This is less about going after little Timmy for downloading a movie and more to do with a Chinese firm stealing biotechnology secrets from a U.S. company to produce its own products.
The "three strikes" was intended for violent criminals, not little Timmy who smokes a joint with his friends. Guess how that turned out.
No it isn't. The proposals are for going after anyone who attacks American corporate/government systems, including Americans themselves. The report spends much time waxing philosophical on int'l contributions to IP 'theft' -- specifically China -- but nowhere does it restrict jurisdiction to foreign entities.
As laid out the commission seems to want broad application here that plausibly could allow use by consumer entertainment companies. The problem there is that while you don't think consumer entertainment seems important enough for companies to bother protecting, consumer entertainment companies do. So it while you'd only bother securing Important Research Co. with genius solutions like rootkit-as-a-feature, Big Music Corp. is going to do it to little Timmy's copy of a Biebz single.
Here are the members of The Commission of the Theft of American Intellectual Property, the commission that authored the paper:
Dennis C. Blair (co-chair), former Director of National Intelligence and Commander in Chief of the U.S. Pacific Command • Jon M. Huntsman, Jr. (co-chair), former Ambassador to China, Governor of the state of Utah, and Deputy U.S. Trade Representative
• Craig R. Barrett, former Chairman and CEO of Intel Corporation
• Slade Gorton, former U.S. Senator from the state of Washington, Washington Attorney General, and member of the 9-11 Commission
• William J. Lynn III, CEO of DRS Technologies and former Deputy Secretary of Defense
• Deborah Wince-Smith, President and CEO of the Council on Competitiveness
• Michael K. Young, President of the University of Washington and former Deputy Under Secretary of State
Which of those is from the MPAA?