ISPs hit back at sharing cost of copyright crackdown

Internet service providers have protested against the government's decision that they will bear a quarter of the costs involved in enforcing the copyright crackdown laid out in the Digital Economy Act.

On Tuesday, the Department for Business, Innovation and Skills (BIS) announced that 75 percent of the cost of sending out warning letters to suspected unauthorised file-sharers will be met by copyright holders, with the rest being covered by internet service providers (ISPs). The same split will be applied to the cost of appeals by consumers, who will not be charged a fee to challenge an accusation.

The Internet Services Provider's Association (ISPA) hit back at the decision, suggesting that the copyright holders should cover the cost.

"ISPA has consistently argued for the 'beneficiary pays' principle and is disappointed with today's announcement," Nicholas Lansman, ISPA secretary general, said in a statement on Tuesday. "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."

The announcement accompanied a BIS document outlining its decision (PDF), published in response to a consultation on cost sharing for the enforcement measures. Under the system in the Digital Economy Act, copyright holders monitor peer-to-peer file-sharing networks to find traffic that they believe infringes on their copyright. The rights holders then identity the ISPs, who will send notifications to customers suspected of unauthorised sharing of content.

BIS justified the split by saying that making ISPs share the costs will encourage service providers to make the notification and appeals process efficient.

"It is right that the rights holders, as beneficiaries, should pay the bulk of the costs, but we want to ensure that the ISPs have a clear incentive to keep the process lean and efficient, and the most effective way to do that is to make them responsible for a portion of the costs," a BIS spokeswoman told ZDNet UK on Wednesday.

The decision is fair and proportionate and benefits ISPs, as the decision benefits the creative economy, BIS said. The department added that copyright infringement harms rights holders to the extent that they may not be able to produce creative content in the future, and that ISPs need that content to sell.

In addition, dividing enforcement costs between ISPs and rights holders will encourage the two to come up with innovative business models, according to BIS.

However, the ISPA said that providers do not need any urging to come up with a streamlined enforcement process. "Generally, our work with law enforcement is lean and efficient," said a spokesman for the trade group, which represents major companies such as O2 and BT.

He also stressed that ISPs and rights holders are already working together to come up with innovative business models, without the need of legislation.

The coalition government is firmly set on carrying through the provisions of the Digital Economy Act, including copyright enforcement, a Conservative Party spokeswoman told ZDNet UK on Wednesday. This is despite the Liberal Democrats' pre-election opposition to the legislation, which said in April should be repealed. "The only way to improve bad law is to take it off the statute book and replace it with something better," the then-Liberal Democrat leader Nick Clegg said.

"The Digital Economy Act has received royal assent, and we have no plans to repeal it," said the BIS spokeswoman.