UK Govt Admits Costs of "Three-Strikes" Will Reduce Internet Access

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Calls it "regrettable" if ISPs were to pass on their full share of enforcing the Digital Economy Act, but says the resulting reduced access for lower income households needs to be "balanced against the wider benefit to the UK's digital economy."

Ever since the UK govt passed the controversial Digital Economy Act ISPs and consumers have been concerned over what the costs will be to help copyright holders with the Sisyphean task of combating online infringement.

Last September the country's Department for Business, Innovation and Skills (BIS) decided on a cost split between rights holders and ISPs at a ratio of 75:25 respectively. It applies to both the notification and appeals process, i.e. the infringement warning letters and the possible challenge by an individual of the allegations.

The govt says the 25% apportioned to ISPs is necessary to give them a "clear incentive to keep the costs of the process to an effective minimum," but the problem with this is that they will simply pass along the new costs to their customers in the form of higher monthly bills. This means a good portion of the cost of "protecting" copyright holders will be borne by the public that's shunning their outdated business model in the first place.

"In effect, ISPs and their customers will be forced to pay for the costs of the music and film industries to enforce their own copyright,"said Andrew Heaney, Director of Strategy and Regulation for UK ISP TalkTalk, at the time. "To us this is manifestly unfair. It is the rightsholders' material; if they think it is being accessed illegally, it is only right that they should be the ones to pay for protecting it."

Consumer advocacy organizations have been among the most vocal critics of the de facto ISP DEA enforcement tax, arguing it will increase the number of people unable to afford broadband connections in a time when the govt is pushing for a goal of 100% connectivity. The Open Rights Group has pointed out that by the govt's own estimates the tax will mean up to 96,000 individuals will be priced out of Internet access.

This concern has been raised by the Merits of Statutory Instruments Committee and recently commented on by the Department for Culture, Media and Sports.

The report reads:

The cost imposed on ISPs will increase broadband retail prices for all consumers, leading to low income consumers being priced out of internet access service;

Response (8): the Government has acknowledged that there may be an effect on broadband take-up should ISPs pass on the full cost of the process. This is regrettable, but needs to be balanced against the wider benefit to the UK's digital economy.

Wider benefit? According to the British Phonographic Industry (BPI), usually the most vocal proponent of the DEA, total music industry revenues have been up for two consecutive years.

Last month it also admitted that a majority of illegal downloaders use Google to find free music, and not P2P nor illegal file-sharing – the real targets of the DEA. It said that the use of cyberlockers and unauthorized MP3 pay sites is "rising alarmingly," two illegal downloading methods beyond the purview of the DEA.

Combined with a UK survey from last year showing that streaming music has already caused a majority of young adults (54%) to quit illegally downloading music altogether couldn't it be argued that the DEA, when taken in the context of reduced Internet access, will likely do more harm than good?

The High Court granted a judicial review of the DEA to determine if it could "harm the basic rights and freedoms of citizens" among other concerns, but the govt says that it "considers it will win the case, and that therefore it would be wrong to hold up implementation, and the benefits that it will afford."

Too bad that those "benefits" will mean that for tens of thousands of households Internet access will be something they can longer to "afford."

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