New Media Law (NML) has called for the introduction of a £1 per month music tax as an alternative to the Digital Economy Act's anti-filesharing measures.
The law firm believes the levy, which would be optional for broadband users, could allay the fears of the creative industries over copyright infringement.
Money could be distributed to artists and record labels based upon the number of downloads and video streams achieved, it suggested.
NML Partner Ian Penman said the system could work in a similar way to royalty payments, which radio stations and television broadcasters currently make for access to music.
"Sadly, the music charge will need to be imposed by central government - as there is no chance of the internet service providers (ISPs) adopting it without a gun to their heads," he stated.
"Many in the music industry can confirm this after years of trying to get the ISPs to accept that literally billions of illegal downloads have been enabled by ISP connections - to no avail."
The Digital Economy Act 2010 introduced a new requirement for ISPs to combat illegal filesharing by warning frequent offenders and potentially blocking their connections.