October 2005

WSJ editorial: “The World Wide Web (of Bureaucrats)”

by on October 12, 2005

This Saturday, my old friend Wayne Crews of CEI and I had an editorial in the weekend edition of The Wall Street Journal dealing with the increasing calls for more “global governance” of the Internet. In our essay, “The World Wide Web (of Bureaucrats),” Wayne and I point out that we are at a critical moment in the history of the Internet, with calls for collective global governance coming from many different quarters.

A “U.N. for the Internet” model would be a disaster, we argue, since it would allow regulators from across the globe to get their paws on the Net and start imposing a variety of confusing, country-specific cultural and legal standards on this open, borderless network or networks. We conclude the essay by noting that, “if laissez-faire is not an option, the second-best solution is that the legal standards governing Web content should be those of the ‘country of origin.’ Ideally, governments should assert authority only over citizens physically within its geographic borders. This would protect sovereignty and the principle of ‘consent of the governed’ online. It would also give companies and consumers a ‘release valve’ or escape mechanism to avoid jurisdictions that stifle online commerce or expression. The Internet helps overcome artificial restrictions on trade and communications formerly imposed by oppressive or meddlesome governments. Allowing these governments to reassert control through a U.N. backdoor would be a disaster.”

On a related note, I also encourage you to read this excellent new editorial by Carl Bildt, the former prime minister of Sweden. Bildt argues that, “It would be profoundly dangerous to now set up an international mechanism, controlled by governments, to take over the running of the Internet. Not only would this play into the hands of regimes bent on limiting the freedom that the Internet can bring, it also risks stifling innovation and ultimately endangering the security of the system. Even trying to set up such a mechanism could cause conflicts leading to today’s uniform global system being Balkanized into different, more or less closed systems.”

Amen to that.

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The RIAA’s New Clothes

by on October 10, 2005

I’ve got a new article up about the recording industry’s short-sighted strategy to online music downloads. I point out that digital rights management technologies don’t prevent piracy, but they do treat their customers like criminals and give people like Steve Jobs control over their customers.

I think it would be great if it became conventional wisdom that DRM technology is the perpetual motion machine of the 21st century. DRM is fundamentally contrary to the way computers work, because there’s no such thing as an uncopyable bit. You can write software to obfuscate your data, thus making copying more cumbersome, but that just makes cracking it more time-consuming, not fundamentally more difficult. Every few years, technology companies promise a new generation of copy-protection that will actually work. And each generation, they fail miserably.

The sooner the folks at the RIAA and MPAA realize that, the sooner they’ll stop hassling their paying consumers with arbitrary and pointless restrictions that penalize their customers while doing nothing to stop pirates.

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Blegging for DMCA exemption ideas

by on October 7, 2005

Speaking of the DMCA, the Copyright Office this week began the triennial rulemaking that considers whether any classes of works should be exempted from the Act’s anticircumvention provisions. Initial comments are due December 1.

Making infringing uses of a work, such a unauthorized copying or displaying, has always been prohibited by the Copyright Act subject to fair use limitations. So, if you legitimately have access to a work (an ebook, say) and you circumvent technology that would otherwise prevent you from making a copy of it (say, to copy a couple of pages for a class), the DMCA would not cover this circumvention. Regular old copyright infringement would control here and you could raise a fair use defense.

The DMCA, on the other hand, prohibits circumvention of technology that would otherwise limit access to a protected work. Because fair use is not a defense to this prohibition, the DMCA says that it “shall not apply to persons who are users of a copyrighted work which is in a particular class of works, if such persons are, or are likely to be in the succeeding 3-year period, adversely affected by virtue of such prohibition in their ability to make noninfringing uses of that particular class of works under this title[.]” That exempted “particular class of works” is determined by the proceeding that began this week.

The standard for a class of works to be exempted is very high. For one thing, “proponents of an exemption must provide evidence either that actual harm exists or that it is ‘likely’ to occur[.] … Claims based on ‘likely’ adverse effects cannot be supported by speculation alone.” Secondly, if a work is available in an unprotected format, then it likely won’t qualify because you can always use the unprotected format to make your uninfringing use. The DMCA’s anticircumvention provision has to render the class of works completely inaccessible for uninfringing uses before it will be exempted:

For example, in the first rulemaking, many users claimed that the technological measures on motion pictures contained on Digital Versatile Disks (DVDs) restricted noninfringing uses of the motion pictures. A balancing consideration was that the record revealed that at that time, the vast majority of these works were also available in analog format on VHS tapes. Final Reg. 2000, at 64568. Thus, the full range of availability of a work for use is necessary to consider in assessing the need for an exemption to the prohibition on circumvention.

In the last rulemaking only four classes of works were exempted. So, given how strict the criteria are, can anyone think of any class of works that could be exempted this time? I would really love to hear any suggestions.

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Confused reasoning about the DMCA

by on October 6, 2005

Over at CNET, Adam’s colleague Patrick Ross has an incredibly confused defense of the Digital Millenium Copyright Act:

When content producers know that they can experiment with various protection approaches, they’re more comfortable entering the online market. Also, investors are more inclined to fund such efforts. Imagine a world of unlimited digital content, packaged with a range of TPM at varying prices. In that world, consumers can purchase exactly the amount of use they need and not pay for more.

But if HR-1201 [the Digital Media Consumers Rights Act, introduced by Rep. Boucher] becomes law, every consumer could legally hack any TPM by claiming fair use, and as fair use isn’t codified, there would be as many definitions of it as there are consumers. Consumers would be legally sanctioned to break their contracts with the content provider.

No sane business operator enters a contract in which one party has the right to disregard its terms at will, but that’s what HR-1201 permits. That hated TPM would disappear from the market, as there’s no reason to employ a lock if everyone has a legal right to the key. But as TPM leaves, so do the digital offerings that come with it.

The first sentence of the last paragraph is a simple, unambiguous falsehood. The Boucher bill specifies “that it is not a violation of [the DMCA] to circumvent a technological measure in connection with gaining access to or using a work if the circumvention does not result in an infringement of the copyright in the work.”

You tell me how that abrogates any contracts.

This isn’t just nitpicking. TPM schemes can place any kind of restriction they want on their cusomers, including restrictions imposed retroactively and without notifying their customers. (Apple, for example, unilaterally reduced the number of copies of its songs existing customers were allowed to burn to CD after the songs had already been sold) There is no reason whatsoever to assume that a TPM scheme constitutes a “contract” between a company and its customers. Prohibiting circumvention of TPM schemes doesn’t aid contract enforcement, because a TPM isn’t a contract.

On the other hand, the Boucher bill would not in any way prevent the enforcement of actual contracts. Fair use is not a defense against breach of contract, and Boucher’s legislation wouldn’t change that. So if a user signs an agreement promising not to break a TPM scheme, and then breaks it anyway, the company that designed the TPM would have every right to sue the customer.

There’s also absolutely no reason to think that content wouldn’t be made available for download without TPMs. Every CD is effectively TPM-free. I could take any CD I own, “rip” the songs on it, and upload them to a P2P network. Yet the recording industry still sells CDs. Why would we think online downloading would be any different?

The folks at PFF desperately want to portray the DMCA as a “free market” approach to copyright problems. But the shoe just doesn’t fit. TPM systems are not contracts, and circumventing them, as such, is not theft. Simply stated, the DMCA is a government-imposed restriction on the design of technological devices. It’s fine to argue that such restrictions are needed to curtail piracy, but such restrictions have nothing to do with freedom of contract.

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The RIAA – Satellite Radio Royalty Spat: What is the “Fair” Price of Music?

by on October 6, 2005 · 6 comments

This royalty spat between the RIAA and the satellite radio industry promises to get very ugly. Anytime major copyright owners and users get in a room to argue about prices, you can be sure that sparks will fly.

I don’t pretend to have any idea what the “fair” price for music is. Honestly, I am a bit of relativist when it comes to prices. I don’t think that there is an objectively “fair” price for anything in this world outside of the price that the contracting parties find mutually beneficial. Once two parties handshake on a deal, that’s the “fair” price in my book.

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Yahoo as a Media Slayer

by on October 6, 2005

In past years, when debating media issues and media power at various events, a lot of critics use to laugh or scoff at me whenever I suggested that new media operators like Google and Yahoo were forces to be watched since they really could start to eat into the power of traditional media companies.

Well, it’s not just me saying this anymore. Read this great column by Mark Glaser of Anneberg’s Online Journalism Review entitled “Is Yahoo Public Enemy No. 1 for Big Media?”

I TOLD YOU SO !

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And the Oscar Goes to…

by on October 6, 2005

Believe it or not, cell phone movie makers now have their own Academy Awards, at least in Europe, that is. The BBC reports that Europe’s first film festival for mobile phone movies will open this week in Paris.

While mobile video is just starting to catch on here in the U.S., it is all the rage over in Asia and Europe since citizens have been quicker to jump on the wireless bandwagon there. As a result, cell phone “art” has been quicker to develop and is now even the subject of contests and awards.

I find this particularly interesting in light of Europe’s ongoing efforts to expand media regulation. You will recall that Patrick Ross released a short paper last week about efforts underway in the European Union to grapple with media convergence and the challenges it poses for traditional media regulation. In “Regulation Without Frontiers: Europe Shows U.S. Policymakers How Not to Embrace Convergence,” Patrick notes that European regulators are foolishly looking to impose outmoded, broadcast-era regulatory mandates of the fast-paced, borderless new world of online media.

So what do the EU regulators plan to do about all these mobile media movies and videos that are now winning awards?!? How are they going to regulate all this stuff? If, for example, someone creates an award-winning but very controversial film and makes it widely available via mobile devices, how are regulators going to bottle that up? Are they going to fine that person directly (assuming they can find them)? Or are they going to force mobile media network providers to police their networks and censor on behalf of government? Are they going to require all this stuff to be rated or filtered? Regardless of the enforcement path they choose, I just don’t see how it could work.

Of course, we can expect this same debate to come to America very soon. We’re already seeing early proposals to extend broadcast regulations to cable and satellite, so it wouldn’t be surprising to see regulators target mobile media next.

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The Left Turns: FAIR Endorses Unplugging Public Broadcasting

by on October 5, 2005

The other day, a report came out from an inflential media advocacy group advocating “unplugging” the Corporation for Public Broadcasting and making it independent of the federal government. Such calls, of course hardly cause a ripple when they are made by conservatives or liberations (even here at TLF). But this particular report was from FAIR — Fairness and Accuracy in Reporting–a certifiably Leftie group that campaigns against conservative bias in the media. (With–until recently–stunning success, it seems. Of course, they don’t see it that way.)

Anyway, FAIR is fed up with CPB, now that it is led by conservatives, such as Ken Tomlinson, its chairman. Tomlinson has been pushing to balance public broadcasting’s output–which has been famously left-leaning for years. (They see Tomlinson, of course, as pushing for conservative bias in public broadcasting.)

FAIR’s solution: to cut CPB off from the federal government, making it an independent foundation. Enough of trying to “save” CPB, they say. The only way to protect public broadcasting is to cut it free of meddling (conservative) officials. They write:

Media activists, independent producers and public broadcasting advocates need to ask themselves whether CPB funding is needed to keep public broadcasting afloat–or whether that government support compromises the very independence of PBS and NPR, and prevents them from ever fulfilling their promise.

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Google, Do You Really Want to Be a Telecom Company?

by on October 5, 2005

So by now all of you have heard that Google’s imperial ambitions will potentially include a telecom / broadband infrastructure component as well. At least for the luckily residents of San Francisco, CA, that is. Google announced this week that it would be entering the competition to create a wi-fi network to provide San Fran consumers with high-speed Internet connections. (Om Malik of Business 2.0 suggests that Google’s ambitions are indeed quite grand and might include a full-blown national broadband network).

Will it work? I don’t know, but any time a company with an $86 billion market cap says it’s going to throw a big wad of their cash at something, you should take it seriously. But what is Google doing playing the infrastructure provider game? Certainly this is outside their “core competency” and does not seem to fit nicely within their overall gameplan of becoming the world’s most well-diversified e-commerce giant. If you look at the world through the prism of the “layers model,” it’s easy to imagine Google as a player in every layer EXCEPT for the physical infrastructure layer. Playing ball in that layer is quite a different game than what Google has thus far developed an expertise in.

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