The Government plans to crack down on copyright infringement and internet pirates, but the two options it is considering run counter to basic liberties and freedom of speech, writes Chris Berg.

One of the quickest ways for a company to cut costs is outsourcing. Even better when you can have the Government do your outsourcing for you.

This is the basic political logic behind the upcoming crackdown on online copyright infringement.

For the last year George Brandis has been hinting at a legislative crackdown on copyright infringement. It wasn't quite an election promise in 2013, but it was definitely on the cards.

Now nine months into Government the Coalition is reportedly on the brink of announcing its approach. (Momentum for the policy was temporarily slowed by the unfortunate political storm around the budget - it was due to go to cabinet in early May.)

Here's what we know. There are two proposals being considered, "graduated response" and a website blocking scheme.

In a graduated response scheme - sometimes called "three strikes" - internet service providers are required to penalise their users for pirating material on a scale of increasing severity.

Graduated response has been introduced in a number of countries around the world, including France, New Zealand, the United Kingdom, and South Korea.

Typically the scheme works like this.

Copyright owners notify an ISP that they believe a user has pirated copyright material. The infringing user is initially issued with warning notices by their ISP.

If those warning notices are ignored and the user continues to infringe, more serious consequences follow.

The final punishment is the disconnection of internet service altogether.

Why disconnection? Simply because disconnection is the most severe penalty ISPs can mete out. Their only "coercive" power over their customers is to stop doing business with them.

Under Australian law downloading copyrighted material is not illegal - it is not a crime, in any formal sense. (There are some copyright offenses which are criminal: things like importing, selling, or exhibited pirated material. Basically copyright infringement on a commercial scale. But simply downloading a movie for personal use is not.)

Rather, piracy is a civil matter. Enforcing copyright requires a copyright holder to sue the pirate themselves. But litigation is complicated and expensive. Determining exactly who has pirated a particular film or music track is not easy. Lawyers are pricey.

Litigation has an even bigger cost - to reputation.

American copyright holders did themselves enormous reputational harm earlier this century when they tried to sue the piracy problem into submission.

There were some appalling cases. Take the legal action against this single mother in Minnesota, who was threatened in 2004 with a $540,000 lawsuit after her daughter downloaded some music - a damages bill orders of magnitude larger than her $21,000 annual salary.

Stories like these didn't just make the industry look greedy - it made them look cruel and vindictive.

Outsourcing the problem to ISPs with a graduated response scheme avoids the costly and controversial need to sue otherwise law abiding citizens.

Better to have the ISPs look like they're the cruel and vindictive ones.

So unsurprisingly, as Nicolas Suzor and Brian Fitzgerald pointed out in an an important 2011 paper, graduated response is counter to basic principles of the rule of law.

Disconnecting someone from the internet is a big deal. It's easy to forget how integrated internet access is to the modern world. There is hardly a public or private service that does not rely on digital interaction with customers.

Graduated response schemes impose such a punishment on internet users without also granting them the legal protections they would receive if they were taken to court.

For instance, graduated response schemes offer little in the way of due process. Copyright infringement is not always clearly proven. The schemes place the burden of proof on the accused, rather than the accuser. Graduated response can easily become draconian.

And for what? There is no reliable evidence to suggest that graduated response schemes reduce copyright infringement, as one detailed study published in the Columbia Journal of Law and the Arts found this year.

The second proposal the Abbott Government is considering to tackle piracy is certain to be even less effective: requiring ISPs to block websites that facilitate the downloading of pirated material. Websites like the Pirate Bay host torrent files through which people share content.

Never mind that some of that content is "legitimate". The last decade has conclusively demonstrated that when one avenue for piracy is closed off, another quickly appears. Exhibit A: Napster.

But more importantly, any such policy would come head to head with the Government's professed support of freedom of speech.

In 2010 Malcolm Turnbull claimed that the previous Labor government's internet filter was "dead, buried and cremated, and if it shows any signs of revival it will then be exorcised".

But a policy that blocks torrent websites will be, in a very real way, the internet filter by other means.

A crackdown on copyright infringement was not one of the Coalition's 2013 election promises. Defending free speech was.

If the copyright lobby convinces the Government to take responsibility for protecting its business model, that promise will be completely broken.

Chris Berg is policy director at the Institute of Public Affairs. Follow him at twitter.com/chrisberg. View his full profile here.