Fears of economic fallout from internet data retention plans

PROPOSED RULES for the retention of internet data could damage Ireland's efforts to attract foreign direct investment and hinder efforts to encourage indigenous internet-based businesses.

Consumers and businesses will pay more for internet services as internet service providers (ISPs) pass on costs for managing and storing internet data under the Government's proposed data retention legislation.

But more than ISPs may be affected by the legislation. A wide range of businesses and internet services, including those provided by consumers, could be liable for storing and managing data under the broad definitions of a "service provider" in the proposed statutory instrument that would be used to implement the European Communities (Retention of Data) Regulations 2008.

Irish ISPs say the Government's intention in the legislation to expand the definition of "serious offences" from crimes with a minimum five-year sentence to crimes with a sentence of six months means that they could face hundreds of Garda requests monthly for data.

Large ISPs may face the prospect of hiring staff who will do nothing but process such requests, says Paul Durrant, general manager of the Internet Service Providers' Association of Ireland (ISPAI).

"When this directive was proposed on the EU side, we were told this legislation was necessary to combat serious organised crime and terrorism. We were talking about crimes of a very serious nature that don't occur that often."

Therefore, data would not be requested very often and ISPs could likely absorb such costs, he said.

But Irish proposals to make retained internet and call data available to Garda investigations into virtually any crime means ISPs could be swamped with requests.

The Government has indicated that it intends ISPs to cover such costs.

"At the end of the day, we are commercial organisations providing a public service, and we're there to make a profit," said Durrant. "We will have [ to charge customers] to cover it." However, the legislation defines a "service provider" as not just an internet-based communications network provider (ISP), but also more broadly as "a person who is engaged in the provision of a publicly available electronic communications service".

Industry observers fear the vagueness of these definitions could make multinationals jittery about prospective costs and privacy concerns, and dampen inward investment in the much-valued "knowledge economy" sectors such as technology and web services.

In addition, many of the cutting-edge young companies emerging from Ireland are in the web services and social networking sectors that could be directly affected by the data retention legislation and may be required to retain data and manage it for possible Garda investigations.

Legal sources say the definition could include any company or individual providing internet-based services, ranging from search websites such as Google to online e-mail and web portal sites such as Microsoft's Irish-based MSN service.

Even individuals who run online discussion boards, collaborative "wiki" websites or weblogs could be required to retain data.

"This could definitely affect our economy because we are so reliant on the technology industry, the shared services sector and so on," says Durrant. "If companies start saying 'Hey, the regime in Ireland is onerous', that could tip the balance for those companies locating elsewhere."