New copyright law could hinder the uptake and use of ultra-fast broadband networks, says an international industry analyst.

Ericsson's director of government and industry relations, Rene Summer, said the enforcement of copyright does not encourage the growth of markets that will drive the demand for high-speed internet.

"We have done three global studies [over the last four years] - the bottom line of it is that media regulation and copyright impact the prospect of take-up on new ultra-fast broadband services," he said.

The Copyright (Infringing File Sharing) Amendment Bill passed through Parliament on Thursday. It seeks to tackle illegal file sharing, including unauthorised movie and music downloads.

Summer argued enforcing copyright does not go to the heart of the problem of why internet users illegally share content.

"Enforcement [of copyright breaches] is addressing a symptom of limited legal availability of digital content," he said.

"There is a root cause to the problem which enforcement doesn't address and hence will not provide a solution to, and that [is the problem of growing] legal digital markets."

Under the current copyright regime, rights holders tightly control how and when content can be distributed, rather than offer users flexibility, Summer said.

He gave the example of Hollywood films which are released at the cinema and then after a period of time released on to DVD.

This controls the conditions under which the public can consume the content, rather than offering choice.

Summer stressed that intellectual property rights were still very important, but claimed that illegal file-sharing was about more than consumers wanting "a free lunch".

"The problem is there is no legal choice. Sometimes you need the whip, but you also need the carrot and the carrot is missing here. And the carrot would be rights holders making sure competing platforms [like internet movie services] can provide new offerings."

Developing the platforms and markets where users could access more content, like movies and television shows, across a range of formats and distributed to a range of devices would help drive the demand for high-speed broadband, Summer said.

The New Zealand Federation Against Copyright Theft, a lobby group connected to the Motion Picture Association, lauded the legislation as a tool for "promoting and protecting the continued growth of New Zealand's creative industries".

"The legislation ... will prove invaluable to our efforts to educate consumers about the value of intellectual property while at the same time deterring copyright infringement," said NZFACT director Tony Eaton.

The Government's ultra-fast broadband scheme is rolling out fibre internet cables across 75 per cent of New Zealand over the next 10 years.

This network aims to offer internet speeds of 100 megabits per second.