New Zealand’s Fight Over ‘Three-Strikes’ Costs

While the three-strikes-rule may be considered a good idea by most rightsholders, ISP's say that they end up paying the lion's share of the costs associated with such systems. According to this TorrentFreak report, ISPs in New Zealand claim that they end up paying upwards of 76 percent of the costs.

Last year a "three-strikes" system (Copyright [Infringing File Sharing] Amendment Act ) was put into effect in the country to deal with file-sharers spreading copyrighted material around.

But in July it was revealed that few notices were sent out because it costs $25 NZD (or $20 USD) per notice and rightsholders couldn't stomach the price. The movie industry sent out no notices at all and asked that the price per notice be cut.

RIANZ (Recording Industry Association of New Zealand) was a little more productive, sending out 2,766 notices between October 2011 and April 2012. The music group also asked for warning notice costs to be cut to around $2 each. But because the ISP's have to do all the work, they want even more money. One ISP asked that the price be increased to NZ $104 (approx $83) to cover costs.

But in a paper issued today by New Zealand Minister of Commerce Craig Foss, all involved in the three strikes system will simply have to deal with the way things are. He also noted that there has been a reduction in the amount of illegal file-sharing incidents because of the new system:

“There has been a significant reduction in the volume of illegal file sharing in the first six months of the regime being in force. This suggests that the level of the fee has not initially prevented the regime from having the desired outcome,” he wrote.

He pointed to a study by Waikato University that found that traffic by P2P applications decreased by more than 50 percent after the legislation came into power last year.

RIANZ agreed with the decline in P2P activity, but put the number at 18 percent. NZFACT said that the number has fallen from 110,000 movie downloads in August 2011 to between 40,000 and 60,000 per month. NZFACT blames the fee of sending out notices for their lack of participation in the system.

Foss went on to say that he would not make the position of ISP's worse by lowering fees.

"While the fee does not allow full cost recovery by IPAPs [Internet Providers], it does allow recovery of an appropriate proportion of their costs, and at a level which appears to be consistent with similar regimes overseas. Lowering the fee at this time would impose an inappropriate level of costs on IPAPs," he said.

The paper also revealed that Vodafone, Telecom, TelstraClear, Orcon and CallPlus spent $919,000 [US$730,000] to set the system up.

Source: TorrentFreak

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