WS>>Taxing Questions: Are Compulsory Licenses a Solution to the P2P Debate?

carl william spitzer iv cwsiv_2nd at JUNO.COM
Tue Nov 4 15:51:00 MST 2003


          by Miriam Rainsford
          10/02/2003

          The  concept of compulsory licenses, first proposed  by
     Professor Lawrence Lessig as a solution to the  peer-to-peer
     debate,  has since been hailed by fair-use lobbyists as  the
     savior  of  persecuted file-sharers, establishing  a  common
     ground  with  the major music labels and offering  the  pos-
     sibility that both parties might, at last, be able to  reach
     an agreement.

          Advertisement

          The idea in itself is simple: users would pay a  little
     more for Internet access, and their ISPs would forward  this
     contribution as a flat-rate license to a collection  agency,
     functioning  in  a similar way to ASCAP  or  the  Mechanical
     Copyright  Protection  Agency (MCPS)  and  distributing  the
     levies  to artists as royalties. But is the  compulsory  li-
     cense  model too good to be true? Lobby groups such  as  the
     EFF  are  keen to use "compulsories" as a means to  get  all
     parties  seated  at the discussion table. And it  is  indeed
     exciting  to think that there may be a simple solution  that
     might  permit  users to swap the songs that  they  enjoy  in
     freedom, without fear of legal action.

          In effect, the compulsory license would form an  effec-
     tive compromise between the music industry and the "pirates"
     upon  whom they wage war: the users of KaZaA  and  Grokster,
     and  the recipients of the RIAA's recent subpoenas.  Extreme
     caution,  then,  should be taken in  negotiating  the  inner
     workings of this new model. It would be all too easy to leap
     forward  and roll out a basic infrastructure for a  "compul-
     sory" system, but in light of the power wielded in court  by
     the  major record labels, we must ensure at all  times  that
     such a system remains impartial and directed to the  benefit
     of  the  artists. Even this cannot be taken for  granted  --
     major  labels  have frequently been found to  have  withheld
     artists' earnings under the guise of obfuscated accounting.

          The RIAA have demonstrated in recent months their great
     fear  of  losing out to P2P users, and  the  resources  upon
     which  they  can  draw if necessary. What is  to  stop  such
     giants  from ensuring a compulsory system is biased  towards
     their  own interests? This is technologically not so  diffi-
     cult  to achieve, and is a situation that P2P  and  fair-use
     advocates must retain in the backs of their minds during any
     negotiations.

          O'Reilly Emerging Technology Conference.

          Cory  Doctorow of the EFF is an enthusiastic  supporter
     of  compulsory music levies, yet is not blind to the  diffi-
     culties of negotiating between such opposing parties, or  to
     the  potential  problems in setting up  a  "compulsory"  in-
     frastructure. But he does maintain that our civil  liberties
     will continue to be infringed unless some form of discussion
     takes place:

          "The two answers we see before us are not: 1) have
          a compulsory license or 2) don't have a compulsory
          license, and P2P continues to go on and we contin-
          ue  to have an Internet and we continue  to  enjoy
          our  basic freedoms. The way we see  the  division
          breaking down right now is that we can either have
          an  Internet with compulsory licenses on  it,  and
          some of the imperfections that may accompany that,
          or we can continue to have things like the loss of
          academic freedom, where the University of  Wyoming
          is  wiretapping  all of its students to  find  in-
          fringement,  and  these crazy subpoenas  that  are
          being issued by the RIAA."

          The  EFF  themselves  take no  particular  position  in
     regards  to  the actual design of a compulsory  system,  but
     instead feel that this must be brought to debate by a  panel
     of experts in order to arrive at the best option. For a  new
     system such as this to work, Doctorow says:

          "We need to answer three really hard questions:

                * Who do you collect from?
                * What do you collect?
                * Who you give it to?"

          Important  questions,  indeed,  particularly  as   most
     advocates  of  compulsory  systems seem to  hold  the  naive
     belief  that a compulsory licensing system would  avoid  any
     need for the invasive Digital Rights Management (DRM)  tech-
     nology  currently being rolled out by producers  of  digital
     music  technology  and supported heavily by  the  RIAA.  But
     would  we still be able to avoid the use of DRM and  at  the
     same  time accurately collect statistics for fair  distribu-
     tion of the artists' monies?


          No DRM?
          Julian Midgley, Chairman of the UK Campaign for Digital
     Rights  and Senior Consultant for Zeus Technology,  is  con-
     cerned with the ways in which a compulsories system might be
     abused,  if  the design is less than rigorous.  Although  he
     believes  a system could potentially be implemented  without
     DRM, he believes this leaves a number of obstacles, primari-
     ly  the issue of ballot stuffing by labels or by  individual
     artists:

          "The  amount an artist receives from the  levy  is
          proportional to the number of times her/his  music
          is  downloaded as a proportion of  all  downloads.
          What's  to stop an artist running  while(1)  {wget
          http://music.com/artists_track.mp3}  to  get  more
          money? (Given that bandwidth is cheap.)

          To prevent this sort of attack, you really need to
          be  able to log the music that's  actually  played
          (and it's trivial to defeat this, as well). And do
          you  really want to send logs from every  Grokster
          client to the likes of the RIAA? (Remembering that
          it's  not  only music that floats  around  on  the
          networks.)"

          The issue of identifying the music being downloaded and
     played  also raises issues of tagging, wiretapping, and  DRM
     authentication. "I suppose you could run the data through  a
     hashing  algorithm  and do a lookup.  Most  other  solutions

     require some sort of DRM. Remember that the DRM need not  be
     more  than  a compulsory identifier -- it  doesn't  have  to
     imply  any  restriction on what you can do  with  the  music
     thereafter."


          Data-Tracking and Privacy Issues

          However,  within  even the most basic of  DRM  systems,
     tagging  and tracing would most probably be used  in  tandem
     for the collection of marketing data. This is not unusual --
     at  present,  the major record labels in the  United  States
     already  use a system called SoundScan to track album  sales
     by associating barcodes with the purchaser's zip code. Civil
     liberties  advocates would raise eyebrows at such a  concept
     in the same way that Michael Moore raises concerns over  the
     amount  of  personal information gathered by  store  loyalty
     cards. But major labels rely on SoundScan for marketing  and
     radio airplay -- and would undoubtedly be keen to  implement
     a  data-gathering system in the ID tags used to track  music
     for distribution of compulsory levies.

          It  is unnecessary and indeed unproductive  for  either
     party's interests to spread FUD about the tracing of digital
     music when the industry already profiles our musical  tastes
     without  objection. And invasive tagging systems are  not  a
     prerequisite  for the implementation of a robust  compulsory
     system.  Julian Midgley suggests that ballot stuffing  could
     be  prevented  even using the most  basic  unencrypted  tag,
     similar to those already embedded in an .mp3 file:

          "All that's required is that music is  distributed
          with   a  standardized  header   identifying   the
          track/artist,  etc. To avoid imposing  unwarranted
          restrictions, a multipart format can be used:  the
          header  first, followed by a second part  that  is
          the   music   itself,   in   any   format   you
          like  -- .mp3, .ogg, WMP, raw,  whatever,  doesn't
          matter."

          The  music-profiling system AudibleMagic could be  used
     for  a  similar  purpose, as it  creates  md5sums  of  music
     tracks, which could then be checked against a central  data-
     base  to  authenticate whether the  track  was  legitimately
     purchased.

          Without DRM, AudibleMagic could well be used as part of
     a  compulsory system, collating download  statistics  across
     the Internet for royalty distribution. The company  BigCham-
     pagne  tracks user downloads across major file-sharing  sys-
     tems for marketing analysis, and until recently sat  quietly
     in the background, advising major labels on how P2P  statis-
     tics  could assist in focusing their  marketing  activities.
     But does this constitute wiretapping? To reiterate Midgley's
     words:  how comfortable are we about letting the  RIAA  view
     our file-sharing activities, even when legalized? KaZaA  and
     other  P2P  users were, until the recent  feature  in  Wired
     magazine,  largely  unaware that BigChampagne  was  watching
     their every move.

          It is highly likely that the major labels will be loath
     to give up access to their marketing data -- and thus, quite
     possibly  reluctant  to agree to a system that  denies  them
     access to statistics that they rely upon to do business.  If
     an ID tag system is used to carry personal data, this  would
     for privacy's sake be required to be encrypted -- making  it

     illegal  under the DMCA or similar EU legislation to  decom-
     pile the tag and extract your own personal data that it  has
     gathered  from your system. And so we should be cautious  to
     legislate  safeguards  over what type of ID tag  the  system
     requires, what data it contains, and how this may be tracked
     and used in association with data from the user's computer.

          Tom Barger, singer-songwriter, political activist,  and
     consultant  to  Congressman Rick Boucher, is alert  to  this
     possibility, and to its potential anticompetitive uses:

          "A  little bit of so called lite  or  non-invasive
          DRM is like being a little bit pregnant. It is all
          or nothing. Any disclaimers to the effect 'We will
          not collect personal information' defies  creduli-
          ty."


          Palladium Through the Back Door?
          Microsoft's  Windows  Media  Player  9  series  already
     contains  built-in  DRM facilities that could  be  used  for
     these  purposes. Researchers have established  that  various
     versions of the Windows operating system are known to trans-
     mit all manner of unrelated data back home in their  reports
     to Redmond. In fact, the Register exposed last year that the
     Windows Media 9 End User License Agreement (EULA)  contained
     a clause permitting Microsoft to add, modify, or delete  any
     file on the end user's computer. If this can be done  within
     a  seemingly  innocent installation of a  music  player,  it
     becomes  easy to see how the tracking of data within a  com-
     pulsory  system  could become a backdoor into  the  nation's
     computers.  Simply integrating compulsories  within  Windows
     Media Player 9 would permit this to happen.

          Microsoft  have  been  very cautious  to  market  their
     "trusted computing" initiatives from a positive  standpoint,
     promoting their apparent "security" -- which has been estab-
     lished  to involve not the actual security of the  computer,
     but whether the user him/herself is "trusted" to use his/her
     own  files.  Using the same deft spin, it  seems  inevitable
     that Microsoft's much-maligned "Palladium," (now the  incom-
     prehensible  "NGSCB") might be given a fresh coat  of  paint
     and  rebadged as a "High-Speed Broadband  Multimedia-Enabled
     Pre-Paid  Authenticated  System." Attractive indeed  to  the
     user who is less than aware of what exactly this authentica-
     tion entails.

          Jay Sulzberger stands out as one of few prominent fair-
     use  campaigners who opposes compulsory licensing. He  fears
     that the very situations that the EFF and other civil liber-
     ties  groups seek to avoid by introducing a  compulsory  li-
     cense may well slip in through the back door:

          "To  make 'compulsories' work, you must  impose  a
          EULA  such as [Windows Media Player 9],  on  every
          device connected to the net.  With DMCA,  Palladi-
          um, and the economics of device production, we are
          already  close  to having  the  infrastructure  in
          place.  'Compulsories' would end private ownership
          of  computers,  and  end  free,  private,  tribal,
          business, and public use of our net."

          Strong  words, but in a world where Carnivore  and  the
     Patriot  Act  were allowed to slip by unnoticed, this  is  a
     real and chilling possibility.


          Other issues arise over the use of ID tags in  tracking
     music  downloads.  Ross Anderson, professor of  cryptography
     at  Cambridge  University, has studied the use of  radio  ID
     tags in consumer goods, and suggests that these could  quite
     plausibly be used for anticompetitive purposes, if  combined
     with anti-circumvention legislation:

          "We  expect  that  RFIDs will be  used  to  create
          market barriers within the EU. There are many ways
          of doing this technically.  For example, if  Bayer
          wants  a non-quota method of stopping  pharmacists
          sending  Adalat  from Spain to the UK,  it  simply
          doesn't  respond  to  Boots  the  chemist  when  a
          'Spanish' carton of the drug passes through the UK
          supply chain and Boots wants to know what it is."*

          This  has  already happened within the  movie  industry
     with DeCSS, and it is not hard to imagine how this situation
     could  extend  to  the music business.  Given  the  levelled
     playing field that a "compulsories" system would create,  it
     is quite plausible that labels could seek to elevate  compe-
     tition  by  tracking  their  customers'  location,  personal
     profile,  and interests, and locking them in to  their  pro-
     duct.  Or  even if the compulsory levy  price  differs  from
     country  to country, a user's ID tags might be  scanned  and
     locked out of the system as "pirate" data if they  emigrate,
     or take their iPod on holiday.


          Actual Vs. Actuarial
          Cory  Doctorow suggests that all of these  difficulties
     could be overcome by using an actuarial, rather than actual,
     sampling  of music use. The systems described above  use  an
     "actual  sample,"  a collection of the exact  statistics  of
     every  single  music file being shared at  one  given  time.
     Doctorow  suggests that accurate and  acceptable  statistics
     have been derived from Nielsen's "actuarial samples" of home
     users  who  submit to anonymous profiling.  Similar  systems
     have  also  been used for blank media levies in  Europe  and
     have been found to recompense minor and independent  artists
     fairly.  But such a system can never be exact: what  happens
     to  the  artist who has one or two downloads, or  who  falls
     through  the net because his/her style of music has  a  cult
     following,  but just doesn't happen to suit any of the  pro-
     files'  taste? It seems that at best, both an actuarial  and
     an  actual system will involve a compromise:  the  actuarial
     will  create inaccuracies in profiling data, and the  actual
     will require tagging systems or wiretapping -- unless  these
     are  set up and legislated in such a way as  Julian  Midgley
     suggested  above,  to specifically avoid the  collection  of
     personal data.


          Collection Agencies and Impartiality
          The collection agency involved must also be trusted  to
     be  impartial.  I have already outlined, in  my  article  "A
     Musician's Take On File Sharing," the difficulties that  one
     music producer experienced at the hands of the UK Mechanical
     Copyright Protection Agency (MCPS), who would not accept his
     work  because  he  used an Open Audio  license.  Given  that
     iCommons  is  now  active in porting  the  Creative  Commons
     licenses to European law, it is imperative that no group  be
     shut out of a royalty distribution system for the compulsory
     levies due to the license they wish to use.

          And who will sponsor the agency? From where will it  be

     formed?  Rumors  have circulated of plans for  a  collection
     agency  founded by a collective of major  cell-phone  compa-
     nies. Given that these parties are now doing big business in
     selling ringtones and facilitating .mp3 downloads and  file-
     sharing across their networks, it is difficult to see how  a
     collection  agency  formed of phone providers  could  remain
     unbiased  towards their own business interests. That is  not
     to  say  that private sponsorship will not work  --  but  if
     businesses are to be involved at this level, civil liberties
     groups  should lobby strongly for clauses ensuring that  any
     anticompetitive activity would be prohibited.

          But  is a government- or centrally-based  solution  any
     less  likely to be free from bias? Senators are, after  all,
     funded  directly by corporate donations, and musicians  fre-
     quently complain of their difficulties with the  established
     collection  agencies.  Even the  centralized  agencies  fund
     their  operation  by  taking an percentage  cut  from  every
     licensed  work  -- which means that the  majority  of  their
     funding  will come from the majority seller, i.e. the  major
     labels.  This system also cannot be ensured to be  unbiased.
     What  is  needed  is an entirely  unconnected  group.   Cory
     Doctorow's  idea  of using an  established  market  research
     company  such  as Nielsen is probably the safest  and  least
     likely to result in anticompetitive behavior, as the  agency
     has no connected interests with any of the parties for  whom
     it  collects, and its reliability has been proven  over  the
     years to the general public.


          Conclusion
          At  present,  the debate between file-sharers  and  the
     music industry remains at an impasse. The EFF remind us that
     the  situation is only going to get worse, and our  freedoms
     are  only going to be locked down in more and more  chilling
     ways if we do not come to the negotiating table.

          P2P  enthusiasts  should remember that  not  all  music
     industry executives are "the bad guys" -- by lumping  every-
     one  into one basket, we exercise the same prejudice as  the
     RIAA  does in labelling all P2P users "pirates." But as  Ted
     Cohen,  Senior VP of New Media for EMI, stresses, "the  only
     way compulsories will work is if everybody is in -- in other
     words,  if there are no analog or digital holes in the  sys-
     tem." Music business is big business, and the big labels are
     the  ones  who have the most to lose, in dollar  terms.  The
     major labels presently do business by competing against  one
     another -- and so if we are to design a new system, we  have
     to  ensure that everyone is signed up and unafraid  of  what
     the  competition might be doing. Otherwise, we will be  left
     with the present paltry smattering of good-quality  licensed
     download systems.

          Perhaps  the music industry is afraid  of  compulsories
     because  it will level out the competition and force  monies
     to  be  divided  by consumer decisions  on  artist  quality,
     rather  than on the quantity of marketing effort behind  the
     promotion of an artist.* A compulsory licensing system would
     certainly  necessitate big changes to established  practice,
     and  perhaps  this  is the real reason  for  the  resistance
     experienced.

          It  is imperative that we concentrate our  efforts  to-
     wards  a  solution that will permit music  lovers  to  enjoy
     their favorite artists' work in the format of their  choice,
     and without fear of the appalling legal action that  brought
     subpoenas  to children. But in our haste to avoid  such  op-
     pression,  we  should  be careful to  examine  any  solution
     presented and seek expert opinion on potential  anticompeti-
     tive implications. We should avoid, at all costs, leaping to
     an  easy  compromise if this may in fact bring  through  the
     back  door  the  very Orwellian scenarios that  we  seek  to
     avoid.


          References
          Tom Barger's essay on attendance of the 2003 FCC  Hear-
     ings:
          www.tombarger.com/fcc.html

          Prof.  Lawrence  Lessig (www.lessig.org)  and  Creative
     Commons
          (www.creativecommons.org)

          Campaign for Digital Rights: ukcdr.org

          Electronic Frontier Foundation: www.eff.org

          Ross Anderson's paper on RFID tags: www.fipr.org/draft-
     ipr-enforce.html

          Audible Magic: www.audiblemagic.com

          "BigChampagne  is  Watching You," Jeff Howe,  in  Wired
     11.10

          Toby Slater of MusicAlly magazine  (www.MusicAlly.com),
     in conversation

          Miriam  Rainsford is a composer, singer and  songwriter
     in classical,
          electroacoustic and underground dance music.



          Return to the OpenP2P.com.


   http://www.openp2p.com/pub/a/p2p/2003/10/02/license.html


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