Government lays ISP copyright notification plans before Parliament

The Statutory Instrument orders copyright holders to pay 75% of the cost of the new system, with internet service providers (ISPs) meeting the rest of the cost.

The DEA required Ofcom to establish a system by which rights holders such as record labels or film producers could inform ISPs of suspected copyright infringement by their subscribers.

ISPs must warn subscribers three times that what they have been accused of doing breaks the law. If the activity continues then at the third warning ISPs must make the subscriber's details available to rights holders to allow them to take legal action.

The secondary legislation published by the Government says that Ofcom should oversee costs and ensure "as far as practicable, that the notification fees payable by all qualifying copyright owners in a notification period amount to 75% of the total costs incurred by all qualifying internet service providers calculated on the assumption that the total costs of each qualifying internet service provider are equal to OFCOM’s estimate of relevant costs".

“The Digital Economy Act sets out to protect our creative economy from online copyright infringement," said Communications Minister Ed Vaizey. "We are introducing a system of mass notification to warn people about the unlawfulness of copyright infringement, explain the harm it does and point them toward legitimate content."

Vaizey said that the costs arrangement was fair because rights companies "will be the main beneficiaries" of the system.

ISPs, though, have objected to any move to make them pay the cost of a system precisely because it will be rights holders, and not ISPs, which benefit.

"ISPA has consistently argued for the beneficiary pays principle and is disappointed with [the plan]," said Nicholas Lansman, general secretary of the trade body the ISP Association (ISPA). "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."

 “These measures are expected to benefit industry by around £200m a year and as rights holders will be the main beneficiaries, we believe our decision on costs is fair to everyone.”

The Statutory Instrument said that rights holders and ISPs should share the costs of appeals against notices in the same proportion as the costs of the notifications themselves.

This follows a Government response to its consultation on the issue in September, which said that individuals should be able to appeal against notices at no cost to them.

"There should be no fee for subscribers to appeal against a notification letter," said the response to the consultation (8-page / 52KB PDF). "However the Government retains the power to introduce one at a later date should it become clear that a large number of vexatious appeals result."

The Statutory Instrument will be debated in both Houses of Parliament.

Editor’s note, 01/02/2011: the fourth paragraph of this story was changed to make it clear that alleged infringers’ details are placed on infringement lists when a third warning is given.