The plan, which not a lot of people seem to believe is entirely real, would be to sell iPods and iPhones with a set "free music" premium charge that would allow unrestricted access to music over the lifetime of the device. The likely cost would be about $100/device, working out to about $5/month over 18 months. This plan would make music labels "dangerously dependent" (again, according to the Guardian article) on Apple.
I'm not sure I follow Pakman's reasoning. The Universal Total Music idea has been around for a while and was originally proposed for non-Apple platforms. If Total Music does pan out for the iPod/iPhone, it seems that it would be Universal Music (or a reasonable music industry facsimile) being anticompetitive not Apple.
Thanks, Sebastian Clarke.