The Russian IT firm Systematica Group has presented a technical blueprint to the Ministry of Culture for collecting royalties on the Internet. The concept belongs to the Russian Union of Right-holders, a group chaired by Oscar-winning film director Nikita Mikhalkov.
Systematica’s proposal would require Internet Service Providers (ISPs) to supply a mirror copy of all incoming and outgoing user data traffic.
After acquiring access to this mirror data, Systematica would identify media content in the traffic, record a digital fingerprint, compare it with a registry of such fingerprints and intellectual property metadata, and finally calculate a score with a special analysis model. Systematica says it would use “a combination widely available industrial technologies” to manage this process.
After comparing a digital fingerprint with its database, the mirror copy of the user data would be discarded, the plan’s authors say. The system supposedly collects only anonymous data, making it theoretically impossible to link individual Internet users to the consumption of a particular kind of online content. Copyright-holders would be responsible for providing Systematica with the intellectual property metadata.
How much Systematica’s project would cost to implement remains unknown. According to IT experts, the total price could be as much as $80 million. Creating the registry described above is expected to cost an additional $1 million.
The legislation originally proposed by the Russian Union of Right-holders would accredit an organization to finance the creation of the project’s technical platform. If the Russian Union were to receive such accreditation, it would apply for a bank loan, a source close to the group says. According to 2013 accounting records, the Russian Union had a surplus of almost 1.2 billion rubles ($19.3 million) in royalty collections. Data for 2014 isn’t yet available.
The platform designed by Systematica does not use Deep Packet Inspection (DPI). Instead, it proposes using “a combination widely available industrial technologies.”
According to the Russian Union’s original proposal, a specially authorized organization would be charged with collecting the Internet tax. Using Deep Packet Inspection (DPI), a form of computer network packet filtering with broad applications for Internet censorship, the new tax collection agency would monitor every Russian Internet user to measure the popularity of various kinds of content, in order to allocate royalty payments accordingly. The Belarusian company Giprosvjaz estimated that creating a system using DPI would cost several billion dollars.
In the Russian Union’s plan, the size of the Internet tax would depend on demand. According to preliminary data, the tax would fall somewhere between $1 and $3 for every Russian Internet user, netting artists somewhere between $200 and $600 million a year in royalties.
Several of the Russian Internet’s largest stakeholders, including major mobile network operators, Internet companies, and copyright holders, have opposed the plan to introduce an Internet tax. Several even signed a letter to Vladimir Putin, stating their objections. The Federal Antimonopoly Service and the Communications Ministry also refused to extend their support for the tax. Frances Moore, head of the International Federation of the Phonographic Industry, also expressed her reservations about the idea in a letter to First Deputy Prime Minister Igor Shuvalov.
Russian ISPs have also criticized the plan to introduce new monitoring and taxation, saying the technology required to analyze Web traffic for copyrighted content does not yet exist.
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