Judge backs internet providers

internet service providers can charge a $25 notice fee to copyright holders such as Warner Bros - the studio investing in The Hobbit - but the providers say it won't be enough. Photo / Supplied

Movie studios, record companies and other rights holders are the beneficiaries of a new copyright regime and should bear the cost of its set-up, says a District Court judge specialising in technology.

The Government's "three strikes" copyright system comes into force on September 1 and requires internet companies to issue warning notices to customers suspected of illegally downloading material, if rights holders request it.

After a customer has been issued a third notice, rights holders can bring the case before the Copyright Tribunal, which can slap an offender with a fine of up to $15,000.

Commerce Minister Simon Power announced last week internet providers (ISPs) will be able to charge copyright holders a fee of $25 for every notice they issue. This was much higher than the $2 suggested by groups representing movie companies such as Warner Bros - the studio putting money into Peter Jackson's The Hobbit.

The Government said the $25 fee would allow ISPs to recover a "reasonable proportion" of expenses involved with implementing the law. But according to one internet company, Orcon, the cost of dealing with each notice could be as high as $76 and the cost of installing systems to cope with the new regime sits at $50,000.

Judge David Harvey, an expert on IT law, argued it was "just and equitable" for rights holders, rather than ISPs, to shoulder the system's set-up costs.

"Fees set should include either set-up costs or alternatively a substantial contribution to set-up costs by rights owners," he wrote in a submission to the Ministry of Economic Development. Harvey, who was making the comments in a personal capacity, said the benefits of the scheme sat solely with rights owners.

"The benefit and advantage is solely for rights owners and provides a quick and cheap system of enforcement as an alternative to expensive and time-consuming enforcement proceedings in court ... [ISPs] are now cast into an enforcement role that is not consistent with their traditional business model," he said.