The government will not push ISPs to pursue illegal file sharers.
Intellectual Property minister David Lammy claimed that the legislation would be too complex. France, among other countries, has supported tough action on file-sharers, who the industry claims cost them dear.
Mr Lammy told the Times: “We can't have a system where we're talking about arresting teenagers in their bedrooms. People can rent a room in an hotel and leave with a bar of soap - there's a big difference between leaving with a bar of soap and leaving with the television.”
Representatives from the music industry said they were disappointed by Mr Lammy's comments. One senior figure said: “The relative cost of stealing a bar of soap from an hotel might be small, but if it came to seven million people nicking the soap each year, which is what we have in the music industry, I'm sure that hotel chain would do something about it.”
ISPs, on the other hand, welcomed the news. British Telecom said: “We're still hopeful that an amicable solution, without the need for legislation, can be reached. It doesn't make sense to try to get people online and at the same time scare them away.”
Simon McCready, from Deloitte's IT Risk team, said: “The communications networks which deliver content are seen as being the low value part of the chain, however the expectation for them to police the traffic flowing across their networks comes with a cost.
“Why should ISPs cooperate when they are not receiving much of the revenue pie? Very high network usage has a cost to the network operator so it would be in their interest to monitor this. However many believe that it is simply not possible to control access to such content, and if you can't shut it down then you'd better work out how to monetise it.
“Apple has recently removed its DRM from iTunes to open up the market for non-iPod users, which could be construed as an acknowledgement of this and a way to increase their market.”