U.K. trade body the BPI claims that Internet Service Providers (ISPs) are exaggerating the cost of measures to tackle piracy.

The government's Digital Economy Bill, currently being debated in Parliament, would oblige ISPs to detect and notify customers suspected of infringing copyright.

ISPs such as BT have suggested the cost of introducing these measures could add up to around £25 ($41) a year for every subscriber, costs which would likely be passed on to the consumer.

However, the BPI commissioned a report from technical consultancy Sweet Consulting, which shows that introducing measures to identify and notify copyright infringers would cost £13.85 million ($22.5 million) in the first year, £9 million ($14.6 million) in the second, and £3.45 million ($5.6 million) in the third. This is a long way from the £25 a year figure - as low as 24 pence (39 pence) per individual ISP subscriber when costs reach £3.45 million.

"Our evidence shows that ISPs are trying to pull off a massive con job on the British public with their back-of-fag-packet figures - the true costs to them of dealing with piracy will be a tiny fraction of their ridiculous guestimates.

"It's time for Britain's ISPs to stop spreading scare stories and face up to their responsibility to help tackle illegal filesharing."

A separate report commissioned by the Creative Coalition Campaign suggested a similar impact, with annual running costs of £8.5 million ($13.8 million).

Charles Dunstone, CEO of the TalkTalk Group, wrote in the Daily Mail on Jan. 18 that other measures in the Bill along with the costs of tackling piracy would total £30 ($48.80) a year.

"Demand modeling shows this could make Internet access unaffordable for 600,000 hard-pressed families. So much for the government's claimed commitment to 'digital inclusion,'" he wrote. "For the record, we make no money out of copyright infringement. The extra traffic costs us money as we have to add additional capacity to the network to carry the data."

The government's own impact assessment published in December 2009 concedes that there would be some major costs involved in the identification and notification system.

It identifies annual average costs at between £7.5 million ($12.2 million) and £24.5 million (39.9 million) for ISPs, although it adds a further £19 million ($30.9 million) in annual costs for mobile network operators, where identification would be more difficult technically as IP addresses are shared by multiple customers.

However, the joint study by the department for business, innovation and skills and the department for culture, media and sport suggested this would result in ISPs passing on a price increase for broadband customers of 0.2% to 0.6% - or 40 pence (65 cents) to £1.40 ($2.28) a year.

The reduced demand for broadband connection likely to result from the price increase is estimated at between £2 million ($3.3 million) and £9 million ($14.6 million) a year for the entire ISP industry.