Paul McGuinness, long time manager of U2, spoke at the Music Matters conference in Hong Kong a few days ago and again attacked ISPs and telecom companies for the profiting off the hard work of music companies, musicians and songwriters. (The full text of the speech has been posted at the U2 website.) It was widely reported that he attacked ISPs, but compared to his speech earlier this year, McGuinness was far less acerbic and far more thoughtful.

The beginning of the speech is filled with optimism (more music being consumed, music driving billions of dollars of global revenues, a great deal of innovation). He emphasized the importance that music companies earn the trust of artists through "fairness, transparency, morality and efficiency."

Then McGuinness got into the meat of the speech and blamed ISPs for their indifference towards music's problems and unwillingness to forge partnerships. Just as he did earlier this year, McGuinness called for government intervention while predicting privately negotiated partnerships are the solution.

Governments in a growing number of countries have woken up to the catastrophe that their cultural industries are facing. They have seen the statistics, understood the inherent benefits of a system which addresses piracy near its source, via the ISPs who can help to do something about it. For the first time there is the prospect that if ISPs do not cooperate at least with steps to help tackle copyright theft, then legislation may require them to do so. This is on the agenda in France and Britain, with discussions proceeding in other countries such as Japan and Hong Kong.

There are broadly two things I would like to see from ISPs. One is a real commercial partnership with the music business in which they fairly share their revenues. The other is action to stop facilitating mass copyright theft themselves.

Though he has not outlined just how both would come into play, I believe his solution is for governments to mandate the protection of copyrighted material and levy heavy fines against ISPs that fail to do so. The fear of legal action and financial loss would incentivize ISPs to create traffic monitoring systems that will distribute fees to copyright owners.

"Progress depends on national governments," he said to the press after his speech. He pointed to government efforts to prevent rampant piracy at the ISP level. Back to the text of his speech:

The real problem here, I believe, is a lack of willingness by ISPs to act. That is why legislation could well have to be the answer.

The belief that government can lead the way to a solution makes sense only if legislation offers ISPs no choice but to negotiate partnerships. In the U.S., though, I think the government is more likely to sit on the sidelines and occasionally threaten to get involved if the two sides cannot play nicely.

As for the "they owe us" argument that underlies everything McGuiness says, it's kinda ridiculous. Techdirt has a very good take on it.

So let me ask McGuinness this: if all of those other companies benefited from the music industry -- is he willing to also concede that the music industry benefited from some of them as well? The radio industry, for years, has helped promote the recording industry. Does he believe the recording industry is morally obligated to pay the radio industry? The internet has made it so much easier to create, distribute and promote music. Does McGuinness believe that musicians have a moral obligation to pay some portion of their own proceeds to these firms who have made that all work?

Moral arguments won't work here. The threat of lawsuits will work. It is, for better or worse, the American way and currently the only option short of an unlikely overhaul of copyright law.