Silver Lining on the digital horizon

Felix Stalder [home page || contact]
Telepolis, March 19, 2002

English original:
German translation:

After a year of legal victories for the content industries to expand the rights of owners of intellectual property, this approach beginning to show the strain of its internal contradictions. The gap between what the new laws prescribe and what people actually do is widening continuously. Additionally, the negative side effects of the news laws are beginning to alienate important groups, particularly technology developers. The chances of the content industry to achieve total control over content appear increasingly slim and the potential for radical innovation still real.

The year 2001 was the annus horribilis for the Internet as a platform for innovation. By now the content industries, lead by music labels, were taking the Internet seriously and their combined efforts to regain control over their property in the new environment made itself felt. As it turned out, "regaining control" was an euphemism for massively expanding the control over content and in the process infringing upon legal and customary rights of various groups of users.

Key element in this drive is the infamous US Digital Millennium Copyright Act (DMCA) which expands the copyright protection, among others, by making illegal the tampering with technological protection of digital content. Several high profile cases brought into sharp relief the massive ramifications of this bill.

In April Princeton Professor Edward Felten was forced to cancel a public presentation of an audience of computer security professionals. He intended to report on how he and his team had broken a piece of code that was to protect music files from unauthorized copying. For the music industry, this was tampering with copy protection technology, illegal under the DMCA, even though though the music industry itself had issued a public challenge to do just that.

In July the Russian programmer Dmirty Sklyarov was arrested for demonstrating at a conference in Las Vegas a piece of code that allowed users to break the content protection of Adobe's ebook technology. He was kept in jail for several weeks before being released on bail. Only in December was an agreement reached that allowed him to leave the US, in exchange for his cooperation in the prosecution of his employer, the Russian company Elcomsoft.

Later last year, the New York Hacker Magazine 2600 was fined, again under the DMCA, for publishing a piece of code, DeCSS, for cracking the copyright protection on DVDs. Each DVD has a so-called regional code which makes it impossible to play, say, a DVD issued for the Asian or American market on an European player. It also makes it impossible to play DVDs on unauthorized players, for example, those connected to Linux systems. The verdict is currently under appeal.

In all three cases the intended purpose for circumventing the technological content protection played no role. Neither Sklyarov, Felten or the 2600 hackers were advocating piracy. Sklyarov's program allowed users, for example, to pass their ebook through a text-to-speech converter, even of the publisher had disabled this option for whatever reason. Felten's presentation was aimed at advancing the state-of-the-art in computer security by demonstrating the weakness in an encryption algorithm. The DeCSS program was written so that Linux users to watch their own DVDs on their own computers. None of this was illegal before and most users still don't think it should be illegal. After all, why should the distributor of a DVD have the right to tell the user what operating system she has to use?

The fact that these technologies could also be used for piracy was enough for the content industry to go to court and the DMCA was the vehicle to carry through their strategy. Contributing to the feeling that lawyers were talking over the development of the Internet was the defeat of Napster in court despite unprecedented popularity with users. With the European Union hell-bent on adopting similarly expansive legislation, it seemed that the content industry might actually achieve its dream of total control over its intellectual property. The damage that this might do to rights of fair use (Sklyarov), freedom of speech (DeCSS), or freedom of research (Felten) seemed of little importance.

However in the last couple of months, cracks have begun to appear and, even within industry, voices that argue that this strategy is counterproductive are getting louder.

Business Week voiced concerns recently that the industry is "abetting a culture of digital lawlessness" because an increasing number of people considered it justified to disobey the overblown new copyright laws. For example, electronics stores all over Europe offer to remove the regional restrictions from DVD players. While this is arguably illegal, it is done overtly by major stores for average customers without much fear of incrimination. No matter what the laws prescribe people feel they have the right to watch their own DVDs no matter where the copy originated from. What the Business Week article shows is that even staunch defenders of copyright begin to understand that there is a limit to which laws can force values and behaviour on people. If laws do not respect common sense - for example the user's perception that she owns a disk she bought - they will be simply ignored. The more outlandish the attempt to impose new restrictions, the less people will feel compelled to obey. The effect, so pro-industry critics argue, is that people, alienated by excessive restrictions, will see less reasons to respect copyright laws in general and the moral barrier against buying pirate copies will vanish.

But not only consumers are increasingly alienated and hostile to new copyright protection schemes. The Dutch electronic giant Phillips, which manages the licenses of the music CD technology, recently threatened to revoke the license for compact disks which contain copy-protection technology. They object that these technologies makes the CDs incompatible with certain players, for example those in computers. Phillips argues that these technologies CD violate the licensed standards which were established in 1980. By revoking the license, Phillips could force labels to put a warning on copy-restricted CDs. This would, most certainly, hurt the sales of these disks.

Phillips, of course, is not against intellectual property. After all, the threat is based on its control over the standards of the CD technology. What Phillips objects to is the attempt of the content industry to impose its own agenda on the technological development. Phillips wants consumers to buy CD players and CDs. Undermining of trust in the quality of the standard is more threatening to Phillips that possible copyright violations of the content on the CD. Previously, the interest of Phillips and the music industry were closely aligned. This is no longer the case necessarily.

However, technological copyright protection works best if the content industry can convince technology manufacturers, for example Phillips, to subordinate their own interests to those of the content industry. This is increasingly difficult, particularly because Digital Rights Management (DRM) technologies have so far failed in the market place.

Electronic books are a case in point. Many publisher were reluctant to sell electronic books because they fear losing control over the content once it has been digitized. Consumers, at least partly because the selection was so small, were not interested in buying ebook readers. The more publishers realized that there was no market for ebooks, the less they were willing to invest in expensive and unproven DRM systems. As the Technology Review recently showed, the DRM industry is in crisis. In the last year, a host of companies have either completely closed down or substantially reduced their staff. The problem is that many schemes are excessively complicated. They restrict the user on so many levels, for example by not allowing her to read a protected document on more than one machine, that people refuse to pay money for such content. Of course, the DRM industry is not dead, but its troubles show that there is also a technological limit to what can be imposed on users who hold significantly different values than the industry.

Even Napster, virtually dead after a series of legal setbacks, bounced back to life. In a recent decision, San Francisco Federal Judge Marilyn Hall Patel, who had previously ruled against Napster, sided with the embattled file sharing company. She argued that the record companies' practices of shutting down independent online distributors while creating their own ventures, MusicNet and Pressplay, are at least suspicious of anti-trust violation. Furthermore, she put the onus on the record companies to prove that they are not simply trying to shut out competitors. Although this decision does not immediately improve Napster's fortunes, it indicates that the content industry might lose the unconditional support of the American courts which are growing more skeptical to their arguments.

All these recent events show that the strategy of total control over content, which with the content industry tries to shore up its outdated business models, is running into increasing opposition. Importantly, this opposition no longer comes only from outside the industry - where people such as Lawrence Lessig have stepped up their efforts to educate the public and the lawmakers to the values on limiting intellectual property rights - but also from previous allies of the content industry. The realization grows that innovation, rather than restrictions, is the best way to survive. While it is far too early to predict how the struggles over user rights will be resolved, the legal means of the old guard looks look less and less impressive. This, at the very least, is a silver lining on the horizon.

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