On Wednesday morning, the U.S. House of Representatives Energy & Commerce Subcommittee on Communications and Technology will hold a hearing on “The Future of Video.”
As we Tech Liberators have long argued on these pages (1, 2, 3, 4, 5, 6, 7), government’s hands have been all over the video market since its inception, primarily in the form of the FCC’s rulemaking and enforcement enabled by the Communications Act. While the 1996 Telecommunications Act scrapped some obsolete video regulations, volumes of outdated rules remain law, and the FCC wields vast and largely unchecked authority to regulate video providers of all shapes and sizes. Wednesday’s hearing offers members an excellent opportunity to question each and every law that enables governmental intervention—and restricts liberty in—the television market.
It’s high time for Congress to free up America’s video marketplace and unleash the forces of innovation. Internet entrepreneurs should be free to experiment with novel approaches to creating, distributing, and monetizing video content without fear of FCC regulatory intervention. At the same time, established media businesses—including cable operators, satellite providers, telecom companies, broadcast networks and affiliates, and studios—should compete on a level playing field, free from both federal mandates and special regulatory treatment.
The Committee should closely examine the Communications and Copyright Acts, and rewrite or repeal outright provisions of law that inhibit a free video marketplace. Adam Thierer has chronicled many such laws. The Committee should, among other reforms, consider:
Here’s to the success of Sen. Jim DeMint, Rep. Steve Scalise, and other members of Congress who are working to achieve real reform and ensure that the future of video is bounded only by the dreams of entrepreneurs.
Imagine the following scenario. The government passes a law that includes regulations governing “transactional consent” for retail commerce. These regulations stipulate how buyers and sellers of various goods shall do business. Some of the rules give the sellers special rights to demand that the stores carry some of their goods as well as rules stipulating that stores not carry the goods of competing sellers from other markets. On the flip side, other preexisting rules give buyers the right to demand that certain sellers deal their goods to them at regulated rates.
Now, it’s true that a contractual negotiation takes place in this “marketplace” governed by “transactional consent” regulations, but does this sound like a truly free market to you? Most of us would say No.
Regrettably, that’s the essential error that the American Conservative Union (ACU) makes in a letter they sent to members of Congress this week in which they made the case against H.R. 3675 and S. 2008, “The Next Generation Television Marketplace Act.” That bill, which is sponsored by Senator Jim DeMint (R-SC) and Rep. Steve Scalise (R-LA), represents a comprehensive attempt to deregulate America’s heavily regulated video marketplace. In a recent Forbes oped, I argued that the DeMint-Scalise effort would take us “Toward a True Free Market in Television Programming” by eliminating a litany of archaic media regulations that should have never been on the books to begin with. The measure would:
- eliminate: “retransmission consent” regulations (rules governing contractual negotiations for content);
- end “must carry” mandates (the requirement that video distributors carry broadcast signals even if they don’t want to);
- repeal “network non-duplication” and “syndicated exclusivity” regulations (rules that prohibit distributors from striking deals with broadcasters outside their local communities);
- end various media ownership regulations; and
- end the compulsory licensing requirements of the Copyright Act of 1976, which essentially forced a “duty to deal” upon content owners to the benefit of video distributors.
Despite these clearly deregulatory provisions, in its letter to Capitol Hill, the ACU argues that the DeMint-Scalise bill would somehow interfere with what they regard as a free market in video programming. The ACU writes: Continue reading →
I’m finishing up Stanford Law School professor Lawrence Lessig’s latest book, Remix: Making Art and Commerce Thrive in the Hybrid Economy and wanted to make a brief comment about his call for a “simple blanket license” to solve online music piracy.
Overall, I thought Prof. Lessig made a good case regarding the benefits of “remix culture” and why copyright law should leave breathing room for the various derivative works of amateur creators. On the other hand, Lessig still too often blurs remix culture with “ripoff culture” (i.e., those who aren’t out to create anything new but instead just take something without paying a penny for it).
To solve that latter problem, Lessig again endorses a proposal that William Fisher, Electronic Frontier Foundation, and others have made for collective licensing of all online music, but he fails to drill down into the devilish details. He says, for example, that “by authorizing a simple blanket licensing procedure, whereby users could, for a low fee, buy the right to freely file-share” we could “decriminalize file sharing.” (p. 271)
I respect the fact that Lessig is at least acknowledging a problem exists and proposing a solution to it, but the collective licensing approach will be anything but “simple” in practice. As I have pointed out here before, collective licensing proposals and efforts almost always become compulsory in practice. They inevitably involve government mandates to determine (1) who pays in, (2) how much they pay in, as well as (3) how much gets paid out and, (4) who gets the money.
Continue reading →
Is there any other issue under the tech policy sun today that creates stranger intellectual bedfellows than collective licensing of online music? After all, as I noted here before, on the pro-collective licensing side we find mortal enemies EFF and RIAA (at least Warner) in league. And on the anti-collective licensing side, we have Mike Masnick and Andrew Orlowski. If you locked those two guys in a room and tossed out any other copyright topic, they’d probably end up killing each other with their bare hands. But somehow they agree on this one (albeit for somewhat different reasons).
Anyway, I continue to have mixed, but generally skeptical, feelings about online collective licensing. There are countless thorny fairness issues on both the artist and consumer side of things. What’s the pay-in rate? How is it set? Who all pays in? Who gets paid out, how much, and by what formula? And God only knows how you deal with those parties (whether they be ISPs, consumers, or even artists) who don’t want to be a part of the scheme.
For these reasons, I’ve always felt a
voluntary collective licensing scheme for the Internet is challenging, if not impossible. It would have to be compulsory to be a truly blanket license that covered all music, all users, and all platforms. I’m not too fond of that approach, but I think that’s where we are likely heading in the copyright wars. After all, that’s how it has been resolved in many other contexts historically. But that doesn’t give me any comfort since those other systems have been a mess in practice. This 2004 Cato study by Robert Merges provides some details and makes the case against apply the compulsory licensing approach to the online music marketplace.
At first glance, it seems to me that this big settlement announced today between Google and the book publishers regarding Google Book Search sounds a lot like an ASCAP model for online book transactions. Specifically, of the key provisions of the agreement, it’s this last one about the Book Rights Registry that makes me think of ASCAP:
Compensation to Authors and Publishers and Control Over Access to Their Works – Distributing payments earned from online access provided by Google and, prospectively, from similar programs that may be established by other providers, through a newly created independent, not-for-profit Book Rights Registry that will also locate rightsholders, collect and maintain accurate rightsholder information, and provide a way for rightsholders to request inclusion in or exclusion from the project.
That’s basically what ASCAP does today, and I think this sounds like a pretty good plan for books going forward. But I also find myself wondering: Could this be the beginning of a move toward a more comprehensive online collective licensing system for other types of content as
everything moves online. For example, could this model work for music? EFF has argued it could. And some in the music industry appear to be moving in that direction. (Talk about your strange bedfellows… EFF and the RIAA potentially on the same side of an issue!)
Of course, you’d need to get a lot more companies than just Google to play ball to make it work for music — specifically, you’d need all the ISPs on board. For books, by contrast, the reason today’s deal will likely work is because Google has been the only online operator with the scale and interest in putting the entire contents of so many books online. But all music is already online and much video is heading online, too. So, I think it would be much, much more challenging to make collective licensing work for music and video the way it appears it might work for books. (We’d probably need
compulsory licensing instead, which I am no fan of). The key to these voluntary collective licensing systems is large, trusted intermediaries that can clear a massive volume of transactions. Google can do that for books as today’s deal makes clear. It will be interesting to see if others suggest that music and video can and should work the same way. I’m skeptical, and I’m also a bit hung up on some fairness issues about how it would work, which I might touch upon in a future essay.
But I’m no copyright expert so I’d be interested in hearing what my colleagues and others think.
Update: Looks like someone beat me to the punch with the ASCAP comparison. I just starting reading through my RSS feed and finding reaction from others and came across Mathew Ingram’s post arguing that, “In effect, Google is setting up a body that does what ASCAP and similar groups do for musicians.”
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