A coalition of five major Australian service providers has released a proposal for dealing with Internet piracy which would see ISPs warning customers if they had breached copyrights online.

The coalition which includes Telstra, Optus, Primus, Internode and iiNet, is working with industry groups the Communications Alliance and the Internet Industry Association. The group outlined their Notice Scheme in a discussion paper that is available online at the Communications Alliance website. Under the proposed scheme, ISPs would forward education and warning notices to customers whose broadband connections have been detected undertaking activity which might infringe copyright laws. If the user already accumulates three warnings and one education notice, the ISPs would send a discovery notice to the customer. The discovery notice would serve as a warning that their personal details may be subpoenaed by the copyright holder.

Copyright holders will have to demonstrate that they have effective piracy detection technology before they can take part in the scheme. The ISP will not impose sanctions of the customer or cut off their Internet access. The ISP will give the customers the right to appeal any notices they receive if they feel they haven't broken any copyright laws. Any legal action will have to be undertaken by the copyright holders.

Communication Alliance CEO, John Stanton said that the proposal was a positive initiative by ISPs to address the problem of online piracy.

"We believe the Notice Scheme can greatly reduce online copyright infringement in Australia, while protecting consumer rights, educating consumers about how to access legal online content and helping Rights Holders to protect their rights," Stanton said.

Stanton notes that it is equally important for Rights Holders to provide consumers with access to legal and affordable content like movies, music and TV shows online to reduce the need for customers to find that content through illegal means. The proposal will still need further consultation with Rights Holders, consumer representatives, the Federal Government and the ISP sector before an implementation timetable could be finalized.

The issue of online piracy has been hotly debated in many countries lately. In the United States the Stop Online Piracy Act, an anti-infringement bill is making its way through the U.S. Congress with its companion bill PIPA or Protect Intellectual Property Act is working its way through the U.S. Senate. If passed the legislation would allow the U.S. Department of Justice and copyright holders to seek court orders against websites accused of facilitating copyright infringement. Recently the European Court of Justice in Luxembourg ruled that Internet service providers could not be required to monitor their customers' online activity to find out if they are illegally sharing music and other copyrighted material.