Earlier this month, the culture and justice ministers in Sweden announced that courts would soon be able to demand ISPs give copyright owners information about suspected file sharers. While legal music downloads are on the rise, this has not been enough to offset falls in CD sales, which the music industry blames on piracy. It also believes ISPs are responsible for ensuring their users do not use their internet services for illegal activities.

Exetel's modified notice and disconnect system, which executive Steve Waddington said in a blog post had been operating for two years, prevents users who have been fingered as copyright infringers by a "recognised industry source or their legal representatives" from browsing any web pages. The user can still send and receive email but cannot surf the web until they resolve the issue with the issuer of the infringement notice, which in many cases is the anti-piracy watchdog of the local music industry, Music Industry Piracy Investigations (MIPI). And in a departure from MIPI's proposed system, instead of summarily disconnecting illegal downloaders, Exetel instead simply blocks their web surfing and gives the user the option of terminating their service if the issue can't be resolved.

Waddington said Exetel had already received emails from outraged customers looking to switch providers as a result of its piracy crackdown. But while MIPI may have succeeded in convincing Exetel to crack down on infringers, the idea has been rejected outright by the ISP industry body, the Internet Industry Association (IIA).

"At this stage there has been little movement from the [local] ISPs, however in light of the sea change that is occurring internationally we are hopeful that ISPs in Australia will voluntarily implement the scheme," MIPI general manager Sabiene Heindl said. "We would prefer not to take legal action against individual file sharers or ISPs in Australia and remain committed to a negotiated code of conduct." The IIA insists the proposal is problematic and unnecessary, saying ISPs should not be required to police the actions of their users or adjudicate on whether or not a person is infringing copyright. It feels there are already adequate procedures and remedies available to copyright holders through the courts and the Copyright Act.

Peter Coroneos, chief executive of the IIA, has said Australian ISPs are looking for a proposal that doesn't involve threatening and intimidating users. He said the music industry should instead focus its efforts on understanding why people steal music in the first place and provide a cheaper way for people to obtain tracks legally.