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12.16.2004
Free Markets, Not Content
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Sometimes bad ideas refuse to go away, because people ignore reality, like a dot-com executive who doesn't care that he's losing money on every sale because he'll make it up in volume. At today's second and final day of the FTC P2P Summit, one horrendously bad idea resurfaced, namely compulsory licenses, while couched in a false free-market argument.
The first proponent of a compulsory license for music online, former ASCAP attorney Bennett Lincoff, called for "statutory licenses." EFF's Fred von Lohmann, who seconded the notion, insisted they shouldn't be called compulsory licenses because the rate isn't compelled if the parties agree to their own rate before going before a rate court or a Copyright Office arbitration panel. But von Lohmann was confusing rate-setting with the act of requiring the licenses themselves. Under a compulsory (or statutory) license, content producers are required to reach agreement on licensing. Thus, the content producer lacks the right to walk out of unproductive negotiations and go home. That producer either has to agree to reach a rate in negotiations or take his or her chances with a government-appointed rate-setter.
Shockingly, von Lohmann actually said he was in favor of a free-market solution to the P2P problem. It would be great if true, but his free-market solution was a compulsory license, in which negotiations are not free and market-based, and a world in which P2P software providers operate without fear of liability. That's a free market for the P2P software makers in isolation, but it's at the expense of an existing, highly competitive, and legal content market. Don't be fooled by P2P supporters calling compulsory licenses or liability-free P2P software part of a free-market solution. They mean a free-content solution.
posted by Patrick Ross : 12/16/2004 01:54:05 PM
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