The Committee for Economic Development on digital copyright

[Posted March 2, 2004 by corbet]

The Committee for Economic Development is a 60-year-old pro-business think tank. This group has recently dedicated some of its resources to the problems associated with intellectual property rights in a digital setting. The resulting report could easily have become another rabid missive on the evils of "piracy" and the need for heavy governmental involvement. But the CED took a different approach. The report (available as a 100-page PDF file) takes a surprisingly broad view of the situation. It contains little that is truly new for people who have been following the situation, but it does show that the business community is beginning to figure out that there is more to think about than the entertainment industry's immediate complaints.

The introduction talks about the challenges posed to publishers by ubiquitous computers and high-speed networking. It notes that sales of audio CDs have dropped significantly, but also discusses a number of (non-piracy) reasons for why that is happening. Movie sales, in contrast, are better than ever; bandwidth limitations have something to do with that, but the fact that movie customers feel they are getting their money's worth also is relevant.

Potential responses to unwanted copying of copyrighted materials are discussed. The report notes, however:

New business arrangements have consistently emerged in response to new technologies. Over the long term, the creators of advances in science and the arts have profited from advances in new production and distribution technologies. And attempts to protect existing production and distribution arrangements by law have failed.

The report then goes into a detailed history of copyright law. The authors are clear on the fact that the real purpose of modern copyright law is to promote artistic and scientific advancement; the provision of certain monopoly rights to copyright holders is simply a means to that end. It is often repeated that creators of copyrighted materials rely heavily on work that was done before; there is little that is truly and completely original. The importance of fair use rights and the public domain is discussed several times.

There is a discussion of responses to piracy which covers most of the usual topics: the DMCA, various other legislative efforts (broadcast flag, the CBDTPA), enforcement actions, digital rights management schemes, etc. The authors are not enthusiastic about legislative "solutions" to the problem; they see laws like the DMCA and state "super DMCA" proposals as anti-competitive, inimical to fair use rights and the public domain, and ineffective. Among other things, they point out that legally-required copy protection schemes can enshrine weak technology and inhibit the development of stronger alternatives.

The report has little good to say about digital rights management (DRM) systems. For starters, DRM systems usually fail in the long term; once a DRM system has been broken, the exploit code can be spread far and wide over the net. DeCSS is used as an example - and the authors even note that DeCSS was created to play DVDs on Linux systems rather than as a piracy tool. Privacy issues with DRM systems are mentioned. The report talks about the innovation which has resulted from the widespread dissemination of general-purpose computers, and how legally-mandated DRM threatens to put an end to that.

There are a few paragraphs dedicated to the effect on free software:

The role of open source software is being systematically ignored in many of the proposals under discussion in this report, and particularly in the broadcast flag context. Open source software is increasingly important as a source of innovation; it can be far more reliable and secure than proprietary software because talented programmers around the world can examine the code and try to break its security, without having to worry about hidden backdoors or holes. Yet such examination and the resulting improvement appears incompatible with a prohibition on tampering.

There are also societal costs to be paid. Widespread use of DRM systems threatens the public domain and fair use rights, and will thus inhibit further development.

We grant limited privileges to creators because we want them to create and to share their works for the benefit of society as a whole, not in order to give them total control over how their works are used. The central problem with broad use of DRM is not that software code will be regulating users, but that content creators will be unilaterally regulating private uses of content and controlling the course of subsequent innovation.

Almost every innovation is "subsequent" to many others, and, as the authors point out, this subsequent innovation is usually done by new, unrelated creators. Allowing creators to choke off subsequent works will thus result in fewer works being created, which is contradictory to the original purpose of copyright protection.

The biggest complaint that the authors have with DRM, however, would appear to be the fact that such systems shift copy protection costs from copyright holders to consumer electronics manufacturers and users.

Finally, the report points out that oppressive DRM (and rights enforcement in general) is bad for the social contract which holds the whole system together:

The existence of private license agreements containing "unreasonable" terms -- terms inconsistent with shared values -- undermines the societal interest in self-enforcing contracts. The self-enforcement aspect of private agreements is essential; after all, voluntary compliance with private agreements is what makes a society livable. If we create a world where license terms do not appear to represent a fair bargain, and are contrary to shared values, we are likely to have built a world where there is little inclination for voluntary compliance and much delight taken in rule-breaking. Such a world will be filled with obtuse letters threatening dire legal consequences, or (more likely) widespread remote disabling of the machines upon which we rely.

One might well argue that we have already proceeded far down that path.

The report concludes with a set of recommendations:

No quick legislative schemes. The report proposes a two-year moratorium in legal "fixes" while a broader consensus on digital copyright protection is worked out.
A high priority should be placed on the development of new business models around creative content. There should be no legal protection for any particular business model.
Existing enforcement and education efforts should continue. In particular, the industry should use the legal tools it has against commercial pirates.
Despite the report's criticism of DRM systems, it recommends that DRM efforts should continue, but that such systems must respect the fair use and first sale rights of users. The report suggests that the DMCA anti-circumvention clause should be reconsidered.
There should be "economic incentives" for copyright holders to facilitate further use of their works. Compulsory licensing is one idea mentioned in the report. It should also be easier for works to enter the public domain; the report mentions the idea of requiring periodic, low-cost renewals to keep copyrights in force.

For those of us who are concerned about ever-increasing copyright terms, criminal charges against software developers, and the lack of ability to use and control our computers as we see fit, this report will fall short of what we would like to see. It is, however, a clear sign that the wider business community is starting to become aware of the costs of unrestricted copyright rights. We are seeing the beginning of a real debate where, before, there was only the illusion of consensus. That can only be a step in the right direction.

An encouraging sign

Posted Mar 2, 2004 17:42 UTC (Tue) by jre (guest, #2807) [Link] (9 responses)

The "Digital Connections Council (DCC)" does use all the tendentious language we have come to know and loathe: "Intellectual Property", "piracy", "digital theft." They are also disturbingly accepting of private development of DRM, even while they recommend against government-mandated DRM.

But, like Jon Corbet, I choose to view the glass as half-full. At least we have a respectable organization with impeccable business credentials actually thinking about the problem, and recommending solutions which go beyond "Bring me their heads!"

An encouraging sign

Posted Mar 2, 2004 17:59 UTC (Tue) by JoeBuck (subscriber, #2330) [Link]

There are certainly situations where DRM solutions are entirely appropriate: for example, to improve the security of electronic voting machines. They are unacceptable when they are imposed on owners of general-purpose computers in an attempt to increase monopoly power and restrict freedom, but the technology itself is value-neutral.

What's really wrong with DRM?

Posted Mar 2, 2004 18:08 UTC (Tue) by elanthis (guest, #6227) [Link] (4 responses)

"They are also disturbingly accepting of private development of DRM, even while they recommend against government-mandated DRM."

What is wrong with that? Sounds like the perfecet situation. With a government mandated DRM system, we can't opt out. I'd be forced to have some kind of DRM setup on my systems even if I didn't want to use DRMd content. Private sector DRM systems let the publishers of content use DRM if they wish, while still allowing us to refuse to use the DRM and tell the publishers to piss off.

The publishers have the right to do whatever they want with what they publish. If you don't like the technology or medium through which they distribute their content, don't buy it. If you are buying their content, you have no right to complain about DRM, because you were dumb enough to buy it. (The exception of course is if you buy it not knowing it's DRMd; we have some laws and are getting more to prevent that.)

The same goes for the old DVD/CSS issue. Yes, it sucked that I couldn't play DVDs on my workstation. Does that mean it should be illegal for DVDs to have CSS? No. I don't have a God-given right to watch DVDs. If you don't like a situation, boycott the product/service.

The other point is that DRM is being so heavily researched and implemented because people *are* breaking copyright restrictions. I have tons of friends who copy music. My sister freely copies images/pictures into her own published works. I can tell them how immoral it is, cite laws, explain why it's not fair to the artists/musicians they enjoy, etc., but they don't care. It's those people who make DRM a necessity. Don't rail on companies for protecting their investment; rail on the assholes who make it necessary.

What's really wrong with DRM?

Posted Mar 2, 2004 19:46 UTC (Tue) by jre (guest, #2807) [Link]

"What is wrong with that? Sounds like the perfecet situation."

You are certainly entitled to that opinion. But, if I may, I'd like to say again that private use of DRM can be a problem in some circumstances. And, after reflection, I think I need to cut some more slack for the authors of the report.

What could possibly be wrong with a system which leaves both parties to a deal free to accept or reject it? I, too, find the idea appealing. As a practical matter, though, your ability to opt out of any deal depends on the availability of an alternative or your willingness to do without.

"Private sector DRM systems [allow] us to refuse to use the DRM and tell the publishers to piss off."

Indeed, they do. And if you are confident that you will always be able to find a suitable (and legal) alternative, or get along without whatever the DRM was protecting, more power to you. But some people do feel that they have, if not a "God-given right to watch DVDs", a set of rights under law and equity to use their property in ways that DRM is often crafted to prevent. The DCC report, to its credit, acknowledges this fact. For example, on page 38, the following footnote:

"* On May 4, 2003, The New York Times reported that "[s]ome of the world's biggest record companies, facing rampant online piracy, are quietly financing the development and testing of software programs that would sabotage the computers and Internet connections of people that download pirated music. ... Industry spokespeople have said publicly that, just as the 'left' believes it has a right to hack overly protective DRM measures, the content industry believes it also has a right to use self-help."

The message we ought to take away from this is that copyright law is heavily politicized, and that we do ourselves no favors by pretending that we can just ignore what's happening in our statehouses and Congress (if we're in the US), and just boycott whatever we don't like. The rest of the world is affected differently, but we have seen some very Bad Ideas wash across the pond in both directions. Pay attention, write your representatives, and vote!

As to cutting the DCC authors more slack, I do note that they took a more balanced view than I acknowledged -- saying, for example, "In particular, the capacity of such systems to accommodate users' rights traditionally allowed under intellectual property law needs to be further explored so that the appropriate copyright balance can be maintained."

They were more clueful than I let on, and deserve credit for it.

What's really wrong with DRM?

Posted Mar 3, 2004 13:57 UTC (Wed) by brugolsky (guest, #28) [Link] (1 responses)

And in, e.g., education? What happens when you or your child is offered the alternative of buying 20 e-books with DRM (that, by the way, can only be read using some Microsoft e-book reader) for $5 apiece, or pay $50 each for the hardcover?

The school or university will tell you that it is not "mandating" anything -- you are free to go with the vastly higher cost alternative, if there is one.

I have zero trust that some lawmaker or administrator won't tell us to "get over it," and trade away a little freedom for reduced cost. It is already happening.

What's really wrong with DRM?

Posted Mar 6, 2004 1:09 UTC (Sat) by giraffedata (guest, #1954) [Link]

What happens when you or your child is offered the alternative of buying 20 e-books with DRM (that, by the way, can only be read using some Microsoft e-book reader) for $5 apiece, or pay $50 each for the hardcover?

I believe the implication of this rhetorical question is that if DRM weren't legally available to a publisher, that the option instead would be 1) e-books without DRM for $5 apiece; 2) $50 each for hardcover.

I really doubt that's true. If DRM weren't legally available to a publishers, the $50 hardcopy would be the only option.

That's why I'm a big fan of DRM. Some day it will allow publishers to offer me product cheaper, and in more convenient form, than they can today.

What's really wrong with DRM?

Posted Mar 4, 2004 8:43 UTC (Thu) by ekj (guest, #1524) [Link]

Copyrigthed material are state-enforced monopolies. If we ended this state-enforced monopoly, and instead let private actors agree on whichever agreement they like, I'd agree with you. The problem is, increasingly copyrigth-holders want to have their cake - and eat it too.

They want the state to intervene on their behalf;

They want the state to enforce their monopoly. (aka copyright)
They want the state to prevent circumvention of their faulty technologies. (aka DMCA)
They want the state to prolong their monopolies indefinitely, the last 40 years congress prolonged copyrigth 11 times.
They want the right to subpoena the names and adresses of anyone simply *suspected* of breaking their copyright.
They want the state to forbid consumers from posessing general-purpose equipment (such as computers without DRM or recording-equipment) on the theory that such equipment *could* be used for copyright-infringement. (all tools *could* be used for illegal activities, that's a poor reason to forbid them...)
They want the state to license spectrum to them, so that they can have a monopoly also on one of the most important marketing-channels, namely radio (and to some degree tv)

But they do *not* want the state to *ever* intervene on behalf of the consumers;

They do *not* want the state to demand that Fair use remains possible.
They do *not* want the state to demand that works actually become available when copyright expire. (all DRM-technologies I've seen comes with no expiry-mechanism whatsoever)
They do *not* want the state to tear down artificial barriers to free trade, such as "region encoding"

That's the thing I have a problem with. The way I see it *either* the state should stay out of the picture, and let people trade in a free market. *or* the state should enforce both sides of the "balance" of copyright-law.

The current trend, where the state increasingly want to enforce only one side of the equation, is intolerable.

An encouraging sign

Posted Mar 2, 2004 18:38 UTC (Tue) by imres (guest, #12) [Link]

> this report will fall short of what we would like to see

It does, but whatever compromise is going to be reached it will have to be in the middle of extremal positions.

This report emphasizes very important aspects of the question: the necessity of a fair equilibrium between the interests of producers and consumers of information, the importance of fair use and above all the extraordinary importance of a rich public domain, free of attached strings of any kind.

I would love to see more steps, however small, towards the center, by holders of extremal positions, on both extremes of this equation.

An encouraging sign

Posted Mar 2, 2004 19:03 UTC (Tue) by iabervon (subscriber, #722) [Link] (1 responses)

I don't think it makes much sense to legislate against DRM. DRM is
essentially a form of encryption. It is not suitable for preventing
copying of the content by someone authorized to get that content, and,
without legislative additions, therefore ineffective against copyright
infringement. On the other hand, it would be bad to outlaw it entirely,
since PGP, for example, is a DRM system.

It might make sense to have laws saying that content protected with DRM
is not the content itself; if someone sells you a CD with DRM on it, it
is as fraudulent as selling you a blank CD pretending to be the one you
wanted to buy. But, even so, I think the market is likely to defeat any
attempts to use DRM which are not routinely defeated by consumers if DRM
is not government-mandated.

How about proactive entitlement to fair use

Posted Mar 3, 2004 12:52 UTC (Wed) by AnswerGuy (guest, #1256) [Link]

How about a law that says that publishers are not permitted to implement features that prevent fair use of their products? A proactive assertion that fair use is a right associated with sale of any copyrighted work --- as a provision of the uniform commercial code (law(s) governing retail transactions)?

That would (in essence) be an "anti-DRM" law.

At least that's what I hope is meant by "anti-DRM legislation."

Commission on Intellectual Property Rights

Posted Mar 2, 2004 18:12 UTC (Tue) by ayeomans (guest, #1848) [Link]

Another interesting older report comes from the UK Commission on Intellectual Property Rights which has an extensive report in various formats and translations. It especially considers the role of IPRs in developing countries, concluding that patent laws in developed countries are not appropriate for developing countries.

A shorter and well-argued report on software rights is Eben Moglen's talk "Freeing the Mind : Free Software and the Death of Proprietary Culture". Well worth reading.

The Committee for Economic Development on digital copyright

Posted Mar 4, 2004 9:12 UTC (Thu) by csamuel (✭ supporter ✭, #2624) [Link] (2 responses)

I have one minor nit that I've never quite gotten my head around. If DeCSS was "created to play DVDs on Linux systems rather than as a piracy tool" as the quoted article says (and as seems to be an article of faith these days) then why was it created as an MS Windows executable rather than as a library for Linux ?

From Harvards Openlaw DVD/DeCSS Forum FAQ

1.1.1) What is DeCSS? What does it do?

 
DeCSS is an executable binary utility, written for Microsoft Windows. 
When you execute this program it displays a simple dialog box and two 
buttons. These buttons are labeled "Select Folder" and "Transfer".      
 
One button reads CSS-scrambled content from a DVD-ROM, and the other 
deposits unscrambled MPEG-2 video files to the user's hard drive. 
[...]

1.2.4) Was DeCSS written to be a component in the LiViD DVD Player?

 
[...] 
When DeCSS 1.1b was released on October 6, 1999, it was released in 
Microsoft Windows executable form only, but apparently source code was 
released privately to Fawcus. He mentions in the LiViD archives at this 
point that DeCSS 1.1b contained the LiViD CSS descrambling code in place 
of the original MoRE algorithm. Presumably each version of DeCSS that has 
since been released has contained the Fawcus routines that were written 
intentionally for the LiViD DVD player. 
 
Three weeks later, Fawcus posted a description of the CSS algorithm on 
his website, with the hope that others in the LiViD project would 
reimplement the algorithm using "clean room" methods. At this point 
DeCSS, the executable, had been in wide circulation for several weeks. 
 
So, to answer the question, there is no evidence that DeCSS itself - a 
Microsoft Windows interface surrounding the Fawcus descrambling code - 
was written to be in any way a part of the LiViD project. DeCSS is not a 
listed module of the LiViD player, nor is it included in the standard 
LiViD release package. Only the internals of recent versions, not written 
by MoRE, were written as part of LiViD. While the vital component of the 
CSS algorithm may have been supplied by the MoRE routines, no one has 
conclusively stated this at this time. 
[...]

The Committee for Economic Development on digital copyright

Posted Mar 4, 2004 12:11 UTC (Thu) by haraldt (guest, #961) [Link]

Jon Johansen, who did this work, knew how to mock up a GUI in MSwindows, but not how to it in GNU/Linux. He was young, and not that experienced a programmer.
It was meant as a proof of concept, another small step in the creation of a free DVD utility set, not as much of a solution in itself.

Also of importance: Modern free DVD players don't use much (if any) of the code in this program. It's outdated, probably as it was meant to be.

The Committee for Economic Development on digital copyright

Posted Mar 4, 2004 15:55 UTC (Thu) by RobSeace (subscriber, #4435) [Link]

It has been mentioned many times that at the time DeCSS was originally
written, Linux support for DVDs (specifically the UDF filesystem, I believe)
was poor and just not up to the task of creating a Linux version of the
program... So, just to test their theory and see if they were on the right
track to something that could work at all, they tried it on Windoze first...
Once they saw it worked there, they knew they could eventually do the same
thing on Linux, which WAS indeed the original intent... So, yes, I think it
IS fair to say that DeCSS was created as part of an effort to be able to
play DVDs on Linux... True, by itself it's not at all useful for that task;
but, it's merely one (very early) stage in the effort... The fact that it
runs on Windoze is just a necessary evil, given the situation at the time,
and the desire to immediately test their approach...

Reasons for decline in CD sales

Posted Mar 5, 2004 18:46 UTC (Fri) by sbrtriguy (guest, #5679) [Link]

Just a quick correction to the LWN article as posted. It mentions that a discussion of other non-piracy reasons for the decline in CD sales takes place in the Introduction section of the CED article. I wanted to read more and had a hard time finding it. It's actually not in the Intro, but rather begins on page 27 of the document (or click on "page" 37 in ghostview).

Other than that, I'm very glad that LWN brought this article to my attention. It is another example of how LWN has broadened my understanding of not only Linux, but the wider societal issues that impact us all as well.