Digital Economy Bill Rushed Through U.K. Parliament Before Election; Broadband Tax Proposals Dropped

The Digital Economy Bill has been passed by the lower House of Commons in the United Kingdom, as the government rushed to pass the controversial law before Parliament closes for a general election next week.

An unpopular proposal to impose a £6.00 (US$9.13) per-year tax on all fixed-line connections was removed from the reform package, to avoid lengthy debate and re-readings, which could have seen the bill fail before Parliament is dissolved on Monday (12 April). The government had hoped to raise around £170 million a year from the tax to finance high-speed broadband roll-out to under-served regions, as part of its Digital Britain plan.

The controversial clause in the bill gives the government powers to throttle or disconnect the Internet connection of users accused of repeated breach of copyright laws, via illegal downloads of files such as music and movies. The bill will give the government the right to disconnect file-sharers, or "pirates" as they have been dubbed by the music industry, without the need for a court order or judicial review, and could become law within days.

Meanwhile, a plan to divert funding from the public-service broadcaster, the BBC, to pay for the creation of regional news offerings by commercial broadcaster ITV also appeared to have been dropped from the bill.

Outlook and Implications

• Withdrawal of Broadband Tax a Blow to Digital Britain Plan: The dropping of the clause relating to the creation of a broadband tax will be a serious blow to the government's Digital Britain plan, which intends to bring high-speed broadband to every home in the country (see United Kingdom: 8 January 2010: U.K. Government Launches Consultation on US$1.6-bil. Digital Britain Broadband Investment), as it looks to Internet connectivity to boost economic recovery. The opposition Conservative party had pledged to drop the tax if it wins the election, which has now been set for the 6 May, while the Labour government is expected to reinstate the tax if it wins another term. With the parties neck-and-neck in the polls, it is impossible to see if the tax has any future at this current point—but the government's decision to drop it from the Digital Economy Bill has been attacked as cynical and spineless. Without the tax, it is hard to see how the Digital Britain plan can succeed, as there is not sufficient market incentive to bring broadband services to the most remote areas of the United Kingdom, and the government has not committed sufficient funding to achieve its goal of universal coverage without the tax. In dropping the broadband tax to push the bill through, the government is risking the failure of its plans to bring broadband to all by 2012.
• Instant Disconnection for Illegal File-Sharing Becomes a Reality: Despite the government's willingness to water down the bill, the highest profile clauses, which will allow the choking (slowing down) or disconnection of Internet access of people who repeatedly infringe copyright law, was left in the bill. The law will force ISPs such as BT, Virgin Media, and TalkTalk, as well as mobile broadband operators, to send warning letters to any users who are illegally downloading copyrighted files such as music and films, with those accused of repeat offences facing having their connection blocked. The majority of U.K. ISPs affected by the bill have criticised the proposals (see United Kingdom: 16 March 2010: Carphone's TalkTalk Slams Broadband Anti-Piracy Bill in U.K. ), with BT attacking it as unworkable and unenforceable and indicating the high risk of innocent customers being disconnected because of third-party access of home wireless networks. Carphone Warehouse operator TalkTalk’s Andrew Heaney has slammed the way the bill had been pushed through Parliament as "undemocratic", adding that it was "a bad day for democracy" when such a complicated bill with such serious ramifications could be passed with so little debate. Internet freedom campaigners also criticised the plans, with the Open Rights Group calling it an attack on everyone's right to communicate, work, and gain an education, adding that the government has shown itself to be out of touch with an entire generation's values. However, the government minister in charge of the Digital Britain scheme, Stephen Timms, said he believed the measures were a "proportionate" and "appropriate" response to the growing problem of illegal file-sharing. The issue of the disconnection of illegal file-sharers has dominated the bill, and the government's unwillingness to drop this contentious issue has left the country's operators facing unrealistic demands to police customers' web use.
• All Eyes on the EU to Take a Lead on Broadband Rights: The European Union (EU) has recently launched a consultation on extending the universal service agreement to cover broadband access, following the release of the 2009 telecoms reform package (see Europe: 3 March 2010: EU Launches Consultation on Telecoms Universal Service Laws). The 2009 package contained a significant climb-down on the issue of Internet disconnection, as several states in the bloc including the United Kingdom were seeking to pass strict new laws allowing the removal of access for illegal file-sharing without judicial review (see Europe: 6 November 2009: EU Agrees Telecoms Regulation Package But Backs Down on Internet Rights Issue). However, the EU has threatened legal action against Spain if the country moves to adopt a similar law that allows cutting off the Internet access of pirates, following the passing of the Hadopi law in France (see France: 23 September 2009: French Parliament Passes Controversial Anti-Piracy Law). Although the EU has yet to adopt a strong legislative stance on broadband access rights, the U.K. legislation could put it on a crash course with the European regulator, which generally regards Internet access as a fundamental right and vital to providing access to services such as education and banking.