This article is structured around three aims. First, a number of historical contextual factors are described which are seen to create a restrictive policy for intellectual property rights on the Internet. Furthermore, this has tended to be the sole major policy initiative on Internet policy. The restrictive policy is seen to be a historical construct, ill-fitting for a mature Internet. Second, it is argued that there is a need for a more balanced policy approach concerning the free circulation and manipulation of media files on the Internet. Thereby, policy could work with, rather than against the huge creative energy relating to what is here called Internet-based cultural consumption (IBCC). I maintain that much is won by utilizing a broad concept, such as this, as it enable us to understand filesharing as an information practice in transformation where the major drivers of change are commercial ventures that are actually exploiting legislative weakness. Third, it is maintained that the heavy-handed and one-sided Internet policy actually has served to create a copygrey business. The three domains of copygrey services are described in the text.