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BPI: policing pirates could cost us all 24p in Digital Britain, not £24 -- UPDATED
20 Jan 2010 | 18.59 Europe/London
The British Phonographic Institute's commissioned some research into just how expensive the Digital Economy Bill's copyright measures could be for both Internet Service Providers and end users. And it says we could ultimately each have to pay an extra 24 pence each for broadband - one hundred times less than ISPs have been claiming - if the cost is passed onto the consumer.
The BPI asked Sweet Consultancy - which isn't just, in a Ronseal kind of way, any old consultancy firm; it's a consultancy firm that specialises in technology (cue gasp) - to have a look at the cost implications of the proposed anti-piracy legislation that's currently going through Parliament. And while it may surprise you that a study commissioned by such a music industry body could ever find that ISPs have been over-exaggerating exactly how pricey that's going to be, that's exactly what happened. (I know what you're thinking: how did that one slip through the net, right?)
According to industry magazine Music Week, Sweet Consultancy's new report shows that the total cost combating copyright criminals a la the Digital Economy Bill will be a mere £13.85 million for ISPs in the first year. But that's not all: in year two expenditure will drop even further to less than £9 million - and by year three they'll just be shelling out just £3.5 million between them. While previous ISPs estimates have suggested we could be all lumbered with paying at least £24 to police piracy online, the data from the BPI-backed research indicates that'll be more like 24 pence.
"The report identifies the real costs of notifications," Adam Liversage, the BPI's Director of Communications, told Samknows. "The truth is, despite what TalkTalk claim, it is up to the ISPs whether they pass on their share of those costs to subscribers. They could absorb the costs without passing anything on. Or, they could simply charge the costs of notification to the infringer themselves."
Of course, with the Digital Economy Bill still being discussed and reformulated in Parliament at the moment, it's difficult to know how anyone can be so precise. It's therefore potentially even more interesting that a study commissioned by the Creative Coalition Campaign - which the BPI is actually part of - has arrived at similar figures. The research from NERA Economic Consulting claims the average annual cost will be around £8.5 million if the measures that were included into the draft Digital Economy Bill are passed.
But just this week the CEO of the UK's second biggest ISP has shown there's no sign of the Internet Service Providers backing down - and that they may even be closing ranks on this one. Charles Dunstone at TalkTalk calls the arguments of the creative industries "phoney" and thinks the Government's anti-piracy measures could "turn our digital economy into a disaster zone."
"The music and film industry has lobbied hard for these measures, claiming that copyright infringement costs them about £400 million a year in lost revenues," he says. "But the cost of tackling the problem will be massive - maybe hundreds of millions of pounds a year. And guess who foots this bill? The music and film companies? Not a chance. You will pay for it - an extra £2 per month on your broadband bill, according to BT."
Dunstone argues that the ISPs "make no money out of copyright infringement" - in fact, because they're the ones who have to "add additional capacity" to their networks to handle the extra traffic peer-to-peer networks are creating, they're actually losing money too due to piracy when you think about it. Us consumers, on the other hand, will have to effectively pay an extra £30 each year for our broadband connections if the Digital Economy Bill goes through when you include the cost of the infamous "broadband tax."
"The reality is that when content becomes digitised it, in effect, becomes free," Dunstone continues. "It doesn't matter how many websites are blocked, how many services shut down, how many families snooped on, people will always find ways to access copyrighted content free online. Film studios and music labels have to live with that truth and adapt their businesses."
So far 31,000 people have signed up to TalkTalk's dontdisconnect.us petition on the Number 10 website; you have to wonder exactly how many signatures would be necessary for MPs to take any notice. The problem is that - in the battle of self-interest - the ISPs, consumers and pirates have all ended up on the same side. This has allowed multi-millionaire record executives and artists to make it look like they're being besieged, while at the same time pass themselves off as the innocent party (because they're not the ones grouped in with the suspected P2P criminals).
Yet it can be argued that MPs will always worry about the "consumer" part of the equitation because sometimes another word for "consumer" is "voter" (i.e. in a few months time).While the BPI would struggle to find signatories for a rival petition, it could succeed in demobilising the support for TalkTalk's campaign. And what better way to achieve this than by commissioning its own study, nevermind one that so conveniently suggests that the ISPs are making a £24 mountain out of a 24p molehill?
From pounds to pence
The BPI asked Sweet Consultancy - which isn't just, in a Ronseal kind of way, any old consultancy firm; it's a consultancy firm that specialises in technology (cue gasp) - to have a look at the cost implications of the proposed anti-piracy legislation that's currently going through Parliament. And while it may surprise you that a study commissioned by such a music industry body could ever find that ISPs have been over-exaggerating exactly how pricey that's going to be, that's exactly what happened. (I know what you're thinking: how did that one slip through the net, right?)
According to industry magazine Music Week, Sweet Consultancy's new report shows that the total cost combating copyright criminals a la the Digital Economy Bill will be a mere £13.85 million for ISPs in the first year. But that's not all: in year two expenditure will drop even further to less than £9 million - and by year three they'll just be shelling out just £3.5 million between them. While previous ISPs estimates have suggested we could be all lumbered with paying at least £24 to police piracy online, the data from the BPI-backed research indicates that'll be more like 24 pence.
"The report identifies the real costs of notifications," Adam Liversage, the BPI's Director of Communications, told Samknows. "The truth is, despite what TalkTalk claim, it is up to the ISPs whether they pass on their share of those costs to subscribers. They could absorb the costs without passing anything on. Or, they could simply charge the costs of notification to the infringer themselves."
Of course, with the Digital Economy Bill still being discussed and reformulated in Parliament at the moment, it's difficult to know how anyone can be so precise. It's therefore potentially even more interesting that a study commissioned by the Creative Coalition Campaign - which the BPI is actually part of - has arrived at similar figures. The research from NERA Economic Consulting claims the average annual cost will be around £8.5 million if the measures that were included into the draft Digital Economy Bill are passed.
Talking the TalkTalk
But just this week the CEO of the UK's second biggest ISP has shown there's no sign of the Internet Service Providers backing down - and that they may even be closing ranks on this one. Charles Dunstone at TalkTalk calls the arguments of the creative industries "phoney" and thinks the Government's anti-piracy measures could "turn our digital economy into a disaster zone."
"The music and film industry has lobbied hard for these measures, claiming that copyright infringement costs them about £400 million a year in lost revenues," he says. "But the cost of tackling the problem will be massive - maybe hundreds of millions of pounds a year. And guess who foots this bill? The music and film companies? Not a chance. You will pay for it - an extra £2 per month on your broadband bill, according to BT."
Dunstone argues that the ISPs "make no money out of copyright infringement" - in fact, because they're the ones who have to "add additional capacity" to their networks to handle the extra traffic peer-to-peer networks are creating, they're actually losing money too due to piracy when you think about it. Us consumers, on the other hand, will have to effectively pay an extra £30 each year for our broadband connections if the Digital Economy Bill goes through when you include the cost of the infamous "broadband tax."
"The reality is that when content becomes digitised it, in effect, becomes free," Dunstone continues. "It doesn't matter how many websites are blocked, how many services shut down, how many families snooped on, people will always find ways to access copyrighted content free online. Film studios and music labels have to live with that truth and adapt their businesses."
No heavy petition
So far 31,000 people have signed up to TalkTalk's dontdisconnect.us petition on the Number 10 website; you have to wonder exactly how many signatures would be necessary for MPs to take any notice. The problem is that - in the battle of self-interest - the ISPs, consumers and pirates have all ended up on the same side. This has allowed multi-millionaire record executives and artists to make it look like they're being besieged, while at the same time pass themselves off as the innocent party (because they're not the ones grouped in with the suspected P2P criminals).
Yet it can be argued that MPs will always worry about the "consumer" part of the equitation because sometimes another word for "consumer" is "voter" (i.e. in a few months time).While the BPI would struggle to find signatories for a rival petition, it could succeed in demobilising the support for TalkTalk's campaign. And what better way to achieve this than by commissioning its own study, nevermind one that so conveniently suggests that the ISPs are making a £24 mountain out of a 24p molehill?