New Zealand ISPs may be sued for letting users bypass geoblocks

New Zealand internet service providers that give users the ability to bypass geoblocks to access overseas digital content have been threatened with legal action by four of the country’s major media broadcasters.

Television New Zealand (TVNZ), the country’s government-owned national broadcaster, and pay-television operator Sky, Lightbox and MediaWorks, have confirmed they are preparing legal action against Call Plus and Bypass Network Services on the basis of breach of copyright.

Both ISPs offer a “global mode” to their users which gives them access to content that is unavailable in their country, such as subscriptions to a US account of streaming service Netflix.

The chief executive of TVNZ, Kevin Kenrick, told Guardian Australia that his concern “is that global mode directly impinges on our copyright. We have secured the right to broadcast and schedule certain content in this geographic territory, sometimes on an exclusive basis, and this service directly impinges on those rights.”

Call Plus and Bypass Network Services refused a midday deadline to axe the services, which means the claimants will pursue a legal challenge in the high court.

The commercial director of Bypass, Matthew Jackson, told Guardian Australia he disagreed with any claim that Global Mode, which has been in operation in New Zealand for two years without issue, is unlawful. He added that the product is complementary to the country’s efforts to reduce piracy.

The case is being closely watched by copyright experts in other parts of the world, including Trish Hepworth, of the copyright advocacy group Australian Digital Alliance. Hepworth said the case could set “a global precedent about copyright holders prepared to take court action with enforcing geographical licensing”.

In Australia, new copyright legislation is being reviewed that could give copyright owners the ability to apply for a federal court order requiring internet service providers to block overseas sites whose primary purpose is infringing copyright or facilitating the infringement of copyright.

Consumer advocacy groups are concerned that copyright holders may make the legal argument that virtual private networks (VPNs) fall under the category of “facilitating the infringement of copyright”.

VPNs act in much the same way as the “global mode” offered by the two New Zealand ISPs. The consumer advocacy group Choice reports that at least 684,000 Australian households use VPNs to access overseas content at globally competitive prices.

The Australian Copyright Council has said using services that offer methods to bypass geoblocks, such as VPNs, may be considered copyright infringement if they involve downloading or streaming without the permission of the copyright owner.

However, a policy FAQ posted on the website of the minister for communications, Malcolm Turnbull, says using a VPN to circumvent “international commercial arrangement[s] to protect copyright in different countries or regions” is not illegal under the Copyright Act.

Hepworth says that although copyright legislation differs from country to country, the case in New Zealand is significant for Australia in that it may represent “a global push about enforcing geographic licensing” and copyright holders might “use whatever legal remedies they could” to achieve similar results in Australia.

While proposed changes in copyright legislation in Australia emphasise stopping piracy, Hepworth hopes the government will also look more closely at “consumer- friendly changes to copyright law” as advocated in recent inquiries into IT pricing and copyright and the digital economy.

“We have a long history in Australia of being, basically, a content backwater – we get things later and more expensively than the rest of the world,” says Hepworth.

“Some portion of online infringement is inevitably about pricing and availability.”