Digital Economy Future Directions Consultation

We are currently working on a submission to DBCDE's future directions paper consultation. They are looking for something by 11 February 2009. See the consultation paper at:
http://www.dbcde.gov.au/communications_for_business/industry_development/digital_economy

The consultation paper asks for submission on a range of topics, from the nature of the digital economy, open access to public sector information, online safety and confidence, copyright, education and
skills training, and environmental impact of the digital economy. Importantly, the paper specifically excludes any submissions related to the National Broadband Network process and mandatory ISP filtering.

EFA intends to lodge a submission. However, since we have transitioned to a fully volunteer organisation, I'm here to ask for your help in writing our submission.

I encourage anyone who is interested in the consultation to help us out here. All editorial decisions will remain with myself and the EFA Board, but we would really appreciate your input.

If you have any questions, please don't hesitate to contact me directly. — Nic Suzor 2009/02/02 22:46

The Department of Broadband, Communications and the Digital Economy has called for submissions to its Future Directions Consultation paper by 11 February 2009.

Electronic Frontiers Australia (EFA) welcomes the opportunity to submit comments to the Future Directions consultation paper.

<Blurb about EFA>

EFA supports open access to public sector information to the greatest extent possible. A philosophy of open access to information can help encourage an ethos of transparency and accountability. Further, it can allow the private sectors and non-government organisations to multiply the value and impact of the information which the government produces.

Open access to public sector information requires three basic commitments: a presumption of that valuable public sector information should be available to the public; a commitment to open standards for publishing information; and the adoption of a liberal set of licensing terms for any intellectual property. Together, these will provide the necessary access and security for consumers of public sector information along with a culture of openness and sharing within the public sector.

It should be presumed that any valuable information created or assembled by the public sector is to be made available to the public free of charge. Exemptions such as those found in Schedule 1 of the Freedom of Information Act 1989 (NSW) provide some caveats to such a principle. A presumption such as this gives public servants the opportunity to share the fruits of their work with the greatest possible audience, and to see it have the greatest possible impact.

Open document formats based on published standards are to be preferred to proprietary formats supported largely or exclusively by one or a few companies. Open formats ensure equity of access to the information now and in the future. Using proprietary standards restricts potential consumers of the information to those owning the proprietary software in question, and requires that this software be licensed indefinitely in order to access the information in the future. Open standards for data transfer and storage are crucial to innovation.

The Commonwealth should endorse a default set of licensing conditions for intellectual property which it owns that foster re-use of information. The standard licences provided by the Creative Commons project provide an example of how this can be done in a manner which is both (relatively) simple and clear. Standardising these licenses across government not only makes clear that a liberal attitude towards intellectual property re-use is encouraged, it also lowers transaction costs incurred by consumers of the information in understanding the licensing conditions.

The Commonwealth is not a business - it should not be producing information which does not have an intrinsic public benefit, and so there is no imperative to recoup the cost of production of the information (although recouping the marginal costs of sharing the information, which will almost always be very low, may be justifiable). Allowing Australian companies and individuals to further develop intellectual property produced in the public sector can help to stimulate innovation in Australia's digital economy.

EFA notes that copyright policy and legislation poses a significant obstacle for individuals with a print disability in the digital economy. While the consultation paper notes that “barriers may presently exist to the full online participation by Australians with vision or hearing impairments”, the paper appears to consider only access to electronic media. EFA is increasingly concerned about the difficulty that blind people have in participating in the digital economy because of the inaccessibility of printed material in electronic formats. Australians with a print disability are increasingly reliant on plain text electronic versions of books and other printed material, which is often much more accessible than the more cumbersome and much slower alternatives of either Braille or books on tape. Unfortunately, plain text digital versions unencumbered by technological protection measures are not easy to come by, and the digitisation and sharing of printed material amongst blind individuals is extremely difficult under our current copyright law. While the recently introduced 'flexible dealing' provision in s 200AB may provide some relief in isolated circumstances, EFA believes that blind people in Australia ought to be able to enjoy significantly higher levels of access to published material, and calls upon the Commonwealth Government to simplify the statutory licence in Part VB of the Copyright Act 1968 (Cth) and either encourage market solutions or adequately fund the development of a public repository of published material in an accessible format.¹⁾

EFA believes that Australian copyright law should be consistent with our broader policy objective of encouraging innovation. Our current overly-restrictive copyright policy appears to be hindering innovation in Australia. The threshold for originality is currently set so low as to provide copyright protection for facts and figures in the public domain.²⁾ The test of substantiality is extremely uncertain and so loose as to impugn almost any taking of copyright material.³⁾ The fair dealing exceptions are so narrowly interpreted as to provide very little certainty and excuse very little reuses of copyright material.⁴⁾ The result is that Australian law is highly uncertain and not well suited to encourage online innovation. The recent changes to Australian copyright law, introducing a convoluted flexible dealing exception and an exception for parody and satire, are not sufficient to overcome these deficiencies in the law.

Experience overseas has shown that innovation requires room to experiment. The development of the current batch of filesharing technologies, virtual communities, social networking sites, and video and music sharing sites has been largely dependent on the ability of developers to experiment with models that may involve some infringement of copyright material. The large scale copyright owners are understandably nervous about the development of these disruptive technologies. Entrenched interests have a strong incentive to maintain the status quo. Maintaining the status quo, however, may not be in Australia's best interests. Again, experience has shown that the copyright industry has largely been successful in adapting to changing technologies and changing consumer demand - from recorded music, to VCRs, to personal video recorders, to on-demand internet distribution of film, television, books, and music. The successful business models of iTunes from Apple and Steam from Valve Software, for example, were greatly facilitated by the technological and social advances made by the various filesharing networks in the late 1990s.

The great danger with our copyright law is that it stifles innovation. The uncertainty in our law too commonly pushes development off-shore or halts it completely. If we are serious about encouraging innovation, innovators need much more certainty and much more breathing space. Innovators ought to be able to experiment with disruptive technologies and new business models with some degree of certainty as to the legal risks they face.

It has become clear in recent months that Australian innovators do not have this certainty. The IceTV litigation currently before the High Court is an example of an innovative business model facing extreme legal expense and risk because it is not clear whether it is permissible, in Australia, to compile directories of factual information in the public domain.⁵⁾ The iiNet litigation currently before the Federal Court similarly shows the risk that a carriage service provider faces through merely providing internet access to its subscribers.⁶⁾ Without speculating on the results of either of these two cases, it is clear that the legal costs and uncertainty that these companies face is sufficient to greatly disincentivise innovation.

Apart from reducing uncertainty, it is also important that we give new technologies a chance to develop. The now ancient example of the VCR goes a long way to show that the most threatening of technologies can be greatly beneficial both to the copyright industry and to everyday citizens. Without room for potentially threatening technologies to develop, we risk stagnating and losing out on technologies that could increase efficiency and social participation.

To this end, EFA suggests that we critically examine our copyright laws with a view to determine whether they really do serve the purpose of encouraging innovation. Encouraging innovation means much more than rewarding investment in the creation of new material; it must fundamentally allow for experimentation with new technologies and transformation and repurposing of existing expression. Copyright policy should reflect not only the interests of existing owners of copyright material, but also the interests of the next round of creators.

One major flaw in Australia's copyright regime, as compared to the United States, is that we lack an exception to infringement for transformative reuse of copyright material. In the US, transformative use is a factor in the four-factor fair use defence, and allows some latitude for innovative repurposing of existing expression. In Australia, our fair dealing exceptions limit unlicensed reuses of copyright material to a small number of allowed purposes. Innovative acts of reuse that are not able to be pushed into one of these categories generally require a licence, which is often not forthcoming or prohibitively expensive. Because the fair dealing provisions are so narrowly interpreted, a large proportion of creative expression is inhibited by our copyright law. Take, for example, Google Book Search, which is neither criticism or review nor research or study. Google argues that its Book Search is a fair use in the US,⁷⁾ but this type of innovation would not appear to be possible under Australian law.⁸⁾

EFA urges a reconsideration of the exceptions to copyright infringement under Australian law, in line with the policy goal of supporting innovation. EFA suggests that a transformative use exception should be introduced that prohibits mere repackaging but allows unlicensed repurposing of copyright material that is not directly substitutable for the original. EFA believes that such an exception could introduce much needed flexibility in Australian copyright law and provide some additional scope for innovation without compromising the incentives to create original expression.

Both the US DMCA and the EU eCommerce Directive provide safe harbour provisions which extend to online service providers (such as content hosts and the operators of websites which accept user created content) as well as carriers. This is not a free pass - the service providers must take action where infringement is brought to their attention - but it provides a degree of protection against errant users.

It is presently unclear whether the safe harbour provisions in Australia extend to such online service providers. These provisions should be amended to make clear that they do. Without such protection, online service providers are at risk of being sued in respect of any infringement that results from the use of their tool. This results in Australian companies being unable to offer services which their international competitors can, and being unwilling to invest in innovation in this space because of their uncertain legal position. The safe harbour provisions in Australia should be brought into line with those in the US and the EU, which have been effective in requiring a fair degree of responsibility without being unduly restrictive.

While the consultation has separated the issues faced by Australia's digital economy into a number of distinct topics, they are not entirely independent. In particular, Australia's attitude to copyright will have an impact upon the skills which Australians, and young Australians in particular, develop.

If Australia adopts a forward-thinking approach to copyright which balances fair use against the right to exploit the subject matter for economic gain, it will encourage the next generation of Australians to be engaged with the Internet and digital media. This will lead to improved digital literacy and a deeper and wider knowledge and skills base. However, if intellectual property rights are overly restrictive, and further cement digital media as a realm of passive consumption, Australian children will fail to develop the creative and technical skills necessary to flourish in the digital economy. We should do everything we can to allow our future artists and technicians to dive into experimentation - the best and cheapest form of education - so that they gain a positive impression of and familiarity with computing as an interactive activity.