£5 million a year for Ofcom's DE Act responsibilities - but Mr Vaizey was a little hazy about what it will pay for. He referred to monitoring activities. Ofcom's own slides reveal an expensive programme of p2p monitoring.

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The Communications Minister Ed Vaizey confirmed to Parliament that the budget for the telecoms regulator Ofcom, in respect of the Digital Economy Act (DE Act), is £5 million a year. That comes on top of £5.8 million for setting up its DE Act operations. The figure in itself is not new, as it was reported last year in a government document. However, Mr Vaizey added a statement on what the £5 million will cover. He said the £5 million a year is to cover Ofcom's "responsibilities" under the DE Act, which include :

"monitoring and enforcement

activities, devising a code of practice, and the establishment of an appeals mechanism".

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Reading the Impact Assessment, it could be interpreted that the £5 million only covers the so-called appeals mechanism. It is not at all clear whether is not this is the case, or whether it should cover the monitoring and enforcement activities as well.

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In considering this, we should ask what precisely is entailed in both sets of costs. The so-called appeals mechanism is a substitute for a judicial procedure and will not come cheap.

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When it comes to 'monitoring and enforcing', there could be two different interpretations. Does it refer to monitoring and enforcing compliance by the two industries involved and the respective stakeholders? Or does it refer to Ofcom's monitoring of peer-to-peer file-sharing activity, which the regulator is also obligated to do under the DE Act.

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Ofcom's plans for monitoring peer-to-peer file-sharing have also emerged in a series of presentation slides. The slides, seen by iptegrity, show that Ofcom has considered using deep packet inspection, as well as ISP traffic data, for this purpose. But the regulator has decided to scan P2P file-sharing networks. An example of the slides is shown at the top of this article.

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Ofcom proposes to commission an outside company to do this scanning. The company will be asked to produce results against criteria including 'key protocols and networks' and ' types, volumes and genres'. It is not clear whether this Ofcom's monitoring will be duplicating what the music industry is already doing.

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Ofcom's specification will be met at a cost. I have no particular insights, but I do know that such consultancies typically have high day rates. I would hazard a guess that the extensive annual monitoring as proposed by Ofcom in these slides, could well cost a few million pounds. So, is the 'appeals' process - which replaces the function of a court - to be jeopardised to pay for monitoring of P2P networks?Or are there two separate budgets?

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And having established the budget, we should probably ask what is the value being delivered. How exactly does measurement of P2P networks help Ofcom to know whether the policy objective is reached by the review point in 2012 - that policy objective (according to the Impact Assessment) being:

"to help ensure that investment in content is at socially appropriate levels by allowing investors to better recoup the returns on their investment and so that consumers can continue to benefit from online use."

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A GCSE media studies pupil could have devised it better.

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Ed Vaizey's statement to Parliament on Ofcom's costs came in a written answer to a question from Tom Watson on 16 February 2011.

Thanks to Trefor Davies of Timico for tipping me off about the Parliamentary questions.

This article is licensed under a Creative Commons Attribution Non-commercial-Share Alike 2.5 UK:England and Wales License. http://creativecommons.org/licenses/by-nc-sa/2.0/uk/ 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) Ofcom's DE Act £5 million-a-year - for exactly what, Mr Vaizey? http://www.iptegrity.com 26 February 2011

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