What does the law aim to do?
Stamp out internet piracy by making it easier to punish people who illegally download music, TV shows, films, books and games. It's an attempt to prevent New Zealand's creative industries from being bled dry by people pirating their work and distributing it free.
It's estimated that Kiwis download 10,000 copyrighted items every day. In 2007, pirated copies of Sione's Wedding were distributed before the movie was released in cinemas, costing investors about $1 million.
While smash hit Boy was kept under wraps until it hit cinemas in New Zealand last year, the damage was done when Kiwis made pirated copies available online, hitting potential box-office and DVD sales overseas.
The law is called the Copyright (Infringing File Sharing) Amendment Act 2011. In a nutshell, the changes aim to crack down on peer-to-peer, or P2P, file sharing.
Unofficially, it has been dubbed "Skynet" after a gaffe by New Plymouth MP Jonathan Young, who compared the internet to the fictional supercomputer villain of the Terminator films – basically implying that the internet could get a mind of its own and take over the world.
What is peer-to-peer file sharing?
When internet users connect via an application or network to download or upload off each other without paying a cent. Popular file-sharing services include Gnutella, Bit Torrent, FrostWire, LimeWire and Vuze.
Kiwis use these services to feed their insatiable appetite to keep up with the world. Shows such as the much-talked about American epic fantasy Game of Thrones become overnight sensations but, with the prospect of waiting years for it to hit our TV screens, Kiwis download them in droves.
The same goes for games that are out of reach to the average kid – the PlayStation 3 game All Blacks Rugby Challenge sells for $128.
Will the law achieve what it sets out to?
Yes, says Copyright Council deputy chairwoman Paula Browning. "Early evidence indicates New Zealanders are very likely to change their behaviour." She's quick to add that the legislation isn't perfect, but it will help educate people.
An Ipsos MediaCT online survey found seven out of 10 people who illegally download material would stop after receiving a warning notice.
Of 1000 New Zealanders aged between 15 and 50 surveyed, about half were aware of the laws before they came into force on Thursday.
Who is liable?
The person named on the internet bill, not the person who physically clicks on the download icon. So mums, dads, holiday home owners, schools and universities are at risk of being pinged for their children's, guests' or students' illegal activities.
InternetNZ chief executive Vikram Kumar says the Government's approach is lazy. "Think of it like a street address. Instead of finding out who in the house has committed the crime, the blame will fall on the homeowner."
Small and medium businesses that can't afford top-of-the-range internet security could also be at risk if employees use work computers to download. What's worse, the onus is on the account holder to prove they did not hit click – the opposite of innocent until proven guilty.
How does the copyright holder track you down?
When you start downloading a file, your internet protocol (IP) address pops up, which is visible to all users on the site. Copyright owners can scan sites and detect when their work is being illegally shared.
It probably won't be a singer or film director monitoring the dozens of file-sharing services. Instead, those that can afford to will hire agents to do the monitoring. For example, the Recording Industry Association represents the four big music labels – EMI, Sony, Warner and Universal.
Umbrella agents will ping users, sometimes on multiple occasions. But Mr Vikram says the $25 fee per warning notice should prevent these giants from sending hundreds of thousands of notifications.
How does the three strikes system work?
Once a copyright holder sees that your computer is downloading pirated material, it will contact your internet service provider, such as Telecom or TelstraClear. Your ISP will send a letter or email on behalf of the copyright owner.
Before an ISP will issue a notice, the copyright owner has to tick 13 boxes, including what time an illegal download occurred – down to the second. The first strike is called a detection notice, the second a warning notice, and the third an enforcement notice.
You can challenge these notices within 14 days of receiving them. If three notifications are sent within nine months, the copyright owner can pay $200 to take you to the Copyright Tribunal, to seek damages from as little as $275 up to $15,000.
Can I be barred from using the internet?
Potentially. The provision allowing a district court to suspend your internet account for up to six months is not in force, but will be reviewed by the Government next year.
What isn't covered by the laws?
Mobile phones for now, though they will be covered from October 1, 2013. Music and movies can still be streamed from sites such as YouTube – the law covers only peer-to-peer downloading and uploading, the Economic Development Ministry says.
But commentators say there is nothing in the legislation restricting enforcement provisions to peer-to-peer file sharing. It will be up to the courts to wade through these murky waters and provide clarification.
Can you download movies, TV shows and music legally?
Yes, but to a very limited extent. If more TV series and films were available online for a small price, Kiwis would do the honest thing and pay, Mr Vikram believes. But, because they don't have the option, they turn to illegal activity.
"People [in the United States] are paying US$8 to $10 a month for unlimited movies. Provide that to Kiwis and take away the data cap, piracy would be dead."
About half of the illegal downloading here relates to TV shows, he says.
However, the latest Ipsos MediaCT survey shows 28 per cent of adults have downloaded pirated music via peer-to-peer sites in the past 12 months. The survey results, released this week, also show that 21 per cent had used peer-to-peer for movies and 18 per cent for TV shows.
Unlike with TV shows, music is readily available to buy via sites such as iTunes or Amplifier, which charge about $2 for a single track and about $20 per album.
How can you get around the law?
After the second notice, change internet providers to clear your slate, Mr Vikram says. "Even if you have to break a contract, you're going to lose $200 to $300 but the risk of getting a third notification is something people must avoid."
The internet providers keep track of how many warnings you have had but, when you move, the information is not transferred. "People who are serious and heavily downloading are going to find ways around the law so they're not going to catch them. People who are ignorant of the law are the ones who are always certainly going to get caught."
Another measure is to use a proxy server which makes your online footprint invisible to a copyright holder. It costs about US$15 a month.
How you can protect yourself at home?
Wipe all peer-to-peer software from your computers and delete all files and folders containing illegally downloaded material. If you are the internet account holder, speak to your household about the risks.
Secure your wireless network by creating a safe password. Don't make it easy to hack, as people will be looking for insecure networks that they can take advantage of from the street or house next door.
How do you protect your business?
Create an acceptable-se policy and ensure all employees know they cannot partake in illegal lunchtime downloading.
Corporations and government departments have the cash to make their networks secure by using measures such as firewalls, which block certain sites and software. However, small and medium businesses, schools, universities, libraries could face difficulties if they can't afford such measures.
Will this be the death of free wireless internet?
Possibly. It depends on whether customers abuse the service at, say, McDonald's or the free wi-fi on the Wellington waterfront. There is the ability to block certain sites but this can be futile as children as young as five know how to get around firewalls and access forbidden Facebook and Hotmail accounts.
- The Dominion Post
If you had a choice, which would you prefer on Christmas day?Related story: Sun takes a Christmas holiday