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Britain's six biggest ISPs, the Government and the British Phonographic Institute (BPI) today signed a Memorandum of Understanding in which they pledged to "significantly reduce illegal file sharing".

Punishments including stripping repeat offenders of their broadband, throttling their connection and filtering their internet traffic all remain on the table.

But the BPI and ISPs have confirmed to PC Pro that no agreement has been reached on what constitutes a suitable punishment. Instead, the parties have a four-month consultation period to reach a conclusion.

A BPI spokesman told us that its preferred method of dealing with offenders remains its controversial "three strikes and you're out" scheme, under which broadband users are warned twice to stop sharing illegal files and have their broadband account terminated if they fail to respond to the previous two warnings. "That's what we believe is a sensible way to tackle repeat offenders," the BPI spokesman told PC Pro.

However, ISPs such as the Carphone Warehouse's

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TalkTalk remain rigidly opposed to such a penalty. "We will not divulge a customer's details or disconnect them on the say so of the content industry, but we will work with rights holders to develop a sensible and legal approach founded on protecting consumer rights and privacy," claims Carphone CEO Charles Dunstone.

A BT spokesman refused to comment on BT's preferred method of dealing with repeat offenders, saying that the ISPs, industry and Government will "come to a view about the effectiveness of those [proposed] solutions" by the end of the four-month consultation period.

Avoiding the courts

One measure that will be implemented immediately, however, is the sending out of hundreds of thousands of "informative letters" to customers of the six ISPs who are alleged to have downloaded or shared files illegally.

The BPI previously had to use the courts to force ISPs to hand over the names and addresses of customers, after identifying IP addresses that were being used on file-sharing sites.

Now the BPI will simply hand over the IP addresses of accounts it claims are being used for illegal file sharing, and leave it to the ISP to send out a warning letter.

"We never find out who the people are - and we don't want to know either," said the BPI spokesman. "We think that [the warning letter] will be incredibly effective. It will be a tap on the shoulder for some people."

The BT spokesman said he believed ISPs would bear the cost of sending out the letters. Last year, a similar deal between Tiscali and the BPI broke down in a row over who bore the costs of enforcement.