Media technology company Playlouder MSP has rebuffed online reports that it is ready to partner with a major U.K. ISP on a music service that allows users to download from file-sharing networks by compensating rights holders.

The London-based company has been developing a business model where customers can download unlimited music using peer-to-peer sites as part of a bundled broadband package, as the service would recognize tracks and use this data to compensate rights holders.

The monthly subscription fees from broadband customers would provide a funding pool which would then be divided between record companies and collecting society the MCPS-PRS Alliance. The only restriction on the service is that tracks must be licensed for download. Playlouder MSP has previously announced licensing deals with EMI Music, Sony BMG and independent labels, although the service has not been commercially launched; a beta work-in-progress version is online at playlouder.com.

CEO and co-founder Paul Hitchman tells Billboard the reports of a deal with a major ISP are "pure speculation" and says the company has no announcement to make, although it has been developing its download model since 2003.

"Our model is quite well known, which is that we're looking to work in partnership with ISPs to offer a music service to their subscribers to be bundled with broadband access," he says. "Obviously in the light of all the interest in ISPs potentially working with music companies, I think that's led to a lot of the speculation."

In July satellite TV company BSkyB announced a deal with Universal Music to offer downloads to broadband subscribers for a monthly fee. The service is due to launch next year.

Hitchman adds, "We've spoken to lots of ISPs and we continue to talk to ISPs and there continues to be interest in our model from ISPs. But we're not ready to announce any services yet."

Last month the six largest ISPs in the U.K. made an agreement with the government and music industry trade body the BPI to reduce illegal downloads by writing to customers who are suspected of illegally sharing music.

Entertainment and communications company Virgin Media has been named by the paidContent:UK digital media Web Site as the ISP that will partner on the Playlouder service next year. However, media relations head Asam Ahmad also described the report as speculation and says Virgin Media has discussions with many potential content partners.

Ahmad says, "We are always engaged in talking with content providers to look at opportunities to provide new content for our customers."

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