Internet companies are scrambling to prepare for anti-piracy laws coming into effect this September, but a legal expert warns they will struggle to cope with the new regulations.

The Copyright (Infringing File Sharing) Amendment Bill was passed in April and seeks to tackle online piracy, including unauthorised movie and music downloads.

The law requires internet companies to issue warning notices, at a right holder's request, to customers suspected of illegally distributing copyrighted content.

If a third alleged infringement takes place, rights holders can go to the Copyright Tribunal, which can issue an offender a fine of up to $15,000.

If this fails to stem online piracy, the Government may grant the tribunal the power to cut off a culprit's internet connection for six months.

While internet providers (ISPs) contacted by the Herald indicated they would implement systems to issue the warnings, intellectual property lawyer Rick Shera said it could be "chaotic" for them come September.

"The two major variables that ISPs haven't got yet [is] the cost per notice and the total number of notices - so they just don't have the ability to design the systems [to distribute notices]," Shera said.

"We're less than 12 weeks out from the go-live date on September 1 and ISPs are saying they need between 9 and 12 months to implement a system. You can see that it will be difficult for them."

Slingshot chief executive Mark Callander said ISPs were still in the dark on the details of the regulation.

"With only three months to go, the Ministry of Economic Development still hasn't provided the details of a format notice or how the systems work," Callander said.

Based on the experience of copyright authorities overseas, Shera said New Zealand internet companies could receive up to 3000 notices a day from rights holders, which they will have to pass on to customers within a week.

"That's substantially more than the [Ministry of Economic Development] suggested in its discussion paper. No New Zealand ISP ... will be able to deal with that many notices per day on a manual basis - and with the shortness of time they won't be able to automate the process so if that number of notices flood in it will be chaotic," he said.

Vodafone, Orcon and Slingshot all said yesterday their systems would initially involve a manual element.

"Once we have a better idea of the volume of notices ... we'll look to build an automated system," said Vodafone's Matt East.

The sticking point for all three was the costs involved with issuing the notices.

"There is a real cost in processing these [notice] requests for ISPs. There have been indications from the US of the cost being around US$50 ($61) [per notice]," Callander said.

Orcon chief executive Scott Bartlett said rights holders themselves should have to cover the expenses of sending out the warnings.

"We believe - and have outlined this in our submission to the MED - that the rights holder should cover this cost. This will ensure they are only targeting serious repeat offenders, and that the law changes are used to stop the frequent and serious copyright offenders," Bartlett said.

However, East pointed out the cost of sending out the warnings would be only one side of the coin.

"The costs for sending out notices will only represent a small proportion of the costs for operating a compliance system. ISPs will need to track customer infringements over time, take inquiries about the legislation and effectively become the conduit for communications between customers and rights holders," he said.

Copyright (Infringing File Sharing) Amendment Bill:

* Requires internet companies (at their own expense) to send out warning notices to those suspected of illegally downloading content such as movies or music.

* After a third suspected infringement, rights holders can take suspects to the Copyright Tribunal, which can issue fines of up to $15,000 to an offender.

* If this doesn't work to stop online pirates, the Government may give the tribunal the power to cut an offender's internet access.