Power Move

WikiLeaks: iiNet hit by Hollywood because Telstra too strong

iiNet managing director Michael Malone has labelled a Wikileaks cable, that reveals why a group of Hollywood studios targeted iiNet in a copyright battle over Telstra, as embarrassing" for the studios involved.

The newly released cable alleges that Telstra was deemed too likely "to fight hard and dirty" and that the American film industry saw iiNet as large enough to make a point, but lacking the financial resources of Telstra to effectively fight back.

Malone responded to the accusation as his company prepares to go up against the Australian Federation Against Copyright Theft in a High Court battle.

"I don't know that it [the cable] really added anything that we didn't already believe. It's pretty embarrassing though, and rather puzzling that the MPAA saw the need to brief the US Ambassador," he told The Power Index's sister publication SmartCompany.

"I note the fear expressed in the note that this would look like the bullies from Hollywood beating up a small Australian business. It's pretty clear now that is exactly the situation. From this cable, it appears that the MPAA (the Motion Picture Association of America) was just too weak to take on Telstra, for fear of repercussions inside and outside the courtroom."

The new cable, part of a new wave of diplomatic communications released by WikiLeaks, shows that the MPAA and its international affiliate the Motion Picture Association were behind the challenge, but that they did not want this to be broadcasted.

"Despite the lead role of AFACT and the inclusion of Australian companies Roadshow and Seven, this is an MPAA/American studios production," the cable states.

It also says that it will watch as the case unfolds, in order to see whether "the 'AFACT versus the local ISP' featured attraction spawns a 'giant American bullies versus little Aussie battlers' sequel".

The cable, which was sent by US ambassador Robert McCallum and dated November 30, 2008, also states that AFACT wanted to target iiNet in order to avoid a likely costly and lengthy legal battle with Telstra.

"It was clear [Singapore president for Asia Pacific region of the Motion Picture Association Mike] Ellis did not want to begin by tangling with Telstra, Australia's former telecom monopoly and still-dominant player in telephone and internet, and a company with the financial resources and demonstrated willingness to fight hard and dirty, in court and out."

"Ellis also said iiNet users had a particularly high copyright violation rate, and that its management had been consistently unhelpful on copyright infringements."

The cable states that Ellis said AFACT had provided iiNet for five weeks with a large list of violations, "complete with a DVD containing gigabytes of data on infringers using its network".

The iiNet battle is set to be heard before the High Court this year, after two Federal Court challenges, both of which found in iiNet's favour.

The cable states that while AFACT hoped the iiNet decision would result in an international precedent, "the studios must now look for other ways to protect their commercial interests".

"In the meantime, the problem will persist and probably worsen with the advent of the high-speed National Broadband Network, as the speeds at which copyright theft can take place will literally multiply."

This article first appeared on The Power Index's sister publication, SmartCompany.

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