The Government is proposing a three-stage process to handle music and movie copyright infringement over the internet that could led to repeat offenders having their net access cut off.
Commerce Minister Simon Power on Tuesday released a proposal to replace Section 92A of the Copyright Act, which was abandoned earlier this year.
Mr Power says unlawful file-sharing is costly to New Zealand's creative industries, and he is determined to deal with it through a fair and efficient process.
Under the new plan, a copyright holder would complain initially to internet service providers, with cease and desist orders issued for further infringements.
If the problem continued, the Copyright Tribunal could ultimately impose fines, or terminate a user's internet account.
Mr Power says the tribunal could be given the power to mediate through the process.
He says there needs to be a penalty for repeat offenders, but also recourse for customers who feel they're not getting a fair deal.
Public submissions on the proposal close on 7 August.
The Australasian Performing Rights Association is welcoming the new proposal.
APRA's general manager Anthony Healy says it will go a long way to affect the majority of people involved in illegal file sharing.
Mr Healy says internet service providers need to play a role in finding a solution to illegal file-sharing.
But Internet Service Providers Association president Jamie Baddeley says disconnecting people's internet accounts is just too harsh.
Bronwyn Holloway-Smith from the Creative Freedom Foundation says the process is much better than the previous regime, but also criticises it for retaining the option of disconnecting internet accounts.
She says fines are a far better option, and could even be used to compensate copyright holders.