Media Wonk

PFF Aspen Summit wrap-up - August 23, 2007

Some final notes and observations from the Progress & Freedom Foundation’s Aspen Summit, before I forget.

Shoot first, ask questions later: Microsoft’s top IP lawyer Thomas Rubin blasted Google as “irresponsible” for not making more of an effort to filter unauthorized copyrighted content from YouTube. In contrast, he boasted, Microsoft takes a digital fingerprint of every video posted to its SoapBox service and checks it against a database of fingerprints maintained by content owners. “If we get a match, it doesn’t get posted, it’s a simple as that,” he said.

When asked later whether Microsoft’s filtering process is capable of assessing the nature of the use behind a particular posting, Rubin, to his credit, admitted frankly that at the moment it cannot. “That’s a very important question to which I don’t have the answer,” he said. “There could be cases where content is being used in a post but it’s not necessarily an infringement and we’ll have to figure out a way to deal with that. That’s the next big set of questions we have to address.

The economics of fair use: Stanford emeritus professor of economics Roger Noll called content protection “just about the most important unresolved public policy question in the U.S. right now,” by which I’ll just assume he meant, apart from the war in Iraq, global warming, the implosion of the mortgage market, our scandalous health care system and steroids in baseball.

His basic point, I think, is that the tug of war between content owners and technology developers is economically inefficient because the uncertainty surrounding the use and misuse of copyrighted content acts as a drag on investment for both sides. “The problem is we don’t have a clear rule for what constitutes fair use,” he said. “The biggest things that could happen would be to get a clear standard for fair use and a better system for setting compulsory license royalty rates.”

University of Texas professor of economics Stan Liebowitz, on the other hand, portrayed fair use essentially as a response to market failure that might be remedied as the market develops, thus eliminating the need for the doctrine of fair use altogether.

“Fair use serves a particular economic function and that function changes over time,” he said. “Where fair use was being developed, if you were quoting from other works it wasn’t that easy to track down the original rights owners and, and then negotiate specific uses, and they pay your two cents or whatever was. It was more efficient to have fair use. But the market changes over time as technology changes. The law may not change but the market does. It’s not clear that fair use today serves the same purpose as it used to. We may not need fair use today because the market may be able to solve the problem.”

As for the Constitutional foundation of fair use, that, apparently, is resistant to economic analysis.

Deal, or no deal? The PFF Aspen Summit, understandably, attracts a pretty wonky crowd: lot’s of Hill staffers, government affairs folks, media wonks and lawyers. But the narrow focus inevitably lends a certain air of unreality to the proceedings.

At a “working dinner” on DRM one night (officially off-the-record so I can’t quote anything said there) there were 13 speakers on the panel, representing the House Judiciary and Commerce Committees, various trade associations, corporate lobbying shots, the Dept. of Commerce and the U.S. Patent & Trademark Office, among other DC operatives. But nary a businessman or woman to be seen—a rather ironic juxtaposition for a group dedicated to market principles.

GiantSteps Media Technology Strategies president and DRM Watch editor Bill Rosenblatt made the point on the record the next day. “The attitudes of both sides in the DRM debate have been guided by fixed principles,” he said. “The content side believes that any content misuse is just bad, it’s piracy and must be stopped, and the battle needs to be fought on all fronts. The technology side sees unfettered innovation as the key to growth that shouldn’t be impeded in any way. But it’s just not helpful. Those principles are getting in the way of what should be a business deal.”

The key to breaking the current impasse, he said, “is for both sides to get beyond their guiding principles and apply a business analysis to the opportunities, on a holistic level. What we need is essentially a trade negotiation.”

Too bad there weren’t more traders in the audience.

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