ISPs could recoup just $2 per copyright notice

MED releases discussion document on file-sharing amendments to Copyright Act

Internet service providers may end up being able to recoup as little as $2 for sending out detection, warning or enforcement notices under the controversial online file-sharing amendments to the Copyright Act; but they may persuade government to let them charge as much as $28.

The Ministry of Economic Development has begun the process of tidying up the details of procedures and charges under the Act. It has issued a discussion document on the form and content of the notices to be issued to an alleged illegal downloader of copyright material and of challenge notices, the sums an offender may have to pay and the fees charged to the copyright owner for administering the process.

The $2-per-notice charge is the low point of scales suggested by MED after preliminary consultation with ISPs.

The document is couched in the usual style with an account of the way the legislation works, a summary of the points to be settled and a series of questions interspersed with the summary paragraphs.

The first set of questions asks what the impact -- negative or positive - would be of not making any regulations and leaving the form of notice and the payments to be decided by individual internet service providers, who will be responsible for issuing them and the fees to be judged on a case-by-case basis.

The MED spells out why it thinks the effects of passing no regulations would be negative, leading to uncertainty and possibly higher compliance costs than if regulations were in place.

It goes on to make suggestions for information to be included on the notices and asks for reaction to these suggestions and an estimate of the cost to the ISP of issuing notices. Some ISPs (or "internet protocol address providers" as they are called in the amendments) provided estimates of costs, of between $14 and $56 per notice, assuming full cost recovery. The MED has discounted setup costs and arrived at a marginal cost over the long term of between $2 and $28 per notice.

When considering penalties, the MED recommends a "compensation" amount, reflecting the market value of the work whose copyright was infringed, reimbursement to the rights owner for the fees it will have been charged to process the complaint, and a deterrent element, scaled according to the "flagrancy" of the offence and whether uploading as well as downloading was involved. One upload on a peer-to-peer network facilitates many downloads, so it is likely that this will be more damaging to a rights-holder, says MED.

Flagrancy otherwise could depend on the volume of material transferred and whether the offender was aware they were offending, the discussion document suggests.

The fee payable by rights-holders and the procedures of the Copyright Tribunal in hearing the cases will be decided by the Ministry of Justice and comment is not requested on these points.

Closing date for submissions on the discussion document is May 27.

The term Internet Protocol Access Provider (IPAP) has been introduced into the Act with the aim of capturing only professional ISPs and not the administrators of a workplace or hotel network, who might otherwise be deterred from providing services owing to the risk of being penalised for illegal acts by the network's users.

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