Nokia responded to rumors circulating that it was paying music labels up to $35 for every Comes with Music-enabled handset it sold, saying that some recent articles have “fundamentally misunderstood the concept” behind the handset makers recent content offering.

In December, Nokia announced its unlimited music downloading service in conjunction with top record label Universal. The service will be free for the first year and after the initial free period, customers will be able to keep all their downloaded music. This represents a break from traditional per-song fees from most digital music offerings. Nokia also recently announced that Sony BMG has joined the program.

Liz Schimel, head of Nokia’s music business, told Reuters that the company expects the new offering to make the company, as well as the music labels, money and that it’s an “innovative” new business model that “requires a different way of thinking for our content partners.”

Although the company denied reports that it was paying up to $35 to record labels per Comes with Music handset sold, the company did not give any further details about its innovative agreement with the labels.