BPI Insists UK ISPs Overstating The Cost Of Three Strikes; So Will BPI Pay The Difference If Wrong?

from the come-out,-pony-up dept

Thu, Jan 21st 2010 10:57am — Mike Masnick

The UK's version of the RIAA, BPI, has been a very, very strong supporter of Peter Mandelson's Digital Economy Bill -- a position that has even some of its members resigning in disgust. In the past, BPI has also implied that ISPs already have some sort of legal obligation to stop file sharing and that they rely on unauthorized file sharing to fund their own business model. As the battle over the bill heated up, many ISPs pointed out that the cost of implementing the bill's requirements would be quite high. On top of that, the UK government did its own study and found that the costs were even higher than the ISPs estimated and the cost of implementing the bill would outstrip even the most ridiculous of BPI's estimates of "losses" from file sharing.

Of course, BPI can't accept those numbers, so its commissioned its own study which (of course!) claims that the cost to ISPs would be tiny. Hell, they'd barely be noticeable at all.

Well, if BPI is so sure of this, how about it steps up and puts some money behind that claim. I would imagine that ISPs would feel a bit more comfortable about supporting the Digital Economy Bill if BPI promised to pay any of the fees above and beyond what its own estimates are for implementing the plan. According to BPI's analysis, it would cost ISPs all of £13.85 million ($22.5 million) in the first year, £9 million ($14.6 million) in the second year and just £3.45 million ($5.6 million) in the last year. Hell, if it's such a small cost, how about BPI pays for the whole thing. Only fair, right? After all, the whole purpose behind the plan is to prop up BPI members' business models because they'd rather not adapt. Seems only right that they should pay for it.

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Filed Under: costs, digital economy bill, isps, three strikes, uk
Companies: bpi

22 Comments

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Alan Gerow (profile), 21 Jan 2010 @ 11:06am

"Of course, BPI can't except those numbers"

Should probably be:

"Of course, BPI can't accept those numbers"
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Anonymous Coward, 21 Jan 2010 @ 11:33am

Re:
When you have no quality comment to add, attack the grammar!
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Anonymous Coward, 21 Jan 2010 @ 11:41am

Re: Re:
The definition of quality when used as an adjective is "being of high quality".
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Richard (profile), 21 Jan 2010 @ 11:42am

Re: Re:
"When you have no quality comment to add, attack the grammar!"

No I think he just expects that Mike will correct it soon - as he usually does.

Now (so as not to be accused of the same thing) here is my main comment)
There is an alternative here. The ISP's spend the amount suggested by BPI and then simply stop doing anything.

I don't think BPI would like that either.
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Mojzu, 21 Jan 2010 @ 11:42am

I think these people have really been grasping at straws for quite some time now - 'ISPs rely on file sharing for money'? What kind of morons are they?

Bandwidth costs ISPs money. Heavy file sharers often use more bandwidth and therefore cost ISPs more then your regular, average customer. ISPs make their money on the difference between the bandwidth they sell you and how much you actually use, which is why so many 'unlimited' plans have such limited usage policies. ISPs do not want you to use lots of bandwidth which is why they regularly throttle file-sharers, they want you to pay for a 10GB per/month account and use 10mb, what orifice did the BPI get their 'facts' that ISPs make money from file sharing? In my experience most file-sharers are more likely to use more bandwidth and be savvy enough to only pay for the bandwidth they use, exactly the opposite of what ISPs want.
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Anonymous Coward, 21 Jan 2010 @ 11:42am

or attack the posts that attack the grammar...
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Designerfx (profile), 21 Jan 2010 @ 11:46am

Re:
did you forget something? customers create money. If they are forced to cut off their own customers, there's no profit.

Also, bandwidth has a baseline cost. Whether you use 500GB a month or 5GB a month, that bandwidth cost is the same. Sure there are marginal incremental costs (electricity, servers, etc), but bandwidth? please.

If a customer to be for another 10 years generated $100/year, disconnecting that customer just cost them $1000. See how fast it can add up? Cost difference might be $1/year or so, but not even close as far as total cost.
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Perry K (profile), 21 Jan 2010 @ 11:53am

where's this report?
The article mentions the report was done by sweet consulting which is apparently run by Gavin Sweet and Helen Sweet. I'd like to see this actual report not just BPI's interpretation of it.

Sweet Consulting: http://www.sweetconsulting.co.uk/about.html

Gavin Sweet
http://uk.linkedin.com/in/gavinsweet

Helen Sweet
http://uk.linkedin.com/pub/helen-sweet/5/80b/aa0
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AdamLiversage (profile), 21 Jan 2010 @ 11:55am

"On top of that, the UK government did its own study and found that the costs were even higher than the ISPs estimated and the cost of implementing the bill would outstrip even the most ridiculous of BPI's estimates of "losses" from file sharing."

The UK Government did not find that the costs were "even higher than the ISPs estimated". The UK Times story that you lifted for your December 28th 2009 piece, and reference again here, didn't make clear that the £500m estimated total costs, lifted from the UK Government's Impact Assessment document, were over TEN years, not annually.
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Michael Ho (profile), 21 Jan 2010 @ 11:56am

Re: fixed
oops. fixed that typo. thanks!
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mike allen (profile), 21 Jan 2010 @ 12:07pm

doesnt matter
most file shearing will be by encription as will email by the time this law is implimented.the tech will move the BPI will rot in the past same as the IRAA
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Anonymous Coward, 21 Jan 2010 @ 12:34pm

stupid people dont get it
if htey did stuff like this in canad aim dropping my internet period

thats a immediate loss of 55$ for one person FOREVER/month
660$ + the taxes
at 13% almost another 100

now imagine if 100K people did that
75,000,000/month
LOST for good until laws get better

and you say there are how many millions using p2p that would have no use for internet after a law like this?
yea

anyone refuting this is a complete moron that needs there head re-examined like OMG

business administration with a major in information systems degree would never tell you to act this way YET here we are seeing it.

so upset i no longer care about proper sentences nor spelling and punctuation. WHO CARES except the lawyers for that anyhow......
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Anonymous Coward, 21 Jan 2010 @ 12:40pm

correction
on math
64$

so i gain 64$ a month and i ain't buying no more of anything lave the net come find me

64$ times 100K
6.4million/month
think maybe they lose 200K-300K people
on high side as most think they cant get caught and then they make it law you have to NOT use encryption unless you allow a govt snoop.
yup thats next get em all using it then WHAM.

6,4x12= 76 or so mill/year
if 100K of you left the isp in Canada i'm with and we pay very large costs but have a cdr levy that the cria never pays artists with anyhow
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Alan Gerow (profile), 21 Jan 2010 @ 1:04pm

Re: Re:
Not at all. It's not an attack. Mike here is really good about editing his posts for grammar and spelling mistakes when they are pointed out. I'm helping him edit his posts for clarity and posterity because I read it literally initially and had to think about what was actually being said.

Mike fixed it. Problem solved.

Not an attack, but a helpful comment to an attentive blog poster.
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Hephaestus (profile), 21 Jan 2010 @ 1:09pm

Yeah a simple rewording of the digital economy act .....
"So Will BPI Pay The Difference If Wrong?"
"Seems only right that they should pay for it."

Mike, why even give them a choice, a simple change in the wording of the UKs digital economy bill would solve the whole thing ... I pointed it out the day I read the Bill.

In the UKs Digital Economy Bill the line

"payment in advance of a contribution towards meeting costs incurred by the provider."

should read

"payment of all costs incurred by the provider."

I hope that ISP's in the US request this change when ACTA opens up for public discussion. It would stop ACTA in its tracks if inserted there.
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Chargone (profile), 21 Jan 2010 @ 1:22pm

Re: stupid people dont get it
you know, it wouldn't surprise me if getting you to drop your internet is the Point, ultimately. then they (be it government or corporations) don't have to worry about it any more. and when you realise that the internet is what they seem to mostly be tripping over on...

at that point, the terrorists win... (the ones with lots of money, not the crazy religious ones.)
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Dementia (profile), 21 Jan 2010 @ 3:09pm

Re:
Hmm, let's see 500 Million over 10 years averages out to 50 million/year. BPI is estimating 26.3 million for 3 years total. Is that not a significant difference? Granted, the article says that the ISP are estimating up to 1 million a day, so the government's estimate is lower than that, but still ISP's say 1 millino a day, gov't says 500 million over 10 years (avg 50 million /year), and yet BPI says a fraction of the gov't estimate. Seems that BPI is still stretching way to far on how little it will cost.
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Dementia (profile), 21 Jan 2010 @ 3:11pm

Re: Yeah a simple rewording of the digital economy act .....
And when will ACTA be opened up for public discussion?
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cc, 21 Jan 2010 @ 3:46pm

Re: Re:
People are prepared to pay more for faster connections, as long as they have something to download.
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cc, 21 Jan 2010 @ 3:53pm

I think I know how their software will work (a guess), and I think the £500m is justified.

They need to assemble packets on the ISP's servers, and build up the file being downloaded (at least a significant portion of it). Then they either have to compare it against known versions of illegal files on the internet (and there's lots of files), or if it's an audio or video file, they may compare it to parts of copyrighted songs and movies (flaky algorithms, and very very CPU intensive).

Not only will this cost loads, it will very possibly slow down all internet traffic!
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Anonymous Coward, 21 Jan 2010 @ 6:58pm

Re: Re: Yeah a simple rewording of the digital economy act .....
About 30 seconds before it is signed by all the criminals involved.
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ethorad (profile), 22 Jan 2010 @ 4:41am

Re:
And then of course run it through their fair-use-checking algorithm ...

All assuming that the files aren't encrypted
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