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New NZ copyright law means ISPs could cash in

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New Zealand ISPs could have a tidy new revenue stream courtesy of their illegal downloading customers as new copyright laws take effect in September.

New Zealand Commerce Minister Simon Power yesterday announced that a NZ$25 fee will be charged by ISPs to rights-holders, such as movie studios, for processing each allegation of copyright infringement.

New Zealand has one of the highest rates of peer-to-peer infringement in the world, which could mean that ISPs will be raking in fees from the movie, music and digital content industry.

Estimates widely differ on how many copyright infringements currently occur, but one figure in the ministry's regulation consultation put the activity at 5,000 breaches per month, per ISP.

The decision was made by Cabinet when considering technical regulations to underpin the Copyright (Infringing File Sharing) Amendment Act 2011, which comes into effect on 1 September. The government said it would review the fee structure after six months of commercial implementation.

The $25 fee was a compromise between varying demands from the industry, the Telecommunications Carriers Forum had demanded a $40 fee, while some rights-holders have requested zero or $2 fees per transaction.

"For rights-holders, the fee level ensures the regime is a more cost-effective enforcement measure than what is currently available through the courts, and allows them to pursue a reasonable number of alleged copyright 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," Power said.

As part of the process, once a copyright breach has been found, the ISP will then send three warning letters to the alleged offender. If warning letters fail to resolve the issue, the rights-holder – such as a movie studio or record company – can takes its case to the Copyright Tribunal, which will cost $200.

Under the new laws, the Copyright Tribunal determines the amount awarded to the rights-holder for copyright infringement arising from file-sharing. The maximum penalty is $15,000. ®

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