Up to £500m will be taken out of the UK economy according to the Government's announcement today about the cost sharing for the letter writing regime following the Digital Economy Act. The BIS cost order confirms the 75/25 split of costs between rightholders and ISPs.
ISPs will of course pass on these costs to their customers. According to the Government's own estimates that means that up to 96,000 individuals will not be able to afford an internet connection anymore.1
Less well off families already face big cuts in benefits and struggle to make ends meet. On top of that they might lose their main access to communication and education through the internet as a result of rising broadband costs. That runs contrary to the government's plans to increase the number of people with internet access.
Up to £500m will be taken out of the economy and wasted into a bureaucratic scheme that is unlikely to bring the public any benefits. This is ludicrous given that we are in a recession.
Rightsholders would be better off investing that money into setting up new online content services.
The music industry increased its profits by 4.7 percent in the recession year 2008 and according to their own figures online revenue rose by an impressive 73 percent in 2009. That proves that the whole letter writing regimes is completely unnecessary. Perhaps the industry can solve its problems without expensive and damaging schemes like this.
ISPs are also likely to invest less in infrastructure if they have to pay a total of £120m2 to set up the scheme including means of identifying subscribers and processing letters to subscribers accused of copyright infringement. So we might well end up with a more expensive and technically worse internet service.
The case against the Act is growing. Hard evidence of economic harm is accumulating. We have every chance of getting the worst parts of the Act repealed. We have to keep up the pressure on Government and Parliament.
1 According to the impact assessment on the Digital Economy Act costs to ISPs could lead to 10,000 - 40,000 UK households being priced out of broadband. (Digital Economy Bill – Impact Assessments package (First Edition), pg.76). That means that up to 96,000 individuals might not be able to afford broadband as the average household size in the UK was 2.4 in 2003.
2 As detailed in Government's own impact assessment of the Digital Economy Act, pg55,78.