So I’m working on a paper on cable franchising and was reading the FCC’s latest proposed rulemaking on the topic (PDF). In it they claim the authority to preempt local franchise regulations that are barriers to entry. They FCC finds authority to do this in Section 621(a)(1) of the Communications Act, which states that local authorities “may not unreasonably refuse to award an additional competitive franchise.” So far so good.
I get to the last item in their “authority” section and there they ask, “Finally, we seek comment on possible sources of Commission authority, other than Section 621(a)(1), to address problems caused by the local franchising process. For example … could the Commission take action to address franchise-related concerns pursuant to Section 706?” So I ask myself, what’s Section 706? Imagine my surprise when I turned to that section and found, “SEC. 706. [47 U.S.C. 606] WAR EMERGENCY–POWERS OF PRESIDENT.” The section goes on to say that in time of war the president can commandeer the airwaves and other communications facilities, etc.
This has got to be a typo. Right?
I just finished reading the complaint (PDF) by the publishers in their suit against Google. Two things struck me. The first is that they are not asking for damages; only injunctive relief. If Google was found liable of willful infringement, it would be on the hook for up to $150,000 per book scanned. The Author’s Guild suit, on the other hand, does ask for damages, which has caused much consternation. The second interesting thing is that rather than challenging Kelly v. Arriba-Soft, the publishers are merely trying to distinguish it. Here’s what they say:
Google analogizes the Google Library Project’s scanning of entire books to its reproduction of the content of websites for search purposes. This comparison fails. On the Internet, website owners have allowed their sites to be searchable via a Google (or other) search engine by not adopting one or more technological measures. That is not true of printed books found in library shelves. Moreover, books in libraries can be researched in a variety of ways without unauthorized copying. There is, therefore, no “need,” as Google would have it, to scan copyrighted books.
So what do these things mean? Is it just magnanimity on their part of the publishers? It could be that while the authors and their lawyers are just acting like one would expect a class in a class action suit to act (maximize damages), the publishers want to continue to work with Google on (what used to be called) Google Print Publisher, so they don’t want to destroy Google. On the
Kelly point, I think this signals that the publishers understand that a court would have to be unbelievably shortsighted not to see the wisdom of Kelly, e.g. that a fantastically valuable set of services (search engines for starters) would be destroyed if they were saddled with the impossible transactions costs of having to ask permission of each site indexed. Maybe the publishers have figured out that their best course is to show that books are different. Of course, they’re not.
NYU prof Siva Vaidhyanathan has been one of my favorite commentators on the Google Print debate because of his pragmatism. Today in the Chronicle of Higher Education he has his first non-blog analysis of the case.
His main concern is that Google has bet not just the company, but the whole internet on this case. If it loses, it could take
Kelly v. Arriba Soft with it, and that would affect the very legality of search engines as well as all sorts of future innovation. But this is a fight we were going to have sooner or later, so why not now? After all, as he points out, this case is a clash between web norms (free copying with opt-out) and real world law (copying by permission only). It has to be settled eventually.
Continue reading →
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.
Everybody seems to be freaking out about Warner Music chief Edgar Bronfman saying earlier this week that he would like to see variable pricing on iTunes. Rather than a flat 99-cent rate for all songs, Bronfman would like to charge more for popular songs and less for songs that are older or not in demand.
Some have suggested that this would amount to price fixing. They’re thinking of resale price maintenance, where a firm requires resellers of its product to sell at a certain price. If all the resellers are locked in to the same price, they won’t compete on price, price won’t come down, and the producing firm might get a supra-competive return. But to make this work Warner would have to not only set the prices on iTunes, but everywhere else. You would also have to assume that songs aren’t substitutable, so that consumers wouldn’t just move over to non-Warner songs that are cheaper. You would have to assume that or a cartel of all the major labels, which would really be serious.
What Bronfman is really proposing isn’t that strange at all. As BusinessWeek notes,
Some books cost $25, others $15. There are magazines that sell for $4.95 a copy, while others go for $2.95. And who hasn’t secretly perused the bargain racks of CDs, looking for a $5 disc from that hair-metal band you loved so much in the ’80s? [I’m looking at you, Adam.] All Bronfman suggested was creating an environment where some songs would command a premium and others would do the equivalent of filling the bargain CD bin.
Still, some ask, what business does Bronfman have telling Apple what retail price to charge? He’s the wholesaler, they say. He can charge Apple more if he likes and let Apple decide whether it will raise its prices. The problem with this reasoning is that Apple does not license music from the labels for a flat per-song royalty. Proceeds from each download are reportedly split 35-65, Apple-label. Here’s an explanation of the agreement:
The deal is straightforward. Of the 99 cents of a download, Apple keeps a portion and the rest goes back to the label, which is then responsible for distributing back to the artists, songwriters, publishers, and so on according to the existing terms between the labels and their bands. This makes it really simple for Apple to acquire content because they don’t have to deal with stuff like licensing agreements or paying publishers–all that stuff is the labels’ responsibility.
Bronfman is just trying to make the portion kicked back to Warner variable depending on the song’s market value. And, oh yeah, Apple doesn’t have to take the deal.
Now, I agree with Steve Jobs when he says, “If the price goes up, [consumers] will go back to piracy and everybody loses.” But that just means that Bronfman’s variable pricing scheme would be a dumb business decision because I personally don’t think any song is worth more than 99 cents. Priced above this consumers will download illegally or buy other songs. But variable pricing by itself has nothing to do with illegal price fixing as some have suggested.
I think Tim is right that courts are beginning to realize that “new technological realities” make the kind of copying that search engines and other net applications engage in different from “the copying prohibited by traditional copyright law.” But they are really going to have to get it if Google Print Library is to succeed in court.
To me, the most important factor in a court’s fair use analysis is “the effect of the use upon the potential market for or value of the copyrighted work.” 17 USC § 107(4). A parody or critique is certainly fair use because you’ll never be able to buy a parody from the creator of the original. That is a parody will never be a substitute for either the original or derivatives and so won’t have an impact on the market for the original.
However, to have an impact on the market for the original doesn’t require there to be a copy that is an exact substitute for the original. In UMG v. MP3.com, the service in question wasn’t a direct substitute for the record companies’ product, namely CDs. But the use did affect the market for licensing. MP3.com’s wholesale copying of the plaintiffs’ music catalogs prevented them from exercising their exclusive right under copyright to decide whether to license their works or not. This isn’t contradicted by the holding in Kelly v. Arriba Soft either. In that case the court just didn’t find any evidence of market harm. And one thing the courts in MP3.com and Arriba both agreed on explicitly is that even if the allegedly fair use helps the market for the original that’s still no excuse.
So, is there a market that Google is affecting negatively? Well, the case can be made that there is a market for licensing the text of books for just the kind of thing that Google Print wants to do. Amazon.com has a “Search inside the book” feature and they get permission from every publisher before they make their books searchable. You also have to look no further than Google’s Print Publisher program that, unlike its Library program, gets permission and shares revenues. And mind you, the statute only requires that there be a “potential market” that is affected.
Tonight I’ll be moderating an America’s Future Foundation roundtable discussion on broadcast indecency and you’re all invited. Speakers will include Drew Clark of the National Journal, former former radio news anchor and reporter Ken Wolfe, and Marvin Johnson of the ACLU. The event will take place at the Fund for American Studies (1706 New Hampshire Ave. NW). Drinks will begin at 7:00 p.m., with dinner and discussion following at 7:30. There’s a $5 cover for non-members, but membership is only $35 and that gets you in to a year’s events. Hope to see you there!
Tucked inside the $82 billion emergency military appropriations bill that passed unanimously in the Senate yesterday (because what senator would vote against “supporting our troops”?) was the REAL ID Act, courtesy of Rep. James Sensenbrenner (R-Wis.). That act effectively creates a national ID card by standardizing state drivers licenses and databases. Worst of all, the Act requires that all licenses include a “common machine-readable technology.” RFID is a top candidate to fill that bill, as I lament here. What’s amazing to me is how little debate there was on this particular bill, even though decades of disagreement on national IDs had managed to stave them off. Check out this column by Bruce Schneier to learn why the new IDs are bad news for privacy, for security, and for the states.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.