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October 03, 2012 | Jim Killock

Digital Economy Act: Costs Order debate pulled

Open Rights Group has just learnt that the debate in the Lords scheduled for Monday, in the Moses Room, to discuss the DEA Costs Order has been pulled. 

We do not know the reasons why, but there are some very serious concerns with the order. The order had previously been withdrawn due to drafting errors

Firstly, Ofcom ran a consultation at the same time as DCMS laid the Order before Parliament. This seems pretty odd.

Secondly, the £20 charge placed on Appeals is a clear attempt to deter people from complaining. Most worrying of all the stated aim of introducing an appeals fee was to reduce the cost of the appeals system to copyright owners by reduce overall numbers of subscriber appeals. The month given to file appeals is also very tight, given that people will wish to get legal advice.

Thirdly, the costs imposed on ISPs have very bizarre implications. Ofcom and ISPs will incur millions in set-up cost, which they can’t claim back from the members of the BPI and MPAA, who lobbied for the DEA. According to the draft cost order’s impact assessment Ofcom’s set-up costs are a cool £6.8 million, and ISPs will incur some £7.6 million, of which ISPs are suppose to recover 75 percent from copyright owners.

Some costs may be excluded, say BT and others. They believe that Ofcom has underestimated their cost, that the draft cost order does not actually allow cost recovery from copyright owners and/or that ISPs wont recover even 75 percent of their cost if volumes of notifications are “low”. It’s all pretty bizarre, but as the Secondary Legislation Scrutiny Committee has pointed out, there is no commitment from BPI or MPAA members to use the three strikes scheme, or pay for the set-up cost.

Fourthly, there are concerned that the draft costs order encourages copyright owners to send millions of letters accusing subscribers of copyright infringement (there is talk of 2 million copyright infringement reports per year), without much impact. The magic 75% reduction in copyright infringement after the first notification has not materialized in France or New Zealand, where three strikes is now operational.

Never mind, but without the DEA the UK has actually achieved a bigger increase in legal digital music sales than France, where the taxpayer pays about €12 million to send just over 1 million email notifications.

Yet again, the DEA is running into trouble (the first draft cost order was pulled by the Joint Committee on Statutory Instruments for defective drafting). The scheme Ofcom proposes is unworkable, expensive and apart from threatening open WiFi, and basic principles of justice, it’s not really clear what it would achieve. There are better ways to enforce copyright, educate users and encourage private investment in advertising and developing legal online content services.

And just in case anyone hadn’t noticed, the likely 2 million-plus letters will go out around 2014, the lead up to an election. Do politicians really want that kind of advert for their ability to run the country, given by definition most letters will go to people who have done nothing wrong?

The DEA is a mess left over from the fag end of an exhausted Parliament. More than two years after the DEBill was rushed through Parliament by Lord Mandelson the Government should have a serious rethink.

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