The UK government's Department for Business, Innovation, and Skills has concluded its consultation on how to pay for all the new copyright enforcement built into the Digital Economy Act.

The DEA is a sweeping, punishing copyright law that the former Labour government crammed through Parliament without debate in a closed-door, poorly attended vote hours before it called the next election (which it lost). The Act requires ISPs to send letter to their customers warning them that an entertainment company has accused them of infringing copyright (if this fails to reduce national levels of infringement by 70% in 18 months — which it will fail to do — ISPs will then be required to disconnect entire families from the Internet on the unsubstantiated accusation of a rightsholder).

The Act also allows rightsholders to demand that whole domains be censored across Britain, through provision of a Chinese-style Great Firewall of Britain.

One question that wasn't answered by the Act (that would have come out in the debate, if it had happened), is who will pay for this — the copyright industries, who are the beneficiaries of reduced infringement, or the ISPs, who would then bear the additional costs and have to pass them on to their customers, including the ones who aren't breaching copyright?

Now the UK government has answered the question: the ISP industry and its customers will subsidize multinational record labels and movie companies to the tune of 25 percent of the cost of sending out the letters. The Open Rights Group estimates that this will come out to £500 million in extra costs that all ISP customers will bear.

So much for the so-called ideology of the LibCon government — fair markets, proportionate justice, and small government. Instead, it's business as usual: smoke-filled rooms filled with powerful industrialists who use the state to distort the market at the public's expense.

Cor blimey! British ISPs must fund P2P copyright crackdown