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By: MarkJ - 14 September, 2010 (11:31 AM)
uk internet piracy opinionsInternet providers have expressed deep disappointment at today's news from the government, which confirmed that they would be expected to pay for part of the costs (25%) associated with tackling online copyright infringement (i.e. "illegal" file sharing) by broadband ISP customers (here). As a result of the move, broadband bills could also go up.
UK ISPs Susceptible to Cost Sharing Rule (ISPs with 400k+ users)
* BT ( PlusNet ) .
* TalkTalk .
* Virgin Media .
* Sky Broadband .
* Orange .
* O2 ( Be Broadband ) .
* Post Office (the PO uses BT's managed platform, like Vodafone UK; we don't know why they're reference by Ofcom) .
The Internet Service Providers Association (ISPA) is particularly disappointed with the Government’s announcement of a 75:25 rights holder to ISP split for costs of both notification and the appeals process.

Nicholas Lansman, ISPA Secretary General, said:

"ISPA has consistently argued for the beneficiary pays principle and is disappointed with today's announcement. Full cost recovery for serious law enforcement cases is an established rule and ISPA sees no reason why it should not be the case here."

Trefor Davies, Chief Technology Officer at ISP Timico UK, said earlier today:

"The Internet Service Providers’ Association (ISPA) and others argued long and hard for a beneficiary pays principle, which suggests that in fact the BIS position should read 100% Rights Holder pays. That was always going to be a difficult one to win considering the whole dubious history of the DEAct.

Whilst I understand the logic in trying to ensure that the costs are minimised[,] I wonder if there is somewhere in European Law relating to government subsidies of industry – because that is effectively what is being done here. The Government is indirectly subsidising the Creative industry by taxing the internet industry and giving the taxes to Rights Holders."

Andrew Heaney, TalkTalk UK's Executive Director of Strategy and Regulation, noted:

"It is absolutely outrageous that ISPs and broadband customers will be forced to pay for the costs of the music and film industries to enforce their own copyright.

The Digital Economy Act means many innocent customers will be falsely accused of filesharing and put on an ‘offenders register’ though they have broken no law and now they are being forced to pay for the privilege.

Far from encouraging a more digitally inclusive nation, these measures will simply alienate web users. Moreover, they don’t tackle the root cause of the problem – the creative industry’s failure to adapt its business model to the 21st century."

Consumer groups have also warned that the move could result in everybody, even the bulk of innocent internet users, being forced to pay higher prices for their service. Contrary to Rights Holder propaganda, many ISPs run off extremely thin margins and some will need to raise their prices in order to compensate for the extra costs.

Robert Hammond, Head of Post and Digital Communications at Consumer Focus, said:

"Consumers should not be picking up the tab for the enforcement of copyright laws that will benefit the music industry to the tune of millions. The previous government admitted any extra cost on ISPs may push up the cost of broadband, making it unaffordable for thousands of vulnerable consumers who need internet access to get vital services and cheaper deals.

These laws needed closer scrutiny before they were passed so extra time for Ofcom to reconsider how they can be implemented is welcome2. This is an opportunity for the Coalition to review the impact of these new regulations on both consumers and the wider UK economy."

Florian Leppla, Campaigner at the Open Rights Group, agreed:

"Is it right to take up to £500 million out of the economy in the middle of a recession and waste it on a scheme that is unlikely to bring any benefits?

It would be much better if rightholders spent that money on finding new online content services. The Government's own figures show that up to 96,000 belong to families that may be unable to afford an internet connection.

Rightholders wanted the Digital Economy Act. It benefits them so they should pay the full costs for its implementation."

Both BT and TalkTalk UK, which together account for almost 10 Million broadband subscribers, have been two of the legislations most vocal opponents. So much so that in July 2010 they even launched a Judicial Review of the controversially rushed Digital Economy Act 2010 (DEA), which started all the trouble (original news).

Both TalkTalk and BT also believe that the act is in conflict with Europe's e-Commerce Directive, which correctly identifies ISPs as being "mere conduits" of content (i.e. they should not be held responsible for traffic on their networks). Indeed several UK laws also recognise that ISPs are not the owners of content posted to the internet by others.

However Judicial Review's are a challenge to the way in which a decision has been made, rather than the rights and wrongs of the conclusion reached. A victory for BT and TalkTalk could result in all or part of the DEA being put through new parliamentary scrutiny, which does not guarantee any major changes, but it might slow things down a bit.

We will add any further comments as and when they are received from ISPs and Rights Holder organisations.
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