The Cato Institute has performed a terrific service for anyone interested in the future of technology. It has assembled a provocative, beguiling, and thoroughly engaging collection of essays on the law and policy of intellectual property.
Over the past few years, intellectual property has morphed from an arcane topic of interest mostly to academicians and patent attorneys to the stuff of newsmagazine cover stories. Courtrooms' klieg lights have illuminated how copyright law has been stretched in ways unimaginable just five years ago. Software patents have roiled the computer industry and alarmed developers of open-source programs. Meanwhile, displaying all the temperance of a methadone addict, Congress keeps handing more and more power to copyright owners.
The stakes are enormous. America's economic might, as Hollywood reminds us, arguably depends in large part on intellectual property law. But some of the entertainment industry's most cherished prizes, such as the Digital Millennium Copyright Act and the No Electronic Theft Act, raise troubling questions about free speech and private property rights.
Other proposals—such as Sen. Ernest `Fritz` Hollings' (D-S.C.) Consumer Broadband and Digital Television Promotion Act—go even further and impose government-mandated regulations on the U.S. hardware and software industries. The justification: piracy will decimate vital industries unless content is secured in a kind of impenetrable lockbox that would put Al Gore's campaign pledge to shame. `A lack of security has enabled significant copyright piracy which drains America's content industries to the tune of billions of dollars every year,` Hollings says. `For example, the movie studios estimate that they lose over $3 billion annually.`
Hollings has a point. Speedy Internet links, improved compression techniques, and fatter hard drives have dealt harshly with traditional views of copyright. Tens of millions of file-swappers are thumbing their noses impudently at legal proscriptions, and content owners fret that the ease of online distribution will reduce sales. They have reason to worry: As bandwidth increases and distribution technology improves, the price of intellectual property online may edge toward zero. Anonymous publishing systems promise to accelerate this trend.
Everyone likes stuff for free, of course, and piracy has always nibbled around the edges of publishers' and distributors' profits. But it's far simpler to copy an MP3 file than to photocopy a Tom Clancy novel, and digital copies—unlike their analog counterparts— do not diminish in value. Every copy has the same quality, which means that, if taken to its logical conclusion, widespread piracy could destroy the incentives to create valuable content.
By now it's clear that copyright holders have concluded the law alone is hardly sufficient to protect their work. Teenage pirates flout legal prohibitions, secure in the knowledge that there are too many of them to prosecute and they have few assets at risk in a civil suit. Overseas pirates are even less likely to be concerned about intellectual property laws, which aren't as strict as the ones in the United States. In response, just as tangible property holders rely not merely on the law but also on technology in the form of fences, locks, and safes to protect their property, copyright holders have started to do the same. `Digital rights management` is the catchall term for self-help technology, and everyone from Microsoft and Intel to AOL Time Warner is testing it out.
All of that is obvious enough. What is not so obvious is what government's proper role should be. Too often, debate has veered between two extremes: lobbyists from the entertainment industry seeking to regulate technology in hopes of limiting copying, and academics and self-described public interest groups seeking to regulate self-help technology in hopes of mandating `fair use.` Both sides hope to enlist Congress—raising the possibility of interminable political battles that could shape the future of digital media more than the technology itself.
The business lobbyists' gains are well-known. The 1998 Digital Millennium Copyright Act banned `any technology, product, service, device, component, or part thereof` designed to bypass digital rights management schemes. The Walt Disney Company and Senator Hollings now want to implant anti-copying devices in all personal computers and electronic devices and most software. But fair-use proponents have not been idle. DigitalConsumer.org touts a six-point bill of rights promising Americans a right to copy and manipulate `content that they have legally acquired`—-even if it is shielded by anti-copying technology. Similarly, Rep. Rick Boucher (D-Va.) has proposed regulating the sale of copy-protected compact discs. His reasoning, endorsed by a librarians' association: the new compact discs, already sold by some record labels, may not permit buyers to make fair use of their music.
Which approach is best? Can free-market methods relying on technological self-help supplant continued government intervention? Must future technologies follow standards to be set by the government? How can piracy be thwarted and reasonable uses of digital content be permitted? Are federal standards for software and hardware consistent with the cherished American idea of limited government?
There are no easy answers to those questions. Allowing the political process to make decisions is what James Buchanan, who won the 1986 Nobel Prize in economics for his public choice theory/ warned us about decades ago. Although the free market is never a perfect judge of people's needs, politicians and bureaucrats in thrall to special-interest groups can do far worse.
I know of no better place to puzzle through these topics than the collection of articles that the Cato Institute has compiled for this book. Timely and learned, they unravel and explain one of the most important subjects that America's technology and entertainment industries are facing today. If you read this book today, you'll be a lot closer to understanding technology's future.
Washington bureau chief