BPI v ISPs - who's won on music piracy?

Just two days ago BskyB signed a deal with Universal to set up an online music service and I asked whether the fast-growing broadband provider would be doing anything in return to crack down on filesharing. Well now I've got my answer. Sky is one of six major ISPs to sign a memorandum of understanding with the music industry to reduce the ilegal swapping of music online.
The deal was brokered by the government and is being unveiled on Thursday morning. Among those companies to have signed up is Carphone Warehouse, whose boss Charles Dunstone sent the music industry away with a flea in its ear a few months back, insisting it wasn't his job to act as an internet policeman.
So victory to the BPI, the music industry trade body which has fought long and hard to get the ISPs to to recognise their duty to cooperate in the campaign against piracy? Err, not quite.
All the ISPs have promised to do is to send letters to those customers identified by the BPI as persistent filesharers. And these letters are described as "Informative", designed to let people know that what they are doing is illegal, but not to threaten them with anything - much like the letters that Virgin Media has been sending to some of its customers. What the BPI wants - and it's been telling anyone that would listen that it had the government's backing on this - is a "three strikes and you're out" policy, which would see customers who ignored repeated warnings disconnected by their broadband providers. I've spoken to two ISPs in the last few hours and both have made it clear that they certainly will not be threatening customers with any such thing.
Now these letters may have an effect on some who receive them, particularly parents who are informed that the teenagers are upstairs sharing their music with the world. Indeed I'm told that a trial shows they work in around 70% of cases. The trouble is that the other 30%, what you might call the hardcore filesharers, will not be deterred. That issue - dealing with the repeat offenders - will now be discussed by the two sides with the media regulator Ofcom.
I've also heard that the business minister Baroness Vadera has spent many hours on the phone to ISP bosses, urging them to sign up to this deal. Whatever the BPI may say about the threat of legislation if the ISPs don't play ball, it's clear the government wants to avoid that at all cost. After all, any kind of voluntary "pact on piracy" sounds a lot better than framing complex laws designed to turn millions of internet users and the companies who supply them into criminals.
Oh, and that story running in one newspaper about the government favouring a £30 tax to download music seems to be wide of the mark. It sounds like the "iPod tax" idea floated by some parts of the music industry - and even they admit that it is now a non-starter.
The BPI has a carrot-and-stick approach in its dealings with the ISPs - you crack down on pirates, and you can have a stake in what is still a pretty lucrative business. So far, the ISPs seem to be grabbing the carrot - while avoiding the stick.