"Three strikes" for Ireland - Eircom, music industry settle filtering case

The big news of the day in Ireland is that Eircom and the music industry have settled the case in which the music industry had demanded that Eircom monitor users' connections to block peer to peer filesharing (background here). Instead the industry has dropped the action on condition that Eircom introduce a "three strikes" system where users accused of filesharing by the music industry will be disconnected after two warning letters. According to Eircom it has agreed to:

1) inform its broadband subscribers that the subscribers IP address has been detected infringing copyright and

2) warn the subscriber that unless the infringement ceases the subscriber will be disconnected and

3) in default of compliance by the subscriber with the warning it will disconnect the subscriber

More from Digital Rights Ireland | EFF | ars technica | Boing Boing | Daithi. Oisin, commenting on Lex Ferenda, makes some interesting points which in the spirit of the litigation I'm shamelessly going to copy (though I'm not sure that I agree that Eircom will need to change their terms of use - the existing policy is already drafted to allow termination for almost any infraction):

What’s probably going to happen is that this whole issue is going to shift from being an IP/regulatory law one to being a contract/ consumer protection law one. Two points spring to mind.

First, to put this settlement into practice Eircom will have to modify its terms of service for all its current customers (without giving any legal consideration for a unilateral modification of a contract) which could pose considerable enforceability problems. Moreover, to properly incorporate the ‘three strikes and your out’ rule into its contracts Eircom is probably going to have to draw this new provision to the attention of its subscribers (so we may, indirectly, get to figure out what the terms of settlement were).

Second, and more interestingly, if, and when, Eircom seeks to terminate someone’s service, we may finally get some litigation as to whether or not these often unfair, impenetrable user agreements are actually enforceable or not. We’ll finally get to see if the Unfair Terms Directive, along with all the old common law and equity cases on enforcing one-sided terms that weren’t negotiated or drawn to the parties attention have any bearing on user agreements.

My take? This isn't really a win for the music industry. They were clearly hoping for an outright win requiring all ISPs to filter and setting a precedent in a common law jurisdiction to match SABAM v. Tiscali. Instead they've merely achieved an agreement with one ISP - albeit the largest - which doesn't go any further than they might have been able to achieve by negotiation in the first place. As Ronan Lupton points out the agreement is not enforceable against the rest of the industry, and it is debatable whether other ISPs will show any appetite to come on board. Moreover, if three strikes is challenged as Oisin suggests then it will receive much less judicial deference than if it had been adopted as part of an industry wide deal with explicit government support.

It is, though, a loss for the user. The three strikes process in this case is procedurally
unfair and represents an extreme model largely rejected elsewhere.