Government “Holds a Gun to the Head” of ISPs Over P2P

The British government appears to be running out of patience with ISPs as they struggle to come to an agreement with the music industry on P2P music piracy. One 'top-level' ISP executive says "The British government just put a gun to our head." Major ISPs are now in "serious" talks with the music industry.

Recently we reported on the agreement between UK ISP Virgin Media and the British Phonographic Industry to start sending out warnings to Virgin’s subscribers who the BPI accuse of uploading copyright music. Now, according to a Digital Music News report, the British government has started urgently applying pressure to prominent ISPs to find a solution to the ‘problem’ of file-sharing. The pressure includes a threat to bring in new laws, should ISPs and the music industry not come to a solution of their own.

The government previously set a deadline of April 2009 for the parties to reach an agreement but according to sources, pressure is intensifying to deal with the issue sooner. A “top-level executive” gave an indication of the level of pressure stating: “The British government just put a gun to our head.”

According to what DMN describe as “top-level” and other “executive” sources, the music industry and major ISPs including BT, Carphone Warehouse, Tiscali and Virgin Media are now involved in “serious negotiations” over how to deal with what they perceive to be a serious threat to their business model.

Andy Burnham, Culture Secretary and Labour Member of Parliament is said to be playing a prominent role after tough comments earlier in the year: “Let me make it absolutely clear: this is a change of tone from the government,” Burnham told the FT. “It’s definitely serious legislative intent.”

At the London Calling event last week – billed as ‘the UK’s premier international music business event’ – sources confirmed meetings between the music industry and ISPs. It’s believed that ISPs are being negotiated with individually, rather than as a group. “All of the ISPs are at the table meeting with the rights holders, but it’s not a roundtable,” said a source.

Current CEO of British Music Rights and former pop star Feargal Sharkey said he was optimistic at the discussions between the music industry and ISPs: “At this moment, I am completely optimistic. Three months ago these guys wouldn’t even get into the same room.”

It’s unclear what could happen if the music industry and ISPs fail to reach an agreement, as Culture Secretary Andy Burnham has already stepped back from a government implemented ’3 strikes and you’re out’ policy.

For their part, ISPs are only too aware of the profit they make from file-sharers. If the latest reports are to be believed, around 6 million Brits use their internet connection for file-sharing. Alienating them could be a huge strategic error.

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