In an op-ed in The American today (and also in comments to National Journal on the reintroduction of the Boucher fair use bill), PFF’s Patrick Ross writes that those of us who advocate reversing the DMCA and strengthening fair use rights have little faith in markets. According to him, curtailing the DMCA means government intervention in emerging markets.
What arguments like Patrick’s ignore is that copyright is unlike other property rights, copyright is a different animal. This is evident in the fact that the power to create copyright is one of the enumerated powers of Congress laid out in the Constitution. Copyright would not exist but for the grace of Congress. If Congress decides to create copyrights, it has complete discretion (within constitutional bounds) to set the outlines of copyright. Congress can decide, among many other parameters, that copyright is for only one year or for 100 or for any length of time in between. Therefore, whatever market in copyrighted works emerges once Congress has created copyright, it must conform to the shape of the copyright Congress created.
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A couple of other quick points about the Hahn/Litan paper:
Throughout the paper, the authors fail to distinguish between neutrality as a means and neutrality as an end. The standard argument for regulation isn’t that all Internet services must operate at precisely the same speed. It’s that certain means of advantaging some traffic over others–namely, network providers setting up routing policies that prioritizes incoming traffic based on who has paid extra for the privilege–will be damaging to the Internet as a whole. You can agree or disagree with that premise, but I don’t think it’s that hard of a point to understand. And it obviously doesn’t implicate services like Akamai, which aren’t network providers at all, and who achieve “non-neutral” ends through scrupulously neutral means.
The paper’s citation of Ed Felten is a little bit odd. They describe him as a “proponent of the end-to-end principle,” which he is, but they fail to mention that he ultimately comes down against new regulations. I think that’s unfortunate, because I think Felten’s line of argument–that discrimination is a complicated concept, and writing a good neutrality rule will be a lot more difficult than people expect–is pretty compelling. Indeed, it’s precisely the sort of argument that should be old hat to two old hands at analyzing regulatory issues, an arena where the law of unintended consequences is constantly raising its ugly head. So it’s a little strange that the authors would implicitly lump Felten in with Wu and Lessig as a proponent of new regulation, rather than citing him as one of the most articulate skeptics of new regulation.
I should emphasize that I agree with Hahn and Litan’s policy conclusion. And I certainly think it’s possible that priority-based pricing will be beneficial, and that’s a reasonable argument against premature regulatory intervention. But it doesn’t strike me as very likely, and I think the debate would be enhanced if those who did think it was likely (on both sides of the debate) paid a little bit more attention to the details of how it would actually work. I think that if they did so, supporters of regulation would find that it wasn’t as big a threat as they’d imagined, and critics would find that discrimination won’t solve as many problems as they hope it will.
The AEI-Brookings Joint Center has a new paper on network neutrality regulation.
The economic logic of the paper is impeccable; price discrimination often benefits consumer because it allows service providers to provide premium services to those willing to pay, while giving other consumers the option of bare-bones service at cut-rate prices. The example they use is airline seats: both first class and coach passengers benefit from the airlines’ price discrimination–those who care about comfort get a nicer ride, while those who care more about price get a cheaper ticket.
But like most people commenting on this issue–on both sides of the debate–Hahn and Litan are frustratingly vague about how exactly the price discrimination regime would work. For example:
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My favorite press critic, Jack Shafer of Slate, penned a fun piece last week entitled “The Case fo Killing the FCC and Selling Off the Spectrum.” The essay builds heavily on the work of Tom Hazlett and Peter Huber, two fine libertarian minds that many of us here at the TLF admire. Here’s some of what Shafer has to say:
“Although today’s FCC is nowhere near as controlling as earlier FCCs, it still treats the radio spectrum like a scarce resource that its bureaucrats must manage for the “public good,” even though the government’s scarcity argument has been a joke for half a century or longer. The almost uniformly accepted modern view is that information-carrying capacity of the airwaves isn’t static, that capacity is a function of technology and design architecture that inventors and entrepreneurs throw at spectrum. To paraphrase this forward-thinking 1994 paper, the old ideas about spectrum capacity are out, and new ones about spectrum efficiency are in.
…
Technology alone can’t bring the spectrum feast to entrepreneurs and consumers. More capitalism–not less–charts the path to abundance. Hazlett and others, going back to economist Ronald H. Coase in 1959, have advocated the establishment of spectrum property rights and would leave it to the market to reallocate the airwaves to the highest bidders. Such a price system would tend to encourage the further expansion of spectrum capacity.”
Amen brother. Read the whole thing.
I’m reading the briefs leading up to the Ninth Circuit’s Kahle decision, (which was handed down this week) and I found this passage, from the government’s motion to dismiss at the district court level, striking:
Under the 1909 Act, a copyright holder could secure a 28-year renewal term only after filing a renewal registration with the Register of Copyrights in the last year of the first 28-year term of protection. S. Rep. No. 102-194, at 3 (1992). “In 1976, Congress concluded years of debate and study on all aspects of the Copyright Act by passing a comprehensive revision to the 1909 law.” Id. Congress identified the copyright renewal revision as “[o]ne of the worst features of the present copyright law.” H.R. Rep. No. 94-1476, at 134. “A substantial burden and expense, this unclear and highly technical requirement results in incalculable amounts of unproductive work. In a number of cases it is the cause of inadvertent and unjust loss of copyright.”
So Congress found in 1976 that requiring authors to file for the renewal of their own works was an unjustified administrative nightmare. This, the government argues, justified scrapping the registration requirement. This despite the fact that this burden and expense is spread across thousands of different authors, and despite the fact that authors know better than anyone else which works they own and which works are still commercially viable.
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WASHINGTON, January 23, 2007–Those who would “Save the Internet” came to Memphis last week and declared victory in their struggle. They also hosted a party to celebrate and launch the next phase of the battle: going on the offensive.
The SavetheInternet.com Coalition is, of course, David to the Bell companies’ Goliath. Over the last two years AT&T, Verizon Communications and their trade group the United States Telecom Association spent more than $50 million lobbying Congress to change the nation’s telecommunications laws, according to disclosure documents. But it was spent in vain. The Bell-favored bill, which had overwhelmingly passed the House, died last year in the Senate.
In contrast, SavetheInternet.com spent $250,000 on educating the public about its side of the story, said coalition spokesman Craig Aaron. “Save the Internet” opposed the Bell bill, and made “Net Neutrality” its rallying cry. The coalition gathered more than 1.5 million petition signatures supporting the notion that telecom companies must be stopped from controlling the content that flows over their broadband networks
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Cindy Skrzycki, The Washington Post’s outstanding regulatory affairs reporter, notes in her column today that The Center for Auto Safety has asked federal regulators at the National Highway Traffic Safety Administration to “restrict the use of systems that carmakers are building into their vehicles so motorists can’t make phone calls or fiddle with other interactive gear while they drive.” The Center for Auto Safety’s complete petition can be found here.
Skrzycki notes that on-board communications, navigation and entertainment systems are gaining in popularity. For example, GM’s “OnStar” system is now being countered by “Sync,” which is Ford’s new offering that is being developed in partnership with Microsoft. (I saw a demo of it out at CES this year and it is very cool. It allows the music from a PC in your house to be zapped directly to your car as soon as you pull in the garage). And many other auto makers currently integrate such systems into their cars, or at least plan to in the near future.
But the Center for Auto Safety claims that this is all just a disaster waiting to happen and want the government to regulate to restrict the use of these technologies within our cars:
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Ken Fisher at Ars has a great article on the flaws in HDCP, the copy protection scheme that “secures” most high-definition devices these days:
This stuff doesn’t work reliably for even the basic stuff like showing video flawlessly, let alone securing outputs. I even have a HDCP/HDMI issue with my TiVo, which decides that my TV is no longer secure about once a month, requiring a reboot.
Stranger reports have arisen from PlayStation 3 owners who are experiencing blinking displays when connected to some HDTV sets. When playing games, occasionally the sound cuts out and the entire display would blink on and off. As it turns out, the HDCP technology in the PS3 would freak out and sputter if a connected TV could not consistently and quickly indicate it was copy-protection ready. No one knew that this was the case until the guys at Popular Mechanics pinned the tail on the donkey.
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Related to our discussion a couple of weeks ago about immigration for high-tech workers, Katherine Mangu-Ward cites a study illustrating one way that a “brain drain” can be good for the country from which the brains drain:
Imagine, if you will, foreign movie makers who come to California. They are much more likely to make excellent movies there–or even to make movies at all, really–and more of their countrymen will get to watch them when they appear, especially if their countrymen have few qualms about bootlegs.
The authors, economists Peter J. Kuhn and Carol McAusland, write that those who remain behind “benefit because ‘their’ brains produce ‘better’ knowledge (such as more effective medicines, more entertaining movies, or more effective software) abroad than if they had remained at home.” This is particularly true in situations where a discrepancy between protections for intellectual property at home and abroad makes it easy for residents of the innovators’ countries of origin to enjoy the fruits of their labors with low transaction costs.
Personally, I find the notion that someone should be forced to live in an impoverished country solely so that his countrymen can benefit from his presence morally repugnant. But even if you buy that premise, it’s not at all clear that liberal immigration of high-skilled workers is, on net, harmful to poor countries. And liberal immigration is undeniably beneficial to the world as a whole.
Ezra Klein shrugs at the decline of the traditional American daily:
Newspapers currently expend a fair number of resources doing certain things very poorly, or replicating the efforts of other organizations. That was fine when the information junkie had few alternatives. It’s less so when the world offers limitless avenues for data accumulation.
But all this really means is that newspapers will begin following magazines and specialty newspapers (like The Wall Street Journal) and seeking to make themselves indispensable to certain audiences. Some of those audiences may be ideological, and you’ll see campaigning newspapers akin to the British Guardian or Fox News. Some will be professional, and you’ll see dedicated foreign bureaus that do nothing save in-depth reporting on global issues, in much the way National Journal does for Congress. All will be, in their way, more relevant. The bloodless, fearful paradigm of “objective” reporting has alienated all while informing none, and it will likely come to a close.
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The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.