Mandelson’s Uncertainty Principle states that the costs to an ISP of processing a Copyright Infringement Report can only be known when that ISP knows how many CIRs it is going to have to process and that Rights Holders will not disclose this number until they know the costs.
If it was as simple as that we might be able to come to some arrangement but of course it isn’t.
The BIS consultation on Costs under the Digital Economy Act is not scheduled until October 2010. Work is going on now to prepare for this and yesterday Ofcom held a meeting with ISPs to take on board their views on the subject.
It was not a happy meeting. Ofcom has been given what is known in rugby parlance a hospital pass. The regulator has job that it cannot perform to anyone’s satisfaction.
ISPs will by January 2011 have to have systems in place that support the notification to their customers of alleged copyright infringement and the storage of the data associated with this.
Based on gut feel I would expect this to be a 9 – 12 month kind of job, and that was once the specification had been agreed and understood.
The spec for this job is not known and won’t be known until we understand how many notifications have to be processed. Rights Holders are not apparently obliged to report on their forecast numbers until two months before the notification process needs to begin.
Ergo impossible job or as Mr Micawber1 would have put it – result misery.
All seven ISPs initially affected by the Act were at the meeting, including I’m told the Post Office, together with some smaller ISPs who are painfully aware that their turn might come in a year’s time.
The Post Office is in my mind an interesting case. Correct me if I am wrong but I think they are a straight white label operation using BT Wholesale as a supplier. The costs of developing a system will be even more in their case as they will likely have to involve BT.
Also I would imagine that most of their customers are of the blue rinse variety (ahem sorry if I got that one wrong – if so someone needs to stamp it out straight away) – in other words of the pension collecting demographic. I doubt that they have many copyright infringers amongst their customers compared with some of the others. Probably all their downloaded stuff is already out of copyright (ok stop that right now).
There is therefore a scenario where Rights Holders will initially focus on a subset of the 7 ISPs with the highest number of (alleged) infringers.
We may end up with the situation where 7 ISPs are asked to develop systems to process CIR notifications with the distinct possibility that not all of them will be asked to issue any notices, at least initially. We don’t know because we don’t have the numbers.
This makes it even more important that ISPs get plenty of advance notice on these numbers. Their capital expenditure plans for this year will be up the spout whatever happens.
People need to get on to BIS to complain here. It is clear that the schedule defined by the DEAct is unworkable.
On an administrative note Ofcom’s Qualifying costs will be allocated on a fixed percentage (75% to 25%) between qualifying RHs and ISPs. Individual ISP shares will be determined according to the projected volumes of CIRs to be received in a notification period. A qualifying ISP that is not due to receive any CIRs in a notification period doesn’t have to contribute to the qualifying costs.
The fixed fee that RHs have to pay to ISPs to cover notification costs will be set by using an efficient operator’s costs as guidelines. Ofcom will commission a study to determine this efficient operator’s costs. Fieldwork will take place between June and August and cover the qualifying ISPs and ideally one or more Mobile Network Operators and smaller ISPs.
PS I have already had one consultant on the phone regarding this commission. My rates are in my mind wholly reasonable if anyone else wants to arrange a meeting.
PPS it seems fair and sensible to me that ISPs outsource all the system development required here to an Ofcom managed consortium which can then pass 75% of the set up costs on to the RHs.
1 David Copperfield by Charles Dickens