PROTECT IP Act Could Cost Taxpayers, Private Sector Millions

Taxpayers in the United States could soon be stuck footing the bill for some very costly copyright infringement enforcement. For those that don't know, the PROTECT IP Act (Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011 or Senate Bill S.968) is a piece of controversial legislation introduced on May 12, 2011 intended to force private ISPs, search engines and other parties to censor websites accused of facilitating copyright infringement. The bill is supported by a large number of infamous IP-protective agencies, including the MPAA, Viacom, SAG, the U.S. Chamber of Commerce, and others.


The legislation is a re-write of the Combating Online Infringement and Counterfeits Act, which failed to pass in 2010. Opposition parties, such as the EFF, Google, eBay, and Human Rights Watch, decry the legislation because of fears that it will place free internet in danger. The bill focuses on websites not registered in the United States, and would give the U.S. Department of Justice the power to seek a court order against websites that have been cited as infringing on copyright law, and then to demand "information location tools" (terms borrowed from the Digital Millennium Copyright Act) to make the target website invisible, basically by "pruning" websites from domain name servers inside the U.S. The bill does not specify what constitutes an infringing website, and allows for an injunction to be issued without notification to the allegedly infringing site.

Based on estimates by the Congressional Budget Office, the enforcement of PROTECT IP will cost taxpayers just under $10 million a year. The majority of the money would be spent simply hiring new DOJ employees and agents for support and to take legal action against infringing websites, working out to $47 million over five years just for the new hires. This is assuming that the estimates have not been down-played to speed up the bill's passage.

Another important, and yet conveniently ignored, concern with the bill is just how much it could cost the private sector. While the CBO is legally required to estimate whether proposed legislation will cost the private sector more than $142 million, in this case the CBO has refused estimates because of "uncertainty about how often and against whom the Department of Justice or copyright holders would use the authority" that the legislation will give them.

Essentially, this leaves ISPs, search engines, and credit card networks in the dark as to how this legislation could affect them financially. The constant updating and enforcing of blacklists across hundreds or thousands of firms would surely not be cheap, and brings into question just how well any money recouped through enforcement (which is a debatable issue in and of itself) would off-set the costs of the enforcement to begin with.