Let's see how many acronyms I can squeeze into this lede. In a deal brokered by the BERR, BPI (the UK version of the RIAA) announced that six leading ISPs had agreed to send warning letters on behalf of the labels and the MPAA to people suspected of illegal p2p downloading. BERR is the UK government's Department for Business, Enterprise and Regulatory Reform, which is analogous to the U.S. Department of Commerce. Essentially, pressure from BERR and the threat of legislation motivated the ISPs to stop stiffing the BPI and start compromising. But today's deal involved a relatively painless concession for ISPs. A more interesting question is what enforcement mechanisms, if any, the ISPs will put in place to give the warning letters teeth.
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If you had the chance to watch a movie on cable or satellite TV before it came out on DVD, what sort of trade-offs would you be willing to make? Would you pay more to watch it than a DVD rental or even a movie ticket? Would you accept having to watch the movie in one sitting, with no breaks for phone calls or snacks? Would you lose interest if you couldn't record the movie to watch again later?
These are the sorts of questions the market typically answers, but that's not how it necessarily works in the entertainment industry. This week, seven consumer advocacy groups urged the FCC not to let the studios conduct the experiment they proposed in early video-on-demand releases. The reason: the MPAA wants to deploy an anti-piracy technique that, in the advocacy groups' opinion, would give the studios too much control over the technology used in homes.
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In an overlooked notice of proposed rulemaking last week, The Library of Congress' Copyright Office lived up to the worst fears about government agencies. It took up a nearly eight-year-old petition and, rather than settling a current dispute, created a new one. It also provided yet more evidence that copyright laws written in the analog era don't map well to the Internet and digital technologies.
The issue has a rich back story, much of it laid out in the notice. But here's a distillation. The Copyright Office was asked in late 2000 to resolve a disagreement between the RIAA and music publishers over how large a mechanical royalty, if any, should apply to two types of music services: on-demand streams from an online jukebox, and "tethered" downloads that expire after a certain number of days or plays. Such streams and downloads are at the heart of subscription music services such as Napster and Rhapsody. In its proposed rulemaking Wednesday, the Copyright Office basically punted on that question. But it unexpectedly held that music publishers were entitled to an additional royalty for non-interactive streams -- e.g., webcasts, satellite services and digital over-the-air radio signals. The size of the royalty was left to a three-person arbitration panel, which has been considering the rates for interactive streams but, apparently, not for non-interactive ones.
Representatives of the music publishers were still digesting the decision when I talked to them Friday, so it's not clear how they'll respond. Nor is it possible to say what impact, if any, there would be on webcasters already struggling to pay royalties to the labels. “This is more than we have ever asked for," said Laurie Jakobsen, senior director of communications for the Harry Fox Agency (a royalty collector for the publishers). Added Jay Rosenthal, general counsel for the National Music Publishers Assn., "We're still reviewing the rulemaking documents, but so far we're optimistic."
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Larry Lessig had a fascinating copyright idea in the other Times a while back, which gives an interesting perspective on this L.A. Times story about J.R.R. Tolkien's descendants' fight for some of the gross on the New Line Cinema "Lord of the Rings" adaptations. Writes Rachel Abramowitz:
Tolkien obviously isn't Peter Jackson, who directed the franchise, or Liv Tyler or Viggo Mortensen, who starred in it, or New Line Cinema, the studio that financed it, or Miramax, which owned the film rights for a second but couldn't get the movie made, or producer Saul Zaentz, who bought the rights in 1976. He's just the guy who dreamed up the cosmology, the whole shebang of hobbits and dwarfs, orcs, ents, wargs, trolls, whatnot. "Three rings for the Elven-kings under the sky, Seven for the Dwarf-Lords in their halls of stone, Nine for Mortal Men doomed to die, One for the Dark Lord on his dark throne." Those were old John Ronald Reuel Tolkien's words.
But he's dead, so why should Hollywood share any of the dough?
In reference to a far less lucrative literary franchise, here's a good reason why not.
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Knowledge Ecology International, a group that seeks to reduce the control wielded by patent and copyright holders, recently posted a list of suggestions that the RIAA purportedly sent to the U.S. Trade Representative for what to include in the proposed Anti-Counterfeiting Trade Agreement. Ars Technica's Nate Anderson took up the issue today, accusing the record companies of trying to disembowel the safe harbor provisions of the DMCA. I checked the legitimacy of the Knowledge Ecology post with Neil Turkewitz, the RIAA's point man on such things, and he said it looked accurate. Not surprisingly, however, he offered a somewhat different take than Ars. Yet he acknowledged that some aspects of the RIAA's proposal for ACTA go beyond U.S. law on the enforcement of copyrights online.
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The MPAA has offered a deal to the Federal Communications Commission that could bring movies to cable and satellite viewers more quickly after their original release. The trade-off, though, is that the movies couldn't be viewed by some high-definition TVs, nor could they be recorded by stand-alone TiVos. The FCC moved quickly to invite public comments on the MPAA's petition, meaning that it could decide the issue later this summer.
Ars Technica reported this story over the weekend, emphasizing the restrictions on recording and the unusual alacrity of the FCC's response. To me, however, the more intriguing element is the studios' interest in creating a new release window for home viewing of high-def movies. Today, studios release the DVD version of a film about four months after it hit the multiplexes (bombs often are released sooner, and hits sometimes take longer). Cable pay-per-view and VOD services have to wait another 30 to 45 days for the movie, although Warner Bros. has started experimenting with simultaneous DVD and VOD release. These delays are designed to preserve box-office and DVD sales, but they also concede the market to bootleggers. There's no legitimate way to watch "Kung Fu Panda" at home today, but there's no shortage of illegitimate ones.
In its petition, the MPAA says each of the major Hollywood studios wants to explore deals with cable and satellite operators that would make high definition versions of their movies available prior to their release on DVD. No details about the price or timing were included, but one would expect the movies to carry a premium. To a family of four, paying $30 to see a (relatively) new movie in high def at home might seem like a reasonable offer, compared to paying $50 for tickets and popcorn at the multiplex. Of course, the reasonableness of the premium would depend on how soon the movie became available.
Now here's the tradeoff.
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So much for the easy part. The Justice Department announced today that it would not seek to block the merger between satellite radio providers XM and Sirius. That leaves the deal's fate in the hands of the FCC, which has a decade-old rule prohibiting one company from owning both satellite-radio licenses. Opponents of media mergers will probably point to today's news as another instance of a Republican Justice Department giving short shrift to antitrust enforcement. To me, though, the decision was inescapable. I just can't see an antitrust problem here, no matter how many times the National Association of Broadcasters invites me to do the math.
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The speech MPAA chief Dan Glickman gave last week at ShoWest is like the gift that keeps on giving. In case you missed my two earlier posts on this topic, Glickman declared the MPAA's unambiguous opposition to Net neutrality regulations. Among other things, he warned that such rules would "impede our ability to respond to consumers in innovative ways" and interfere with ISPs' anti-piracy efforts. Today the Digital Freedom Campaign
-- a lobbying group backed by the Consumer Electronics Assn., several consumer advocates and other groups that often oppose Hollywood on copyright issues -- issued a statement inviting Glickman to take the same deregulatory approach to the rest of the MPAA's policy agenda in Washington. The studios, after all, have a history of pressing Congress and the FCC for regulations that would impede hardware and software makers' ability to respond to consumers in innovative ways, particularly when copyrighted programming was involved. For example, the "broadcast flag" rules sought by Hollywood would require home networks to include government-approved content-protection technology, and its approach to closing the "analog hole" would dictate how long a TiVo could store some of the programs it recorded. Here's the money graf from Digital Freedom spokeswoman Maura Corbett:
We suspect the big studios are rolling the Trojan Horse of “copyright
enforcement” to Congress to protect their business models from openness offered
by the Internet. But for now, let’s take them at their word – given MPAA’s
newfound aversion “government regulation”, we eagerly look forward to them
standing down on broadcast flag legislation, the analog hole bill, and other
initiatives to restrict consumers and limit new technologies.
Don't hold your breath, Maura!
Verizon, a leading provider of broadband services in the U.S., is
the belle of the blogs today thanks to its work with a p2p trade group on a technology to speed p2p downloads. The technique, developed by researchers from Yale and the University of Washington, enables p2p software and broadband networks to work together to select the most efficient way to deliver a requested file.
For ISPs, this "P4P" approach offers a way to cut the amount of bandwidth hoovered by file-sharing applications -- in particular, the costly bandwidth between the ISP's local network and the rest of the Internet. That's because it would help downloaders obtain as much as possible from the shortest possible electronic paths.
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"Invoking the metaphor is a shield against thinking," William Patry, the chief copyright counsel for Google, wrote on his blog a couple of years ago. The topic was "technical protection measures," but he's argued that bad metaphors are also behind the entertainment industry's rhetoric that unauthorized downloaders are thieves. I give my own take today on the question of whether infringement should be viewed as a form of theft in a latimes.com column, which you can read here. I'm not completely in sync with Patry on this issue, so you should take my views with more than the usual grain of salt.