The Problem With A Three Strike Response To Australian Piracy

If the government's anti-piracy submissions have told us anything so far, it's that most rights holders and studios want a graduated response, or "three strikes" scheme, for Australia to reduce what they see as rampant content piracy. The resistance to the idea in the ISP community stems from the idea that a three strike notice scheme is expensive to maintain, and they're not wrong: cost is the problem that may hold up the whole anti-piracy process.

Several countries have graduated response schemes right now, including the US, UK, Korea and our close neighbours across the Tasman in New Zealand.

Each scheme is based on the idea that if an ISP catches a user downloading what it defines as copyright-protected material over services like P2P or BitTorrent, it sends them a letter with some sort of warning. After a specified number of warnings, action is taken against that particular user.

Submissions from the likes of Village Roadshow and Foxtel have found that ideal punishments would include the slowing of an offender's internet connection, or the blocking of pages.

Users in each system have the right to appeal copyright notices for a nominal fee, which is refunded should the notice be found to have been issued in error.

What's not covered in depth by many of the submissions to the Attorney-General's department is who pays for such a scheme, mostly because running one is regarded as particularly costly for whoever fronts up to foot the bill. It would appear that everyone would love the piracy problem to stop via a three strikes scheme, but not if it costs oodles of dollars to do so.

The New Zealand model, for example, is one that the industry finds particularly unattractive because of its cost.

In NZ, users are issued with three notices: a detection notice, a warning notice and an enforcement notice. On the third warning, the rights holder is free to bring the wrath of the courts onto offenders, with fines up to $15,000 allowable.

Here's where it gets unattractive for studios: New Zealand ISPs are charging $NZ25 per notice that they have to process.

Writing in its submission to the Government's copyright consultation yesterday, Foxtel in particular was more than up front about why it doesn't want the New Zealand model in Australia: because the price is too damn high:

Why the New Zealand costs model should be avoided in Australia
A stark demonstration of the excessive costs of issuing notices in New Zealand can be seen when you apply the per-notice cost to the rate of piracy of Foxtel programs. As mentioned, during 10 days in August monitoring for Foxtel detected around 40,000 unauthorised downloads of just four Foxtel programs. Fifty-seven per cent of these, or around 22,800 downloads, occurred in Australia.
Assuming that the amount per notice was set at AUD$25, even if only one notice was sent in relation to each of these 22,800 downloads this would cost Foxtel $570,000 in respect of four programs over ten days. If three notices were required in relation to these downloaders, this would balloon to $1.71 million. This is clearly excessive. To set such a high fee would render the scheme inoperable due to prohibitive cost. It would be much more effective for content owners and ISPs to bear their own costs so there is an incentive for the scheme to be run as cost-efficiently as possible.

The future success of any graduated response scheme is going to come down to who pays, and just how much the bill is per offence.

Pirate gold image via Shutterstock

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