Media technology company Playlouder MSP has confirmed it has had discussions with the Isle Of Man's e-business division, which is currently working on a proposal to license ISPs and telcos on the island to enable customers to access unlimited music for a monthly blanket fee.

The all-you-can-eat offering, to be unveiled at the end of March and tested in the summer, is set to incorporate music files from P2P sites, with downloads tracked and rights holders compensated.

The Isle Of Man is a self-governing British crown dependency in the Irish sea with a population of 78,000; it boasts a superior telecoms infrastructure, including 100% broadband coverage.

London-based Playlouder was reportedly working with U.K. cable ISP Virgin Media on an unlimited service that included access to P2P downloads for a blanket fee, but it emerged recently that the proposition had stalled.

Virgin Media and Playlouder declined to comment on the venture. But Playlouder CEO Paul Hitchman confirms to Billboard.biz that the company is looking for partner ISPs on an offering that would combine access to P2P for licensed music and "value added services and applications around the music" that could compete with unlicensed P2P.

Hitchman confirmed that he has had discussions with the Isle Of Man's inward investment manager Ron Berry, who announced the proposal at the MidemNet digital music conference in Cannes on Jan. 18. Berry has since had dozens of meetings with the music and tech industry. The island's main telecoms provider Manx Telecom, owned by O2, is set to be the lead ISP partner.

"The announcement really put us on the map and opened a lot of doors for us," Berry tells Billboard.biz. He adds that he is "very, very aware" of the stalled Playlouder and Virgin Media proposal.

Asked if the Isle Of Man's radical proposal could lead the way in a new digital music licensing model, Hitchman comments: "I think it has that potential; I think there's a danger with any project like that [which is] that something gets parked in a non-threatening space for two years while, in the meantime, the business gets destroyed.

"But I think the Isle Of Man is genuine about wanting to help move the process along and I think it could certainly play a role. It's going to require all parties - Manx Telecom, the Isle Of Man, a service provider like us and the music rights owners - to come together and make it work. And so long as there's good will on the part of all of those players, there's no reason while the Isle Of Man couldn't lead the way in this area."

Berry says the development of the licensing model will be good for the Isle Of Man. "As with any business, if you're there to test a model and prove a model, then you have a role to play going forward," he tells Billboard.biz. "Going forward, it's good for e-business in the Isle Of Man and shows we have got a very innovative approach to business."

Last summer's memorandum of understanding in the U.K. with ISPs and the music industry resulted in an agreement on tackling illegal file-sharing, with ISPs sending letters to those individuals that labels suspect of infringing copyright. But there has been little indication yet of the promised new services, to be developed by ISPs and the biz, that are supposed to offer an attractive alternative to P2P.

"Fundamentally, it comes down to whether the industry is prepared to license a service that can compete effectively with illegal file sharing," says Hitchman.

For more on the Isle Of Man's licensing proposal see the current edition of Billboard magazine.