Paying the freight for fighting piracy

Three-Strikes One of the animating but un-litigated issues behind a lot of DMCA litigation in the U.S. is cost — as in, who should bear the cost of policing digital networks and platforms for infringing material? Copyright owners have long complained that it’s prohibitively expensive for them to monitor every web site or service that might be hosting infringing material in order to send take-down notices.

Both the record companies and the studios have tried repeatedly to get courts to shift some of the burden onto ISPS and other service providers by arguing that knowledge that infringement is taking place on a platform should trigger an obligation by the platform provider to identify and screen out infringing content without waiting for take-down notices. So far, however, courts have generally refused to go along.

While the battle has been fought largely in the courts in the U.S., in Europe it’s playing out in the political and regulatory arenas as well, which if anything, has made the issue even more controversial.

On Tuesday, British market regulator Ofcom ruled that copyright owners will have to pay 75% of the cost of scouring the web for infringing content as part of the Digital Economy Act passed last year, with ISPs picking up the remaining 25%. The DEA calls for Ofcom to develop procedures that will govern a new monitoring and notification system that will go into effect next year. ISPs will be required to send warning notices to subscribers, identified by their IP addresses, that are found to be swapping files illegally over the Internet. ISPs must also keep records of the miscreants. Repeat offenders could have their real identities turned over to copyright owners for possible legal action.

Estimates for the cost of administering the system have run from £8.5 to £13.8 million (US $13.2 – $21.4 million), leading to a fierce debate over who should pay it.

Predictably, no one is happy with the result. Copyright owners (most of them anyway) were hoping for more of an even split of the costs while ISPs erupted over having to pay anything. Consumer groups sided with the ISPs fearing any cost imposed on them would be passed through to subscribers.

Meanwhile, a similar battle is ranging across the Channel in France, where ISPs are demanding compensation from the government for the cost of administering the HADOPI three-strikes law passed last year.

Apart from a few federal judges, the U.S. has largely been spared a public debate on the issue since the DMCA seemed to settle the matter. Should copyright owners manage to persuade Congress to revisit the law, however, with an eye toward increasing service provider liability for policing their networks, we can look forward to a similarly pitched battle on this side of the Atlantic.

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