Music piracy costs money; does fighting it cost more?

[p2p rules]

Big Content often claims to be losing absurd amounts of cash to a peg-legged and eye-patched crowd of Internet pirates. To deal with the problem, entertainment lobbyists around the world have suggested that governments might want to mandate "three strikes" laws to punish repeat online infringers, and that Internet service providers should get involved in the battle. But three-strikes rules have their own significant costs, and ISPs are now waging a "bogus numbers" battle of their own in an effort to defeat the proposals.

Case in point: the UK, where a BT spokesman told the Mirror this week that a proposed graduated response scheme could cost each Internet user in the country £24 a year—and cost the ISP industry £1 million a day.

A bit of fancy mathematics shows this to be £365 million a year, but extreme skepticism is needed here. There's no data given to support this claim, and the pleasing roundness of the number suggests that this is about two rungs up the ladder from "total guess."

The £365 million claim is more about countering content industry rhetoric about losses by pointing out that graduated response schemes have real costs of their own.

For example, the UK's major label trade group, BPI, wants action from the government because of losses—£180 million in 2008 and £200 million in 2009. These numbers have calculations behind them, but they're still wildly approximate, incorporating all sorts of assumptions. A BBC Radio 4 program looked into this number recently and showed conclusively just how fuzzy it was.

But such numbers have tremendous shaping power on the debate about online copyright infringement. We've seen far more absurd numbers used literally for decades in the US in an attempt to scare legislators, despite having no foundation.

BT is fighting back with calculations of its own, this time suggesting that the yearly cost of implementing graduated response laws is actually greater than the major labels' alleged losses to file-sharing. Of course, once other content industries (such as movies) toss their numbers onto the pile, this no longer holds, but the basic point remains: "fighting piracy" is not without significant costs of its own.

arstechnica.com