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The Government has just released a cabinet paper outlining proposed amendments to the Copyright Act to battle widespread illegal downloading of copyrighted material.

Many will remember the backlash earlier in the year when the infamous section 92a proposal was nearly passed into law. It would have allowed internet providers to disconnect those suspected of illegally downloading copyright material after three warnings.

The problem is the proposed legislation was a dog’s breakfast – unfair to consumers who didn’t have a proper mechanism to defend themselves and putting too much power in the hands of rights holders.

The paper released today looks a lot more sensible.Kiwiblog’s David Farrar has been following the issue closely and summarises the pros and cons well.

Effectively, there’s more formality in the process of disconnecting a wayward downloader and the final decision, which would result in disconnection for six months, will now be made by the courts. The Copyright Tribunal will get involved if after three notices, the ISP account holder continues to infringe copyright law. Then the right holder can pursue the downloader for up to $15,000 in damages.

However, the account holder can also counterclaim to the tribunal anonymously via their ISP. This could become important as downloading over shared internet connections and computers sees the person paying the bill wrongly fingered for illegal downloads.

Overall, it’s about as watered-down as we could expect, given the ACTA negotiations and the legislation passing all around the world to tighten up copyright legislation to take on illegal downloaders.

According to NZFACT, there are approximately 200,000 file shares per month in New Zealand. That’s a fair amount of content walking out the door for the entertainment industry and software makers, so you can understand their desperation to have the law changed.

How effective the measures are if passed into law will depend on a number of factors – cheif among them, as Farrar points out, is the fee rights holders will have to pay ISPs to issue a complaint notice against an ISP’s customer. If the fee is too low, they will bombard ISPs with requests to notify customers. If the fee is high, the rightsholders will likely only go after the biggest downloaders.

Either way, in the next year or so legislation is likely to pass that will stem the flow of free content to broadband connections all over the country. Technology will provide workarounds for the most determined downloaders, but the average user is likely to throw in the towel after receiving two or three notices. For those who have grown up with Bittorrent, the end of the party will be particularly bitter.

We aren’t out on a limb with this one – in a bid to protect their creative industries most western nations are moving this way and cosying up together under the banner of ACTA. At a time when the web is facilitating open access to content like never before, the question is whether this blitz of legislation will slow the magnificent innovation and diversity the net is known for.