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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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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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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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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