Briefing on the Telecoms Package and copyright enforcement Written by…

Briefing on the Telecoms Package and copyright enforcement
Written by Monica Horten
University of Westminster, Communications and Media Research Institute (CAMRI)
PhD research: The Political Battle for Online Content in the European Union
18 August 2008




The Telecoms Package and `3 strikes' ­ voluntary cooperation to restrict
downloads
Abstract

How far does the Telecoms Package set out a 3 strikes or graduated response regime?
                                                                    th
The purpose of this paper is to examine the text that was voted on 7 July, in the context of
copyright enforcement measures.

The E-commerce directive says that EU governments may not obligate ISPs to monitor content
on their networks, but they may ask for a voluntary agreement. This is the starting point for the
Telecoms Package amendments.

There is a request for a voluntary agreement implicit in the text that asks regulators to promote
cooperation. The request is supported by obligations for end-user contracts and regulatory
oversight, making it very difficult for ISPs to slither out of doing it. There is also a limitation
on the content that users may access ­ and arching over the all these changes is a framing
clause that reinforces it within the ISPs' terms of doing business, and opens the way to
monitoring of user traffic.

The nature of the voluntary agreement is encoded by the word cooperation, which is defined by
the rights-holder companies themselves in terms that parallel graduated response. The text
says that regulators may oblige ISPs to send users information which `may include warnings
regarding copyright infringement'. And the regulator will pay for the ISP ` to send information
by post'. Strikes one and two, of graduated response.

The word lawful is utilised to limit the content users can access. User's contracts are to say
that ISPs can send them email warnings, and to limit the ISPs liability for degradation and
restriction of service ­ the slowing down of peer-to-peer connections and blocking website
access.

So it can be argued that we do have a text that obliges ISPs to work with rights-holders for the
purposes of enforcing copyright, and we have a text which limits users rights to access and
distribute content ­ a limitation which is defined in terms of its copyright status.

The problem for policy-makers is whether to let it happen. The question to ask is, what is the
risk that Europe could end up with a filtered Internet, with government warning messages
winging their way through cyberspace to all our inboxes?

Critical amendments - See IMCO Amendment 9, 11, and 112. ITRE Amendments 61,Article 1, point 8,
point e. (See also: IMCO Amendments: 62 and 67, 75 and 76, and 8, and Annexe 1 Point 19 of the
Authorisation Directive). Update to my original paper of 21st July: ITRE Amendments 120 and 121
­ deletion of Annex 1, point 19 of the Authorisation Directive and replacement text, Point19a.




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Briefing on the Telecoms Package and copyright enforcement
Written by Monica Horten
University of Westminster, Communications and Media Research Institute (CAMRI)
PhD research: The Political Battle for Online Content in the European Union
18 August 2008

The Telecoms Package and `3 strikes' ­ voluntary cooperation to restrict
downloads

Overview
At the risk of mixing my sporting metaphors, the Telecoms Package does seem to have the
telco industry looking up at the EU umpire with McEnroe-like incredulityi. "3 strikes - you
cannot be serious!" they cry, as they spot the amendments which will impose on them
contractual obligations in respect of copyright, overseen by national regulators.

On the other side of the net are the rights-holders, who openly sought legal changes in the
Telecoms Packageii , and yet now, seem to be crying off ­ it's all meaningless. Huh? If it's
meaningless, why put it there in the first place?

In my previous paper The `Telecoms Package' and the copyright amendments ­ a
European legal framework to stop downloading, and monitor the Internet, I argued that the
`mere conduit' status of the ISPs is in danger of being eroded by a series of amendments
hidden in the Telecoms Package. I suggested that the E-commerce directive says that EU
governments may not ask ISPs to monitor content on their networks. That is, they make it
obligatory. But they may ask for a voluntary agreementiii.

The purpose of this paper is to look at the actual text of the Telecoms Package that was voted
through on July 7th in the IMCO and ITRE committeesiv and examine the copyright
amendments. I am specifically investigating the telecoms package in respect of the `3 strikes'
proposals ­ or graduated response (riposte graduée) to give it the formal name ­ and I am
interested in the use of language to set it up.

The starting point is to consider the voluntary agreement . The concept of cooperation in the
IMCO report Recital 12c and Article 33 2a, would seem to imply a voluntary agreement, and
it is supported by a range of obligations for end-user contracts and regulatory oversight, that
make it very difficult to slither out of doing it. It would seem there is also a limitation on the
content that users may access implicit the text `lawful' and `unlawful' ­ words which make
their first appearance here, as far as telecommunications law and content is concerned.

It is arguable that without overtly specifying a graduated response regime, the Telecoms
Package sets up the raw framework, including the principle that ISPs should enforce copyright.
It also establishes the principle that user's traffic may be degraded or restricted, paving the way
for filtering of Internet traffic:

-ISPs may be obligated by the regulator to enforce copyright (ITRE Amendment 121, Annexe
1, Point 19a of the Authorisation Directive)
 -Regulators are obligated to `promote' ISP `co-operation' with rights-holders (IMCO
 Amendment 112, Article 33, 2a), where the definition of `promote' and `co-operation' is left
 open but the use of the word in the context of online content would imply 3-strikes measures
-ISPs are obligated to pass on public interest messages, where `public interest' is defined as
`warnings regarding copyright infringement' (IMCO Amendment 9, Recital 12c) and where
there may be `postal costs' incurred, reflecting strikes one and two of graduated response

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Briefing on the Telecoms Package and copyright enforcement
Written by Monica Horten
University of Westminster, Communications and Media Research Institute (CAMRI)
PhD research: The Political Battle for Online Content in the European Union
18 August 2008

-ISPs are obligated to alter their contracts with users in respect of two matters: passing on
messages from rights-holders and national regulators (IMCO Article 20, 2,2; Article 21 4a;
Recital 12c ); and `restriction' and `degradation' of service (IMCO Article 20, point 2, 1b,
Recital 14). The
text on degradation and restriction of service is written in such a way that leaves it open for
ISPs to filter traffic and to pass on messages from rights-holders. In other words they can filter,
because they will be covered by clauses in their contracts to the effect that users may
experience restrictions on their service.
- There are restrictions on the content which users are permitted to access via the Internet -
lawful content only, which appears to be a brand new concept in EU telecommunications law .

It is not the final step, but it is a very necessary first step. It forces open the door, allowing for
further legislation, perhaps with the Content Online Recommendation or within the context of
the Member States' own legal framework. It begs the question: why is the British government
insisting the agreement is `voluntary' ? Why does the French Presidency push so hard to get
the Telecoms Package through by November? Interestingly, the following topic was up for
discussion at an informal culture council meeting on 21-22 September: measures suggested by
the Commission to protect copyright and related rights, particularly with the aim of making
ISPs responsible for informing internet users of rules in this areav.

The tactic of using the European Parliament committee process to get the legislation amended
makes it very difficult for policy-makers, who do not have the proper opportunity to scrutinise
the measures properly. One thing that became obvious was that the MEPs who had to vote on
these amendments were confused, and did not understand what they were voting on. That is
hardly surprising ­ telecommunications law is difficult enough for the uninitiated, let alone
when there are a hundred and fifty-two amendments to be voted onvi, and some related to a
totally different area of law, such as copyright.

The problem for policy-makers is whether to let it happen, opening up the possibility that
Europe could very soon have a filtered Internet, with a range of government `information
messages' winging their way through cyberspace to all our inboxes.

Graduated response
To determine whether graduated response (riposte graduée) is intended by the amendments in
the Telecoms Package, we need first to define what it is. It is a mechanism intended to deal
with people who download content on the Internet and who in doing so, allegedly infringe
copyright. The first concrete proposals are in France, and the law is in draft form at the time of
writing. Users are alleged to have downloaded copyrighted content may be sent warning
emails (strike one). If they do not change their behaviour, they will be sent a letter by recorded
post (strike 2). If they still do not stop, their Internet access will be terminated for up to one
year, and they will be put on a blacklist, so that they cannot sign up with another Internet
provider during that time (strike 3).

Many issues have proved to be problematic, including who will pay for it ­ the ISPs, the
French government, the tax payer or the rights-holders. It is not clear how users can appeal
against the strikes. As many people use alternative email suppliers, they will hear nothing

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Briefing on the Telecoms Package and copyright enforcement
Written by Monica Horten
University of Westminster, Communications and Media Research Institute (CAMRI)
PhD research: The Political Battle for Online Content in the European Union
18 August 2008

until strike 2, when they get the letter. There are a range of possible unintended consequences,
for example, entire households could be cut off the Internet.

Some form of monitoring or `filtering' of Internet users' traffic has also been proposed to sit
alongside graduated response. At one level, monitoring is necessary to identify the content that
is allegedly infringing. It is also needed to fulfil rights-holders demands for people using peer-
to-peer file sharing to be stopped as they are downloading. The only way the ISP can do that, is
to monitor individual users' traffic, and slow down or block users who try to access peer-to-
peer systems.

Copyright hooks
Insiders have confirmed that the content industries lobbied the Commission to get copyright
enforcement measures into the Telecoms Package. The responsible services within DG
Information Society did not include it. But, as I discussed in my previous paper, the College
of Commissioners placed two copyright amendments into the package - these were dubbed
the `copyright hooks'. Annexe 1, Point 19 of the Authorisation Directive, may be interpreted
either as a political signal that authors' rights are to be protected online, or as a framing clause
permitting regulators to ask ISPs to enforce copyright. Unexpectedly, it was deleted in the final
ITRE report (Amendment 120), and secretly replaced by an amendment that had not been seen
prior to the vote ­ Amendment 121, point 19a.

ITRE amendment Point 19a is problematic. At face value, it says one thing, but when you look
into the background, it says something quite different. It could be argued that it goes further
than the original Point 19. It links to Article 8 of the Framework Directive, which links to
another amendment in the text (ITRE amendment 61) ­ see below for a full analysis.
Effectively, it is a roundabout way of saying that ISPs can be asked to enforce copyright by
cooperation with rights holders ­ and this will become a condition of doing business as an ISP
in the EU. It also says that ISPs should be mandated to tell users about restrictions on access
to services and applications and "traffic management policies". This begs the question ­ why is
it so important for ISPs to tell customers about restrictions, if there are no plans to restrict
services?

One answer is that it opens the way for them to use techniques such as filtering and throttling
(which restrict and degrade the service to the end-user), provided that they include this kind of
information in their contracts. It builds in this concept right at the framework level, which sets
the overall structure for the ISP business. If this amendment is passed, it makes a fundamental
change to the principle on which the ISP business operates. The E-commerce directive says
that ISPs must not be asked to monitor, and establishes them as `mere conduits'. This
amendment says they may monitor if they inform their customers in the small print. It is very
concerning that this particular amendment appears to have been allowed through without any
consultation whatsoever, even in the Parliamentary lobbies.

Article 20, point 6 which mandated ISPs to include notices on copyright infringement in their
contracts, has been amended, and been incorporated elsewhere in Article 20.




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Briefing on the Telecoms Package and copyright enforcement
Written by Monica Horten
University of Westminster, Communications and Media Research Institute (CAMRI)
PhD research: The Political Battle for Online Content in the European Union
18 August 2008


Cooperation and graduated response
 "Co-operation" (see IMCO report, Amendments 9 and 112, Recital 12c and Article 33 (2a))
has acquired a meaning in the context of copyright enforcement which is almost the opposite of
its usual meaning. The Motion Picture Association, representing Hollywood studios, wrote to
the European Commission, defining `cooperation' as "proportionate and effective means of
redress" and that includes encouragement of "the take-up of technological tools discouraging
and/or preventing illegal activities"vii.

The European Film Companies Alliance (EFCA) says the French MoU `is an example how
cooperation between right owners and ISPs can be achieved. The deal foresees the
implementation of a "graduated response" to illegal file-sharing activities: Internet users
downloading illegal music or film files risk losing web access should they not answer
positively to initial warnings. Finally, filtering measures are another way to prevent online
copyright infringement..."viii

IFPI's written communications to the European Commission have been unequivocal in their
definition: " IFPI has been asking for the cooperation of Internet Service Providers ...to help
control the unauthorised offer and dissemination of protected content online". It continues:
"(ISPs) are usually best placed to act promptly and effectively against infringements over their
networks or services. Yet, in Europe, access providers have been unwilling so far to provide
any meaningful cooperation" ... "One of the most effective steps an ISP could take is to warn
infringing subscribers and thereafter to suspend and, eventually, terminate services to
subscribers who are repeatedly abusing the service to infringe copyright. Such termination is
feasible and not technically burdensome".ix

In this text, we have the words warn, suspend and terminate ­ the three strikes of graduated
response. Proposed as an option which the EU should consider, by the organisation which
represents the recorded music industry.

A similar definition has previously been proposed to the Parliament, and was rejected. This
was an amendment to the Bono reportx, which defined cooperation as : " the use of filtering
technologies to prevent their networks being used to infringe intellectual property, the removal
from the networks or the blocking of content that infringes intellectual property, and the
enforcement of their contractual terms and conditions, which permit them to suspend or
terminate their contracts with those subscribers who repeatedly or on a wide scale infringe
intellectual property"xi This text was rejected, and an amendment to the Bono report
opposing these concepts, was passed. One must therefore question why MEPs want to now
pass it into law.

The text of the revised Telecoms Package states "national regulatory authorities ... shall ...
promote cooperation between undertakings providing electronic communications networks
...and the sectors interested in the protection and promotion of lawful content ..." (IMCO,
Article 33 2a) And IMCO Recital 12c mentions a cooperation procedure.

It is entirely plausible that MEPs felt that they were voting for something entirely reasonable,
when seen out of context. However, when seen in the context of the available written material
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Briefing on the Telecoms Package and copyright enforcement
Written by Monica Horten
University of Westminster, Communications and Media Research Institute (CAMRI)
PhD research: The Political Battle for Online Content in the European Union
18 August 2008

on copyright enforcement, we must ask how should we then consider the Telecoms Package
which mandates national regulators to promote this "co-operation"? Does it, or does it not
mean graduated response measures supported by filtering and blocking of internet content? xii

Lawful vs unlawful
The current Framework directive xiii does not contain this word lawful. Nor does lawful occur
in the Universal Access directivexiv. In the e-Privacy directivexv it occurs in the context of
`lawful business practice' and `lawful interception', and the `period in which a bill may be
lawfully challenged', but not in the context of content. The word `lawful' in the context of
content and EU telecommunications law, first appears in the text drafted by the European
Commission of the amended Universal Access and e-privacy directives (Telecoms package)
. xvi In other words, in the law governing all telecommunications network and the carriage of
electronic data, we have an important new concept. It is interesting that this wording was
never questioned.

As discussed in my previous paper, there is a gap in definition for the word "lawful" in this
context. The text says that users will be restricted to lawful content, and in the context of the
wording "lawful" could be interpreted as meaning copyrighted and licenced, and possibly to
the exclusion of all other content. for example, the text links the word "unlawful" linked to
"copyright infringement" in one sentence. (IMCO Amendment 76, Article 21)`to engage in
unlawful activities or to disseminate harmful content, particularly where it may prejudice
respect for the rights and freedoms of others, including infringement of copyright.." This
raises a concern, because there is plenty of other lawful content on the Internet, other than
content put out by rights-holders. The question arises whether the intent is to restrict user's
access to content.

Cooperation supported by contract - the linked amendments
The pivotal clause is IMCO Amendment 112, Article 33 2a, which states that national
regulatory authorities shall `promote' co-operation. Promote is used because, as per the E-
commerce directive, the EU cannot mandate any filtering or monitoring of users ­ it has to be
a voluntary agreement. This clause is linked into the Framework directive via ITRE
Amendment 61 ( Article 8, paragraph 4, point g) , establishing such co-operation within the
overall telecommunications regulatory framework and user service obligations.

Article 33 (2a) is linked to the requirements for information on copyright infringement to go
into end-user contracts, via IMCO Amendment 67, Article 20, 2,2xvii and to an obligation to
send end-users messages in IMCO Amendment 75, Article 21, where it is specified that users
must be told they may be sent warning messages about copyright infringement. These two
Articles are supported by IMCO Amendment 9 Recital 12cxviii . It says that warnings regarding
copyright infringement could be sent out either as a preventative measure or in response to
particular problems, without defining what the particular problems are. It looks remarkably
close to strike one of graduated response. Recital 12c also states that ISPs will only receive
significant costs - where significant is defined as sending a letter by post'. The recorded
delivery letter, sent by post, is strike two of graduated response.

Thus, it can be argued that we do have a text that obliges ISPs to work with rights-holders for
the purposes of enforcing copyright, in a way that resembles graduated response. ISPs are
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Briefing on the Telecoms Package and copyright enforcement
Written by Monica Horten
University of Westminster, Communications and Media Research Institute (CAMRI)
PhD research: The Political Battle for Online Content in the European Union
18 August 2008

obligated to distribute information about copyrightxix and to put restrictions in their contracts.
And we have a text which limits users rights of access and distribution, to content which is
defined in terms of its copyright status. "Lawful" could be interpreted as meaning
copyrighted and licenced, and possibly to the exclusion of all other content.

Degradation and restriction of service
'Degradation of service' and `restriction of service' are difficult terms in a policy context
because they can have positive and negative meanings in the context of copyright enforcement.
They have been deliberately inserted into the contractual terms required of ISPs, and one has to
ask why? The reason appears to be that under EU law, there is a problem with ISPs filtering
content under a voluntary agreement, unless they have contractual clauses to limit their
liability, in the event that they will be filtering. Let's understand more about what they mean.

Degradation of service refers to the slowing down of an Internet connection. It happens when
an ISP takes measures to reduce the speed at which the data travels to the user's computer, and
typically is used to for peer-to-peer (P2P traffic. Technically, the ISP intercepts the P2P
download, and has a way to tell the computer to take the data at a slower rate. The user will
notice that the movie or music file they are downloading arrives much more slowly than they
expected. The technique is known as `throttlingxx' .

ISPs use `throttling' as a way to manage traffic when the network gets congested or when
there is a security threat such as a denial of service attack. That is the positive meaning where
we see the term `degradation of service' in the context of the `Telecoms Package' (Recital
14b).

However, in the context of copyright enforcement and `riposte graduée', the same `throttling'
techniques can be used to punish users. There is a risk that the ISP is placing a restriction on
legitimate activity. For example, the `throttled' traffic could be a legitimate software download
for business purposes, and nothing to do with copyrighted content.

Restriction of service is the next step up from degradation. It uses the same technology to
prevent traffic flows on the network ­ in other words, it's like a road-block - it can identify
individual types of peer-to-peer traffic, for example, bit torrents and shut them down.

The positive meaning is that it can be used for market segmentation. For example, users who
want to use bit torrent software, have to pay more for their Internet access; users who don't
want it, pay less. Rather like first class and economy travel.

However, the Telecoms Package concerns copyrighted content. In the context of copyright
enforcement policy, there is a negative meaning of restriction of service. The technology can
be used to police the restrictions which have been set in place by the State, or by the rights-
holders. The ability to shut down peer-to-peer traffic can be used to prevent users from
accessing websites and Internet facilities.

 In other words, a block on peer-to-peer would be implemented for the purposes of policing
restrictions on copyrighted content. Rights holder interests have advocated to policy-makers

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Briefing on the Telecoms Package and copyright enforcement
Written by Monica Horten
University of Westminster, Communications and Media Research Institute (CAMRI)
PhD research: The Political Battle for Online Content in the European Union
18 August 2008

that blocking of peer-to-peer , and blocking access to websites is an appropriate element of
`cooperation'xxi.

However, some peer-to-peer websites, content and facilities are not related to copyrighted
content. For example, students of film production might use them to communicate their own
work which may not be yet at a commercial level. Similarly, for musicians and software
developers. A unilateral block on peer-to-peer traffic risks blocking non-commercial cultural
and other content, and stifling innovation in the process. And it involves widescale monitoring
of user traffic across the ISP networks.

Restriction of service amendments
IMCO Article 22(3), and Recital 14 discuss restriction and degradation of service. Article 20,
(2, b) obligates ISPs to include information on restrictions in the user contract, and Article 21
(4 c) asks regulators to make ISPs do so. All of these texts hook into the ITRE Amendment 61
(Framework Directive, Article 8 ­ 4 ­ g), which contains the same limitation on user's rights
to lawful content.

The curious thing about Article 22(3) is that it asks the regulators to take action to prevent
degradation of service ( noting our definition above, this would mean preventing ISPs from
throttling traffic) . But, it immediately contradicts itself: regulators are also asked "to ensure
that the ability of users to access or distribute lawful content or to run lawful applications and
services of their choice is not unreasonably restricted." One interpretation of this second
element is that the converse is also true ­ that users ability to distribute unlawful content, may
be reasonably restricted. This leaves the door open for restricting access to content ­ given
our definition above, that would mean that technology on the network could be used to block
their access to copyright infringing content.

The point appears to be to reduce liability for ISPs, if they restrict users access to content.
Recital 14c, says that users should be `fully informed of any restrictions' ...'either the type of
content, application or service concerned' which may be an indication of the intent of the
drafter. It is also intriguing that Recital 14b specifically absolves liability for restrictions that
are carried out for network management purposes. If users must be told what content is to be
restricted ­ and it isn't about network management - then there is an implication that access to
content will be restricted. Meaning bandwidth is throttled and websites are blocked. On what
basis, we can only assume from the rest of the text, for their has been no public discussion.

You are free to use the information in this paper, provided you attribute it to the author.

To discuss the issues raised in this paper, please contact the author. Monica Horten is
carrying out PhD research in European communications policy at the University of
Westminster. Tel: +44 (0) 1628 672155 Website: www.iptegrity.com
i
   John McEnroe `You can not be serious!' on You Tube
http://www.youtube.com/watch?v=ekQ_Ja02gTY&feature=related
ii
    Gesac question in the high Level Conference on Counterfeiting and Piracy 13 May 2008 ; MPA, IFPI
submissions to European Commission, Consultation for Content Online 2006 and 2008
iii
    E-commerce directive 2000/31/EC Recital 40
iv
    A6-0318/2008 REPORT on the proposal for a directive of the European Parliament and of the Council
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Briefing on the Telecoms Package and copyright enforcement
Written by Monica Horten
University of Westminster, Communications and Media Research Institute (CAMRI)
PhD research: The Political Battle for Online Content in the European Union
18 August 2008


amending Directive 2002/22/EC on universal service and users' rights relating to electronic communications
networks, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the
electronic communications sector and Regulation (EC) No 2006/2004 on consumer protection cooperation
Committee on the Internal Market and Consumer Protection. Rapporteur: Malcolm Harbour. AND PE398.542v02,
Draft report, Rapporteur Catherine Trautmann
v
   Available on French Presidency website: http://ue2008.fr/PFUE/lang/en/accueil/PFUE-07_2008/PFUE-
21.07.2008/Informelle_culture_et_questions_audiovisuelles
vi
    The 152 amendments were reduced from over 600 on the IMCO report.
vii
     Public Consultation on Creative Content Online in the Single Market ­ Submission of the "Motion Picture
Association" (MPA) in response to the Questionnaire of the European Commission regarding Policy/Regulatory
issues, 2008 , p9
viii
     EFCA submission to ContentOnline Consultation 2008
ix
    Creative Content Online, IFPI response to the Commission Consultation , 2008
x
   Report on the Cultural Industries in Europe. Committee on Culture and Education. Rapporteur: Guy Bono. A6-
0063/2008
xi
    PE 398.378, Amendment 80, Heaton-Harris
xii
    IMCO Amendment 112, Article 33 (2a), consultation with interested parties. Linked to ITRE Amendment 61,
Article 1, point 8, e
xiii
     Directive 2002/21/EC . My point is easily established by running a search on the document.
xiv
     2002/22/EC
xv
     2002/58/EC , lawful business practice: Recital 23, Article 5 (2); lawful interception: Recital 11; lawful
challenge to a bill: Article 6(2)
xvi
     COM (2007) 0698
xvii
      Although the amendment text does not specify copyright infringement, the justification does do so.
xviii
      IMCO report Amendment 9
xix
     Recent comments from some MEPs have suggested that the messages are not just about copyright, but will
encompass a range of public interest messages from governments, such as public health information about buying
drugs on the Internet.
xx
     Also known as TCP reset /protocol spoofing.
xxi
     ibid IFPI




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