Separate from the anti-piracy, website-blocking regime passed in June, the scheme was designed to warn consumers via notices to stop pirating or face the prospect of having their personal details handed over to rights holders if they got caught pirating more than three times.

Once details are handed over – through "an expedited preliminary discovery process" designed to bypass the recently drawn-out courtroom battle between iiNet and the backers of Academy Award-winning film Dallas Buyers Club – pirates could then be sued by rights holders.

But it appears the scheme, forced on ISPs by Communications Minister Malcolm Turnbull and Attorney-General George Brandis, has not met its first deadline.

Submitted to the Australian Communications and Media Authority in April with a start date of September 1 (after public consultation in February and March), the breakdown of who would pay for it was left absent.

As of Tuesday September 1, the ISPs and rights holders had still not reached an agreement, meaning that the scheme cannot start and has been delayed.

At issue, according to technology publication iTnews, which attended a recent industry briefing on the scheme, is how the first 200,000 notices – the cap of notices that can be sent per year to consumers – would be funded and by whom, as well as a number of other issues.

iTnews said the ISPs had estimated their costs to be around $27 to identify a pirate, send them a notice, and field any helpdesk calls about it. Meanwhile, rights holders want the figure to be $6, of which they are only prepared to pay about $3.

"If the cost is too high, the scheme won't be used," Foxtel director of corporate affairs Bruce Meagher said at the briefing, iTnews reported.

"We saw that in New Zealand where the government mandated $25 per IP address, and no one used the scheme. We've got to work out a way of setting a price that encourages the scheme to be used."

Asked what he would do if the scheme had not been finalised by September 1, Communications Minister Malcolm Turnbull told Fairfax Media at a press conference late last week that he would wait and see.

"I will sit down and have a talk to them and see where they are up to," Turnbull said.

"People can always reach agreement on matters of money; it's just probably a bit further apart than where they end up."

Turnbull went on to say that illicit file-sharing of copyright-protected content was "actually becoming a small part of the piracy problem".

"[I'm] not suggesting that it is not a problem, but file-sharing is ... less of a factor both here and in other countries than it was [previously]," he said.

"The growing part of piracy is people downloading pirated audio-visual content from pirate sites, and that's where the site-blocking legislation – which we've introduced here, [and] which is modelled on [legislation] in the UK and other jurisdictions – we hope will be effective."

John Stanton, chief executive of the Communications Alliance, told Fairfax his members were still "working in good faith" to seek agreement on the underlying commercial arrangements needed to drive the scheme, and on the detail of the operating framework.

"Our preference would have been to have everything in place to enable a September kick-off," he said. "But given the chequered history of previous attempts to create a copyright notice scheme in Australia, the fact that we are still making progress is encouraging."

It's understood Turnbull and the ACMA received a briefing note from the ISPs last Friday, which conceded the September 1 date would not be achievable.

"It is self-evident that the 1 September target timeframe for commencement of the scheme will not be met," the note said.