New Zealand has edged closer to adopting a "three-strikes" policy.

Parliament's commerce select committee has recommended several changes to the Copyright (infringing File Sharing) Amendment Bill, and contains a compromise on Internet account termination.

The bill will repeal controversial section 92a clause of the Copyright Act and put in place a three-notice graduated response, which would see ISPs sending warning letters to copyright infringers.

Implementation of the clause had been postponed, revived and ultimately shelved following a high profile scare-mongering campaign from Web user associations.

In a report released today (Nov. 3), the Copyright Tribunal will be given extended jurisdiction to provide a fast track process for illegal file-sharing claims and will be able to award penalties of up to $15,000 New Zealand ($11,600).

The bill as referred to the select committee included the power for a District Court to suspend an Internet account for up to six months, in circumstances deemed "appropriate."

The committee recommended that this power be included in the Copyright Act but not brought into force unless the notice process and the remedies in the Copyright Tribunal are ineffective. The U.K. took a similar approach and will review the impact of warning notices before implementing any system of account suspension or technical measures.

It's expected the issue will be reviewed in two years' time, coinciding with the five-year review of the digital copyright amendments that were passed in 2008.

Commerce Minister Simon Power today welcomed the changes to the bill, claiming they would help the document become "more workable and effective." Once enacted," he declares, "this legislation will discourage illegal file sharing and provide more effective measures to help our creative industries enforce their copyright."

In other key recommendations unveiled today, the notice regime will not apply to cellular mobile networks until August 2013.