If one were to say that internet privacy and concerns for file-sharers rarely, if ever, cross paths, this latest development would only further disprove this myth. While the Australian government says that the Telecommunications (Interception and Access) Amendment Bill 2009 – Network Protection is merely about network maintenance, the Electronic Frontier Australia paints a very different and far grimmer picture on what is going on.

EFA’s submission addresses our key concern that the proposed legislation provides a very broad exception to the prohibition on interception of network communications for the purposes of ensuring that a network is ‘appropriately used’. This is a very broad category that means that all network operators in Australia will be able to monitor the substance of communications that pass over their network for compliance with their Acceptable Use Policies – the terms of which could include nearly anything. The AGD suggests that this is necessary to increase security, but have not shown any convincing justification why the contents of communications need to be examined nor why the scheme should extend beyond corporate networks to all Australian networks – including consumer ISPs.

This proposed changed threatens to radically alter the ability of network operators to intercept, store, and disclose information passing over their networks. There are no safeguards to prevent disclosure to law enforcement agencies or third parties. It is entirely possible for these new provisions to be used to examine P2P filesharing data for copyright violations, for example, and to disclose any captured information to copyright owners.

In other words, these amendments could be used to get ISPs to do all the dirty work for the copyright industry.

In a submission during the very short consultation period, the EFA submitted their comments with regards to the proposed amendments, saying that the consultation was far too short for more critical analysis. They further comment with the following:

Section 5(1) effectively provides that ‘network protection duties’ includes monitoring the content of communications in order to ascertain whether the network is being ‘appropriately used’. Because of the broad undefined nature of the term ‘appropriately used’ and the fact that many AUPs may contain restrictions not on protocols or services that internet uses may use but upon the purpose for which those communications are being made, this provision opens the bulk of network communications to potential interception and continuing surveillance.

A common example can be found in AUPs that prohibit the use of peer-to-peer filesharing networks for the purposes of copyright infringement. In order to determine whether “the network is appropriately used”, a network operator would be required to intercept all peer-to-peer traffic and attempt a determination of whether any given traffic streams are being used to communicate copyright material without the licence of the copyright owner. Not only is such a task difficult or impossible due to the inherent complexity of copyright law and need to analyse the scope of any potential licences or fair dealing defences, it seriously imposes on the privacy of network users who are using legitimate file-sharing protocols for non-infringing activity.

EFA opposes the construction of ‘appropriately used’ in s 6AAA of the exposure draft. We submit that the definition in s 6AAA ought to be amended to reflect that operators are only entitled to intercept and monitor communications where those communications pose a threat to the security of the network itself. EFA notes that there are already laws in place which deal with the disclose of sensitive information, and that there are already civil and criminal procedures available to determine the origins and contents of communications that appear to contravene such laws. The proposed amendments have the dangerous effect of reversing the burden of proof for such monitoring, allowing network operators to monitor for compliance, rather than to seek disclosure once a prima facie case or reasonable suspicion of unlawful
activity exists. To the extent that operators of networks require the ability to monitor the activities of their users, there is no justification for allowing substantive examination of the contents of communication as opposed to the envelope information – numbers and types of packets and their destinations.

At best, this law should be a frightening prospect to all internet users, not just file-sharers as this is a huge infringement of personal privacy. While Canada is currently in the midst of mulling lawful access once again, at least the scope was far narrower than this. Even the US, home of the much despised DMCA didn’t go this far. Even the French three strikes law required some action from rights holders. To date, this appears to be the worst ISP law proposal we’ve ever seen followed closely by Austrian newspapers wanting to use data retention to enforce copyright.

Clearly, to the best of our knowledge, Australia is mulling the concept of boldly going where no other country has gone before in terms of mass communication interception. One wonders if the government has any idea what kind of task it would be to force ISPs to patrol their own networks on a packet-by-packet basis. Searching through headers on an entire major ISP is probably full time work for a team of internet specialists. That doesn’t even touch encrypted traffic. ISPs would probably have to pay money to a whole task force to people just to comply with this law which could have been spent on critical infrastructure upgrades, so Australian ISPs have a lot to lose, let alone Australian ISP customers who would have to worry about an ISP specialist covertly spying on every message or packet they send and receive online.

The law proposal will be debated in the Australian parliament in December, so there is still time to oppose this law.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

The news comes from IT News Australia where they cite an Exetel company posting which explains the plan.

“We will simply ban P2P traffic in the 12 midnight to 2 am period if the user elects to make that an ‘off peak’ period.” John Linton explains, “The penalty for selecting that period as ‘free’ and then using it for P2P downloads will be the removal of the free period completely for that customer or termination of the service.”

“Unlike every one of our competitors (or at least I assume this is the case) we have never been concerned about making as much money as possible from providing our services – we have always been driven by the objective of providing the best possible value. One way of doing this is to make use of the ‘dead’ bandwidth that exists on virtually very commercial network (though I have known of at least two exceptions) in the early hours of the morning.” Linton also said, explaining why the company is mulling this. He continued, “Typically on an efficiently utilised network such as Exetel’s this costs us (at our current size) well over $A150,000 a month and the bandwidth is completely wasted. Simple solution offer it to your user base at no cost to them – how, over a five year period could you fail to make that work?…..giving away $A150,000 a month worth of services…..not a problem in the world. We couldn’t do it – rather than using the virtually unused 3 am to 7 am period to set a schedule of downloads our user base insisted on starting them at one second past midnight EVERY night and, for over 90% of those users their downloads were completed by 12.30 am EVERY morning. Could they be persuaded to start their downloads after 2 am?……nothing we could do for five plus years could make that happen.”

Perhaps the sad part of all of this is the fact that there was frustration over customers actually using what they paid for. If a company offers a popular service, then suddenly stops it altogether, no doubt there’ll be anger within the customer base.

Many Australian file-sharers make use of schedulers that either download during certain times of the day or certain times of the month to try and maximize their allotted bandwidth caps. In fact, sometimes users resort to an alternative form of file-sharing, blanks and postage, to help bypass the caps while still getting what they want. One wonders, if bandwidth problems haven’t been solved by now, exactly how much investment is being made in the underlying infrastructure in the first place in Australia? In addition, what happened to caching traffic to help save bandwidth for the ISPs anyway?

Linton seems to think that there is only a tiny fraction of p2p users actually using that bandwidth in the first place. He concluded, “One of the unprovable ‘business school myths’ (similar to the “every unhappy customer etc” nonsense) is that EVERY service provider would be better off without 1% – 2% (depending how unlucky they are) of their customers.”

So it seems that they think there’s no problem cutting people off if they try using p2p. Given more businesses use p2p solutions, this could only serve to hurt the overall Australian economy. If a small business such as a vidcaster uses BitTorrent to distribute their shows, sorry, but some ISPs don’t allow it. It doesn’t matter if you are selling the content, making money off of ad revenue, or even if you are legitimate at all. The ISP will have non of it.

It’s unclear if banning p2p traffic on peak hours will actually be implemented, but Exetel has already expressed interest in carrying through with it.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

Australia’s Minister for Broadband, Communications and the Digital Economy Stephen Conroy is certainly happy these days with news that his plans for a “voluntary mandatory” Net filtering plan has had a minimal effect on the connection speeds of a majority of the participants connections speeds.

In case you’ve forgotten, Minister Conroy is the same one behind the country’s much criticized efforts for “mandatory voluntary” filtering of “”offensive and illegal material,” pornography, P2P, gambling websites, and even the recently disclosed online gaming sites, per his ill-conceived plan to “protect the children.”

“From a technical perspective we’re more than confident that if the government decided to roll out a mandatory Internet filter based on or around an Australian Communications and Media Authority [ACMA] blacklist or subset thereof, then it can be done without any impact whatsoever to the speed of the Internet,” said Webshield managing director, Anthony Pillion.

A total of 9 ISPs participated in the Filtering Live Pilot, 5 of which, iPrimus, Netforce, Webshield, Nelson Bay Online and OMNIconnect, reported “minimal speed disruptions or technology problems.” The remaining 4, Tech2U, Highway1, Unwired, and Optus either had no comment or refused requests for one.

One ISP did report that some customers complained that legal sites had been blocked, an obvious admission that the site blacklist needs a lot of careful oversight and moderation.

“Some of the customers complained because the block list really hadn’t been moderated well enough,” OMNIconnect chief technician, Graeme Lee, said. “One in particular was a site called Redtube.com. The whole site had been blocked and it was just a standard pornography site,” Hutton said.

However, it’s safe to argue that the trial is a pretty poor representation of what it’ll be like when they begin filtering the activities of millions of users. ISP Nelson Bay Online for example, had only 15 participants.

iiNet, Australia’s largest ISP, has been conspicuously absent from the whole affair noting last November “how stupid” the plan is. It initially agreed to participate to give the govt some “hard numbers” and prove the plan unworkable, but later quit after concluding that it was no longer about child pornography, but a “much wider range of issues including what the Government simply describes as “unwanted material’ without an explanation of what that includes.”

Stay tuned.

jared@zeropaid.com

Australia’s ridiculous plan to censor the Internet gets more ridiculous by the day.

It all started as a voluntary effort to “protect children,” but quickly spiraled into an all out attempt by the Australian govt to make it mandatory for ISPs to filter the Internet of all “inappropriate content” and “offensive and illegal material.” It quickly deteriorated from an attempt to somehow safeguard children from things like child pornography to things like legal pornography, gambling, and even P2P traffic, making Australian citizens rightly upset.

Now it’s being reported, and apparently confirmed by Broadband Minister Stephen Conroy, the main proponent of the govt’s efforts, that the filtering plan will include video games by targeting sites that host or sell ones that don’t meet the MA15+ standard (suitable for 15yos) being that Australia lacks an R18+ or X18+ classification.

This means downloadable games, flash-based web games, and sites which sell physical copies of games will all come under fire and is an affront to adults who will be limited to a Disney-esque Internet experience.

“For one, this latest expansion of the scheme has to be seen in the wider context of the plan as a whole,” Electronic Frontiers Australia (EFA) writes in a press release responding to the news. “Sold to the electorate as a plan to protect children, it actually only targets websites that an adult is likely to encounter, and applies indiscriminately to all Australian homes and businesses. Due to technical limitations, it can’t and won’t stop the traffic of child abuse material. The blacklist is secret, there is no appeal, and what goes on there is controlled by Government. The potential game ban is only one alarming aspect of the plan as a whole.”

The EFA has warned the govt filtering of the Internet would expand over time and it has. As I mentioned before it went from child pornography to gambling, P2P, and now video games, all without public input of any kind.

“It’s simply impossible to imagine this and future governments resisting the temptation to add content to the list when politically expedient or in response to powerful lobbies,” adds the EFA. “Even if the blacklist was just targeted at child abuse material, it would soon expand to include hate speech, violent games, copyright violation, incitements to crime, adult pornography, and any other political panic of the day.”

Eerily enough, the plan is remarkably similar to China’s Green Dam efforts to censor pornography in that country, govt blacklists and all.

Stay tuned.

jared@zeropaid.com

There’s an international movement afoot to get ISPs to more closely monitor their networks and the traffic that flows through it. On the international stage, questions are being raised over ISP or DNS blacklists, ISP level surveillance and data retention. Since no human is perfect, does these new expansions in powers around the world also increase the potential for abuse as well?

The editorial in the National Post comments on the repeated themes on how legislation like warrantless wiretapping was pushed forward in the past. In Canada, it’s the repeated themes of how this is suppose to help save the children from online predators. In North America, there’s also that theme of how it’s suppose to somehow help fight terrorism. The editorial article comments on how such arguments are weak while defending the broadening of surveillance in Canada.

Meanwhile, the Ottawa Citizen echoed those sentiments and also notes how in any given gathering, there are those who are present for less than ideal reasons. Not only this, but also puts forth the question, since when do judges block a police investigation on a regular basis and prevents them from getting a warrant in the first place? The editorial suggests that apologists for the surveillance legislation has yet to provide such evidence and concludes that given another Conservative member had issues with the Google van taking pictures around neighbourhoods for their Street View project (they were definitely questioned in committee over privacy concerns) and given that the Safety Minister is pushing for surveillance legislation that would diminish privacy much more severely than any fleet of vans with 360 degree cameras ever could, the party that argues for small government is sending mixed messages to the public.

There was another theme both editorials conveyed which has been an underlying issue ever since the legislation was tabled, the fact that the minister who tabled the legislation was the same minister who, in a different time, promised to not expand surveillance powers and have such surveillance laws forgo the need of a warrant. Was this part of the political deal when Canadians saw their election postponed to at least the Fall? Who knows. At the very least, though, a backtrack is a backtrack and for the months leading up to the tabling of the legislation, the Liberal party has continually pushed to have surveillance legislation tabled in the House of Commons (Just use Google to search through the Hansard for things like ‘modernization’, ‘2008′, ‘2009′ and ‘investigation techniques’) With support from both the Liberal party and the Conservative party, the legislation is pretty much guaranteed to pass save for another election.

But what of the fears that this opens the floodgates for abuse? The legislation does, indeed, call for the installation of surveillance technology on the ISPs in Canada. We’ve looked through Bill C-46 and Bill C-47 to find that out. While the editorials have pointed to evidence in Canada that police are actually prone to doing less than legal things (one pointed to unauthorized plate checking for one) However, we also know that, internationally speaking, when things like ISP level wiretapping occur, not only has it opened the floodgates for abuse in the legal and law enforcement sphere, but it also opened the floodgates for abuse in the commercial sphere as well.

We begin our look at the country that is geographically closest to Canada. The neighbours to the south. The United States where it has appeared that the debate on such things looks as though security trumps privacy, an ironic turn of events considering that famous quote from Benjamin Franklin that rings true today, which says “He who sacrifices freedom for security deserves neither”, actually comes from the United States in the first place. The NYTimes unearthed quite a lot recently about the Bush promoted AT&T wiretapping program recently. Among the evidence was commentary on how, probably millions of, Americans were wiretapped that went far beyond the legal restraints surrounding such activity. One of those Americans who was illegally wiretapped? Former president Bill Clinton. One can get the impression that the unauthorized wiretapping is starting to get out of control.

It is important to note the differences between the case in the United States. In Canada, the proposed legislation would grant eavesdropping to police without a warrant. In the United States, the eavesdropping permits a copy of the traffic flowing through ISPs like AT&T and connects that information directly to organizations such as the NSA. While an important difference, when it comes to privacy concerns for many, that is little more than a clerical difference rather than a significant difference. In the end, police obtained unfettered access to details of your activity online.

Of course, an increase in state powers have gained the interest of commercial entities as well. The most vivid also happening to be the most recent. Austria is a member of the European Union. In the European Union, there is a law that makes ISPs retain data of all of it’s users – also known as Data Retention. While there was a movement to stop the data retention directive, data retention ultimately became law. It appears that an organization of Austrian newspapers have been eyeing that data retention and have called upon the government to use data retention to enforce copyright. There was a stunning quote from the organization that seemed to cap off this attempt which says, “Privacy should not be used as a cover for rights abused.” Forget child abuse. Forget the terrorists. Forget identity thieves. The debate, judging by that development, has shifted to whether or not commercial entities should have access to that data retention for their commercial interests. The real question is, where do these surveillance demands end? What interests should be brought up to the level of access enjoyed by entities interested in, say, national security? As we’ve noticed, this kind of thing isn’t an isolated incident either in Europe.

Last year, in Germany, Deutsche Telekom was raided over spying allegations. In essence, the telecommunications company was worried that insiders were leaking information to reporters, so they monitored their employees – illegally. Since the Canadian case is about installing surveillance infrastructure, it’s important to note how installing such technology would open up potential abuse precisely like this. Legal or not, the potential is there.

Recently, Germany passed legislation that would bring in mandatory censorship legislation. While not wiretapping or surveillance, it does force ISPs to grant new powers over the internet – in this case, blocking a whole list of websites. Isn’t it interesting that just three months earlier, German book publishers wanted to add Rapidshare to that blacklist?

Even further back into January of this year, there were things that happened that forced the German government to say that data retention is for terrorists, not copyright infringers. In response, the IFPI said that it would be contradictory for the government to not hand over all the information over to them for copyright legal pursuits.

What about free speech? A government mandated blacklist in many countries is said to stop child pornography. Australians know all too well how web censorship like that can go too far after the ACMA blacklist leak showed perfectly legal sites on them. While the governing body denied the authenticity of the leaked list, there have been suggestions that the blacklist did come from an ISP in the first place and some of those sites have been added on there because of commercial reasons. Over in Britain, a similar incident happened where British ISPs blocked Wikipedia.

Going further, these aren’t the only cases where new surveillance or censorship measures were attempted to be used for reasons beyond what the legislation was promoted to be stopping in the first place. Already, the copyright industry, along with a few other companies, have tried multiple times to use surveillance or censorship for commercial gains or interests. Legal websites have been put on national blacklists in the past in other countries. The question many Canadians should be asking over top of other questions that have already been raised is where would these intrusions on internet users rights end? Is this legislation in Canada merely an update or modernization and that would be the end of it or would further demands be raised if the currently proposed legislation is passed? All this given multiple international examples.

It certainly, from this standpoint, that this surveillance legislation is not only bad for users privacy, but also the tip of the iceberg as well.

[Hat Tip: Michael Geist 1 and 2]

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

The Australian Christian Lobby is angry over recent testimony by Broadband Minister Stephen Conroy in which he seemed to signal that the govt is backpedaling from plans for mandatory Internet filtering in the country.

They want the govt to institute mandatory ISP filtering of pornography and other “inappropriate” material, offering an opt-out mechanism for those that choose.

Jim Wallace, the group’s managing director, says the Federal Govt, vis a vis Senator Conroy, are breaking their election promise by not forcing ISPs to do so.

“The promise was clearly about providing a safer internet environment for children and to do that you need to mandatorily block in the first instance pornography and R18+, and then provide an opt-in system for those adults who want to access it,” he said.

Alternatively, Australian Senator Nick Minchin, Shadow Minister for Broadband, Communications and the Digital Economy, says mandatory Internet filtering sends the patently offensive message “that parents cannot be trusted to mind their children online.”

“There is no technological substitute for adult supervision and it’s irresponsible and misleading to infer otherwise,” he adds. “Mandating a so-called ‘clean feed’ has the potential to create a dangerous false sense of security, leading parents to believe ongoing supervision and vigilance is no longer needed.”

More importantly, Senator Minchin makes the important observation that the most dangerous places for children to visit online are unaffected by the filtering plans. MySpace anyone?

Wallace apparently acknowledges that parents are the ones ultimately responsible, but he says that some parents just aren’t tech-saavy enough with the whole Internet “thing” to keep up with their kids and need help.

“It’s not the children of responsible parents only that you’re concerned about here, it’s the children of parents who are either bewildered by the thing or are not responsible and don’t protect their children from this unsolicited pornography,” he said.

It seems to me that Wallace is really the one “bewildered by the thing” and doesn’t realize that it’s unfair for the rest of society to have their Internet connections filtered simply because he and other, presumably Christian in the context of his lobbying efforts, parents are unable to effectively monitor their children.

Opting out shouldn’t be the default Internet connection standard, opting in should.

jared@zeropaid.com

It’s been a long battle between Australia’s Broadband Minister Stephen Conroy and those opposed to his plans for mandatory Internet filtering, but at last the scheme may be coming to an end as suggested during testimony given by Senator Conroy yesterday to a Senate estimates committee.

He testified that instead of a mandatory filtering mechanism it could instead by done by a voluntary agreement by all ISPs.

“Mandatory ISP filtering would conceivably involve legislation … voluntary is available currently to ISPs,” Senator Conroy said.

“One option is potentially legislation. One other option is that it could be (on a) voluntary basis that they (ISPs) could voluntarily agree to introduce it.”

The plan was quickly mocked by a bemused Senator Nick Minchin, Shadow Minister for Broadband, Communications and the Digital Economy, member of the Liberal Party, leader of the opposition in the Senate, and longtime critic of the plan, who said he couldn’t understand how a mandatory system could be voluntary.

“Well they could agree to all introduce it,” added Senator Conroy.

The filtering began as a voluntary system intended to protect children, but quickly spiraled to include all “inappropriate content” and “offensive and illegal material,” P2P sites, and even gambling-related sites.

It was Senator Minchin who long ago criticized the plan by observing that the underlying message is “that parents cannot be trusted to mind their children online,” and furthers by saying that “there is no technological substitute for adult supervision and it’s irresponsible and misleading to infer otherwise.”

The plan has faced stiff opposition since it switched from voluntary to mandatory, culminating in massive street protests last December.

At one point the blacklist the govt intended to use for the filters contained more than 10,000 sites.

The govt is currently conducting a trial of the filtering plan, the results of which are to be released in late July or early August.

Stay tuned.

jared@zeropaid.com

If the topic of internet filtering is of interest to you and you find yourself in Melbourne Australia at 6:30PM this Monday, you can head on down to Federation Square where a public forum will be held on the issue. Senator Scott Ludlam of the Australian Greens, Michael Flood, a sociologist and Colin Jacobs of the Electronic Frontiers Australia will be the speakers for the event. More information on the forum can be found at the Electronic Frontiers Australia website.

There will be many questions to be discussed including whether or not Australia should implement mandatory web filters to block porn, whether internet filters are inevitable and whether or not there are better ways to regulate the internet. Let’s hope this will forum will be recorded and posted online so the whole world can benefit from it.

The MPAA and the Australian Federation Against Copyright Theft (AFACT) have suffered an unusually embarrassing blow with news that 26yo Craig Farrugia of Australia was freed after pleading guilty to 18 counts of copyright infringement, and even after having been found to be be “part of an organized criminal conspiracy” in the process.

Farrugia had been accused of supplying the PreVail “Scene” group with illegal camcordings of a number recently-released movies including: “He’s Just Not That Into You”, “Marley and Me”, “Yes Man”, “Bedtime Stories”, and “Beverley Hills Chihuahua.”

Each count could have meant up to 5 years and prison (90yrs total) and a $43,311 USD fine. Instead he was immediately released on an 18mo non-custodial “good behavior bond” and fined a mere $3,866 USD.

The charges arose from a 13 February raid by New South Wales Police, supported by investigators from the Australian Federation Against Copyright Theft (AFACT), in which sophisticated video camcording and computer equipment was seized. Tests of the equipment apparently confirmed that it had been used for making the illegal CAMs cited before.

AFACT investigators and the MPAA have to be dejected by the sentencing because of all the work involvd and the fact that the conviction really won’t serve as the “powerful message to others” that it had hoped for.

Magistrate Keady, whom presided over the trial, had even declared that Farrugia’s actions were “..part of an organised criminal conspiracy” and even compared it to home burglary.

“[The movie industry is] ..entitled to the same protection of their property as are householders whose house is broken into and property removed,” he said. “It is a property offense similar to that of larceny.”

Too bad the “larceny” in this case hasn’t seemed to prevent the MPAA from being on pace to break the already record-breaking previous year’s ticket sales, both domestic and overseas.

The MPAA tried to play up the successful prosecution, but did lament the fact that Farrugia got off easy.

“While we are pleased with the very prompt closure of this matter, we are disappointed in the sentence meted out by the Court as it has failed to recognize the damage this particular crime can have on the industry,” said Mike Ellis, pres and manager of the MPAA’s Asia-Pacific region. “This illegal act of camcording can single-handedly destroy the ability of a movie to recoup the investment made in its production and adversely impact the business of cinemas, DVD retail outlets and on-line services around the world that rely on the downstream revenue of the movie. We hope for more stringent sentences to be passed in Australia to deter anyone thinking about camcording.”

This is the second Australian conviction for making illegal CAMs. In November 2007, Jose Duarte was convicted of camcording and distributing “The Simpsons Movie” on his mobile phone and uploading it to the Internet. The unauthorized recording was tracked to streaming sites and P2P systems within 72 hours of Duarte making and uploading it.

iiNet, Australia’s 3rd largest ISP, has been quietly defending BitTorrent-using broadband subscribers there in Federal Court.

The Australian Federation Against Copyright Theft (AFACT), on behalf of Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc. and the Seven Network, is suing iiNet for allegedly allowing customers to download movies illegally in violation of copyright laws.

“iiNet refused to address this illegal behavior and did nothing to prevent the continuation of the infringements by the same customers,” said AFACT’s Executive Director, Adrianne Pecotic, when it filed the suit last November. “iiNet has an obligation under the law to take steps to prevent further known copyright infringement via its network. “Our members have asked the court to order the ISP to act to prevent the continuing unauthorized use of copies of our titles by its customers, consistent with iiNet’s own terms and conditions which prohibit illegal activity on its network,”

iiNet has refused to admit that any of its customers engage in illegal file-sharing by using BitTorrent to share copyrighted material.

In a recent court hearing iiNet also questioned whether the one-to-one nature of data transfer really meant “making them available” under Australian copyright law.

It also noted that if BitTorrent breaks a movie, for example, down into a hundred different files and a customers only shares a portion of them then it may not be enough to argue that a user illegally distributed a “substantial portion” of the copyrighted material in question.

AFACT said it’s irrelevant, that all it needs to prove is that iiNet’s customers engaged in copyright infringement and the ISP did nothing to stop them after being informed of the transgression.

By failing to disconnect repeat infringers, it argues, iiNet in effect “authorized” the behavior.

In remarks following the court date given to the Communications and Media Law Association (CAMLA), the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, said the trial “embodies the challenge of how to lay down the rules for tomorrow.”

Senator Conroy, if you recall, is the one responsible for the country’s ill-conceived efforts towards mandatory Internet filtering for all, and iiNet is the same ISP that told him it would no longer participate in a trial of his proposal.

He noted that the entertainment industry is reluctant to pursue new business models because it’s confidence in making more content available online is being sabotaged “by reports that indicate a large amount of internet traffic is P2P file-sharing” and the “…the activity persists in ways that potentially undermine the commercial sustainability of the industry.”

Senator Conroy’s solution?

Force ISPs to become content cops or convince the entertainment industry to change their business models and create new online content delivery systems that are capable of luring people away from illicit file-sharing.

Too bad we already know which it’ll choose before it even debates the merits of the latter proposal.

The Federal Court date for the iiNet trial has been set for October 5th.

Stay tuned.