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Digital music: flat fee futures

Terry Fisher reviews the year

The early publicity given to alternative compensation systems has seen the RIAA preparing their ammunition. When Steve Gorden, a flat fee proponent and former Sony attorney, made his case on NPR recently the RIAA stepped up to the plate, asking "Do you want Government to set the price for music - for Beethoven?" This absurd claim was left unchallenged by the producers, but it was typical of objections left during Fisher's stint as a guest on Lawrence Lessig's weblog. Not only did this bring out the usual array of bedroom hopefuls, touting their own software, but the objection to state involvement in the market for cultural goods. This gets short shrift from Fisher.

"These objections have a lot of rhetorical power, but they're wrong headed. I point out in the book that the entire music industry is already shot through with government involvement: copyright confers power on producers insulating them from market forces, the entire intellectual property regime requires a major involvement of the government; and the past shows that the industry is full of devices such as compulsory licenses which required government involvement. The idea that an ACS for digital music represents a new involvement by government is entirely wrong".

That said, Fisher notes, some objections seem quite legitimate and a successful ACS must address them.

"There are really two kinds of objections. One is the practicability of the idea - can you really design a system that reliably estimates the ways music works are consumed, without compromising privacy or succumbing to widespread fraud. People want to know will money end up in the pockets of genuine distributors, rather than being absorbed by middlemen. And they want to know if the system is susceptible to government capture by officials who want to prevent artists they consider pernicious from getting their fair share." An example of the latter would be evangelicals leaning on intermediaries to cut penalize "immoral" art.

"If you can't answer these questions," says Fisher, "it would be a bad idea to launch an alternative compensation system. You have to build a system that demonstrates that it's feasible."

Fisher has addressed conservative talk radio audiences with the proposition that an ACS doesn't extend government involvement and preserves what he calls "the fundamentally capitalist principle of consumer sovereignty. It's very different to the French subsidizing their cinema."

Under the ACS models that win the most widespread support, an artist who wasn't listened to or whose music wasn't exchanged wouldn't receive a cent.

Is there an opportunity for working through the WTO's TRIPS agreement, which already acknowledges that individual states can impose a compulsory license? Fisher doesn't think so. Articles 30 and 31 of the TRIPS agreement only allow compulsories in a specific context: "in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use," which doesn't' seem to leave would-be breakaway nations much wiggle room. In fact he thinks that the Berne Convention would need to be modified, at the very least for movies, for an ACS to work.

How do we get there from here?

Fisher's figures have been revised slightly, but remind us how cheap a digital pool would be. Assuming an ACS compensated the movie and music rights holders 20 per cent of lost revenue in the first year, as Fisher's proposal does, the burden on each US household would be 50 cents a week. At a time when US citizens are nickel and dimed to death on their utility bills (not to mention health insurance) this might be the most popular "tax" in history. It's certainly a progressive alternative to what Jobs, Gates and the RIAA propose, which essentially entails charging citizens for rights that they already enjoy for free. And it's hard to envisage a more dramatic or transforming use of technology than to walk down the street, collecting music as you go.

Many proposals over the years have lost because lobby groups played upon people's fears. The task facing proponents of flat fees for digital music persuading a wider public of the truth: that this is not only the most rational of all possible alternatives, it's also the most beneficial for everyone.

There's another reason why Promises To Keep is important, too. In a very understated manner, Fisher has also provided a most valuable argument for preserving the internet as an open "end to end" communications medium. It hasn't quite turned out as promised. The vibrant marketplace resolved into an oligopoly of eBay, Amazon and Google. The platform for innovation became a haven for spam, viruses and frauds. And as a communication mechanism that was supposed to promote a new discourse, speech without consequences flourishes; the only legacy maybe the addition of the words "troll" and "flame war" to the dictionary. At the same time, closed networks provide people with much of what the internet fails to do: simple, reliable messaging such as SMS, and cheap and ubiquitous services like finding out when the next bus will arrive, or AQA.

There are certainly enough vested interests keen to close the internet. If the end to end 'net is to prosper, or even survive, it needs to deliver utility, and there can't be a greater argument for it than the vision Fisher describes here. ®

Related links

Promises to Keep - draft ACS proposal [PDF format]

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