U.K. collecting society PRS for Music has proposed a levy on Internet Service Providers based on the levels of piracy on the individual networks.

The idea of a levy is contained in a discussion paper, "Moving Digital Britain Forward Without Leaving Creative Britain Behind."

Will Page, chief economist at PRS for Music and David Touve of Washington and Lee University, write in the paper that as the U.K.'s Digital Economy Act obliges telecoms regulator Ofcom to measure levels of piracy, then this could enable a compensation system to be introduced.

"The desired end game is one of no compensation," the document states, as the authors believe ISPs would act to eliminate piracy on their networks.

"What co-author David Touve and I have been working on developing are market-based solutions to the harm caused by illegal file sharing over the Internet," said Page in a statement. "More importantly, we explore what legal options exist for recovering the value of that harm, and offer an economic framework that can be considered when structuring a resolution."

However, U.K. broadband providers would react with fury at any such measure being introduced. ISPs are already unhappy with obligations placed on them in the Digital Economy Act, which means they have to warn customers about their online activity if a rights holder issues an infringement complaint. BT and Talk Talk are already seeking judicial review.

"The solution to piracy needs to be fairer and a better balance between what ISPs get out of their investment to help protect against piracy and how creative rights holders protect their content from the outset," said Lee Myall, U.K. regional director at Interoute, owner operator of Europe's largest next generation network.

A spokesperson for the Department for Business, Innovation and Skills told the Financial Times: "I understand this would require fresh legislation, which we don't have any plans for at this time."