Matt Lonsdale is a JD candidate at Dalhousie University.
On April 20, 2011, the UK High Court released its decision in the judicial review of the Digital Economy Act. The Act was challenged on five grounds by two prominent British internet service providers (ISPs), TalkTalk and BT. Justice Parker largely rejected their submissions, with the ISPs finding success on only one of the five grounds.
The Act places an obligation on ISPs to notify subscribers when a report is filed with them that an Internet Protocol address associated with their account is engaging in file sharing activities which infringe copyright. With the appropriate court order, rights holders would be able to obtain the personal details of subscribers they have filed reports on in order to commence litigation against them. If these measures were not successful in reducing illegal file sharing, further “technical obligations” could be imposed on ISPs. These might require the ISPs to limit the Internet access of certain subscribers by engaging in bandwidth shaping or even the temporary suspension of accounts.
TalkTalk and BT submitted that the Act was incompatible with several European Union directives on electronic privacy and commerce, and that it constituted a technical regulation on services as contemplated by the Technical Services Directive which should have been submitted to the EU Commission for review while still in draft form. They allege that it violates the Authorisation Directive by requiring ISPs to fund 25% of the operating costs of the scheme, including the cost of setting up an appeals body for subscribers who feel they have been unjustly reported. These costs, they argued, should be characterized as “administrative charges” of a type a prohibited by the Directive. Finally, they argued that the restrictions on privacy and freedom of speech that the Act would impose are disproportional to the limited benefits it would provide,
The ISPs were unsuccessful on all but the costs argument, and even there they found only partial success. Justice Parker agreed that passing the cost of establishing an appeals body on to ISPs had the effect of imposing administrative charges on them. He was not as sympathetic with regards to the cost of sending notifications to subscribers, which he viewed not as administrative charges but merely as internal costs incurred by the ISPs in meeting their statutory duties.
British ISPs were understandably disappointed with the outcome of the judicial review. Darren Famden, marketing head for Entanet stated that “[T]he government seems determined to get this controversial and poorly considered Act implemented no matter what and seem to have little consideration for the views of one of the two main industries to be affected by it”.