Concern Over Russian “Piracy Buster” Internet Tax

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Russian officials have expressed caution over proposals to introduce an Internet tax to compensate copyright holders for online piracy. The proposals, which were put forward by the Russian Union of Rightsholders, are said to be worth around $860m a year to creators.

russiaOver the years there have been many strategies put forward aimed at reducing online piracy.

Rightsholders have often pushed for tough legislation in the hope that hefty fines and lengthy jail sentences will encourage the masses to buy rather than download for free. Recent proposals in Russia, however, look at the problem from another direction.

During October the Russian Union of Right Holders (RUR) suggested that a fixed royalty fee should be paid to rightsholders in exchange for people receiving certain freedoms to deal with online content.

“[People would] get the right to freely and lawfully use for private purposes – including to receive, distribute and share – absolutely any content that is not excluded from the system of global licensing,” RUR told Izvestia.

The proposals envision Internet service providers obtaining “universal licenses” from rightsholders or their collecting societies in order to legitimize the ‘infringements’ of their subscribers.

While nothing has been set in stone, figures appearing in the press suggest an annual fee of anything up to $5 per subscriber. While the ‘tax’ could inflate ISP subscriptions by as much as 5% per year, reports suggest it could also bring in $860m for rightsholders.

Unsurprisingly, the proposals have a number of potential pitfalls.

Every Internet subscriber would be required to pay the tax, whether they are downloading copyrighted material for free or purchasing it legitimately. Also, public sharing of content would not be licensed, a serious limitation for most file-sharers.

Furthermore, royalty charges would be “per device”, including home connections and cellphones, meaning some people could end up paying multiple times, whether they ‘pirate’ or not.

For their part, ISPs have also expressed concerns that by accepting the proposals the Internet piracy ‘problem’ would be placed on their shoulders as they would have to collect fees from customers.

Even copyright holders seem to have issues with the proposals. Some say that no suitable system for distribution of royalties exists. Others are expressing concerns that the tax would amount to the legalization of piracy and the undermining of fledgling digital services.

Still, reports now coming out of Russia suggest that the whole thing won’t easily or quickly get off the ground.

Late Friday Mail.ru reported First Deputy Prime Minister Igor Shuvalov as saying that the government “won’t be rushed” into a decision on the licensing model.

All stakeholders need to negotiate, Shuvalov said.

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