[Today’s post is by FMC Policy Counsel Chris Naoum]

Here at FMC, we spend a fair amount of time thinking about how to establish a legitimate digital marketplace for music, where creators are compensated and fans can find the music they want.

Sounds simple, right? Not exactly.

We tend to think of things from the perspective of preserving artists’ ability to reach potential audiences via technologies like the internet. Yet we definitely recognize that the unauthorized distribution of music has an impact on how rightsholders — including musicians — make a living. Discussion on how American stakeholders should approach this issue can go on for days (and in our offices, it sometimes does).

Being in Washington means that you can sometimes get a front-row seat to other perspectives around this issue, as I did at a recent DC event on European strategies to curb unauthorized filesharing.

The event was an Intellectual Property Broadband Breakfast called “Approaches by Internet Service Providers Around the World to Copyright Infringement.” (You can check out the video archive here.) Speakers included reps from the Motion Picture Association of America (MPAA), the British Embassy, a local telecom law firm, a French telecom company and  a French digital think tank.

Conversation centered around two new European laws meant to combat certain kinds of digital infringement. Additionally, the panelists compared these laws to American approaches to copyright protection online.

Jean-Baptiste Soufron, Director of Think Digital, a public agency think tank in Paris, started the discussion with an explanation the French HADOPI law. Introduced in 2009, HADOPI is French legislation that promtes the distribution and protection of creative works on the internet. The law has two parts. First, it created a three step/ three strike “graduated response” process to copyright infringement. Second, it established a nine-member government agency under the Ministry of Culture, tasked with the power to police internet users and enforce the first part of the law.

The three steps require the rights holder to first file a claim of copyright infringement against an internet user.  Once the claim is filed, the Internet Service Provider (ISP) is required to fork over the user’s IP address, at which point the suspected infringer is sent a warning email. (These emails contain educational info as well as instructions aimed at parents on how to block certain illegal sharing sites.) If a repeat offense is suspected by the rightsholder, the ISP or HADOPI within six months after the first email, a certified letter is sent to the home address of the user. If the they fail to comply with the letter or are found in violation a third time, the ISP is required to suspend the user’s internet connection for two months to one year.

In 2009, France’s highest court struck down the third step of the this law, claiming that internet access is a basic civic right. This portion of the statute was later reinstated with the requirement of a judicial review prior to termination of internet services.

In the past year, there have been a number of questions about who bears the cost of enforcing the law. Soufron admitted that there is a considerable expense involved in sending out thousands of emails and certified letters.  The French now play approximately 30 euro a month for their “triple play” services (that’s pretty cheap!). He estimated that the cost of this kind of enforcement could raise the monthly charges by up to 3 euros. (Still pretty cheap!)

One French ISP called Free challenged the law, claiming that it only required ISPs to hand over personal IP addresses to the rightsholders and not actually email users. The government subsequently went back to the drawing board and decreed a change to the law explicitly requiring ISPs to send the notices themselves. (A highly unlikely outcome in the US, given the strength of the cable and telecommunications companies.)

Herve Rannou, the Managing Director of ITEMS — a consulting firm for French telecom operators — specified that the HADOPI law is designed to go after the P2P type infringement that has become prevalent over the past decade. Other issues such as sites hostng illegal content are dealt with via treaty enforcement protocols or regular lawsuits.

When asked to relate the HADOPI law to US efforts in combatting online infringment, Gregory Frazier, Executive Vice President & Chief Policy Officer of the MPAA, noted stressed consumer education as a key strategy. He suggested mounting a serious and sustained campaign to address the demand side of the problem as an important first step. He made the analogy to the massive educational effort around seat belts as an example where behavioral norms were changed for the better. Additionally, he mentioned that every ISP agreement in the US already has a clause saying that the user is not allowed to engage in illegal activities on the internet, adding that “rightsholders have always had the ability to sue.”

From there, the panel considered Britain’s Digital Economy Act. The first part of the law would require rightsholders to track the IP addresses of the infringing users. Second, the rightsholder would supply the addresses to the ISPs along with an infringement report. The ISP would then fire off a notification to the subscriber (the form is not yet set), with both a report filed by the ISP. From there, the rightsholder can request a list of infringers that have reached a certain threshold of infringement under the code and ultimately file a copyright infringement suit against them.

The Act will have a built in appeals process and is expected to be implemented by March 2011. Again, this law is only designed to deal with P2P-type infringement and will have no affect on those who access unauthorized content through illegal streaming sites or other platforms. According to Robin Tynman, First Secretary of the British Embassy, 75 percent of the costs associated with implementation and enforcement will fall on the rights holder and only 25 percent is expected to be absorbed by the ISPs.

It was really interesting to hear about these efforts, not because we happen to think they’re the best way to solve the problem, but because they’re actually being implemented. American rightsholders and policymakers will certainly be paying close attention to how this all plays out. Still, it’s important to remember that the political calculus here is a good deal different. No matter what enforcement strategies are put in place, FMC believes that the most important thing is to preserve musicians’ access to fans. Without that, we lose the ability to have a legitimate digital music marketplace that works for everyone, and not just the major players.