Irish Internet firm to shut off illegal music users

DUBLIN, Jan 29 (Reuters) - Irish Internet provider Eircom has agreed to disconnect users who download music illegally from the Web in a settlement with four major record companies that Irish media said was the first of its kind in the world.

The record companies -- EMI, Sony, Universal and Warner -- had wanted Eircom to install software from a U.S. firm to detect the “fingerprint” of copyrighted music files being sent on its network.

Eircom, which feared the software would have interfered with its broadband service and could break privacy laws, instead pledged to disconnect users who continue to download illegally after two warnings.

As part of the settlement reached after proceedings in an Irish court on Wednesday, the companies agreed to supply Eircom with the IP addresses of people they detect illegally uploading or downloading copyrighted works on a “peer-to-peer” basis.

Peer-to-peer sites like Napster, which allow anyone to share songs for free on the Web, became a headache for the music industry as the Internet gained popularity in the late 1990s.

The industry successfully beat Napster’s song-swap service in court but music piracy continued to cripple the business, sending CD sales plummeting.

“High Court proceedings ... have been settled on an amicable basis with both sides expressing satisfaction with the outcome,” Eircom said in a joint statement with the record companies.

"The record companies have agreed that they will take all necessary steps to put similar agreements in place with all other Internet Service Providers (ISPs) in Ireland," said Eircom, which is majority owned by Australia's Babcock & Brown Capital BCM.AX and ranks itself as Ireland's biggest telecommunications supplier.

The head of the Irish Recorded Music Association said he was happy with the settlement.

“It’s something we’ve had to work together to make sure this got to a stage where we can deal with what is an enormous difficulty within the Irish and worldwide record business,” Willie Kavanagh, who is also managing director of EMI Ireland, told state television RTE.

The Recording Industry Association of America (RIAA) last month abandoned mass lawsuits against Internet users who steal music and will instead work with Internet Service Providers to discourage piracy.

The RIAA, which represents major U.S. record labels, said it would have the ISPs send warning notices to users who illegally download music files.