Who will pay for policing copyright infringement?
Friday 20 November 2009 13:18:03 by Andrew Ferguson

The Digital Economy Bill stretches to some 60 pages and continually refers to the earlier Communications Act 2003 making it a hard read for a Friday. Digging into the document reveals that there is provision for sharing of the costs that will arise from the new rules on managing copyright infringement.

15 Sharing of costs
After section 124K of the Communications Act 2003 insert-
"124L Sharing of costs

1. The Secretary of State may by order specific provision that must be included in an initial obligations code or a technical obligations code about payment of contributions towards costs incurred under the copyright infringement provisions.
2. Provision specified under subsection (1) may relate to, in particular-
   
   1. payment by a copyright owner of a contribution towards the costs that an internet service provider incurs;
   2. payment by a copyright owner or internet service provider of a contribution towards the costs that OFCOM incur.
3. Provision specified under subsection (1) may include, in particular-
   
   1. provision about costs incurred before the provision is included in an initial obligations code or technical obligations code;
   2. provision for payment in advance of expected costs (and for reimbursement of overpayments where the costs incurred are less than expected);
   3. provision about how costs, expected costs or contributions must be calculated;
   4. other provision about when and how contributions must be paid."

Extract from Digital Economy Bill

The costs of passing on all the infringement letters and maintaining an accurate database of past infringements has been raised by various broadband providers since the original Digital Britain report, the Bill would appear to offer a cost sharing solution, but it seems it is down to the Secretary of State to control whether this sharing takes place. Interestingly Ofcom will be able to have its costs from its involvement paid for by copyright holders and providers.

While reducing copyright infringement is something that must be addressed, there is the danger that the methods used will actually cost more to run than it creates in extra revenue. At this time there is little sign of any extra revenue streams for broadband providers. The largest providers may benefit from partnerships with music labels to bundle a music subscription with their service, but for those providers with less than a million users they do not have the negotiating power to get a good deal from these sorts of deals. Thus, at the end of day we may see the price of broadband creeping up to cover the extra costs, or those people who do buy music and films will see media costs increase to cover what the media industry must pay.