Cost Concerns Set to Delay Internet Piracy Warning Letters from UK ISPs

The United Kingdom’s economics and finance ministry, HM Treasury, has quietly withdrawn vital secondary legislation that sets out how the costs of its controversial measures to tackle internet piracy by customers of broadband ISPs would be shared. The move could result in further delays for the Digital Economy Act (DEAct).

Ofcom published its revised Initial Obligations Code, which describes how and when internet providers should issue Notifications Letters (internet piracy warning notices) to their customers, and the related Sharing of Costs Order in June last year. At the time it was envisaged that the first letters would be sent during early 2014.

However, according to PC Pro and the Open Rights Group (ORG), the already once revised Sharing of Costs Order has now been withdrawn because HM Treasury “need to make technical changes” in order to ensure that the legislation can meet the departments “Managing Public Money” guidelines.

Peter Bradwell, Open Rights Group, said:

“Ofcom is spending hefty amounts of public money, which ultimately would be paid back by copyright owners participating in the scheme. The government maintains the issue now is technical compliance with the guidelines.

The exact reasons are not clear. But the fact that Ofcom is stumping up many millions of pounds with apparently no clear commitment from copyright owners about who will pay it back, and when, could be part of the problem.”

The order itself requires ISPs to pay only around a quarter of the costs. Rights Holders would bear all of the costs incurred by Ofcom, the majority of costs incurred by the appeals body, and 75% of the costs “efficiently and reasonably incurred by Qualifying ISPs” (i.e. only the biggest broadband ISPs) in carrying out their obligations. It also sets out the structure for the £20 fee for appeals by ISP subscribers.

The costs order is a key piece of legislation and its withdrawal means that the legislation must, yet again, be redrafted and resubmitted to parliament. The government remains adamant that any “changes will not impact on the overall effect of the legislation” but an additional delay is expected, which could push the first letters back into the spring or summer of 2014.