The Digital Economy Act 2010: landmark or lame duck?

On 8 April 2010, as one of the final acts of a departing Parliament, the Digital Economy Bill became law. Did you miss the fireworks and wild celebrations? Do you feel digitally empowered all of a sudden? Probably not.

The Digital Economy Act 2010, as it now is, implements some – but by no means all – of the recommendations set out in the government’s 2009 Digital Britain Report. While the Act contains a range of provisions relating to the UK’s digital economy, it is as notable for what it omits as what it contains. Unless you’re a content owner or operate in one of a handful of specialist fields, the Act contains relatively little to help mainstream businesses.

The Act certainly directly affects some specific sectors of the digital economy: radio broadcasting and video game production, for example. But most businesses will feel that the approach to the regulation of online copyright infringement is the single most important aspect of the Act. Content owners are the main winners from the Act. Companies in the music, film, video games and other industries that rely heavily on IP assets will eventually feel the benefit of new (although possibly laborious) provisions requiring internet service providers to cooperate with copyright holders to combat online piracy and obliging ISPs effectively to penalise subscribers who download content in breach of copyright.

These provisions will be of concern to corporate internet subscribers. More particularly, Ofcom has indicated that organisations who share a public IP address across their internal users will be liable for illegal activity perpetrated through the use of their network by their internal users. This means that, if an organisation’s network is used to download infringing material, that organisation will itself be exposed to the risks of sanctions, which could include the termination of its internet connection. In light of this, organisations will need to take greater responsibility for how their networks are used, which includes ensuring that they are properly secured against unauthorised use and also revising their internal “acceptable use” policies and checking that they are enforced.

The Act will disappointanyone hoping for a meaningful commitment to upgrading the UK’s next generation of high-speed mobile broadband and universal 3G coverage by modernising the mobile communications infrastructure. The hope had been that the UK could invest in technology infrastructure in order to boost the economy generally but specifically to position itself as a leading country in Europe for inward investment in the technology sector. These proposals proved just too expensive and too controversial to be included in the Act.

The May general election in the UK does, however, add a layer of uncertainty to the future of the Act. While the Labour Party has pledged that it will “update the intellectual property framework that is crucial to the creative industries – and take further action to tackle online piracy”, the Conservatives have made no such pledge. Moreover, the Conservative Party has indicated that if it wins the election it will drop certain provisions of the Act (although not the much debated anti-piracy measures), while the Liberal Democrats have stated that they would seek the wholesale repeal of the Act. Therefore, with many of the Act’s provisions requiring secondary legislation in order to become effective, it is likely to be some time before Act’s precise effects become apparent.