ISPs, rights holders continue negotiations over anti-piracy code costs

Although an industry code that will create a new anti-piracy warning notice scheme has been submitted to the Australian Communications and Media Authority by ISPs, registration of the code, which will allow the ACMA to enforce it, remains stalled.

Appearing before a Senate Estimates hearing this morning, the ACMA's Jennifer McNeill said the code had been submitted to the authority in April for registration.

The 'three strikes'-style code includes a mechanism for letters to be sent to ISP customers who appear to have engaged in illicit downloads of copyright material.

The code was submitted to the ACMA by industry body Communications Alliance ahead of a deadline set by the Communications Minister, Malcolm Turnbull, and the Attorney-General, George Brandis, for ISPs and rights holders to complete negotiations over an online copyright enforcement scheme.

However, when it was submitted to the ACMA, some details, such as who pays the costs associated with the scheme, were not included in the code.

"At the time the code was presented Communications Alliance, under whose auspices the code was developed, indicated that there were some outstanding matters still to be agreed with rights holders and it's really only when a landing on those matters is reached that we'll be in a position to make a proper assessment of the code, how it works, its costs and benefits," McNeill said.

"I might add that those questions of costs and benefits also feed into the requirement that any code registration process be accompanied by regulation impact statements — so we can't do can do [a] regulation impact statement without that information," McNeill said.

Communications Alliance CEO John Stanton said that negotiations with rights holders to fill in the blanks in the code were continuing.

"There are a whole range of different cost components that need to be funded," Stanton said.

"They include the detection costs, the costs of the copyright industry panel, the startup costs for the ISPs, the ongoing processing costs for ISPs of receiving infringement reports and preparing and sending notices and doing the IP match and so forth. And there's also the adjudication costs. So it's a bit of a matrix of different cost elements."

"In terms of the processing costs, we haven't yet been able to negotiate an agreed figure," Stanton said.

He said that the parties involved are about to commission an independent third party study in an attempt to quantify the cost elements involved and reach a final agreement.

"We want to get these negotiations completed as soon as possible because, as the ACMA rightly points out, it can't complete its regulatory impact statement and assess whether the code's fit for registration until it understands the underlying commercials. So certainly there is pressure on for us to get those negotiations concluded as soon possible"

Cost has been a sticking point in past attempts to develop similar codes.

"I think everyone is committed to ensure that [the process] doesn't fall apart, but the commercials are not a simple matter to agree [on] as we've discovered," Stanton said.

Another major component of the government's copyright crackdown is a bill that will allow rights holders to get court orders compelling ISPs to block access to piracy-linked websites.

That bill is currently the subject of a parliamentary inquiry.