Mirabile Dictu! Phone Companies Stand Up For Consumers « naked capitalism

Saturday, September 1, 2007

Mirabile Dictu! Phone Companies Stand Up For Consumers

Among their many good qualities, Australians have little respect for authority and can be refreshingly blunt.

The Sydney Morning Herald reported that the Australian Federation Against Copyright Theft is trying to get internet service providers to crack down on illegal downloaders by sending them warning notices and if they continue, disconnect them.

Amusingly, the industry will have none of it. And the industry includes, in particular, Telstra, the formerly government owned phone provider that has a monopoly in land lines. Needless to say, it’s a company most Australians love to hate. It was slow to implement broadband, wanting to milk its old infrastructure as long as possible, charges high fees by international standards, and isn’t big on customer service.

So the specter of Telstra siding with the little guy is refreshing and amusing. From the SMH:

Adrianne Pecotic, executive director of AFACT, said talks had broken down with the industry body that represents the ISPs, the Internet Industry Association (IIA). AFACT was now asking ISPs individually to implement the proposal….

She proposes that AFACT would identify the internet addresses of those suspected of illegal downloading and pass those details on to the ISPs, which would be able to identify the specific customers.

The ISP would then send those customers a letter directing them to an information site “to educate people that this activity is illegal, that it’s not anonymous”. Repeat offenders would have their access speeds slowed and, ultimately, their internet service disconnected “if they continue to flagrantly engage in illegal activity”….

But…. the IIA [Internet Industry Association] said the proposal was problematic and unnecessary.

“The board is concerned that ISPs are not (and should not be placed) in a position to adjudicate on whether or not a person is infringing copyright or to suspend or terminate a service based on an allegation of infringement,” it wrote….

Telstra BigPond’s position was similar to that of the IIA.

“While we do not encourage or condone piracy, particularly as we are a legal provider of online music, games and movies content, we do not believe it is up to the ISPs to be judge, jury and executioner in relation to the issue when the content owners have any number of legal avenues to pursue infringements,” BigPond said in a statement.

“We are not going to take AFACT’s claims against customers at face value.”

8 Comments:

Anonymous says:

September 1, 2007 at 5:27 am

This is bullshit.

Of course the ISPs don’t want to participate. This is how they get paid, and adminstrative costs would just take money out of their pockets and create a firestorm of controversy.

The reason being so many people like you think piracy isn’t worth doing anything about. You claim it’s about “the little guy”. What bullshit that is.

In fact, it’s about collapsing entire industries because of people like you having the attitude that stealing copyrights is ok and are unwilling to support solutions that might actually have some effect.

Disgusting.

Yves Smith says:

September 1, 2007 at 12:52 pm

I happen to live solely on the basis of selling my intellectual property, so to suggest I don’t care about or understand IP is rubbisn.

And I’m not certain how much you know about ISPs, particularly in Australia. First, in general, the ones that compete with guys like Telstra, meaning lease Telstra’s infrastastructure, operate on very thin margins. An additional administrative/compliance cost could well put them out of business. Very very few people get cable in Australia. so Telstra is the big fish in the broadband game.

Telstra could well have gone along with this idea to eliminate competition, but they didn’t.

Second, heavy downloaders pose a big problem for ISPs. They chew up a huge amount of system resources. Yes, in Australia they charge more for higheer download limits. That’s uncommon around the world, and is a sign of poor management/infrastructure as well as the fact that they can get away with it.

It is a sufficiently big problem that many (most?) ISPs will slow down the download speed for heavy downloaders, irrespective of what the plan says. That’s perfectly legal, BTW; the contracts say that the upload/downloadpeeds you get are maximums and not guaranteed.

Third, whether you like it or not, Telstra is 100% correct legally. These charges are not proven. The industry association and the copyright holders they represent have not gone through a proper legal process.

Fourth, why does Australia have such high downloads? Gee, it might have something to do with the US movie and TV industry releasing most their content in the Australian market after they’ve released it just about everywhere else in the world. You can see a movie on the plane before you see it in Oz.

Finally, lack of respect for IP “collapsing entire industries”? I’m not certain what you are talking about, and in any case, they are not being collapsed by some home downloaders in Oz. The industry association is not accusing these people or pirating or redistribution.

Lab Rat says:

September 1, 2007 at 5:04 pm

Technically, due to the cooperative nature of P2P networks, most downloaders _are_ engaging in redistribution. My recent encounters with the MPAA here in the US indicates they are focusing on the transmission rather than the reception of copyrighted material. In the case of Bittorrent they watch the centralized trackers and focus on the upload value reported by the clients. If a copyrighted work appears on Youtube, they do not go after the downloaders (I could very well be wrong on this point). This makes sense given that this area of the law is probably stronger than the pure reception case, and carries higher penalties.

I very much support the ISPs’ demands that the various copyright watchdogs provide a stronger case than they have been, both because copylefted, public-domain, and fair-use material tends to get caught in the crossfire, and with the advent of wireless networks and NAT-based home routers it is more difficult to accurately identify the entity responsible for the infringement. This gets even worse with the growing problem of for-profit malware. Witness the recent case of a defendant with child porn on his computer who successfully identified the true problem as invasive third-party software which downloaded the material to his system without his knowledge or consent.

In fact, some people deliberately operate open wireless networks because it provides them a fallback defense in case of accusations of illegal activity.

I must acknowledge I believe that changes in technology have, inevitably, made data easier to copy and that trying to control these systems with lawsuits and regulations stifles innovation and unfairly penalizes non-infringing activity. Actually, I go further than this and think of the MPAA/etc. and the large media companies as buggy-whip manufacturers who are unworthy of our sympathy or support.

Whew, I didn’t set out to write such a long screed but I hope it was of value to someone.

Yves Smith says:

September 1, 2007 at 6:37 pm

Lab Rat,

Thanks for taking the trouble to make such a thorough comment. However, I’m not certain that the Australian case can be assumed to hew closely to that of the US.

The big difference is that broadband is metered in Australia. Uploads and downloads are counted towards your total usage. That means anyone running a P2P network is incurring costs (or at least at risk of incurring costs) if people hit his server too often.

And the charges if you exceed your plan limit are very high. I did that once in Oz when I reconfigured some mailboxes (IMAP). The bill that month was nasty indeed. And to get to high enough included data levels to make even regular personal movie downloads economically attractive isn’t cheap.

If you look at the bandwidth charges, you will see what I mean. I can’t see anyone in Oz having anything other than at most a music server. The costs of moving bigger files would get catastrophic fast.

Here is a link to the Telstra BigPond fees, you’ll see what I mean. In local purchasing power terms, on A$1 = $1 US. Their currency is chronically undervalued.

And Australians are cheap, BTW, not in a bad way, but it’s a middle class society. Cable uptake is very low because people don’t think it’s worth the money.

That’s why I think this is mainly personal use, which still does deprive the content provider of revenue in theory, but that presupposes the user would have bought the content otherwise. It’s a harder economic case to prove.

And I agree 100% with your point that the content providers are at least partly to blame. They went for convenience, ease of distribution, and low cost, and are now suffering the consequences.

Lab Rat says:

September 1, 2007 at 7:51 pm

Holy cow! I had no idea bandwidth was that expensive over there. I guess it’s not entirely unexpected though, Australia being an island continent far from the “core” Internet of Europe and NA. Reminds me of the insane connection charges I faced in ’98 to get a frame-relay T1 from Seattle to Alaska ($15,000/mo, for a 1.5 megabit connection).

Given Bittorrent’s rise in popularity, I suspect people in Australia are uploading more than you think. Bittorrent is designed such that you are practically required to upload to others while you are downloading a file yourself, if you want decent download speeds. As far as P2P in general goes, nobody sets up a “server” because, in essence, _everyone_ is a server. Certainly one has control over what and how quickly one shares, but in general one is expected to contribute back to the network anything one downloads. For those systems that have actual centralized servers at all, the main purpose of the server is to act as a registry of the various peers on the network so that they can connect to each other.

I agree that it is likely Australians are mostly downloading music, given the relatively small size of an album (150MB or less).

I actually forgot to include the issue of theoretical versus real losses due to piracy in my earlier comment. It is amazing how wildly inflated claims of losses always are, since they assume that every person who downloaded a work would have otherwise purchased it. It’s not exactly a huge research hurdle to repudiate this. In fact, for some things free electronic availability _increases_ hard-copy sales. Take Baen Books’ free e-books – the authors have found that releasing an e-book drives paperback sales long after they would have otherwise petered out.

My feeling on the blame the content providers hold is actually the reverse of the issues you cite – like any good monopoly they clung desperately to their obsolete distribution and pricing systems and have forced their own customers to drag them kicking and screaming into the 21st century, whereas if they had adapted quickly they would have had the _advantage_ of convenience, ease of distribution, and low cost.

Yves Smith says:

September 1, 2007 at 8:06 pm

Lab Rat,

Telstra makes those arguments about distance, but the big reason is Telstra is the only game in town. Satellite (for some reason I never understood) was too pricey to be a competitor, smaller ISPs have to mark up Telstra’s charges to them, and with only something like 41% of homes passed for cable and lousy uptake, you are getting what you’d expect with a de facto monopoly broadband provider.

You are right, I didn’t make my case re the content providers very well. My impression is that when they were forced to go digital, they made expedient choices at the time that they are now regretting. I’m not expert enough to know what a better regime might have been, but I have a sneaking suspicion that some foresight would have illegal use at only, say, 25% of what we are seeing now. Still a loss, but nothing like what they are suffering.

a says:

September 2, 2007 at 7:27 am

“people like you having the attitude that stealing copyrights is ok”

I think you should get off your moral high horse.

It’s government (and ultimately society) which decides to what extent copying of intellectual property is illegal. There are both societal benefits and detriments to copying, and which should counterweigh the other is a difficult and complex question. I don’t see anything written in the stars which determines what is “stealing” ip.

If some industries find themselves on the wrong side of advancing technology (and indeed, have mismanaged the transition), then it would seem that is their problem.

Lab Rat says:

September 3, 2007 at 11:40 am

Yves,

This entry makes an interesting followup to our discussion:

http://www.freedom-to-tinker.com/?p=1194

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