The Attorney-General’s Department has admitted it needs to reassess how much its policies on data retention and online copyright infringement are costing the telecommunications industry.

The Coalition has been quite costly for the telecommunications industry, with a range of new national security legislation, piracy and site-blocking legislation, and a new code to crack down on online copyright infringement all arriving within the first two years of the Abbott government being elected.

“It’s certainly an expensive period for the telco sector we’re going through,” Communications Alliance CEO John Stanton told the ABC in July.

In the May federal budget, the telecommunications industry received a slight reprieve, with $131.3 million offered to the entire industry to help get systems in place in order to comply with the government forcing telecommunications companies to retain customer data for at least two years, so that law enforcement agencies could access the data without a warrant.

It was much less than the telcos wanted, and much less than they have estimated their set-up costs will be, but the government said it was a “reasonable” contribution to industry.

But the government might not actually know how much its own legislation is costing the industry. In response to a question on notice from budget estimates published this week, the department stated it was now looking to reassess how much the scheme would cost industry.

“The regulatory impact of the data retention scheme is being re-costed to measure the impact of the scheme as passed by Parliament, and to include the deregulatory [sic] impact of the government’s $131.3 million data retention industry capital assistance budget measure,” the department stated.

The funding that has been provided to the industry will help the telcos develop “efficient and innovative solutions”, the department said.

Telcos at a conference in June expressed their frustration with the department’s handling of the implementation process in helping telcos design their “innovative” solutions, with some indicating they still had no idea what data they were supposed to retain for the scheme.

Implementation plans for mandatory data retention were due by August 13. The Attorney-General’s Department has not indicated whether an extension has been granted to any telcos so far, and had not responded to a request for comment at the time of publication.

AGD was also going back to determine how much it will cost the industry to implement a three-strikes code designed to deter users from downloading pirated TV shows, films, and music online.

“The regulatory impact of the Copyright Notice Scheme code is currently being re-costed following submission of the code to the Australian Communications and Media Authority,” the department stated.

AGD had already determined that the annual cost for all ISPs to block torrenting websites under legislation passed in June is expected to be $130,000.

The separate copyright code scheme, submitted to the ACMA in April, will require ISPs to send warning letters to users when they are alleged to have been caught downloading infringing content over peer-to-peer services. After a third warning in 12 months, that customer can then have his or her details made available to rights holders through the courts.

The Communications Alliance this morning held a briefing with the legal community, ISPs, and rights holders such as Foxtel, on both the site-blocking legislation and the code.

The copyright scheme was due to be in place by September, but rights holders and ISPs cannot agree on who should actually bear the costs of enforcing copyright on behalf of the Hollywood studios. There is also a disagreement about the volume of notices that ISPs will get — they do not want to be flooded with emails or letters from rights holders demanding letters be sent out to users.

Foxtel’s Bruce Meagher told the meeting that Foxtel felt the ISPs’ pain, because while it was mainly a content owner, it was now also an internet service provider. He said the site-blocking would not deter the most determined pirates, but it would stop some.

“Having made it difficult for someone … you should see an uptake in legitimate services and a decline in illegitimate service,” he said.

Meagher confirmed to Crikey earlier this month that Foxtel was working with ISPs to determine what sites should be blocked. He said today that when the cases reach court, ISPs and rights holders will likely agree on 90% of what orders the court should make to block sites.

Foxtel sought a copyright code “with more teeth” than the final product, but Meagher said Foxtel would work with ISPs on how best to educate customers on piracy. He said Foxtel and other rights holders had agreed to pay for the code in a pool, but will also allow other rights holders to use the code without paying.

Meagher said that costs paid by rights holders should not be too onerous, otherwise the code will not be used. He cited the New Zealand notice scheme — where rights holders need to pay $25 per notice they send out — as one that isn’t being used because it is too expensive.

Conversely, the Communications Alliance’s Gary Smith said that the overall regulatory burden on ISPs had increased significantly over the past few years.

“Public policymakers have seen ISPs as playing a more critical role, or they should be more accountable … for the actions of their users,” he said.

The Attorney-General’s Department has argued that its repeal bills have outweighed its legislative burden placed on the telecommunications industry since the election, claiming the total value of the legislation repealed is $130.5 million.

“This is greater than the new regulatory burdens created over the same period,” the department stated.

Peter Fray

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