A Whitehall paper dealing with the Digital Economy Act has declared that internet service providers will pay 25 per cent of the cost of notifying customers believed to be infringing copyright, as well as the same percentage of the cost of appeal administration.
The remaining costs will be shouldered by the copyright holders, who must separately identify users who they consider to be infringing copyright and then notify their ISP.
The ISP must issue three warnings to the consumer before legal action can take place under the act. ISPs have argued that, as they see no benefit from the actions of the bill, they should pay no costs. They also claimed that costs would have to passed on to consumers.
The Digital Economy Act was passed this year, and claims to protect the rights of copyright holders against illegal downloading, piracy and digital replication.
The clarification, published in a paper entitled Online Copyright Infringement: Government Response, and reported by Technollama, makes clear that no cost will fall to the public, although successful prosecutions will likely result in a fine and payment of costs for offenders.
"The notification costs of ISPs and Ofcom as regulator are to be split 75:25 between copyright owners and ISPs on the basis of the costs of an ISP which is an 'efficient operator' as verified by Ofcom. The regulator costs also include the costs related to the appeals system, " said the report.
The paper argues that asking copyright owners to foot 100 per cent of the bill would not incentivise ISPs to pursue the charges with due efficiency.
Speaking to the Telegraph, communications minister Ed Vaizey defended the ruling.
"Protecting our valuable creative industries, which have already suffered significant losses as a result of people sharing digital content without paying for it, is at the heart of these measures," he said.
"The Digital Economy Act serves to reduce online copyright infringement through a fair and robust process and at the same time provides breathing space to develop better business models for consumers who buy music, films and books online.
No fees are due to be charged to consumers if they decide to appeal against a charge under the act, although the government has indicated that it reserves the right to change this should it see fit.
Finalisation of the code by Ofcom was initially timetabled for December, 2010 - but complications arising from the submission of the costs scheme to the EU has seen the regulator granted a three month extension.
Unnamed copyright owners' responses to the paper indicated that they largely felt that the allocation ratio of costs was "aribitrary", feeling instead that ISPs should handle the bulk of them as it would be their notification processes which inferred the costs.