The Commercial Court of the country has recently started the hearing of a challenge by a number of record companies targeted at forcing telecoms company UPC to disconnect its subscribers accused of illegal file-sharing.

Such music labels as Universal Music, Sony Music and Warner Music are all seeking a “graduated response” regime, which may force the companies to disconnect the customers, similar to the one implemented by Eircom ISP.

According to record companies, they keep losing millions each year as a result of Irish Internet users illegally sharing copyrighted music via file-sharing services. After Eircom ISP struck a settlement with record companies in 2009, the company enforced a so-called “graduated response” or “three strikes” policy.

The Internet service provider now informs the infringers that they violate the law, provides them with data on the alternative ways to obtain the desired content and finally disconnects them if the subscribers continue to infringe after receiving the first two warnings.

By the way, the music industry has already taken UPC to court 5 years ago, in attempt to force it to block access to illegal download services, but did not succeed. In two more years, the government amended the law and enabled the record companies to seek court orders in order to force ISPs to block portals that facilitate illegal downloading of copyrighted content. Since then, the music industry has successfully sought orders to force the block of specific websites.

In the case against the UPC, the representatives of the record companies pointed out that the graduated response system is a reasonable step for the ISP to take in response to a situation damaging to copyright owners. The system in question had already been agreed with Eircom, and the music industry is contractually bound by that agreement to reach similar agreements with other Irish ISPs.

The main problem for the both sides of the potential agreements is the costs involved in implementing a graduated response system. Apparently, the record companies consider UPC's estimation of the costs involved as excessive.

It is known that UPC has 28.5% of the fixed line broadband market in the country and a substantial number of its subscribers are using it to illegally share music. In the meantime, the record labels point out that blocking of individual websites, like The Pirate Bay, does not address the issue, due to the nature of P2P technology.