ISPs Say Ofcom Is Underestimating Cost of Digital Economy Act

A number of major UK Internet Service Providers (ISPs) have accused Ofcom of underestimating just how much it will cost them to comply with the Digital Economy Act (DEA). BT, EE and TalkTalk have all raised concerns in submissions to the communications watchdog, expressing their disappointment with Ofcom’s proposals.

Ofcom was required to draft an anti-piracy code under the DEA, which currently states that ISPs with a broadband customer based in excess of 400,000 must send notification letters to subscribers suspected of breaking copyright laws.

After three strikes, organisations can apply for a court to reveal the identity of the perpetrator so they could be punished by being cut off from their ISP.  Currently, BT, EE, O2, Sky, TalkTalk and Virgin Media meet this minimum subscriber criterion and some of them are not happy. BT and TalkTalk have already failed in their attempts to overturn the DEA.

Digital Economy Act

Under the current proposals, ISPs are liable for 25 percent of the costs of the notification letters while digital rights groups must pay for the remainder. However, the three ISPs have complained that Ofcom has ignored the impact of fixed costs incurred in processing these notifications, specifically dealing with complaints resulting from them.

TalkTalk said that it was wrong that only ISPs with 400,000 fixed broadband connections were liable and warned that it would distort the market. It reckons that at least 20 ISPs should have to comply with the obligations.

The company also said that it was perverse that the more infringement that occurs on an ISP’s network, the more likely it was to recover its costs. Ofcom estimates that BT will recover all of its costs, while Sky will only receive 63 percent and TalkTalk – 66 percent.

Ofcom has said that after investigating a number of solutions, it found the proposed method the fairest way of implementing the measures.

The draft code is set to be put before the House of Lords on 8 October and the House of Commons on 24 October. At this stage, the legislation cannot be amended, only passed or rejected. If approved, the first notification letters could be sent out in 2014.

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