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This Issues Paper is the first formal publication of the Inquiry into how Australia's copyright law is affecting participation in the digital economy. It is intended to help frame discussion and encourage public consultation at an early stage. It provides background information about copyright in the digital environment, highlights the issues so far identified in preliminary research and consultations, and outlines the principles that will shape the ALRC's proposals for reform. It asks more than 50 questions about how the current copyright framework is affecting both commercial and creative enterprise and how current exceptions and statutory licences are working in the digital environment.