How Much Does It Cost Taxpayers To Implement Three Strikes?

from the this-seems-important dept

With the recent UN report condemning three strikes laws that kick people off the internet based on accusations (not convictions) of copyright infringement as a civil rights violation, there's been a lot more attention paid to the reasonableness of such laws. Of course, there are other factors to take into account as well, including the general cost to the taxpayer. Over in the UK, James Firth filed some Freedom of Information requests with the UK government to try to understand how much such things are really costing. He got an answer from Ofcom, the telecom/ISP regulator, who noted that it's expected to have spent about £5.9 million (or just under $10 million) by the end of this year on implementing the digital copyright enforcement measures in the Digital Economy Act (which are mostly about a three strikes plan). Firth notes that this is just one part of the government's costs, and he has other FOI requests out for other parts. He also notes, per Ofcom, that the agency hopes to get this money back from fees from copyright holders making use of the process, but that's not guaranteed. Definitely an interesting bit of information to explore, which usually gets ignored in these discussions.

Filed Under: costs, ofcom, three strikes, uk

Reminder: Please Help Us Calculate The 'Cost' Of Overprotective Copyright Laws

from the estimation-is-good dept

A quick reminder here. After a Senate-commission report by the US ITC concerning "losses" from China due to intellectual property infringement, we noted that the methodology was ridiculous. The ITC simply went out and asked some of the biggest companies who rely on IP how much they thought they "lost," and used that to extrapolate a number. In what world is it the appropriate methodology to ask those who would financially benefit the most from greater protectionism to provide accurate data about the need for that protectionism? However, if that methodology is considered credible for the US Senate and the ITC, we figured we might as well use the identical methodology to calculate the "loss" the public has dealt with due to overprotective copyright laws. Of course, unlike the ITC, we actually asked people to "be reasonable." You can provide your own thoughts in the form below: The initial response has been fantastic -- with many more responses than we expected. On top of that, a wonderfully large percentage of them included detailed, and thoughtful, explanations of their calculations and reasoning. There have been, not surprisingly, a few ridiculous claims (i.e., trillions of dollars) that we'll be removing from the calculations, because we're (mostly) serious here about trying to come up with a number. Either way, please spread this around, as the more data we get, the better the results will be. Thanks!

Filed Under: copyright, costs

Please Help Us Figure Out How Much The Public Has 'Lost' Due To Overprotective Anti-Copy Laws

from the using-their-methodology dept

We recently posted about an ITC report that, among other things, estimated that US companies "lost" $48 billion due to "piracy" in China. This $48 billion number generated plenty of headlines, and since the report was requested by the Senate, you can bet that it will be used politically. The problem, however, was that the methodology was ridiculous. Rather than using any sort of objective measure, the ITC went out and asked 5,000 businesses who were in "IP-intensive fields" what they thought their "losses" were, and then extrapolated out.

It should be obvious why this is ridiculous. It's asking the most biased party, who would benefit the most from government protectionism in their favor, to give totally self-reported details of the "harm" that happens without increased government protectionism, with no attempt to reality-check those results.

One of our critics in the comments responded with a fallacy, suggesting that somehow we should not be allowed to criticize the clearly specious methodology here, without offering an alternative study and results of our own. Of course, to point out that a study's methodology is wrong does not mean that you need to supply your own numbers. And, of course, we regularly point to plenty of good studies on these kinds of subjects as well.

However, an anonymous commenter made the absolutely brilliant suggestion that we should create our own study, using their methodology to calculate how much the public loses each year due to overprotective anti-copy laws. And, so we are. Just as the ITC asked those who had most thought about their "losses" from infringement, I think it's fair to suggest that the readership here includes plenty of people who have thought deeply about the public's losses from overprotection. Thus, I'm hoping we can put together a similar corpus of data from which we can extrapolate a similar number about the public's losses. You can input your own estimate of your losses here: Now, obviously, this methodology is ridiculous, but if it's good enough for the ITC and the US Senate, it seems that it must be good enough for the counter study. It seems only reasonable that those who accept the results of the ITC study must also accept the results of our study, or admit that both methodologies are simply ridiculous.

Of course, to make this work, we really would like to get as much data as possible (and we really do want you to try to answer the question as honestly as you can -- i.e., don't just make up some crazy large number, but think about it). However, please also spread this post by letting other communities of folks who likely have thought about these issues know about it, so that we can really collect enough data to make this meaningful (in as much as you can make a totally ridiculous and bogus methodology meaningful).

Filed Under: copyright, costs, culture, public domain

Drug Companies Overestimate Cost Of Developing A New Drug By Merely $1.26 Billion

from the and-there-you-go dept

It's one of those numbers that comes up every single time we talk about the pharma industry: the claim that it costs $1.3 billion for pharma companies to develop a new drug. In fact, in our recent discussion on the FDA banning drugs that have been on the market for decades, it didn't take someone long to toss out such a number (they used $1.2 billion, but $1.3 billion is the "standard" these days -- just a few years after it was $800 million). Of course, every time people point this number out, I point to the excellent research by Merrill Goozner who did a massively thorough debunking of the $800 million number seven years ago, showing that the true number was closer to $35 million.

And yet, the $800 million number has lived on, boosted by inflation to $1.3 billion.

And it's still bunk. Gerd Leonhard points us to some new research that appears to have dug deeper into the question today, and found (once again) that the $1.3 billion claim is total bunk and the real number is more like $55 million -- based on the same data used by the study used to support the $1.3 billion number. In fact, they point out that it appears the pharma industry and those seeking greater protectionism appear to be overestimating the actual cost of drug development by $1.265 billion.

Now, there are some reasonable quibbles with the lower number as well, but there's a growing body of evidence that the real number is a lot closer to the lower one than the higher one. There are certainly some outliers, but the idea that the average cost to develop a new drug is over a billion dollars, and therefore pharma companies need special extra protection is bunk and certainly shouldn't be cited any more.

Filed Under: costs, development, drugs, patents

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

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.

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

UK Government Report Shows That Digital Economy Bill Will Cost More Than Highest 'Piracy' Estimates, Drive 40,000 Offline

from the this-is-good-for-who-exactly? dept

As the UK considers Peter Mandelson's Digital Economy Bill, a UK government report that looks into the likely impact of the law is incredibly damning. It finds that the plans to send threat letters to users and eventually kick them offline based on accusations (not convictions) would cost consumers in the neighborhood of £500 million. Note, of course, that the music industry itself claims that £200 million worth of music is downloaded in the UK per year (and, of course, that's only "losses" if you use the ridiculous and obviously incorrect calculation that each download is a "lost sale"). The report also finds that these greater costs on ISPs for managing such things (all of which will get passed along to consumers) will likely caused 40,000 residents to just give up their broadband, rather than pay the higher fees.

You might think that this would be reason enough to drop the bill as quickly as possible, but not so fast. The report also, without any evidence, suggests that the same law would also increase sales for the music and movie industry by £1.7 billion over the next ten years. That's odd, because there's still no one who can explain how kicking people off the internet actually gets anyone else to buy anything. In fact, we already have proof that it won't. Prior to the threats of losing your internet access were the much more threatening prospect of ending up being fined millions for sharing two dozen songs. And that didn't convince people to buy more.

Either way, the cost side of the equation makes it quite clear that this is the government asking consumers to artificially foot the bill for an entertainment industry that appears unwilling to adapt to a changing marketplace that requires new business models.

Filed Under: consumers, copyright, costs, digital economy bill, peter mandelson, three strikes, uk

In Going Free, London Evening Standard Doubles Circulation While Slashing Costs

from the but-free-doesn't-work!! dept

In October, we wrote about how, just as Rupert Murdoch and crew look to put up paywalls for online content, the operators of the London Evening Standard were going in the other direction and making their physical paper free. So, how's that been working out? mowgs alerts us to the news that the paper has doubled its circulation in just a month. Not bad. But what's more interesting is that it's also slashed its distribution costs massively. It used to cost about 30p, and now it's just 4p per paper.

This actually brings up a point that's rarely talked about in the free vs. paid debate. Charging can be expensive. It takes quite a bit of effort to charge, to take money, to manage the money, to set up the accounting and bureaucracy for managing each transaction. And, even worse, if you're working with third party distributors, like news agents, then you have to handle financial relationships with them as well. Getting rid of the per paper price changes the economics not just on the revenue side, but on the cost side as well -- something that's rarely discussed at all. And, yes, this impacts online news orgs too. Putting up a paywall is going to prove a lot more expensive than most people think on the cost side.

Filed Under: costs, free, news, subscriptions
Companies: london evening standard

Having ISPs Fight Piracy Could Cost More Than Claimed 'Losses' From Piracy

from the inefficiency-at-work... dept

While I'm sure defenders of kicking people off the internet will quibble with the numbers, ISPs are pointing out that the cost of implementing Lord Mandelson's plan to have ISPs police the internet for file sharing, will cost the industry significantly more than the music industry claims it's losing to "piracy." Even if you accept that the ISPs may be exaggerating the cost, we already know for a fact that BPI massively exaggerates its loss numbers. So if you cut back the ISP estimates significantly, the overall cost is still likely to be much higher. Meanwhile, we're still waiting for anyone to explain how kicking people off the internet gets more people to buy stuff. It's difficult to see how anyone could support this plan if they've actually put more than two seconds into thinking about it.

Filed Under: costs, isps, piracy

Music Industry Squanders $69 Billion Worth Of Free Promotions In 2007

from the got-your-attention? dept

Over the years, we've seen so many bogus reports on the supposed "losses" to various industries due to unauthorized file sharing, that it's about time the story was flipped. Reader SteveD writes in to point out the latest research, claiming that in 2007, the dollar value of all unauthorized music file sharing was $69 billion. The research company that put out the number does clearly state that those numbers are not lost revenue (good), but then goes on to still claim that this shows how damaging unauthorized file sharing is for the industry:

"A $69 billion figure is staggering to contemplate, but it effectively illustrates the impact of piracy on the music industry."

Actually, I disagree. I don't think it shows the "impact" at all. If anything, you could flip this around (as I did in the title) and use it to show how much goodwill and free publicity provided by fans the industry squandered by trying to turn those fans into criminals, rather than learning to embrace that free labor in a business model that took advantage of all of that free promotion. Sure, the headline is an exaggeration, but it's no more of an exaggeration than claiming that the $69 billion represents the extent of any problem. If there's a problem, it's in the fact that so many folks in and around the industry view this as a problem rather than a huge opportunity and resource.

Filed Under: amount, costs, music industry, piracy