In London, the Digital Economy Bill was pushed through the House of Commons on Wednesday night, during a process called “the wash-up,” which is a free-for-all period between the call for a general election (which happened last Tuesday) and the formal dissolution of Parliament on April 12.

The wash-up is usually reserved for bills that are minimally controversial, but this status could be given the DEB only in the sense that both the Labour and Conservative parties officially supported it. There was considerable opposition from “digital activists,”  and the final vote was 189-47. There was some thought that resistance might continue in the House of Lords, but it did not happen, and the Royal Assent was given on Thursday afternoon.

However, this is not the end of the debate over the digital economy, or anything near to it. The bill started out as a broad approach to a number of issues, an embodiment of the recommendations in Digital Britain, a 245-page report released in June 2009 that recommended an “active industrial policy” with a program of action to:

• Complement and assist the private sector in delivering the effective modern communications infrastructure we need, built on new digital technologies;
• Enable Britain to be a global center for the creative industries in the digital age, delivering an ever wider range of quality content, including public service content, within a clear and fair legal framework;
• Ensure that people have the capabilities and skills to flourish in the digital economy, and that all can participate in digital society; and
• And continue to modernize and improve government’s service to the taxpayer through digital procurement and the digital delivery of public services.

The program was delayed by disagreement over its terms, and in the end, according to the Financial Times (proprietary) “the one significant reform to survive is a crackdown on online piracy.”

The FT may call it a “crackdown,” but on the whole the DEB seems measured.  (A summary is here.) It sets up a system whereby affronted copyright holders can inform ISPs of infringements and the ISPs in turn notify alleged infringers, Ofcom (the regulatory agency) monitors the situation and, in conjunction with the government, decides whether ISPs must “sanction speed blocks, bandwidth shaping, site blocking, account suspension or other limits against an ISP customer.” If Ofcom determines that technical measures are needed, Parliament must approve their actual implementation. Costs of technical measures are to be paid both copyright owners and ISPs.

British practice and terminology is so different from American (“two peoples divided by a common language”) that it is difficult to be sure what is going on here. Basically, it appears that the government is moving toward the idea of implementing technical anti-piracy measures at the ISP level, but is not yet convinced that they can work.

One measure that did not survive was a provision allowing an injunction to force an ISP to block access to an online location if a substantial portion of that location infringes copyright, with the ISPs required to pay copyright owners’ court fees. The Guardian called this “the most incendiary part of the bill” but noted that “it was replaced by a government amendment, which will effectively achieve the same outcome by different means.” The paper also noted: “Other clauses, including one that gives Ofcom the power to impose fines of up to £250,000 on ISPs who don’t act against persistent offenders, went through. Cue fury from those, including privacy campaigners, who claim this infringes the rights of internet users.”

Now that passage is complete, official reactions are spewing forth — measured happiness from content producers, outrage from digital activists. In the United States, an Ars Technica poster is on the outrage side — Screw you, Internet? Digital Economy bill passes in the UK — but without any suggestion as to how he would handle the problem of piracy, or to use a slightly less judgmental term, “digital content free-riding.”

Unless one buys into the moonshine that property rights are unnecessary to promote content creation, it seems obvious that there must be some form of policing and that it must be Internet based. Here at DS, we are conflicted.

My colleague George Ou is skeptical of the remedy of cutting off Internet access, which raises many problems of possible collateral damage (like parents and schools). I share this concern, though probably not as much, and I also would favor market-based protection rather than regulation — let content providers contract with ISPs for protection because the cost of protecting one’s property is a part of the cost of ownership. As with all property protection, there is a role for the state in both defining property rights and policing, but I am not sure that the DEB gets the mix right.

While the FT says that only the piracy part of the DEB survived, that is not quite right. Other provisions deal with segments of the British system of broadcasting, and DS’ Nick Brown points out that video games are addressed:

The bill also made the Pan European Game Information (PEGI) the sole game ratings system in the UK.  My understanding is that PEGI is run by the Interactive Software Federation of Europe (ISFE) which is supposedly a non-partisan, non-profit that rates games in the same way that the Entertainment Software Rating board (ESRB) rates games here at home.  On the one hand it’s a win to have PEGI as the official rating group since it is not run by a government, but to have it mandated is probably a loss being that this particular system is the only one the UK will use.  Whereas here in the states, obviously no rating or rating system is mandated, but submission of software entertainment to the ESRB is encouraged as way of self-regulating the industry. But since the ESRB is not mandated, if another rating system were created that turned out to be better it could take the place of the ESRB. In the UK that won’t be an option.

In any event, the debate is not over because most of the Digital Britain report is still on the table.