BT and TalkTalk, two of the United Kingdom's biggest ISPs, have lost their long-running challenge to the U.K. Digital Economy Act, removing one of the main obstacles to the Act finally coming into effect.
The court judgment was announced today (March 6), following two years of protracted legal challenges and appeals from the ISPs, who objected to the legislation on the grounds that it was incompatible with European law relating to data protection and privacy, and required ISPs to pay an unproportionate percentage of costs to enforce the act.
Designed to tackle online piracy and illegal downloading, the Digital Economy Act (DEA) was given Royal Assent on April 8 2010 (passing the bill into law) and came into force June 8 2010. In November 2010, BT and TalkTalk challenged the bill on the grounds that it was "rushed through parliament" and infringed on web users "basic rights and freedoms" and were granted a judicial review.
That appeal was, however, rejected by the British High Court in April last year, with the High Court upholding only one point (relating to the since-amended draft Costs Order) from the five challenges leveled by the two ISPs. BT and TalkTalk were subsequently twice refused permission to re-appeal with Judge Sir Richard Buxton declaring last year that the Act "is a moderate and proportionate parliamentary response to a serious economic issue".
Today's Court of Appeal judgment follows yet another failed appeal by the two ISPs, which was heard on January 16/17 this year. The ruling enforces the previously held judgment that ISPs will have to pay 25% of the Relevant Costs, which includes receiving information from copyright holders about infringements and the sending of three-strikes notification. 75% of the costs will be paid by copyright holders. ISPs will also be required to pay 25% of the costs of any appeals by subscribers to the appeals body (Case Fees), with copyright holders paying 75%. An original ruling that ISPs would be required to pay 25% of the Qualifying Costs incurred by U.K. telecoms regulator Ofcom in establishing an appeals body for alleged illicit filesharers was, however, overruled.
The news that BT and TalkTalk had lost their legal challenge to the DEA was welcomed by the U.K. music industry, with Geoff Taylor, chief executive of U.K. labels trade body the BPI, stating: "The courts have confirmed, once again, that the Digital Economy Act is legal, proportionate and fair and can now be implemented."
"The ISPs' failed legal challenge has meant another year of harm to British musicians and creators from illegal file-sharing. The ISPs now need to work constructively with government and rights holders to implement the Act," Taylor went on to say in a statement.
"We always believed that the [ISPs] Judicial Review was misconceived," added John McVay, chief executive of PACT [Producers Alliance for Cinema and Television] and spokesperson for collective body the Creative Industries 'interested parties' in a statement. "Rather than needlessly spending more time and money on further legal challenges, BT and TalkTalk now need to focus on working with rights holders and the Government in implementing the DEA with immediate effect," added McVay.
President of the Film Distributors' Association, Lord Puttnam CBE also lent his support to the High Court ruling, stating: "Hopefully this brings to an end a long chapter of uncertainty, and the DEA can now help in implementing a mass consumer education programme so that people, especially young people, can come to appreciate the damage piracy inflicts on the whole of the creative community."
Although today's ruling removes one of the main obstacles to the British government finally implementing the Digital Economy Act, a definite time frame for the first warning letters to sent to suspected copyright infringers is yet to be announced, with 2013 widely expected to be when the Act first comes into practice. U.K. telecoms regulator Ofcom is in charge of drafting how the DEA will operate and has recommended a £20.00 ($31.00) fee for consumers wishing to appeal against copyright infringement. The penalty for repeat offenders is yet to be determined, however.