ISPs with less than 400,000 subscribers will not have to issue warning letters to customers accused of illegally downloading, under proposals from Ofcom.
The watchdog is responsible for creating a code of practice for ISPs regarding the internet piracy measures set out in the Act, which was passed by MPs last month.
During the meeting, Ofcom revealed that initially only the UK's seven biggest ISPs would be required to issue warning letters to the customer thought to be illegally downloading.
Davies also said mobile broadband providers would be exempt from the code to begin with.
"The long-term ambition is to target those ISPs with copyright infringing consumers. So downloaders who migrate to an ISP not included in the soft launch of the Code will eventually be covered as Ofcom follows the traffic," he said.
Davies also said that "due to the short timescales Ofcom has been working to, the Code will be instructional rather than setting out line-by-line what is required".
The first draft of Ofcom's code is expected to be published this month, with a further statement to come in September. The code must then be submitted to the European Commission.
Once the code has been approved, Ofcom will be required provide the Secretary of State with quarterly reports covering levels of illegal file-sharing in the UK and the extent of legal action by copyright owners.
If, after a year, the measures have failed to reduce net piracy by 75 percent, the Secretary of State could ask ISPs to implement 'technical measures' against those accused of illegal downloading.
These include restricting connection speeds and temporary internet bans.