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File-Sharing Measures Face Delay With Court Review Pending

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UK government plans to curb illegal filesharing could be delayed for at least a year as its most contentious measures are battled out in the high court.

The UK’s two biggest internet service providers, BT (NYSE: BT) and TalkTalk, will on Wednesday challenge the Digital Economy Act in a judicial review, on the basis that its proposals to tackle illicit filesharing infringe users’ “basic rights and freedoms” and received insufficient parliamentary scrutiny. The two companies together have 8.4 million subscribers, and have repeatedly expressed opposition to elements of the act.

The high court is expected to rule on whether the challenge can go ahead on Friday. If it agrees, the process of review could take until spring 2012, delaying implementation of the act even further, while content companies assert that illicit filesharing is costing UK businesses £400m annually in lost sales.

The act was due to come into force in January, but has been delayed by a series of regulatory hurdles and now by the legal challenge.

The outcome of the challenge is “critical” to the future of the act, a senior television executive told the Guardian. TV companies are increasingly concerned at the volume of their content being swapped over filesharing networks.

Under the act, rights holders will collect data about people believed to be downloading film and music from filesharing sites. Internet providers will then match the rights holders’ data against their customer database and send warning letters to those accused.

Repeat copyright infringers could have their internet access slowed or even blocked under secondary measures in the act. However, this second phase is understood to be about 18 months away from being considered as part of the measures.

“Since the DEA passed into law there has been a considerable amount of work to do to implement the mass notification system,” said a spokesman for the Department for Culture, Media and Sport. “Secondary legislation setting out how the system will be paid for and how it will work has to be passed by parliament. Ofcom also has to set up an appeals process.”

Jeremy Hunt, the culture secretary, last month passed one of the act’s most contentious measures – blocking access to websites accused of enabling filesharing – to Ofcom to review whether it is workable. The communications regulator is expected to report back in the summer.

Copyright owners, largely represented by the Motion Picture Association and the British Phonographic Industry, support the act’s attempt to crack down on piracy but have become discouraged at its protracted and slow progress.

The act’s cost-sharing arrangements also burden film and music bodies with 75% of the costs of the “mass notification system”, with internet providers footing 25% of the bill.

Film bodies are more interested in forcing internet providers to block access to allegedly infringing sites, and are understood to have drawn up a blacklist of around 90 so-called “cyberlocker” sites.

The high court’s judicial review judgment is likely to be appealed by whichever side loses, further delaying its implementation.

“The impact of online copyright infringement on the creative industries is huge,” said Christine Payne, general secretary of the creative industries trade union Equity.

“The DEA is the result of many years of discussion between government, industry and trade unions to try to provide a framework to legislate against online copyright infringement. We believe we had no choice to intervene to give the government support for this case.”

This article originally appeared in MediaGuardian.