Friday, May 25, 2007

The DMCA's Silver Lining

I've just returned from the UMUC conference on copyright, this year with a theme of Copyright Utopia. This is the seventh year that UMUC has held this conference and the first that I have attended, and it was an excellent two days with many interesting talks. I'll mention here two in particular, that of Fred von Lohmann of the Electronic Frontier Foundation, who talked about the "mashup culture," and that of William "Terry" Fisher, Director, Berkman Center for Internet and Society, Harvard Law School, who proposed a solution to the file sharing hoopla.

von Lohmann showed a number of highly entertaining videos from YouTube, all of which had some level of potential copyright infringement. As he explained, content of this nature would never appear through traditional media channels such as television or even theaters or bookstores. The reason? Because of carrier liability; that is, because a TV station or bookstore could be held liable for the content that it makes available, even if it didn't create that content. Thanks to the DMCA and its provision that treats internet service providers (ISPs) as common carriers, organizations like Youtube cannot be held responsible for the content that flows across the portion of the internet that they control, as long as the organization has a "take-down" procedure in place to respond to complaints of copyright or trademark violation.

The restrictions on liability in the DMCA were the result of heavy lobbying by ISPs interested in preserving their own bottom line. This has had the unintended effect of creating free speech zones on the net that we don't have in other media. The result is that we are now seeing a huge amount of creative re-use of copyrighted material, and even of material that is owned by some of the more powerful and more assertive of copyright holders. A prime example is a video explaining copyright that is constructed entirely of snippets from Disney films. It opens with a "parody" of the FBI warning that reads:
WARNING. Federal law allows citizens to reproduce, distribute, or exhibit portions of copyright motion pictures, video tapes, or video discs under certain circumstances without authorization of the copyright holder. This infringement of copyright is called "Fair use" and is allowed for purposes of criticism, news reporting, teaching, and parody.

Whether or not such works are infringing is open to interpretation, but as von Lohmann explains you can't even wonder about infringement if the works do not get distributed in the first place. This is a brave new world.

Terry Fisher ran through a wide swath of possible solutions to today's copyright environment with an interesting proposal that seems to be a kind of ASCAP for all intellectual property.
In brief, here's how the system works: In each country, copyright owners (record companies, music publishers, film studios, etc.) authorize Noank to distribute digital copies of their works. Noank, in turn, enters into contracts with major network service providers: broadband consumer ISPs; mobile phone providers; and universities. Noank provides the service providers' end-users with unlimited downloading, streaming, and copying licenses. In return, each access provider pays Noank a fee on behalf of each of its end-users (consumers, students, employees). 85% of the money collected from these content fees is distributed to content copyright owners. A small software program on the users' device counts the content use. That information (automatically aggregated to protect users' privacy) is used to determine the amount of money paid to each copyright owner.

This system, called Noank Media, is operating today primarily in China and Canada. In China they are charging $20 per year per user. Twenty bucks doesn't seem like much, but that is probably a significant fee in China, which is definitely a country where you can make it up on volume. The main thing is that Noank is an "all you can eat" model rather than a "pay per view" one. The copyright holders get paid in proportion to the relative use of their content. It's slice of the pie, not whatever the market can bear. However, if copyright holders go for it their content will get the kind of exposure it does today on peer-to-peer networks but as a revenue stream.

P2P was a big topic at the conference because of the RIAA's recent wave of letters to college students. The RIAA appears to be targeting about 400 students per month that it identifies as having illegally downloaded music files. The letters are sent to the university to be distributed to the named students, in an obvious attempt to make the university a party to the action. The students are offered a "buy-out" of $3,000 to avoid an actual lawsuit. The role of the university is an interesting one -- in this case, the files are on the students' computers, so the university can't act as an ISP with a "take down" policy. It's not clear at all whether the university has any responsibility for the actions of its students in relation to non-university activities, even if they are illegal. Many universities have set up or licensed music download services to try to offer the students a legal alternative to P2P downloading, and some of the universities that have received the RIAA letters do offer such services. It's an uneasy role for the educational institutions to be in, and some of the conference participants felt strongly that the RIAA is attempting to use the universities to create a precedent that will undermine the DMCA's ISP immunity.

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