Will decrypt asap. For now, raw notes…
DRM, session 2
DRM as an enabler of business models
- Carl Shapiro, Haas School of Business, UC Berkeley (moderator)
- David Reed, Cable Labs
- Allan Adler, Association of American Publishers
- Bob Blakley, IBM Corp.
- Donald M. Whiteside, Intel Corp.
- Cary Sherman, Recording Industry Association of America
- Lon Sobel, Entertainment Law Reporter (paper on ISPs as digital retailers)
- Sarah Deutsch, Verizon Communications
Panel 1: Gary (Hass) intros
Lon: distribution-based copyright scheme, royalty rates set by copyright owners, watermarked w/ info about who’s to be paid, etc. If stripped of watermark, use fingerprints. ISPs compute and collect/distribute fees. Motivations: get copyright owners paid, keep gov out of legislating manner of tech design. Would allow P2P w/out concern for legislation. Last session’s Hollings bill would have required mfgrs to build DRM in to technology; current session FCC’s broadcast flag bill is very similar. Business model: ISPs mark up copyright fees? Also retail stores that distribute (examples: bookstores, record stores mark up 100%, etc.) Darknet; Microsoft? Would hammer hardware lifespan if DRM were in technology. Would increase value of broadband. Problems include copyrighted spam, would require ISPs to know exactly what we’re doing (invasion of privacy) but get over it, this is 2003, credit card companies know where you are, this is incrimental; see his paper.
Don Whiteside, Intel: exploring new biz models for digital media. Internet changes everything: internet is one of multitude of disruptive techs… panel about disrupting/creating business models: how consumers use media. Consumers don’t know what fair use, but know what customary use is about: I can therefore I should be able to. Societal ethics and morality evolves separate from law. DRM as biz enabler: strategic inflection point created by disrupting; common element as to which path. Shareholders, distribution partners, customers are elements. Recording and movie studios trying to keep life in existing model; but choice is available. Small, nimble companies will, incumbents should explore their relationship with customers. Won’t happen overnight, but incumbents may lose their consumers. Role of DRM: protection mechanism (to protect existing biz models), but tech companies don’t view their work this way; new control and choices enabled by DRM. Cross industry efforts trying to develop solutions.
Carey Sherman, RIAA: need to continue selling Cds (can’t ‘just stop selling them, can’t just encrypt or market would disappear. Need new players, will take time. Format wars in evolving technology, online is tiny market, consumers think the music should be free. Uncontrolled file sharing, CD burning (giving away and selling) which has collateral effect of street piracy around the world and burners included in new tech, burning replaces purchases. Double-digit decline, complicated rights situation, but they’re only one part of a web of rights holders, all parties need to buy into schemes. No one attitude among companies, most widely held: consumers should be able to copy, can’t give away or sell copies (commercial expectations). Strategies: companies are pursuing multiple, concurrent approaches: get online w/ as many distribution models as possible. Obstacles: PressPlay (req’d subscription), improving steadily. Identifiers, messagers, to facilitate copyright enforcement. Fair use balanced w/ distribution; vendors keep improving but not good enough for commercial release. Pre-compressed files for computers but can’t use on Cds, but need to have compliant devices to prevent piracy. Personal use copies allowed but can’t protect against burning the burned. Add value: bonus tracks, free DVD w/ CD, concert tix, merchandise, other pricing strategies. Make P2P systems less attractive (spoofing). Incentives to companies (ISPs) to prohibit downloading & dis-incentivize P2P. Education, enforcement against consumers. Industry transitioning concurrently w/ artists & customers, lot of moving parts.
Sarah D, Verizon: Trade assns still pursuing old ways, role of 3rd parties? Blame rather than content partners, looking for incentives, wanting to grow DSL thru content development (they don’t profit from P2P). Service providers not to interfere w/ standards re: DRM technologies, no substantial costs or burdens on network, talks not yet begun, just attacks (litigation, legislation, …) Service providers all seeing liabilities. Verizon’s case: RIAA sued for customer info on P2P, injunction to disable user. No files are on V’s network. District ct’s decision gives roving subpoena power: based on assertion, one-pg form loosely based on facts & IP address; has significant privacy implications, has already been misused. V claims unconstitutional if w/out case/controversy, but no requirement for lawsuit following subpoena. RIAA can use John Doe lawsuits, has other remedies but targeting ISPs & consumers. Ref to 18th amendment & similar solutions being used now. Darknet concludes shutting down will fail, must compete on own terms (convenience & low cost). Lon’s compulsory license worth considering, has concerns.
RIAA: switching liability: not to hold ISPs liable but to go where infringing is occuring to enforce RIAA rights. No diff on burden to ISPs? Public policy on RIAA’s side. Roving subpoena based on good faith belief.
Bob B, IBM: Security architecture is a failure? No, packet movement (ARPAnet design goal), sum of all fears is redistribution”; sum of all hopes is to have cheap,easy distribution (and re-distrib). New technologies for DRM & failure modes: alternate reality: you get what you ask for? Based on enabling rights, rights have value. Does your DRM discourage retail? (prices new & used) Does it raise inventory cost? (regional modes v all-region models)? Mass customization w/ DRM at the last second v all rights for all commodity? Exchange rates & process? Security limits lifespan? (help desks expensive). Privacy liabilities and/or discourage sales? Create niches for competitors? (ringtone trading on certain models). If rights have value, commodity potential? (comparison shopping, price pressure on rights owners until everyone grants all rights, then prices go down.) What if price goes down then tech goes obsolete?
David Reed, Cable labs: (diff book than listed in bio.) Cable industry: balance fair use w/ biz concerns to protect & enable biz models. Building infrastructure now including ports, set-top boxes, cable has proposed strategy for current but not future biz models. Inter-industry cooperation: set-top boxes via retail 2005, open cable requirement complicated by expectations, evolving standards (Consumer Electronics), licenses. Tauzin roundtables, discussions, one-way devices enabled: agreement reached. FCC rulemaking to follow. Encoding rules include DRM, 1394 IEEE plug (dig recording devices, dig (HBCP: high bandwidth copy protection), high host/descrambling devices: set-top box, host interface, connects to VR & TV, component analogs… Encoding rules: free-air broadcast copy once? Never? Does agreement support which biz models? FCC hearing to follow. Challenges: one/two way devices, rules for interfaces.
Allen A: contribution: persuade people to stop homoginizing interests & industries. Copyright never intended to be one-size-fits-all, esp in digital environment. Gov mandates that stifle innovation? Ebooks: minimal demand, book publishers recognized opportunity, offered risks of market failure, limitations of print not carried over to digital. Market harm ?? by DRM, but frustrated consumer expectations. Publishers don’t make DRM, vendors focus on feasibility v own missions of convergence & convenience. Publishers don’t deal with consumers, not part of DRM conversation. Joe Krause’s website. Tech vendors, standardization projects offer help to facilitate products’ usefulness. Strong consumer prefs: do same w/ ebooks as print books, but once introduced to enhanced uses, they won’t settle for less. Regulatory interference in nascent marketplace: gov tech mandates. Consumers unwilling to forgo expectations of traditional copyright use rules. Evolving w/ competition across industries, platform shifting & as affirmative rights of customer choice. Ability of users to access on many devices is important, should be addressed in biz plans, should accommodate fair-use doctrines.
Sarah: on Lon’s work: compulsory license (via congress)? Do you want to turn ISP into tax collector? Common carrier status, flat fee system, wary of technology issues & circumvention possibilities, end-user billing system is really ambitious! Charges based on bits, prices, etc (world’s most complicated business system, big brother mining watermarking, fingerprinting)
Lon: yes, really compulsory, exemption for ISPs & service providers. Mandatory retailers, yes; trade-off for ready access for consumers. Not proposing every copyright owner demands payment (spam) or per-use copyright fee. Pop-up notices give opportunity to decline royalty. Billing: asking a lot of computers but he talked w/ vendors & was assured that those companies could provide this kind of system. Keyword: vendor. Things available today, does not require new technology, just perfection of it. Preferable to impose blanket license fee on ISP customers, royalties flow into a pot, generalize according to sampling (ASCAP, BMI), probably not attractive to copyright owners, everything doesn’t have same value (Photoshop v one 49 cent song). Blanket license, assigned values, etc. would not happen in his career.
Bob on Lon’s points: be skeptical of vendors claims. 3 generations of payment and micropayment systems. Billing systems are difficult, real actual money disappears. Watermark is additional fee. (hacker-type thoughts as circumvention model.)
Wi-fi might distroy system: transmitter at Starbucks: Lon’s response: define ISPs including last-in-line to downloaders to be retailers (Starbucks won’t). Unauthorized distribution goes to consumers unreasonable beliefs, follow PO box.
Tech, legal, business uncertainties.
BREAK.
Content, Policy common carriers, copyright, DRM, fees, license, RIAA, rights management