August 11, 2004  ·  Rick Boucher

When disruptive new technologies have emerged that changed the way in which consumers have gotten access to news and entertainment (e.g., radio and cable television), the existing legal structures of the Copyright Act often could not accommodate the challenges posed by the new technology. In the early case of piano rolls and later with radio and cable television, for example, Congress adopted compulsory licensing legislation as a means of appropriately compensating content owners while simultaneously encouraging widespread use of the new technologies.

With P2P music file sharing, we have witnessed a range of dramatic responses from the content owning community: massive lawsuits against individuals, including innocent children and grandparents; invasive efforts to get customer information without the intervention of a judge through misuse of administrative subpoena provisions of title II of the DMCA; and now the Induce Act in the Senate.

Fred von Lohmann and his colleagues at EFF have suggested an innovative alternative to litigation and traditional compulsory licenses. Their approach, described as a “voluntary collective licensing” system, is aimed at compensating artists while ensuring that new technology will flourish. I would welcome your thoughts on whether this is the kind of approach we in Congress should implement or whether there are other alternative means of moving beyond the unproductive debates of today to a new legal regime for music file sharing.

  • http://sethf.com/ Seth Finkelstein

    There are many critiques of the idea. But it does hold out some hope for resolution. I suggest it would be quite feasible to do some pilot studies and begin to address the evident problems via empirical evidence, as well as perhaps convincing some in the content industry that there are alternatives to the present war.

  • http://www.elricindustries.com Ross Housewright

    I don’t know if collective licensing is necessarily the right way, but it does seem like positive actions would be a nice change from the overwhelmingly negative atmosphere there is now… The RIAA, MPAA, etc, seem utterly unwilling to recognize what people want to do with their media – the public has seen the possibilities of filesharing, etc, and generally seems to think its pretty cool. People want to share, to trade, copy, etc, and the content industry, instead of finding a way for people to be able to pursue these behaviors and still get paid, is busily trying to convince people that they’re wrong about thinking that sharing is good.

    I think it would be great if we could have a regime under which people could do the things they want with their media and technology, without being unduly hampered by threats of lawsuits. Collective licensing is an interesting idea, but the RIAA seems absolutely opposed to it, refusing to even consider the possibility. I wish that they were willing to work towards a compromise position, where people could pursue the behavior they enjoy, but they still get paid, instead of trying to retain complete control at the expense of everything else. I think that if Congress can (is willing to?) encourage positive work like this, then that would be of great benefit to the public. The RIAA is unwilling to make any positive steps, so maybe they need to be pushed a little bit…

    Thanks very much for all of your positive work, Rep. Boucher – you’re a true inspiration :) I’ve had the opportunity to attend a few hearings this summer that you were present at, and was each time impressed with you as a voice of reason and balance :) Again, thanks for all of your efforts.

  • Robert Young

    Rep. Boucher,

    IMHO, such licensing schemes, whether compulsory or voluntary, are largely band-aids that do not actually solve the underlying problem. It seems to me that the root of all the problems we are all debating here (e.g. copyright, political representation, telecom policy, etc.) ultimately lies with media ownership/concentration rules. Ted Turner’s recent piece in Washington Monthly (see… http://www.washingtonmonthly.com/features/2004/0407.turner.html), as well as recent statements and testimony given by Barry Diller, address this issue from such a perspective. It’s instructive, and highly significant, that even such “media moguls” see a fundamental problem in the way existing laws and regulations favor the entrenched conglomerates at the expense of entrepreneurs who embrace disruptive technologies and business models.

  • http://dmusic.com Tom Barger

    Congressman Boucher, I believe you are familar with Neal Netanel’s work on the NUL (Noncommercial Use License)

    Terry Fisher’s book “Promises to Keep: Technology, Law and the Future of Entertainment” finally debuted last week on August 8 and will be the defining work on establishing alternative compensation procedures (ACS). This book is a Big Tent and encompasses the work of a “who’s who” of scholars in the field. It has complete details for the financial determination of “just the right price-no more, no less” to inspire authors to create (and forestall underproduction) and yet not tax the public so harshly as to creat market failure. Which is another way of saying, why should anyone bother to purchase if they can get it for free?

    Now, of course, in a ACS panel at the Future of Music, an ASCAP rep said, “That’s very nice that you academics did all this work, but why don’t you go back to campus?”

    I agree that funding the administration fees of a royalty collection agency starts with taxes, and Professor Fisher and his cohorts have exhaustively explained how to do it. (Before establishing a new field of thought regarding artists’ compensation, the book firstly explains how the traditional agencies operate.)

    I have no particular preference if this so-called collection agency is governmental, semi-regulatory or entirely private.

    Many people say we have almost one hundred years of useful observation how the PRO’s (ASCAP and BMI) collect money. But for practical purposes, my opinion is that we should avoid involvement with the traditional players in this field (ASCAP and the Copyright Office)

    This book is the beginning of a new era of compensation for artists. And oh-too-easy to dismiss in this era of paranoia as “taxation.” It may be difficult for Congressional staff to grasp the complexities or search for a TV sound bite, but that is the nature of Copyright Law after all. Dense and tangled! Despite all the work materials with which the MPAA and BSA are trying to innoculate children in class.

    As Tim Wu has pointed out, the traditional view of copyright as “author’s rights” is a romantic concept that is outdated. Otherwise, how to explain the tangled complexities and specific exemptions ennumerated in the mechanical license (� 115), secodndary transmission cable television license (� 111) digital audio recording devices (�1001) and internet providers immunities (�512).

    We can accomodate changes in technology. Laws are for changing. The issues are not as child-simple as the MPAA, the RIAA and BSA insist on presenting.

    Terry Fisher’s book is bulletproof. Let’s discuss this in the halls of Congress and compensate artists fairly for the first time. We can get it right.

  • http://dmusic.com Tom Barger

    Hmmm, the Congressional Budget Office has a new study on copyright regimes. Seems they have decided not to decide. This will take some time to plow through!

    http://www.cbo.gov/showdoc.cfm?index=5738&sequence=0

  • http://www.byrequest.dj Tim_Myth

    “Fourth, any solution should minimize government intervention in favor of market forces.”

    All I can say to that is ‘HECK YA!’ On one hand you have an estimated 60 million file sharers; on the other you have the RIAA and MPAA. New file sharing applications are being produced regularly. Lawsuits, DMCA, and INDUCE won’t stop this. They will only mire the federal governemnt (and my tax dollars) in thousands of lawsuits and criminal cases.

    Think of it like a wild fire. At some point the fire is too big to control with a fire hose, so fire fighters make “back fires” to defeat the real fire. This would be the best course of action for the RIAA: beat the file sharers at their own game.

    But where will their profit come from?

    I’d gladly pay 5 or 10 bucks a month to have access to millions of songs that I can download and use just like a CD from Wal-Mart. Assuming 60 million file sharers, that’s at least $300 million a month. No credit card to pay the subscription fee? No problem. Napster has teamed up with many retailers to sell music cards for people with no credit card, the RIAA could do the same.

    How many “traditional business” would line up to put an ad on a LEGAL napster-like site run by the RIAA? How many millions do you figure advertising alone would generate?

    Cost savings would be another “revenue stream”. Using a distributed distribution system like BitTorrent, the RIAA doesn’t have to run massive servers like Apple. Being digital, fewer products will have to be shipped to store shelves.

    Being run by the RIAA, artists could be paid for the exact number of copies people have because the RIAA would know how many people had a particular song. Studios could record, produce, and release immediately meaning artists could see royalty payments trickling in the very next day.

    No matter how much legislation is passed, file sharing will not go away. Murder has been a part of society since the beginning of time, and no legislative means of stopping it has ever worked. That the RIAA expects to legislate file sharing out of existance is just a sign of their fear of change.

  • http://www.byrequest.dj Tim_Myth

    Erm…my apologies. I guess I should have read the article further because my post is pretty much the same thing as the whole article.

  • Jardinero1

    “lies, damned lies and then there are statistics”-Mark Twain, I believe.
    First: If I am reading this correctly it seems that compensation is based on a statistical analysis of what is popular. Statistical data can be massaged to give you whatever results you want assuming the data set isn’t corrupted in the first place and I would trust no non-artist in the music industry with the data.

    Second: if the best example they can give is how the labels through ascap, bmi, and sesac manipulated the radiowaves into playing worthless formulaic drivel then count me out.

    Third: this idea is a dead duck in any case. The labels and the men who run them are all about control. They want to control the content, the medium, the price, everything. To think for one second that they will submit their music libraries to this kind of regime is absurd at best.

  • http://sethf.com/ Seth Finkelstein

    Now, of course, in a ACS panel at the Future of Music, an ASCAP rep said, “That’s very nice that you academics did all this work, but why don’t you go back to campus?”

    This is why I think the next step has to be some *IMPLEMENTATION*. Some real-world testing, in order to determine if what sounds like a good idea is realy feasible (or if what sounds like a bad idea isn’t really a problem).

    Well all the money at stake, I’d expect it would be possible to run some experiments.

    Charge it to marketing. After all, everything else is charged to marketing anyway …

  • http://www.geocities.com/codewarrior_wins CodeWarrior

    Mr. Boucher, and of course, Mr. Lessig, I just wanted to extend my personal thanks for your great contributions to freedom and protections for the rights of digital consumers.

    Your dedication to the need for protection of the rights of the Common Man, is admirable, and I only wish others would emulate your tremendous efforts, and that there were more “reasonable men” in congress that would take up the defense of citizen and consumer rights in this digital age.
    ~Code

  • http://www.sidejump.org Drew Vogel

    Copyrights grant the exclusive priviledge of reproduction of a creative work to the creator of said work.

    Some people saw a business opportunity in purchasing these rights from the creators. Business is risky. It always has been. Unfortunately for the people who seized this business opportunity, there is little monetary value in the trade of copyrights.

    In essence, technology has taken us back in time to the days when artists really did reproduce their music. Now, though, instead of using a pen and paper to manually copy the sheet music, they use a PC to copy digital files.

    Therefore, I think the first new change to be made in copyright policy should be to revoke the right of non-creator copyright holders to protect the copyrights. Afterall, the copyright is an attempt to incentivise creativity. Non-creator copyright holders don’t generate more creative works when the monetary value of a given copyright is increased. So why should we withhold the cultural value of a creative work from society if withholding it will not generate more creative works?

  • Raoul

    �[W]hether this is the kind of approach we in Congress should implement�

    Feasability aside, it is an interesting conundrum to come up with an idea about how congress can help facilitate the implementation of �voluntary collective licensing� without passing a law to make it compulsory. Congress could provide some sort of financial incentive to influence such a policy. Perhaps, tax incentives such as a lower rate on royalties earned through collective licensing as opposed to normal distribution channels.

    It may be a good idea, with any solution, to try and drive a wedge between the artists and the record companies.

    For example: (1) create and adequately funded non-profit organization (or government agency); (2) create a plugin for gnutella based P2P programs that provides a mechanism for downloaders to voluntarily contribute a collective fund (5-10 cents a song via a paypal type set up); (3) take those funds and start sending checks to the artists; (4) fight a rearguard action against the RIAA (ala Napoleon�s retreat from Waterloo) long enough to demonstrate to the public that the artists are being compensated for their work.

    It would be effectively a compulsory system without the compulsion. It could be described as �passive aggressive collective licensing.� Revenue would be generated from distribution that is already taking place and cannot be stopped anyway. Ideally, this would work best with a G. Soros type benefactor setting everything up offshore.

    The headlines could read, �Pop Star Receives $150,000 Check from Renegade Music Licensing Clearinghouse.�

    Fait accompli.

  • Rob

    I think it’s unworkable. I think it’s irrational to expect high-school and college students to pay a $5/month premium for “legal-ized” file downloads when they don’t have to pay anything to get them from the existing framework; legality or illegality doesn’t concern them until they get the lawyergram in the mail. If I’m the parents, I don’t want to pay an additional $5/month on my ISP bill for a service that I’m not going to use; and the ISPs won’t make it something you can unbundle because of the administrative cost of keeping track of who’s paid their music license and who hasn’t. It’s just not the way business works.

    It’s also a non-starter because from the viewpoint of the RIAA they don’t have anything to gain. Why settle for half a loaf when they can get the whole one already through lawsuits and IICA Acts? Until they get decisively checked with something like the Betamax decision that forces them to adapt, there is no incentive for them to accept anything less than full control.

    I am very pessimistic that anything will be done to prevent the RIAA from accomplishing their goal of criminalizing all unapproved (i.e. unpaid-for) uses of their “property”. The current legislative environment is simply too pro-corporate for me to expect any other outcome. I say this with all due respect to Congressman Boucher, who speaks as a voice of reason in the wilderness of a pro-Big Business Congress.

  • Alexander Wehr

    If a collective license were brought about, do you believe the way would be paved for the easier passage of legislative efforts such as H.R. 107 to free the public of restrictive DRM?
    Are there other conerns which are prompting rightsholders such as the MPAA to impose these control systems?

  • Alexander Wehr

    “I think it�s unworkable. I think it�s irrational to expect high-school and college students to pay a $5/month premium for �legal-ized� file downloads when they don�t have to pay anything to get them from the existing framework; legality or illegality doesn�t concern them until they get the lawyergram in the mail. If I�m the parents, I don�t want to pay an additional $5/month on my ISP bill for a service that I�m not going to use; “

    I would like to disagree with Rob on this.

    These fees are not simply “voluntary”, they are backed up by the force of traditional copyright law. There would be far less public sympathy and backlash for someone greedy enough not to pay a reasonable monthly fee.

    Because lawsuits against teens are generally exacted upon the parents, parents would be likely to pay for their teens if given the choice. I would think teens too would galdaly pay a small fee, and $5 a month is not a lot of money even for a 5th grader with allowance. College students, with their high ticket expenses, would view $5 as a pittance worth paying to avoid lawsuits or prosecution.

    Well, that’s my two cents.

  • http://www.eff.org Fred von Lohmann

    Under this voluntary system, licensed downloaders would only be protected from prosecution by participating rightsholders.

    That’s right. And that’s exactly the rule for radio stations in the ASCAP/BMI world. Yet you don’t see songwriters suing radio stations one by one. Once critical mass develops and collecting societies have money in the pot, copyright owner holdouts will have a choice of cashing a check or trying to sue individuals one at a time. As the RIAA will tell you, suing one at a time is not a profit center.

    Some have also suggested that a voluntary collective licensing approach will never work because the music industry will never agree. That’s a general observations, however — no legislated compulsory solution will pass either, unless the music industry agrees. I believe the industry will come around, once they realize that their other efforts have failed to make P2P disappear or shore up their revenues. I think that day is coming soon. The major labels are in serious financial trouble, and new offers like iTunes (which have attracted a tiny user base when compared to P2P and are generating insignificant revenues) are showing no sign of turning that around.

  • Alexander Wehr

    what worries me about Fred von Lohmann’s comment is there are movements in the committees to felonize the activity. As long as those movements continue the RIAA will not be encouraged in that direction.

    Additionally, without the DMCRA, the mandatory DRM imposed on cable/satellite by the MPAA will generate the same stubbornness from their part, as they will make open home recording a breach of federal law.

  • Jardinero1

    I have this neat little idea that the downloaders as a class are engaging in “adverse possession”. In real estate law if you can stake a claim to some piece of land and fend off all other claimants for a period of time it becomes yours.
    The downloaders of the world are staking their common claim for our musical-cultural heritage. Hang-on guys and gals, it will be yours eventually.

  • Jardinero1

    I am with Drew a couple of comments back.

    The real problem is that corporate entities are treated as persons. They aren’t; and since they aren’t they can’t really create anything either. Only living, breathing persons can create something.

    What needs to happen is to dispense with the legal notion that corporate entities, whether public or private, are people.
    Early on, the corporate form(whether public or private) was created as a form for aggregating capital. After the civil war corporations were treated legally as people. This has since morphed into a form where real people abuse the corporate form by either
    a) hiding from responsibility behind the corporate veil i.e. enron, et al or
    b) abusing the priviledge of the corporate veil as in the major labels.

  • http://www.lawhacker.com Andrew Greenberg

    I believe that the idea is ultimately impractical, and unfair, to smaller content owners and unnecessarily a recipe for distribution disputes among the larger ones. While the ASCAP/BMI model works well for clubs, I think it may be impractical here, where there are many more players across many disparate industries. In short, while a decent idea, I think the practical issues will preclude it from getting much traction.

    However, a slight variation of the idea may well work wonders, borrowing from the model of the Copyright Clearance Center which distributes licenses to make photocopies of magazine and journal articles, however acquired and using whatever means to replicate. The mechanism was created in response to the Wilkins case, which held that it was fair use to make private research file copies of journal articles, because the transaction costs for negotiating copying licenses were impractical, and thus no market effects.

    After the CCC was formed, a consortium of publishers, including American Geophysical sued Texaco, and in a landmark decision, the “fair use for private copying” defense was reversed, precisely because there existed an entity to facilitate getting copying licenses (the 4th factor). The Am Geophysical reasoning was very persuasive, and the Second Circuit affirmed a multi-million dollar judgment.

    It is a sensible model. Assume that you could obtain, by electronic or network services, a cryptographic token that grants a right to make personal copies of a single song (or work) for personal use, using whatever technology to produce it and obtained from whatever source. The network service should provide transparent means to facilitate acquiring the token, transferring the token, and preserving privacy. Make it automatic and capable of supporting micropayments. Make a standard API for using the service.

    What result? A thousand flowers can bloom! (1) people who make excellent distribution technologies can build their technologies without interference. The technology can be credibly and responsibly programmed to ask a person seeking a copy to demonstrate authority to receive it, or even (like iTMS), to provide the means (directly or indirectly) to obtain that right for the person seeking the content; (2) people who aggregate content, communally or for profit, can assure they are not directly liable for infringement by challenging a requesting party to authenticate using the token; (3) people who sell content need only make and distribute the content, register with the clearance center, and start clipping coupons. Those who distribute best will succeed, according to market demands, for their distribution technology. those who aggregate and reformat content the best will succeed, according to market demands and their formatting technologies. Those who obtain and market content best will succeed, according to market demands, for their content and the effectiveness of their marketing of it. Everybody does what they do best, and gets rewarded by a business model consistent with the meritocracy of the marketplaces.

    Most important, this approach dovetails well with the copyright. It rewards authors for their works, but doesn’t necessarily overreach to let them develop monopolies on related distribution technologies and marketplaces therefor. Of course, if they are good enough to do everything, the better for us all!

    The market prices will determine what is what — unless Congress sees fit to make the license compulsory and fix prices as they have in some other areas. If they do, the clearinghouse could be set up in this manner.

    But I like the idea of obtaining a per-work token — it leverages all of the downside of the network for content-owners, to make possible a direct and immediate means for profiting from the same technology they claim is threatening them.

    Of course, there are clear hybrids between this idea and Fred’s. These are, ultimately, the “other” business models that everybody has been talking about.

  • Rick Boucher

    My apologies to everyone for deferring my participation until now. Occasionally , I am reminded that I still have a day job ( representing some very insistent constituents) , and today is one of those days.

    Moreover, given the through nature of the proposal made by Fred Von Lohman, I thought it best to just let you read his suggestion and respond. Predictably , your responses are varying considerably.

    Here are a few thoughts of mine:

    Fred should be credited for a truly innovation suggestion, as is typical of his work. I think that in view of the certainty that P2P file sharing will continue and probably grow in spite of the law suits and other enforcement attempts of the RIAA , the music industry will eventually conclude that some form of collective liscensing approach, voluntary or compulsory, will be better than essentially giving away billions of dollars worth of music for free each year. It is probably too soon for the industry to reach that conclusion. At present the RIAA appears to have a laser-like focus on enforcement. They will probably have to experiment with it for a bit longer before they become convinced that it will not solve the problem for them.

    In the meantime, the industry is beginning to experiment with an early collective liscense with a handful of major universities which have added several dollars per month to the student activity fee ,which is passed along to the legal industry music download sites ( I Tunes, ect) . Students then get all you can eat access to the legal sites from their dorm rooms. There is no limit on downloads to the hard drive, but there are some limitations on CD burning just as there are on the regular subscription services for these legal sites. All students pay the fee , and all students can access the site. Apparently the activity fee charge is less than an individual subscription to the site would be.

    Of course, the inventories on the legal sites are far smaller than on P2P sites, and in all likehood, file sharing will continue at these universities, although perhaps to a lesser extent by virtue of the legal alternative. This is a kind of early and primitive demo project, Seth, although not of the exact model Fred is suggesting.

    I have many questions about the acceptance of the EFF approach by file sharers. Fred points out that 60 million people in the US are doing some amount of file sharing. He multiplies that number by $5 per month and derives $ 3 billion in annual profits for the industry , as compared to an annual $11 billion in gross revenues today. If all 60 million file sharers took part in the voluntary program, the industry would probably make more profit than it does today.

    The problem is getting even a large percentage of the 60 million to take part. Presumably the incentives are “being legal”, which I do not discount , but which will motivate far fewer than 60 million , and immunity form suit from the rights holders who are voluntarily participating. I’m not sure that the threat of suit is particularly intimidating at present–witness Fred’s statement that file sharing is still growing in spite of highly publicized suits against file sharers. Moreover, as several postings this morning pointed out, there will be no protection from suit from rights holders who opt out of the program. I have real doubts that there will be sufficient incentives to encourage even a large majority of the 60 million to take part.

    As unlikely as it may sound, further analysis may presuade the industry that it is not losing so much from file sharing after all. Earlier this year, 2 notable graduate business school professors published an in depth study concluding that file sharing is not causing loss to the industry at all. Apparently, file sharers are the largest purchasers of recorded music both from stores and from download sites. They sample on P2P and then buy what they like. The quality is more assured with the purchased product ,and one gets the added virtue of being legal. (I would strongly maintain that if you have bought the music, even after the fact, your file sharing should be seen as fair use for products that you eventually buy–perhaps a creative interpretation, but certainly consistent with fair use theory). When teamed with the fact that a major reason labels are losing revenue is that they are simply putting out less product than they used to, the study has opened some eyes. Perhaps more such studies focusing on other aspects of file sharer behavior would further reveal that the industry is not as badly harmed as it claims by file sharing.

    Such a realization combined with the futility of enforcement may bring the industry around to a collective liscensing arrangement. At that time, Congress would probably welcome whatever role it can play in facilitating the collective liscense. Don’t look for Congress to take the lead on this–the RIAA’s influence there is just too great–althought not with every member :-) Congress would probably implement an RIAA collective liscense recommendation but not force one on the industry.

  • http://arton.cunst.net/ hungerburg

    Voluntary means, it has to be fun. Its easy as pie:

    The collecting society operates an electronic voting machine (possibly monthly paper/email trail:) Software makers include a means in their applications for people to vote, eg. for the current song. The users monthly fee is divided by the number of votes and split to the receiving artists. No vote means, split like the sum of all the votes did. Vote only once: all the money is to this one songs creators.

    Instant gratification by direct communication with the favourite artists – the internet at its best.

    No gaming by greedy artists, or cunning script kiddies. Users only have to trust the sharing software; create a PGP key at home that only you know, send the public key to the collecting society, as part of becoming a member; its used to secure the votes. presto.

    The fee: a reasonable part of what restaurants pay: home users dont perform in the public. There can even be a “silver”, “gold” and “platinum” membership: for people that want to have bigger votes.

    No patent pending, at least not by me.

  • hungerburg

    PS: one way to game this: if eg. bitzi was used to determine, whom the vote was for, was to spoil the bitzi database.

  • Rob

    Alexander Wehr said:

    These fees are not simply �voluntary�, they are backed up by the force of traditional copyright law.

    And you see how effective traditional copyright law has been at preventing illicit file sharing. Let’s go ahead and try it, I’m not averse to making the effort if it will get the RIAA out of the business of stifling technology for profit’s sake, I just don’t see it being very successful. $5 may seem like a pittance to you, but back when I was going to college in the 1980′s that was two pizzas and cokes; and when I’m choosing ISPs (not that I have any choice today!) I’m not going to be very happy being forced to pay $5 extra for a service I won’t use.

    …$5 a month is not a lot of money even for a 5th grader with allowance.

    Depends how much that allowance is, doesn’t it? I got $10 a week at most, until I went out and started getting my own lawnmowing jobs. $5 a month would have been a significant chunk of change to me.

    Because lawsuits against teens are generally exacted upon the parents, parents would be likely to pay for their teens if given the choice.

    Actually, I think it more likely that parents would simply forbid their teens to use those evil illegal file-sharing services in the first place; I think we can all guess how effective that would be. And I submit again that there’s no way you’re going to convince very many people to pony up $5 for something they can already get for free. There has to be some sort of value-add, either a more complete selection or greater ease-of-use; the supposed lure of legality (and I do say supposed) simply isn’t going to make the plan succeed on its own.

    Fred von Lohmann said:

    Some have also suggested that a voluntary collective licensing approach will never work because the music industry will never agree. That�s a general observations, however � no legislated compulsory solution will pass either, unless the music industry agrees. I believe the industry will come around…

    You’re more optimistic than I am. The RIAA has shown no indication of wavering, continuing to insist that their downturn in revenue is mostly if not entirely attributable to P2P “piracy” and discounting all studies making findings to the contrary. Instead, I see them sticking to their guns stubbornly until the last lawyer falls. Once they secure their “rights” in the U.S., they will pursue similar injunctions throughout the rest of the world, just as DMCA-like laws and regulations have been pushed out to Europe and Australia.

    What’s the solution? I don’t know that there is one. How can an artist extract value from their work when it is so easily recordable and distributable? I think it still domes down to value-add; if there is a product that is not simply the songs (which are available for free) but includes other items such as music videos or interviews, there will be an incentive to buy that product. I still buy CDs even though I have always been able to download music from Usenet for free, because of the ability to rip the CD to whatever format I want (and because I can’t afford a new radio for my truck that would play CDs; I have a portable CD player I use to play my mixed CDs through a cassette adapter. It’s a hassle to set up and I’m always afraid someone is going to break into my truck to steal the player, but I have no other choice). Funky band-aid solutions that preserve traditional copyright protections without acknowledging the new distributional reality are simply not going to be attractive enough to succeed on their own merits. That’s my two cents.

  • Charles Williamson

    Rep Boucher,

    I sincerely applaud your efforts to investigate new approaches to digitized content, and your forward thinking attitude towards the disruptive technologies that threaten the existing “content” industries of music, movies, and print.
    However, I think the nature of the debate is unfairly constrained by a 500 pound gorilla that is latent in many posts thus far, and it is best summarized in your call for “a new legal regime for music file sharing.” The underlying assumption, of course, is that some sort of regime, structure, or schema is necessary to mitigate the conflict between file-sharers and the copyright controlling companies.
    I propose an alternate idea: do nothing. More specifically, Congress should enact no law, give sanction to no entity, nor make any other intervention on either side in the conflict. In other words, refuse to take sides. Here’s why:
    There have been several passing references to “disruptive technology,” and I think it is fair to say that the Internet is the king of all disruptive technologies, in that many of the old rules on how society and business work no longer apply. The immediate reaction of any entrenched business to a disruptive technology is to make it go away by any means necessary, which describes how the RIAA, MPAA et al have been handling file sharing on the Internet thus far. While the EFF plan is forward looking, in the end it will end up playing right into the hands of the content industries by condoning the idea that a single copyright gatekeeper is an essential part of the Internet society. To echo an earlier post, it provides a band-aid on the problem of excessive litigation, but in fact hinders any further exploration into the purpose and durability of copyright in a digital world. Moreover, it furthers the idea (I think incorrectly) that corporate entities, as opposed to individual creators, are the proper custodians of copyright. To borrow from Professor Lessig’s book “Code,” once the architecture is enabled and the idea is sanctioned that people need to pay copyright clearinghouses some form of compensation, then a mechanism is in place to control and manipulate that content.
    Several posts have claimed that the RIAA and MPAA’s business model is dead; I couldn’t agree more. However, it is not up to Congress to protect a dying business model in the face of several that could (and I have no doubt will) prove just as beneficial to society. By way of example, if a corporation has erected a toll road in between two towns and charges people to pass, and frustrated commuters have hacked a path through the woods to avoid paying the toll, my view is that it is not up to the government to shut down the second road and propose a way to fairly compensate the owner of the first. Rather, by doing nothing it will force the corporation to confront the fact that it is going about business the wrong way, and if the second road exists long enough, the owner of the first will realize that it should not focus on shutting down the second road, but make its own road more attractive to travel on.
    While the content industries will continue to howl bloody murder and some additional grandmothers might get sued, Congress cannot forsake the forest for the trees. The bigger, and much more valuable picture is about the role of copyright on the Internet. Content industries have already proven their ability to legislate copyright into perpetuity, but if Congress refuses to do all the work for the content industry by enacting architectures of control, then hopefully the industry will learn that copyrighting everything in sight is neither an engine of perpetual wealth nor a sound public relations strategy.

  • http://www.alevin.com/weblog Adina Levin

    Mitch Bainwol’s comment at the Senate INDUCE hearings seemed telling to me. When asked about evidence that industry revenues were not hurt by file sharing, he responded with a chart showing how sales of hits had declined.

    If both facts are true, than filesharing is changing the recording industrys revenue mix away from hits toward more obscure songs that people find through file-sharing exposure.

    This implies that the recording industry is not just fighting to preserve its revenue stream — they’re fighting to maintain their current product mix.

    If the recording industry is currently dedicated to using the legal system to protect a changing product mix, it will take a long time to persuade them about alternative solutions that make money for them. They don’t just want to keep making money — they want to keep making money the same way they always have, even though customer preferences are changing.

  • Alexander Wehr

    “Alexander Wehr said:

    These fees are not simply �voluntary�, they are backed up by the force of traditional copyright law.

    And you see how effective traditional copyright law has been at preventing illicit file sharing.”

    There is a vast difference between using traditional copyright law to force people to abandon a rich source of art, accept restrictive DRM, and pay through the nose VS. using traditional copyright law to persuade payment of a mere $5 a month.

    “Because lawsuits against teens are generally exacted upon the parents, parents would be likely to pay for their teens if given the choice.

    Actually, I think it more likely that parents would simply forbid their teens to use those evil illegal file-sharing services in the first place;”

    Are they effectively doing this now? they have no $5 alternative and they are not forbidding it.

    I do apologize Rob, but while these arguments are somewhat relevant, they are trivial and in the case of your representation, completely overinflated.

    It is an economic fact that people will very easily part with trivial sums of money. I see no reason for active resistance to a fee small enough for even a gradeschool kid to pull from his pocket.

  • http://oknarb.web-log.nl Branko Collin

    Observations:

    - The phrase “content owning community” reeks of the propaganda language used by copyright middlemen. It’s not content; it’s not a good. They’re works. Your constitution only recognizes the value of works, not the (monetary) value of sellable ‘intellectual’ goods.

    (I was surprised when I found out that US copyright law speaks of authors as ‘owners’ of a work; I would have guessed ‘copyrigth holders’ a more logical term.)

    - Copyright middlemen have tasted blood, and now they cannot get enough. Where in the old days they had to be content with the laws as passed by congress, today they dictate those laws. I doubt they will give up that kind of power.

    The keyword here is power. Larry Lessig’s idea for a law that requires a copyright renewal fifty years after publication could mean a tremendous revenue stream for publishers, yet they all seem against. The reason? Power. The major publishers would rather lose money and dictate the rules forever, than give up a little power and make more money.

    If you think I am exagerating, try the following thought experiment; try and think of a USA in which copyrights are non-transferrable (and where transfer of rights cannot be emulated through contract provisions). How likely would such a system seem? Yes, it would solve a tremendous amount of problems, but the middlemen would never let it happen.

    - Compulsory licensing schemes have worked for ages, and work in other countries, so there is no reason why they would not work for P2P. Some might argue that downloads are too fine-grained to measure, or that you can never find out exactly who downloaded what; when has that been a problem with for instance radio, where you will never find out who listens to what?

    Tip: levies on the storage media, rather than on the bits transferred. (The advantage is that it is easier to measure an amount of CD-Rs shipped than to identify a blob of bits floating through cyberspace + it puts the burden of payment with those actually downloading works.)

    - The collecting societies for radio get a lot of flak, because famous artists get a disproportianally large amount of money. Still, it could be argued that the situation is not that bad; radio stations try and cater to their audiences’ tastes. As a result, they generally cannot and will not play songs that are rarely appreciated.

    P2P networks actually facilitate matches between obscure tastes and the songs that go with them. A lot of people use these networks to find that rare track nobody is playing or selling anymore. A voluntary licensing scheme such as outlined by the EFF should take great care to pay a lot less money to the big acts and a lot more to obscure acts. The ‘dividing it up’ plan proposed by the EFF seems inadequate.

    Of course, this would again mean that the current major record companies get bypassed a lot, and again they won’t stand for it.

    - One final thought: if the US congress wants to regain its law-making power (which is something different from law-passing power), it could start by setting the record companies and Hollywood a deadline. Say: “either you come up with a proposal, or we’ll do our job and this time write the law ourselves”. It is your mandate, isn’t it?

  • Javier Perez

    Hi All.

    I finally read the EFF proposal and I have several problems with it. First of all, it is based on Negative incentives. In other words, DO something otherwise bad things will happen to you. Like lawsuits, running afoul of the law, etc. In general, it does not change one iota of the current sociopolitical climate regarding the relationship of authors, publishers and general public. If nothing basic has changed, then why should we believe that the current situation will improve.
    Second, collection societies have their own problems. Right now in Canada they are making dentists pay for the music they play on their cubicles. The rules and reglations used by BMI and ASCAP are a real mess regarding who has to pay and when. For example, if you have a bar with at least X number of screens of Y size at least then you have to pay $Z per month or year, whatever. Anyone remember when they wanted the girlscouts to pay for singing a copyrighted song around the fire?
    Third, the $5 or $10 or $20 whatever will spread thin, very thin as we keep downloading and listening to more music. Downloading the first song is worth $5. Downloading the hundred song is worth $0.05. and it keeps getting worse from the artist point of view.

    How can we solve this? First, we must change the system from a Negative incentive one to a Positive incentive one. Scott Mathews’s DRUMS database is a good idea for this. The voluntary compulsory association (VolComp) MUST provide some kind of service that people will be willing to pay for. Access to the DRUMS database could be one. The VolComp association can also provide indexes to Most played, most downloaded, In Most Playlist, etc, songs. Likewise, same as Amazon, they can create affinity services that allow people with similar interests to share recommendations. If you decide not to pay the $5 or $10 for this then you forfeit access to such services.

    Second, instead of a statistical system to apportion the $5 or $10 subscription price, you should implement a Mecenas system. Whatever software you use to communicate with the VolComp association should allow you to divide up your contribution among the artists/acts that you want. This feature automatically creates two behaviors. First, as an artist it behooves you to belong to the VolComp. Second, Minor artists have a better chance of being paid up for their music than using the statistics popularity method. People COULD have software on their computers to help them decide on the aportioning, but there should not be a compulsory feedback from the user back to the Volcomp regarding what he/she is listening or have on his/her Hard Disk. Privacy abuses would be unavoidable if we do that.

  • http://www.corante.com/importance/ Ernest Miller

    Rep. Boucher,

    Although I’ve made numerous criticisms of the EFF plan, I think it is a major step in the right direction and that some form of voluntary collective licensing agreement is the likely solution barring draconian new copyright and paracopyright laws.

    In response to your concern, I think the incentives for people to switch to a reasonable, authorized filesharing scheme are greater than you postulate.

    Those who switch to the legitimate scheme will be guaranteed quality and ease of access. Find what you want, easily and quickly. For those who value their time more than a small, reasonable fee, this will be incentive enough. You’ll never be able to convince those with more time than money to switch, so you really shouldn’t bother too much (although a certain amount of price discrimination might be helpful).

    Institutional actors, such as businesses, schools and the government (including the military), and even parents, can do much by buying such licenses en masse. Their incentive will be relatively inexpensive social benefit, more control over filesharing programs, and etc.

    With open APIs, value-added services can easily be added to the authorized filesharing channels that non-authorized services will have difficulty matching, for example, playlist sharing. Send a playlist to a friend that will automatically download what he doesn’t have … a non-authorized service can’t guarantee such a system will work, given spoofing, etc.

    There will be a tipping point in the process. Once sufficient numbers of people switch to the authorized service, the unauthorized service will become more and more unreliable, thus increasing the attractiveness of the authorized service. Smaller numbers of unauthorized filesharers will be easier to police and enforce against. No system will be perfect, but enforcement will be easier.

  • http://www.lawhacker.com Andrew Greenberg

    Congressman Boucher:

    Despite my pessimism about the particulars of Fred’s proposal, I think he has his finger on the pulse of the solution. The reason for this is that I am not at all pessimistic about compliance by file sharers, and ultimately of the effectiveness of combining a decent solution with the risk of enforcement. Its ultimately a lot like trying to regulate against speeding — you won’t really stop all speeders, but you can save lives.

    Despite my reputation as a cynic, I genuinely believe that most people are basically honest — in particular, they don’t want to break the law and they won’t take something for nothing, particularly if there is some risk, however slight, that they might get caught at it. For the most part, people can put out a box of fund-raising chocolates and an envelope for people to put money in — and most of the time, nobody is going to steal the money or the chocolate. People tip for good service at restaurants. many far better examples can be proffered, but i don’t have the time or imagination to explain this point now. suffice it to say, I think that given the chance to steal an album or a song, or to acquire it under responsible circumstances — no matter how badly they want it — folks would prefer to do so.

    How to explain file sharing, then? Even accepting at once that there is an epidemic of people owning entire libraries of infringing content, how can this be reconciled with my generally flowery view of the world?

    This is easy. File-sharing offers something that record companies don’t provide: (i) immediate access to an enormous pallate of music; (ii) on an individual song-by-song basis; and (iii) in a form that is perfect for the new and modern way of enjoying music in electronic form. Nothing at any record store could compare. I believe this was far more compelling than issues such as (a) free; and (b) occasionally scratchy or incomplete content. And it was the roman numbered items, together with (1) ease-of-use; (2) consistent, reliable operation, that made it a lifestyle.

    You can surely compete with free (bottled water), but you can’t compete with good, useful and fundamentally life-changing.

    I have to tell you, when I was a software publisher, we had copy protection on our games (we didn’t call it DRM then), and fought the pirate/new tech battles with glee. We were geeks, and that was fun. But we had no illusions that they ever worked, just served to keep honest people honest.

    Ultimately, and I think this must eventually happen here, the market rebelled. After hard disks became common-place, a competitor could seek a significant competitive edge by offering its content WITHOUT copy protection. For awhile we dabled with dongles, artifacts and code-wheels, but eventually gave all of that up because the market required it. We took out the DRM, and our sales went up. We listened to our customers, and they told us how to make more money.

    I have no doubt our piracy increased too. But probably not much, and probably our sales went up more — in those days (early 80s), it really was a no-brainer. Nowadays, more limited types of protection is tolerated by the marketplace, but nothing like the lock-in technologies being suggested now. The market will eventually rebel, and sooner or later competitive entrepreneurs will recognize they can do better by offering more for less, and all the while make far more money in the process.

    My point is this: give people what they want, and they will pay for it. (iTunes Music Store, big fee per tune, GREAT product, compelling interface, superb hardware -> its like a drug). If they have to go somewhere else to get it, they will.

    I am sympathetic as to the desire of content management people to control the mix of available content and manner of distribution. If I could do that, I would too. But copyright policy has nothing to do with supporting that, and barring dramatically powerful and therefore disruptive technologies under color of a trademark claim, or keeping new talent’s work under cover to promote others, is problematic. That is a variartion of technical and creative luddism, and has nothing to do with the promotion of progress.

  • Alexander Wehr

    A comment to Andrew Greenberg:

    you spoke of competitors eventually offering services without DRM.

    In the case of digital cable this will not be the case because of manipulation of FCC mandates, so how are people’s future consumer and recording rights to be protected from such restrictive regimes?

  • Rob

    Alexander Wehr said:

    I do apologize Rob, but while these arguments are somewhat relevant, they are trivial and in the case of your representation, completely overinflated.

    That’s your opinion. We have no empirical evidence before us either way, so we must conjecture based on our respective thoughts on human behavior and our own past experience. Obviously different people have a different perspective.

    [parents] have no $5 alternative and they are not forbidding it.

    Or if they are, it’s been ineffective. That was my point. Even if you put the alternative out there, if parents don’t pay the $5 the kids just go ahead and download anyway; all you’ve really accomplished is to force parents to subsidize your system because they know they can’t really stop their kids from downloading. Additionally, if the “legal” service doesn’t happen to have the content the kids want you’ve accomplished exactly nothing. You’ve held a gun to the parents’ heads and said “pay this $5 or else”, and they are *still* on the hook for lawsuits. My question is, why bother? Why waste all this time, treasure and effort to prop up a distribution system that is horribly inefficient compared to P2P file sharing? Let it adapt, or perish. Isn’t that the way capitalism is supposed to work?

    It is an economic fact that people will very easily part with trivial sums of money. I see no reason for active resistance to a fee small enough for even a gradeschool kid to pull from his pocket.

    All I can say is gradeschool children must be extraordinarily well-compensated in that part of the country, and I don’t consider $5 a month a trivial sum to someone on a budget; there’s lots of those “only $5″ services out there, why should I be forced to take on one more?

  • Alexander Wehr

    “Additionally, if the �legal� service doesn�t happen to have the content the kids want you�ve accomplished exactly nothing.”

    I believe you misunderstand the structure of the collective license. It does not call for a new p2p service. It calls for payments to compensate artists for use of existing services, and any of their successive generations.

    I honestly do not have to conjecture on this. I live on a campus full of people who at one time or another admitted they would pay a collective license fee rather than go through the current hassle and uncertainty.

    Even high school economics notes demand increases as price drops.

  • Robert Young

    I agree completely with Charles Williamson’s post earlier. In fact, he’s conveyed what I was actually trying to say with clarity. I couldn’t have said it better myself, literally :-) Thank you.

    As a postscript however, I would like to add one more observation. Everyone here continues to refer to the RIAA and MPAA. But the problem is that such “industry” orgs are no longer representative of reality. As I trust Rep. Boucher knows well, and certainly more than me, it’s all about a handful of integrated conglomerates that own every critical piece of the value/distribution chain. As a result, viewing public policy, consumer advocacy, or technological advances/regulations from a narrow lens of simply copyright, or distribution, or even DOJ for that matter, is by its very act self-defeating. IOW, by doing so, the media giants have already “won the war before it’s begun.”

  • Robert Young

    In other words, the media giants have already divided and conquered everyone here ;-)

  • Rick Boucher

    To Charles Willamson:

    I take your point that Congress should do nothing to protect the old business model of the record labels. That model is failing and is doomed .The labels still basically want to cling to the sale of an entire CD at $16 or so when the consumer really only wants 3 tracks on the CD.

    The long standing reluctance of the industry to create or liscense lawful download sites with an ample selection of music to be delivered in a user friendly form ( meaning unlimited permanent and portable downloads at an attractive per track price ) stemmed in my view from an unrealistic nostalgia for that old model of “buy the whole CD “. Now with Itunes and a few other legal sites some progress is being made, but the selection is still small, there are still limits on number of downloads, portability, ect. As Fred points out, consumer uptake has been anemic.

    In selecting a title of today’s session “a new legal regime”, I was thinking “regime ” in the broadest sense of the word. legal regime could imply an act of congress, or it could mean using private contract law as Fred has suggested in his proposal. Either way a new leagl regime could arise. You have suggested doing nothing.

    Why is doing nothing not the best option? The basic problem is that the 60 million file sharers are technically acting outside the law. When that many people are law violators, respect for law generally is affected. Society is not well served by this outcome. I am frankly less concerned about the financial condition of the record labels and song writters than about the condition of public respect for law.

    It’s not an answer to make everything lawful by simply declaring that all file sharing is legal. Rights holders would claim confiscation of property without due process , effective condemnation of their interests or somesuch and file loss claims against the government. Actually, they might have a greater chance of getting payed in this circumstance than presently.

    Finding a new mechanism to enable and free file sharing while providing compensation to IP holders seems to be the obvious answer. A new legal regime , perhaps based entirely on private contracts with congress doing nothing or nearly nothing, would have to arise to support the mechanism. As I said earlier, I think that time will come, but not immediately.

  • Keong Lim

    Rep Boucher,

    I’ve been following these debates from Australia, even more closely now because the AUSFTA has come into play and we look set to follow the US wherever it may go.

    I was wondering if it’s possible for a “catch-all” law to be enacted that specifies a voluntary collective licensing scheme, e.g. as it operates for radio, so that it becomes the default modus operandi for all future disruptive technologies and systems, that aren’t adequately covered by more specific schemes? This would include all copyrighted materials, not just music, for all distribution methods, not just internet-based, though these are some of the obvious current targets. The government would probably create some common infrastructure, e.g. the Office of Voluntary Collective Licensing, that all such schemes can hook into, instead of having to create their own organisations.

    I know it’ll be a difficult task to get the wording just right to cope with all future possibilities, but the benefit is that there’ll always be a balanced way forward that allows for both profit-making and for development of the new technologies, rather than trying to stall everything with litigation. There’ll be no need to revisit this same situation again every few years, so law-makers will have more time to examine other areas.

    It may put the onus on the technology developers to build the licensing scheme into the new systems they create, but it also means they are free to develop any kind of new system. Inventors would be encouraged to bring to market all the variations on a theme. Surely this burst of innovation and the job-creating activities that surround it would provide long-term benefits to the overall economy too. Heck, even the vested interests (MPAA, RIAA, etc) might get into the act by funding R&D, safe in the knowledge that the copyright holders they represent will always get a cut of the profits from the trading activity and they will get opportunities to market the technology itself.

    Perhaps litigation is already the “catch-all” default, but that doesn’t mean it should always be that way. Increased litigation is certainly one aspect that I don’t want to see imorted to Australia.

    Thanks for your time,
    Keong

  • http://www.chaosthirtyseven.com Carlos

    I think this idea is horrendous. The only group it benefits are high volume pop music acts– it essentially kills any cashflow into the underground music “industry”.
    Take, for instance, a small band or artist living in a city somewhere.
    With current policies, this band or artist may, being pretty obscure, sell 1,000 to 5,000 albums. This isn’t much, but at ten bucks a pop, 5,000 albums generates 50,000 bucks with very little startup capitol. They probably get downloaded a bunch too, but most people tend to feel a responsibility to support their favorite artists when they know that every dollar actually counts.
    With Voluntary Collective Licencing, however, fans are led to believe that downloading is 1) approved by any music act, regardless of that band’s label affiliation; and 2) going to make money for everyone, even the artists who’s filesharing stats are too small to be acurately represented in Nielsen type studies, or whose music is mainly traded through more secure means or networks than the ones targeted by stupid companies like BigChampagne.
    The result?
    Our band now lost the little paying fan-base it had, while even more money is being given to RIAA affiliates than ever before.
    Disgusting.
    Not just that, but by telling the world that simply paying 5$ a month makes across the board music filesharing is OK, you’re pretty much stifling the one thing that makes it possible for albums to reach the networks in the manner they do– purchases.
    Since the turn of the year alone, i think i’ve purchased between 12 and 15 cds. Your average consumer/ pc user is going to chuck any moral obligation to purchase an album in the future, negating it with a quick click and a five dollar charge. Parents/ aunts/ uncles are going to save the trips to the “weird” part of the city to get their kids the obscure punk cd they wanted for christmas, and tell them to download it instead– “Don’t worry, son– it’s paid for!”
    I realize whole heartedly that something has to change. The way things are working right now is either going to become an endless battle a’la “feds vs. drugs”, or morph into something completely different.
    When i read articles like this, though, that are supposed to be the “voice of the good guys”, i worry that that morphing process is going to be even uglier than the most vicious lawsuit.

    (i apologize about the spelling errors– i know there are a few in there, but i wanted to post this before i decided that the argument wasn’t worth it)

  • Rick Boucher

    To Andrew Greenberg:

    Your posting at 4:06 is well reasoned and supported by examples of why the public was driven to file sharing by the lack of an acceptable legal product from the industry . I have a speech on the subject that makes many of the same points. I also agree that you can compete with free with a superior product ( a Juperter Media Matrix study of 2 years ago makes this point graphically). Unfortunately, the industry for a variety of reasons , including the difficulty in clearing the publishing/songwritter interests in some music, has failed to offer a truly attractive legal alternative even today.

    I also agree that most people are honest and given an attractive legal alternative will opt for it. I’m just not quite as optimistic as you are that a large percentage of the 60 million file sharers would pay the $5 per month and go legal when they can still get the same thing ( not a better product, but the same thing) or free.

  • Javier Perez

    Representative Boucher:
    I take issue with the following comment in your answer to Charles Williamson:

    Rights holders would claim confiscation of property without due process , effective condemnation of their interests or somesuch and file loss claims against the government

    There is nothing in the Constitution that says Authors should be compensated when their copyright is over. Like in the patent regime, once it is over, it is over. Enjoy it while it exists. The way you spoke perpetuates the ideas=properties falacy that the publishers like so much. If publishers can sue for confiscation, then why is the common public kept from extending a class-suit to the publishers for the same after the Sony Bono Copyright Extension? (remember Eldretch).

  • Rick Boucher

    To Keong:

    An ineresting variation on the EFF proposal. Thanks for the suggestion

  • Rick Boucher

    To Javier:

    When a copyright naturally expires, you’re right, it’s over. But for the government to terminate by law copyright interests during their term would without doubt spawn litigation that would probably conclude that government improperly terminated a property interest and award compensation. I would bet heavily on that outcome.

  • Rick Boucher

    To Earnest Miller:

    As I read your post and that of others , I am beginning to think I may be a bit too pestimistic that the EFF structure could entice file sharers to participate. As I said earlier, Fred deserves credit for an innovative idea. I hope it gets lots of exposure in the near future so that many other thoightful observers can comment on it. We made a good start on that process today.

    It’s 10:30 pm here, and I’m turning in . More tomorrow.

  • http://www.thersitesconsulting.com Gord Deinstadt

    A data point: here in Canada we already have compulsory licensing of music for personal copies. A levy is collected at the wholesale level on writable CDs and blank tapes. The money is distributed by a government-appointed committee. You can avoid paying the levy by signing an attestation that the blank CDs or tapes will not be used for personal copying of music, so for example a manufacturer buying writeable CDs in bulk for distributing software doesn’t have to pay the levy.

    It seems likely that gathering data about file-sharing would be much simpler than gathering data about private copying of music onto CDs and tapes. Hence the distribution of file-sharing fees could be done on an objective and fair basis.

    Another data point: in Quebec 90% of record releases come from independent publishers (“How Quebec may be the saviour of music”, by Juan Rodriguez, Ottawa Citizen, 14 April 2004, page F6; reprinted from the Montreal Gazette). These Quebec labels account for 25-30% of sales in Quebec (ibid). But those independents are still worried about file-sharing (ibid). So worry about file-sharing is not simply a manifestation of over-concentration in the music publishing industry, as alleged by at least one poster above.

  • http://www.lawhacker.com Andrew Greenberg

    Congressman Boucher:

    I think the huge success of iTMS is evidence of people voting for quality products with their pocketbooks. That’s the carrot — excellent product, excellent prices.

    Now, the stick. Whatever may be said of the technologies in question, the end-users who are engaging in copyright infringement are engaging in copyright infringement. It is too soon to say whether the spate of “sue everybody in sight” lawsuits will be effective, but I am here to say that litigation is an essential element of any intellectual property licensing scheme, whether compulsory or otherwise.

    ASCAP/BMI, the model for the EFF proposal is a case in point. Neither ASCAP nor BMI have clubs and restaurants running to them for the, not inexpensive, performance licenses. Why? Because its pretty hard to compete with free. ASCAP and BMI provided a dramatically superior form of licensing to the alternative of going to a “Harry Fox-like” agency or to individual authors for each song to be performed, but it still is pretty expensive, and its not obvious why they would want it.

    Does ASCAP/BMI sue every nonconforming club? Be real. Do they sue and whine on the first indicia of some infringement. Oh, please. What they do is send a salesperson to explain to the club the error of its ways, and the benefit of compliance. Eventually, dunning letters are sent. Ultimately, for clear problems, witnesses are sent to measure infringements, and finally, for the cases where examples must be made, yes, people are sued, sued, sued.

    Some clubs face ruinous damages, some actually go under. Most are settled profitably. (Litigation for ASCAP/BMI, done right, is a source of profits — the Copyright Act is an AMAZINGLY pro-plaintiff regime, long before DMCA). And in time, a few examples are made. And then the salespersons add those examples to the list of events.

    Nobody is fond of speeding laws, and yet nobody really whines about enforcement. If content owners act responsibly and give a great product at a reasonable price, convenient to use and effective — if they permit the marketplace to make the technology to deliver it and NOT interfere with development of technologies, the P.R. downfall of suing little Suzie can be managed — and the example of little Suzie (who at the end of the day will have been seen to have been dunned, given second, third, fourth and eighth chances, and is actually a front for her deadbeat (musicwise) lawyer dad) will be a deterrent.

    Can it work? Sure. After the enforcement bans were lifted for performance licenses, the consortia turned a significant profit. The fallout of composers suing a club, albeit by proxy, is nil, and most enterprises fall in line.

    Can it get everyone? Of course not. No amount of enforcement will EVER get anyone, even under INDUCE. Only the most draconian and wasteful modes of enforcement would give that result, and would ultimately destroy through imbalance any benefit for which the copyright regime was designed, and take out a few other industries with it. In the twentieth century, bootlegs could be purchased in virtually every neighborhood on city streetcorners or second-hand stores (heck, there were bootlegs routinely available in rural upstate New York). The bootlegs were every bit as good as the originals, and much, much cheaper (certainly not free). Routine enforcement held that, ACTUAL piracy, in check, and reasonable profits were made by content owners and related industries.

    Like speeding enforcement, I anticipate there will always be freebie-takers, but so what? The deterrence is slight, and many people speed, but they speed way less, and lives are saved.

    My point is this: whatever we do, measure twice and cut once. Why opt for draconian changes when existing structures have not been tested and no effort has been made by content owners to address the problem. Look how things worked at the common law in the American Geophysical scenario:

    1) paper media didn’t think they needed to facilitate copying licenses, that people should simply buy multiple copies or back-issues of their entire journals (in some cases at huge annual fees).

    2) the marketplace got tired of asking, and ignored them. rampant copying occurred, both reasonable and illicit.

    3) the content people (apparently without the congressional clout of other media) went to the courts and asked for relief.

    4) no sir, the courts said. the use was fair BECAUSE there was no credible alternative, hence there is no use impinging upon a relevant marketplace.

    5) the content people created a consortium to dramatically ease the transacitonal costs, permit people to make their own copies for their own purposes in their own way, and license on a pay as you go.

    6) the comfy users said, “we won, go away”

    7) paper content sued, and this time won BIG BUCKS against the most unlucky defendant of the twentieth century, Texaco. Texaco lost at trial and on appeal.

    Let’s show some respect for the common law. By saying, “NO!, try something else before you ask for serious change,” the content people created a solution. Nobody pretends that private copying doesn’t occur all the time. But NONE of it happens in Texaco labs, and many other companies have similar policies, paying an annual license fee that rewards the content publishers for their efforts.

    Sometimes, actually most of the time, the right thing to do is to let the marketplace do its bidding. If the marketplace fails, trust in the wisdom of the common law. By ALL MEANS, listen deeply to the plaints of content owners, some of whom are my clients, as well as the technologists, some of whom are my clients as well. But before we make changes that can literally change the world through unmeasurable and unintended consequences, let us make sure that all existing structural remedies have actually been tried, and keep the changes to the tiniest and least invasive changes necessary to correct the problem.

    No doubt, the INDUCE bill will give content owners a lot of what they want. But there are also many other forms of technology mandates that can make things better for them. That we can make things better for copyright owners isn’t the only question. Whether those changes create a net plus for the American people, after we do ALL of the accounting. That is the issue.

    Like I said, I’m all about the balance. We can’t have enough intellectual property. But neither can we have too much. Just call me Goldilocks. Its got to be just right.

  • Charles Williamson

    To Representative Boucher:

    I would like to respond to your incisive and thought-provoking comments along two lines of logic, one relative to the music industry and its business model (although I believe the logic can be extended to other content forms), and the other relative to copyright law and Congress. By viewing these parallel lines of reasoning, I will hopefully elucidate why I think that government abstinence (pun intended) is truly the best policy. I will begin with the music industry side.
    The negative excesses of the music industry are widely chronicled; I find two exceptional descriptions are Fredric Dannen’s “Hit Men” and Clinton Heylin’s “Bootleg: A History of the Other Music Industry.” In both, the creative accounting practices of the music industry are given thorough review, with astounding figures that many artists have lost money by making gold records. This is notable insofar as it reveals that as long as the music industry has been around, portable media sales have usually been a loss leader for many acts. For every Metallica that cries out that music sharing hurts their bottom line, there are scores of well known artists (usually those whose careers are at an ebb) and hundreds of lesser known artists that have embraced the download concept as a vehicle to connect and reconnect with their fans and as a way to fuel the real profit center of the music industry: live touring.
    While I take your point that file sharers are acting technically outside the law, it is clear that many artists, most notably (and exceptionally) Phish and the Greatful Dead, have long and profitable histories of relaxing, if not waiving their desire to enforce that law. Even multi-platinum acts have realized the potential of releasing special tracks as promotional vehicles for appearances and for albums themselves. At the very least, this indicates that total copyright protection is not a universal concern among creative artists, in spite of industry protestations to the contrary. At the most, it frames the copyright debate as the desire of a consolidated, entrenched corporate beauracracy to maintain its longstanding industry practice of only promoting acts with wide-ranging appeal.
    This is one side of the reason why a dedicated compensation mechanism is a bad idea. It places the guilt on the file trader, demanding payment on the assumption s/he is trading in material that the holder would like to protect. Copyright and compensation for a class of media should be universally applied, it would be premature to apply a structure for mandatory compensation when many people would like to use it as a promotional tool. Since there are two diametrically opposed camps, it would not be proper for Congress to favor one camp over another, and to reward acts like Metallica and penalize independent artists. Advocating a non universal compensation mechanism would require Orwellian control mechanisms over computer networks, to which I think we are all highly opposed.
    On to my second line of reasoning, I share deeply in your concern about public respect for the law. I do, however, think that there is a difference between enforcing a law and beating people over the head with it. Walk onto any college campus (at least in my experience) and you will see the ultimately futile efforts of the war on drugs (which I think is disappointing). In fact, even among campus authority figures there is more of a permissive “just don’t let me see you breaking the law” attitude. In other words, the legality of certain actions stems from society’s mores on the subject. While the government is the ultimate arbiter of the law, it is not the ultimate arbiter of society’s mores (see: Prohibition). In the case of file sharing (and, incidentally, drugs), I believe that society’s mores are in flux. In the case of file sharing, I ultimately believe that people’s (both consumers and composers, not the corporate executives) opinion of file sharing is becoming more permissive because of the obvious promotional benefits. Mandating a compensation scheme for the rearguard action of corporate executives would embrace a position that might be unpopular in the future, or more to the point, irrelevant. If, as you say(and I agree), the industry and its artists are moving away from the “buy the whole album” format, then there is also the possiblity that people might move away from the “buy the album” format altogether, and it would be harmful to have a mechanism that prevents this from happening.

  • http://www.newmediamusings.com JD Lasica

    Rep. Boucher,

    First, let me say how much I admire not only your legislative record and grasp of P2P and tech-related issues, but I also admire your willingness to dive into discussions like this and hear what people have to say (not all your fellow congressmen are so disposed, to say the least). Bravo!

    I’ve read this entire thread now, and I find Charles Willamson’s argument most persuasive: Congress should do nothing on the licensing front. It’s too early in the game. Let P2P services continue. Let the music and movie industries adapt to new technologies and changing times. Let a thousand business models bloom.

    You yourself say that a recent credible study suggests that file sharing is *not* hurting music sales. If that’s the case — and it may well be true — then I don’t see the point of a voluntary collective license.

    I suspect P2P will ultimately undermine the record industry’s hit-making machinery, but it’s quite likely that a new regime of independent artists selling 10,000 to 100,000 CDs will rise to take the place of the Britneys and Eminems. That would be a healthy development — something that collective licensing could well undermine.

    Eventually, years from now, Congress may revisit the digital rights arena to modify copyright law to reflect and enshrine user behavior in the digital age. But let’s not forget that every time Congress has waded into these waters over the past decade, it has mucked things up even worse: the DMCA, Sonny Bono Act, and now the proposed INDUCE Act. (Your Digital Media Consumers� Rights Act would be a welcome exception.)

    Yes, it’s a noble goal to restore balance in copyright law, but I don’t see that happening with this Congress (or the next), although perhaps you would be in the best position to know. But I fear the worse. How can you guarantee us that the result of Congressional action won’t be a copyright regime even more onerous than the one we have today?

    I say this, by the way, as a writer and author who is no foe of reasonable copyright.

    More on New Media Musings.

  • http://dmusic.com Tom Barger

    I mentioned above the release today of the white paper: “Copyright Issues in Digital Media” from the Congressional Budget Office.

    http://www.cbo.gov/showdoc.cfm?index=5738&sequence=0

    Nathan Musick of CBO�s Microeconomic and Financial Studies Division wrote this paper under the supervision of Roger Hitchner and David Moore.

    This paper is amazing! And moreso that we would normally expect a slanted view from the content industry perspective. This is a must-read. Congressman Boucher, do these kind of budgetary studies have any weight in Congressional offices?

    A number of posters above have mentioned the “do nothing approach.” Indeed, the Congressional Budget Office paper suggests “forebearance” as one of three approaches. The other two are compulsory license schemes and revision of extant copyright law.

    Here is an example and I urge you all to read the paper, 38 pages in length.

    Forbearance
    The Congress may choose to wait and see if the current
    copyright debate resolves itself without further legislative
    action. This course exploits the impending increase in the
    supply of content-control technologies by the private sector,
    as well as new services providing creative content in
    digital format, to determine whether changes to copyright
    law are in fact needed. Market-based solutions
    might gain support among both copyright owners and
    consumers.
    One standard for judging the effectiveness of forbearance
    is the case of the videocassette recorder. In that instance,
    many content producers viewed the new home-recording
    device as a threat to their intellectual property and consequently
    sought to undermine a technology that consumers
    were rapidly adopting. Yet ultimately, producers and
    consumers reached a consensus that defined socially and
    legally acceptable uses of the new technology.

  • Alexander Wehr

    If content control becomes a norm in the markets, then this underscores the importance and urgency for a law like the DMCRA to assure that such content controls are not used to foist limitations or indirect regulation on consumer electronics and fair use.

  • Rick Boucher

    To Tom Barger:

    Regarding the CBO study released yesterday. I have not had an opportunity to read it. Yes, in answer to your question, the CBO is widely respected by Members of Congress. It’s reports are influential.

    On the other hand, sometimes in the effort to be even handed and to acknowledge the equities on all sides of a debate, the reports often do little to drive toward policy conclusions. There are typically quite useful in providing an authoritative source of data.

  • Rick Boucher

    Thanks to JD Lasika for the favorable reference to the DMCRA, HR 107. The bill has gained traction in the House. It’s cosponsors include several full committee chairmen, including the chairman of the committee to which it has been referred. It has support from a broad cross-section of the technology and public interest community. My prediction is that the bill or a close relative of it will become law. The maturation process may take another several years, but we will get there.

    I think you can count on Congress doing nothing regarding P2P, at least for the near term. The upraising of tech community opposition to the Induce Act has had an effect, and even though it has impressive Senate sponsorship, I think it is on life support and will be put to rest as gracefully as its sponsors can manage. I don’t want to encourage anyone to let their guard down because it can always surface again in an amendment of another copyright bill or in a conference committee, but at the moment, I think the tech community is winning. This is , in fact, the time to redouble the effort to defeat it , and a knockout punch is now possible.

    On the liscensing front, several matters are a given:

    1. Congress will do nothing until rights holders ask for legislation that would implement either a compulsory or voluntary liscensing arrangement. I explained the reasons for this result yesterday.

    2. If a compulsory liscense is requested, the legislation will be through and detailed much like the cable compulsory liscense or the satelite TV distant signal liscense. That’s the invasive approach.

    3. If content owners come to the sensible conclusion that enforcement alone does not work and opt to try a voluntary liscense alone the lines of the EFF proposal, the role of Congress will be only to watch with interest since as Andrew Greenberg points out, existing legal sturctures can easily accomodate it. If anything, Congress might be asked to provide seed money to launch the project.

  • http://dmusic.com Tom Barger

    Jessica Litman has a brilliant addition to the Netanel, Fisher, Ku proposals with the opt-out provisions. The paper is “Sharing and stealing” and is available at

    http://www.quicktopic.com/25/D/cD8dwc52A3p.html#QT_item_77

    This is a quick topic page and has user comments.

    I like this approach. In assigning a new file designation as *.drm, traditional record label distributors and big publishers (known as “hold-outs”) can avail themselves to an opt-out mechanism.

    This allows the rest of us, (that is, the new entrants and songwriters,) to develop the innovations of P2P networks. We are the larger group after all. The celebrity artists in the major label system will find themselves sitting on the sidelines watching as a pool of money is paid out and they have none of it.

    The major label artists will start peeling away from the company line and will surely investigate signing up for royalty collection with an independent royalty collection agency such as Royalty Logic.

    We need Congress to preserve an alternative to the RIAA front group Sound Exchange. We have an opportunity to start a clean slate of accounting practices. Inviting the camel nose into the tent will perpetuate the classic racketeering accounting practices and “black box” methods that have accrued in the music business over the last 100 years.

  • http://www.culturedialogue.org Anatoly Volynets

    If I am going to do publishing myself (let it be a movie or audio CD production, it does not matter in this context), I have to be ready to compete with others and fight for my market share. If I am not going to do business myself and sell my work to a publisher, how does copyright help me? I am not satisfied with the commonly accepted speculations. I want to really find out.

    * 3 Models

    Anarchy
    This means there is neither copyright, nor any other specific regulations for cultural affairs working at all. There was a historical precedent pretty close to these conditions. In Jacobinian France, for a short period of time, which ended in 1793, all royal publishing privileges were abolished. Aside from that particular case, individual printing privileges were granted by the royalty in the pre-copyright era.

    Copyright
    A universal publishing monopoly. It is the private property, like ownership, imposed onto cultural phenomena. This regime was introduced for the first time in England in 1710.

    Authoright
    A universal right to attribution for individual authors. This regime has never existed thus far, although its partial implementations have occurred.

    * Method

    As a method for the deliberation we take a virtual writer, who is looking for a publisher, say, in XVIII century. We will put the writer in different possible scenarios in his quest up to its resolution. It is my understanding that neither genre or kind of art, nor historical time, nor any other technicalities play a central role in the reality we are going to scrutinize. Said scenarios, in their essential features, can be equally applied to any creator at any time in any area of human activity. It would be all the same for a music composer, or painter, or inventor, in XIX, or XXI, or XXX century, regarding fundamental points, although all mentioned above cases and countless others obviously differ in detail.

    # Anarchy

    * Scenarios

    An author has to shop for a publisher. He never found one, and thus end of story.

    Suppose he did find a publisher. He can conduct preliminary negotiations before letting his work go.

    Suppose he got some result. For instance, in case the work is accepted, the author will be paid such and such. If the sum is considerable – we get a happy ending in the very beginning.

    If the publisher wants exclusive rights (effectively, for that period of time only, before the work is published, because after that any other publisher can use it) he may pay more to buy the author’s loyalty.

    If the publisher does not want exclusive rights, the author may bring the manuscript to another one and get paid by both. He has to have more than one copy in this case.

    What happens after the publishing? This depends on the acceptance of the work by the public. Generally the author gets more and more exposure as far as other publishers use his work. And they do it, while it brings any money. They all promote him.

    Does second-hand publishing bring any incentive to the author? If a publisher wants to be branded he may pay the author so that the publisher will be the author’s announced sponsor. Furthermore, the next work will be sold for a greater price, if the first one got famous. In the latter case, publishers will compete for the ability to get the next one first hand. Being the first in this environment means being a brand.

    What if the very first publisher robs the author: does not give any written promise, take the work and publish it under some other name? This does change situation, but not much. If the first stolen work brings considerable money, the second one will not be stolen, but bought, because other publishers will intervene in order to get it. Thanks to anarchy, that is to say, thanks to the no-exclusive-rights situation, it will become known sooner or later, who is the real author with all corresponding consequences for the author, the publisher-thief and the entire artist and publishing communities.

    As soon as this variant brings bad reputation to the thief, he must take it into account. Also, the author may turn to a court and sue the publisher under civil law. This will be a matter of proof and money, but still is possible. For example, the author could have another copy of the work and a witness he had it before bringing the work to a publisher. Such measure may effectively secure the work from stealing.

    Now, suppose the first work does not bring money, which means the author hasn’t got any popularity. In this case the entire story starts over with the next work.

    * Summary

    Making the first summary, let us stress that as far as this model creates a highly competitive situation, publishers have to fight to develop brand names. A publisher may achieve this by:
    1. Trying to be always the first,
    2. Trying to offer the best in terms of quality-for-price,
    3. Trying to sponsor authors, instead of making appearance as a lover of free rides.

    This should bring another layer of incentives to authors.

    It is noteworthy that as far as all works are accessible for all publishers, success of an author depends on his talent. On the other hand, if an author lacks talent, it is not for us to worry about his failures.

    *
    A Historical Excurse

    The Anarchy model is based mostly on contractual law, so eventually, publishers, after getting considerable economical power may (and, history says, they have), plot to contract authors and conduct publishing in a copyright-like manner. That is, they would try to secure their portfolios and thus revenues for some time. The next step will definitely be an attempt to make it universal and to have a government backing this, so to strip, effectively, authors’ abilities to dictate conditions. This is what happened in 1710 in England.

    Before then, for about two hundred years, the Crown resisted the demands of licensed scribes to limit the freedom of the spread of the printing press and free publishing. In 1710, the Crown was eager to get rid of anonymous pamphlet writers, so the government’s desire for effective censorship met with publishers’ desire for easier money and thus brought about the Statute of Queen Anne. It is even more interesting that actually the same law (in its basic features: 14+14 years of limited printing monopoly) was later adopted in the US in order to provide “the progress of science and useful arts.”

    The question is, how could the same mechanism work in such contradictory directions: to back monopolies for big guys and, at the same time, to provide incentives for “starving artists?”

    Through centuries and countries publishing monopolies have definitely proved to be practical for governments and big publishers, the pretext being that it is to protect authors, creativity, culture, education, etc., but has this speculation ever been proved to work, in reality? Let us see.

    # Publishing Monopoly aka Copyright

    What I am going to do now, is copy the above text and make changes to it when necessary to stress the differences between two models. I shall mark the changes by numbers in parentheses.

    * Scenarios

    Well, an author has to shop for a publisher. He may never find one and thus end of the story. There is no difference with the Anarchy in this regards.

    Suppose he did find a publisher. He may conduct preliminary negotiations before letting his work go. There are no differences so far.

    Suppose he got some result, like: in case the work is accepted, then the author will be paid such and such. Happy ending in the very beginning. No differences as of yet.

    If publisher wants exclusive rights for the printing monopoly of the legal term – here is the first difference with the Anarchy model (1) – he may pay more.

    If the publisher does not want exclusive rights, or the author does not want to relinquish all of his rights, he can bring the work to another publisher and get paid by both.

    What happens after publishing? This depends on acceptance of the work by public. Author gets exposure depending on his (one!) publisher’s marketing efforts and abilities (2) – this is the second difference with the Anarchy model. The next work may be sold for a greater price, if the first one got famous. In latter the case, publisher will compete for the ability to get the next one first hand. On the other hand, the publisher, having exclusive rights is interested to promote the work, no matter how talented it is (3).

    However, there is one new circumstance brought in by legally extended printing monopoly: having secured portfolio for some prolonged time (initially for 14 + 14 years, about 100 years today) a publisher may not be interested in buying another book (4). Or he may buy it not for publishing, but to prevent competitors from doing this (5). In any case, this is exactly what publishers fought for: to make their life easier at the expense of public and this is how the printing monopoly turns around and strips authors of an income instead of providing it. The latter phenomenon fires back on an author: condemned to sell a work to a single publisher, whoever he is, the author has to take this fact in consideration and make adjustments to the work, which, generally speaking, undermines creativity (6) – which is one more specific feature brought in by publishing monopoly.

    What if the very first publisher robs the author: does not give any written promise, takes the work and publishes it under some other name? This does change situation, because having exclusive rights the publisher can provide that no one ever learn who the real author is (7).

    However this variant can bring bad reputation to the publisher-thief, so he must take it into account.

    The author may turn to a court and sue the publisher under the copyright law (8). But again, if stealing is not proved, the author lost his work forever, while within the Anarchy he may just compete with the publisher-thief. Anyway, a law suit is always a matter of proof and money, and in this respect there is no difference between models.

    Another new feature is the following: by the very nature of art we, the audience, develop personal relations with a work of art. These relations are, in fact, very similar in nature to those with real people. The differences are only in the consequences of the relations. When it comes to the access to some wanted work of art, generally speaking, there is no substitute available: if you want to read the Bible, then you want to read the Bible, if you want Lord of the Rings, then you want Lord of the Rings. It is a personal matter. Yes, in practice, if you cannot get the artistic work that you want, you may find some “substitute,” but this would hurt like losing and finding substitute for a friend. That means a publishing monopoly on a single book is, in fact, a monopoly that is as effective as if this book were the only one on the market. Thus, copyright allows the raising of the prices to the maximum level possible (9). This feature stays in the way for public access to distributed works in terms of price and thus badly affects markets.

    A quite unexpected development within the copyright-driven environment, is promotion of actual plagiarism (10). Plagiarism cannot survive within the Anarchy, because the public is very sensitive to it and no publisher would like to risk his brand, while all original works are at his disposal. This is not the case within the copyright-driven environment. It is very tempting here to get and sell something similar to a well-selling work. In order to do so, one only needs to provide some measured formal differences with the example to follow. What is it, if not a plagiarism? Interestingly enough, another publisher would prefer to buy described plagiarism instead of something really new with an uncertain projection for sales. Hence, we have one more blow to creativity caused by publishing monopolies.

    Yet another lovely consequence of copyrights is that publishers try to influence audiences in order to conserve a current level of perception of arts (11). Having secured a portfolio for years, a publisher wants to make sure all of it would be sellable as long as the monopoly lasts. Thus, publishers must try to retard the promotion of new ideas, new aesthetic approaches to arts, new kinds of arts, new genres, you name it. They need to restrain the development of public tastes. This trend must bear some inertia in it: while investing money in the retardation and conservation of public development, publishers are driven to get new works to fit the picture, thus contributing again, for the third time in the suppression of creativity.

    Now, let’s get back to the author. Suppose the first work does not bring money, which means the author hasn’t got any popularity. The entire story starts over with the next work. However this would be harder for the author to start over in the environment poisoned by publishing monopolies: publishers having backed by their portfolios would not want to risk for the author, which had not succeed already. It wouldn’t matter if he was misunderstood genius or one which just failed to convince a powerful publisher to market his work.

    * Summary

    Actually, I used to think that the Copyright model was not as bad than as it appears now. It looks like it completely disrupts a self-tuning market, applies pressure on a creator’s mind to give up to tastes of the now-well-defended-publishers, compromises creativity, and promotes actual plagiarism. Its important feature is that any work of art may disappear unnoticed, regardless of how talented it is. High prices must overwhelm the book/art market and undermine its development.

    The last trend brings in tensions in the industry and spurs up attempts to extend the initial monopoly even further in order to restore vanishing profits. Actually such attempts come forward even before markets shrink or regardless. As long as the idea of monopoly is considered to be the right one, holders should fight to always extend it.

    The copyright trick amazes me more and more. It badly affects culture and civilization in many ways while helping publishers to make business easier. What is really striking here, is that “easier” does not mean “better” in terms of revenues!

    # Authoright

    I want to explain some of our guidelines to this really simple model. We saw the Anarchy model provides a pretty good framework for culture and culture related market development. Still, there is some uncertainty in terms of the author’s well being, some room for dishonesty and other anti-cultural trends to exploit. Thus, it makes sense to provide backing by society for culture so that cultural phenomena would be treated according “the law of nature” of culture:

    1. The main law of nature causing cultural development is ultimate freedom.
    2. Cultural equivalent of physical stealing is lying.
    3. Cultural phenomena is produced in an individual mind or in free communication of individuals.
    4. Culture, while being governed according to its nature, will pay back in infinitely greater degree to an author, publisher and the entire society.

    The main features determining the Authoright model are:

    1. No entity of any kind may control or regulate in any way copying, sharing, distribution, all and any public use of an idea, work of art or any other cultural phenomena.
    2. Every author has an eternal and unalienable right for attribution.
    3. A publisher or any other entity may pay an author for the right to be named his/her sponsor. The amount is the matter of negotiations.
    4. No company, organization or a group entity of any kind and nature beyond the actual author(s) may be considered an author for any creative work.
    5. The source (publication) of a work must be attributed to in every public use of the work.
    6. Any sponsor of an author, or a single work, or a single publication deserves proper attribution.

    What I am going to do now, is to copy Copyright model text and make changes to it when necessary. The differences with the Anarchy model will also be noted. I shall number all the specific features of the model in parentheses.

    * Scenarios

    Like the other two models, an author has to shop for a publisher. He may never find one, and thus end of the story. However, we have to note now, this kind of ‘end’ is essentially less probable here (and within Anarchy, as well) than in the environment poisoned by publishing monopolies: as far as it is much more difficult to secure a portfolio for considerable time, it is vital for a publisher to be first in finding a new work or discovering a new author (1).

    Suppose the writer did find a publisher. He may conduct preliminary negotiations before letting his work go.

    Suppose he got some result. For instance: in the case the work is accepted, then the author will be paid such and such. Happy ending in the very beginning. However, it is noteworthy that this kind of end is more probable here than having publishing monopolies in place: an author and his new work are much more valuable assets now for many reasons (2). Firstly, because he is free to bring his work to as many publishers as he wants. Secondly, because only individual authors can claim authorship. Thirdly, because the best way for a publisher to develop a brand is to get the work first hand, to name just a few reasons.

    If a publisher wants exclusive rights (until the work is published) he may pay more. The same story happens within other models. Differences lie in time frames only, and this affects publishing only. We saw that copyrights bring nothing good here.

    If the publisher does not want exclusive rights until the moment of publishing, the author may bring it to another one and get paid by both.

    What happens after publishing? This depends on the acceptance of the work by the public. Anyway, the author gets more and more exposure as far as other publishers may use his work. And they do it while the work brings any money. Thus the entire competing publishing-community promotes the author. (3). If a second-hand a publisher wants to be branded he may pay the author in order to be the author’s announced sponsor (4). These two features have a more powerful effect within Authoright compared with Anarchy, because attribution is mandatory here. More importantly, is that an author is really FREE TO CREATE now, has no necessity to adjust to anyone’s taste, but to his imaginary interlocutors only. Having his name protected by law and the work promoted by the entire publishing community, the author knows that he will be judged by the public for his work only (5).

    The next work will be sold at a greater price, if the first one got famous. In the latter case, publishers will compete for the ability to get the next one first hand. It is important to underline that having no possibility to secure some prolonged portfolio, publishers must be really fast to grab any new work to use. This is important in terms of incentives for authors (6).

    Now, what if the very first publisher may rob the author: will not give any written promise, take the work and publish it under some other name? This changes not much. If the first stolen work brings considerable money, the second one will not be stolen, but bought, because other publishers will intervene in order to get it.

    This variant, on the other hand brings a bad reputation to the publisher-thief, so he must take it into account. Now, the author may turn to a court and sue the publisher under Authoright law (7). However, this difference between Authoright and Copyright is not essential. We just have to remember that under Authoright an author can sue for the stealing of the name only. The important point is that even if stealing happened, but is not proved, the author may just compete with the publisher-thief (8), which is one more advantage to compare with copyright.

    Now, remember, we were discussing earlier, that by the very nature of art we, the audience, develop personal relations with a work of art. These, in fact, are the same as those with real people. The difference is only in consequences of the relations. So, when it comes to the access to some wanted work of art, there is no substitution available, by definition. Yes, in practice, if you cannot get the artistic work that you want, you may find something else, but it is as hurtful as losing and finding a substitute for your loved ones. Because of that, a printing monopoly on one book allows the rights-holder to raise the price as if this book was the only one on the market. This is absolutely impossible within the Authoright environment, where a work of art is accessible for everyone to copy and publish since the very moment it is published (9).

    We also remember another quite unexpected development within the Copyright model, which is the promotion of actual plagiarism wrapped in hypocrisy: having copyright, it is very tempting to promote something similar to a well-selling work with some formal differences. This absolutely makes no sense within the Anarchy and Authoright models, because the public is very sensitive to plagiarism and no publisher would risk his reputation while all original works are at his disposal. Thus, while the publishing monopoly (copyright) promotes plagiarism and compromises creativity, Authoright promotes creativity and makes plagiarism impossible. It spurs the natural drive to get original works (10).

    Authoright makes baseless another absolutely unacceptable consequence of copyrights: publishers’ motivation to restrain the development of audiences (11). As far as they cannot secure any portfolio for a period of time greater than the one necessary to prepare a work for publishing, a publisher has no interest in stagnating and thus organizing public taste. On the contrary, because in this environment everybody is chasing after the New, it is necessary to have a public capable of understanding the New. It would be in the publishers’ best interest to push the public to learn, to develop understanding of aesthetic principles and so forth.

    Now, suppose the first work does not bring any money, which means the author hasn’t got any popularity. The entire story starts over with the next work then. Another start is likely to be easier in the Authoright environment, where the publishers and the public are in an ongoing hunt for new works and authors (2). After all, the only thing which really matters within Authoright is talent.

    # 3 Models. General Summary

    * The Authoright model comprises the advantages of both, the Anarchy and the Copyright models, while bearing none of their disadvantages: Under Authoright, like within the Anarchy model, an author is more likely to find his first publisher, if he is unique. Unlike the Copyright model, an author is less likely to find the first publisher if he repeats after someone else.
    * Like within Anarchy, an author is a more valuable asset in general terms to compare with Copyright, and thus always has a chance to get paid better from the very beginning.
    * Unlike to any other environment it is impossible, under Authoright, for any entities, but the individual authors of the work to claim authorship. This specific feature gives the author another push into the very center of all culture-related businesses.
    * Like within the Anarchy model, authorighted work gets promoted by the entire competing publishing community, while under Copyright the promotion of a work is restricted to the good will and real abilities of one or somewhat limited number of publishers and other public users of the work. Under Authoright, the promotion of a work automatically means promotion of its author.
    * Similar to the Anarchy environment, an author may sell his work either literally fixed in some media or in the form of sponsorship as many times as he gets. However, within the environment poisoned by publishing monopolies, he is actually condemned to one time or otherwise limited sale. Regarding sponsorship, any entity may call itself an author’s sponsor if it provides agreed-upon incentives to the author. This can happen to an author in any environment, but cannot be considerably useful within Copyright, because the quantity of business and other public users of a work of art is extremely limited. It may be useful under Anarchy, but in a lesser degree than under Authoright, because of differences in the attribution requirements.
    * Similarly to the Anarchy environment, the more talented an author is and thus the more unique, the more he gets promoted. However, within the environment poisoned by publishing monopolies, the author is pushed to follow well-selling examples.
    * Like within the Anarchy environment, an author is free and encouraged to create truly new, and on the other hand, meets no restrictions to learn from others. However, under the copyright regime, an author must adjust himself to the tastes of a limited number of publishers in an increasingly greater degree, and, on the other hand, is limited to learn and build upon the works of others.
    * Similarly to Copyright, an author can protect his name using the special law of the mandatory attribution, while under Anarchy, he has to use non-specific laws. On the other hand, I presume, it is likely that unwritten rules will emerge and work, like they do in academic environment.
    * Similarly to Anarchy, if a publisher steals an author’s name, the author can still compete with the thief. On the contrary, under copyright, a work, if stolen and is not recovered in the court, is lost forever.
    * Like within the Anarchy environment, markets are flooded with works of art with a spectrum of content, quality and prices, while under Copyright, market development is limited at least two times: firstly, by direct regulation by publishers and secondly, by monopolized prices. Within the Anarchy and Authoright environments, a work gets promoted by all of the publishers willing to copy it. Thus, it gets exposed regardless of the economic and other abilities of specific publishers. Within the Copyright environment, exposure of a work really depends on the one publisher who bought it. Hence, the author is naturally forced to look for a big publisher, which means that Copyright enforces regular monopolies also, not only culturally based ones. This trend once again forces for the author to bow to the taste of that big publisher in order to be published. Thus, an author’s dilemma in the Copyright-driven environment really is: “more exposure for less creativity”.
    * Similarly to Anarchy, an author is discouraged to conduct plagiarism under Authoright, while he is encouraged to do so under Copyright. Within no-publishing-monopolies environment, where ALL WORKS ARE ACCESSIBLE FOR ALL PUBLISHERS, the publishers are naturally driven to go after the best, and have to get it by all possible means. Under the Copyright model, a publisher secures his portfolio for some prolonged time. This portfolio is the real essence of the entire Copyright business, nothing else. A big publisher may invest big money into the promotion of a work. A small one is tempted to follow: he will try to buy something similar to secure his profits. There is no urgent need to find the best for anybody, because the only urgent need is to find/order something somewhat different from a bestseller and to monopolize it. That is, plagiarism is encouraged. It reveals itself in false diversity, when the market is flooded by many talentless works following some greatly promoted ones as examples. We have to emphasize this: greatly promoted works, not the best ones, stage examples to follow. This also addresses the current situation regarding derivatives. While a real creator’s freedom to build upon earlier works is suppressed, a plagiarist can very easily measure the level of formal differences and follow all necessary formalities with permissions in order to be published.
    * Like under Anarchy, publishers are interested in public development under Authoright , while under Copyright publishers are interested in public retardation.

    # Conclusion

    An amazing point is that every positive speculation about copyrights (and I understand, all the same applies to patents and other kinds of “intellectual property” as well) look somewhat rational on the surface and work in the opposite direction in reality. This is seen when exclusive rights get analyzed in depth.

    The Authoright driven environment, in very general terms, creates highly competitive, aggressively growing markets with the common intention towards the great New, providing market/competition-driven incentives to authors and publishers… The most important point here is that cultural affairs are governed according very nature of culture and thus it intensively develops. The last point is crucial for the “Knowledge Based Economy”

  • http://earreverends.com Jay Fienberg

    One good thing about the EFF proposal is that it represents an alternative money making scheme that could, at least in theory, chill-out the RIAA. I think this chilling-out is important in freeing the post-record company economy around music recordings.

    But, to me (as a musican who releases recordings independently), the interesting aspect of the EFF proposal is that it implicitly addresses the intangible value of music and the absence of a tangible “medium” of music commerce in the digital, interconnected, environment.

    Before recordings, music commerce happened around the tangible events of performances and/or around the development of compositions–and that commerce was in the form of both patronage and “for hire”. With records/CDs, music commerce has been happening around tangible media (discs) as commodities.

    But, we don’t usually want discs that happen to have music on them: we usually want music that has happened to be on discs.

    Music recordings on the Internet, in terms of commerce, become more akin to a singular utility service than to individual commodities. And, the EFF proposal, I think, recognizes this and attempts to address it in a neutral/open/comprehensive manner.

    But, I also think this issue is about putting the past to rest: the music commodities of the past are now like utilities. Let’s support them functioning this new way. Then, judging from history, musicians will continue to find new ways to associate their work with tangible events and/or artifacts around which individual patronage/commerical transactions will be conducted.

    In the past, statutory licensing has been one decent way to put the old technology/media to rest with the new. The other good option has been to give to the old no protection (e.g., VCRs vs films). Let’s roll, either way!

  • http://www.xs4all.nl/~phulshof Pieter Hulshoff

    Rep. Boucher,

    I must say that I find myself to be mostly in agreement with what JD Lasica wrote earlier: if it is true that P2P does not truly influence the sales, then trying to regulate a rapidly evolving technology may very likely do more harm than good, especially to lesser known artists. If the industry persists in their current reaction to this new technology it is not unlikely that they will work themselves out of existence in about 10-15 years, but I’m sure they’ll eventually find a way to work with it, just like they did with all new technology of the past century. If not: for the larger part of history there was no recording industry. They filled a need while technology evolved, and perhaps with the new technology advances they no longer have a purpose as an intermediary between artist and fan.

    As written by others: there are also many artists that are embracing this new technology as a (very) cheap way to reach their fanbase, and to promote the one thing they actually make money off: live tours. Who are we trying to protect? The artists that create the music, or the industry whose role as a middleman may slowly be phasing out in favor of a cheaper alternative? Considering how artists have been treated by record companies in the past (e.g. the ‘work for hire’ clauses), I can imagine many artists who’d love to break free of the restraints placed on them by this industry.

    I’m very much in favor of letting the market decide where this will go. You are correct: many Americans are technically acting outside the law, but I can’t imagine an industry sueing their clientbase getting any improvement on their bottomline either. I’m sure they’ll come up with better alternatives when they have to.

  • Michael Johnson

    I have some info I’d like to pass on to you all.
    If you or anyone you know has been threatened/busted for copyright violations regarding video or audio media, you may be interested in what I have to say.
    I worked for a school district that for 7 years INTENTIONALLY stole copyrighted movies, etc. to advertise 2 local businesses on our “educational” cable channel (200K households). What the motivation for this was is unknown to me…
    I became aware of it at the same time that I observed abuse of the students by the perpetrators of these crimes, including one of them recruiting students for devil worship meetings.
    I reported this to the school officials. This began an “Alice thru the Looking Glass” experience for me, eventually resulting in me being fired. This has caused extreme detriment to my family.
    I also reported it to: CA Board of Education, Arnie and his wife, the FBI, U.S. Justice Dept., MPAA, RIAA, and each of the copyright owners individually. Many others too. I have boxes of evidence, there is no doubt. Dates, times of offenses (required for prosecution of these crimes), videotapes, numerous witnesses, certified mail receipts of notification, etc. Agent Sanchez of the Victorville FBI office told me: “because of the negative publicity, these copyright owners are usually hesitant to prosecute when a school is involved.” That seems to be the case, so basically I get screwed and the crooks are still laughing and working. Unlike the typical d/l’er, these folks were violating the law to make huge sums of money.
    My reason for telling you all this is not to solicit sympathy. It is because it is quite clear the law is not being applied equally. I’m not a legal expert, but I believe that your attorney can use this information to get charges dropped.
    Please feel free to spread this wherever you think it may do some good. I want to sing, sing, sing. The MPAA and copyright owners are no friends of mine, so maybe I can do some good going in the out door.
    I have _lengthy documents on the web describing the affair in great detail:
    http://webpages.charter.net/drfibes/crimesatvvuhsd.htm
    http://webpages.charter.net/drfibes/improprieties/response_to_dr_marks.htm
    The last link is a letter to the superintendent expressing shock at her threat to fire me for whistleblowing. She resigned 12 days after I sent it.
    Send ‘em to me. Maybe we can blow this whole thing sky high. My snail mail address is on one of the links.

  • http://ohio-criminal-lawyer.com/white-collar-crime-rico.html Ohio RICO lawyer

    Anti-Racketeering laws – collectively known as RICO statues – have loopholes that have caused problems sinces their inception. Specifically, the RICO Act stipulated that an individual who committed 10 or more of the same crime, which crime was classified as “white collar” or racketeering, could be charged with racketeering – a federal felony offense that often carried with it extremely stiff penalties. In the P2P generation, illegal file-sharing may, in certain circumstances, qualify as racketeering under certain jurisdictions. Such a state of affairs could easily be abused by intelligence and law enforcement agencies to harass the average law-abiding citizen who simply happens to like music, movies, video games, shareware, etc.