The Film Policy Review Panel was appointed by the Government and has said that copyright infringement is contributing to declining industry revenues and that a "key element" to addressing the problem was in implementing the measures contained in the DEA.
Under the DEA communications regulator Ofcom is required to publish a code of practice setting out the procedures internet service providers (ISPs) must follow to combat illegal file sharing. Ofcom published a draft code in 2010 but finalised rules have still to be published.
"The Panel welcomes the DEA measures and the requirement for Ofcom to report regularly to the Secretary of State on their impact, and recommends that the Government implement these as quickly as possible," the Panel said in its 'Future for British film' report (111-page / 2.79MB PDF).
In its draft code of practice Ofcom said that internet users should receive three warning letters from their ISP if they are suspected of copyright infringements online. Details of illegal file-sharers that receive more than three letters in a year would be added to a blacklist, the draft code said. Copyright holders would have access to the list to enable them to identify infringers. Under the draft code, ISPs could also have to suspend users' internet access if they are found to be illegally downloading copyrighted material.
The finalised code had been expected to be published last year. A spokesman for the Department for Culture, Media and Sport (DCMS) told Out-Law.com that it was hoped the code would be published "before too much longer". He said the previously announced timescale for the first warning letters to be sent out under the new code rules remained the same - the start of 2013.
Last year BT and TalkTalk were granted permission to challenge a High Court ruling which previously rejected the ISPs' claims that provisions contained in the DEA breached EU laws on privacy and electronic communications. The ISPs are in court today seeking to overturn the ruling although an immediate judgment is not expected, the DCMS spokesman said.
The Film Policy Review Panel rejected claims by rights holders that other measures were needed in order to combat "websites and streaming services promoting or allowing copyright infringement". It said that the High Court's ruling last year requiring BT to block its customers' access to Newzbin2 showed that "it is possible for rights-holders to apply for an injunction to require ISPs to block access to specified sites".
The Panel said ISPs in the UK could learn from their US counterparts in order to "play their full part" in combating copyright infringement.
"The Panel understands that there are a number of similarities between the UK system and the agreement reached in the United States, in July 2011, between ISPs and rights-holders to develop a ‘Copyright Alert System’. The Panel believes that if it is possible for a voluntary agreement to be reached with the ISPs in the US, then UK ISPs should play their full part in ensuring that measures in the UK to tackle copyright infringement, including the DEA provisions and other initiatives, work effectively," it said.
Last year five US ISPs signed up to a new voluntary framework, agreed with film, TV and music industry bosses, for combating illegal file-sharing. Under the system suspected infringers could be issued with up to six early electronic alerts notifying them that their account had been used to breach copyright laws. Repeat offenders will face "mitigation measures" restricting their behaviour. Press reports at the time suggested that those measures may include slowing down a repeat offender's internet service or blocking website browsing.
Similar plans for a voluntary system to be developed are hoped for in the UK and the Government has been chairing discussions between creative industry bodies and ISPs to help an agreement to be formed. Last year representative bodies from across the creative industries detailed plans for a new code of practice around website blocking in which ISPs would have to implement measures to cut off customers' access to content under agreed procedures. Culture Minister Ed Vaizey has said the Government does not want to introduce new regulations on website blocking "unless necessary".
The Panel recommended that the Government continue to "facilitate the partnership work of content creators, ISPs and others to tackle websites which permit or promote copyright infringement".
The Panel acknowledged that there was some dispute over the quality of evidence that the creative industries have previously produced to make the case for new anti-piracy measures to be introduced. It said the UK film industry should work with the Intellectual Property Office (IPO), Ofcom and a proposed new British Film Institute research unit "to ensure that evidence on the levels and impacts of copyright infringement and theft on industry is as robust as possible".
Better education of the "unlawfulness" of copyright infringement is needed, whilst industry and the Government should also help "promote initiatives that raise the visibility of legitimate sources of intellectual property to consumers". This would form "part of an overall strategy designed to reduce significantly infringement and theft," the Panel said.
Industry should look towards advances in technology and the advent of social media to provide access to legitimate content, the Panel said.
"The Panel ... recommends that rights-holders and retailers more actively take advantage of the growing consumer demand for access to films online via a broad variety of devices. A wider range of business models could be explored, recognising that there are opportunities for the private sector to use cloud-based facilities and for copyright owners to make their material legitimately available in an increasing number of different ways," it said.
"Interoperability issues must also continue to be addressed, so that devices can connect to one another to the benefit of the user. The development and uptake of cloud storage must not be hindered by rights issues that end up driving consumers towards more easily manageable but unlawful options ... There are clear opportunities for increasing audiences and global revenues across digital media devices platforms of all kinds with the potential rewards for success being huge," it said.
The Panel also urged the Government to consider the "concerns" of the film industry if it decides to press ahead with a new digital copyright exchange and introduce new exceptions to copyright into UK copyright law. Industry is concerned about how licensing conditions under any new copyright exchange could "impact on the existing licensing arrangements for film" and that it will lose revenues if new exemptions are introduced.
Government plans announced last year include bringing in a new private copying exception into UK law, which would allow works to be lawfully transferred between storage devices under certain circumstances. The Government is also proposing to introduce an exception allowing copyrighted works to be used in parody or pastiche.