The Australian, Canberra

Net giants seek to change FTA rules

James Riley

7 December 2004

AUSTRALIA’S largest internet service providers have made an 11th-hour bid to amend the free trade agreement with the US, claiming it would expose them to an avalanche of litigation.

Telstra and Optus met senior government ministers yesterday to tell them the legislation was flawed and would hurt the internet industry and users. They claim the FTA legislation involves stricter copyright standards that could force internet companies to shut down alleged offending websites without proof or notice.

The multi-party Senate Legal and Constitutional Committee held a special meeting last night seeking clarification from the internet industry and Department of Foreign Affairs and Trade negotiators.

The Internet Industry Association, a Canberra-based lobby group that orchestrated yesterday’s meetings, initially said the discussions with Trade Minister Mark Vaile had been fruitful and that the minister had agreed to investigate the draft legislation.

But by afternoon, the federal Government said it would introduce the legislation today — rather than tomorrow as had been scheduled — effectively scuppering any hope that the Government might change the bill before its introduction into parliament.

The IIA claims to have been blindsided by two provisions that were made public only late last week. The provisions mean that internet companies would be forced to remove any material subject to copyright disputes from the websites of the customers who use their service. The industry is worried that automated "take-down" notices will flood the Australian market — as happens in the US — and leave the service providers open to legal action by the customer if the take-down notice is based on a wrongful copyright.

"Throughout the process we were told that any changes in a further bill would be of a minor and technical nature," said IIA executive director Peter Coroneos. "But there is nothing in these changes that are either minor or technical. These are wholesale changes that go beyond even what is required under US law."

While Labor or other parties might try to amend the bill in the Senate, they could run out of time given that parliament is scheduled to break for the year on Thursday.

The original goal of the changes to the Copyright Act had been to "harmonise" the intellectual property protection regimes between Australia and the US. But Mr Coroneos said items 11 and 13 in the draft bill would make the Australian copyright regime draconian, removing the "careful balance between the rights of copyright owners and users" that exists under current arrangements.

"Incredibly, the provisions have even stripped away protections required by the FTA," he said. "We can’t understand why these two new provisions are necessary.

"ISPs are now stuck between a rock and a hard place — they will be liable to copyright owners if they don’t act, and liable to their customers if the do."