1) A compulsory license on all media for use over computer networks
2) A tax on all computer networks and other computing storage devices
3) a statistically vague statutory metering model to distribute this money.
Calling this nationalization is not an exaggeration.
Will this compensation scheme pay me for my blog, for my posts to the pho mailing list, for my IM chats and video conferences?
People buy internet connectivity to connect to one another; transferring copyright works is incidental. This is like charging a annual car tax to pay for music listened to on the radio while driving.
Jim's suggested scheme plays into the heart of the democracy debate, because he does not trust the public. He does not believe they will voluntarily pay for music, so they must be coerced. Here's what he said:
payment for music can now truly be said to be voluntary, technically and practically if not legally. [...]
A civilized society should not -- I think cannot -- tolerate a voluntary economy in knowledge, creativity, art and speech. [...]
I am avowedly for compulsory payments for digital art assessed at the source of the digits, whether internet service provider or digital wireless provider. In the country where you get your digits, you must pay through the service provider, which worldwide is regulated by a sovereign communications agency.
Jim is a good man, and I'm sure if he were given control of disbursing the taxes on computers he would try to do it fairly and well, but I don't believe he'd get the job. I think the kind of regulatory capture we have seen before would take place, and the placemen for the big publishers who feel most threatened by a widening of the market would divert the revenues to themselves.
The iTunes music store and others like them show that people will voluntarily pay, when they perceive a fair deal. 5 million songs sold in 8 weeks to the relatively small pool of users has generated more revenue for Jim's erstwhile clients, the record labels, than 5 years of compulsory licensing from the DMCA.
This is the zeroth law of economics. Uncoerced trades create value, as both parties perceive a benefit, or they don't trade. Coerced trades destroy value.
To increase the funds for art in a sustainable way we need to come up with models that provide that perceived value.
Jim's 'insurance for copyright payment' is less like nationalization, but it is a lot like a protection racket. Pay off the RIAA and they won't use the Verizon decision to harass you with automated DMCA takedown requests?
It also is predicated on the payment for art falling to the marginal cost of distribution; effectively treating music as homogeneous and of low value; he advocates the great 'lost dream' of the celestial jukebox service.
There has been huge growth, as he concedes, in devices designed to store streams for playback. The million iPods, the success of TiVo devices, and yes, all those CD burners, are concrete counter examples that show how much people value having their own stored media, not relying on a centralized, and possibly ephemeral service.
If the iTunes store's terms were adjusted a bit, to provide a lifetime right to obtain a high-quality unencrypted copy of the work in question, rather than the right to download an encrypted one once, and back it up and burn to CD in your own time, I think it could realise even greater value, as this is what people are trying to buy when they buy CDs.
Jim's (January) post in full, reproduced with permission:
At its essence, I think the current situation can be summed up as follows: Increasingly, we live in a world where payment for music (and other digital art) is voluntary.
Sure, that's always been true to some degree, but the degree is increasing with the erosion of friction. Technology is propelling us to a world of friction-free delivery of music (and books and movies and most speech and art). Indeed, it is fair to say that some are already there -- Qualcomm has a demo vehicle equipped with 2.4mbps wireless (almost two T-1 connections) -- and it is a slippery slope as the rest of us follow.
I repeat, payment for music can now truly be said to be voluntary, technically and practically if not legally. Violations are less enforceable than speeding tickets, with only large-scale violators the avowed targets of authorities. You can find anything you want with a simple software client, and that's not going to change during our lifetimes; in fact, it's going to get easier. Or worse, depending on your perspective.
A civilized society should not -- I think cannot -- tolerate a voluntary economy in knowledge, creativity, art and speech. Quite the opposite, the hallmark of civilization is advancement in the creative arts, and art is indispensable in the advancement of science.
Clearly, some differ on this point. They advocate the straight-line efficiency of free markets on the one hand, but believe morality or technology or the law or some combination will sufficiently compel us to satisfy and stimulate art, knowledge and speech with payment that is essentially by choice. This talk is about speed bumps, or keeping honest people honest, or inducing just enough friction to make a market, or virtual tip jars, suing the supernodes, whatever. Call it what you will, it is the last grasp of an argument that began with control and now pleads for just enough inconvenience or persuasion to keep people buying products or digital keys or authentication services they now know they no longer need to enjoy the art they love.
I do not believe voluntary payment for music will sufficiently spur the growth of the information economy to reward rightsholders in music, movies, books and other digital art, nor do I believe we will develop legal, technical or persuasive means to make payment more than voluntary, unless we enact a sovereign, global system of compulsory payments on digital access, whether wireless or wired.
If you are not part of finding an appropriate solution for compulsory payments then you are part of supporting a world of voluntary payment. Knowingly or not, you must either advocate a solution that collects the money needed to support a global world of audio, video, text and graphics you love, or watch them whither and die.
Supporters of rights management technologies are also unwittingly supporting a world of voluntary payments. These hypothetical, unproven so-called solutions never have and never will achieve their aims for a long list of reasons, but here I will offer only one: Digitization liberates art and knowledge that can be digitized to establish the shortest, most efficient path from source to destination, and this bionomic (www.bionomics.org) notion was designed into the internet and is an inherent feature of digitization. The cat is out of the bag; the shortest path to the music you hear in the dorm room next door will never again include the record store down the street.
As a result, I am avowedly for compulsory payments for digital art assessed at the source of the digits, whether internet service provider or digital wireless provider. In the country where you get your digits, you must pay through the service provider, which worldwide is regulated by a sovereign communications agency. The penetration rates of digital services are now sufficient in almost every country to spread the costs across many wallets such that the payments will not seriously diminish the growth and use of those services. In fact, the opposite is true, because without access to content, whether because of licensing or because its economy continues to dry up for lack of revenue, the services cannot thrive.
Finally, I now believe compulsory payment to be more important than compulsory licensing. I think we cannot live without the former, and the latter will take care of itself with a sufficient pool of money. Like performance rights, you needn't license them, needn't choose a society, but you'd be silly not to do so. Given a sufficient pool of money, there will be plenty of content, and the serious pools created by per connection payments will grow the business by multiples that will bring all major studio content by choice, and offer independents access to global markets previously restricted by practical, legal and illegal obstacles.
We today live in a world of voluntary payment for music, movies and other digital art. Technology's liberation of this content will increasingly outstrip its ability to control the content. We must either fashion and enact a global, sovereign compulsory payment system on digital access or accept an art and knowledge economy based on ever more voluntary payments and the inevitable loss of revenue. And we needn't compel rights holders to join this system; building it will draw them, and while they may not be wrong to await its creation, I believe them certainly wrong if they are not actively a part of bringing it about.