DEA Cost Sharing Consultation Response

The Department for Business, Innovation and Skills has published its response to the consultation on how costs under the Digital Economy Act 2010 should be shared. These are the costs of ISPs’ systems and processes to receive and pass on Copyright Infringement Reports (CIRs), Ofcom’s costs in regulating the process, and the costs of the Appeals body.

The result of the consultation is to confirm the original proposal:

• Ofcom will estimate how much it should cost an efficient ISP to process each CIR;
• Rightsholders will pay ISPs 75% of this cost, with the ISP covering the remaining 25% plus any additional costs over Ofcom’s estimate;
• Costs of Ofcom and the appeals body will also be split 75%:25% between rightsholders and ISPs.

There is no mention of whether the cost per CIR might be varied for different classes of ISP, for example the costs might well be different for a large ISP that implemented a fully automated system as against a small ISP that handled CIRs manually. This is probably not immediately relevant given Ofcom's proposal that the initial qualifying ISPs should be large fixed-line broadband providers, but I suspect that it may need to be revisited if the scope of the Act widens.

On appeals the consultation considered whether there should be a fee for a subscriber to make an appeal against a CIR (refunded if the appeal was successful). It has been decided not to impose a fee initially, though the number and outcome of appeals will be monitored to see whether this policy needs to change.

It has also been concluded that the deadline for introducing the Code needs to be delayed by three months (to the end of March 2011) to allow approval by the European Commission.