Digital Act heads to High Court
Parts of the Digital Economy Act that deal with illegal file-sharing are being challenged in the High Court.
Internet providers BT and TalkTalk demanded the judicial review, arguing that the legislation was rushed through parliament without proper debate.
They claim that the measures unnecessarily impact users' privacy and force ISPs to police copyright infringement on the net.
If the court finds in their favour, the act would no longer be enforceable.
"It is a big deal to be judicially reviewing primary legislation but we took advice and there were very clearly were some real problems," said Simon Milner, BT's head of industry policy.
"It might find that it is all fine - I'd be surprised if it was - but we are going to court to get legal clarity," he added.
The courts will consider whether the act is in line with European legislation, in particular as it relates to users' privacy and the role of ISPs.
The previous government brought in the tough measures to deal with the growing issue of internet piracy.
Under the current legislation, content providers will have to monitor peer-to-peer networks for illegal activity and collate the IP addresses - the numerical code that links a particular computer network to an illegally downloaded file.
They can then apply to a court to force ISPs to surrender the real world address that is connected to that IP address.
Letters could then be sent to alleged net pirates, advising them that their computer connection has been used in illegal activity.
The creative industry is keen that the emphasis will be on education initially, although people will go on a blacklist which could in future be used to take individual infringers to court.
Other penalties, such as slowing down net connections or even cutting people off from the net entirely have not been ruled out, but would need additional legislation.
The letter-writing strategy bears similarities to the tactics of discredited law firm ACS: Law, which sent over 10,000 letters to alleged net pirates.
Unlike content providers, which will not be levying fines, ACS: Law collected some £300,000 from people - who were charged an average of £500 per infringement.
Not everyone paid up and 27 cases recently went to court in highly controversial circumstances.
Lead solicitor Andrew Crossley attempted to discontinue the cases shortly before the hearing was due and was accused of obstructing the court process.
In the middle of the case, Mr Crossley said he no longer wanted to be in the business of chasing net pirates and the cases were eventually thrown out.
But he faces an investigation for his conduct from the Solicitors' Regulation Authority and could be hit with legal costs for the cases he brought.
During the court case, doubt was cast over whether an IP address was suitable evidence of wrong-doing as it does not identify the individual user - only the location of their connection.
Consumer watchdog Which? highlighted several cases where people claimed to have been wrongly accused.
Charles Dunstone, chairman of TalkTalk, thinks the same thing will happen if the government's measures go ahead.
"Innocent broadband customers will suffer and citizens will have their privacy invaded," he said.
Jim Killock, director of the Open Rights Group, said that he is particularly worried about how the legislation will affect public wi-fi hotspots.
"We need to start again and find a new policy settlement which embraces, rather than tramples on, the exciting possibilities that the digital age offers," he said.
John McVay, chief executive of PACT (Producers Alliance for Cinema and TV), who will represent the UK's creative industries at the judicial review, defended the act.
"The Digital Economy Act is the result of many years of consultation and presents a reasonable and balanced solution," he said.
But Mark Mulligan, an analyst with Forrester Research, warned that even if the act remains intact, the measures won't work because they are already out-of-date.
"Peer-to-peer file-sharing is yesterday's game. People now are going off the network where they won't be detected - swapping hard-drives, and getting music via blogs and upload sites," he said.