The Digital Britain review, and the government's response to the peer to peer 
consultation, result in the following:

ISPs will be obliged to "tackle repeated infringement". The emphasis is on 
dealing with specific individuals. ISPs will be obliged to warn individual 
infringers when presented with evidence of infringement. So far, content 
owners have proven extremely bad at identifying repeat offenders, so ISPs are 
to be required to count the number of notices they send to their customers, 
which can then be provided on a court order along with the user's personal 
details, in order to sue serious offenders. It is believed based on 
experience elsewhere that these measures should reduce offending by around 
70%.

Ofcom, with the ISPs and content owners, will develop a Code of Practice 
dealing with appeals, standards of evidence, cost sharing, etc. It is 
strongly implied that ISPs will be required to disconnect users at some 
point, else why the need for appeals? In the original consultation this was 
also to look into technical options such as filtering, but it was generally 
focussed on dealing with repeat offenders; hopefully if it is part of the 
Code of Practice it will be targeted against known offenders, since the 
government has rejected any general requirement for filtering.

So what this means is that the government has no intention of forcing ISPs to 
block peer to peer software, and the intention is to warn offenders, sue the 
most serious offenders, and presumably have disconnection, filtering of the 
offender's connection, or similar sanctions as a middle road, subject to 
appeals and requiring evidence. This is probably the most we could have hoped 
for; under French law, developing peer to peer software is illegal as well as 
there being arbitrary disconnections, apparently without evidence or appeal 
(but I have not investigated this in detail).

Other interesting conclusions from the Digital Britain review:
- The communications sector is roughly the same size as the creative economy.
- The role of legislation is not to prop up old unsustainable business models.
- They may consider taxes on blank media and/or internet connections to 
subsidise content creation in the near future, since these appear to have 
worked well in other countries. (IMHO this is a reasonable measure given the 
alternatives)
- DRM may have a role, but needs to be flexible enough to not limit the 
customer's using content how they like. (IMHO this is a contradiction...)

URLs:

http://news.bbc.co.uk/2/hi/technology/7854494.stm
http://news.bbc.co.uk/2/hi/technology/7858062.stm
http://www.berr.gov.uk/files/file49907.pdf
http://www.berr.gov.uk/files/file47139.pdf
http://www.culture.gov.uk/what_we_do/broadcasting/5631.aspx

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