October 24, 2014

Horse 1783 - More Than Just About Piracy On The Digital Seas

Australians who illegally downloaded the movie Dallas Buyers Club may have to cough up cash payments, with the studio behind the Oscar-winning film asking companies to hand over the identities of pirates.
But Australia's second largest ISP, iiNet, who defeated Hollywood in a piracy battle in 2012, says it will put up a fight for its subscribers.
They were asking for settlements of up to $US5000 per offence, or more in some cases. Now they're taking their battle to Australia, applying to the Federal Court that it have iiNet and other local ISPs hand over the identities of the alleged pirates.
- Sydney Morning Herald, 23rd Oct 2014

This post is not about the legalities of downloading movies; nor about the right to privacy but about a third issue which isn't even being discussed amidst this - common carriage.
In a war about the identities of alleged pirates, I think that battleships are being mobilised beyond the horizon.

Uncle Google informs me that the movie Dallas Buyers Club, was made by Focus Features, which is a division of NBCUniversal, which itself is a subsidiary of Comcast Corporation.
Comcast Corporation is the largest broadcasting and cable company in the world by revenue.

What does it mean in relation to the other players within the Australian internet market such as Optus and Telstra? When you consider that Telstra is itself a 50% shareholder of Foxtel along with News Corp Australia, the waters get muddied very quickly.
Suppose for a second that NBCUniversal wins its case against iiNet. What does that mean for internet in Australia?

If iiNet loses its case, it then becomes responsible for the data which passes through it. If an ISP is by law a responsible gatekeeper, then it can not be by definition a common carrier.
Suddenly, players like Telstra become very interested indeed. If ISPs are not common carriers, then suddenly they get handed all sorts of interesting power. Take the clauses within the rules which govern Australia Post, for instance:

Without limiting subsection (1), the terms and conditions determined by the Board may make provision with respect to:
(a)  the kinds of articles that may be carried by post and the means by which different kinds of articles may be carried; and
(b)  the carriage of letters and other postal articles; and
- Section 32, Australian Postal Corporation Act 1989

5 Right of refusal 
5.1 To the extent permitted by the Act, Australia Post is not a common carrier and reserves the right to refuse to provide postal and related services to any customer or to accept articles of any particular class, character or nature whatsoever at its sole discretion.
- Australia Post, Terms and Conditions
, Part A - General Postal Services, Sep 2014.

The Right Of Refusal to carry certain documents, which is allowed at the Board's discretion under the Australian Postal Corporation Act 1989, means that if Australia Post for some reason, didn't want to take a particular entity's letters and parcels, they have the legal right to enforce that refusal.

If you then apply the same logic to an ISP, it would then give them an equivalent right of refusal to carry certain particular entity's data, which might be extremely handy given the perpetual war which News Corp has been fighting with the ABC since as far back as the 1930s.

But Anny Slater, of Slaters Intellectual Property Lawyers, said the plaintiff would have picked iiNet ahead of Telstra as the "best chance" of success, possibly after studying the 2012 landmark case brought against the Perth-based telco by the Australian Federation Against Copyright Theft. iiNet won that case, but among the documents exposed during the process were case notes that pointed to higher legal hurdles at Telstra and its omission from that legal action.
- Sydney Morning Herald, 24th Oct 2014

Considering that Telstra and News Corp both own 50% of Foxtel, there might very well be an underlying commericial reason why Comcast wouldn't want to take on Telstra in a legal battle. This is classic warfare diplomacy - make peace with your stronger neighbours and isolate and conquer your weaker neighbours. iiNet is a weaker neighbour; they must be isolated and conquered. Fighting against Telstra would be a war of attrition, which neither side wants to engage in.

What else could be behind the scenes here? I wouldn't put it past the current Abbott Government to sell NBN Co to Telstra & Foxtel in a joint venture with Comcast; then what? Comcast and HBO have already exhibited tensions for a while and this manoeuvring by Comcast with respect to iiNet, might just be the first of many shots fired in a very big battle indeed.

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