Angry ISPs to pay 25% of costs of piracy-busting scheme

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Service providers angered that rights holders will benefit from legal action

ISPs are up in arms over Government plans to force them to bear 25% of the costs of enforcing online piracy measures as part of the Digital Economy Act.

Under a scheme outlined earlier this year, rights holders will send IP address of customers caught downloading copyrighted material to Britain's major ISPs, which will then send warning letters to subscribers, with the potential for legal action for anyone sent three notifications within a year.

Anything the ISP has to pay will be passed on to consumers so they will end up paying anyway

The question was, who should foot the bill for the process - rights holders, ISPs or consumers? In a move that will be popular with end users, anyone issued with a Copyright Infringement Notice will have the right of appeal for free, with ISPs and rights holders splitting the entire costs of the scheme on a 25:75 ratio.

The Government did warn however, that the service may not remain free if too many consumers used the service. “The Government will monitor the situation closely, and reserves the right to introduce a small fee at a later stage,” a statement said.

ISPs are angry that they have to pay anything, claiming that rights holders should bear the full costs because they would be the beneficiaries of any legal action taken over piracy.

"The Internet Service Providers Association [ISPA] has consistently argued for the 'beneficiary pays' principle and is disappointed with today's announcement,” said Nicholas Lansman, ISPA secretary general. “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.”

ISPA also claimed “the internet offers excellent opportunities for rights holders to access their target market with relevant lawful content without the significant costs associated with a non-digital environment and views today’s announcement as contrary to the promotion of the digital economy”.

However, other Industry voices were cautiously optimistic about the news, but expressed concerns that the appeals process would be too complicated for consumers.

“We do still have some concerns about the level of technical understanding a consumer may require to effectively challenge an allegation of copyright infringement," said Sebastien Lahtinen, co-founder of thinkbroadband.com.

Price hikes

Lahtinen also said that although consumers won't be paying directly for making an appeal, “anything the ISP has to pay will be passed on to consumers so they will end up paying anyway.”

Campaigners at the Open Rights Group also jumped on the knock-on costs, saying 45 million internet users would face higher bills

"Using the internet will become more expensive as a result," said campaigner Florian Leppla. "Rights holders wanted the Digital Economy Act - it benefits them, so they should pay the full costs for its implementation."

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