Telcos and musicians join fight over internet downloads

TELECOMMUNICATIONS firms and a group representing musicians will have their say in a landmark High Court dispute over whether internet companies can be held responsible for illegal movie downloads by users.

By InvestSMART · 1 Dec 2011

By InvestSMART ·
1 Dec 2011

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A High Court battle between 34 Hollywood and Australian film and television studios and the internet provider iiNet began in Canberra yesterday, kicking off a case with major implications for piracy laws.

The Australian Federation Against Copyright Theft, representing the studios, is appealing against a Federal Court ruling that iiNet had not authorised its customers to break copyright laws.

In a sign of the potentially wide impacts of the case, the court yesterday allowed a bid from the Communications Alliance and the Australasian Performing Right Association to appear before the court.

This decision paves the way for the Communications Alliance, which represents telcos including Telstra and Optus, to argue against the studios' push to make internet companies liable for online piracy. In a submission to the Court, the Alliance said overturning the Federal Court's ruling would have a "very significant negative impact" on the industry.

The Australasian Performing Right Association is a body that enforces property rights on behalf of musicians, which is backing the film industry's bid to to overturn the ruling.

The studios, headed by Village Roadshow, have been arguing internet service providers should be held responsible for illegal video downloads by their customers since 2008.

Counsel representing the studios, Tony Bannon, argued that iiNet authorised the copyright breaches by failing to act on information that showed their customers were downloading movies illegally.

"We do object to the fact that they chose to do nothing," Mr Bannon told the court.

iiNet has argued that enforcing the studios' property rights is not its responsibility, and it would be impractical and too costly to act against every allegation that its customers had engaged in piracy.

The case is set to continue today.

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Frequently Asked Questions about this Article…

What is the iiNet High Court case about and why does it matter to investors?

The High Court case is an appeal by 34 Hollywood and Australian film and television studios, represented by the Australian Federation Against Copyright Theft, against a Federal Court ruling that iiNet did not authorise its customers to illegally download movies. It matters to investors because the outcome could reshape liability for internet service providers and affect costs, regulation and risk for telcos and ISPs.

Who are the main parties involved in the dispute over internet movie downloads?

The main parties are the studios (headed by Village Roadshow and represented by the Australian Federation Against Copyright Theft) and the internet provider iiNet. The Communications Alliance (representing telcos including Telstra and Optus) and the Australasian Performing Right Association (APRA, representing musicians) have been allowed to appear in the case.

What did the Federal Court previously rule about iiNet's responsibility for customer piracy?

The Federal Court previously ruled that iiNet had not authorised its customers to break copyright laws. The studios are appealing that decision in the High Court.

What argument are the studios using to try to hold iiNet liable for illegal downloads?

Counsel for the studios, Tony Bannon, argues iiNet authorised copyright breaches by failing to act on information that showed its customers were downloading movies illegally, claiming iiNet 'chose to do nothing.'

How has iiNet defended itself against the studios' claims?

iiNet argues that enforcing the studios' property rights is not its responsibility and that it would be impractical and too costly to act on every allegation that its customers had engaged in piracy.

Why did the Communications Alliance and APRA intervene, and what do their positions mean for telecom investors?

The Communications Alliance (representing telcos such as Telstra and Optus) and APRA (which enforces musicians' rights) were allowed to appear because the case has wide implications. The Communications Alliance warns overturning the Federal Court ruling would have a 'very significant negative impact' on the industry, indicating potential increased costs or regulatory burdens for telecom investors to monitor.

What are the potential business and financial implications if the High Court rules against iiNet?

If the High Court overturns the Federal Court decision, ISPs and telcos could face greater legal responsibility to police copyright breaches. That could mean higher compliance costs, new operational processes, and increased legal risk for companies in the sector, which investors should monitor closely.

What is the current status and next step in the legal process that investors should watch?

The High Court hearing began in Canberra and is ongoing, with the case set to continue. Investors should watch the court's ruling and any industry reactions, because the decision could influence future piracy laws and the responsibilities of internet providers.