A breakthrough coalition of the MPAA, RIAA and other copyright holders have signed an agreement with AT&T, Cablevision, Comcast, Time Warner Cable and Verizon to curb piracy. Under the agreement the ISPs agree to send "copyright alerts" to subscribers whose Internet connections are used for copyright infringement. Repeated offenders will not be disconnected from the Internet, but could be slowed down instead.

As unofficially announced last month, a coalition of entertainment industry groups and several major U.S Internet providers have teamed up to curb online piracy.

At the center of their plan is a system to notify and educate suspected copyright infringers by sending them so-called ‘copyright alerts’.

According to the participants, including the MPAA, RIAA and all major ISPs, the warning system is likely to result in a massive decrease in online piracy in the U.S. All partners stress, however, that the agreement is merely a ‘common framework’ to deal with copyright infringements and it doesn’t oblige ISPs to disconnect users’ Internet access.

So what the plan?

The new agreement will streamline the current avalanche of DMCA notices Internet providers are already forwarding to their customers. A third-party will monitor file-sharing networks and collect the IP-addresses of suspected infringers. These will then be added to a database and forwarded to the Internet provider who will send a corresponding copyright alert.

This alert will inform the Internet subscriber that his or her account was allegedly used to share copyrighted content, and how to prevent this from happening in the future. If the same IP-address is spotted again a similar alert will be sent, and only after 5 ‘strikes’ will the Internet provider take action.

The ISPs have several options on how to deal with repeat infringers. One of the suggestions is to slow down their connection speed, but ISPs may also temporarily redirect the customer to a landing page which offers instructions on how to engage in a friendly and educational chat with the abuse department.

Before any of the above sanctions go into effect Internet subscribers have the right to call for an independent review at the cost of a $35 filing fee.

But will it be effective?

Not really. First of all this agreement only covers a few of the many sources of online piracy. The millions of U.S. Internet users who download via cyberlockers are not affected by this agreement at all, as these downloads are impossible to track by third parties. The same is true for the many online streaming portals which have become very popular recently.

The agreement is mainly targeted at BitTorrent users, but these can also bypass the copyright alerts quite easily. Signing up for a VPN or proxy does the trick, and the same is probably true for more obscure private BitTorrent trackers which are less likely to be monitored.

A recent survey in France, where Internet users can actually lose their connection, revealed that the new agreement might not be worth the cost. Only 4% of the polled file-sharers said they stopped sourcing music from illegal services out of fear of detection. In the UK, a recent survey by an ISP revealed similar results.

Despite the relative ease with which copyright infringers can bypass the warning system and the lack of deterrence, all parties involved are ecstatic about the new agreement.

“This groundbreaking agreement ushers in a new day and a fresh approach to addressing the digital theft of copyrighted works,” RIAA’s Cary Sherman trumpeted in a comment.

We have our doubts.