The Isle of Man, a self-governing island in the British Sea with a population of only 78,000, has proposed a file-sharing fee that would give its broadband customers unlimited downloads without the legal entanglements currently faced by P2P users.

The proposed monthly fee -- keep in mind this is just an early proposal even though many media outlets treat this as a done deal -- is a mere one Euro per month. That's 1.29 U.S. dollars.

The BPI issued a statement today, according to the AP, that was not supportive of the idea. "A blanket file-sharing deal akin to a broadband tax imposed by government, as has been suggested, is not something we'd welcome — and is some way wide of the mark."

Music Ally's liveblog post of a Midem panel on ISPs quoted the BPI's Geoff Taylor as being fairly supportive of the idea. If all ISPs were as engaged as the Isle of Man, he surmised, the industry wouldn't face many of its current problems. But the real position of the BPI came though in the next quote: "For the future, ISPs will need services that will allow them to differentiate themselves, and which will add margin."

Exactly. Services. What the BPI wants are label-sanctioned services to be bundled with ISP services and hardware. That means more control on the part of the major copyright owners. The Isle of Man's proposal, I imagine, is too "wild west" for much of the industry.

The IFPI's recent Digital Music Report 2009 confirms as much. It highlights Nokia's Comes With Music, Sony Ericsson's PlayNow plus and Danish ISP TDC's unlimited download service PLAY as models for the future. It is important to note that all offer downloads with DRM and none come close to the sort of license proposed by the Isle of Man.

If you read further into the IFPI's report and have paid attention to comments made at Midem, it's clear the major players in the industry want ISPs to help fight piracy just as much -- if not more -- as they want them for sources of revenue. There is a clear distinction between ISP-based music services and a blanket license. Once you have a blanket license, all parties participate and customers are charged a monthly fee, piracy no longer exists. If piracy exists, there is an absence of a blanket license. And that implies that customers get their unlimited downloads only from industry-approved services.

But the Isle of Man's proposal has its merits. A blanket license that would cover all songs and recordings would let consumers choose their preferred manner of acquisition. That is an efficient way to building better services. Consumers, not labels and publishers, are better at determining which products and services should succeed and which should die. The current system rewards the best funded music services, not the brightest and most capable. When the industry puts its weight behind one or the other, it slows and distorts the evolutionary process. It's like Congress telling Detroit what sort of cars it needs to make in order to turn around its business (and get Federal emergency loans). Consumers, not Congress, will decide what cars will be built and sold. If Congress wants better fuel efficiency, it can impact the market through regulation. Even then, consumers will decide what to buy.