Internet service providers will be able to charge rights holders up to $25 for processing an allegation of copyright infringement, Justice Minister Simon Power said today.

The Telecommunications Carriers Forum, representing the major phone companies and internet service providers, had wanted $40. Rights-holders, according to an MED summary of submissions, had wanted $2 or lower.

An internet service provider will then send three warning letters to the alleged offender.

Fees were considered by cabinet under the technical regulations of the Copyright (Infringing File Sharing) Amendment Act 2011, which comes into effect on 1 September.

If warning letters fail to resolve the issue, a a rights holder - such as a movie studio or record company - can takes its case to the Copyright Tribunal, which will cost $200.

Mr Power said the fees were a compromise between what ISPs and rights-holders wanted. Internet service providers have been worried about the cost of the new law if rights holders bombard them with complaints, as has happened in France and other countries where similar laws have been introduced.

Shortfall
An MED paper on the regulations, however, revealed Mr Power wanted a $20 fee. Cabinet disagreed, nudging it upward.

A rights holder has to identify an alleged offender, and provide their internet service provider with details about their which copyright files they've acccessed, and when.

The MED paper sees a "$0.060m" shortfall, or what most humans would call $60,000, during the new law's first year of implementation.

It projects the $200 fee for taking a case to the Copyright Tribunal will lead to a 6% cost recovery "based on a case volume of 250" or 12% "based on a volume of 500 cases per year."

The fees will be reviewed after six months.

InternetNZ chief executive Vikram Kumar told NBR he was surprised to see the 500 cases per year figure quoted in the MED's regulations document. 

"That's substantially different from the 5,000 per month per ISP that was included in the regulations consultation," Mr Kumar said.

The InternetNZ boss added that "The degree of discretion given to the Copyright Tribunal is absolutely right and welcome. Each case can be dealt with on its own merits."

More funding, more members
Copyright Tribunal funding was increased by $838,000 to account for its extended jurisdiction.

The tribunal - which currently has a chairman and two members (all part-time) - is due to get two extra members to accommodate its increased workload as the act kicks in.

The current chair is Victoria University legal academic Professor Susy Frankel, backed by members Peter Dengate-Thrush (who also serves on the global internet organisation Icann) and the University of Auckland law school's Paul Sumpter.

The act maintains the so called "ultimate sanction" of disconnecting an account holder's internet connection if they (or one of their family members or employees) repeatedly ignores copyright warnings. 

However, in a compromise deal a disconnection can only be by an Order In Council, created by a cabinet minister and signed by the Governor General - a process so arcane that Labour (which voted for the amended version of the act) said it had effectively been "taken off the table".

Some continue to oppose elements of the act, however, including its onus on an accused to prove their innocence.