Legal flaw in Sky TV's action against ISPs

OPINION

Paul Brislen

Paul Brislen says "Sky says this isn't censorship but there's really no other way to describe it."

Do you support Sky TV's bid to make ISPs block alleged pirate websites?

Yes
22%
No
78%
Total votes: 188
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Sky TV has written* to the major ISPs asking that they block certain websites because they carry materials that Sky says it has the rights to, locally.

It's drafted a note to take to court asking it for the power to do this.

The four ISPs named (Spark, Vodafone, Vocus and 2degrees) cover the vast bulk of New Zealand's user base so any move to block access to these sites for those customers would in effect be a blanket ban on accessing those sites for the whole country.

Sky says this isn't censorship but there's really no other way to describe it.

The law, as it stands, does not allow for this. The section of the Copyright Act that Sky invokes (Section 92B, which deals with an ISP's liability) says ISPs can't be held liable for a customer's infringing but that "nothing in this section limits the right of the copyright owner to injunctive relief in relation to [the customer's] infringement or any infringement by the Internet service provider". There's nothing that says ISPs have to take this extraordinary step to secure Sky's rights.

And this really is where the problem really lies. Sky has bought the rights to this content for a geographically restricted area (New Zealand) but these days we live in a global economy where that same content is made available to other territories on varied and sometimes incompatible grounds. Sky's argument isn't really with the local telcos, it should be with the rights owners who have licensed the content but aren't enforcing those licences. I'm sure that taking Disney, Fox and Sony to court isn't something Sky relishes so it's turned instead to the local network providers to see if it can't make them responsible for the whole mess.

Piracy dropping
Piracy is a big problem and Sky clearly feels it is hard done by and needs to respond. But piracy is nowhere near the problem it was five years ago and is rapidly dwindling in the New Zealand ecosystem. Vocus says piracy rates have dropped by around 70%. Why? Because paid services are available en masse and customers are happy to pay $15 a month for a service that offers them hundreds of hours of content. I'm signed up with Amazon Prime and now that I've watched "Sneaky Pete" I should probably cancel but I'm paying about $3 a month for the service so…

This is, I suspect, Sky's biggest issue. Customers are leaving because paying $140 a month for HD, all the channels and a hard drive just doesn't stack up next to Netflix, Lightbox, Quickflix, Amazon and all the others. Competition has come to town, reset the price point and Sky has not responded well at all. Its online offerings have been slow and late to market, its service is costly and a channel-based system is no longer the standard that the customer wants.

Let's pretend Sky wins
Let's assume the court grants this injunction and Sky gets to force the ISPs into blocking Pirate Bay and all the other sites they can find. What will happen then? Put aside for the moment the idea that the pirates will simply give up and not just launch another website and enter the amusing world of parallel importing and the Virtual Private Network.

The clever customer will simply add an extra hop to their internet connection and sign up for a VPN service and access content in another jurisdiction. Netflix NZ has a lot of content but Netflix USA has a ton of it, and there's BBC's iPlayer and all the rest as well. The ISPs won't be able to stop it because plenty of people and services use VPN capability and unless they want to get into DPI (deep packet inspection) and really breach everyone's privacy on many levels, this is a dog that won't hunt. And of course, it opens the door to other aggrieved businesses who will want to know why they can't demand similar actions from their internet provider. The slippery slope is very slippery at that point.

Sky needs to reassess its business model. It needs to offer a video on demand service similar to Netflix and it needs an interface that works as it's supposed to. It has to come to some agreement with the sport franchises about the future because without sport, Sky has no model at all and it's a long way down. It has to do that now and it has to stop blaming everyone else for the situation it is in. The market has moved on and Sky needs to move with it or be run over.

Paul Brislen is a former chief executive of the Telecommunications Users Association and a current contributor to the Institute of IT Professionals' TechBlog.


QUICK TAKE ON SKY'S WEBSITE BLOCKING BID

  • Spark: will fight Sky in court
  • Vocus: will fight Sky in court
  • Vodafone: won't comment on if it will fight Sky in court, says will comply with any order
  • 2degrees: hasn't made a final decision, but has issues with Sky's draft injunction on several fronts

* Sky sent Spark, Vocus, Vodafone and degrees this draft injunction. It says it will file the real thing in the High Court in a few days.


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17 Comments & Questions

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Sky tv just wants to screw everybody it doesn’t care about the rights of its customers or its competitors the ceo of SKY is feeling his grip on the Zealand economy is slipping the ceo of SKY can feel his bubble is about to burst oh my god we can,t have New Zealanders looking at stuff they are not supposed to look up this message is for the ceo of sky quit telling New Zealanders what they can and cannot do this is a free country man get with the program and offer New Zealanders the same type of content that netflix in the Unitedstates offers then maybe you will stop losing customers

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Excellent comments by Paul.

Because I think business is mostly personal, I suggest that the heart of Sky's problem is its CEO, who sadly has been underperforming for quite some time. This was not always the case, but its clearly been so the last few years.

So when will the Sky board of directors bring in a CEO who has the skills and experience to get them out of their current mess and go forward under a new business model that could make Sky a sustainable business once again?

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Can anybody say monopoly?

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Absolutely spot on analysis I reckon - I also suspect the Sky board and MD are not the people to bite the bullet and attempt a rescue for it is too late for the company,

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Your opinion seems to hinge on this:

"ISPs can't be held liable for a customer's infringing but that "nothing in this section limits the right of the copyright owner to injunctive relief in relation to [the customer's] infringement or any infringement by the Internet service provider.""

1. SKY aren't saying that ISPs are infringing anything. I don't know why this section would even be relevant. If SKY were saying they were liable they would be suing them for breach of copyright. Clearly that is not what is happening.

2. It specifically says SKY can seek injunctive relief in relation to a customer's infringement. This is exactly what they are asking for. The law doesn't say that the injunction must be against the infringer necessarily, only in relation to them. And it just so happens that the ISPs are the most logical parties to injunct in all this.

Fix the title.

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The issue is though that trying to get a website blocked that is not 100% copyright material (and copyright Sky holds) is not getting relief for a customers infringement, it is actually preventing customers who may not be infringing Sky from using that site as well. Simply won't fly.

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"...ISPs are the most logical parties to injunct in all this"
- yeah, right. Why not issue a take down notice for the specific content instead of trying to hit with hammer?

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I think you might have missed the bit where the author says there is nothing in law that requires the ISP to carry out the potential injunction.

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Sky youre just too expensive, never joining again with something so expensive showing less programmes repeatedly 20 times more than Netflix

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I suggest a VPN at around $5 per month is mandatory this day and age

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Sky does offer a Netflix style service - Neon ($20 per month).

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As do they provide another shaky streaming platform for sport - Fanpass. But they made their intentions very clear when they doubled the price of a monthly pass to push people back to boxes and subscriptions. Not willing to invest in a reliable and competitively priced streaming model.

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Which is significantly more expensive than the competition; isn't available on many platforms; and is clunky at best. It is almost like they offer it solely so that they can say that they have an on-demand offering - but they don't actually want anyone to use it!

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There is already the "SkyNet" law which is supposed to be there to tackle piracy but is seldom used and only by the music industry.

I hate using NRA quotes, but "Enforce using the laws you already have, don't create new ones".

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So it looks like the sky is finally about to fall.

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The US DMCA has "Safe Harbor" The EU equivalent calls it "Mere Conduit" .

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This > "Sky needs to reassess its business model" which is a very generous way of describing the issue. They have had a monopoly for years and don't really have a business any more. This legal action is their last wave before drowning.

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