The Committee for Economic Development on digital copyright

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:

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:

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.

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:

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

The report concludes with a set of recommendations:

1. 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.

2. 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.

3. Existing enforcement and education efforts should continue. In particular, the industry should use the legal tools it has against commercial pirates.

4. 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.

5. 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.

 
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. 
[...] 

 
[...] 
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. 
[...]