The impact of the Digital Economy Act

One of the last pieces of legislation to be passed by the former Government before Parliament was dissolved was the Digital Economy Act. This Act, among other things, provides increased protection for copyright owners against the illegal downloading of material (eg songs and films) from the internet. Under the provisions of the Act, internet providers will be required to send warning letters to customers if they detect illegal downloading taking place and, if this activity continues, sever the customer’s internet connection.

Accommodation providers have expressed considerable concerns as to what impact this will have on their ability to provide internet services to customers as they have little ability to monitor and restrict their customers’ use of the internet. The fear is that their internet service could be terminated as a result of their customers’ activities. These concerns have been heightened through mailings from various firms offering to inform businesses of their legal responsibilities under the new legislation.

However, while this legislation has been passed, there remains a lengthy process before any internet service is disconnected. The first stage of this process is that the independent media regulator, Ofcom, will be consulting with copyright owners and Internet Service Providers to develop a Code of Practice. This Code of Practice will set out how the monitoring of internet use will be undertaken, who pays for it and how the procedure for warning internet users will work. It should also provide guidelines for businesses that provide internet access to their customers on what they need to do to fulfill their responsibilities.

Once this guidance is developed, it will be put out for public consultation. This process is expected to take at least six months. The Code will also need to be approved by the EU as it needs to be consistent with European Directives on issues such as copyright and privacy.

This means that the legislation will most probably not be introduced until 2011 and, even then, it will only allow Internet Providers to send letters to customers warning them against illegal downloading. It is only if, after a 12 month period, this warning strategy does not reduce the illegal downloading of material from the internet by 70% that disconnecting customers will be considered.

If, after 12 months, simply warning customers not to download material has not worked, the Secretary of State can then instruct Ofcom to develop measures to enable Internet Providers to restrict or disconnect customers’ access to the internet. This means that it will be 2012 at the earliest before any customers risk having their internet service disconnected. And even then there will be an independent appeals body that customers can apply to in order to have a decision to limit or disconnect their service overturned.

This is not to say that businesses should not be concerned about the new legislation. Implemented inappropriately, it has the potential to cause significant problems for accommodation providers. However, there are significant hurdles for the legislation to go through before it is implemented and any impact will be some time away.