Digital Economy Act's copyright infringement regime could hit Wi-Fi providers

Updated June 2010

The Digital Economy Act and Ofcom's draft code of practice to reduce online copyright infringement may raise serious consequences for pubs, bars, cafés and other outlets providing Wi-Fi to their customers.

The first sets of obligations are imposed on internet service providers (ISPs). The new regime establishes a procedure under which owners of music, videos and other content can send an infringement report to ISPs if they believe that a high number of the ISP's customers (or "subscribers" as they are called in the Act) are downloading content unlawfully. ISPs must inform the relevant subscriber that they have received an infringement report. They must also send copyright owners, on request, anonymised lists of subscribers to whom a copyright infringement report has been sent.

It is hoped that these warning notices will significantly reduce the level of illegal file sharing. However, if it does not, Ofcom has the power to bring forward "technical obligations". ISPs could be required to take more severe action against subscribers, including limiting internet speed or suspending internet services.

Before the publication of the Code, the question for those in the leisure industry has been whether they will be treated as an ISP for the purposes of the Act when providing Wi-Fi services (free or paid). The draft Code provides some clarity on this issue. Ofcom suggests that where a Wi-Fi network is provided in conjunction with other goods or services, such as a coffee shop or a hotel, its presumption is that the provider is an ISP. However, only ISPs with more than 400,000 subscribers are proposed to be caught by the new requirements, ruling out all but the seven largest ISPs in the UK.

This is good news for leisure outlets, but it leaves two remaining concerns.

First, the criteria may change. The Code is only in draft form and is currently open for consultation. Before publication of the final Code, the definition of ISPs may be widened to include leisure outlets with a smaller number of customers. Also, the draft Code specifically envisages that the criteria will be kept under review and could be widened even after publication of the final Code if this is necessary to address illegal file sharing. This would be a significant concern, as outlets have little, if any, control over what users are doing with Wi-Fi and they could find themselves having their internet connection restricted or terminated without having been at fault themselves.

Secondly, it is possible that an outlet may be treated as a subscriber, rather than an ISP, so that for the purposes of the Act, the actions of its customers in downloading infringing content are treated as the actions of the outlet. This concern is not new and is a risk to anyone providing Wi-Fi services to the public.

Any leisure operator wanting to submit a response to Ofcom's consultation must do so by 30 July 2010. TLT is in the process of reviewing the Code with clients and can assist with this. The new Act and proposed Code are also a reminder for providers of Wi-Fi services to have in place effective terms and conditions with its customers using Wi-Fi services managing the copyright infringement risks. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2010. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.