SuitWatchWednesday, March 6, 2002
The Choice
In his first short story, "Life-line," Robert Heinlein wrote this:
"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped or turned back, for their private benefit."
Some men and corporations apparently do have the right, however, to lobby Congress into outlawing whatever threatens their revenue streams. And when we're talking about high-dollar outfits like the Disney Corporation, or trade groups like the MPAA and the RIAA, that right comes backed by a great deal of power. Thanks to that power, we have the DMCA -- the Digital Millennium Copyright Act <http://www.educause.edu/issues/dmca.html>, which has already been used to bludgeon members of the Linux community -- among other parties with little political leverage <http://www.eff.org/IP/DMCA/MPAA_DVD_cases/>.
The DMCA is a walking octopus with loose shoes on all its tentacles, and late last month another of those shoes dropped when the Copyright Arbitration Royalty Panel (CARP) issued a report <http://www.loc.gov/copyright/carp/webcasting_rates.html> "recommending rates and terms for the statutory license for eligible nonsubscription services to perform sound recordings publicly by means of digital audio transmissions ("webcasting") under 17 U.S.C. §114 and to make ephemeral recordings of sound recordings for use of sound recordings under the statutory license set forth in 17 U.S.C. §112."
By the CARP plan, commercial broadcasters who co-stream their over-the-air signals on the Net would pay .07 cents per performance, while Internet-only stations would pay double that:.14 cents. Noncommercial broadcasters would pay between .02 cents and .14 cents per "performance" depending on a variety of conditions -- plus an annual fee of $500 for each licensee. That's right, webcasters would have to be licensed for compliance with the DMCA. And, on top of the performance royalties, CARP would impose an across-the-board license rate of 9% of performance fees due for any temporary recordings made to facilitate a Webcast. (At least that's how I'm reading it. Even if I'm wrong on some details, there's no way this looks good.)
Bear in mind that many of the most innovative Internet broadcasts are made possible by the low costs of generic hardware running Linux and other open source software. It's a promising way to make a little bit of money, but no way to get rich. Still, relatively few of the businesses in the Yellow Pages are about getting rich. They're about making a living doing work people running those companies enjoy. Internet radio is no different. Two leading examples are Radio Paradise and KPIG, both implemented by Bill Goldsmith, about whom I've written quite a bit already:
Bill has worked and fought in the Net radio trenches more than anybody, and he believes the CARP plan will flat-out kill Internet adio. Here's what he says on the Radio Paradise site:
This might be fair if it were being applied to large webcasting corporations whose stations were loaded down with lots of expensive ads. But, given the state of webcasting today, the highest fees would be owed by stations like ours that are in no position to pay them. We would be required to cease operation - depriving our listeners of a source of great enjoyment, depriving station operators of the opportunity to grow our stations into profitability, and depriving the artists of the potential revenue that would flow from our success.
The loss of our stations would serve the interests of no one. Due to the nature of the proceeding, we are not allowed to file comments with the arbitration panel. Therefore we are appealing directly to the public, through the press. We invite anyone not familiar with the stations in question to go to the station directory at www.shoutcast.com and sample the programming from stations like Digitally Imported, Radio Paradise, WOLF-FM, Groove Salad, Mostly Classical, KPIG, Smoothjazz.com, and thousands of others. <http://www.shoutcast.com/> Nearly all of these stations would be forced to cease operation if this ruling is adopted. All of the station operators are hoping that a way can be found for reason and fairness to prevail.
And CARP is just one part of the larger story here.
Not satisfied with their DMCA successes, Michael Eisner of Disney and Jack Valenti of the MPAA were at work last week lobbying Congress to require that manufacturers burn digital rights management (DRM) right into silicon, so customers would have no choice about complying. Here they are:
Eisner: "Common standards will create a technologically predictable market to which content owners can bring their movies and other works. And common standards will make it reasonable to mandate that device manufacturers build he necessary hardware and software into their devices. <http://commerce.senate.gov/hearings/hearings.htm>
Valenti: "What's keeping the movie industry from making its creativity theft-proof? Simply put, in order to transport movies as agreed to by the consumer on a rent, buy or pay-per-view basis with heightened security, computers and video devices must be prepared to react to instructions embedded in the film." <http://www.washingtonpost.com/wp-dyn/articles/A62085-2002Feb24.html>
Let's be clear about what's going on here. None of Eisner and Valenti's rhetoric is native to the natural interplay between Supply and Demand. In fact, the very nature of that interplay is anathema to people like these, who are accustomed to a world in which Supply tells Demand what it wants, what it will pay, and how it will get whatever Supply decides it will have.
The Net threatens that system by putting it in the middle of a real marketplace where Demand has just as much power as Supply, and everybody involved is exactly one click from everybody else.
So the real war here is not between a few producers and its billions of "consumers". It's between two completely different visions of the Net itself. One sees it as a MEDIUM -- a plumbing system for pumping content from producers to consumers, controlled top to bottom by suppliers. The other sees it as a PLACE where people and companies meet to make culture, do business and share stuff that makes life interesting, including music. Here in the Linux, free software and open source communities, we know which side we're on. And we're joined there by businesses that share the same passions and values.
The DMCA and the CARP recommendations are thick with the language of shipping. They outlaw the Net as a marketplace by describing its operations almost entirely in shipping terms. And we do the same when we argue with these people on their own terms. We have to stop doing that.
Law professor and author Lawrence Lessig <http://cyberlaw.stanford.edu/lessig/> has taken the lead in defining the Net as a "commons", and in framing copyright and patent law once again in the place-based terms the founding fathers used back when markets were still bazaars and customers were still customers -- and not "target groups" of "consumers" of goods pumped through supplier-controlled distribution systems.
I suggest we join Larry there. And I suggest he join us in a Million-Customer March on Washington.
I'm serious. Isn't it time we gave Congress a friendly lesson in the democratic nature of real markets?