The Digital Economy Act (DEA) created an anti-piracy notification scheme allowing copyright holders to report suspected infringers to their Internet Service Providers (ISPs). The UK Government has decided that ISPs are to share 25 per cent of the costs of running this scheme, including Ofcom’s costs, with copyright holders bearing the remaining 75 per cent.


The DEA introduces new sections into the Communications Act 2003, imposing obligations on ISPs, known as “initial obligations”. The first of these is to notify subscribers if the IP addresses associated with them are reported by copyright owners as being used to infringe copyright. The second is to monitor the number of reports about each subscriber and, on request by a copyright owner, compile on an anonymous basis a list of those subscribers who are reported on by the copyright owner above a threshold set in an initial obligations code. After obtaining a court order to obtain personal details, copyright owners will be able to take action against those included in the list.


The notification costs of ISPs and Ofcom as regulator are to be split 75:25 between copyright owners and ISPs. The regulator costs also include the costs related to the appeals system. There will be no fee for subscribers to appeal against a notification letter. However, the Government retains the power to introduce one at a later date, should it become clear that a large number of vexatious appeals result.


The Government’s decision has met with resistance from both right holders and ISPs. Right holders wanted the costs of detection included in the cost sharing arrangement and ISPs have complained that they are required to pay for a system that only benefits right holders.

The decision on costs will now be notified to the European Commission before being introduced in Parliament as a Statutory Order. Ofcom’s Initial Obligations Code will implement the notifications process and will also reflect the decision on costs. This will come into force in the first half of 2011, somewhat later than envisaged originally.