Two events that occurred in Australia this week go a long way to helping us understand the current shape of Australian culture.

The first occurred in hundreds of venues in and around Adelaide, as the country’s largest arts festival — the Adelaide Fringe — opened last Friday. The second occurred yesterday in the Federal Court, when by a two-to-one decision a consortium of large media companies called AFACT (the Australian Federation Against Copyright Theft) had their appeal against iiNet in a long-running copyright infringement case turned down.

Superficially, the two have little in common. The Adelaide Fringe gathers together the ultimate motley crew of the Australian arts, from jugglers and comedians to puppeteers and singer-songwriters. Roadshow Films Pty Ltd versus iiNet Ltd featured teams of lawyers at 20 paces and the most-watched performance was by iiNet’s chief executive, Michael Malone.

But taken together, the two events show us the big and the small of Australian culture, and the very different problems faced by each end of the sector. While artists and cultural entrepreneurs in Adelaide combat meagre resources, small audiences and red tape issues like public liability, for the big content companies the enemy is piracy — perhaps even, as some critics argue, the internet itself.

I travelled to Adelaide last weekend for the launch of the Fringe, and to attend a forum organised by Renew Adelaide, a scrappy but energetic non-profit trying to activate Adelaide’s many empty buildings and spaces for culture. While at the event, I met Cassandra Tombs, proprietor of the Tuxedo Cat, a new Fringe venue in a reclaimed space in the heart of Adelaide’s CBD. Tombs and her team have rehabilitated the beautiful three-story Elektra Building in King William Street, struggling to get it open despite thickets of red tape and the attentions of over-zealous council and state government liquor licensing inspectors.

For Tombs and many artists and producers like her, the problem is an inflexible regulatory system, geared to big nightclubs and thousand-person capacity beer barns. Small companies and independent artists often face high hurdles creating new venues or hiring old ones, like public liability insurance and planning and liquor licensing laws. The regulatory burden pushes costs up, even for one-person shows running for a few nights in temporary Fringe venues.

But for Big Content, the problem appears to be too little regulation. Roadshow, the Ten Network and the other big companies involved in the iiNet case want internet service providers to police broadband customers, if necessary cutting off their internet when they’ve been naughty.

The full judgment of the iiNet appeal is very long, but it makes for fascinating reading. Perhaps the key part of the judgment was in relation to whether iiNet “authorised” the illegal downloading of movies on BitTorrent. AFACT argued that because iiNet ignored the infringement notices issued to it by the copyright holders, the ISP was assisting users to steal movies. But the Federal Court found the copyright infringement notices issued by AFACT were “no more then assertions” and that “no means of verification was furnished”.

Despite hiring a special internet private eye called DtecNet, the copyright owners could only supply iiNet with a list of IP addresses, not people’s names. iiNet rather reasonably replied did not equate to a person or legal entity. What if the infringing computer was in a library? A school? An internet cafe?

Despite spending millions losing their second-round suit against iiNet, Big Content look set to take their appeal all the way to the High Court. The legal bills alone will probably comfortably exceed the total remuneration of all the artists in this year’s Fringe. And if that fails, their back-up plan is becoming apparent: to lobby Communications Minister Stephen Conroy to further tighten the law.

Interestingly, songwriters collection agency APRA and the actors union MEAA both presented briefs to the Federal Court arguing in favour of stricter interpretations of the Copyright Act (and, by implication, against iiNet). The Federal Court accepted the submissions, but concluded that “not all of the submissions … are necessarily relevant”.

Are more stringent copyright laws really going to help struggling actors and musicians — the sort that appear in Adelaide Fringe? It’s highly contentious that tighter regulation will stop illegal downloading in the first place, so it’s a long bow to draw to believe they will make much difference to artists at the grassroots.

What does make a difference are small venues like the Tuxedo Cat. Unlike festivals, they provide performers with year-round access to audiences in small, appropriate spaces. They also create employment in ancillary industries such as hospitality, lighting and sound.

But unlike large movie studios or collection agencies, small venues and independent artists have no industry lobby groups or high-price legal teams. Compared with the billions earned by global movie studios and television broadcasters, the cashflow of the independent arts scene is small and diffuse. As a result, their voices are rarely heard.

Imagine what might be achieved if the small-scale sector enjoyed the resources that the big broadcasters, movie distributors and producers have devoted to the iiNet case. A very different perspective on regulation might emerge: instead of advocating for more red tape in copyright, perhaps the discussion would be about less red tape for small venues, festivals and cultural events.