So, the argument is that compulsory licenses helped us get to the functional and healthy radio and music industries we have today?

Boy, what could go wrong with an idea like that!

Edited by author 12-07-2002 11:57 AM
This idea is floating round a lot at the moment; it is flawed in a few ways.

1. By statutorily imposing a solution like this, it makes it much harder to establish a true marketplace for digital media - people are reluctant to pay twice. This will reduce overall spending on music.

2. Statistical measurement of a scale-free distribution like music (or the net) is hard to do well - because the central limit theorem does not apply, most sampling will count the large players accurately, but miss significant numbers of small players who may well predominate in aggregate. This kind of centralised scheme undoes the bottom-up formation and propogation of musical styles that the net can do, and puts us back into a top 20 world.

3. Any centralised taxation-like scheme is highly prone to capture by a few interest groups - ASCAP and BMI are poorly regarded by independent musicians for this very reason.

4. By legitimating only non-commercial repurposing of existing copyright, it does nothing to cut through the thicket of rights and licensing that acts as dead weight on those who create; instead it pushes derived works into a second-class non-commercial status. My model in which derivative works pass throughb the cost of the source works is far more liberating.

A far better idea is to establish a true marketplace for media that incorporates incentives for those who buy and sell within it to reward copyright holders.

My mediAgora proposal explains how this would truly benefit everyone.

It's ironic to have a relatively favorable presentation of this "P2P tax" idea immediately above an article railing against the Broadcast Bit. The same arguments presented against the BB apply to the P2P tax. It will limit innovation and require future systems to be designed in such a way that the amount of data being traded can be monitored and taxed. New systems will have to be constrained to fit into this restrictive legal regimen.

Radio is not the Internet. It's one thing to put restrictions on radio stations, when there are a limited number of them and they need a government license to operate. It's another to step in and try to impose a tax whenever two people exchange some data (perhaps encrypted data) that a third party suspects might be copyrighted.

This idea is a non-starter and I hope those of you with connections to the EFF don't get the impression that it is consistent with the kinds of freedoms that the EFF stands for.

Did you read Netanel's piece, cypherpunks? None of the compulsory proposals -- Netanel's, Kazaa's -- suggest that there be ANY auditability constraints on P2Pnets. A much better solution would be something like Nielsen families, volunteers whose drives are regularily grepped for files.

Meanwhile, the innovation in P2P is genuinely threatened by legal risks -- that's why everyone doing P2P development is focusing on attack-resistance, often at the expense of reliability, ease of use, or other user-centric constraints.

As to imposing a tax on users, that's ALSO not in Netanel's proposal, who instead calls for a levy on ISP lines, not a per-user or data-centric cost.

There are lots of things that are questionable about this proposal, but your objections are straw-men.

Cory, taxing ISPs is in some ways worse - why should my legitimate use of the net for philosophical debate be taxed for the benefit of a bunch of degenerate freeloaders?

The problem with this battle is that neither of the major proponents has a good moral case - the labels have clearly exploited musicians, and those who download thousands of songs with no thought of rewarding their creators are explotative too. The two wrongs don't balance out. This proposal would tax the rest of us for the benefit of these two dubious groups.

The fundamental rule of economics is that coerced exchanges destroy value, whereas voluntary ones create it. My mediAgora proposal is designed to create value. Netanel's is designed to destroy it.

"copyright law, whose purpose is to make work available to the public"

Wrong. The purpose of copyright law is to protect the intellectual property of the people who create it. Everything you create is automatically copyrighted, whether or not you ever publish it. More rights accrue to the creator if he or she places a copyright notice on the work ("copr. 2002 Joe Blow") and even more rights accrue if he or she registers the copyright, but neither, strictly speaking, is necessary to provide basic protection.

It's simply incorrect to assert that the purpose of copyright "is to make work available to the public."

El Kabong, I don't know what country you live in, but if it's the USA, where I live, I refer you to the copyright clause of the Constitution and to subsequent interpretations in judicial and legislative arenas, including those made by the Framers of the Constitution itself. As Netanel observes:

Copyright industries regularly deploy the rhetoric of private property to support their lobbying efforts and litigation. But like copying levies and compulsory licenses (as well as many other facets of copyright law), the NUL reflects an important insight: Copyright law does not and need not make creative expression the copyright holder's "property," certainly not in Blackstone's proverbial sense of "sole and despotic dominion ... in total exclusion of the right of any other individual in the universe." Rather, as the Supreme Court has repeatedly emphasized, copyright is a limited statutory prerogative designed to benefit the public by providing an economic incentive for the creation and distribution of original expression.

Granted, copyright holders typically enjoy a broad exclusive control over original expression that shares many of the attributes commonly associated with "property." But that is largely due to more than a century of copyright industry lobbying for more expansive rights; copyright need not inherently assume that shape. To add some perspective, consider the first U.S. copyright statute. The Act of May 31, 1790 granted authors of maps, navigational charts, and books the exclusive right to "print, reprint, publish, or vend" for a once-renewable 14-year term. That decidedly limited grant hardly exemplifies the copyright industries' current private property rhetoric, nor did it comport with contemporaneous understandings of private property. Under the 1790 Act, even during the short period that copyrights remained in force, others were free to use copyrighted works in a myriad of ways, including reciting books in public, making copies by hand, and making and publishing translations and abridgements. The Act also pointedly circumscribed the universe of expression that could be subject to an author's exclusive rights. Under the 1790 Act, works authored by foreigners were ineligible for copyright. Nor did copyright extend to graphics, sheet music, newspapers, songs, or other types of creative works that were not enumerated in the statute. Finally, the Act conditioned copyright protection on compliance with several nontrivial procedural requirements. As a result, only a small fraction of the books published in the early United States enjoyed even the narrow protection afforded under the Act.

Copyright, of course, need not remain within the narrow confines of that first statute. But copyright's original decidedly limited reach does stand in striking opposition to the copyright industries' grandiose claim that any unlicensed use of creative expression is the theft of "private property." In fact, the optimal scope of copyright holder rights -- and the extent to which those rights should have attributes of property -- depends upon how copyright operates to benefit the public. And an examination of copyright's function further highlights the disjunction between copyright and Blackstonian property.

Further reference to this point can be readily had in Lessig's Future of Ideas, briefs on *both* sides of the Eldred case and so on.

International conceptions of copyright -- particularily in France and other jurisdictions that support the idea of *droit moral* -- are based on different notions. Droit moral and related concepts have been rejected by the US courts every single time they've been tried. There is no moral basis for copyright in America -- it is not a "property" right in the traditional sense. Rather, copyright in the USA serves one policy goal: to encourage the production of material and move it into the public domain as quickly as possible, recognizing that providing authors with a liminted monopoly over their works is a good way of acheiving that goal.

Kevin, policy has never sought to eliminate freeriders. There are freeriders on speech, on roads, on telephony, on education, on the welfare system. The existence of freeriders isn't in itself enough to damn a policy -- rather, the cost of freeriders needs to be compared to the benefit of the policy (it's a social good to offer universal education, even if the bill must be footed in part by people without children and by people who could afford private education for their own children). A solid argument in counter to a compulsory proposal based on freeriders should have some assertions about the social cost of freeriding and compare them to the benefits of the system.

Seems to me that the primary flaw is the assumption that those battling the P2P nets are concerned about the money. They aren't -- at least in the narrow sense. They're concerned about losing control of the choke points of distribution. Ultimately, that does come down to money, but certainly not in a direct way that could be solved by this plan.

Whatever you charge to the ISPs IS a tax that is going to be spread across the entirety of their user base. You could argue that that's already happening do to the increase in bandwidth utilization that the file sharers bring to the network, but this would be additional cost. It's conceivable that the ISPs might offer a tiered level of services where they pass these costs along only to the ones using the network for this purpose, but even there, I really don't think they want to be in the middle of this fight.

I'm also not clear why you need Neilson like sampling. That's good for broadcast (one source to many) distribution, but this is narrow cast in the purest sense, and you could just as easily build true tracking into the network.

Create some form of voluntary registration - which provides additional value in that what ever you get is then from a confirmed good source, and a network that tracks that tagged file as it moves across the net. That could quickly become a closed/controlled standard, so I don't know that I'd be quick to move to it over purely open networks, but that seems like the way to do it if you're going to do it.

Again, I don't see it ever being acceptable to those battling P2P though, which means you'd need regulatory imposition of the scheme, and since the regulators have already been bought, how likely is that really?

Will, you raise good and valid points here. However, consider that the media companies that are fighting to shut down P2P technology have framed the issue in the context of money, not control. They argue that the media product that we know and love cannot be sustained in the face of widespread infringement -- that file-sharing robs artists and their publishers of income, which will reduce the quality and quantity of material available.

This is a highly questionable assertion, of course -- Hollywood's bottom line is healthier than ever, and even the record labels are only reporting a 5-10% downturn in unit sales in the same year that they eliminated 20% of their SKUs (CD singles and cassettes), which sounds like growth to me.

This sort of proposal, if it ever makes it out of the academe, would smoke the copyright industries out on this issue. If it's really about *money*, then here's a multibillion-dollar income windfall, and moreover, you won't have to keep on fighting those pesky, expensive court and lobbying battles to shut down P2P.

Instead, this would reframe the debate in the context of *control*, which, as you correctly assert, is at the heart of the matter. Even advocates of Draconian DRM -- even MSFT's Palladium team! -- admit that copy-control technology poses no hurdle to organized criminals who turn a buck at rights-holders' expense (think of the plants in the Ukraine and the Pac Rim that turn out millions of bootleg CDs for commercial resale). Instead, they say that DRM "keeps honest people honest" -- in other words, copy-control technology only affects lawful users. It only controls private performance and use. It's sufficient to compel someone to buy an extra copy of The Lord of the Rings DVD for the kids' playroom (rather than duping it, a fair use), but utterly ineffective at stopping criminals from making millions of copies of the disc and selling them at a fraction of the retail cost.

Reducing this issue to its real basis -- control over average customers -- frames it in a fashion much more amenable to the side of technologists. Copyright exists to serve the public domain, by compensating artists. If compensation can be accomplished without control, the position of the copyright companies becomes that much less defensible.

Maybe it's instructive to look at another recent compulsory licensing system: webcasting. Although the details got screwed up, the basic idea was that webcasters could pay a certain amount of money and in exchange they could play any music they want. I can imagine that being extended to P2P so that P2P developers or users voluntarily pay $X/user/month for the right to share and download stuff. As I said on my site, I don't feel comfortable charging ISPs.

As for innovation being stifled, that appears to be specific to people trying to build a better Napster than Napster. I don't hear the Groove, YouServ, WebRAID, BitTorrent, HiveCache, or OceanStore developers complaining.

Cory, this kind of 'answer' is the one with the free rider defence to make, not me.

 I object to it just as much in the context of education; - my children are home-schooled because the state-supplied education is not up to scratch; I still pay my property tax, and I can't even deduct the cost of educational materials used at home.

The phrase 'keeps honest people honest' is pure cant. If they're honest, why should they be treated as thieves?

DRM'd content is less valuable than non-DRM'd - people will pay less for it. Thus DRM destroys value.

Focusing on compensation is the right answer, but this kind of crude regressive redistribution isn't it.

[rant]The P2P networks, the humans that constitute them, will defend themselves - without compulsory licenses. That innovative players will continue to be closed down I have no doubt, but I like the way the law of unintended consequences workled with Napster - a whole wave of decentralised networks including top notch free software projects such as Gnucleus of EMule.

Neil has always pushed a line about copyright that it was inherently emancipatory from the point of view of the cultural producer, and generated positive democratic effects by allowing the emergence of a mass media industry capable of withstanding governemnt pressure. if you believe that his analysis is correct, fine. I think it's a preposeterous load of bullshit, and agree utterly with Rusty's initial comment.

The paper that I'm interested in reading is "How We Will Snuff the Music/[insert media of your choice] industry promptly, preferably immediately." These engines of exploitation have no right to exist. None. It's up to us to help them on their way to Valhalla or wherever.
[/rant]

For those interested in the compulsory license route, check out Jamie Love from the Consumer Project on technology, he's been pushing this idea around for a few months now.

But Wes while you get the jest right you have forgotten some things..

There is already a precendent within copyright law of having consumers pay a guilty till proven innocent tax..

It covers both casettes and vcr tapes.. its known not as fair use but as Home use..

In other words they might argue that since it worked in the hyscial world with a new copyright use law that they might as well make one for P2P sharing as well..

Edited by author 12-11-2002 10:00 AM
The purpose of a tax-based scheme is to smoke out the content cartel. It is the only political cover the freedom fighters (aka the P2P hackers, Internet loonies, good guys, us) have. Whether you should support it or not depends on how good you think our position is. At the least, we should be able to wave it around whenever complete insanity like the CBDTPA is being taken seriously.