Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Hansard source

I am pleased to rise to speak on the Copyright Amendment (Online Infringement) Bill 2015. This is an important bill which will provide an effective mechanism for copyright owners to disrupt the supply of infringing copyright content to Australian consumers. I would like to emphasise three points in my remarks this evening: firstly, there is a growing issue with copyright infringement in digital media; secondly, there is a need to take action to address this problem; and, thirdly, I want to speak about the measures in the bill which are directed to addressing the problem.

Let me start with the growing problem of copyright infringement. The copyright framework has existed for centuries. The policy rationale is to give creatives an incentive to engage in the intellectual and creative effort to produce works—and that incentive arises because they can capture remuneration for their work. Typically, and traditionally, the copyright framework has worked on the basis that the work—be it a literary work, an artistic work or a musical work—is created and then it is disseminated on a per unit basis. That might be the number of records sold, the number of books sold or the number of movie tickets sold. Historically, there has been a physical production process which is difficult to replicate. It is not easy to replicate the printing of a book if you are not the copyright owner; it can be done but it is not the easiest thing in the world to do.

The policy framework for copyright has always involved the striking of a balance between the rights of the creators and owners of copyrighted works and the users and disseminators of those works. Striking that balance is never a simple or straightforward exercise; there are a range of considerations to weigh up. What we have seen, however, over the last 20 to 25 years is a new factor which has made the policy issues in this space even more complex, and that is the rise of digital technology as the means by which artistic, literary and creative works are disseminated. The way most people in Australia and other advanced nations—indeed, most nations—access music, movies, television or books today is almost invariably over a digital pathway.

There are a whole range of very telling statistics that can be quoted in substantiation of that proposition. Let me quote a few statistics from a compilation prepared by Teresa Sperti, an expert in digital marketing. She has drawn together some interesting statistics from a range of reputable sources. For example, the Sensis e-Business Report 2014 noted that 56 per cent of Australians now own a tablet device and 77 per cent now own a smart phone. The Deloitte Media Consumer Survey2014 noted that the internet, as a preferred source of entertainment, continues to grow at roughly 10 per cent per year. Indeed, among all Australian consumer in that survey, the percentage of people who ranked television as their preferred source of entertainment was 64 per cent and the percentage who ranked the internet as their preferred source for social or personal interests was 63 per cent; and it was expected that the crossover between the two would occur this year—that is, the internet would become the most preferred source of entertainment. So digital mediums for the dissemination of material continue to become ever more important. Another interesting statistic is that, according to the Deloitte Media Consumer Survey, some 32 per cent of Australians purchase e-books and, of those who do purchase e-books, two-thirds are reading more digital books than printed books. So there is ample evidence to support the proposition that content is being generated and disseminated using digital technology.

From the point of view of both producer and consumer, digital technology is much more efficient and rapid than the traditional technologies. But one of the consequences of digital technology is that it is much easier to copy a work than it hitherto was. Indeed, thanks to digital technology the copy can be indistinguishable in quality from the original work. The policy risk this presents is that we will end up in a world where it becomes very difficult to protect your copyright in a work. That tends to undermine the incentives of creators and also those in the business of disseminating content.

We know that we do have an issue in Australia with online copyright infringement. Indeed, Australia is a jurisdiction which has a relatively high rate of online copyright infringement, or illegal downloading. According to some recent research, some 21 per cent of all Australians over the age of 18 have engaged in illegal downloading. A statistic which should not fill us with pride is that 11.6 per cent of all illegal downloads of Game of Thrones happen in Australia. That is a percentage vastly in excess of our percentage of the global population. According to 2014 research prepared by the IP Awareness Foundation, online film and television piracy is increasing, with 29 per cent of Australians admitting to being active pirates. That same research found that one in four teenagers engages in the downloading or streaming of infringing film or television content. So we do have a growing problem with copyright infringement when it comes to digital media.

I want to turn now to why it is important that we do what we can to address this issue. There are good policy reasons why seeking to address the issue of online copyright infringement is something that government should aim to do. To start with, it is clearly important that we are seen as a jurisdiction, a market, which respects and enforces copyright. That is critical to having and maintaining a vigorous set of creative industries in Australia in fields as diverse as film, television, music, literature and so on. According to a 2012 report by PricewaterhouseCoopers, the range of Australia's industries that are subject to copyright protection employ some 900,000 people and generate economic value exceeding $90 billion, including $7 billion in exports. But of course, as I have been arguing, digitisation has tended to mean that these industries are particularly susceptible to harm from online copyright infringement. Of course a second factor is that, potentially, online copyright infringement can be harmful to consumers.

A third issue that we need to take account of, as we identify reasons why it is important to see if we can fix this issue, is that there are deficiencies in the current law of copyright, meaning that it is not a fit-for-purpose tool in some ways in allowing rights holders to efficiently enforce their rights in this modern digital world. For one thing, there are a number of foreign based websites that disseminate large amounts of infringing content to Australian internet users, and presently they are able to operate, in practical terms, without disruption, and their operators can secure a profit from facilitating the streaming and downloading by end users of infringing copies of audiovisual material. And of course the legitimate owners of that material do not share in the returns which are generated. In fact, if we are clear about what is occurring here, unlawfully accessing and then profiting from the intellectual and artistic endeavour of others is a form of theft.

Today, however, rights holders face a number of practical barriers when it comes to seeking to enforce their rights against the operators of these sites and these services. The most practical barrier of all is that the website that is facilitating this type of infringement, the operators of which are engaging in this form of intellectual property theft, is typically located in a jurisdiction where it is very difficult, if not completely impractical, to take legal proceedings. So we have a specific problem in the current regulatory and legal framework which is available to the owners of copyright to enforce their rights: that it can be very hard to take enforcement action against entities which are operating outside Australia. You would need to seek an injunction from a court, which requires lengthy and costly civil proceedings, and, because infringement is occurring on quite a large scale, it is often not viable for rights holders to enforce their rights against individual users.

It is important to acknowledge that there is a range of factors at play here, and it has been argued by a number of people in this debate that one factor has been that global rights holders tend to bring content to Australia later than it is made available in other markets and at higher prices. On that front, it is important to acknowledge that rights holders have changed some of their practices in recent years, and there are a number of constructive developments that we have seen in the last year or so. We saw Foxtel, for example, lowering its prices late last year, and we have seen new streaming services—Stan, Presto and Netflix—operating in Australia providing greater access to consumers for legitimate content at reasonable prices.

Let me turn now to the key mechanisms in this bill which are designed to facilitate copyright owners taking action to disrupt the supply of infringing copyright content to Australian consumers. Specifically, the bill will enable copyright owners to apply to the Federal Court for an order requiring a carriage service provider—typically, that is going to be an internet service provider, one of the companies through which most Australians obtain their internet connectivity; so it is an order requiring an internet service provider—to block access to what the bill calls 'online locations' where those locations infringe or facilitate the infringement of copyright and that infringement is in fact the primary purpose of those online locations. I think that, for present purposes, we can understand 'online location' as primarily meaning a website, but, nevertheless, that language has been used to take account of the rate at which technology changes and of course the mode of operation of some technologies where bits of content are spread very widely amongst multiple locations.

Provisions of the kind contained in the bill have been used in other jurisdictions, including the UK, Ireland and Singapore, and in these jurisdictions an injunction is often ordered without any opposition from the internet service provider concerned. The provisions in the bill have been drafted carefully to ensure that the new injunction power will not affect legitimate websites and services that legally provide access to copyright material. Importantly, the provision will apply on a no-fault basis against the carriage service provider—that is to say, the internet service provider. This recognises that it is not necessarily the case that carriage service providers are responsible for the infringing online locations. They are, however, best placed in a practical sense to facilitate Australian internet users being prevented from accessing those locations. So there is a clear distinction being drawn between whether internet service providers are responsible for the infringement—that is not being asserted; that is not the policy basis underlying this bill—and, on the other hand, whether internet service providers are the party best placed to facilitate the legitimate rights of copyright owners being protected against those who are engaging in infringing behaviour. Importantly, the legislation has been drafted with a view to ensuring that the power in it is only as broad as it needs to be to achieve its objectives and no broader.

There has been extensive consultation conducted on these measures, including a discussion paper released last year by the Attorney-General and the Minister for Communications, and a number of submissions—quite a number of submissions—were made in response to that discussion paper, and there are certainly measures in this bill which respond to comments made in those submissions.

Copyright protection is an essential mechanism for ensuring the viability and success of creative industries by providing an incentive for and a reward to creators. That is the underlying policy rationale for why the government is taking action here in this legislation, with a view to reducing the rate of online copyright infringement in Australia. The government does want to acknowledge the collaboration and cooperation of a range of parties, including internet service providers as well as rights holders, in developing this framework. The government looks forward to the ongoing cooperation of these stakeholders as we move to implement this framework.

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