The speed at which the Digital Economy Bill was rushed through Parliament to become law last week (9 April) has left the media industry feeling short-changed, as the promise of a "Digital Britain" fades amid controversy.
With the date of the General Election looming, the Government fast-tracked the landmark media legislation in the "wash-up" period before Parliament is dissolved, spending just two hours debating the Bill's 45 clauses in the House of Commons.
The Conservatives, who supported the Bill in the Commons but have pledged to revise it if they come into power, have been quick to censure the legislation, with shadow culture secretary Jeremy Hunt describing the Bill as a "catalogue of ducked decisions".
Pointing to the lack of reforms for the struggling local radio and press sectors, the lack of a path to provide super-fast broadband, and the failure to clarify the limits of the BBC, he said: "We wanted an iPod; we got an Amstrad. We wanted a digital switchover; we got an analogue switch-off. It's time to reboot."
The Digital Economy Act that has emerged is very different from the vision outlined in the Digital Britain report of June 2009, and even the first reading of the Digital Economy Bill last December. It was, after all, a highly ambitious piece of legislation, designed to revamp the broadcasting industry, encourage radio switchover, tackle the issue of internet piracy and ensure high-speed broadband access for all.
But the progress of the Bill through Parliament has been an exercise in legislative compromise. The £6 levy on fixed phone-lines to pay for broadband extension has been ditched, as have proposals to allow free use of orphan works and the plans to use part of the BBC licence fee to fund independent local news consortia.
By far the most controversial part of the Act is the addition of a clause to the Communications Act 2003, which states that internet service providers must provide copyright owners with details of copyright infringers, and must block access to sites that allow "substantial" infringement.
Opponents argue this amendment could be used by corporations or governments to prevent embarrassment on sites such as Wikileaks, which republishes leaked - and therefore already copyrighted - material.
Their second concern is that libraries, hotels and cafes will be deterred from offering free wireless access if their internet service could be temporarily suspended after users commit copyright infringement on their premises.
Campaigning body the Open Rights Group is mobilising its supporters to challenge Parliamentary candidates on these issues throughout the election campaign, while TalkTalk, an ISP with more than four million customers, has said it will "battle against the oppressive proposals" by protecting consumers' identities unless forced to disclose them by a court.
The Commons may have found just two hours to debate the future of the UK's digital economy, but the wider debate in the media community is only just beginning.
What the Digital Economy Act 2010 means for the media industry
The Act requires Ofcom to produce reports on the state of network infrastructure and internet domain name registration. In recognition of the fact that public service broadcasting is increasingly delivered online as well as through traditional channels, Ofcom must also report on how a broader range of content providers are contributing to public service objectives. The Act also gives Ofcom the power to impose fines of up to £250,000 on ISPs who don't take action against persistent offenders.
Geoff Taylor, chief executive of record industry trade body the BPI, comments: "These measures will not eliminate all piracy, but they will go a long way towards reducing illegal freeloading and will help build a more sustainable ecosystem for content on the internet. We will work diligently with other stakeholders, including ISPs and Ofcom, to develop the Code of Practice that will bring the Act into effect."
On top of the Ofcom fines, the Act will force ISPs to restrict or cut off internet access to customers who habitually download films or music illegally. In addition, the Act makes an amendment to the Communications Act 2003, which states that ISPs must provide copyright owners with details of copyright infringers, and they must block access to sites that allow "substantial" infringement.
Andrew Ferguson, co-founder of Thinkbroadband.com, comments: "There was certainly a need for legislation to deal with the unlawful distribution of copyrighted content over the internet, but this legislation is badly drafted. The Act has lost focus on the underlying problem: why users download unlawful material in the first place."
He adds: "The act focuses on peer-to-peer file sharing rather than the overarching issue of copyright infringement. This seems like a last-ditch attempt by the record industry to preserve an outdated business model. This matter will only be settled by making digital content available through a variety of legitimate channels that provide a better service."
The Digital Economy Act will rewrite and extend Channel 4's remit so its original requirement to make innovative content for minority groups applies to its online activities as well as television. Channel 4 must also produce news and content for children and teenagers.
Kevin Lygo, Channel 4's director of television and content, comments: "Channel 4 is delighted its remit has been updated to recognise the increasing public service contribution it is making beyond the core linear channel. Creative innovation has always been at the core of Channel 4, and the Digital Economy Act implements changes that Channel 4 was pressing for as far back as the 2003 Communications Act, giving us a remit to continue innovating to create great content for the digital age."
The Act merges England's ten Channel 3 franchises and Scotland's two into one franchise owned by ITV. It confirms the licences for Teletext on ITV and Five will expire in 2014, and Ofcom will rule on their future after that date. The Act notes that if those licences are renewed, they must be on "commercially viable" terms.
David Lancefield, media partner at PricewaterhouseCoopers, says: "The Digital Economy Act tidies up the legislative framework for commercial TV ready for the digital switchover - it recognises the falling value of analogue licences and broadens C4's role. But action in adjacent areas will have more material impact. The outcome of reviews of advertising rules, pay-TV and the BBC's strategy will influence the dynamics of commercial TV over the next 12 months and beyond, as will the actions of the new chief executives and chairmen at Channel 4 and ITV."
The Act does not confirm a date for switchover to digital radio, but it gives the Government the power to set a date.
Travis Baxter, consultant for Bauer Radio, says: "The Act is good for radio: it lays out a policy framework that allows for the radio industry, the Government and the regulator to design a new shape for the radio industry of the future. The commitment to digital radio and the potential for significant new flexibility in regulation will enable radio to respond far more effectively to the pace of consumer change. The key will be the follow-through in the form of resourcing and implementation, both from the Government and operators."
The Act shifts the regulation of video games from the British Board of Film Classification to the Video Standards Council, and provides more power to regulate games that include violence or encourage criminal activity.
Paul Mallett, managing partner at digital agency Swamp, says: "Now the Government has caved into tabloid pressure in a last desperate act to appear relevant, it has delivered a series of monumentally crass laws. I can only assume the impact of the video games clauses will be to produce a slew of titles where you ditch the role of mafia hitman and take on the work of the much more tabloid-friendly bobby on the beat. Expect to see The Bill back on the small interactive screen soon."
This article was first published on mediaweek.co.uk