Australia's industry piracy code still stuck on cost debate

Australia's telecommunications sector and content owners are still stuck in a battle over who will bear the cost of the new industry copyright infringement code, almost four months after it was submitted for government approval.

In early April, the Communications Alliance handed the ACMA its draft version of a voluntary graduated warning scheme the government had mandated be put in place to combat copyright infringement .

It applies to around 70 of Australia's biggest internet service providers, or all ISPs that provide residential fixed internet services to more than 1000 account holders.

The code centres on an escalating notice scheme for fixed-line residential users who rights holders claim have infringed copyright.

However, the draft document contained no mention of the allocation of costs of the scheme - a traditionally sore point between the two parties.

It mentions only that funding arrangements must be designed to ensure smaller ISPs are not unduly burdened by the scheme's requirements.

But almost four months on from the code's submission deadline, the Communications Alliance has revealed the telco industry and rights holders are still deadlocked over who should bear the cost of the scheme.

The code will not come into effect until the debate on costs has been resolved.

The deadlock has forced telcos and rights holders to go to an external party for an independent assessment of the costs telcos and ISPs will be lumped with as a result of the scheme.

The industry has previously tentatively estimated its costs to be upwards of $30 per IP address - a figure disputed by rights holders.

"Negotiations are ongoing between the parties to finalise a commercial agreement, including cost-sharing, that will allow the code and scheme to begin operating," the Comms Alliance said in a statement today.

"Extensive negotiations over cost-sharing have not yet resulted in an agreement, so ISPs and rights holders have jointly commissioned work by an independent expert to look at the costs that ISPs will incur to process infringement notices."

The industry body argued rights holders should be required to pay the majority of the costs of operating the scheme given the "enormous financial upside that will flow to rights holders from changing the behaviour of online infringers".

Cost a long-time sore point

It's not the first time movement on an industry copyright infringement code has stalled as a result of debate on costs.

More than a year of talks failed in 2012 after telcos and rights holders were unable to come to agreement on the issue.

ISPs refused to pay for a process they said rights holders would financially benefit from, while content owners argued each side should bear its own costs.

It was this inability to reach consensus that late last year prompted the government to issue a warning to both parties: develop a scheme or have one mandated for you. They were then given just four months to pull a draft code together.