UK telecom regulator Ofcom detailed the code that ISPs and copyright holders must abide by when enforcing the contentious Digital Economy Act—a law where prolific pirates can face legal action after three warnings.

The act allows copyright owners to send infringement reports to broadband providers BT, Everything Everywhere, O2, Sky, TalkTalk, and Virgin Media. In turn, those ISPs will send letters to their customers whose accounts are connected to the report.

If a customer receives three or more letters in a 12-month period, they'll be put on a "Copyright Infringement List." The list is an anonymized document that enables copyright owners to see which of the reports they have made relate to subscribers who have received multiple notifications.

In the copyright holder wishes to do so, it can then get a court order to strongarm the ISP into revealing the identity of those customers. Then, legal action can take place. It's designed to put legal pressure on the most prolific infringers.

Ofcom says that the letter must also include tips on securing a wireless network to prevent others from downloading pirated content over the customer's connection. Plus, ISPs should offer suggestions on websites and services that offer legal and licensed content.

The letter will also include the number of copyright infringement reports connected to the customer's account. Customers can appeal the decisions—it costs £20 ($31.22), but you'll get that cash back if your appeal is successful. Ofcom will appoint an independent appeals body for this task.

The regulator has also detailed who will pay for the policing, appeals, and letters. Essentially, rightsholders will pay the most—they'll bear all the costs incurred by Ofcom, the majority of the costs from the appeals body, and 75 percent of the money spent by the ISP.

Rightsholders will get a discount for reporting in bulk, though. If a copyright holder sends 70,000 reports a month they'll pay £17 ($26.50) for each report. If they send 175,000, the reports will only cost £7.20 ($11.24) each.

Ofcom will now open a month-long consultation period, which closes on July 26, 2012. Subject to further review by the European Commission, the revised code will then be laid in Parliament around the end of 2012

Ofcom currently expects the first customer notification letters to be sent in early 2014.