[IP] Re: Copyright is dead

[David Farber <dave@farber.net>]

________________________________________
From: Gerry Faulhaber [gerry-faulhaber@mchsi.com]
Sent: Saturday, March 22, 2008 4:45 PM
To: David Farber
Cc: David P. Reed
Subject: Re: [IP] Copyright is dead

[For IP, if you wish]

Hmmm.  Hope I didn't miss the last 25 years while "yearning for a golden age
of...monopoly."  I and most other economists did what we could to help end
that monopoly and contest further government monopolies (cable, etc.).
Economists generally applaud the dismantling of monopolies of all sorts, and
are particularly concerned about government-created ones.

I am quite interested to read that the conduit guys really have no control
at all over content.  Here we have been contending over network
neutrality/open access lo these last two years precisely because the conduit
guys have control over content distribution, and many of us are fearful of
that.  Now that David tells us they have no control, I guess we can quite
worrying about net neutrality, right?  (Fat chance!).

But I think we agree that in a world of digital content that is practically
free to distribute by hundreds of thousands of people, copyright offers no
protection, and models to monetize creative content based on copyright are
essentially doomed.  New business models?  Of course.  I can even think of a
business model that could work for music.  I am less sanguine about video
content, but there are many entrepreneurs cleverer than I who may figure
this out.  From this vantage point, however, it looks like teaming up with
conduit guys is the best (though desperate) play.

Are conduit guys in control?  I am certainly well aware that encryption is a
way to thwart deep packet inspection, so that perhaps the evil conduit guys
don't know that this huge stream of mysterious stuff is really video.  But
do we think these evil conduit guys can't tell that the stream is encrypted?
Do we think that they cannot set the terms of service to prohibit
sending/receiving encrypted streams (exceptions for financial transactions,
etc.)?  Using encryption is not the ultimate trump card against conduit
guys.  It is merely the next step in the game.

Gerry Faulhaber

----- Original Message -----
From: "David P. Reed" <dpreed@reed.com>
To: <dave@farber.net>
Cc: "ip" <ip@v2.listbox.com>; "Gerry Faulhaber" <gerry-faulhaber@mchsi.com>
Sent: Saturday, March 22, 2008 2:23 PM
Subject: Re: [IP] Copyright is dead


>A big quibble, perhaps worth mentioning on IP., Dave
>
> Faulhaber says that the only hope for "content guys" is to hook up with
> "conduit guys" who he claims "can control its distribution".
>
> Perhaps Prof. Faulhaber has missed the last 25 years of disruption in the
> bit-transport industry.   Largely the result of the Internet, but
> ultimately due to the scientific realization that bits have no semantics
> while in transit between endpoints, there is little or no fundamental
> capability in a fully networked world for "conduit guys" to **control*
> anything.
> *
> Perhaps Prof. Faulhaber, who I know as a quite expert economist, having
> served as Chief Economist at the FCC while you were Chief Technologist,
> Dave, should investigate the actual degree of control that can be
> practically exercised over raw bits, e.g. end-to-end scrambled content.
>
> This is hardly new on the planet.  Information and its encodings have not,
> for most of human history,  been constrained to live in the pipes of a few
> government-grant-monopoly carriers.
>
> Faulhaber may yearn for an imagined golden age from his youth; that is,
> for a fully controlled, centralized government licensed information
> distribution system that enforces monopolies granted to a few "conduit
> guys"  (GOSPLAN comes to mind).  But with the exception of "TV broadcast
> news outlets" like FOX and CNN there are few government monopolies on
> information being amassed today (and even those must compete with the
> blogosphere, and seem to be losing on the quality front).
>
> If there is really a threat to creators getting rewards from their
> authorship (and there seems to be lots of debate about whether the threat
> is to the creator or to the middlemen like the RIAA and the television
> producers), then perhaps we must go back to a regimen that grew up in the
> days of the printing press.  Enforce copyright when tangible expression is
> copied to a tangible expression copy and/or performed.
>
> I agree with Gerry: We now live in a world where information is liquid.
> But I will go farther than he does, suggesting that it is becoming obvious
> that we in society are collectively the better for that new liquidity.
> Creators are already adapting to that world.  Just as science abandoned
> the guilds and secret societies of the alchemists centuries ago, producing
> a modern science that generates huge benefits without granting a few
> select people monopolies to "do science" as long as they maintain control
> and keep all the secrets.  Communicators and the public are the better for
> this new liquidity.
>
> Perhaps we should begin abandon the fantasy that the government's primary
> function is to construct and hand out more and more diverse and ingenious
> monopolies to its friends in corporate America.  Rather than looking
> backwards to a fantasy of "conduit control," let's look forward.
>
>
> David Farber wrote:
>> Copyright is dead - March 20, 2008
>> <http://www.contentagenda.com/blog/1500000150/post/630023663.html>
>>
>> No wonder they call Economics the Dismal Science. At the Internet Video
>> Policy Symposium in Washington yesterday (co-sponsored by Content
>> Agenda), a chorus line of academic economists postulated that content
>> owners face a far more difficult challenge than they know in monetizing
>> their content on the Internet, and that the odds that we can build our
>> way out of the current debate over how to manage scarce online capacity
>> are virtually nil.
>>
>> The most enthusiastically glum was Gerry Faulhaber, a professor at the
>> Wharton School of Business at the University of Pennsylvania and the
>> former chief economist for the FCC. According to Faulhaber, copyright is
>> a dead letter.
>>
>> "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," he said. "It's gone. If you have a business model
>> based on copyright, forget it."
>>
>> 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."
>>
>> Faulhaber was also gloomy about resolving the current stand-off over the
>> allocation of bandwidth.
>>
>> "Video takes lots and lots of bandwidth, and bandwidth is not cheap," he
>> said. "If bandwidth were cheap, the business would be attracting new
>> entrants, which clearly it isn't."
>>
>> [snip]
>>
>>
>> -------------------------------------------
>>


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