After immense effort and with a background of controversy, in 2010 the then Labour government rushed through the Digital Economy Act (DEA) in the UK. That legislation contained provisions which would allow rightsholders to monitor alleged file-sharers and send them warning letters via their Internet service providers. But three years on and the implementation of the law is still well over a year (maybe two) away.

In the meantime the music business has concentrated on legal action to have file-sharing sites such as The Pirate Bay and KickassTorrents blocked at the ISP level. But despite their claims that this is an effective anti-piracy technique (and in the face of reports to the contrary), the labels have grown weary of waiting for the additional powers allocated to them by the DEA.

According to a Guardian report, the labels are currently in talks with Virgin Media, BSkyB and TalkTalk in an effort to have the ISPs implement a voluntary graduated response scheme for dealing with errant subscribers.

And the music biz, headed by the BPI, aren’t on their own. The negotiations have also included the British Video Association, an organization which represents a wide range of Hollywood studios and local broadcasters including the BBC and Channel 4.

So what do the labels and Hollywood want?

At the core is a three-strikes or graduated response-style scheme, which will see rightsholders monitor networks such as BitTorrent for infringements and send warning notifications to Internet subscribers via their ISPs. It appears a US-style ‘Copyright Alert’ model would be desirable but it’s almost certain that there will be calls for a tougher regime with harsher punishments such as throttling and disconnections. But industry dreams aside, there are issues with introducing a system like this on a voluntary basis in the UK.

In order to create an escalating response to serial offenders, someone will need to keep track of which subscribers have had letters in the past. It’s pretty much a certainty that on privacy grounds the ISPs would not freely share this information with rightsholders, but even holding onto this data themselves as part of a voluntary scheme could get them into trouble under the Data Protection Act.

And as far as negotiations go, already there appears to be problems. TalkTalk, a company that previously ran a campaign in direct opposition to any kind of anti-piracy punishment that includes subscriber disconnection, told the Guardian that while talks are indeed underway, the company would “never agree to anything” that would compromise their customers.

Virgin Media went further still, describing the industry’s demands as “unworkable.”

As Prime Minister David Cameron invites key UK music figures to Number 10 to have a chat about government support for their industry, the BPI have confirmed that anti-piracy proposals are on the agenda.

“We expect a range of issues to be covered, including encouraging the growth of legal digital music services in the UK and overseas exports,” a BPI spokesperson said.

“As concerns the Digital Economy Act, we will discuss with Government the need for swifter action to reduce online copyright theft, improve consumer awareness of legal services and make the UK the leading digital economy in Europe.”

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Anticipating on the possibility that not all customers will be interested in the monthly subscription service, the deal between Virgin and Universal also includes an anti-piracy section. That is, Virgin have pledged to go after their customers who share files illegally on BitTorrent and other file-sharing networks.

How exactly Virgin will prevent or discourage illegal file-sharing is unclear but the ISP itself will not spy on the download behavior of its customers or intercept traffic. Instead, they plan to warn those who download copyrighted content, based on evidence provided by third party tracking companies. Those who receive multiple warnings will experience a suspension in their Internet connection, lasting from “a few minutes to a few hours.”

Interestingly, less than a year ago Virgin publicly said that it would never disconnect alleged file-sharers, after they mistakenly threatened some of their customers with such a measure. There is “absolutely no possibility” of being disconnected, the company said at the time. Clearly they’ve had a change of heart.

In addition to this temporary disconnection, repeat infringers might face speed bumps or humps, meaning that their Internet speed could be decreased significantly, a measure that probably wont be very effective as a deterrent. The music industry is nevertheless happy with the deal and hope that many ISPs will follow Virgin’s lead.

“This is the kind of partnership between a music company and an Internet service provider that is going to shape the future for the music business internationally,” IFPI chairman and chief executive John Kennedy told Reuters commenting on the new deal, adding “It also marks new ground in ISPs’ willingness to take steps to protect copyrighted content on their networks, and that sets a very encouraging example to the whole industry.”

Geoff Taylor, head of the BPI was equally delighted about the deal and told the BBC: “It is very encouraging to see an ISP and a record label working together as creative partners. At the same time, the fact that Virgin Media will apply a graduated response system to tackle persistent illegal downloaders demonstrates that graduated response is a proportionate and workable way forward.”

Tomorrow the UK government will release the final version of the Digital Britain report where it will come up with detailed solutions on how ISPs and the creative industries should deal with the ‘piracy problem.’

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.