Internet service provider (ISP) Karoo, based in Hull, has changed its policy of suspending the service of users suspected of copyright violations.
The about face was made following a BBC story outlining the firm's practice.
Karoo issued a statement on Friday, saying that it has been "exceeding the expectations of copyright owners".
The firm will now adopt a "three strikes" rule, in which suspected file-sharers will receive three written warnings before action is taken.
"We have always taken a firm line on the alleged abuse of our internet connections," said Nick Thompson, director of consumer and publishing services, in the statement.
"However, we continually review our policies and procedures to reflect own customers' changing needs and evolving use of the internet.
"It is evident that we have been exceeding the expectations of copyright owners, the media and internet users. So, we have changed our policy to move in more line with the industry standard approach."
'Totally unfair'
Karoo - the only ISP in the area, which has no BT lines - long held a policy of suspending service of suspected file-sharers. In order to get their service restored, customers had to sign a document promising not to repeat the offence.
The firm's approach is more aligned with many other ISPs' approaches to suspected file sharers, mirroring the "three strikes" rule that the music industry itself has called for.
Andrea Robinson, a Karoo customer from Willerby, told the BBC that a day after her service was cut off, she received a letter from the firm claiming that she had been using the peer-to-peer file-sharing service BitTorrent to download the film Terminator Salvation.
On calling Karoo, she was told to visit the company's offices to resolve the issue.
"They gave me a form to sign to get reconnected," she told the BBC. "The form basically said 'if I admit my guilt you'll reconnect me'. So I didn't sign it and walked out."
Jim Killock, executive director of the digital rights activists The Open Rights Group, told the BBC that it is "totally unfair" to disconnect people without notice.
"In fact, disconnection is something that should only even possibly be considered as a result of court action," he said.
While she said that her service had still not been restored, Mrs Robinson called Karoo's policy change "a step in the right direction".
"I'm still a bit upset about it, but it's an improvement that they've done that - rather than just zero chance for any negotiation or to put your case across," she told BBC News.
Editors Note: Dont tread on torrents!
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