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| DATE | 2005-04-08 |
| FROM | Ruben Safir
|
| SUBJECT | Subject: [hangout] DRM is Theft
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Subject: [hangout] DRM is Theft
From: Ruben Safir
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A House committee has re-examined the use of interoperability in
digital-rights-management schemes.
This week, the House Judiciary Committee's Subcommittee on Courts, the
Internet, and Intellectual Property asked four industry representatives
to testify on the issue of proprietary DRM schemes, which can prevent a
track downloaded from a competing music store from being played on a
player like the iPod, unless the song is downloaded in an unregulated
MP3 format. ADVERTISEMENT
William Pence, chief technology officer of Napster, joined Michael
Bracy, policy director of the Future of Music Coalition, Ray Gifford,
president of the Progress and Freedom Foundation and Mark Cooper,
director of research at the Consumer Federation of America, to testify
in front of the panel. However, the four speakers advocated a
market-driven response, instead of government intervention.
While the committee did not indicate that it would seek to open up the
rights-management schemes, Rep. Lamar Smith (R-TX), who chaired the
committee, said that the House planned to investigate the issue in light
of the so-called "Section 116" license, which governs the making and
distribution of physical records and digital music deliveries.
"Many of the licenses and rights in the music industry stem from
compulsory licenses and exclusive contracts," Smith said. "Since one of
these licenses, the compulsory Section 115 mechanical license, is now
being updated for the digital era, the time is appropriate for the
subcommittee to learn more about the impact of digital interoperability
on consumers and artists."
The issue of copyright and managing that copyright has tended to go
hand-in-hand, and Smith cited the ongoing Grokster Supreme Court case,
which is testing the right and liability of peer-to-peer software makers
to transmit works which may belong to a third party. Smith noted that it
is in the interests of consumers and copyright holders alike to
disseminate the works on a broad basis, so that enjoyment and profit can
go hand in hand. On the other hand, Smith also drew parallels between
the various rights-management schemes and digital formats.
"Legitimate questions have been raised regarding the impact of digital
interoperability on consumers," Smith said. "In the physical world,
consumers didn't expect that music audio cassettes were interoperable
with CD players. Consumers switching from music cassettes to CDs bought
the same music for $10 to $20 per CD that they already owned. Consumers
accepted this since they felt they were getting something new with more
value – a digital format that made every reproduction sound as good as
the first playback.
"Music is quickly becoming an online business with no connection to the
physical world except for the Internet connection," Smith added. "Even
that connection is increasingly becoming wireless. Some of the same
interoperability issues that occur in the physical world are now
appearing here."
Several speakers cited the landmark fight between the VHS and Betamax
videocassette standards, which were ultimately decided by the
marketplace, and not regulators or the courts.
Pence, in particular, argued that the government should take a hands-off
approach – to a point. Legitimate music services are competing against
"pirate services," he said, which can offer a virtually unlimited
catalog of music. Locking up certain tracks in one format or another
inhibits authorized music resellers, he said.
"Historically the government has not been a participant in competition
between early-stage consumer technologies, such as between the VHS and
the Betamax, the cassette and the 8-track tape, USB and Firewire, or the
current competition between DVD Audio and Super Audio CD," Pence said.
"Similarly, it does not seem prudent for government to pick a winner in
the continuing but still quite early-stage marketplace battle between
Apple's Fairplay DRM and its competitors. Government intervention in the
innovation business can lead to politicizing and inhibiting such
innovation, rather than allowing the marketplace, based on actual
demand, to select "winners" that must continue to provide viable
solutions or lose their market, deservedly, to the next great offering
that someone develops in his or her garage or corporate lab."
On the other hand, Pence said that the government has a role to play in
enforcing the Copyright Act, especially sections 112 and 115, which deal
with copyright royalties. "Napster and our legitimate online music
competitors compete with pirate services, and it is critical to creators
and all who support them that royalty-paying services win the day," he
said.
Likewise, Gifford argued that mandating interoperability would rob the
music industry of innovation. Although products like the Sony PSP and
even coffee makers use proprietary formats, users will tend to gravitate
toward interoperable formats in most cases, he said.
"Should public policy be concerned with this turn in the annals of
coffee maker platform design or video game devices?" he said. "Probably
not. If you start looking for standards to scrutinize, you will see them
everywhere – from razors and blades, to PSPs and disk drives, to MP3
players and iPods. Because we cannot know in advance what consumers will
prefer or what is truly superior, we should forbear from interfering."
Bracy, whose Future of Music Coalition was set up to represent the
artists who create music, said that there are a number of alternative
issues that Congress should be addressing instead of potentially
legislating interoperable DRM: the alleged "payola" that takes place
between recording studios and radio stations, the questions of Digital
Audio Broadcasting and low-power non-commercial stations in urban
markets, and the digital divide that even separates some emerging
artists from their more successful brethren.
"The point is not that this industry is now perfect, or that we even can
see the solution," Bracy said. "Rather, we all should acknowledge that
the digital transition is complicated. It includes multiple competing
markets, dependent on evolving technological innovation and regulatory
policy decisions."
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