The Government teamed up with copyright holders and ISPs, who will start sending warning emails to pirating Internet users next year. In addition there will be a broader educational campaign to steer people towards using legal options.

While the campaign is a private initiative the Government has decided to back it financially with several million pounds. However, TorrentFreak has learned that the Government funding wasn’t straightforward and was made outside of the available marketing budget.

Through a Freedom of Information request we obtained an email conversation between the UK Intellectual Property Office (IPO) and music industry group BPI. In the email from May this year IPO’s Ros Lynch explains that there are no regular marketing funds available to support VCAP.

“As part of the process of agreeing Government financial support for the educational element of VCAP we will need to seek a marketing exemption as we are currently not permitted to spend on marketing,” Lynch writes to BPI’s Ian Moss.

To be able to get the exception the Government needs additional information from the entertaining industries, showing that the investment makes sense financially. Or put differently, that the Government will see a good return for their invested taxpayer money.

“Essentially this will require a proper business case which includes hard figures,” Lynch writes.

“For example, what research are you basing your target audiences on? How have you calculated your 5% reduction in infringement? What £ saving does a 5% reduction bring? What overall estimate can you make of the ROI of this campaign e.g. what financial benefit would a £2.2m Government investment bring?”

The above suggests that the BPI is predicting a 5% drop in piracy from the anti-piracy measures. However, in a response to the IPO’s request the industry group writes that even with a lower success rate the Government’s spending will pay off.

In a “Summary Business Case” (pdf) BPI uses the expected VAT increase to convince the Government of the “profitability” of the campaign. It estimates that if 15% of all illegal downloads are lost sales, piracy only has to decline 1% over three years for the Government to recoup their investment.

“The underlying assumptions are based on very good data that has been produced by Ofcom and by a number of academic studies looking at the replacement ratios. It shows that only very small changes in piracy lead to significant returns to Government,” BPI notes.

The music industry group stresses that the calculation only looks at VAT income and that the effects on the wider economy may be even greater. However, the static model they presented should already be good enough to warrant the funding.

“So even from a very simple, static assumption, a small reduction in piracy of between .49% and 1% over the three years would return Government investment of £4m in an education scheme,” BPI writes.

This prediction was apparently good enough for the Government to invest in the new anti-piracy plans beyond the available marketing budget. Even more so, the authorities committed £3.5 million to the campaign, instead of the £2.2 that was discussed in May.

Whether the Government will indeed be able to recoup the taxpayer money through the anti-piracy campaign will be hard to measure, but the plan is going full steam ahead.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

VCAP is an agreement between the music and movie industries and several of the UK’s leading ISPs. The idea is that the entertainment companies monitor P2P networks (such as BitTorrent) and identify IP addresses connected to the illegal sharing of infringing content. That data is passed to the ISPs, the IP addresses are linked to customer accounts, and errant subscribers are sent a warning.

The idea behind VCAP is to educate the casual file-sharer about legal alternatives in the hope he will change his ways, but the softly-softly approach has its limitations. A reliable source close to the program told TorrentFreak that the focus of VCAP is the repeat infringer. However, after a customer receives four warnings he will receive no more.

On some level there appears to be some kind of acceptance that little can be done about hardcore file-sharers, an approach mirrored in the U.S. with its Copyright Alerts Scheme. But while there are suggestions that the worst-of-the-worst can simply do whatever they like under the UK program, consideration is already being given to what happens should VCAP fail following its 2015 introduction.

Aside from the Digital Economy Act sitting in the wings, Prime Minister David Cameron’s IP advisor believes that the carrot needs to be backed up by a stick. In a report published yesterday largely detailing the “Follow the Money” approach to dealing with pirate sites, Mike Weatherley MP says now is the time to think about VCAP’s potential failure.

“The Voluntary Copyright Alert Programme (VCAP) is welcomed and will be a good step forward once it is hopefully in operation in 2015, although it is primarily an education tool,” Weatherley says.

“However, we need to start thinking now what to do if these notices are ignored by infringers – will VCAP be followed by something more enforceable?”

Weatherley says that while the IP enforcement “stick” is a “last resort option”, being able to show “teeth” is important. Unsurprisingly, those measures involve hitting persistent pirates harder and harder each time they show defiance.

“It should be a graduated enforcement response,” Weatherley explains.

“Warnings and fines are obvious first steps, with internet access blocking and custodial sentencing for persistent and damaging infringers not to be ruled out in my
opinion.”

These suggestions aren’t new, but this is the second time in a matter of months that the Prime Minister’s closest advisor on IP matters has spoken publicly about the possibility of putting persistent file-sharers in jail.

Earlier this year we reported on comments Weatherley made in the House of Commons on the prison option. Although he never denied using those words, the MP did attempt to dismiss the tone of the ensuing debate as containing “misinformation”.

Not to say though, that jail will be immediately on the cards for pirates. Weatherley says that education has to come first, with an emphasis placed on informing consumers that “piracy and similar illegal activities are not in their best long-term interests and are not socially acceptable.” The second phase will see the onus placed on industry “to get their product right and attractive” to consumers.

“[The third stage] once we have won the ‘hearts and minds’ of consumers and provided suitable content, keeps the option of enforcement of copyright law on the table when all else has been exhausted,” the MP says.

Given Weatherley’s suggested plan for preparing now for VCAP’s failure, the ISPs involved in the scheme (BT, Sky, TalkTalk and Virgin Media) must be considering the kind of road they’re being led down. While sending out warnings with no mitigation measures sounds reasonable enough today, if that transforms into a cash fine, disconnections and jail sentence model in future, the whole thing could turn into a PR disaster.

Update: Prime Minister David Cameron says he will “closely consider” Weatherley’s report.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Thus far details on the proposed system have been scarce, leading to the wildest assumptions and in some cases a core misunderstanding of how the process will work.

Earlier this week, for example, the CEO of a smaller UK Internet provider said that he will refuse to join the program as ISPs shouldn’t be compelled to monitor everything their customers do. Others fear that they may receive a warning for downloading an MP3 from a file-hosting site, or for streaming a copyrighted YouTube video.

All of the above have nothing to do with the proposed measures.

To clear up some of the confusion TorrentFreak spoke to a source closely involved in the Vcap system. We were informed that Vcap will be part of a larger campaign to inform the public about copyright issues. For this reason, the warnings, or alerts rather, will focus on educating people about how they can access content legally, much like the scheme currently operating in the U.S.

The four ISPs who are confirmed to be involved in Vcap are BT, Sky, TalkTalk and Virgin Media, but other providers could join in at a later stage. Below we have summarized how the Vcap program is expected to work, including several new details.

What will be monitored?

According to information obtained by TorrentFreak the Vcap system will only apply to P2P file-sharing. In theory this means that the focus will be almost exclusively on BitTorrent, as other P2P networks have relatively low user bases.

Consequently, those who use Usenet providers or file-hosting services such as 4Shared, RapidShare and Hotfile are not at risk. The same is true for those who use streaming sites. In other words, the Vcap program only covers part of all online piracy.

Will all P2P file-sharers receive a warning?

TorrentFreak has learned that not all P2P file-sharers will receive a warning. The system will focus on people whose Internet accounts have been used to share copyrighted material more than once. This is different from the U.S. model where people get an alert after the first offense.

The focus on repeat infringers is a logical choice since there are millions of file-sharers in the UK and the copyright holders and ISPs have agreed to cap the warnings at 2.5 million over three years.

Who will be monitoring these copyright infringements?

While ISPs take part in the scheme, they will not monitor subscribers’ file-sharing activities. The tracking will be done by a third party company. The most likely candidate is MarkMonitor (Dtecnet) who are also the technology partner for the U.S. Copyright Alert System.

This tracking company collects IP-addresses from BitTorrent swarms and sends its findings directly to the Internet providers. The lists with infringing IP-addresses are not shared with the record labels, movie studios or other third parties.

Each ISP will keep a database of the alleged infringers and send them appropriate warnings. If the ISPs get approval from the Information Commissioner’s Office, recorded infringements will be stored for a year after which they will be deleted.

Will any Internet accounts be disconnected?

There are no disconnections or mitigation measures for repeat infringers under the Vcap program. Alleged file-sharers will get up to four warnings and all subsequent offenses will be ignored.

The source we spoke with clarified that it’s not the intention of Vcap to stop the most hardcore file-sharers. The program is mostly focused on educating casual infringers about the legal alternatives to piracy.

Can the monitoring be circumvented?

The answer to the previous questions already shows that users have plenty of options to bypass the program. They can simply switch to other means of downloading, but there are more alternatives.

BitTorrent users could hide their IP-addresses through proxy services and VPNs for example. After the U.S. Copyright Alert Program launched last year there was a huge increase in demand for these kind of anonymity services.

So how scary is the Vcap anti-piracy plan?

While we can’t say anything too conclusive, it appears that the main purpose is to inform casual infringers about their inappropriate behavior. The focus lies on education, although the warnings also serve as a deterrent by pointing out that people are not anonymous. For some this may be enough to switch to legal alternatives.

All in all the proposed measures are fairly reasonable, especially compared to other countries where fines and internet connections are on the table. Whether it will be successful is an entirely different question of course, and one which will only be answered when the first results come in.

Finally, it’s worth noting that if Vcap fails it’s not automatically a win for the pirates. A few months ago the Government promised to “bring the Digital Economy Act into force as soon as practicable,” which will result in more stringent anti-piracy measures.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.