Olivier BOMSEL explains the economics of the graduated response

Olivier BOMSEL, French economist, has always presented interesting views on the media industry. Thus, he has been invited to participate to the French commission Olivennes. The outcomes of this commission have given the basis for the French graduated response.

It was normal that Olivier justifies the outcomes. In Decreasing copyright enforcement costs: the scope of a graduated response, he explains why it is an economically rationale decision.

Section 3 is my preferred one. He explains why free riding on copyright content was an incentive for a strong roll-out of broadband. ISPs had no incentive to fight piracy. According to him, once broadband successfully deployed, a second phase starts. ISP search new revenues through paid distribution. Butt due to piracy, cost of content raised. ISP have now some incentives to fight piracy.

Section 4 explains the graduated response. The purpose is to increase the probability to be caught, thus through fear have a deterrent effect.

With the French case, he shows that the ISPs will bear the cost of this fight and not the content owners. One interesting application of the polluters pay principle.

This section is less convincing. Nevertheless, the paper is highly recommendable.

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