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UK Government Shuns Committee Concern over ISP Internet Piracy Cost Sharing

Posted: 11th Feb, 2011 By: MarkJ
UK DCMS internet copyrightpirate flagThe Merits of Statutory Instruments Committee (MSIC) has drawn to the "special attention of the House" a number of serious concerns with the UK governments Secondary Legislation (Statutory Instrument) for sharing the costs of the controversial Digital Economy Act 2010 (DEA).

The legislation is a key part of plans to tackle "illegal" (unlawful) internet copyright infringement by customers of broadband ISPs. It states that the cost of sending warning (notification) letters to end users should be split between ISPs (25%) and Rights Holders (75%).

In recent weeks a number of new concerns have been raised, not least from the European Commission (here, here and here). Most of these have been completely shrugged off by the government, although two responses about the economic benefits and the impact of BT and TalkTalk UK's Judicial Review deserve quoting.

The Impact Assessment accompanying the draft SI does not provide a sufficient rationale for imposing costs on ISPs;

Response (5): We disagree, and the Government is clear that, whilst it is appropriate for copyright owners to bear the bulk of the costs, it is also reasonable to give ISPs a clear incentive to keep the costs of the process to an effective minimum. Reducing widespread unlawful copying will benefit the digital economy as a whole, opening up new opportunities for legitimate content to be sourced via ISPs and elsewhere, and removing a significant amount of economically sterile traffic from networks, benefitting both ISPs and consumers in terms of the service they are offered.

Is it right for the draft SI to go forward at this stage given that the BT/Talk Talk JR and OFCOM review of the Digital Economy Act are both outstanding, and therefore likely to cause some uncertainty over the legality of the Digital Economy Act?

Response (9): the Government considered the question of whether to proceed with implementation of the Act, including this Statutory Instrument, in the light of the judicial review very carefully. The Government considers it will win the case, and that therefore it would be wrong to hold up implementation, and the benefits that it will afford. The Ofcom review of section 17 of the Act is not relevant since it is entirely separate to the Statutory Instrument under consideration.

The government clearly feels (response 5) that it is justifiable for ISPs to bear part of the cost of the implementation because they will receive benefits as a result of new "legitimate content" opportunities (we've yet to see that work) and by removing "a significant amount of economically sterile [unlawful] traffic" from their networks.

The latter point is certainly an interesting remark and does have some practical merit, although it's difficult to see how the government could have arrived at such a precise 25% figure from that reasoning. Finally, the government has sent a very loud message to both BT and TalkTalk by saying that they "will win the case" (i.e. Judicial Review) brought against the act.

In addition, rights holders raised concerns about the Appeals process and how some consumers could abuse it by launching a "concerted campaign which leads to significant numbers of vexatious or unreasonable appeals". The Creative Coalition Campaign (CCC) would rather have ISP subscribers pay to defend their assumed innocence.
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