry, to resist attempts to tilt the balance of power in cyberspace.
Indeed, in the last week, the public interest advocates have shown that they are able to create effective alliances with other stakeholders, such as service providers (ISPs), telecoms and digital content producers, when access to online information, freedom of sharing information and content distribution innovation are perceived as common stakes.
Similar developments in Canada, Australia, the US and some European countries in recent years suggest that governments are complying with the policy standards established by the World Intellectual Property Organisation's Copyright Treaty. It is expected that the emerging uniformity in national legislations would help enforce the internet copyright protection laws across borders.
In that respect, Section 92A is a product of both "fashion" and fear - the fear of the open ethos of the internet that favours sharing of content, ideas and innovations.
With 81 per cent of its population using the internet, New Zealand is a leader around the world. Surveys have shown, though, that only around 20 per cent of those users download or watch videos, and 26 per cent download or listen to music online at least weekly.
Considering these data, should the New Zealand Government reach for the easy solution and impose liability on the only "gatekeeper" in cyberspace - the ISPs?
In effect, the proposed legislation would make these providers liable intermediaries in copyright infringement disputes. They will be the party to bear the costs of implementing the copyright protection policy in the digital world.
In the US Digital Millennium Copyright Act and the EU Copyright Directive, the liability of those ISPs that play the passive role of a mere conduit of information for third parties is limited.
But Section 92A operates under a rather broad definition of organisations facilitating internet access without discriminating among them based on their functions.
In addition, the selected "notice and takedown" approach would impose the burden of proof on the internet users, alleged by copyright owners of downloading and distributing movies, music and pictures without their permission. Under that regime, after receiving a notice from a copyright owner, an ISP must initiate a procedure leading to the closure of a customer's account.
Aside from the fact that the only way a user can fight the infringement allegation is through the costly court process, ISPs would be exposed to lawsuits by their customers.
Monitoring the internet traffic, and controlling and punishing "bad" behaviour on the net, could be an effective policy in the short term, but that "easy" solution will affect the creative use of the internet.
For all these reasons, the Government should support the continuing negotiations between the copyright owners constituency and the coalition of "light internet regulation" champions, and allow them to explore the "notice and notice" regime as proposed by the Telecommunications Carriers' Forum (TCF) in their internet Service Provider Copyright Code of Practice.
Under that regime, an ISP, as true intermediary, issues a notice to a customer after a notice is received from a copyright holder, and informs the latter that the notice was given. Resolving the dispute is left to the parties involved - the copyright owner and the infringer.
The ISP will take other actions only if it is required by court order.
The TCF's Draft Code shifts the burden of proof in an alleged copyright infringement complaint to the copyright owners, while the service providers' role is seen as assisting the parties involved in the conflict by providing a policy and procedures to communicate with, and educate users.
On the last point, as the first World internet Project New Zealand survey (2007) has shown, "those who create content tend to be under 30".
Another solution, debated in the US, is the introduction of alternative compensation schemes, where blanket taxes are collected on overall instrumentalities, like ISP services or computer purchases, and the funds are then directed to creators and publishers in proportion to the popularity of their intellectual products.
In this case, downloading will demonstrate the popularity of a song, and this will benefit its creators.
Meanwhile, the publishers have come up with another business model using such free software as iTunes to provide comparatively cheap music, video and movie files.
Why risk distributing illegally downloaded copyright material in peer-to-peer networks when you can buy it cheap? That's the wisdom the ISPs can teach their young customers. There are two ways to motivate ISPs to take action when cyber-pirating is detected - either rearrange liability, or develop new industry best practices.
Section 92A goes with the first "easy solution" option, without considering the long-term societal effect of the new legislation.
As a social problem, and not a purely proprietary issue, copyright infringement can be controlled through a community process based on norms, motivation and education.
* Dr Slavka Antonova is a senior lecturer in the department of management and international business at Massey University, Albany, and has published a book, Powerscape of internet Governance.