BT and TalkTalk, the two largest broadband providers in the UK, have lost an appeal over measures in which ISPs would be forced to act as copyright infringement 'police' on their networks.
Their bid to overturn a High Court decision backing the measures, which is thought to help claw back the thought to be £400 million lost each year in lost revenue, was turned down this morning.
ISPs will now have to send letters to alleged copyright infringers and file sharers warning them that their service could be cut off and barred from accessing the Web.
For ISPs, filters and blocks will have to be put in place at their expense, which will surely be passed onto the customer in higher broadband fees. For customers, it could result in users being cut off from the Web.
BT with 8 million users, and TalkTalk with 4 million users, makes up around one-tenth of the UK population.
The ISPs had argued that the Digital Economy Act, which was rushed through Parliament during the last few days of the previous Labour government, was incompatible with European law. Today's appeal closes two years of legal challenges, and confirms that it is compatible with Europe.