Digital Economy Act 2010

8.8.0.2.
61Status: Law In Force
Digital Economy Act 2010 c. 24
OFCOM reports
This version in force from: June 8, 2010 to present
(version 1 of 1)
1 OFCOM reports on infrastructure, internet domain names etc

(1) In Chapter 1 of Part 2 of the Communications Act 2003 (electronic
communications networks and services), after section 134 insert—
“ Reports on infrastructure etc
134A OFCOM reports on infrastructure etc

(1) OFCOM must prepare reports in accordance with subsections (2) and (3)
and each report must deal with—
(a) the electronic communications networks matters listed in section

134B(1), and
(b) the electronic communications services matters listed in section

134B(2).
(2) The first report must—
(a) relate to the position on a day specified in the report which falls
within the period of 12 months beginning with the day on which this
section comes into force, and
(b) be sent to the Secretary of State by OFCOM not more than 2 months
after the specified day.
(3) A further report must—
(a) be prepared for each relevant period, and
(b) be sent to the Secretary of State by OFCOM as soon as practicable

after the end of the relevant period.
(4) “ Relevant period” means—
(a) the period of 3 years beginning with the day specified in the first
report, and
(b) each subsequent period of 3 years beginning with the end of the
previous period.
(5) Where there is a significant change in connection with a matter listed in

section 134B(1) or (2) and OFCOM consider that the change should be
brought to the attention of the Secretary of State, OFCOM must—
(a) prepare a report on the change, and
(b) send it to the Secretary of State as soon as practicable. (6) For the
purposes of subsection (5), a change is significant if OFCOM consider that it
has, or is likely to have, a significant adverse impact on—
(a) persons carrying on business in the United Kingdom or a part of the

United Kingdom, or
(b) the general public in the United Kingdom or a part of the United
Kingdom.
(7) OFCOM must publish every report under this section—
(a) as soon as practicable after they send it to the Secretary of State,

and
(b) in such manner as they consider appropriate for bringing it to the

attention of persons who, in their opinion, are likely to have an interest
in it.
(8) OFCOM may exclude information from a report when it is published under
subsection (7) if they consider that it is information that they could refuse to
disclose in response to a request under the Freedom of Information Act
2000.
134B Networks and services matters

(1) For the purposes of section 134A, the electronic communications
networks matters are—
(a) the different types of electronic communications network provided in

the United Kingdom (“ UK networks” ),
(b) the geographic coverage of the different UK networks,
(c) the proportion of the population covered by the different UK

networks,
(d) the extent to which UK networks share infrastructure,
(e) the capacity of the different UK networks,
(f) the extent to which the providers of the different UK networks allow
other communications providers to use their networks to provide
services,
(g) the amount of time for which the different UK networks are and are
not available, including the steps that have been or are to be taken to
maintain or improve the level of availability,
(h) the preparations made by providers of UK networks for responding to

an emergency, including preparations for restoring normal operation of
UK networks disrupted by the emergency, and
(i) the standard of the different UK networks in comparison with

electronic communications networks provided in a range of other
countries, having regard, in particular, to their coverage and capacity.
(2) For the purposes of section 134A, the electronic communications services
matters are—
(a) the use of the electromagnetic spectrum for wireless telegraphy in

the United Kingdom, (b) the different types of electronic communications
service provided in the United Kingdom (“ UK services” ),
(c) the geographic coverage of the different UK services,
(d) the proportion of the population covered by the different UK services,
(e) the amount of time for which the different UK services are and are
not available, including the steps that have been or are to be taken to
maintain or improve the level of availability,
(f) the preparations made by providers of UK services for responding to

an emergency, including preparations for restoring normal operation of
UK services disrupted by the emergency, and
(g) the standard of the different UK services in comparison with

electronic communications services provided in a range of other
countries.
(3) The preparations referred to in subsections (1)(h) and (2)(f) include—
(a) the steps taken to assess the risks of different types of emergency
occurring,
(b) the steps taken to reduce or remove those risks, and
(c) the testing of proposed responses to different types of emergency.
(4) In a report under section 134A, OFCOM are required to include only
information about, and analysis of, such networks, services and providers as
they consider appropriate.
(5) In this section “ emergency” means an event or situation that seriously

disrupts a UK network or UK service.
Reports on internet domain names
134C OFCOM reports on internet domain names

(1) OFCOM must, if requested to do so by the Secretary of State—
(a) prepare a report on matters specified by the Secretary of State

relating to internet domain names, and
(b) send the report to the Secretary of State as soon as practicable.
(2) The specified matters may, in particular, include matters relating to—
(a) the allocation and registration of internet domain names, and
(b) the misuse of internet domain names.

and (b) in such manner as they consider appropriate for bringing it to the
in it.
2000.”
(2) In section 135(3) of that Act (information required for purposes of

Chapter 1 functions), after paragraph (ib) insert—
“ (ic) preparing a report under section 134A;
(id) preparing a report under section 134C;” .

Crown Copyright material is reproduced with the permission of the Controller of HMSO and the Queen’ s Printer for
Scotland
Annotation
Section 1
Introduction
The Government’ s Explanatory Notes to the Bill for this Act (see General Note:
Explanatory Notes) say as follows:
“ Clause 2: OFCOM reports on infrastructure, internet domain names

etc.
“ 25. This clause inserts three new sections into the 2003 Act which will
require OFCOM to report to the Secretary of State on the state of the UK’ s
communications infrastructure and services.
“ 26. New section 134A requires OFCOM to produce an initial report in the
first year after the provision comes into force, followed by subsequent
reports at three[-]yearly intervals. It also requires that should OFCOM
become aware of a marked change with a significant impact on business or
the public, in any of the reporting areas, and which they consider should be
brought to the attention of the Secretary of State, they should write a further
report. OFCOM must publish each report under new section 134A as soon as
practicable after they send it to the Secretary of State.
“ 27. New section 134B sets out in detail the subject matter to be covered by
the reports on infrastructure. The initial report and the three-yearly reports
will consist of a survey of:
• The different types of electronic communications network and service

in the UK;
• Geographic and population coverage of those networks and services;
• Downtime, and measures in place to maintain or improve availability;
• Emergency planning; and

• A comparison between UK networks and services and equivalent
networks and services provided in a range of other countries.
“ 28. Additionally, in relation to UK networks, the reports will cover

infrastructure sharing (for example, where two or more mobile operators
pool their network of masts and both offer services across them), capacity
(the amount of data that networks and parts of networks are able to carry
and the rate at which they can carry it) and wholesale arrangements (the
extent to which one operator can buy capacity on another operator’ s
network and then sell it on to retail customers). In relation to services, they
will also cover the use of the electromagnetic spectrum.
“ 29. The clause also inserts a new section 134C into the 2003 Act which
requires OFCOM to report on matters specified by the Secretary of State
relating to internet domain names when requested to do so. These matters
might include the management and distribution of internet domain names by
registries and the misuse of domain names or the use of unfair practices by
registries, end-users of domain names or their agents (known as registrars).
“ 30. The reporting duty would, for example, enable the Secretary of State to
ask OFCOM to report on the activities of internet domain registries based in
the UK (and their registrars and end-users) in circumstances where the
Secretary of State believes that the operation of those registries (or the
activities of their registrars or end users) could adversely affect, or has
already adversely affected, the reputation or operation of the UK’ s internet
economy and/or the interests of consumers or the public in the UK. OFCOM
are required to publish these reports.
“ 31. In addition, the clause amends section 135 of the 2003 Act to enable
OFCOM to use their existing information gathering powers to require
communications providers and others to supply the information which they
will need to write their reports. Those powers are subject to the restrictions
in section 137 on the imposition of information requirements, which means,
in particular, that a demand for information must be proportionate to the use
for which the information is to be put. Penalties for contravention of the
information requirements may be imposed under section 139.”
Pepper v Hart Note (see General Note: Pepper v Hart): In Committee on the Bill
for this Act in the House of Lords the Parliamentary Under-Secretary of State,
Department for Environment, Food and Rural Affairs (Lord Davies of Oldham) said as
follows:
“ The matters to be covered in the reports are already outlined in

subsections (1)(a) and (1)(b), but I want to make clear beyond doubt that
those specific network and service matters are to be covered in the initial
and subsequent biennial reports, to which we have just referred. I am
grateful to the noble Lord, Lord Lucas, for his suggested amendment. It
helpfully drew to our attention the fact that, as drafted, there was indeed
ambiguity as to whether each report would cover all the matters in
subsections (1)(a) and 1(b). However, we have difficulties with the
amendment. I would like to have stood at the Box and accepted it. I am sure
that that would have pleased him as much is me. However, his amendment
clarified the situation only in respect of the initial report, and we feel that it is
necessary to make the clarification in respect of all subsequent reports as
well.
“ I might add that while we were looking at the drafting of the clause, we
became aware that, as originally drafted, new Section 134A requires
subsequent reports to relate to a ‘ relevant period’ , but does not expressly
require there to be a subsequent period for each relevant period. In theory,
that could allow gaps to occur in the provision of reports. Because of that
possible anomaly, we have tabled the two amendments and trust that they
will provide clarity on the extent of each report and that there must be a
report every two years. I am extremely grateful to the noble Lord, Lord
Lucas, for having already improved the Bill-or at least having obliged the
Government to make the necessary improvements.” (Hansard, HL Vol.716,
HYPERLINK
"http://www.publications.parliament.uk/pa/ld200910/ldhansrd/text/100106-
0008.htm"col.187 (January 6, 2010).)
for this Act in the House of Lords the Minister for Postal Affairs and Employment
Relations (Lord Young of Norwood Green) said as follows:
“ My Lords, Clause 2 amends the Communications Act by inserting new

sections requiring Ofcom to report to the Secretary of State at regular
intervals on the UK’ s communications infrastructure and services. One such
report is where there is a significant change in connection with the matters
listed in new Section 134B(1) or (2). It requires that, should Ofcom become
aware of a marked change which has a significant impact on business or the
public in any of the reporting areas and which it considers should be brought
to the attention of the Secretary of State, it should write a further report as
soon as practicable. We have not been prescriptive as to when these reports
will be prepared. This will ensure that, if there are developing problems or
constraints on the UK’ s infrastructure, the Government will get advance
warning of this from the regulator and, as appropriate, will be able to
consider whether any action is needed.
“ Your Lordships will no doubt appreciate that the persons or organisations

from which information will be gathered are likely to be very sensitive to
disclosure, since much of the information will be commercially confidential,
as the noble Lord, Lord Howard, recognised. Disclosure could prejudice
network security issues, for example. Because of commercial confidentiality,
we believe that the information that Ofcom would obtain will be exempt
under Section 44 of the Freedom of Information Act. This is because it is
information relating to a particular business, which is subject to the
prohibitions in Section 393 of the Communications Act 2003.
“ For the reasons stated, we do not believe that these reports should be
made available to the public. However, I assure the noble Lord that we
propose to publish an account of the broad information on the overall state
of health of the UK’ s communications infrastructure, detailed in both the
initial and biennial reports. I mentioned earlier that it is our intention to set
out in a note for your Lordships how we expect this reporting process to work
in practice in a number of areas. I will ensure that that note includes our
expectation that the conclusions of these reports will be made public
wherever possible.” (Hansard, HL Vol.716 , HYPERLINK
0009.htm"col.196 (January 6, 2010).)
© 2010 Sweet & Maxwell
Status: Law In Force
OFCOM reports
(version 1 of 1)
2 OFCOM reports on media content

After section 264 of the Communications Act 2003 insert—
“ 264A OFCOM reports: wider review and reporting

obligations
(1) When carrying out a review under section 264 for a period, OFCOM must
also carry out a review of the extent to which material included in media
services during that period (taken together over the period as a whole)
contributed towards the fulfilment of the public service objectives.
(2) Every report under section 264 must—
(a) include a report on the matters found on the review under this
section,
(b) specify, and comment on, whatever changes appear to OFCOM to

have occurred, during the period to which the report relates, in the
extent to which the public service objectives have been fulfilled,
(c) specify, and comment on, whatever changes appear to OFCOM to

have occurred, during that period, in the manner in which those
objectives are fulfilled, and
(d) set out OFCOM's conclusions on the current state of material included
in media services.
(3) “ The public service objectives” are the objectives set out in paragraphs
(b) to (j) of section 264(6) (as modified by subsection (4)).
(4) Paragraphs (b) to (j) of section 264(6) have effect for the purposes of
subsection (3) as if—
(a) references to the relevant television services were to media services,

and
(b) references to programmes were to material included in such services.

(5) In this section—
“ material” does not include advertisements;
“ media services” means any of the following services that are available to
members of the public in all or part of the United Kingdom—
(a) television and radio services,
(b) on-demand programme services, and (c) other services provided by

means of the internet where there is a person who exercises editorial
control over the material included in the service.
(6) The services that are to be taken for the purposes of this section to be
available to members of the public include any service which—
(a) is available for reception by members of the public (within the

meaning of section 361); or
(b) is available for use by members of the public (within the meaning of
section 368R(4)).”
Scotland
Annotation
Section 2
Introduction
“ 32. Section 264 of the 2003 Act requires OFCOM to report at least every
five years on the fulfilment of the public service remit for television by public
service broadcasters, namely the BBC, Channel 4, S4C and providers of
Channel 3 and Channel 5. The public service remit involves the provision of a
balanced diversity of high quality content, which meets the needs and
interests of different audiences in the United Kingdom. Paragraphs (b) to (j)
of section HYPERLINK
"http://login.westlaw.co.uk/maf/wluk/ext/app/document?crumb-
action=reset&docguid=IA1595B50E45211DA8D70A0E70A78ED65"264(6) of
the 2003 Act provide detailed public service objectives underpinning this
remit. According to these objectives, examples of public service media
content would include content that reflects, supports and stimulates cultural
activity in the United Kingdom, and content that facilitates fair and well
informed debates on news and current affairs.
“ 33. This clause extends the scope of OFCOM’ s reviewing and reporting
obligations beyond television. Under new section 264A, OFCOM will be
required to consider the wider delivery of public service media content on
other platforms, such as the internet and on-demand programme services,
and review the extent to which such content contributes towards the
fulfilment of the public service objectives defined in section 264(6)(b) to (j).”
Online infringement of copyright

(version 1 of 1)
3 Obligation to notify subscribers of reported infringements

After section 124 of the Communications Act 2003 insert—
“ Online infringement of copyright: obligations of internet

service providers
124A Obligation to notify subscribers of copyright

infringement reports
(1) This section applies if it appears to a copyright owner that—
(a) a subscriber to an internet access service has infringed the owner's

copyright by means of the service; or
(b) a subscriber to an internet access service has allowed another person

to use the service, and that other person has infringed the owner's
copyright by means of the service.
(2) The owner may make a copyright infringement report to the internet
service provider who provided the internet access service if a code in force
under section 124C or 124D (an “ initial obligations code” ) allows the owner
to do so.
(3) A “ copyright infringement report” is a report that—
(a) states that there appears to have been an infringement of the

owner's copyright;
(b) includes a description of the apparent infringement;
(c) includes evidence of the apparent infringement that shows the

subscriber's IP address and the time at which the evidence was
gathered;
(d) is sent to the internet service provider within the period of 1 month
beginning with the day on which the evidence was gathered; and
(e) complies with any other requirement of the initial obligations code.
(4) An internet service provider who receives a copyright infringement report

must notify the subscriber of the report if the initial obligations code requires
the provider to do so.
(5) A notification under subsection (4) must be sent to the subscriber within
the period of 1 month beginning with the day on which the provider receives
the report.
(6) A notification under subsection (4) must include— (a) a statement

that the notification is sent under this section in response to a copyright
infringement report;
(b) the name of the copyright owner who made the report;
(c) a description of the apparent infringement;
(d) evidence of the apparent infringement that shows the subscriber's IP

address and the time at which the evidence was gathered;
(e) information about subscriber appeals and the grounds on which they
may be made;
(f) information about copyright and its purpose;
(g) advice, or information enabling the subscriber to obtain advice, about

how to obtain lawful access to copyright works;
(h) advice, or information enabling the subscriber to obtain advice, about

steps that a subscriber can take to protect an internet access service
from unauthorised use; and
(i) anything else that the initial obligations code requires the notification
to include.
(7) For the purposes of subsection (6)(h) the internet service provider must
take into account the suitability of different protection for subscribers in
different circumstances.
(8) The things that may be required under subsection (6)(i), whether in
general or in a particular case, include in particular—
(a) a statement that information about the apparent infringement may

be kept by the internet service provider;
(b) a statement that the copyright owner may require the provider to
disclose which copyright infringement reports made by the owner to the
provider relate to the subscriber;
(c) a statement that, following such a disclosure, the copyright owner

may apply to a court to learn the subscriber's identity and may bring
proceedings against the subscriber for copyright infringement; and
(d) where the requirement for the provider to send the notification arises
partly because of a report that has already been the subject of a
notification under subsection (4), a statement that the number of
copyright infringement reports relating to the subscriber may be taken
into account for the purposes of any technical measures.
(9) In this section “ notify” , in relation to a subscriber, means send a

notification to the electronic or postal address held by the internet service
provider for the subscriber (and sections 394 to 396 do not apply).”
Scotland
Annotation
Section 3
Introduction
“ 44. The section of the 2003 Act that is inserted by this clause (section
124A) sets out an obligation for ISPs to notify subscribers of copyright
infringement reports (‘ CIRs’ ) received about them from copyright owners. It
describes what CIRs and notifications to subscribers must contain, the
procedures that copyright owners must comply with when making CIRs, and
the procedures that ISPs must follow when sending subscriber notifications.
“ 45. Copyright owners are currently able to go on-line, look for material to
which they hold the copyright and identify unauthorised sources for that
material. They can then seek to download a copy of that material and in
doing so capture information about the source including the IP address along
with a date and time stamp. However, at present they do not have the ability
to match this information to the broadband subscriber to whom that IP
address was allocated at that precise time. This information is only held by
the subscriber’ s ISP. Therefore, the copyright owner relies on the ISP’ s
ability to match the IP address to the name and address of the subscriber
concerned.
“ 46. However, the ISP is unable to pass this information on to the copyright
owner without a court order. To do so would breach data protection and
privacy law. To help ensure that the subscriber is made aware that their
account appears to have been used to breach copyright, section 124A
imposes an initial obligation on the ISP, in relevant cases, to notify the
subscriber if the ISP receives a CIR from a copyright owner. There are
maximum time limits of one month between when an infringement is
detected and a CIR sent to an ISP, and between when a CIR is received and
when a notification is sent to the subscriber.
“ 47. The notification from the ISP must inform the subscriber that the
account appears to have been used to infringe copyright, give the name of
the copyright owner who has provided the report, provide evidence of the
apparent infringement, direct the consumer towards legal sources of content,
include information about subscriber appeals and the grounds on which they
may be made, and provide other information. It also requires ISPs to make
available advice on protecting internet access services from unauthorised
use, taking into account that different protection will be suitable for different
subscribers such as, for example, domestic subscribers, libraries, and small
and medium business. The code may require the notification to include other
material as well, such as a statement that information about the apparent
infringement may be kept and disclosed to the copyright owner in certain
circumstances. Further apparent infringements using the subscriber’ s
account may result in additional notifications.”
“ My Lords, Clause 4 sets out the requirements that must be met to produce
a copyright infringement report. These reports are the mechanism by which
the copyright owner brings specific apparent infringements of their copyright
via a particular IP address-and I stress ‘ apparent’ -at a particular point in
time to the attention of the relevant internet service provider.
“ Some of these amendments seek to change the name of these reports from
copyright infringement reports to copyright infringement allegation reports.
Others propose a change of the wording to require the trigger leading to the
creation of a CIR to be that in the ‘ reasonable opinion’ of the copyright
holder an infringement of their rights has occurred on that internet account,
rather than it merely ‘ appearing to them’ that an infringement has
occurred.
“ I recognise that the apparent infringements are not tested and proved to
court standards. It will not be possible at the time the copyright infringement
report is made to be able to declare with legal certainty that an infringement
has occurred or that the IP address in the reports was responsible. Given
this, clearly it is of the utmost importance that the standards of evidence
surrounding the identification of both the infringement and the IP address of
the infringing account should be as high as possible. I certainly concur with
the points that the noble Lord, Lord Clement-Jones, made in relation to the
standard of evidence and not presuming this is an open-and-shut case; and
indeed with the point that the noble Lord, Lord De Mauley, made about
speculative allegations-in other words, what is important is the standard of
proof and evidence.
“ New subsection (3) in Clause 4 already expressly recognises that the

infringement described in a copyright infringement report is, as the noble
Lord, Lord De Mauley, reminds us, only ‘ apparent’ . Equally I think that the
copyright infringement reports amount to more than mere allegation.”
(Hansard, HL Vol.716, col.441 (January 12, 2010).)
Pepper v Hart Note (see General Note: Pepper v Hart): Introducing the Second
Reading of the Bill for this Act in the House of Commons the Secretary of State for
Culture, Media and Sport (Mr Ben Bradshaw) said as follows:
“ The Bill introduces obligations on internet service providers-the ISPs-to

send letters to subscribers who are linked to an alleged infringement, and to
record the number of notifications with which each subscriber is associated.
Copyright owners will be able to apply for a court order to access the names
and addresses of alleged serious infringers and take targeted legal action.
We expect that those initial measures will be effective and anticipate that, on
receipt of such letters, the vast majority of subscribers will seek legal
alternatives. There is research and real-world experience to back that up.”
(Hansard, HL Vol.508, col.839 HYPERLINK
"http://www.publications.parliament.uk/pa/cm200910/cmhansrd/cm100406/
debtext/100406-0007.htm"(April 6, 2010).)

(version 1 of 1)
4 Obligation to provide infringement lists to copyright owners

After section 124A of the Communications Act 2003 insert—
“ 124B Obligation to provide copyright infringement lists

to copyright owners
(1) An internet service provider must provide a copyright owner with a
copyright infringement list for a period if—
(a) the owner requests the list for that period; and
(b) an initial obligations code requires the internet service provider to

provide it.
(2) A “ copyright infringement list” is a list that—
(a) sets out, in relation to each relevant subscriber, which of the

copyright infringement reports made by the owner to the provider relate
to the subscriber, but
(b) does not enable any subscriber to be identified.
(3) A subscriber is a “ relevant subscriber” in relation to a copyright owner

and an internet service provider if copyright infringement reports made by
the owner to the provider in relation to the subscriber have reached the
threshold set in the initial obligations code.”
Scotland
Annotation
Section 4
Introduction
“ 48. ISPs will have to keep a record of the number of CIRs linked to each
subscriber along with a record of which copyright owner sent the report.
Under section 124B of the 2003 Act, inserted by clause 5, an ISP may be
required to provide a copyright owner with relevant parts of those records on
request (‘ copyright infringement lists’ ), but in an anonymised form so as to
ensure compliance with data protection legislation. The code must set the
threshold for determining who is a relevant subscriber who may be the
subject of a copyright infringement list that the ISP provides to a copyright
owner. The threshold may be set by reference to any matter, including the
number of CIRs made (see clause 8).
“ 49. A copyright infringement report represents a single breach of copyright

at a moment in time. At present, a copyright owner has no way of knowing
whether the subscriber behind that CIR habitually infringes copyright online
or whether the CIR represents a curious individual trying file-sharing for the
first and only time. Because of this, the high costs involved in legal action
deter copyright owners from enforcing their rights. By allowing copyright
owners to target only the most serious repeat infringers, copyright
infringement lists provided by ISPs are intended to make legal action a more
attractive and effective tool for copyright owners to use in respect of their
copyright.
“ 50. The lists would be made available to copyright owners on request in an

anonymised form. For example, while a list might (for example) identify
subscriber 936 as being linked to the most CIRs, it would not include any
personal information about subscriber 936. In order to get this personal
data, the copyright owner would need a court order. However, the list would
allow the copyright owner to identify subscriber 936 as someone against
whom legal action may be appropriate.”
Pepper v Hart Note (see General Note: Pepper v Hart): Introducing the Second
Reading of the Bill for this Act in the House of Commons the Secretary of State for
Culture, Media and Sport (Mr Ben Bradshaw) said as follows:
“ The Bill introduces obligations on internet service providers-the ISPs-to

send letters to subscribers who are linked to an alleged infringement, and to
record the number of notifications with which each subscriber is associated.
Copyright owners will be able to apply for a court order to access the names
and addresses of alleged serious infringers and take targeted legal action.
We expect that those initial measures will be effective and anticipate that, on
receipt of such letters, the vast majority of subscribers will seek legal
alternatives. There is research and real-world experience to back that up.”
(Hansard, HL Vol.508, col.839 HYPERLINK
"http://www.publications.parliament.uk/pa/cm200910/cmhansrd/cm100406/
debtext/100406-0007.htm"(April 6, 2010).)

This version in force from: April 8, 2010 to present
(version 1 of 1)
5 Approval of code about the initial obligations
After section 124B of the Communications Act 2003 insert—
“ 124C Approval of code about the initial obligations

(1) The obligations of internet service providers under sections 124A and
124B are the “ initial obligations” .
(2) If it appears to OFCOM—
(a) that a code has been made by any person for the purpose of
regulating the initial obligations; and
(b) that it would be appropriate for them to approve the code for that
purpose,
they may by order approve it, with effect from the date given in the order.
(3) The provision that may be contained in a code and approved under this
section includes provision that—
(a) specifies conditions that must be met for rights and obligations under
the copyright infringement provisions or the code to apply in a particular
case;
(b) requires copyright owners or internet service providers to provide

any information or assistance that is reasonably required to determine
whether a condition under paragraph (a) is met.
(4) The provision mentioned in subsection (3)(a) may, in particular, specify

that a right or obligation does not apply in relation to a copyright owner
unless the owner has made arrangements with an internet service provider
regarding—
(a) the number of copyright infringement reports that the owner may
make to the provider within a particular period; and
(b) payment in advance of a contribution towards meeting costs incurred

by the provider.
(5) The provision mentioned in subsection (3)(a) may also, in particular,

provide that—
(a) except as provided by the code, rights and obligations do not apply in
relation to an internet service provider unless the number of copyright
infringement reports the provider receives within a particular period
reaches a threshold set in the code; and
(b) if the threshold is reached, rights or obligations apply with effect from the
date when it is reached or from a later time. (6) OFCOM must not approve a
code under this section unless satisfied that it meets the criteria set out in
section 124E.
(7) Not more than one approved code may have effect at a time.
(8) OFCOM must keep an approved code under review.
(9) OFCOM may by order, at any time, for the purpose mentioned in
subsection (2)—
(a) approve modifications that have been made to an approved code; or
(b) withdraw their approval from an approved code,
with effect from the date given in the order, and must do so if the code
ceases to meet the criteria set out in section 124E.
(10) The consent of the Secretary of State is required for the approval of a
code or the modification of an approved code.
(11) An order made by OFCOM under this section approving a code or

modification must set out the code or modification.
(12) Section 403 applies to the power of OFCOM to make an order under this
section.
(13) A statutory instrument containing an order made by OFCOM under this

section is subject to annulment in pursuance of a resolution of either House
of Parliament.”
Scotland
Annotation
Section 5
Introduction
“ 51. The obligations provided for in new sections 124A and 124B would not
have effect until there was a complementary code in force that had been
approved or made by OFCOM.
“ 52. Clause 6 inserts new section 124C in the 2003 Act. This section sets out
the requirements for OFCOM’ s approval of a code regulating matters in
connection with the initial obligations. The process by which infringements
are detected, the standard of evidence that the copyright owner must meet
before an ISP must send a notification, the format of CIRs, and the routes of
appeal for consumers are all issues of detail that section 124C would require
the code to deal with. The government hopes that all stakeholders (ISPs,
copyright owners and consumers) will contribute to the development of an
industry code. Other criteria that an approved industry code may specify
include setting in advance the number of CIRs the ISPs will be expected to
process in a given period (say, six months).
“ 53. Without these criteria, there would be no obligation for copyright

owners to provide infringement information in a standard format and no
protection for ISPs in the event that copyright owners set extremely high
levels of expected CIRs.
“ 54. The government also envisages that any approved code would also set
out the time a copyright owner has to submit a CIR (so that a CIR must
relate to a recent infringement) and the time the ISP has to act on the CIR
and send a notification to the subscriber (for example, 5 working days)
within the outer limits of one month set by the legislation.
“ 55. The government’ s intention is for the obligations to fall on all ISPs
except those who are demonstrated to have a very low level of online
infringement. This is on the basis that it would be disproportionate (in cost
terms) to require an ISP to incur significant costs to counter a problem that
does not exist to any significant degree on its network. The proposal is
therefore for the code to set out qualifying threshold criteria, based on the
number of CIRs an ISP receives in a set period of time. The government
anticipates that most small and medium (‘ SME’ ) ISPs and, possibly, the
mobile networks would fall under the threshold. However, this exemption
would not be a one-off exercise and the qualifying period would be a rolling
one (for example, ‘ x’ number of CIRs received in a rolling 3 month period).
ISPs would need to ensure online infringement of copyright remained at a
low level or else face the prospect of passing the qualifying threshold. Once
in scope, ISPs would have to comply with the obligations and to continue to
do so even if the number of CIRs later fell below the threshold.
“ 56. In order to ensure that the code covered all the necessary areas and to
a sufficient standard, OFCOM’ s approval would be needed before it could
come into force and the Secretary of State would need to consent to the
approval.
“ 57. Before approving a code, OFCOM would have to carry out consultation.
Under section 124C and section 124E (which is inserted by clause 8), OFCOM
would also need to satisfy themselves that the code was objectively
justifiable, proportionate and transparent.”

(version 1 of 1)
6 Initial obligations code by OFCOM in the absence of an

approved code
After section 124C of the Communications Act 2003 insert—
“ 124D Initial obligations code by OFCOM in the absence

of an approved code
(1) For any period when sections 124A and 124B are in force but for which
there is no approved initial obligations code under OFCOM must by order
make a code for the purpose of regulating the initial obligations.
(2) OFCOM may but need not make a code under subsection (1) for a time
before the end of—
(a) the period of six months beginning with the day on which sections
124A and 124B come into force, or
(b) such longer period as the Secretary of State may specify by notice to
OFCOM.
(3) The Secretary of State may give a notice under subsection (2)(b) only if
it appears to the Secretary of State that it is not practicable for OFCOM to
make a code with effect from the end of the period mentioned in subsection
(2)(a) or any longer period for the time being specified under subsection (2)
(b).
(4) A code under this section may do any of the things mentioned in section
124C(3) to (5).
(5) A code under this section may also—
(a) confer jurisdiction with respect to any matter (other than jurisdiction
to determine appeals by subscribers) on OFCOM themselves;
(b) provide for OFCOM, in exercising such jurisdiction, to make awards of

compensation, to direct the reimbursement of costs, or to do both;
(c) provide for OFCOM to enforce, or to participate in the enforcement of,

any awards or directions made under the code;
(d) make other provision for the enforcement of such awards and
directions;
(e) establish a body corporate, with the capacity to make its own rules
and establish its own procedures, for the purpose of determining
subscriber appeals;
(f) provide for a person with the function of determining subscriber

appeals to enforce, or to participate in the enforcement of, any awards or
directions made by the person; (g) make other provision for the
enforcement of such awards and directions; and
(h) make other provision for the purpose of regulating the initial
obligations.
(6) OFCOM must not make a code under this section unless they are satisfied
that it meets the criteria set out in section 124E.
(7) OFCOM must—
(a) keep a code under this section under review; and
(b) by order make any amendment of it that is necessary to ensure that

while it is in force it continues to meet the criteria set out in section
124E.
(8) The consent of the Secretary of State is required for the making or
amendment by OFCOM of a code under this section.
section.

of Parliament.”
Scotland
Annotation
Section 6
Introduction
“ 58. Clause 7 inserts new section 124D in the 2003 Act. The new section
provides for the making by OFCOM of a code regulating the initial obligations
if there is no industry code. The government hopes industry can devise a
satisfactory code which OFCOM approves. However, if that does not happen,
OFCOM must develop a code themselves for adoption by order. It is possible
that stakeholders may be able to reach agreement on parts of the code,
which OFCOM can then consider, and, if appropriate, include as part of
OFCOM’ s code. Again, the consent of the Secretary of State would be
required for the making of the code.”

(version 1 of 1)
7 Contents of initial obligations code

After section 124D of the Communications Act 2003 insert—
“ 124E Contents of initial obligations code

(1) The criteria referred to in sections 124C(6) and 124D(6) are—
(a) that the code makes the required provision about copyright
infringement reports (see subsection (2));
(b) that it makes the required provision about the notification of

subscribers (see subsections (3) and (4));
(c) that it sets the threshold applying for the purposes of determining
who is a relevant subscriber within the meaning of section 124B(3) (see
subsections (5) and (6));
(d) that it makes provision about how internet service providers are to
keep information about subscribers;
(e) that it limits the time for which they may keep that information;
(f) that it makes any provision about contributions towards meeting costs
that is required to be included by an order under section 124M;
(g) that the requirements concerning administration and enforcement are

met in relation to the code (see subsections (7) and (8));
(h) that the requirements concerning subscriber appeals are met in

relation to the code (see section 124K);
(i) that the provisions of the code are objectively justifiable in relation to
the matters to which it relates;
(j) that those provisions are not such as to discriminate unduly against
particular persons or against a particular description of persons;
(k) that those provisions are proportionate to what they are intended to
achieve; and
(l) that, in relation to what those provisions are intended to achieve, they
are transparent.
(2) The required provision about copyright infringement reports is

provision that specifies— (a) requirements as to the means of obtaining
evidence of infringement of copyright for inclusion in a report;
(b) the standard of evidence that must be included; and
(c) the required form of the report.
(3) The required provision about the notification of subscribers is provision

that specifies, in relation to a subscriber in relation to whom an internet
service provider receives one or more copyright infringement reports—
(a) requirements as to the means by which the provider identifies the

subscriber;
(b) which of the reports the provider must notify the subscriber of; and
(c) requirements as to the form, contents and means of the notification

in each case.
(4) The provision mentioned in subsection (3) must not permit any copyright
infringement report received by an internet service provider more than 12
months before the date of a notification of a subscriber to be taken into
account for the purposes of the notification.
(5) The threshold applying in accordance with subsection (1)(c) may, subject
to subsection (6), be set by reference to any matter, including in particular
one or more of—
(a) the number of copyright infringement reports;
(b) the time within which the reports are made; and
(c) the time of the apparent infringements to which they relate.
(6) The threshold applying in accordance with subsection (1)(c) must operate
in such a way that a copyright infringement report received by an internet
service provider more than 12 months before a particular date does not
affect whether the threshold is met on that date; and a copyright
infringement list provided under section 124B must not take into account any
such report.
(7) The requirements concerning administration and enforcement are—
(a) that OFCOM have, under the code, the functions of administering and
enforcing it, including the function of resolving owner-provider disputes;
(b) that there are adequate arrangements under the code for OFCOM to
obtain any information or assistance from internet service providers or
copyright owners that OFCOM reasonably require for the purposes of
administering and enforcing the code; and
(c) that there are adequate arrangements under the code for the costs
incurred by OFCOM in administering and enforcing the code to be met by
internet service providers and copyright owners.
(8) The provision mentioned in subsection (7) may include, in particular—
(a) provision for the payment, to a person specified in the code, of a

penalty not exceeding the maximum penalty for the time being specified
in section 124L(2);
(b) provision requiring a copyright owner to indemnify an internet service

provider for any loss or damage resulting from the owner's failure to
comply with the code or the copyright infringement provisions.
(9) In this section “ owner-provider dispute” means a dispute that—
(a) is between persons who are copyright owners or internet service

providers; and
(b) relates to an act or omission in relation to an initial obligation or an

initial obligations code.”
Scotland
Annotation
Section 7
Introduction
“ 59. Clause 8 inserts new section 124E in the 2003 Act. This sets out what
the code underpinning the initial obligations (whether an industry code or
OFCOM’ s own code) must contain. The reason for including the underpinning
material in a code, rather than directly in the 2003 Act, is that it is likely to
be detailed and to have to be adapted and refined over time.
“ 60. The code must set out the process by which the initial obligations will
operate and the procedures that copyright owners and ISPs must follow in
relation to them. It must set out the criteria, evidence and standards of
evidence required in a CIR and the required format and content of a
notification letter sent to a subscriber. It must not permit any CIR more than
12 months old to be taken into account for the purposes of a notification.
“ 61. The code must also set the threshold applying for the purposes of
determining who is a ‘ relevant subscriber’ under section 124B (and may
therefore be the subject of a copyright infringement list). CIRs which are
more than 12 months old must not be taken into account to determine
whether the threshold is met and a copyright infringement list under s134B
must not take into account any such CIR.
“ 62. The code must also take into account circumstances whereby
injunctions as specified under clause 18 may be brought. It must provide for
OFCOM to administer the code and to enforce it in the event of a failure to
comply with the code, and it must meet the requirements concerning
subscriber appeals (as set out in new section 124K of the 2003 Act, inserted
by clause 14).”

(version 1 of 1)
9 Obligations to limit internet access: assessment and

preparation
After section 124F of the Communications Act 2003 insert—
“ 124G Obligations to limit internet access: assessment

and preparation
(1) The Secretary of State may direct OFCOM to—
(a) assess whether one or more technical obligations should be imposed

on internet service providers;
(b) take steps to prepare for the obligations;

(c) provide a report on the assessment or steps to the Secretary of
State.
(2) A “ technical obligation” , in relation to an internet service provider, is an

obligation for the provider to take a technical measure against some or all
relevant subscribers to its service for the purpose of preventing or reducing
infringement of copyright by means of the internet.
(3) A “ technical measure” is a measure that—
(a) limits the speed or other capacity of the service provided to a

subscriber;
(b) prevents a subscriber from using the service to gain access to

particular material, or limits such use;
(c) suspends the service provided to a subscriber; or
(d) limits the service provided to a subscriber in another way.
(4) A subscriber to an internet access service is “ relevant” if the subscriber

is a relevant subscriber, within the meaning of section 124B(3), in relation to
the provider of the service and one or more copyright owners.
(5) The assessment and steps that the Secretary of State may direct OFCOM
to carry out or take under subsection (1) include, in particular—
(a) consultation of copyright owners, internet service providers,

subscribers or any other person;
(b) an assessment of the likely efficacy of a technical measure in relation

to a particular type of internet access service; and
(c) steps to prepare a proposed technical obligations code. (6) Internet

service providers and copyright owners must give OFCOM any assistance
that OFCOM reasonably require for the purposes of complying with any
direction under this section.
(7) The Secretary of State must lay before Parliament any direction under
this section.

and
(b) in such manner as they consider appropriate for bringing it to the

in it.
2000.”
Scotland
Annotation
Section 9
Introduction
“ 65. New section 124G of the 2003 Act, inserted by clause 10, confers a
power on the Secretary of State to direct OFCOM to assess whether ISPs
should be obliged to take technical measures against certain subscribers, or
direct OFCOM to take steps to prepare for technical obligations. In particular,
OFCOM may be required to carry out a consultation or assess the likely
efficacy of different kinds of technical measure, and to report back to the
Secretary of State. Technology used for the purposes of online infringement
of copyright is changing fast and it is not possible at this stage to know
which technical measures would be effective. OFCOM will have to publish
their reports under this section but may exclude information they consider
they could refuse to disclose under the Freedom of Information Act
HYPERLINK "http://login.westlaw.co.uk/maf/wluk/ext/app/document?crumb-
action=reset&docguid=I5FACCF40E42311DAA7CF8F68F6EE57AB"2000.
“ 66. The government’ s aim is for the initial obligations in new sections 124A
and 124B to significantly reduce online infringement of copyright. However,
in case the initial obligations prove not as effective as expected, new section
124H gives the Secretary of State the power to introduce further obligations,
should that prove appropriate.
“ 67. OFCOM would be required to set out supporting provision in a technical

obligations code under section 124I (which is inserted by clause 12).”
for this Act in the House of Lords Lord Faulkner of Worcester said as follows:
“ It might be helpful if I start by saying why we have included the possibility

of technical obligations in the Bill. As my noble friends on the government
Front Bench have said many times in our consideration of the Bill thus far,
the Government believe that the initial obligations set out in Clauses 4 to 8
should result in a significant reduction in online copyright infringement. We
believe that they are reasonable and proportionate steps to take and that
most people will respond positively when they become aware that their
actions are not only unlawful but also visible to those who can take steps to
seek redress.
“ However, we also recognise the strength of the argument that has been put
to us that these initial obligations may not be sufficient. Those industries that
have suffered at the hands of mass online copyright infringement are rightly
anxious that we should be sure that the Bill gives us all the tools required to
solve the problem. Therefore we have in Clauses 10 to 13 a reserve power to
introduce technical obligations, should it be necessary to do so, to stem the
flood of online copyright infringement if the initial obligations do not work.
Clause 10 gives the Secretary of State the power to require Ofcom to assess
the need for technical obligations and to make preparations for the
imposition of those obligations such as preparing a technical obligations
code.” (Hansard, HL Vol.716, col.1068 (January 20, 2010).)
“ My Lords, Clause 10 allows the Secretary of State to require Ofcom to

prepare in advance against the need for technical obligations, to require
Ofcom to assess the need for technical obligations generally and the likely
efficacy of particular technical obligations on particular types of networks,
and to require Ofcom to develop a code of practice to underpin any such
technical obligations.
“ It may well be desirable for those powers to be used one at a time rather
than in parallel. The Secretary of State might want an assessment of
whether any measure is needed and, if so, which is the right one before
asking for a code to be drawn up. This would make sense since the detail of
the code is likely to be heavily influenced by the nature of the measure. This
suggests that it is not sensible to make all of paragraphs (a) to (c) a
requirement in relation to every direction that the Secretary of State might
make under new subsection (1) of new Section 124G of the Communications
Act 2003 in Clause 10.
“ Imposing technical obligations is something a Secretary of State would

decide only if he were sure it was the only way to deal with the problem of
online copyright infringement and if the initial obligations have failed to
deliver the expected results. I stress that because we are all committed to
ensuring that the initial obligations have an opportunity to deliver the
expected results before we think about technical measures. An assessment
of whether technical obligations should be imposed will be informed by
consultation of relevant groups, including consumers-there is an explicit
assurance on that-which in this context includes subscribers.” (Hansard, HL
Vol.716, col.1302 (January 26, 2010).)

(version 1 of 1)
10 Obligations to limit internet access

After section 124G of the Communications Act 2003 insert—
“ 124H Obligations to limit internet access

(1) The Secretary of State may by order impose a technical obligation on
internet service providers if—
(a) OFCOM have assessed whether one or more technical obligations

should be imposed on internet service providers; and
(b) taking into account that assessment, reports prepared by OFCOM

under section 124F, and any other matter that appears to the Secretary
of State to be relevant, the Secretary of State considers it appropriate to
make the order.
(2) No order may be made under this section within the period of 12 months
beginning with the first day on which there is an initial obligations code in
force.
(3) An order under this section must specify the date from which the
technical obligation is to have effect, or provide for it to be specified.
(4) The order may also specify—
(a) the criteria for taking the technical measure concerned against a
subscriber;
(b) the steps to be taken as part of the measure and when they are to be
taken.
(5) No order is to be made under this section unless—
(a) the Secretary of State has complied with subsections (6) to (10), and
(b) a draft of the order has been laid before Parliament and approved by
a resolution of each House.
(6) If the Secretary of State proposes to make an order under this section,
the Secretary of State must lay before Parliament a document that—
(a) explains the proposal, and
(b) sets it out in the form of a draft order.
(7) During the period of 60 days beginning with the day on which the
document was laid under subsection (6) (“ the 60-day period” ), the
Secretary of State may not lay before Parliament a draft order to give effect
to the proposal (with or without modifications).
(8) In preparing a draft order under this section to give effect to the
proposal, the Secretary of State must have regard to any of the following
that are made with regard to the draft order during the 60-day period—
(a) any representations, and
(b) any recommendations of a committee of either House of Parliament

charged with reporting on the draft order.
(9) When laying before Parliament a draft order to give effect to the proposal
(with or without modifications), the Secretary of State must also lay a
document that explains any changes made to the proposal contained in the
document laid before Parliament under subsection (6).
(10) In calculating the 60-day period, no account is to be taken of any time
during which Parliament is dissolved or prorogued or during which either
House is adjourned for more than 4 days.”
Scotland
Annotation
Section 10
Introduction
“ 68. New section 124H of the 2003 Act is inserted by clause 11 and gives
the Secretary of State power to order ISPs to impose technical measures on
internet access service subscribers meeting certain criteria. This power can
only be used if the initial obligations code has been in force for at least 12
months, and OFCOM have assessed whether technical obligations should be
imposed on ISPs. The order would be subject to the draft affirmative
procedure.
“ 69. A technical measure may only be applied against a ‘ relevant

subscriber’ , that is a subscriber who has been linked to sufficient CIRs to
make them eligible for inclusion in a copyright infringement list.”

(version 1 of 1)
11 Code by OFCOM about obligations to limit internet access

After section 124H of the Communications Act 2003 insert—
“ 124I Code by OFCOM about obligations to limit internet

access
(1) For any period during which there are one or more technical obligations
in force under section 124H, OFCOM must by order make a technical
obligations code for the purpose of regulating those obligations.
(2) The code may be made separately from, or in combination with, any
initial obligations code under section 124D.
(3) A code under this section may—
(a) do any of the things mentioned in section 124C(3) to (5) or section

124D(5)(a) to (g); and
(b) make other provision for the purpose of regulating the technical
obligations.
(4) OFCOM must not make a code under this section unless they are satisfied
that it meets the criteria set out in section 124J.
(5) OFCOM must—
(a) keep a code under this section under review; and
(b) by order make any amendment of it that is necessary to ensure that

while it is in force it continues to meet the criteria set out in section
124J.
(6) The consent of the Secretary of State is required for the making or
amendment by OFCOM of a code under this section.
section.

of Parliament.”
Scotland
Annotation
Section 11
Introduction
“ 70. If the Secretary of State makes an order under section 124H requiring
ISPs to take technical measures against subscribers, OFCOM will be under an
obligation to adopt (by order) a code underpinning the technical obligations.
This is provided for in new section 124I of the 2003 Act, inserted by clause
12.
“ 71. Section 124I sets out the procedure for the making by OFCOM of the
code on technical obligations. It also provides that the Secretary of State’ s
approval of the code is required before it can be made, and specifies that the
statutory instrument containing the OFCOM order is subject to the draft
affirmative Parliamentary procedure.”


(version 1 of 1)
12 Contents of code about obligations to limit internet access

After section 124I of the Communications Act 2003 insert—
“ 124J Contents of code about obligations to limit

internet access
(1) The criteria referred to in section 124I(4) are—
(a) that the requirements concerning enforcement and related matters

are met in relation to the code (see subsections (2) and (3));
(b) that the requirements concerning subscriber appeals are met in

relation to the code (see section 124K);
(c) that it makes any provision about contributions towards meeting

costs that is required to be included by an order under section 124M;
(d) that it makes any other provision that the Secretary of State requires
it to make;
(e) that the provisions of the code are objectively justifiable in relation to
the matters to which it relates;
(f) that those provisions are not such as to discriminate unduly against
particular persons or against a particular description of persons;
(g) that those provisions are proportionate to what they are intended to
achieve; and
(h) that, in relation to what those provisions are intended to achieve,

they are transparent.
(2) The requirements concerning enforcement and related matters are—
(a) that OFCOM have, under the code, the functions of administering and
enforcing it, including the function of resolving owner-provider disputes;
(b) that there are adequate arrangements under the code for OFCOM to
obtain any information or assistance from internet service providers or
copyright owners that OFCOM reasonably require for the purposes of
administering and enforcing the code; and
(c) that there are adequate arrangements under the code for the costs
incurred by OFCOM in administering and enforcing the code to be met by
internet service providers and copyright owners. (3) The provision made
concerning enforcement and related matters may also (unless the Secretary
of State requires otherwise) include, in particular—
(a) provision for the payment, to a person specified in the code, of a
penalty not exceeding the maximum penalty for the time being specified
in section 124L(2);
(b) provision requiring a copyright owner to indemnify an internet service

provider for any loss or damage resulting from the owner's infringement
or error in relation to the code or the copyright infringement provisions.
(4) In this section “ owner-provider dispute” means a dispute that—
(a) is between persons who are copyright owners or internet service

providers; and
(b) relates to an act or omission in relation to a technical obligation or a

technical obligations code.”
Scotland
Annotation
Section 12
Introduction
“ 72. Clause 13 inserts new section 124J in the 2003 Act. Section 124J sets
out a list of matters which are to be included in the technical obligations
code. Thus the code must, for example, include provision in relation to
enforcement and meet the requirements concerning subscriber appeals (as
set out in new section 124K, inserted by clause 14). The person hearing
appeals from subscribers must be independent, and OFCOM may set up a
body for that purpose.
“ 73. The government envisages that the code would also set out the process
by which a technical measure would be taken, and the information that
would have to be sent to a subscriber facing such a measure. It would also
address how any costs might be apportioned, and set out the dispute
mechanism in the event of disagreement between an ISP and a copyright
owner.”

(version 1 of 1)
13 Subscriber appeals
After section 124J of the Communications Act 2003 insert—
“ 124K Subscriber appeals

(1) The requirements concerning subscriber appeals are—
(a) for the purposes of section 124E(1)(h), the requirements of

subsections (2) to (8); and
(b) for the purposes of section 124J(1)(b), the requirements of

subsections (2) to (11).
(2) The requirements of this subsection are—
(a) that the code confers on subscribers the right to bring a subscriber
appeal and, in the case of a technical obligations code, a further right of
appeal to the First-tier Tribunal;
(b) that there is a person who, under the code, has the function of
determining subscriber appeals;
(c) that that person is for practical purposes independent (so far as
determining subscriber appeals is concerned) of internet service
providers, copyright owners and OFCOM; and
(d) that there are adequate arrangements under the code for the costs
incurred by that person in determining subscriber appeals to be met by
internet service providers, copyright owners and the subscriber
concerned.
(3) The code must provide for the grounds of appeal (so far as an appeal
relates to, or to anything done by reference to, a copyright infringement
report) to include the following—
(a) that the apparent infringement to which the report relates was not an
infringement of copyright;
(b) that the report does not relate to the subscriber's IP address at the
time of the apparent infringement.
(4) The code must provide for the grounds of appeal to include contravention
by the copyright owner or internet service provider of the code or of an
obligation regulated by the code.
(5) The code must provide that an appeal on any grounds must be
determined in favour of the subscriber unless the copyright owner or internet
service provider shows that, as respects any copyright infringement report to
which the appeal relates or by reference to which anything to which the
appeal relates was done (or, if there is more than one such report, as
respects each of them)—
(a) the apparent infringement was an infringement of copyright, and
(b) the report relates to the subscriber's IP address at the time of that
infringement.
(6) The code must provide that, where a ground mentioned in subsection (3)
is relied on, the appeal must be determined in favour of the subscriber if the
subscriber shows that—
(a) the act constituting the apparent infringement to which the report
relates was not done by the subscriber, and
(b) the subscriber took reasonable steps to prevent other persons

infringing copyright by means of the internet access service.
(7) The powers of the person determining subscriber appeals must include
power—
(a) to secure so far as practicable that a subscriber is not prejudiced for

the purposes of the copyright infringement provisions by an act or
omission in respect of which an appeal is determined in favour of the
subscriber;
(b) to make an award of compensation to be paid by a copyright owner

or internet service provider to a subscriber affected by such an act or
omission; and
(c) where the appeal is determined in favour of the subscriber, to direct

the copyright owner or internet service provider to reimburse the
reasonable costs of the subscriber.
(8) The code must provide that the power to direct the reimbursement of
costs under subsection (7)(c) is to be exercised to award reasonable costs to
a subscriber whose appeal is successful, unless the person deciding the
appeal is satisfied that it would be unjust to give such a direction having
regard to all the circumstances including the conduct of the parties before
and during the proceedings.
(9) In the case of a technical obligations code, the powers of the person
determining subscriber appeals must include power—
(a) on an appeal in relation to a technical measure or proposed technical

measure—
(i) to confirm the measure;
(ii) to require the measure not to be taken or to be withdrawn;
(iii) to substitute any other technical measure that the internet

service provider has power to take;
(b) to exercise the power mentioned in paragraph (a)(ii) or (iii) where an

appeal is not upheld but the person determining it is satisfied that there
are exceptional circumstances that justify the exercise of the power;
(c) to take any steps that OFCOM could take in relation to the act or
omission giving rise to the technical measure; and (d) to remit the
decision whether to confirm the technical measure, or any matter
relating to that decision, to OFCOM.
(10) In the case of a technical obligations code, the code must make
provision—
(a) enabling a determination of a subscriber appeal to be appealed to the
First-tier Tribunal, including on grounds that it was based on an error of
fact, wrong in law or unreasonable;
(b) giving the First-tier Tribunal, in relation to an appeal to it, the powers
mentioned in subsections (7) and (9); and
(c) in relation to recovery of costs awarded by the Tribunal.
(11) In the case of a technical obligations code, the code must include
provision to secure that a technical measure is not taken against a subscriber
until—
(a) the period for bringing a subscriber appeal, or any further appeal to
the First-tier Tribunal, in relation to the proposed measure has ended (or
the subscriber has waived the right to appeal); and
(b) any such subscriber appeal or further appeal has been determined,
abandoned or otherwise disposed of.”
Scotland
Annotation
Section 13
Introduction
“ 74. Clause 14 inserts new section 124K in the 2003 Act. Section 124K sets
out how the mechanism for subscriber appeals will work. It requires that the
initial obligations code and any technical obligations code provide a route for
appeals and sets out grounds for appeal. It also requires that the codes must
provide for an appeal to succeed unless the copyright owner or ISP shows, in
relation to each relevant CIR, that there has been an infringement of
copyright and that this has been correctly linked to the subscriber’ s internet
account. A subscriber appeal must also succeed where the subscriber shows
that the infringement was not carried out by the subscriber and that the
subscriber had taken reasonable steps to prevent an infringement.
“ 75. Where an appeal is successful, the codes must allow compensation to

be paid to the subscriber and also any reasonable costs.
“ 76. In the event of technical measures being introduced, the person

hearing subscriber appeals must be able to confirm, overturn or modify the
imposition of a technical measure, including in cases where the appeal is
unsuccessful but there are exceptional circumstances. The code must also
provide for an appeal from the first appeal body’ s decision to a First-tier
Tribunal.
“ 77. Finally, the code must ensure that no technical measure is imposed
until the appeals process has been exhausted, or the subscriber has decided
not to proceed further with an appeal, or the time limit for appeals has
expired.”

(version 1 of 1)
14 Enforcement of obligations
After section 124K of the Communications Act 2003 insert—
“ 124L Enforcement of obligations

(1) Sections 94 to 96 apply in relation to a contravention of an initial
obligation or a technical obligation, or a contravention of an obligation under
section 124G(6), as they apply in relation to a contravention of a condition
set out under section 45.
(2) The amount of the penalty imposed under section 96 as applied by this
section is to be such amount not exceeding £250,000 as OFCOM determine
to be—
(a) appropriate; and
(b) proportionate to the contravention in respect of which it is imposed.
(3) In making that determination OFCOM must have regard to—
(a) any representations made to them by the internet service provider or

copyright owner on whom the penalty is imposed;
(b) any steps taken by the provider or owner towards complying with the
obligations contraventions of which have been notified to the provider or
owner under section 94 (as applied); and
(c) any steps taken by the provider or owner for remedying the
consequences of those contraventions.
(4) The Secretary of State may by order amend this section so as to

substitute a different maximum penalty for the maximum penalty for the
time being specified in subsection (2).
(5) No order is to be made containing provision authorised by subsection (4)

unless a draft of the order has been laid before Parliament and approved by
a resolution of each House.”
Scotland
Annotation
Section 14
Introduction
“ 78. Clause 15 inserts new section 124L in the 2003 Act. Section 124L sets
out the penalties which may be imposed on an ISP for the contravention of
the initial obligations or obligations to impose technical measures, or of the
obligation to provide assistance to OFCOM under section 124G.
“ 79. The maximum penalty is specified as the sum of £250,000. However,

the Secretary of State has a power to increase this amount by order. The
order would be subject to the affirmative resolution Parliamentary
procedure.”

(version 1 of 1)
15 Sharing of costs
After section 124L of the Communications Act 2003 insert—
“ 124M Sharing of costs

(1) The Secretary of State may by order specify provision that must be
included in an initial obligations code or a technical obligations code about
payment of contributions towards costs incurred under the copyright
infringement provisions.
(2) Any provision specified under subsection (1) must relate to payment of
contributions by one or more of the following only—
(a) copyright owners;
(b) internet service providers;
(c) in relation to a subscriber appeal or a further appeal by a subscriber

to the First-tier Tribunal, the subscriber.
(3) Provision specified under subsection (1) may relate to, in particular—
(a) payment by a copyright owner of a contribution towards the costs

that an internet service provider incurs;
(b) payment by a copyright owner or internet service provider of a

contribution towards the costs that OFCOM incur.
(4) Provision specified under subsection (1) may include, in particular—
(a) provision about costs incurred before the provision is included in an

initial obligations code or a technical obligations code;
(b) provision for payment in advance of expected costs (and for

reimbursement of overpayments where the costs incurred are less than
expected);
(c) provision about how costs, expected costs or contributions must be

calculated;
(d) other provision about when and how contributions must be paid.
(5) No order is to be made under this section unless a draft of the order has
been laid before Parliament and approved by a resolution of each House.”
Scotland
Annotation
Section 15
Introduction
“ 80. The initial obligations and any later technical obligations will give rise to
costs. These will include the cost to ISPs of processing copyright
infringement reports and issuing subscriber notifications, the costs to ISPs
associated with the imposition of any technical measures, OFCOM’ s costs in
approving or preparing the codes, the cost of enforcing them, and the
funding of any subscriber appeals to an independent appeals body or the
First-tier Tribunal.
“ 81. New section 124M of the 2003 Act, inserted by clause 16, confers a
power on the Secretary of State to specify by order provision which must be
included in the codes and which sets out how costs are to be apportioned
between copyright owners, ISPs and, in the case of subscriber appeals, the
subscriber concerned. This must be done through the affirmative resolution
Parliamentary procedure. The costs are those incurred under the copyright
infringement provisions. The purpose of the section is to help ensure that the
parties carry out their obligations in an efficient and effective manner and
that both ISPs and copyright owners have economic incentives to take action
to reduce online infringement of copyright through commercial agreements.
“ 82. The government believes that most of the costs of subscriber appeals
to an independent person determining appeals or to the First-tier Tribunal
should be funded by industry, so that a subscriber does not face significant
costs in making an appeal.”
“ My Lords, it is worth setting out why Clause 15 is part of the Bill. The
apportionment of costs is, not surprisingly, one of the most contentious parts
of the process for industry; it is an area where it is not realistic to expect the
different industry parties to agree. Both copyright owners and internet
service providers are adamant that their view of who should pay is the right
one and there is little common ground between them. That is why we
decided to include the sharing of costs as part of the Bill, rather than leave it
as a matter for the code, which might have made reaching agreement on the
code an intractable problem.
“ We have already discussed in Committee Amendments 200 to 206 and the

principle of cost sharing. The draft statutory instrument with which we
provided your Lordships set out our working assumption that copyright
owners should meet 75 per cent of the costs-both those incurred by ISPs in
complying with the initial obligations and the other costs that will arise for
Ofcom and in relation to the appeals processes. We are quite clear that the
bulk of the cost should apply to the copyright owners. Before the Horsemen
of the Apocalypse ride in with somewhat melodramatic comparisons with the
poll tax, I stress that in this working assumption ISPs would meet the
remaining 25 per cent of those costs. We have been clear that in our view
the bulk of the cost should be met by the copyright owners as the main
beneficiaries of the process, while leaving internet service providers-I stress
this-with a strong incentive to ensure that they keep their costs to the lowest
effective level.
“ Finally, let me address the point about seeking to prevent internet service
providers from passing costs on to their subscribers. This just is not
practical. It is not appropriate for the Government to dictate how any of the
industry parties should cover their costs or to prohibit any particular route. I
suggest that the amendment would, in practice, be virtually impossible to
police and could lead to endless disputes. “ I shall spend some time on how
this will be paid for. It will be paid for by industry through a flat-rate fee that
copyright owners will pay, which will be set in a way that incentivises both
copyright owners and ISPs to keep the process efficient and cost-effective. It
is only right that copyright owners should bear the cost of infringement
identification and any court action that they choose to take. They will also
have to pay a flat fee to an ISP for each notification that the ISP has to
process. However, the fee will be set at such a level that it will not cover all
the ISP’ s costs. Placing part of the costs on ISPs should ensure that the
systems that they put in place to comply with these obligations are both
effective-in other words, delivered rapidly-and cost-efficient. It will also
provide ISPs with incentives to minimise the number of notifications that
they receive either through commercial content deals or by taking voluntary
action to limit file-sharing on their network.” (Hansard, HL Vol.716, col.1342
(January 26, HYPERLINK
0008.htm"2010).)

(version 1 of 1)
16 Interpretation and consequential provision

(1) After section 124M of the Communications Act 2003 insert—
“ 124N Interpretation
In sections 124A to 124M and this section—
“ apparent infringement” , in relation to a copyright infringement report,

means the infringement of copyright that the report states appears to have
taken place;
“ copyright infringement list” has the meaning given in section 124B(2);
“ copyright infringement provisions” means sections 124A to 124M and

this section;
“ copyright infringement report” has the meaning given in section

124A(3);
“ copyright owner” means—
(a) a copyright owner within the meaning of Part 1 of the Copyright,

Designs and Patents Act 1988 (see section 173 of that Act); or
(b) someone authorised by that person to act on the person's behalf;
“ copyright work” has the same meaning as in Part 1 of the Copyright,

Designs and Patents Act 1988 (see section 1(2) of that Act);
“ initial obligations” has the meaning given in section 124C(1);
“ initial obligations code” has the meaning given in section 124A(2);
“ internet access service” means an electronic communications service

that—
(a) is provided to a subscriber;
(b) consists entirely or mainly of the provision of access to the internet;

and
(c) includes the allocation of an IP address or IP addresses to the

subscriber to enable that access;
“ internet service provider” means a person who provides an internet

access service;
“ IP address” means an internet protocol address;
“ subscriber” , in relation to an internet access service, means a person

who—
(a) receives the service under an agreement between the person and the
provider of the service; and
(b) does not receive it as a communications provider;
“ subscriber appeal” means—
(a) in relation to an initial obligations code, an appeal by a subscriber on

grounds specified in the code in relation to—
(i) the making of a copyright infringement report;
(ii) notification under section 124A(4);
(iii) the inclusion or proposed inclusion of an entry in a copyright

infringement list; or
(iv) any other act or omission in relation to an initial obligation or an

initial obligations code;
(b) in relation to a technical obligations code, an appeal by a subscriber

on grounds specified in the code in relation to—
(i) the proposed taking of a technical measure; or
(ii) any other act or omission in relation to a technical obligation or a

technical obligations code;
“ technical measure” has the meaning given in section 124G(3);
“ technical obligation” has the meaning given in section 124G(2);
“ technical obligations code” means a code in force under section 124I.”
(2) In section 135(3) of that Act (information required for purposes of

Chapter 1 functions), after paragraph (i) insert—
“ (ia) preparing a report under section 124F;
(ib) carrying out an assessment, taking steps or providing a report under

section 124G;” .
(3) In Schedule 8 to that Act (decisions not subject to appeal to the

Competition Appeal Tribunal), after paragraph 9 insert—
“ 9A
A decision relating to any of sections 124A to 124N or to anything done
under them.”
Scotland
Annotation
Section 16
Introduction
This section inserts a section into the Communications Act 2003 providing definitions
for the sections inserted by earlier sections of this Act.

(version 1 of 1)
17 Power to make provision about injunctions preventing

access to locations on the internet
(1) The Secretary of State may by regulations make provision about the
granting by a court of a blocking injunction in respect of a location on the
internet which the court is satisfied has been, is being or is likely to be used
for or in connection with an activity that infringes copyright.
(2) “ Blocking injunction” means an injunction that requires a service

provider to prevent its service being used to gain access to the location.
(3) The Secretary of State may not make regulations under this section
unless satisfied that—
(a) the use of the internet for activities that infringe copyright is having a
serious adverse effect on businesses or consumers,
(b) making the regulations is a proportionate way to address that effect,

and
(c) making the regulations would not prejudice national security or the
prevention or detection of crime.
(4) The regulations must provide that a court may not grant an injunction
unless satisfied that the location is—
(a) a location from which a substantial amount of material has been, is

being or is likely to be obtained in infringement of copyright,
(b) a location at which a substantial amount of material has been, is

being or is likely to be made available in infringement of copyright, or
(c) a location which has been, is being or is likely to be used to facilitate
access to a location within paragraph (a) or (b).
(5) The regulations must provide that, in determining whether to grant an

injunction, the court must take account of—
(a) any evidence presented of steps taken by the service provider, or by

an operator of the location, to prevent infringement of copyright in the
qualifying material,
(b) any evidence presented of steps taken by the copyright owner, or by

a licensee of copyright in the qualifying material, to facilitate lawful
access to the qualifying material,
(c) any representations made by a Minister of the Crown, (d) whether

the injunction would be likely to have a disproportionate effect on any
person's legitimate interests, and
(e) the importance of freedom of expression.
(6) The regulations must provide that a court may not grant an injunction
unless notice of the application for the injunction has been given, in such
form and by such means as is specified in the regulations, to—
(a) the service provider, and
(b) operators of the location.
(7) The regulations may, in particular—
(a) make provision about when a location is, or is not, to be treated as

being used to facilitate access to another location,
(b) provide that notice of an application for an injunction may be given to

operators of a location by being published in accordance with the
regulations,
(c) provide that a court may not make an order for costs against the
service provider,
(d) make different provision for different purposes, and
(e) make incidental, supplementary, consequential, transitional,

transitory or saving provision.
(8) The regulations may—
(a) modify Chapter 6 of Part 1 of the Copyright, Designs and Patents Act
1988, and
(b) make consequential provision modifying Acts and subordinate

legislation.
(9) Regulations under this section may not include provision in respect of
proceedings before a court in England and Wales without the consent of the
Lord Chancellor.
(10) Regulations under this section must be made by statutory instrument.
(11) A statutory instrument containing regulations under this section may

not be made unless—
(a) the Secretary of State has complied with section 18, and
(b) a draft of the instrument has been laid before and approved by a
resolution of each House of Parliament.
“ copyright owner” has the same meaning as in Part 1 of the Copyright,

Designs and HYPERLINK
action=reset&docguid=I5FF6D090E42311DAA7CF8F68F6EE57AB"Patents
Act 1988;
“ Minister of the Crown” has the same meaning as in the Ministers of the
Crown Act 1975; “ modify” includes amend, repeal or revoke;
“ operator” , in relation to a location on the internet, means a person who

has editorial control over material available at the location;
“ qualifying material” , in relation to an injunction, means the material

taken into account by the court for the purposes of provision made under
subsection (4);
“ service provider” has the same meaning as in section 97A of the

Copyright, Designs and HYPERLINK
action=reset&docguid=I5FF6D090E42311DAA7CF8F68F6EE57AB"Patents
Act 1988;
“ subordinate legislation” has the same meaning as in the Interpretation

Act 1978.
(13) In the application of this section to Scotland—
“ costs” means expenses;
“ injunction” means interdict.

Scotland
Annotation
Section 17
Introduction
This section was substituted in the House of Commons during the passage of the Bill
for this Act. Pepper v Hart Note (see General Note: Pepper v Hart): In Committee
on the Bill for this Act in the House of Commons the Parliamentary Under-Secretary
of State for Business, Innovation and Skills (Mr Stephen Timms) said as follows:
“ We want to remove clause 18, the text of which was inserted in another
place on a joint initiative of the Conservatives and Liberal Democrats. New
clauses 1 and 2 contain amended provisions, and I hope I can persuade the
Committee that our approach is the right way to proceed.
“ We have set out why we did not think that the clause 18, which was
inserted by the other place, would work and our concerns about introducing
such provisions in such a way and at such a time. We have also set out why
we think the text in new clauses 1 and 2 would have the same benefits, but
ensure proper consideration, including full consultation and proper
safeguards. The key benefits of the amended approach are that, as a power
to introduce regulations, which is what we are providing for, it is enforceable;
it does not immediately fall foul of the technical standards directive, as the
existing text would.
“ There will be proper opportunities to consult on the measure and for

Parliament to consider it via the now famous super-affirmative procedure,
with any recommendations having to be taken into account. The Secretary of
State must consider the proportionality of the regulations and the evidence
that they are necessary to deal with infringement that is having a serious
adverse effect. We can also ensure that any security law enforcement
concerns are properly taken on board.
“ In addition, should such regulations be introduced, the court from which an

order was being sought would need to consider carefully legitimate uses and
users affected by any order, as well as have due regard to freedom of
expression. We certainly do not want the clause to be used to restrict
freedom of speech. We want to ensure that the safeguards are properly
considered and that ISPs do not have an incentive to block sites purely on
the basis of an allegation, for fear of bearing costs-although we also need to
ensure that ISPs are not allowed to flout a decision of the court. Essentially,
our view is that the costs should be borne, not by the ISPs, but by those
seeking a court order.
“ The new clause we propose does the job of dealing with online infringement
other than unlawful file sharing, which is dealt with by earlier parts of the
Bill, but adds safeguards to ensure that the position of internet
intermediaries and citizens are properly protected.” (Hansard, HC Vol.508,
col.1135 (April 7, 2010.)
Subsection (1)
See General Note: Secretary of State.
Regulations — for procedure see subss.(10) and (11) and s.18.
Satisfied — see General Note: Levels of Certainty.
Subsection (5)
Minister of the Crown — see subs.(12); see also General Note: Minister of the
Crown.
See General Note: Proportionality.
Subsection (7) See General Note: Statutory Instruments: Different Provision for
Different Purposes.
See General Note: Statutory Instruments: Ancillary Provision.
See General Note: Transitional Provision.
See General Note: Consequential Amendments.
Subsection (8)
See General Note: Henry VIII Provision.
Subsection (9)
See General Note: England and Wales.
See General Note: Lord Chancellor.
Subsection (10)
See General Note: Statutory Instruments.
Subsection (11)
See General Note: Statutory Instruments: Draft Affirmative Procedure.
Subsection (12)
See General Note: Repeal.

(version 1 of 1)
18 Consultation and Parliamentary scrutiny

(1) Before making regulations under section 17 the Secretary of State must
consult—
(a) the Lord President of the Court of Session and the Lord Chief Justice
of Northern Ireland,
(b) the persons that the Secretary of State thinks likely to be affected by
the regulations (or persons who represent such persons), and
(c) such other persons as the Secretary of State thinks fit.
(2) If, following the consultation under subsection (1), the Secretary of State
proposes to make regulations under section 17, the Secretary of State must
lay before Parliament a document that—
(a) explains the proposal and sets it out in the form of draft regulations,
(b) explains the reasons why the Secretary of State is satisfied in relation
to the matters listed in section 17(3)(a) to (c), and
(c) contains a summary of any representations made during the

consultation under subsection (1).
(3) During the period of 60 days beginning with the day on which the
document was laid under subsection (2) (“ the 60-day period” ), the
Secretary of State may not lay before Parliament a draft statutory
instrument containing regulations to give effect to the proposal (with or
without modifications).
(4) In preparing draft regulations under section 17 to give effect to the

proposal, the Secretary of State must have regard to any of the following
that are made with regard to the draft regulations during the 60-day period
—
(a) any representations, and
(b) any recommendations of a committee of either House of Parliament

charged with reporting on the draft regulations.
(5) When laying before Parliament a draft statutory instrument containing

regulations to give effect to the proposal (with or without modifications), the
Secretary of State must also lay a document that explains any changes made
to the proposal contained in the document laid before Parliament under
subsection (2).
(6) In calculating the 60-day period, no account is to be taken of any time

during which Parliament is dissolved or prorogued or during which either
House is adjourned for more than 4 days.
Scotland
Annotation
Section 18
Introduction
This section was substituted in the House of Commons during the passage of the Bill
for this Act. Pepper v Hart Note (see General Note: Pepper v Hart): In Committee
on the Bill for this Act in the House of Commons the Parliamentary Under-Secretary
of State for Business, Innovation and Skills (Mr Stephen Timms) said as follows:
“ We want to remove clause 18, the text of which was inserted in another
place on a joint initiative of the Conservatives and Liberal Democrats. New
clauses 1 and 2 contain amended provisions, and I hope I can persuade the
Committee that our approach is the right way to proceed.
“ We have set out why we did not think that the clause 18, which was
inserted by the other place, would work and our concerns about introducing
such provisions in such a way and at such a time. We have also set out why
we think the text in new clauses 1 and 2 would have the same benefits, but
ensure proper consideration, including full consultation and proper
safeguards. The key benefits of the amended approach are that, as a power
to introduce regulations, which is what we are providing for, it is enforceable;
it does not immediately fall foul of the technical standards directive, as the
existing text would.
“ There will be proper opportunities to consult on the measure and for

Parliament to consider it via the now famous super-affirmative procedure,
with any recommendations having to be taken into account. The Secretary of
State must consider the proportionality of the regulations and the evidence
that they are necessary to deal with infringement that is having a serious
adverse effect. We can also ensure that any security law enforcement
concerns are properly taken on board.
“ In addition, should such regulations be introduced, the court from which an

order was being sought would need to consider carefully legitimate uses and
users affected by any order, as well as have due regard to freedom of
expression. We certainly do not want the clause to be used to restrict
freedom of speech. We want to ensure that the safeguards are properly
considered and that ISPs do not have an incentive to block sites purely on
the basis of an allegation, for fear of bearing costs-although we also need to
ensure that ISPs are not allowed to flout a decision of the court. Essentially,
our view is that the costs should be borne, not by the ISPs, but by those
seeking a court order.
“ The new clause we propose does the job of dealing with online infringement
other than unlawful file sharing, which is dealt with by earlier parts of the
Bill, but adds safeguards to ensure that the position of internet
intermediaries and citizens are properly protected.” (Hansard, HC Vol.508,
col.1135 (April 7, 2010).)
Subsection (1)
See General Note: Consultation.
See General Note: Court of Session.
See General Note: Lord Chief Justice of Northern Ireland.
Status: Not Yet In Force
Powers in relation to internet domain registries

This version in force from: date to be appointed
(version 1 of 1)
19 Powers in relation to internet domain registries

After section 124N of the Communications Act 2003 insert—
“ Powers in relation to internet domain registries
124O Notification of failure in relation to internet domain

registry
(1) This section applies where the Secretary of State—
(a) is satisfied that a serious relevant failure in relation to a qualifying

internet domain registry is taking place or has taken place, and
(b) wishes to exercise the powers under section 124P or 124R.
(2) The Secretary of State must notify the internet domain registry,
specifying the failure and a period during which the registry has the
opportunity to make representations to the Secretary of State.
(3) There is a relevant failure in relation to a qualifying internet domain

registry if—
(a) the registry, or any of its registrars or end-users, engages in

prescribed practices that are unfair or involve the misuse of internet
domain names, or
(b) the arrangements made by the registry for dealing with complaints in
connection with internet domain names do not comply with prescribed
requirements.
(4) A relevant failure is serious, for the purposes of this section, if it has
adversely affected or is likely adversely to affect—
(a) the reputation or availability of electronic communications networks

or electronic communications services provided in the United Kingdom or
a part of the United Kingdom, or
(b) the interests of consumers or members of the public in the United

Kingdom or a part of the United Kingdom.
(5) In subsection (3) “ prescribed” means prescribed by regulations made by

the Secretary of State.
(6) Before making regulations under subsection (3) the Secretary of State
must consult such persons as the Secretary of State considers appropriate.
(7) In this section and sections 124P to 124R— “ end-user” , in relation to

a qualifying internet domain registry, means a person who has been or
wants to be allocated an internet domain name that is or would be included
in the register maintained by the registry;
“ qualifying internet domain registry” means a relevant body that—

(a) maintains a relevant register of internet domain names, and
(b) operates a computer program or server that forms part of the system
that enables the names included in the register to be used to access
internet protocol addresses or other information by means of the
internet;
“ registrar” , in relation to a qualifying internet domain registry, means a

person authorised by the registry to act on behalf of end-users in
connection with the registration of internet domain names;
“ relevant body” means a company formed and registered under the

Companies Act 2006 or a limited liability partnership;
“ relevant register of internet domain names” means a register of—
(a) the names of second level internet domains that form part of the
same UK-related top level internet domain, or
(b) the names of third level internet domains that form part of the same
UK-related second level internet domain;
“ second level internet domain” means an internet domain indicated by

the last two elements of an internet domain name;
“ third level internet domain” means an internet domain indicated by the

last three elements of an internet domain name;
“ top level internet domain” means an internet domain indicated by the

last element of an internet domain name.
(8) An internet domain is “ UK-related” if, in the opinion of the Secretary of

State, the last element of its name is likely to cause users of the internet, or
a class of such users, to believe that the domain and its sub-domains are
connected with the United Kingdom or a part of the United Kingdom.”
Scotland
Annotation
Section 19
Introduction
“ 91. This clause amends the Communications Act 2003 (‘ the 2003 Act’ ) by
inserting a new section 124O. The section applies where the Secretary of
State wishes to use the new powers set out in clauses 20 and 21 and is
satisfied that there has been a serious failure of a registry because:
• The registry itself, its end-users (that is, owners of or applicants for
domain names) or registrars (that is, agents of end-users) have been
engaging in practices prescribed in regulations made by the Secretary of
State which are unfair or which involve the misuse of internet domain
names; or
• The registry’ s arrangements for dealing with complaints in connection

with domain names do not comply with requirements prescribed in
regulations made by the Secretary of State.
“ 92. Possible examples of unfair practices would be cyber-squatting (that is,

registering domain names which are of economic value to other people and
then charging those people high prices to buy them or use them for their
own purposes); drop-catching (that is, waiting until the expiry date for an
existing registered domain name, snatching it and then charging the
previous owner to buy it back); or pressure sales tactics.
“ 93. Possible examples of the misuse of internet domain names would be

registering intentionally misleading domain names, perhaps using them for
phishing (a form of internet fraud); distributing malware or spyware, which
are computer viruses; spamming; intentionally misleading the public into
believing there is a connection between the domain name owner and other
organisations (or that another organisation owns or authorises the use of the
domain name).
“ 94. The Secretary of State is required to consult before making regulations

prescribing the unfair practices and misuse of domain names or the
requirements in relation to arrangements for dealing with complaints.
“ 95. The section provides that such a failure will be serious where it has
adversely affected or is likely adversely to affect the reputation or availability
of electronic communications networks or services provided in the UK, or the
interests of consumers or the public in the UK.
“ 96. Where the section applies, the Secretary of State must notify the
registry specifying the failure and a period within which the registry may
make representations to the Secretary of State. In practice, the Secretary of
State may (if he considers it appropriate in the circumstances) require
OFCOM to prepare a report on the allocation, registration and/or misuse of
internet domain names by UK-based registries under section 134C (inserted
by clause 2(1)) before exercising his powers.”

(version 1 of 1)
20 Appointment of manager of internet domain registry
(1) After section 124O of the Communications Act 2003 insert—
“ 124P Appointment of manager of internet domain

registry
(1) This section applies where—
(a) the Secretary of State has given a notification under section 124O to
a qualifying internet domain registry specifying a failure,
(b) the period allowed for making representations has expired, and
(c) the Secretary of State is satisfied that the registry has not taken the
steps that the Secretary of State considers appropriate for remedying the
failure.
(2) The Secretary of State may by order appoint a manager in respect of the
property and affairs of the internet domain registry for the purpose of
securing that the registry takes the steps described in subsection (1)(c).
(3) The person appointed may be anyone whom the Secretary of State thinks
appropriate.
(4) The appointment of the manager does not affect—
(a) a right of a person to appoint a receiver of the registry's property, or
(b) the rights of a receiver appointed by a person other than the

Secretary of State.
(5) The Secretary of State must—
(a) keep the order under review, and
(b) if appropriate, discharge all or part of the order.
(6) The Secretary of State must discharge the order on the appointment of a
person to act as administrative receiver, administrator, provisional liquidator
or liquidator of the registry.
(7) The Secretary of State must discharge the order before the end of the
period of 2 years beginning with the day on which it was made (but this does
not prevent the Secretary of State from making a further order in the same
or similar terms).
(8) When discharging an order under this section, the Secretary of State may
make savings and transitional provision. (9) The Secretary of State must
send a copy of an order made under this section to the registry as soon as
practicable after it is made.
(10) In subsection (4), “ receiver” includes a manager (other than a

manager appointed by the registry) and a person who is appointed as both
receiver and manager.
(11) In subsection (6)—
“ administrative receiver” means an administrative receiver within the

meaning of section 251 of the Insolvency Act 1986 or Article 5(1) of the
Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19));
“ administrator” means a person appointed to manage the affairs,

business and property of the registry under Schedule B1 to that Act or
Schedule B1 to that Order.
124Q Functions of manager etc

(1) An order under section 124P may make provision about the functions to
be exercised by, and the powers of, the manager.
(2) The order may, in particular—
(a) provide for the manager to have such of the functions of the
registry's directors as are specified in the order (including functions
exercisable only by a particular director or class of directors), and
(b) provide for one or more of the registry's directors to be prevented

from exercising any of those functions.
(3) The order may make provision about the remuneration of the manager,
including in particular—
(a) provision for the amount of the remuneration to be determined by

the Secretary of State, and
(b) provision for the remuneration to be payable from the property of the
registry.
(4) In carrying out the functions conferred by the order, the manager acts as
the registry's agent.
(5) The Secretary of State may apply to the court for directions in relation to
any matter arising in connection with the functions or powers of the manager
(and the costs of the application are to be paid by the registry).
(6) On an application under subsection (5) the court may give such
directions or make such orders as it thinks fit.
(7) In this section “ the court” means—
(a) in England and Wales, the High Court or a county court,
(b) in Scotland, the Court of Session or the sheriff, and
(c) in Northern Ireland, the High Court.
(8) Where the registry is a limited liability partnership, this section applies as
if references to a director of the registry were references to a member of the
limited liability partnership.”
(2) In section 192(1)(d) of that Act (appeals against decisions of the

Secretary of State), after sub-paragraph (ii) insert—
“ (iia) an order under section 124P;” .
(3) In section 402(1) of that Act (powers of the Secretary of State to make
orders and regulations), after “ “ conferred by” ” insert “ “ section 124P and”
”.
Scotland
Annotation
Section 20
Introduction
“ 97. This clause amends the 2003 Act by inserting new sections 124P and
124Q. If the Secretary of State has served a notice under new section 124O,
the period allowed for making representations has expired and the Secretary
of State is satisfied that the registry has not taken appropriate steps to
remedy the failure or its consequences, the Secretary of State may appoint a
manager in respect of the property and affairs of the registry to secure that
appropriate steps are taken to remedy the failure.
“ 98. New section 124Q makes provision about the powers and functions of
the manager so appointed. In particular, the Secretary of State may provide
for the manager to take over any or all specified functions of the directors in
order to ensure that the registry remedies the failure, and may also prevent
the registry’ s directors from carrying out those functions (subsection (2)).
The Secretary of State may also provide for the remuneration of the
manager, which may be payable by the registry itself (subsection (3)). In
order to ensure that this power does not affect the rights of third parties or
the insolvency process, section HYPERLINK
action=reset&docguid=IA087B370E45211DA8D70A0E70A78ED65"124P(4)
provides that the appointment does not affect the rights of any third party to
appoint a receiver or manager, or the rights of any receiver or manager
appointed by a third party. For similar reasons, section 124P(6) provides that
if certain office holders under insolvency legislation are appointed in respect
of the registry, the Secretary of State must discharge the order appointing a
manager. The Secretary of State must also keep the order under review and
discharge it if appropriate, for example if the registry has remedied the
failure (section HYPERLINK
action=reset&docguid=IA087B370E45211DA8D70A0E70A78ED65"124P(5)).
The order has a time limit of two years but the Secretary of State can, if
necessary, make a further order in the same or similar terms.
“ 99. Section 124Q(5) to (7) allow the Secretary of State to seek directions
from a court in connection with the manager’ s functions. This might be done
in order to counter obstruction of the manager by a registry or its officers,
since disobeying the court’ s directions would amount to contempt.
“ 100. Section 124Q(8) applies all the provisions to limited liability

partnerships as if the references to a director were to a member of the
limited liability partnership.
“ 101. Subsection (2) of clause 20 inserts a reference to an order under

section 124P into section 192(1)(d) of the 2003 Act. The effect of this is that
the registry has a right of appeal on both the facts and the law to the
Competition Appeal Tribunal (and thence to the Court of Appeal on a point of
law) in respect of a decision to appoint a manager.”

(version 1 of 1)
21 Application to court to alter constitution of internet domain

registry
After section 124Q of the Communications Act 2003 insert—
“ 124R Application to court to alter constitution of

internet domain registry
(1) This section applies where—
(a) the Secretary of State has given a notification under section 124O to
a qualifying internet domain registry specifying a failure,
(b) the period allowed for making representations has expired, and
(c) the Secretary of State is satisfied that the registry has not taken the
steps that the Secretary of State considers appropriate for remedying the
failure.
(2) The Secretary of State may apply to the court (as defined in section
124Q) for an order under this section.
(3) The court may make an order—
(a) making alterations of the registry's constitution, and
(b) requiring the registry not to make any alterations, or any specified
alterations, of its constitution without the leave of the court.
(4) An order under this section may contain only such provision as the court
considers appropriate for securing that the registry remedies the failure
specified in the notification under section 124O.
“ constitution” means, in the case of a company, the articles of association

and, in the case of a limited liability partnership, the limited liability
partnership agreement;
“ limited liability partnership agreement” means the agreement or

agreements, whether express or implied, between the members of a
limited liability partnership, and between the partnership and the members
of the partnership, determining—
(a) the mutual rights and duties of the members, and
(b) their rights and duties in relation to the partnership.”
Scotland
Annotation
Section 21
Introduction
“ 102. This clause amends the 2003 Act by inserting a new section 124R.
This gives the Secretary of State the power to apply to the court for an order
to alter the constitution of a registry and to limit the registry’ s ability to
amend its constitution itself without the leave of the court. The provision only
applies where the Secretary of State has served a notice under new section
124O, the period allowed for making representations has expired and the
Secretary of State is satisfied that the registry has not taken the appropriate
steps to remedy the failure. The court may only make an order if the court
considers it is appropriate in order to secure that the registry remedies the
failure specified in the section 124O notification.
“ 103. Section 124R(5) provides that, in the case of a company, the

constitution means the articles of association, and in the case of a limited
liability partnership, it means the limited liability partnership agreement (as
defined).
“ 104. The Secretary of State may exercise his power under this section to
apply to court to alter the constitution and the power under new section
124P to appoint a manager concurrently (if he considers it appropriate).”
Copyright and performers' property rights: penalties

(version 1 of 1)
42 Increase of penalties relating to infringing articles or illicit

recordings
(1) The Copyright, Designs and Patents Act 1988 is amended as follows.
(2) In section 107 (criminal liability for making or dealing with infringing
articles etc.) in subsections (4)(a) and (4A)(a) for “ “ the statutory
maximum” ” substitute “ “ £50,000” ” .
(3) In section 198 (criminal liability for making, dealing with or using illicit
recordings) in subsections (5)(a) and (5A)(a) for “ “ the statutory maximum”
” substitute “ “ £50,000” ” .
Scotland
Annotation
Section 42
Introduction
“ 211. The Gowers Review of intellectual property recommended that the

penalties under section 107 of the 1988 Act for online copyright infringement
should be matched with those that apply for physical infringement, by
increasing the maximum prison sentence. Section HYPERLINK
action=reset&docguid=I6E2A7F90E44B11DA8D70A0E70A78ED65"107 of the
1988 Act currently restricts fines awarded on summary conviction for
criminal infringement of copyright under section 107(4)(a) and 107(4A)(a) to
the statutory maximum, which is £5,000 in England and Wales and £10,000
in Scotland. The clause increases the maximum fine that may be imposed for
these offences to £50,000. It also increases the maximum fine on summary
conviction for making, importing, distributing or making available an illicit
recording under section 198(5) or 198(5A) from the statutory maximum to
£50,000.”
General
(version 1 of 1)
44 Power to make consequential provision etc
(1) The Secretary of State may by regulations made by statutory instrument
make incidental, supplementary, consequential, transitional, transitory or
saving provision in connection with the amendments made by this Act.
(2) The regulations may—
(a) make different provision for different purposes,
(b) modify an Act passed before or in the same Session as this Act or
subordinate legislation made before this Act is passed, and
(c) where they are made in connection with an amendment made by

section 28 or by a provision listed in section 47(3), modify a provision of
an Act passed, or subordinate legislation made, before the day on which
that amendment comes into force.
(3) A statutory instrument containing regulations under this section that

amend or repeal a provision of an Act may not be made unless a draft of the
instrument has been laid before, and approved by a resolution of, each
House of Parliament.
(4) Any other statutory instrument containing regulations under this section
is subject to annulment in pursuance of a resolution of either House of
Parliament.
“ modify” includes amend, repeal or revoke;
“ subordinate legislation” has the same meaning as in the Interpretation

Act 1978.
Scotland
Annotation
Section 44
Introduction
“ 228. This clause gives the Secretary of State the power to make incidental,
supplementary, consequential, transitional, transitory or saving provision in
connection with the amendments to various enactments made by the Bill.
Certain necessary consequential amendments have already been identified
and are included in the Bill. This power allows any further amendments to be
made, where necessary, in order to give proper effect to the provisions made
by the Bill.”
Subsection (1)
See General Note: Statutory Instruments.
See General Note: Statutory Instruments: Ancillary Provision.
See General Note: Consequential Amendments.
See General Note: Transitional Provision.
Subsection (2)
See General Note: Statutory Instruments: Different Provision for Different Purposes.
See General Note: Henry VIII Provision.
Subsection (3)
See General Note: Statutory Instruments: Draft Affirmative Procedure.
Subsection (4)
See General Note: Statutory Instruments: Negative Resolution.
Subsection (5)
See General Note: Repeal.

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8.8.0.2.

61Status: Law In Force

Digital Economy Act 2010 c. 24

1 OFCOM reports on infrastructure, internet domain names etc

“ Reports on infrastructure etc

134A OFCOM reports on infrastructure etc

(a) the electronic communications networks matters listed in section

(b) the electronic communications services matters listed in section

(2) The first report must—

(3) A further report must—

(a) be prepared for each relevant period, and

(b) be sent to the Secretary of State by OFCOM as soon as practicable

(4) “ Relevant period” means—

(5) Where there is a significant change in connection with a matter listed in

(a) persons carrying on business in the United Kingdom or a part of the

(7) OFCOM must publish every report under this section—

(a) as soon as practicable after they send it to the Secretary of State,

(b) in such manner as they consider appropriate for bringing it to the

134B Networks and services matters

(a) the different types of electronic communications network provided in

(b) the geographic coverage of the different UK networks,

(c) the proportion of the population covered by the different UK

(d) the extent to which UK networks share infrastructure,

(e) the capacity of the different UK networks,

(h) the preparations made by providers of UK networks for responding to

(i) the standard of the different UK networks in comparison with

(a) the use of the electromagnetic spectrum for wireless telegraphy in

(c) the geographic coverage of the different UK services,

(d) the proportion of the population covered by the different UK services,

(f) the preparations made by providers of UK services for responding to

(g) the standard of the different UK services in comparison with

(3) The preparations referred to in subsections (1)(h) and (2)(f) include—

(b) the steps taken to reduce or remove those risks, and

(c) the testing of proposed responses to different types of emergency.

(5) In this section “ emergency” means an event or situation that seriously

Reports on internet domain names

134C OFCOM reports on internet domain names

(a) prepare a report on matters specified by the Secretary of State

(b) send the report to the Secretary of State as soon as practicable.

(a) the allocation and registration of internet domain names, and

(b) the misuse of internet domain names.

(3) OFCOM must publish every report under this section—

(a) as soon as practicable after they send it to the Secretary of State,

(2) In section 135(3) of that Act (information required for purposes of

“ (ic) preparing a report under section 134A;

(id) preparing a report under section 134C;” .

“ Clause 2: OFCOM reports on infrastructure, internet domain names

• The different types of electronic communications network and service

• Geographic and population coverage of those networks and services;

• Downtime, and measures in place to maintain or improve availability;

• Emergency planning; and

“ 28. Additionally, in relation to UK networks, the reports will cover

“ The matters to be covered in the reports are already outlined in

“ My Lords, Clause 2 amends the Communications Act by inserting new

“ Your Lordships will no doubt appreciate that the persons or organisations

© 2010 Sweet & Maxwell

Status: Law In Force

Digital Economy Act 2010 c. 24

2 OFCOM reports on media content

“ 264A OFCOM reports: wider review and reporting

(2) Every report under section 264 must—

(b) specify, and comment on, whatever changes appear to OFCOM to

(c) specify, and comment on, whatever changes appear to OFCOM to