Copyright Office Says No to P2P

By Richard Menta 9/01/04

It's September, the election process is in the home stretch and all of the Washington lobby groups are using the opportunity bred by a tight race to call in some of their markers. That's what it seems at least after reading Declan McCullagh's article on CNET that announced the U.S. Copyright Office was pitching its own anti-P2P bill.

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Not that the Copyright Office should have its opinions excluded from the process, but to step in with its own bill just shortly after the judges from the federal appeals court ruled such applications were not only legal, but good for economic growth smacks of lobby politics.

As the court wrote:

"The introduction of new technology is always disruptive to old markets and particularly to those copyright owners whose works are sold through well-established distribution mechanisms," the court wrote. "Yet history has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karaoke machine or an MP3 player. Thus, it is prudent for courts to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude."

The Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA) desperately want to overturn this decision, which supported a lower judge's ruling in favor of P2P. They lost in the courts twice already so are putting more pressure on legislators to quash P2P and file trading for them.

According to McCullagh the Copyright Office's draft was prepared immediately after a meeting by the Senate Committee on the Judiciary, which is chaired by Orin Hatch R-Utah. This new bill is a modified version of Hatch's draconian Induce Act, an act designed to kill future evolution in digital media (both business and technical) because its might bring competition older media companies are ill-equipped to handle.

The media companies efforts to criminalize P2P shows how out of touch they are. As I have said before, even if this law passes its reach does not go beyond US borders. Canada has also ruled that P2P services are legal and future services will grow within its borders.

The media companies have cried great losses, even in the wake of record revenues and profits (the movie industry had another record summer at the box office and DVD sales have increased revenues by the billions). The interesting thing is that they are not wrong. They have lost money. Not from lost sales, but from lost opportunity.

Opportunity costs are losses stemmed from passing on new opportunities that can bring growth. By fighting rather than actively engaging the Internet as the efficient distribution method it is, these companies have lost out on much of its growth. Growth Apple proved with its iTunes service 4 years after the record industry first rejected the potential of such services.

If a domestic P2P industry will not be allowed to grow, a foreign one will step in. All laws like the Induce Act will do it send innovation overseas and make it a US import rather than an export.

That leaves the media companies to go back to continue suing and arresting 13 year-old file traders.



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