Rights law

WASHINGTON—Although I moderated the copyright panel at the Internet Video Policy Symposium here on March 19 (co-sponsored by VB), it was not a good day for the exclusive rights of authors.

The grim drumbeat began with the breakfast keynote by Ambassador David A. Gross, U.S. coordinator for international communications and information policy at the State Department.

Gross, whose job includes liaising with foreign governments on intellectual property issues, noted that the heavy-handed approach to copyright issues around the world, urged by many U.S. rights holders, is not always productive.

“When you go around the world with a hammer, every problem looks like a nail, but that’s not always the most productive approach,” Gross said. “There’s a lot of focus on copyright issues [in the U.S.’ discussions with foreign governments], which is important. But it’s also important that people around the world have access to scientific information, to the latest health information, and so forth, and it’s important that we focus on that too.”

Wharton School of Business professor Gerry Faulhaber, former chief economist for the Federal Communications Commission, was even more blunt.

“Copyright is a very big issue in the legal world today, but in the business world, when you talk to consumers about protecting copyrights, it's a dead issue. It’s gone,” Faulhaber said. “If you have a business model based on copyright, forget it.”

Well.

According to Faulhaber, the “world of open piracy,” created by digital technology, will always thwart content owners seeking to leverage the monopoly granted to them by copyright law.

“The music industry is yet to figure this out,” he said. “The current iTunes model is probably the best they can do. In both movies and music, this is likely to result in substantially lower revenue for content owners.” The movie studios will have an even tougher time than the music companies, according to Faulhaber, because some of the monetization models that can work for music—such as advertising—probably won't work for full-length movies.

The likely result? “Content providers will have to hook up with the conduit guys,” Faulhaber said. “They're the only ones in a position to monetize content online, because they can control its distribution.”

Georgetown University professor Michael Nelson, who was special assistant for information technology at the White House during the Clinton administration, when the Digital Millennium Copyright Act was being crafted, called that landmark IP law “the biggest error we made.”

Instead of protecting copyright, he said, the law has “been used mostly for anticompetitive ends, to shut down competition.”

Why so glum? Maybe it was the crummy weather that day. But the comments also reflect a growing gulf between the narrow, legalistic view of copyright favored by content owners and the more pragmatic views of economists, technologists and ordinary businesspeople.

Copyright exists (in the U.S. at least) to enable market forces to operate on behalf of authors and creators. But copyright law today is increasingly in conflict with market forces.

By insisting on strict adherence to the law, content owners, as often as not, limit their own ability to benefit from those market forces.

Or so say the economists.


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