The Protect IP Act (an acronym for Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property) is a bill introduced earlier this year aimed at combating online copyright infringement.
PROTECT IP will target and censor so-called “rogue websites”, online sites and services (especially overseas) which U.S. authorities say facilitate infringement of local intellectual property rights. The bill also imposes new anti-piracy requirements on ISPs, payment processors and advertisers. Search engines also have duties to perform, such as deleting links to outlawed sites.
The MPAA is a big supporter of the legislation and firmly believes that its implementation will lead to an increase in its members’ revenues. However, for those not in the entertainment business the legislation, which is currently on hold following intervention by Senator Ron Wyden, will come at a financial cost.
According to a Congressional Budget Office (CBO) estimate released this week, between 2012 and 2016 PROTECT IP will cost the U.S. taxpayer tens of millions of dollars.
“Based on information from the Department of Justice (DOJ), CBO estimates that implementing [PROTECT IP] would cost $47 million over the 2012-2016 period, assuming appropriation of the necessary funds,” the report states.
In order to enforce the legislation, the Department of Justice says it will need an additional 22 special agents and 26 support staff.
“Once fully phased in, CBO estimates the costs of the additional employees under the bill would reach about $10 million annually, including salaries, benefits, training, equipment, and support costs,” says the CBO.
The report notes that there will be an “impact on the private sector”, particularly for the above-mentioned Internet service providers, credit card companies, online advertisers and search engines who have direct or indirect business with “rogue sites”. The legislation intends to outlaw this business but the costs of that are unclear.
“Because of uncertainty about how often and against whom the Department of Justice or copyright holders would use the authority to prohibit the actions outlined in the bill, CBO cannot determine the cost of the mandate to the private sector,” the report concludes.
By its very nature, leading search engine Google will be affected by the new legislation. Recently executive chairman Eric Schmidt spoke out against PROTECT IP-style censorship during the company’s Big Tent conference in London, saying that the company would fight demands to carry out web blocking.