New Zealand's controversial "three strikes" anti-piracy law has been scrapped after copyright holders and ISPs failed to agree on a code of conduct.
The planned copyright law, known as Section 92a, would have forced ISPs to ban users accused of copyright breaches after three warnings.
Enactment of the law had already been postponed for a month to give both parties time to come up with a code.
Only three carriers - Telecom NZ, TelstraClear and Woosh - had signed the Telecommunication Carriers' Forum (TCF) disconnection code.
The New Zealand government believes consensus will not be possible unless the section is reworded, New Zealand's commerce minister, Simon Power, said.
"While the government remains intent on tackling this problem, the legislation itself needs to be re-examined and reworked to address concerns held by stakeholders and the government," Power said.
Jamie Baddeley, president of the ISP Association of New Zealand (ISPANZ), told telecomasia.net he was "delighted" by the move.
"It was a poorly written law and we had been asking for months that it be repealed," he said. The law had several fundamental issues, including the vague definition of an ISP, which included businesses, libraries, schools and hospitals, he added. "How does a library terminate an account? How does a business terminate an account?"
The law was very vague on how it should be determined that an infringement has taken place, and there was no clear direction on a disputes process, he said. "The law was making the ISP judge, jury and executioner on matters that ISPs are not experts on and frankly don't want to be," he said.
Baddeley said it was difficult to speculate on what form the new law will take, "but ISPANZ expectation is that NZ will follow other jurisdictions and that it will not be a three strikes law."
TelstraClear said the decision would be a "huge relief" to internet users.
"They've done the right thing. Had Section 92a become effective, thousands of New Zealanders could have had their internet connection terminated without proof," TelstraClear head of marketing Mathew Bollard said.
The bill had drawn protests from NZ's internet community and ISPs, but the Recording Industry Association of New Zealand (RIANZ) had argued it did not go far enough.
The UK government scrapped its own proposed "three strikes" law in January, stating that a system where teenagers could be arrested in their bedrooms would be unacceptable.