New Zealand content owners and Internet service providers are close to an agreement in principle on a voluntary code of conduct covering the implementation of new copyright legislation.

An independent mediation service is being touted as the solution to an impasse between copyright holders and ISPs over a section in the draft code, which the music industry feared would provide a get-out clause for P2P offenders.

The new law, which takes effect Feb. 28, requires New Zealand's ISPs to develop policies to terminate the accounts of persistent copyright infringers. The Telecommunication Carriers Forum, which represents the telcos, has issued a draft voluntary code of conduct to guide its members on how to meet the new law's requirements.

Music industry groups were concerned by a clause in the draft code that potentially could allow consumers to continue to use their account 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, following discussions last week between content owners and ISPs, a compromise solution has emerged, which would see a third party mediator rule on disputes between copyright holders and consumers over warning notices.

Ralph Chivers, CEO of the TCF, says there is still work to be done on how a mediation system would work, but he describes it as "a big step forward."

Anthony Healey, the Australasian Performing Right Association's (APRA) director for New Zealand operations, adds that the industry has never been opposed to the idea of an independent third party adjudicating on objections. "We are not opposed to this approach provided the process is fair and timely," he says.

The code itself will not be formally adopted until a public consultation process has been completed. Submissions on the draft close on March 7.

Meanwhile, opposition to the legislation continues in New Zealand. The Creative Freedom Foundation, which claims to represent artists and technologists, today (Feb. 23) launched an online 'Blackout' campaign, with Web sites replacing their usual content with a protest message about the legislation.

The action was backed by a number of high profile NZ media blogs; there has also been international support on portals such as Twitter and Facebook for another foundation initiative, in which users are urged to replace their photos with a "Guilt Upon Accusation" blackout message. In addition, last week the CFF presented a 5,000-strong petition to parliament asking for the legislation to be repealed.