Mired in controversy since its inception but held up as an example by entertainment companies looking to spread the model worldwide, France's Hadopi anti-piracy law now looks set to be scrapped. A just-published government-commissioned report recommends that the graduated response system, which promised fines and disconnections for errant file-sharers, should be shelved and replaced with 60 euro per time automated fines.

Hadopi was ex-President Nicolas Sarkozy’s baby, built on the notion that punishing file-sharers and disconnecting them from the Internet would woo them back into music and movie stores and away from unauthorized sites. But now that particular dream seems to be coming to an end.

Last August, French Minister of Culture Aurélie Filippetti commissioned former Canal Plus chairman Pierre Lescure to advise on policies for pushing forward local entertainment industries in the digital age.

Yesterday a nine-member panel, lead by Lescure, produced a 700 page report. It recommends that the Hadopi agency, the body that currently administers the so-called “Three Strikes” system, should be resigned to history after spending tens of millions of euros but achieving just one 150 euro fine during its reign.

The report said that the anti-piracy regime had not been effective. Although a reduction in illicit file-sharing on P2P networks such as BitTorrent had been achieved, there had also been an increase in use of other services, including streaming, over which Hadopi has no control. Moreover, legal offerings haven’t benefited as promised.

But contrary to hopes that the so-called ‘graduated response’ would die along with Hadopi, the report suggests that the agency’s tasks, including that of fighting Internet piracy on the ground, should be handed over to the Conseil supérieur de l’audiovisuel (CSA), the agency which regulates electronic media in France.

However, things will change. The thorny issue of Internet disconnection for infringement, which generated the most controversy but was never actually exercised, looks set to be replaced by a system of automated fines after two warnings, as suggested earlier by the music industry.

Under Hadopi, fines extended to a theoretical maximum of around 1,500 euros, but recommendations by Lescure suggest that these should be reduced to around 60 euros each, but with increases applied to repeat offenders. The panel also recommend decriminalization, so offenses of this nature do not call on police resources or result in a criminal record.

Instead of primarily targeting citizens, France should refocus its anti-infringement drive towards more organized for-profit sources of piracy, Lescure said. Search engines and advertising agencies should be encouraged to help in the fight, but domain seizures and blocking were not advised due to the risk of causing collateral damage.

The abolition of Hadopi was among a list of 75 proposals handed to French president François Hollande yesterday. Others include a 1% tax on smartphones, tablet, laptops and other Internet-enabled devices.

“Companies that make these tablets must be made to contribute some of the revenue from their sales to help creators,” said Culture Minister Aurelie Filipetti.

Revenue raised – an estimated 86 million euros – would be funneled back into French movies, music and other art and would replace current levies on recordable media such as blank CD/DVDs, hard drives and memory.

French lawmakers are now expected to review the recommendations and report back during the summer.