The announcement came as the Government admitted that an industry-wide voluntary agreement to tackle illegal file sharing is unlikely to emerge. The Government has brokered a deal between content owners and the UK's six major ISPs on the writing to subscribers and on negotiation over what action to take against persistent illegal activity.
Those ISPs and the film and music industries will create a code of conduct governing what to do with subscribers who do not stop their activities when warned. No decision has yet been made on whether or not the code will require ISPs to terminate accounts which have been used for illegal file-sharing.
But the Government's consultation on the issue admits that this process will not solve the problem of illegal peer-to-peer (P2P) file-sharing.
"Despite a great deal of effort from all stakeholders a voluntary agreement at this time appears highly unlikely," said its consultation document. "A voluntary agreement would require the voluntary participation of all ISPs and it has become clear that we do not yet have this."
Because of this the Government has had to propose legislation which would enforce the code of practice across the ISP sector or force ISPs to introduce adequate anti-piracy policies.
"The Government’s preferred regulatory solution is to adopt a co-regulatory approach which takes the basic approach and principles that have been developed during discussions on a voluntary agreement and combines these with high level regulatory oversight and an underlying obligation obliging ISPs to engage with rights holders to tackle the issue of repeated infringement through P2P," it said.
The Government will introduce this obligation to take action on persistent illegal file-sharers. One way to fulfill that obligation would be to sign up to the code of practice, it said.
"ISPs who choose not to engage in the self-regulatory arrangement would remain bound by the underlying requirement to have an effective policy on unlawful P2P filesharing," said the proposal.
Though the deal does not answer all the questions about how illegal P2P file sharing can be combatted, one intellectual property law expert welcomed the move.
"I think this is quite a breakthrough," said Kim Walker of Pinsent Masons, the law firm behind OUT-LAW. "It is interesting that it is the rights holders that are policing the content. It was never going to be easy for ISPs to do it because they always sheltered behind the mere conduit safe harbour defence and they won't want to get involved in actively policing their networks not just for technical reasons but for legal reasons."
Walker said that the deal could present a way for ISPs to cut off subscribers without alienating customers.
"I think it's rather convenient for everybody that Ofcom is going to be involved in the consultation on what sanctions might be involved because that has postponed the decision and taken it out of the direct hands of the ISPs," he said. "It would rather indicate to me that Ofcom might end up having to advocate some kind of change in the law to make it easier for everybody to take action without ISPs violating their terms and conditions."
The Government said earlier this year that if the ISP and content industries could not agree to work together on illegal file sharing it would create legislation dealing with it.
"Britain's creative industries have grown quickly in the last 10 years and will play a bigger role in our future," said Culture, Media and Sport Secretary Andy Burnham. "Their success is critically underpinned by workable systems of copyright and that is why the issues we are discussing today go to the heart of our economy. We made a commitment to tackle these difficult issues and I am encouraged by the new focus and momentum. But we want solutions that work for everybody."
The Memorandum of Understanding states as its aim a significant reduction in illegal file-sharing activity within three years. It contains agreement from six ISPs that they will engage in a three-month trial during which they will write to 1,000 infringing subscribers a week.
The Memorandum was signed by BT, Carphone Warehouse, Virgin, BSkyB, Orange and Tiscali. No decision has been made on what action to take against persistent law breakers, but the Memorandum includes an agreement that a proposal will be produced within four months, and that it will be subject to approval by telecoms regulator Ofcom. No direct mention is made in the Memorandum of cutting-off subscribers.
"The group will report in 4 months and look at solutions including technical measures such as traffic management or filtering, and marking of content to facilitate its identification. In addition, rights holders will consider prosecuting particularly serious infringers in appropriate cases," it said.