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 Is the Online Infringement of Copyright (Initial Obligations) (Sharing of Costs) Order 2011 being rushed into Parliament just so that Ofcom can claim back expenses related to  the UK's  graduated response scheme?  


***Update 19 January. The draft SI on cost sharing and the "online infringement of copyright"  is due to be published by the UK Parliament today - I will update with a link when I have it ***


Today the UK Parliament took delivery of a  draft law - known as a Statutory Instrument - setting out the cost sharing arrangements for  the first stage of the  graduated response /3-strikes measures in the Digital Economy Act. 'Cost sharing' means how the costs will be split between ISPs and rights-holders, and the SI is highly controversial.


The Statutory Instrument - or SI for short -  has been  ‘laid before Parliament' which I have discovered means that it was deposited at the Secretary's office.  This means that it must now go through a process where

both Houses of Parliament (the Commons and the Lords) will have to either approve or reject it. Importantly however, Parliament may not amend it. 

The SI is entitled the Online Infringement of Copyright (Initial Obligations) (Sharing of Costs) Order 2011.  It is controversial because it fixes  the cost-sharing at 75 percent  for  rights-holders, and 25 percent  for ISPs. This percentage split was determined under the previous Labour regime, and appears not to have been reviewed.


However, the SI has a wider role in governing the costs of running the graduated response scheme. It sets the rules for how much rights-holders will pay for ISPs to sent notifications, and  how much rights-holders must pay in order to join the scheme in the first place.


It is not immediately obvious therefore, why the government would want to put it before Parliament now, when the DE Act is held up pending a judicial review.


Sources close to the Parliament are suggesting cost-recovery as the  reason.  Namely,  that the government wants to claim back the expenses paid out by Ofcom in 2010 in respect of the graduated response measures. 


It is not known how much of a tab  Ofcom has run up to date.  But it is being suggested that  the Ministry for  Business, Innovation and Skills, could be footing the bill.


The SI  relates to section 15(4) of the Digital Economy Act,  stating that the SI may include "provisions about costs incurred before the provision is included in an initial obligations code or a technical obligations code".   It therefore  would permit  Ofcom to  claim back from the ISPs and the rights-holders expenses paid out before the scheme even starts. 


According to the watchdog group, Consumer Focus , a  key objection to putting the Cost-sharing SI through Parliament now, is that the costs for operating the graduated response scheme ( even just the notification/warning part of it) are still unquantifiable, and it is too soon to make hard and fast decisions.


The government's own estimates reveal projected costs of up to 24.5 million for running the copyright notification /warning scheme  (the first part of the graduated response).


A Statutory Instrument - or SI for short - is secondary legislation. That means it does not get the full scrutiny of Parliament which a proper law should get, and it can be simply approved or rejected. As those of us who watched the Digital Economy Act will recall, even proper laws can be pushed through without scrutiny, so it is not clear what will happen with this 'Online Infringement of copyright'  SI.


*I have used the figures reproduced in this briefing from Consumer Focus .

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This article is licensed under a Creative Commons Attribution Non-commercial-Share Alike 2.5 UK:England and Wales License. It may be used for non-commercial purposes only, and the author's name should be attributed. The correct attribution for this article is: Monica Horten (2011)  , E Act: Will Parliament approve or reject copyright expenses? 19 January 2011.







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