We are not fans of the "Three Strikes" approach to anti-piracy, but we will say that there are different versions of it and some are better than others. Moreover, while we do not think it is the definitive solution, it's a move in the right direction and something is better than nothing!!
How "Three Strikes" Works
"Three Strikes" is not what you think it is. It is not ISPs waving some magical technical wand and "knowing" illegal downloading is taking place.
In fact, it's sort of the exact opposite of that. What is being detected is illegal uploading. Moreover, the ISP is not doing the detecting.
The switch to DtecNet is unlikely to prove any more fruitful [than prior music industry efforts], since no anti-piracy company is capable of identifying uploads to anyone but itself, which makes mass-infringement almost impossible to prove.
After DtecNet or BayTSP "gets the goods," it then, on behalf of its clients (principally the movie makers, and among them, principally for what are expected to be blockbusters only) sends a letters to the ISPs notifying them of the uploading activity. The ISPs, under the "Three Strikes" authority then issue a "warning." Eventually, (the third strike), the internet user can be cut off from their internet connection.
Now think about this for a second Mr. Music Industry Executive: Is it financially feasible for you to hire DetecNet or its ilk to track every song you release, document it and notify the ISP? Right. No, it's not.
Movie makers may love it, but, "Three Strikes" is not an effective solution for the music industry.
One final thought: studies are starting to come out stating that the French HADOPI three strikes law is ineffective and in fact, piracy is increasing. These results are not surprising given the mechanics of the HADOPI approach as we detail above. First of all, the law has only been in effect for a few months (as of this writing). The process of determining uploading, communicating with ISPs, ISPs sending out their notices, etc. will take months. Moreover, the vast majority of IP is not being tracked and infringement is not being reported to French ISPs.
In a way, HADOPI is almost perfectly designed to create the kind of negative PR such an anti-piracy effort can ill afford.
One Benefit of "Three Strikes"
One thing Three Strikes does do is give IP owners an alternative to bringing an infringement lawsuit (which as we have noticed elsewhere on this site is very expensive to bring and even more difficult to win). As mentioned above, the IP owner hires someone to detect the infringement and then notifies the ISP of the infringer's IP (internet) address. The ISP knows who is behind that IP address and they warn them to stop the infringement activity. If the infringement persists, the infringer's internet access can be terminated.
It should be clear from this description that the IP owner never needs to actually know who the infringer is (by name and address), which they would need to know to pursue them legally. Moreover, the IP owner does not have to prove in a court of law under the rules of evidence that the infringement took place.
We don't know how this approach will fare in France where it is law now or in the UK and New Zealand where the Three Strikes approach looks poised to be enacted. But, we do think in the U.S., if it is ever adopted, it will face immediate litigation on constitutional grounds (due process, among other issues). We are not sanguine that it will hold up under legal review.