Cost obligations of the Digital Economy Act

January 25, 2011 5:48 PM

On January 17, the draft Statutory Instrument on how the cost of the implementation of the Digital Economy Act will be shared between rights holders and Internet Service Providers was laid before Parliament. The draft Statutory Instrument lays out the cost sharing of the implementation and it states that 75% of the cost is to be paid by the rights holder while 25% of the cost is to be covered by the Internet Service Provider (ISP) on whose network the rights holder claims that illegal downloading is taking place.

The Digital Economy Act (DEA) is a far reaching law that covers everything from the spectrum auction to regional broadcast stations. The Online infringement of copyright section of the act, however, has garnered the most controversy with its sanction of disconnection – or a court ordered blocking injunction - based on reasonable evidence that a person named as potentially downloading illegal material did do so on a certain Internet connection.

So how does the draft Statutory Instrument fit in? It lays out the costing obligations so that implementation can take place. The issue is that the Statutory Instrument needs to pass through scrutiny under the Joint Committee on Statutory Instruments and then be discussed in both houses and voted in the affirmative. In light of the very fact that the Digital Economy Act is coming under Judicial Review on March 22 and the legality of the DEA is coming into question, why is this happening now?

There are other outstanding issues. According to the EU, there are still outstanding issues around the Statutory Instrument especially around why ISPs are asked to pay and, as the EU said in comments on notification 2010/633/UK – a notification required by the EU on Statutory Instruments – “Providers do not appear to benefit in any way from the planned online copyright measures.”

And this is exactly the point. It is egregious enough that the DEA would include any intention to disconnect a user, but to require ISPs to bear the burden of any kind of payment of misuse on their connection seems extreme. Though 25% of the cost may seem like a small amount, in France a similar measure is being implemented currently and is resulting in the notification of hundreds of thousands of potential rights infringers. The cost of this alone will amount to millions of Euros and an equivalent cost is expected in the UK. Placing undue burden on ISPs means less investment in the next generation broadband as promoted by the Coalition Government and fewer jobs being created in the long term.

The most sensible thing would be for the Statutory Instrument to be stalled until after the Judicial Review. Barring that, at least a debate will take place on the Statutory Instrument and on this part of the Digital Economy Act that didn’t get to happen in the run up to the election when the DEA was debated. Of course, maybe MPs will do a little more homework and realise that music piracy is going on, but it isn’t as bad as the music industry claims.On January 17, the draft Statutory Instrument on how the cost of the implementation of the Digital Economy Act will be shared between rights holders and Internet Service Providers was laid before Parliament. The draft Statutory Instrument lays out the cost sharing of the implementation and it states that 75% of the cost is to be paid by the rights holder while 25% of the cost is to be covered by the Internet Service Provider (ISP) on whose network the rights holder claims that illegal downloading is taking place.

The Digital Economy Act (DEA) is a far reaching law that covers everything from the spectrum auction to regional broadcast stations. The Online infringement of copyright section of the act, however, has garnered the most controversy with its sanction of disconnection – or a court ordered blocking injunction - based on reasonable evidence that a person named as potentially downloading illegal material did do so on a certain Internet connection.

So how does the draft Statutory Instrument fit in? It lays out the costing obligations so that implementation can take place. The issue is that the Statutory Instrument needs to pass through scrutiny under the Joint Committee on Statutory Instruments and then be discussed in both houses and voted in the affirmative. In light of the very fact that the Digital Economy Act is coming under Judicial Review on March 22 and the legality of the DEA is coming into question, why is this happening now?

There are other outstanding issues. According to the EU, there are still outstanding issues around the Statutory Instrument especially around why ISPs are asked to pay and, as the EU said in comments on notification 2010/633/UK – a notification required by the EU on Statutory Instruments – “Providers do not appear to benefit in any way from the planned online copyright measures.”

And this is exactly the point. It is egregious enough that the DEA would include any intention to disconnect a user, but to require ISPs to bear the burden of any kind of payment of misuse on their connection seems extreme. Though 25% of the cost may seem like a small amount, in France a similar measure is being implemented currently and is resulting in the notification of hundreds of thousands of potential rights infringers. The cost of this alone will amount to millions of Euros and an equivalent cost is expected in the UK. Placing undue burden on ISPs means less investment in the next generation broadband as promoted by the Coalition Government and fewer jobs being created in the long term.

The most sensible thing would be for the Statutory Instrument to be stalled until after the Judicial Review. Barring that, at least a debate will take place on the Statutory Instrument and on this part of the Digital Economy Act that didn’t get to happen in the run up to the election when the DEA was debated. Of course, maybe MPs will do a little more homework and realise that music piracy is going on, but it isn’t as bad as the music industry claims.

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