Australian Internet users are today celebrating a landmark decision in which an Australian court ruled against the film industry in their lawsuit against iiNET, Australia's third largest ISP. The industry had asked the court to hold the ISP liable for infringing BitTorrent activities of its users. The court soundly rejected that demand, holding that the ISP could not be seen to have authorized the infringement.
While the authorization analysis is unquestionably the foundation of the decision, there is a detailed, must-read section on subscriber termination schemes, better known as three strikes and you're out (paragraphs 425-442). In it, Justice Dennis Cowdroy explains why such schemes are far more complicated than is often claimed and are simply not reasonable in many circumstances.
First, Justice Cowdroy confronts claims that ISPs terminate subscribers for non-payment of accounts, so why not for copyright infringement: