Studios in 'skynet' copyright talks

United States movie and music studios have talked to internet providers about establishing a centralised facility that would process copyright infringement notices on behalf internet providers, industry executives have revealed.

It is understood the negotiations have involved the Telecommunications Carriers Forum (TCF) and the goal was to make it more practical for rights holders to use the controversial  ''Skynet'' law that came into effect two months ago to crack down on internet piracy.

TCF chief executive David Stone said it was not currently involved in the talks on the issue. He would not comment on what had been discussed or whether the TCF expected a future role.

Internet users can be fined between $275 and $15,000 by the Copyright Tribunal for illegally accessing copyrighted material, such as pirated movies, over the internet.

However, the Government took the sting out of the law change in August by allowing internet providers to charge rights holders $25 to process each infringement notice sent under the ''three strikes'' regime, on top of a $200 fee to the Copyright Tribunal for each prosecution. Those fees are due to be reviewed in March.

InternetNZ chief executive Vikram Kumar said the society was not aware of any infringement notices having been issued. Telecom and the country's second-largest internet provider, TelstraClear, confirmed they had received none.

Kumar believed Hollywood film makers and the music industry were afraid of establishing an international precedent by paying anything to internet providers to forward notices to their customers, but probably wanted to keep their options open.

He believed they might wait to see what happened in a landmark court case with internet provider iiNet in Australia in December before settling on their tactics. The court case will determine whether iiNet is liable under Australian law for illegal downloads by its customers.

A central facility for processing copyright infringement notices could allow internet providers here to determine whether those notices were customers' first, second or third ''strike'', he said.

That could reduce their administration costs, in turn allowing rights holders to make a case to the Government for a cut in the fees.

Kumar said the society had not been involved in the talks and expressed concern about internet users' privacy if a centralised system for processing infringement notices went ahead.

A spokeswoman for Commerce Minister Simon Power said the Government had not brokered the discussions, but noted internet providers could voluntarily lower their fee for processing notices.

Kumar said that given the urgency under which the copyright law change was passed, he imagined there would be some ''red faces'' in government.

Orcon chief executive Scott Bartlett confirmed the TCF's involvement in the talks with rights holders and said Orcon was supportive of the discussions ''up to a point''. But from Orcon's perspective, there was a workable system already in place. His message to rights holder was ''if you want to send us notices, send us notices''.

Orcon hired two temporary staff to deal with an expected flood of infringement notices when the ''Skynet'' regime came into effect in September, but had since let them go as there had been nothing for them to do, Bartlett said.

Telecom spokeswoman Anna Skerten said it had invested significantly to put a system in place allowing it to comply with its obligations under the Copyright Act amendment.

''This includes keeping staff on standby in the event we receive a significant volume of notices. To date, we have not received any notices, so have been unable to recover any of our costs for being prepared.''

Telecom had participated in TCF discussions with rights holder groups, she said. ''We have been, and continue to be, open to dialogue with rights holder groups to identify ways that might lessen the burden of complying with the copyright regime. We don't however agree that Telecom should bear the costs of doing so, simply to enable rights holder groups to send more infringement notices to our customers.''