The Government has seriously underestimated the expected costs and uptake of a controversial law designed to prevent illegal file sharing, the Labour Party says.
The Government yesterday announced internet service providers (ISPs) would be able to charge rights holders up to $25 to process allegations of copyright infringement when the new law comes into effect on September 1.
The law would allow copyright owners to send evidence of alleged infringements to ISPs, which would then send up to three infringement notices to the internet account holder.
If the warnings are ignored, the copyright owner can take a claim to the Copyright Tribunal and the tribunal can make awards of up to $15,000 against the account holder.
Commerce Minister Simon Power yesterday said the $25 fee was an appropriate compromise between what rights holders and the ISPs wanted.
But Labour's communications and IT spokeswoman Clare Curran said the Government had seriously underestimated the processing costs, with ISPs estimating they could actually be as high as $56 per notice.
"And that doesn't include indirect costs or the cost to establish a new or upgraded system to process infringement notices," she said.
There would also likely be a flood of notices from big distribution companies, predominantly American movie studios and record labels, once the law came into force, Ms Curran said.
"The Government suggests there will be up to 500 cases of infringement taken to the Copyright Tribunal in a year, yet previous estimates put the figure closer to 5000 per month per ISP," she said.
Some ISPs had already received tens of thousands of infringement notices a month, despite there being no law in place to enforce them, she said.
Mr Power yesterday said the fee would be reviewed six months after the law came into effect to ensure it was at the right level.
He said the fee level was more cost-effective for rights holders than taking matters to court, and allowed them to pursue "a reasonable number" of alleged infringements to educate internet users.
"For ISPs, the fee level prevents them from being inundated with alleged copyright breaches to the point they find it difficult to comply with the regime, and allows them to recover a reasonable proportion of their costs," Mr Power said.
