Speaking at the MidemNet conference in Cannes, Feargal Sharkey, chief executive of umbrella industry organization U.K. Music, warned the British government to tread carefully on any regulation to control illegal file-sharing.

It follows a Jan. 16 report in the Financial Times, which cited sources who said that a regulatory body called the Rights Agency would be introduced along with a new code of practice for ISPs and rights holders.

The plan is reportedly contained in a leak draft of Lord Carter's report on Digital Britain, and it follows a lack of consensus among ISPs and content owners in submissions to the Department for Business Enterprise and Regulatory Reform (BERR) on how to tackle illegal file-sharing.

Sharkey, while a defender of rights holders, has led a rapprochement between the music industry and ISPs and is concerned by any government-imposed solution. There had been hopes of an industry-led solution, with the government appointing media regulator Ofcom as a third-party regulator.

Sharkey had tried to build bridges, despite several years of mutual mistrust between the labels and ISPs. "I can and do understand the frustration that a decade's worth of repetitively futile conversations can bring - for everyone involved - and how on occasion that frustration can translate into despair and even anger," he said.

However, he cautioned the government on imposing any regulatory solution.

"Any intervention must be designed to embrace new horizons and must be fit and proper for use in a modern world; a modern society and a modern culture," said Sharkey. "For this industry, regression is not an option. We have learnt from our past mistakes and have no ambition to repeat them. Our future lies ahead not backwards.

"Regulation brings a cost to all parties. We all need to be sensitive that the debt we pay for an imposed government solution does not outweigh the benefits and the rewards."

Sharkey added: "By viewing ISPs as partners in the solution, I am certain that this can be the year that we all stop fretting about delivery platforms and concentrate on what really matters."

The U.K. government last threatened to intervene with legislation last year unless a self-regulatory solution was found. This led to the groundbreaking memorandum of understanding (MOU) signed in July 2008 by the music and film industry and the ISPs.

"Relations between U.K. ISPs and members of U.K. Music have moved on considerably in the past 12 months," added Sharkey. "But I reiterate: that MOU is still only a starting point. There is still much to do. And we need to accelerate the pace at which we translate constructive dialogue into deeds."

Sharkey said the focus should be on providing music fans with the legitimate music services they want, while ensuring rights holders get paid and the telecoms sector can grow and develop.

MidemNet continues tomorrow (Jan. 18) followed in the evening by MIDEM, the international music market and conference. Check back at billboad.biz for full coverage.