According to basic economic theory, when you raise the marginal cost of an action, you make people less likely to take that action. Applying this theory to fighting academic dishonesty, Simon Frasier University introduces the grade FD: failure with dishonesty.
Dr. Rob Gordon, director of criminology at SFU and acting chair of the senate committee on academic integrity, says the new grading is intended to curtail cheating using the internet.
"What used to be a lot of cheating in libraries has changed quite significantly," he told ctvbc.ca.
"We now have to be concerned about cheating during exams with high-tech devices and the inappropriate use of internet sources and downloading, including online companies offering services to students that promote academic dishonesty."
This seems reasonable to me. The marginal costs of cheating have come down of late because it's easier to get the information needed to cheat in the first place. What this does is tip the decision back towards being a non-cheater. And it's not that heavy-handed because it doesn't stay on the student's record forever. Don't cheat and you won't have to worry about it at all.
Update: I neglected to note that the link was via Ming Lo.