The Australian Federation Against Copyright Theft’s (AFACT’s) decision to take Perth Internet Service Provider (ISP) iiNet to court will have conspiracy theorists in raptures.

iiNet is a challenger brand that has innovated, invested and undercut the big players like Telstra. But AFACT says the company has not done enough to stop its customers downloading and distributing illegal copies of movies.

iiNet says it has informed Police about AFACT’s complaints and that it is up to the authorities to determine guilt or innocence of its users. If iiNet receives word that its users are indeed breaking the law, it will disconnect them from its network.

iiNet has also, AntiGeek can reveal, passed on “Cease and Desist” letters from US cable television channels to its users after they have been identified downloading programs (it’s not me — AntiGeek has geek friends). So the company is not quite the laissez-faire pirate’s friend that AFACT is making out. ISPs in the USA take those letters very seriously, and generally pop one of their own into the envelope filled with dire warnings to their customer to cut out the piracy or lose their access to the Net.

Yet piracy continues wholesale, with users of every ISP surely culpable.

So why go after iiNet when Telstra and Optus have millions more customers? Telstra’s stake in Foxtel, with whom AFACT members almost certainly have distribution deals, is almost certainly a factor. Telstra’s legal team and budget both probably dwarf AFACT’s too. Singtel/Optus’ pockets are also deep enough to make a legal fight long and messy.

iiNet’s a tiddler by comparison, with a market cap of less than $200 million. But it’s a high-profile tiddler thanks to recent national advertising campaigns. It is also in bed with Apple, as the company does not include downloads from the iTunes music store when toting up its customers data usage each month. Apple has terrorised the film and music industries around the world by playing hardball on the prices they can charge for downloads, making a get-square with an ally a possibility.

You could even throw in a Union angle — as iiNet has outsourced customer service to South Africa. Unions hate offshored customer service, arguing that it takes jobs from Australia. With one of AFACT’s key messages being that piracy kills jobs, conspiracy nuts could draw a long bow and suggest that iiNet’s in its cross-hairs thanks to some Bruvvers pointing out its complicity in job exports.

It’s also possible that AFACT really does think that iiNet’s “let the cops decide” line is letting its customers get away with murder. Whether other providers are harsher on infringing users is not known, but AFACT is clearly upset with iiNet’s approach.

ISPs’ standard defences to this stuff say that they cannot possibly keep tabs on everything their customers do online. Nor can they trust copyright holders’ assertions that their customers are conducting illegal activity. iiNet has already trotted out variations of these arguments.

But the most interesting aspect of the case could turn out to be Channel 7’s involvement, as the network has hopped aboard due to alleged pirating of its TV shows. Just why anyone would want to download Packed to the Rafters is beyond this AntiGeek. Yet this kind of behaviour is rampant. AntiGeek is no longer surprised when ordinary, un-geeky, people tell us that they use BitTorrent, the technology AFACTS alleges iiNet users have deployed to steal its wares. Ordinary people use it to time-shift television shows or bring them to Australia before local networks get around to adding them to local schedules.

This behaviour has already caused the free-to-air networks to change the way they schedule shows. Gone are the days of holding back US hits that go to air in August until a fresh Australian ratings season in February. Our networks now “fast-track” shows to avoid audience erosion by illegal downloaders.

It’s not hard, given Seven’s involvement in this case, to infer that things are getting worse for TV-land.

Movie studios still have cinematic release and DVD sales to cling to. But free-to-air television now has to scrap for every viewer and, presumably, has found a small-but-significant revenue lifeline in DVD sales of local shows.

The outcome of this case is fairly predictable. AFACT will hold the line that “stealing is bad and costs jobs”. iiNet will try to say it cannot be forced to get tough with its customers, but will find a way to do so in the face of financial catastrophe. A precedent will be set. Meanwhile, a new technology will come along that makes piracy harder to stop, users will embrace it and we’ll start again with the same arguments.

But just what happens to free-to-air television is anyone’s guess.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey