Copyright law cost could hit consumer

Photo / Thinkstock

Consumers may be forced to cover part of the cost of enforcing new copyright laws, the Government has revealed.

The "three strikes" copyright regime requires internet companies to issue warning notices to customers suspected of illegally downloading material, if rights holders - such as movie studios or record companies - request it.

After a customer has been issued a third notice, rights holders can bring the case before the Copyright Tribunal, which can slap an offender with a fine of up to $15,000. The law comes in to force on September 1.

Commerce Minister Simon Power announced yesterday that internet providers (ISPs) will be able to charge copyright holders a fee of $25 for every notice they issue.

This amount was lower than the $40 they were asking for but a good deal higher than the $2 proposed by groups representing movie studios and the recording industry.

ISPs estimated it would cost $40 to issue each notice.

Power said the $25 fee was a compromise and would be reviewed in six months to make sure it was appropriate. "The fee level prevents [ISPs] from being inundated with alleged copyright breaches to the point they find it difficult to comply with the regime," he said.

Power also revealed rights holders would be charged $200 for every case they brought to the tribunal.

However, documents released by Power's office explaining the new regulations said the $25 fee would not cover ISPs' expenses and admitted consumers might have to cover the shortfall.

"[The fee] will not result in an [ISP] being able to fully recover their implementation costs ... the likely effect being that those costs will be passed on to consumers."

Orcon chief executive Scott Bartlett said the company would not increase its charges unless it was "absolutely necessary".

"I wouldn't anticipate Orcon jumping in straight off the bat on day one and charging customers more because of this," he said. "We'll have to proceed and comply with the law and get an understanding of the true and actual costs after six months before we make any decisions on charges."

Telecom said it was still looking over the details of the law and would not provide a comment. The Telecommunications Carriers Forum, which represents all major ISPs, accepted the fee was a compromise but said its members needed more time to implement the copyright regime.

"We're still deeply concerned with the time we've got for implementation and concerned about being put in the position where we cannot comply [with the law] and found to be in breach," said TCF chief executive David Stone.

Intellectual property lawyer Rick Shera said the new information meant internet companies could begin to prepare for the law, but doubted they would be ready come September.

"As all of the ISPs have said they need between six and 12 months to properly implement [automatic notice systems] rather than the six weeks they've got now. It's a little bit too late.

"Most, if not all the work is going to have to be manual, so the ISPs are going to struggle to cope," he said.

ISPs have predicted they could get 5000 notices a month from rights holders, which they will have to pass on to customers within seven days.

Despite this, Power said there would be no flexibility on the implementation date.

"Though I understand concerns about timing, I expect ISPs to be in a position to implement the act on 1 September. The act's provisions have remained unchanged since April when it was passed by Parliament," he said.

THE LAW
* Rights holders, such as a movie studio, will alert an internet company if a customer is suspected of pirating material.
* An internet company will issue warning notices to the alleged offender within seven days, which the suspect can challenge.
* After a third warning, a rights holder can take a suspect to the Copyright Tribunal, who can issue a fine of up to $15,000.
* As it stands, an offender cannot have their internet connection cut off, but the Government may introduce this if the new regime does not stop piracy.
* The law comes into effect on September 1.