DEA: next steps

As well as deciding not to implement the web blocking powers under the Digital Economy Act 2010, the Government has today provided a progress update on the rest of the Act.

The Initial Obligations Code, which will define which networks and rightsholders fall within the Act's scheme for Copyright Infringement Reports and how they must act, will be published "shortly" before a pause of "at least three months" for it to be considered by the European Commission as required by European telecommunications law.

The Cost Sharing Regulations, which were already law, have been re-issued with amendments to reflect the outcome of the Judicial Review hearing. Under the new version, ISPs will no longer have to contribute to the costs of Ofcom or the Appeals process, which the hearing found to be unlawful. However they will still have to contribute 25% of their own costs in implementing the Code and of handling any Appeals, with all remaining costs coming from rightsholders.

[UPDATE: on closer reading I see that I misread the Regulations and ISPs will still be paying 25% of the costs of handling appeals. Sorry]

[Further UPDATE (6th March 2012) - A further appeal of the Judicial Review process has concluded that ISPs will not have to pay 25% of the cost of handling appeals after all!]

Finally, an Ofcom paper considering the costs involved in the appeals process has been published. This notes the difficulty of predicting the total cost since there are no obvious comparisons with existing schemes, but concludes that on plausible estimates of the number of Reports issued, percentage of these appealed and cost of handing each appeal, it could "easily surpass £40m per year" and "form by far the largest cost component of implementing the Digital Economy Act's measures ... [on] copyright infringement". The paper also notes the various tensions inherent in the scheme: for example strongly drafted notices are likely to increase the deterrent effect (the purpose of the Act) but will also increase the number and cost of appeals! The Government's press release responds by announcing

The Government has decided to introduce a £20 fee for subscribers wishing to appeal detected instances of unlawful sharing of copyright material they have been notified about. The fee will be refunded if the appeal is successful.

A report by Ofcom, which is published today, identifies a risk of the system being overwhelmed by vexatious appeals from people determined to disrupt the system. Government expects that a £20 fee should deter appeals without deterring genuine appeals.