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UK Royalty Group Wants Piracy “Cap and Trade” ISP Levy

UK Royalty Group Wants Piracy “Cap and Trade” ISP Levy

PRS for Music proposes that ISPs be charged a “fee for the transmission of unlicensed media on their networks” and that the fee would be “reduced in line with reductions in the volume of unlicensed media transmitted.”

In a new paper titled “Moving Digital Britain Forward, Without Leaving Creative Britain Behind,” PRS for Music, the UK’s leading royalty collection society, is calling for the introduction of a levy on broadband providers based on the amount of pirated music they “allow” to travel across their networks.

It warns that as ISPs install “fatter and fatter pipes” the problem of illegal P2P will worsen and broaden the constituency of content industries affected. It wants to latch onto the fact that the recently enacted Digital Economy Act requires that the country’s Office of Communications (Ofcom) establish a methodology for estimating the level of illegal file-sharing in order to assess the effectiveness of the Act’s measures.

“The Digital Economy Act states this problem has to be measured and measurable problems can be priced,” says the group’s chief economist, Will Page. “The price would be a fine which he says could be paid to either the state or directly to rights holders, and would would rise and fall based on the level of piracy on an ISP’s network.”

He compares this “negative spill over” approach to the “cap and trade” market for carbon emissions.

“It would be up to operators whether and how they wish to affect the transmission of unlicensed media on their networks,” reads the paper. “This has the potential to produce an internal market of different ISP networks adopting different routes to getting their respective pollution indexes down — allowing the cost saving to be passed on to the consumer.”

Alternatively, it also proposes a “positive spillover” approach that would require ISPs to obtain a blanket license like the kind currently issued to broadcasters of all types that would allow them to transmit copyrighted material on their networks in return for a fee.

“Network operators would pay such a fee, and determine for themselves how best to capture the raw value of media on networks,” it says. “A reduction of such fees might occur as a result of changes in the level of media transmitted that has been directly licensed from rights holders.”

It even encourages people to think of ISPs as “venues,” comparing them to Parisian restaurants from the 1850’s, in order to offer a “unifying theme” so that different stakeholders will no no longer see the “problem (and therefore the solution) quite differently.”

It’s quite a stretch to think of ISPs as venues, but I must say I’m amazed by PRS for Music’s brazen attempt to latch onto an otherwise innocuous detail of the DEA for the purpose of creating such an extraordinary new content tax regime. Even if you didn’t illegally share copyrighted material online you would still be subject to the tax in the form of a monthly levy issued by your ISP.

That’s hardly fair, especially when Page was the one who published a study for PRS for Music last year claiming that total music industry revenues are up 4.7% since 2007. Squeezing more money from consumers to fund an industry that is apparently not suffering from the dire economic woes it would have you believe is in poor taste, even for a royalty collection society.

There’s also the question of how large the levy would be, and whether or not it would have the intended neutralizing effect on revenue losses from piracy. And won’t customers just switch to an ISP with a cheaper levy?

Stay tuned.

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