The New Zealand music industry is cautiously optimistic that new copyright legislation relating to Internet service providers will still be implemented, despite a last minute U-turn by the government.

Prime minister John Key announced that the government would be delaying by a month the introduction of a controversial clause that requires to ISPs to develop policies to terminate the accounts of persistent copyright offenders. The government had previously said it had no plans to either repeal or delay the implementation of Clause 92A.

The Telecommunication Carriers Forum, which represents the country's main ISPs, has already issued a draft voluntary code of conduct to guide its members on how to meet the new law's requirements. However, the code would not be ready before the new law was to take effect on Feb. 28, so the government has put back the law's implementation date until March 27 to allow for the code to be ratified.

What concerns some in the music industry is that the prime minister also said the legislation - a legacy of the previous Labour administration - will be scrapped if a voluntary code cannot be agreed. Although the ISPs are working on a voluntary code, they have made no secret of their opposition to the legislation.

Anthony Healey, director for New Zealand operations at the Australasian Performing Right Association, is disappointed by the government's decision, particularly since the content owners and TCF were already close to an agreement in principle on the draft code.

However, after a meeting today (Feb. 24) with commerce minister Simon Power, Healey says he remains confident that the clause will still be implemented. According to Healey, the government felt that it was important a voluntary code was in place before the legislation was implemented.

TCF chief executive Ralph Chivers also signaled that the ISPs are still committed to the idea of a voluntary code. "Recent discussions between the TCF and copyright holders about the content and operation of the code have been constructive, and it seems likely that we will be able to reach an agreement on all outstanding matters in the near future," he said.

The main stumbling block between the two sides had been a section in the code that would allow consumers to dispute copyright warnings. The music industry believed that this would allow copyright offenders to continue to use their accounts to access P2P networks if they repeatedly disputed warnings from ISPs. Under the draft code, a termination notice can only be issued after three undisputed warnings.

However, an agreement was reached in principle last week on a compromise solution, which would see a third party mediator rule on disputes between copyright holders and consumers over warning notices.

At his press conference, prime minister Key also stressed the government's commitment to the protection of copyright.

"I think we need a bit of give and take on both sides," he said. "But I don't think we could sit back and realistically say that we are going to have no copyright laws on the Internet, because that would make a free trade agreement with America impossible."

However, he added that even if the voluntary code did get the go-ahead, the government would review the situation in six months to be sure that the system is working.

Meanwhile, Irish ISP Eircom's agreement to tackle illegal file-sharing sites (Billboard.biz, Jan. 29) has now become an official arrangement with the majors. After agreeing to introducing a three-strikes system for users sharing copyrighted material, which would ultimately cut off their connection, Eircom is also planning to block access to file-sharing sites.

In a letter sent to other Irish ISPs, the Irish Recorded Music Association (IRMA) confirmed the deal with Eircom and advised others to take similar measures or face legal action.