Three Strikes…unintended consequences for Canadians?


This week, representatives from various nations will gather in Guadalajara, Mexico to discuss the Anti-Counterfeiting Trade Agreement, or ACTA.

ACTA is an agreement being negotiated by several countries, including Australia, Canada, the European Union, Japan, Mexico, Morocco, New Zealand, United Arab Emirates, and the United States. The main objective of ACTA is to put “in place international standards for enforcing intellectual property rights in order to fight more efficiently the growing problems of counterfeiting and piracy.”

One of the intents of the agreement is to stop illegal file sharing on the Internet.

There are, of course, convincing arguments to be made for addressing illegal file sharing. The Canadian Record Industry Association (CRIA) – the organization that represents the interests of the Canadian sound recording industry – claims file sharing in Canada costs the industry $100 million annually, and the RCMP has stated that they are powerless to stop it. The recording industry internationally has noted important drops in income, jobs, and new artists signed, and has attributed this to illegal file sharing.

Some aspects of ACTA, including lack of transparency and secrecy surrounding its negotiation, have raised the ire of many people. A contentious item expected to be on the table is the so-called “three strikes” approach to piracy.

There are many flavours of the three strikes scheme, but the concept is that suspected illegal file-sharers would be met with graduated responses from their Internet Service Provider (ISP).  They would first be sent a warning email, then a letter if they continue. The final strike would result in an appearance before a judge or tribunal.  The judge or tribunal could impose a fine, or suspend their access to the Internet for a period of time.

The idea of a three strikes law is gaining traction in many countries. France has recently adopted the loi Création et Internet which imposes such a three-strikes regime.  Britain’s government is considering the Digital Economy Bill which may include similar provisions.  New Zealand has been considering such a regime since 2008.

It’s not the only route to follow, however.  Other countries, such as Spain, have opted to not go down the disconnection path, but rather attempt to penalise websites that permit illegal file sharing. Germany, home to the world’s most popular ccTLD (.DE), has decided not to go down the three strikes road, reasoning that the approach would be at odds with the country’s privacy laws.

What are some of the implications of taking such an approach?

Imagine that your 14-year-old son downloads music illegally. Your entire household could potentially be kicked off the Internet for an extended period of time. This means no access to banking online, no access to government services, no email, no access to work for many.  As we move more and more to a digital-based economy, what are the consequences of penalising possibly thousands of average people by denying them access to the Internet?

I think we also need to consider the effect such a prescriptive, top down approach to regulate the Internet would have. The Internet is, by its very nature, generative, creative and organic.  To start imposing measures such as this could challenge the very ‘spirit’ with which it was created. It’s also this creative and organic nature that would present one of the biggest challenges to such a law: put up a barrier on the Internet such as monitoring traffic for illegal downloads, and there’ll be legions of people looking for – and finding – ways around it.

Finally, the costs of monitoring for illegal activity and enforcing these rules will no doubt add costs for ISPs, which in turn will be passed on to the consumer. We need to be careful about doing anything that may have the unintended consequence of raising the price for Internet access in a country that already has some of the most expensive access in the world.

CIRA’s vision for Canadians is to have minimal barriers to get online, where they have the opportunity to participate in an Internet that is a generative, creative and organic environment for the benefit of all.  Let’s make sure we don’t do anything that ends up having unintended negative consequences.

With regard to the Anti-Counterfeiting Trade Agreement, what do you think Canada needs to consider?

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  • Richard Pitt

    While the point about the 14 year old’s actions affecting a whole family should not be minimized, the major reason I am against most of the ISP vs customer scenarios is that the ISP is not now and should never be put in the position of being a judge, jury, executioner. They should be treated in the same manner as telephone companies and trucking companies – that of common carrier – no interference with nor prejudice against the traffic of any customer, and only part of a proper police investigation under properly issued judicial warrant in collection of evidence for any infraction.

    The publishers should not be able to use, or force others to use, civil law to bypass or augment the criminal courts – ever!

  • Rob

    I think Canada needs to look at who seems to be running the US these days.The entertainment industry.We don’t need a DMCA imposed on the world by the US.The industry is trying to change the world because they are to stupid to change their own business plan to fit the 21st century.

  • Steve Hannah

    [quote]The industry is trying to change the world because they are to stupid to change their own business plan to fit the 21st century.[/quote]

    Exactly what does a 21st century business plan look like? You can’t compete with free.

  • Richard Westgate

    Well of course you can compete with free! Just provide the best service, the most convenient service, the most value added service, so that no-one will want to bother with the inferior product they can get for free.

  • Scott Walsh

    “…claims file sharing in Canada costs the industry $100 million annually, and the RCMP has stated that they are powerless to stop it.”

    How much revenue has been generated by the blank media levy ($0.29 per CD-R regardless of use)? I suggest that the numbers be corrected to reflect the income generated by the levy.

    You can’t tax an illegal act, and the media levy essentially legalizes private copying.

    Also, labels owe artists some cash for the whole “pending list” scam, so who are they to advocate for “the rights of the artists”?

  • Ted

    A couple of points:
    Given the high quality of media distributed over the internet for free, the only real value that someone selling the product can offer is the reward of having monetarily supported its production. One might argue that if it such a reward system were not sufficiently powerful, the music industry would have died out in the 80’s with the advent of dual cassette decks. In any case it’s not clear that $100 million is a significant amount of money for the recording industry — what percentage of total revenue does this represent?
    An interesting aspect of filesharing is that titles need to hit a critical mass of popularity (and sales) before they are widely available via file sharing. So the loss of revenue tends strongly toward titles which are already profitable, allowing new or unknown artists to receive proportionately more income. This does not strike me as undesirable; it would seem to encourage record labels to expand their rosters and make it easier for more artists to achieve success, by borrowing Robin-Hood-style from the more profitable ones. Certainly the Nickelbacks and Avril Lavignes of the recording industry are not, barring unfortunate spending problems, in need of revenue.
    Also I expect that ISP’s would stand to be able to reduce costs as a result of such a policy, due to a decrease in bandwidth. I’d like to see a projection of these numbers, as well as an estimation of the cost of enacting the three strikes system. It’s worth noting that unsavoury ISPs could simply issue strikes based on bandwidth utilization in order to save money. What is the proposed appeals process for the accused?

  • Dave

    Why don’t we just abolish Intellectual Property! End the monopoly. The fashion industry deals with knockoffs (piracy) all the time. They survive by creating brand image and good customer support. Using the government to coerce or force people to buy your (old) media won’t win the consumer over.

    Why don’t record companies offer mass licensing and their entire library at the touch of my fingers? Perhaps I will buy on volume!

  • Mark

    Just because the recording industry *says* it’s file sharing that’s breaking their business model, doesn’t mean it is.

    The last two years running, the top earning movies, the Dark Knight and Star Trek, were supposedly also the ‘most pirated’. Hmm. Doesn’t seem to be hurting their bottom line very much.

    The recording industry has been whining about losing money ever since the dawn of radio, and probably before that. Tell them to STFU, legislate network neutrality, and be done with it. And put an end to the damned recordable media levy while you’re at it.

  • George Geczy

    What the media industries continue to fail to understand is that it isn’t ‘illegal sharing’ that is reducing their revenues so much as a complete shift in how media is produced, published and consumed. They also display an incredible lack of knowledge about their own customers, often penalizing their very best customers with their policies.

    The record industry plan was to migrate everyone away from singles and less expensive LPs to more expensive CDs… moving back to singles distributed as individual files was against this roadmap, so they have fought it wherever possible. Imagine if they started selling $0.99 songs without DRM on the internet in 1999 (everything, new and backlist) – Napster would have never gained traction, and illegal file sharing would be a minor issue.

    While exceptions always exist, many surveys and reports have also shown that high volume ‘illegal’ file sharers often are also the greatest purchasers of CD and DVD media.

    ACTA is attempting to codify certain business models that not only make minimal sense today, but will be made even more outdated in the future. This needs to be fought, and public debate (aka transparency) is the only way to fight it.

  • Gerald

    The making of music for profit is nothing new, but mass proliferation of personal -and now portable- music players for playback pleasure is. We have changed the variables of the industry to the extent that it is time to think of new ways to profit from it rather than the direct sales of individual songs. It’s no ones fault but it’s time.

  • Alberta Business Plans

    this is such an alrming stage i think someone should do something to prevent it

  • government grants

    well if they do it they will surely pay the price

  • datatect

    Dear Byron Holland – I am familiar that you still work for the rather sleazy Aeroplan online marketing schemers in some capacity. And the expiration of Aeroplan offers, was that not a huge problem some yrs back?


    Do you support ACTA at its core, with a few minor tweaks? No, Yes?

    Do you support Bill C10 based on some preposterous idea that Harper and the CPC are trustworthy, and somehow Canadian official are immune from spying of citizens, even though huge amounts of data can be mined and used at taxpayers expense to shape election campaigns, a sort of Google Analytics advantage for CPC? Or do you wholeheartedly support a free and open Internet? And we are all innocent unless proven guilty, and not by snooping?