UK ISPs: Unfair Consumers Must Pay to Protect Entertainment Industry Profits

TalkTalk says it’s “absolutely outrageous” that the UK’s Department for Business, Innovation and Skills has decided to require ISPs to pay 25% of the costs of the costs of enforcing the Digital Economy Act‘s measures to tackle online copyright infringement. Points out the unfairness of forcing ISPs, and in effect their customers, to pay the costs of the music and film industries efforts to enforce their own copyright.

Earlier I mentioned how the UK’s Department for Business, Innovation and Skills (BIS) has decided on a cost breakdown for enforcing the Digital Economy Act‘s measures to tackle online copyright infringement, which according to it, will be split between rights holders and ISPs at a ratio of 75:25 respectively.

The govt’s Minister for Communications, Ed Vaizey, says the decision on costs is “proportionate to everyone involved,” but many disagree with that sentiment because it belies the fact that others will be forced to pay the costs of protecting the outdated business models of the entertainment industry.

In fact, Andrew Heaney, Director of Strategy and Regulation for UK ISP TalkTalk, calls the decision “absolutely outrageous.”

“In effect, ISPs and their customers will be forced to pay for the costs of the music and film industries to enforce their own copyright,” he says. “To us this is manifestly unfair. It is the rightsholders’ material; if they think it is being accessed illegally, it is only right that they should be the ones to pay for protecting it.”

And he’s right. The 25% will be passed along to consumers who will in effect be subsidizing the entertainment industry’s efforts to extract as much money from consumers as possible.

Other ISPs are also saddened by the decision.

“Whilst I understand the logic in trying to ensure that the costs are minimised[,] I wonder if there is somewhere in European Law relating to government subsidies of industry – because that is effectively what is being done here,” says Trefor Davies, Chief Technology Officer of Timico UK. “The Government is indirectly subsidizing the Creative industry by taxing the internet industry and giving the taxes to Rights Holders.”

A number of consumer groups are also angry with the decision and the substantive unfairness of it all.

“Consumers should not be picking up the tab for the enforcement of copyright laws that will benefit the music industry to the tune of millions,” says Robert Hammond, Head of Post and Digital Communications at Consumer Focus, a UK consumer advocacy group. “The previous government admitted any extra cost on ISPs may push up the cost of broadband, making it unaffordable for thousands of vulnerable consumers who need internet access to get vital services and cheaper deals.”

This is brings up a good point. If the cost of Internet service is already barely affordable for some, this added tax for enforcing the DEA will surely push it out of reach. According to the Open Rights Group, a UK-based digital rights advocacy group, by the Government’s own estimates the tax will mean up to 96,000 individuals won’t able to afford an internet connection anymore.

The Open Rights Group also makes the more poignant argument that it will mean up to £500m ($775m USD) will be extracted from economy and poured into a silly system of notifications and appeals without any likelihood of public benefit.

“This is ludicrous given that we are in a recession,” it says. “Rightsholders would be better off investing that money into setting up new online content services.”

More importantly, the music industry has already said that it’s total revenue was up 4.7% in 2008 as well as up 2.3% in 2009. If this is the case is it really necessary to create such an expensive experiment with peoples’ money?

I guess for copyright holders the answer is yes. Too bad UK politicians can’t seem to be able to say no.

Stay tuned.

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