Allan Freeth, chief executive of TelstraClear, has spoken out against his country’s Copyright (Infringing File Sharing) Amendment Act 2011, which comes into effect Sept. 1. The New Zealand legislation introduces a set of penalties that impose fines and possible account suspension for infringing activities, and it involves ISPs in the process of identifying and notifying account holders based on IP addresses.

“TelstraClear respects copyright and supports the ability of rights owners to realise value from their intellectual property. But a business model that has to be propped up by specific legislation in this way is flawed and needs to change,” Freeth said.

The new law will not help copyright owners defend their rights, he added. “It may encourage parents to take more notice of what their kids are doing online, and that’s a good thing. But it won’t stop those who really want content from getting it.”

TelstraClear is a wholly owned subsidiary of Australia’s leading telecommunications and information services company Telstra, but Freeth does not represent the parent company.

Freeth said his company’s market research found definitive reasons why people illegally downloaded content: the legal product takes too long to become available;  it costs too much;  the packaging and distribution of physical music, movies and games is unnecessary and costly; and they believe the business model is outdated and out-of-touch.

Three main themes emerged from TelstraClear’s study on the subject of how to reconcile the financial needs of artists with customers ’ expectations for content in a broadband world. One was to forge stronger bonds between the artists and the audience, which the respondents thought would result in reducing the overhead costs of traditional business practices major companies and therefore lowering the cost of legitimate content. Second was to implement different business models, such as advertising supported, sponsored, or getting lower quality for free and paying for improved quality.  Third was to distinguish between consumers who copy for personal use and people who profit from illegally copying and selling content, with the latter receiving harsher punishment.

“Instead of bringing in a law that we believe will not and cannot work, our government should be breaking monopolies, allowing personal choice and letting New Zealanders experience information and entertainment when the rest of the world does,” Freeth said. “Instead, it has chosen to introduce a law that could turn ordinary Kiwis into law-breakers.”

Thanks to TorrentFreak for the tip.

Related Links:

New Zealand’s Copyright (Infringing File Sharing) Amendment Act 2011 –

TelstraClear’s customer FAQ –