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UK ISP Slams Proposal for Piracy Cap and Trade Levy


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TalkTalk points out that monitoring levels of file-sharing on an ISP's network for the purpose of determining technical penalties and fines is "futile since people will switch to undetectable methods e.g. encrypted services, streaming."

UK ISP Talk Talk is not very happy with recent reports that PRS for Music, the UK's leading royalty collection society, is calling for ISPs to implement either a "negative spillover" or "positive spillover" approach to illegal file-sharing on their networks.

The former is a "cap and trade" approach that would impose a fine based on the rise and fall of piracy, while the latter would mean the acquisition of a blanket license like the kind currently issued to broadcasters that would allow them to transmit copyrighted material.

"It would require monitoring of traffic and this has huge implications in respect of directives on privacy and data retention," TalkTalk told Sky News Online. "It's profoundly unfair – it is like making a bus company responsible for shoplifters who use their buses to get to the shops. It is futile since people will switch to undetectable methods e.g. encrypted services, streaming."

It suggested that the entertainment industry would be better served by fixing its business model rather than asking the govt to fix it for them, something it has long railed against.

The controversy stems from PRS for Music's realization that the recently enacted Digital Economy Actrequires the country's Office of Communications (Ofcom) to establish a methodology for estimating the level of illegal file-sharing in order to assess the effectiveness of the Act's measures. It wants to latch onto those measurements for the purpose of mitigating the damage it alleges is done by pirated material that ISPs "allow" to travel across their networks.

However, lost in the debate is the fact that P2P doesn't have the 1:1 pirated content equals a lost sale ratio effect that copyright holders would have policymakers and the public believe it does.

Harvard researchers Felix Oberholzer-Gee and Koleman Strumpf (now of the University of Kansas) released the results of a new file-sharing study a few weeks ago that concludes that file-sharing is to blame for "no more than 20%" of the decline in music sales. It's a slight revision from an earlier conclusion that P2P has an effect "which is statistically indistinguishable from zero," but either way both are much, much more modest levels of culpability than the 100% music industry execs say it's responsible for.

Oberholzer-Gee and Strumpf also conclude that file-sharing has increased the demand for what they call "compliments to protected work" like concerts and concert ticket prices which encourage artists to tour more, "ultimately raising their overall income."

This means if we are going to gauge P2P's negative effects for the purpose of a levy or license we must also take into account it's benefits as well.

In fact, the BI Norwegian School of Management, the largest business school in Norway and the second largest in all of Europe, concluded last year that file-sharers actually buy 10 times as much music as they download for free.

A Canadian federal government-funded study from a few years ago found that "P2P file-sharing tends to increase rather than decrease music purchasing."

"For every 12 P2P downloaded songs, music purchases increase by 0.44 CDs," it says. It also found that other forms of entertainment such as movies, concert tickets, and video games tend to increase with these music purchases.

Nevermind the fact that it probably wouldn't be a levy or license from a single copyright holder group, but rather from them all. Reps from the movie, music, TV, book, software, etc. industries are each going to want a slice of the revenue pie. Can you imagine then how much a "cap and trade" regime or especially a blanket license would cost the individual broadband customer?

It won't be pretty.

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