It is over a decade since the signing of the World Intellectual Property Organisation’s ‘Internet treaties’. The Copyright Treaty (WCT) and the Performances and Phonograms Treaty (WPPT) were a legal response to the rise of the Internet and related technologies. Their main innovation was in privileging anti-copying code as the best way to enforce restrictions upon copying, given the ease of reproduction of digital media.[1]
These ‘anti-circumvention’ rules ban the creation, distribution or use of tools that bypass Technological Protection Measures (TPMs) – systems enforcing Digital Rights Management (DRM) that restrict the usage of certain works – even for otherwise legal purposes. [2] TPMs are now commonplace in many applications, including iTunes, Adobe’s Acrobat Reader and Microsoft Word, and are being built into computer hardware and the core of operating systems such as Windows Vista.[3]
However, while these legal changes have not stopped the widespread unauthorised sharing of copyright works, they have impeded computer security research, retarded innovation in technology and commerce, and blocked groups such as visually impaired users from accessing locked-up material.[4]
Given the failure of TPMs to stop large-scale infringement, right holders have more recently been lobbying for requirements to be imposed upon ISPs to monitor customers’ communications to detect and prevent copyright infringement. Unfortunately such requirements would be likely to have even less impact upon levels of infringement, but represent a massively disproportionate invasion of users’ privacy.
This article examines the misconceptions that lie behind these hybrid techno-legal copyright enforcement systems, and suggests that innovation in business models is much more likely to effectively protect the interests of creators than technological enforcement mandated via copyright law.
Digital Media Misconceptions
Since the advent of digital delivery of music (Billy Joel’s CD 52nd Street in Japan, 1982) we have seen a revolution in the distribution of audiovisual materials. Numerous technological advances since (particularly widespread broadband Internet access and high quality lossy compression for music and video) have resulted in a chaotic business environment.
This is not the first time technological developments have disrupted business models in copyright industries. The origins and evolution of Anglo-American copyright law represent an ongoing attempt to balance incentives for creators, the freedom to innovate (in both technology and business models), and access to works by the public.
Businesses and politicians have consistently misunderstood the technology and the social norms that have developed in response.
These misconceptions are neatly summarised in some of the lobbying positions adopted by right holders:
- Keeping Honest Users Honest
- You Can’t Compete with Free
- Piracy is Killing Music
- The Answer to the Machine is in the Machine
In reality, the capabilities of new media technology and its interactions with consumer and business behaviour produce counterintuitive ripostes to these positions.
Turning Honest Users Dishonest
A fundamental difficulty in creating a digital work that cannot be reproduced is that DRM systems need only be broken once by anyone in possession of a given work – who is then able to share the resulting unprotected file across the globe.[5] A related problem is the futility of seeking total control over all playback devices, given the existence of a global community of coders and security researchers who are capable of breaking such systems. In practice, most TPMs that have been deployed so far (such as the DVD format’s Content Scrambling System) are trivially broken using tools that can be freely downloaded.
The Motion Picture Association of America (MPAA) has conceded that TPMs would not stop redistribution of premium Digital TV content, merely make it ‘more difficult’. In evidence to a Congressional committee hearing in 2003 they described TPMs as designed to ‘keep honest users honest’.[6] In their Frequently Asked Questions document on the ‘broadcast flag’ the MPAA said:
Q: … a system to protect this content … will just be broken into and made worthless … what’s the point?
A: … even if a few are successful, the flag will not be worthless … Most people are honest and will not attempt to circumvent [it][7]
As Ed Felten of Princeton University retorted: ‘Nothing needs to be done to keep honest people honest, just as nothing needs to be done to keep tall people tall.’[8]
The latest skirmish has seen the movie industry attempt to prevent the publication of a cryptographic key enabling the decryption of every Hi-Definition DVD released before February 2007. Unsurprisingly, it was soon available from nearly 700,000 web pages.[9]
By waiting (in vain) for effective TPMs, music companies wasted several critical years before innovating in the marketplace to provide authorised downloads. File-sharing services offering unauthorised copies moved to fill this gap and became the default source for many consumers.
Companies have used TPMs in an attempt to control many ordinary uses of material that are either legal, or expected to be legal, by users. This includes shifting songs from CDs to PCs and portable music players; watching DVDs on operating systems like Linux; and using text-to-speech software to make e-books accessible to visually impaired users. TPMs blocking such activities encourage users to obtain unrestricted unauthorised copies of copyright works.
If DRM systems simply informed users of their rights in respect of copyright works, they would be trivial to implement and uncontroversial. However, by seeking to use TPMs to enforce these restrictions, most DRM systems have turned honest users dishonest. Is it surprising that consumers will seek out tools and unprotected versions of works that allow them to exercise their ‘fair use’ or ‘fair dealing’ rights?
Monopolistic Pricing is Killing Music
When CDs replaced vinyl as the standard medium for pre-recorded music, the price per unit increased while the manufacturing price per unit decreased significantly.
As authorised digital downloads come to dominate the market, this is being repeated. Many music fans have paid for the same music multiple times already (on one or more vinyl records and/or CDs) and are unwilling to pay similar or higher prices for digital downloads with near-zero distribution costs.
This extreme differential between prices and the costs of distributing existing works is bringing copyright law into disrepute. In the UK, the recent government-sponsored Gowers review found that downloading was now the most common offence committed by 10-25 year olds, and that 63% of downloaders had full knowledge that it was illegal.[10]
You Can Compete with Free
Should copyright law offer (and enforce) protection to right holders allowing them to charge for every single use of their material?
In the past, the law recognised restrictions including statutory licensing, exemptions from payment for certain uses, and allowances for holes in the system (such as the use of photocopiers to make small numbers of copies). In the networked digital era unauthorised copying bypasses tollgate payment mechanisms in new ways, although such avoidance has always existed.
At each development of a disruptive technology in the past, new business models arose and were allowed to develop, then merged into the mainstream of copyright law, despite efforts by the existing businesses to shut down the new system (player pianos, radio, photocopying, video cassette recorders). In the context of this latest disruption, however, the existing business owners managed to have international copyright treaties agreed which attempt to stifle the new competition. This strategy resulted in the shutdown of Napster. However, the number of music files shared online continues to grow, with shrinking file sizes and growing bandwidth leading to sharing of TV, films, comics and books.
The shutdown of Napster forced music (and now video) content underground onto untracked decentralised services. By squashing the centralised money-making Napster service, the recording industry prevented the development of a source of revenue that might have been used to compensate artists.
There are clear parallels with the development of other new media technologies of the 20th century.[11] The claim that ‘you can’t compete with free’ is historically naïve. Radio airplay of music not only boosted sales, but became so important that recording companies bribed their way onto playlists. The home taping boom of the sixties and seventies, attacked by the industry with the slogan ‘Home Taping is Killing Music’, not only failed to kill the pre-recorded music industry, but arguably increased the paying audience once the home tapers reached earning age and could afford to replace their home tapes with vinyl records, and then CDs. Online music retailers have shown that users are happy to pay for convenience, speed and well-designed user experience – with the iTunes Music Store now having sold over six billion copies of songs that are also available free on file-sharing networks
It is also clear that it is entirely possible to build sustainable businesses around the availability of free software, while charging for convenient distribution, customisation, integration and support. Organisations from corporate behemoths like IBM to freelance programmers and support technicians have created a complex ecosystem of services around the free software that makes up much of the architecture of the Internet.
The music industry of the 19th century, built around live performances, was radically changed by the emergence of the recording technology of the early 20th century. While some performers were undoubtedly put out of business, others adapted to new business models that allowed them to reach much larger audiences, and eventually to spark whole new genres of music.
It is unsurprising that the creative destruction of capitalism has operated in the music industry as elsewhere to radically reshape products in the face of new technology and changing consumer preferences. Attempts to use copyright law to preserve 20th century business models in the face of disruptive new technologies, including the personal computer and the Internet, are not sustainable in the long term.
Piracy Creates (some) Value
The recording industry has spent much of the last two decades attempting to equate the unauthorised sharing of music with piracy. The downloading of music as an activity has little in common with 17th-century armed robbery on the high seas. Nor does it compare with the violent and often murderous raids on modern container ships.
Nonetheless, unauthorised sharing of music has often been blamed for declining music sales and loss of revenue. A paucity of meaningful data has led to a wide range of estimates of this impact, with one study suggesting no significant effect,[12] another suggesting a positive effect for newer artists but negative effect for better-known artists[13] (who are usually already well compensated for their work), while others claim the entire downturn in recording industry revenues can be attributed to file-sharing.[14] An investigation by the OECD found that international trade losses due to product counterfeiting and piracy in 2005 were at one-fifth of the higher levels claimed by industry.[15]
The ‘sky is falling’’ recording industry response to the Internet mirrors its reaction to a range of new technologies throughout the 20th century. Falling music sales during the 1920s were blamed on newfangled radio stations; the Depression-era decline in music sales were apparently a result of the invention of ‘talking pictures’; while a post-war slowdown in sales during the early 1950s was blamed on the television.[16] The recording industry later adapted and turned all of these new technologies to their advantage.
The industry’s online offerings are only now catching up with unauthorised peer-to-peer networks. Who can say how different public attitudes to file-sharing would be had music companies seized the opportunity a decade earlier to sell their current hits and back catalogue from high-quality, easy-to-use online stores?
The industry has also been very slow to develop new business models that take advantage of the opportunities of zero-cost digital reproduction, instead attempting to maintain 20th-century business models based on scarcity. A small number of musicians, notably the Grateful Dead, always saw recordings of their music as advertising for the tours and merchandise that could not be so easily reproduced – and built highly successful careers in this way. Bestselling authors, including Lawrence Lessig and Cory Doctorow, have seen book sales boosted by the release of free digital versions.
The Answer to the Machine is not in the Machine
Perhaps the most significant of the technology misconceptions that led to the WIPO Internet treaties was that ‘the answer to the machine is in the machine” – that technology could solve the problem created for scarcity-based copyright business models by low-cost, error-free digital reproduction and distribution.
The resulting laws, including the US Digital Millennium Copyright Act (DMCA) and the European Union Copyright Directive (EUCD), are the most controversial legislation so far of the information age. Since they outlaw the ‘circumvention’ or breaking of access controls even for entirely legitimate purposes, the DMCA and EUCD have caused problems for a wide range of users of digital media. Visually impaired readers are blocked from using text-to-speech tools to listen to locked-up e-books. Computer security researchers interested in evaluating TPMs or protecting PC security from error-riddled DRM systems need to spend half their time talking to lawyers. Music fans cannot play restricted music files purchased from services such as the iTunes Music Store and Zune Marketplace on many MP3 players.[17] These problems have recently led most online music stores to refocus on the sale of unrestricted audio files.
TPMs cannot take account of the ‘fair use’ and ‘fair dealing’ flexibilities that make copyright workable for educators, researchers and artists themselves. It is difficult to see how media players could take account of all of the circumstances of the use of a work that would be considered by the courts. Is a video clip being played as part of a school lesson (usually legal), movie review (often legal) or to a paying audience (probably illegal)? Is an e-book chapter being printed by an individual student for the purposes of private study (normally legal) or for distribution to an entire class (more problematic)? Will ‘fair compensation’ be paid? What is the overall effect on the market for a work of a particular use? Which of the 19 optional fair dealing rights in the EUCD applies when each of the 30 Member States of the European Economic Area have implemented different combinations with subtle variations?
While artificial intelligence systems have made great advances over the last few decades, they are yet to match the interpretive skill of the US Supreme Court or European Court of Justice. Ed Felten’s comment in 2003 remains equally valid today: ‘Accurate, technological enforcement of the law of fair use is far beyond today’s state of the art and may well remain so permanently’.[18]
ISP Monitoring and Blocking Obligations
It seems that the recording industry has learned little from the failure of TPMs to reduce copyright infringement. Their more recent strategy has been to lobby governments to place new requirements upon ISPs to monitor their customers’ communications for evidence of infringement, blocking the transmission of infringing works and connections to infringing sites.[19] This would overturn ISPs’ status as ‘mere conduits’ under the EU E-Commerce Directive, and represent a massive invasion of users’ privacy.
It would also be most unlikely to reduce levels of infringement for the following reasons.
- It would be trivial for the authors of file-sharing software to enable the encryption of traffic flowing between peer-to-peer clients. This would make it much more difficult for ISPs to identify the transmission of copyrighted works, even if they undertook highly resource-intensive and invasive traffic analysis of customer data flows. Use of network-level encryption protocols such as IPSEC would make it difficult to block specific peer-to-protocols. Such protocols can also be masked to avoid restrictions.
- The US government spent 25 years trying to prevent the widespread availability of encryption software, and failed spectacularly.[20] Even after the horrific events of 11 September 2001, it made no serious attempt to reopen that battle. Cryptographic protection is now the foundation of Internet security. It is almost inconceivable that governments would attempt to ban it a second time.
- ‘Well-known’ sites that contain infringing content and hence might be blocked by ISPS are easily duplicated at less well-known sites – at a speed that would likely outpace the ability of right holders to keep up. Much peer-to-peer software is already designed to avoid a dependence upon access to particular servers, following the shutdown of the first-generation Napster’s indexing servers.
- As with TPMs, data monitoring software run by ISPs is not in a position to understand the context and hence legality of the transmission of a given work.
- The widespread availability of multi-gigabyte hard disks and USB data sticks is making it ever-easier for users to exchange entire music collections face-to-face. The heaviest restrictions on Internet service would have little impact on this ‘sneakernet’.
The recording industry’s proposed monitoring and blocking obligations appear to be a dead end as a copyright policy response to the new technological environment.
Conclusion
The WIPO Internet treaties were an attempt to proactively legislate against an unknown future technological and business environment. They have not measured up well as that future has arrived. This has been acknowledged even by major players in the drafting of the treaties; Bruce Lehman, head of the US Patent and Trademark Office for President Clinton, told a conference in 2007 that ‘our Clinton administration policies didn’t work out very well’ and ‘our attempts at copyright control have not been successful.’[21]
Unfortunately, today’s copyright lobbyists are continuing in their efforts to enlarge rights despite the impact of new technology on the business environment. Broadcasting lobbyists have for the last decade been pushing the World Intellectual Property Organisation to introduce a whole new layer of rights in a Broadcasting Treaty, despite little evidence that such rights would do any more than damage the public’s access to information, especially in the developing world. The recording industry is close to persuading the EU to extend the term of copyright in sound recordings from its current 50 years, despite UK and European government reviews that have found there is no economic justification to do so. The author of the EU review, Prof. Bernt Hugenholtz, wrote in an open letter to the European Commission president that this ‘reinforces the suspicion, already widely held by the public at large, that its policies are less the product of a rational decision-making process than of lobbying by stakeholders. This is troublesome not only in the light of the current crisis of faith as regards the European lawmaking institutions, but also – and particularly so – in view of European citizens’ increasingly critical attitudes towards intellectual property law.’[22]
Copyright industry lobbyists seem to be particularly fond of Chicken Little scenarios lacking independent economic evidence, based on misconceptions of technology, and featuring naked appeals to irrelevant political issues of the day such as British patriotism (in the case of term extension) and cultural diversity (very popular with European officials and politicians). The author of the UK government’s Gowers review expressed frustration at the results of this lobbying: ‘Politicians often do and say silly things when they come into contact with celebrities. So it was [in December 2008] when a star-struck Andy Burnham, Britain’s secretary of state for Culture, Media and Sport, showed up for a speech and photo-opportunity with the former lead singer of the Undertones, a punk-pop combo of the 1970s…’[23]
Copyright policy needs to be based on the realities of our evolving technological and business environment if we are to avoid another decade of misconceived legislation, and continued missed opportunities for creators and consumers to benefit from this era of rapid change.
Dr Andrew A. Adams is a Lecturer, the Deputy Director of Teaching and Learning and the Senior Tutor in the School of Systems Engineering at the University of Reading, where he is also the chair of the Informatics Research Group.
Dr Ian Brown is a senior research fellow at the Oxford Internet Institute, Oxford University, and an honorary senior lecturer at University College London.
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[1] C. Clark (1996). ‘The answer to the machine is in the machine’. The Future of Copyright in a Digital Environment, The Hague: Kluwer Law International, pp. 139-48.
[2] I. Brown (2006). ‘The evolution of anti-circumvention law’. International Review of Law, Computers & Technology 20(3), pp.239-260.
[3] P. Gutmann (2007). ‘Windows Vista Content Protection: Threat-modelling the attempt to seal an open architecture’. 16th Usenix Security Symposium, Boston, 6-10 August. Retrieved 10/1/2009 from http://www.cypherpunks.to/~peter/vista.pdf
[4] Electronic Frontier Foundation (2008). ‘Unintended Consequences: Ten Years under the DMCA’. Retrieved 9/1/2009 from http://www.eff.org/files/DMCAUnintended10.pdf
[5] P. Biddle, et al. (2002). ‘The Darknet and the Future of Content Distribution’. In ACM Workshop on Digital Rights Management.
[6] Hearing before the Subcommittee on Courts, the Internet, and Intellectual Property of the Committee on the Judiciary, House of Representatives 108th Congress First Session (6 Mar 2003) p.54
[7] Motion Picture Association of America (2002). `Broadcast Flag Frequently Asked Questions’. Retrieved 9/1/2009 from http://www.mpaa.org/Broadcast_Flag_QA.asp
[8] E. W. Felten (2003). `Keeping Honest People Honest’. Freedom to Tinker. Retrieved 9/1/2009 from http://freedom-to-tinker.com/blog/felten/keeping-honest-people-honest
[9] D. Waters (2007). `DRM group vows to fight bloggers’. BBC News, 4 May. Retrieved 9/1/2009 from http://news.bbc.co.uk/1/hi/technology/6623331.stm
[10] A. Gowers (2006). Gowers Review of Intellectual Property. London: The Stationary Office p.27.
[11] J. Litman (2001). ‘Digital Copyright’. New York: Prometheus Books p.173.
[12] F. Oberholzer & K. Strumpf (2007). ‘The Effect of File Sharing on Record Sales: An Empirical Analysis’. Journal of Political Economy 115 pp.1-42.
[13] D. Blackburn (2004). Online piracy and recorded music sales. Working Paper, Department of Economics, Harvard University.
[14] S. J. Liebowitz (2006). ‘File-sharing: Creative destruction or plain destruction?’ Journal of Law and Economics 49(1) pp.1–28.
[15] H. Williamson (2007). ‘Forgery trade losses ‘under $200bn’’. The Financial Times 7 May.
[16] M. Lesk (2003). ‘Chicken Little and the Recorded Music Crisis’. IEEE Security and Privacy 1(5) pp.73-75.
[17] See note iv
[18] E. W. Felten (2003). ‘A skeptical view of DRM and fair use’. Communications of the ACM 46(4) pp.56-59.
[19] International Federation of the Phonographic Industry (2007) ‘ISPs – Technical Options for addressing online copyright infringement’. Memo to the European Parliament, retrieved 10/1/2009 from http://www.eff.org/files/filenode/effeurope/ifpi_filtering_memo.pdf
[20] I. Hosein (2003) ‘Regulating the technological actor: how governments tried to transform the technology and the market for cryptography and the implications for the regulation of information and communications technologies’. PhD thesis, London School of Economics.
[21] M. Geist (2007) ‘DMCA Architect Acknowledges Need For A New Approach’. Retrieved 10/1/2009 from http://www.michaelgeist.ca/content/view/1826/125/
[22] Retrieved 10/1/2009 from http://www.ivir.nl/news/Open_Letter_EC.pdf
[23] A. Gowers (2008) ‘Copyright extension is out of tune with reality’. Financial Times, December 14.
