A controversial law that would have forced internet service providers in New Zealand to cut off service to repeat copyright violators will not come into force this week as scheduled, the government announced Monday.

"Allowing section 92A to come into force in its current format would not be appropriate given the level of uncertainty around its operation," Commerce Minister Simon Power said in a statement.

He maintained that large-scale copyright infringement as a result of "unlawful" file sharing is still an important issue.

"While the government remains intent on tackling this problem," he added, "the legislation itself needs to be re-examined and reworked to address concerns held by stakeholders and the government."

Section 92A is part of an amendment to the country's 1994 Copyright Act to deal with new technologies and bring it up to date with its obligations under the World Intellectual Property Organization treaty. The amendment, introduced in 2006, gained royal assent in November 2008.

Power acknowledged Monday that ISPs and copyright holders have been trying to negotiate a policy to implement Section 92A, and their discussions "have exposed some aspects of section 92A which require further consideration."

New Zealand's decision comes at a time when Canada is working on modernizing its own copyright legislation and negotiating an international Anti-Counterfeiting Trade Agreement with a group of countries that include New Zealand, the European Union, the U.S. and other nations around the world.

File sharers use internet for other activities: researcher

David Fewer, acting director of the Canadian Internet Policy and Public Interest Clinic, based out of the University of Ottawa, said a major problem with rules like New Zealand's "three-strike" rule forcing ISPs to disconnect copyright violators is that even rampant file sharers use the internet for far more than just downloading songs, movies and other copyrighted material.

They also use it to engage in e-commerce, communication and dialogue, and a growing number of other important activities, Fewer said.

Therefore, cutting them off from internet service might be unconstitutional in Canada and in the U.S., he suggested.

Michael Geist, Canada research chair of internet and e-commerce law at the University of Ottawa, said Monday that a similar approach to the New Zealand law has been rejected in both Germany and in the U.K., although France is still considering it.

However, none of this stopped the Recording Industry Association of America (RIAA) from announcing in December that it would start asking U.S. ISPs to send warnings to customers who allegedly commit copyright infringement. It is also asking them to possibly follow that up by slowing down the customer's connection speed and ultimately cancelling their access. The RIAA alleged it already had agreements in principle with some ISPs.

Fewer said that with respect to the trade agreement under negotiation, the possibility of enforcement rules similar to New Zealand's three-strikes rule are likely being discussed, but it is hard to know because the process is not very transparent.

He suggested the controversy over such rules and whether they might be unconstitutional will likely stop them from becoming part of the agreement, "but you never know," he added.

He added that the government involved in the negotiations is the same one that brought the rule in to begin with.

N.Z. could bring experience to trade negotiations

"Maybe they can bring their experience to the table and identify that this just isn't acceptable to the population," he said.

"Or maybe they bring the complete opposite perspective — maybe they say, 'Look, we can't do this on our own. We need the obligations of a trade agreement to get this in place.'"

Meanwhile, Canada's minority Conservative government indicated as part of its election platform that it plans to reintroduce copyright reform to replace Bill C-61, a copyright reform bill introduced last spring that died when the election was called in the fall.

That bill did not include a "three-strikes" rule, but was in other ways more restrictive with respect to consumers' rights than New Zealand's act. For example, while the New Zealand act allows librarians to circumvent some digital locks on behalf of consumers, the Canadian bill proposed banning the breaking of digital locks altogether.

Both Fewer and Geist said Canada should pay attention to what is going on in New Zealand, as it says something about what consumers will consider acceptable policies.

"I think the events in New Zealand highlight yet again how copyright has   emerged as a mainstream issue with people willing to make their voices heard against reforms that do not adequately address user concerns," Geist said in an email.

"Looking ahead, the Canadian government should factor this new reality into any future copyright bill."