The file sharing debate has got serious. Now a cause for government debate, all factions of the music industry have been speaking up to make their positions known.

The debate has its roots in the publication of the Digital Britain report back in June written by Lord Carter. If you missed the details of that report take a look here http://bit.ly/E4x. Originally the report advised to give regulators until 2010 to consider what technical measures ISPs should take — if any. But that has now been deemed too long a time frame and the government is pushing for action.

Thus government has since been looking at ways to deal with the growth and protection of online content for the film, music and games industries. Innovation and Skill Minister Peter Mandelson proposed a “three strikes and you’re out” system for curbing the file sharing problem. This has wildly divided opinions within the online creative community.

UK Music CEO Feargal Sharkey was keen to stress their total cooperation with the government in an open letter to Mandelson. Appearing a week later on a fringe panel at the Labour Party conference in Brighton, Sharkey expanded on his views for tackling the problem. He says “the ultimate goal has to be to create an environment where the content industries, working with the ISPs and the technology companies, can build what will be sustainable businesses in the online world”. You can hear the whole audioboo here http://bit.ly/W46KC.

Blogging for the Guardian, Robert Andrews argues that this may not exactly add up to support for Mandelson’s proposal, you can catch his post here http://bit.ly/Xnqyr Initially, other organisations did not warm to the proposal at all. The Featured Artists Coalition was initially disapproving of the proposal. The FAC felt that the life would be squeezed out of music discovery culture if fans sharing music illegally was to be penalised. Their unwillingness to take firm action against the most egregious offenders sparked rage from the prominent artist Lily Allen.

Allen’s blog argued that artists were running out of reasons to continue making records if they were doomed from the start not to make any legal sales. This placed her at odds with the likes of Radiohead, but was called a “bold move” and supported by UK Music. Her position ignited fierce debate within the music community. However, after support grew from more artists for Allen’s comments, the FAC released a statement that backed Lily’s move for a clear government policy on clamping down on illegal file sharing.

A recent debate on how artists want to move things forward, which Lily Allen attended, was chaired by Jeremy Silver last week. Check his blog here http://jeremy1.wordpress.com/. By all counts the debate was almost entirely split until the close. The conclusion reached was that file sharers ought to have their bandwidth squeezed, but not removed altogether. Mandelson’s “three strikes” position was out, but forcing offenders to accept slower web connections– and thus less media content – might well have the desired effect, which is a bit like only being able to get black and white TV in mono if you watch without a TV license. For many consumers, it’s hassle that isn’t worth the money it saves you.

The libertarians in this debate tend to be breaking acts that think file sharing is a necessity to open their music up to create awareness and a fan base in the early days. The conservative faction are artists more likely to hold major record deals whereby they have been allocated large sums for album production and are now desperate to shift units to work their way into profit.

The issue appears to be most damaging to those artists that are newly popular and whose future record deals are blighted by file sharing. But there is a third way which is stealthily growing in popularity and might make the whole bandwidth-squeezing debate redundant if it takes off… companies like Spotify are able to make fair and elastic deals with the record labels and ISP’s, as they have done in Sweden where Spotify comes as standard with your internet connection. Surely it is a win-win to promote such applications, giving revenue to artists – albeit less than retail revenue and delivering unlimited quantities of music on demand to fans, which reduces the need to file trade in the first place. As the UK wireless cloud and mobile apps make on-demand media more affordable and mobile, file trading will probably become a niche activity for people who collect MP3 files rather than a mainstream way to consume media.

Is this the best way forward? In an email by Brian Message and Jon Webster of the Music Managers Forum to its members last week, a call for ISP’s and the music Industry working together was well received… watch this space. http://bit.ly/HNS5w.