Ownership, Control and Innovation

Copyright and Net Neutrality: An attempt to highlight the nasty bits 

There has been a fair amount of  heated debate around how technology effects ownership, control and innovation.  Specifically, this debate has fallen under the headings of copyright and network neutrality.  I would like to spend a few paragraphs looking at these discussions highlighting what I think are the particularly salient (or nasty) bits as well as how, in my view, these two issues dovetail in to each other.  The basic premise is that traditional property law applied to a digital paradigm with stifle innovation, not just by by making it legally difficult to innovate but by providing a structure by which ownership extend not just to creative works but more insidiously, to the means by which those creative works can enter a marketplace.

There will be very few original ideas in here.  I am stealing most of my insights (or lack there of) from Lawrence Lessig, Yochai Benkler and an interesting paper from Tim Wu.

Copyright 

In Lessig's book, Free Culture, he spells out a very clear and rational approach to copyright law, an approach that, unfortunately, is not the one that we are undertaking.  The current trend is clearly towards a reflex to apply a strict understanding of ownership to all creative works with little to no "fair use" consideration or any historical consideration for the role that mimicry or "standing on the shoulders of giants" has played.

As Lessig is always careful to point out, stealing is stealing.  And, the application of copyright to an artists creative work is critical to that artists ability to make a living from her art which in turn is critical to our society's development of a soul.  That said, it is also critical for artists to be able to build off of the works of others and some of the new "mash-up" art like DJ Danger Mouse's Grey Album and Anime Music Video's are "fair use" derivatives of original works.  Much is written about this so I won't go any farther.

What I want to point out is an aspect of this debate that does not get as much attention.  The current trend in copyright law, with its primary focus on ownership, as opposed to a focus on the protection of the ability to support creativity, has created an environment where creativity is stifled.  This has happened in the context of a fear of reprisal for being "derivative" in any manner, but it has also happened by propping up a legal structure that allows culture pimps to to be the primary beneficiary of creative output.  Let's look at two situations to show what I mean.

The first relates to peer to peer (p2p) file sharing.  The p2p tool that got all the press was Napster.  Napster was shut down based on an opinion that it's primary purpose was to facilitate an illegal activity.  This opinion is more clearly stated in the Grokster case that went to the Supreme Court which condemned Grokster by saying: "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties."  (For an interesting point of view on this, you can visit Grokster now where the website will condemn you for visiting and claim to have recorded your ip address.)  Where this becomes really interesting is in its juxtaposition with the Sony Supreme Court Ruling where the Supreme Court ruled that the use of then Beta Max tapes, manufactured by Sony to record TV shows was not an infringement of copyright and was allowed via the Fair Use clause.  So, what's the difference?  I don't know.  Here is an interesting explication. And here is the Electronic Frontier Foundation's take on the p2p issue.  While this conversation has revolved almost exclusively around the illegal trading of copyrighted material, there is very little talk about the legitimate use of p2p.  There is no reason what it should be broadly illegal for two users to trade files.  It is the nature of the files that is the salient issue.  However, the debate is so horrible obscured by the sharing of copyrighted material and the music and movie industry's massive campaign to eradicate this where enormous fines have been imposed upon individuals and their families that we have totally lost the perspective moving files between computers is a very reasonable and even uniquely useful act.  As an example of this, take a look at the  Freenet project.   

So, here is my point.  The primary reason that the music and motion picture industry's are acting, in such a massively out of proportion manner, against individuals is not to protect the revenue that they might have gained if those same individuals actually purchased the copyrighted material that they illegally downloaded.  Instead, the music and motion picture industries are acting to protect their position relative to the content in a world where they are becoming increasingly less relevant.  The reality is that p2p presents the opportunity to artists to interact directly with their audience.  P2p presents the opportunity for artists to BE the distributor.  This means two things: 1) the Music company's will be relegated to more the role of marketing and PR and, 2) as these p2p networks develop and become more usable and pervasive, the consumer will have more power to find artists they like and artists that are like the artists that they like.  Some great examples of this are Pandora.com and last.fm.  Or, put in the inverse, the music company's will have a more difficult time pushing their own favorite artist.

This brings me to the second, not so lengthy, highly subjective and a little bit mean spirited example.  Ashlee Simpson.  In what universe does Ashlee Simpson become a star.  This could only happen in a world where non-artist, pop culture pushers, who were interested in income and not art, were controlling the artist selection process.  These folks can only control the artist selection process as long as they control the distribution channels.   

Net Neutrality

What we hear about net neutrality is that we are headed for a tired Internet.  Essentially, the pipe owners see the web 2.0 denizens (Amazon, Google, eBay, Salesforce.com and their ilk) as freeloaders hogging the resources that they worked hard to build.  They want to charge more to company's that use more. 

The directly opposite argument tends to begin by challenging the the extent to which the telecoms have the right to claim ownership of a network that was built out by the defense department.  Where it gets a little more traction is a populist argument that says the Internet is a public resource that should be protected as such.   

This argument is really just two sets of companies with competing business models and only really gets interesting when the we begin to conceptualize the "consumer" as creative.  Just as with copyright, the discussion gets more important when we look at the ability of the individual to publish.  If I could stop for a few minutes here to say, this is why the Internet is interesting anyway.  The Internet is a revolutionary communications tool ONLY in its ability facilitate the amplification of quite, marginalized or unheard voices.  Buying books on line is not revolutionary.  It is just better.  (Or worse if you sell books from a building.)  To this point, net neutrality is most effectively argued in terms of individual freedoms, in terms of, not only the right to speak, but more importantly, the right to be heard.

Here is how this plays out.  One of the major players on the tired Internet side is Cisco.  This is because Cisco sees a lot more money providing equipment that will place intelligence at the center of the Internet than they do for providing equipment to the edges (you and me).  Cisco has written white papers to convince the telecom industry that it is in their best interest to install intellegent routers in their backbones so that they can identify the nature of the traffic running through their pipes and act upon it.

Cable companies have this equipment installed today and DSL providers recently won the right to do the same.  They are now both classified as information service providers and NOT telecommunications providers.  This means that they can control (filter) the information and not just the pipes. There is a legitimate social/business need.  As the Internet becomes vital to social and corporate services, one can conceptualize the need to buy guaranteed bandwidth, or, put another way, privileged passage.  However, it is the inverse that is the problem.  If content can be favored then it can be censorred.  It can be slowed down or completely blocked.  The telecoms say that they can be trusted to act fairly.  This would be a silly thing to do for if it were not illegal and it were in their best interests, they would do it.  Their have been at least two cases of this happening (canada firm and AOL).  This is a critical issue that is not well understood and goes to the core of our civil rights.  It should not be legal for a corporation to filter speech from the world stage.

There is still one more, hugely insidious angle to this.  It is parallel to the insight that the culture pushers want p2p technology itself to be illegal, not just the trading of copyrighted content.  The telecoms want to be able to apply filters to the Internet not just to favor (or filter) content but also to regulate innovation.  Just at the record companies were caught off guard by p2p, the telephone companies have been caught off guard by VOIP.  Skype, a peer to peer (p2p) Internet telephony solution that is free to call another Skype user and very cheap ($.021 per minute from London to San Francisco) to call regular land lines, represents a spectacular example of a tool that is both revolutionary and disruptive.  If it were possible for the telephone companies to apply filters to the Internet when this particular revolution was just gaining steam, before anyone (I see in excess of 5.5 million users actually logged in to Skype when I log in) really caught on, I believe they would have.  It is this power that they would like to have.  Their argument is that innovation will happen more rapidly and less chaotically if it is controlled from the center of the network.  The part that they don't mention is that, while it is specious at best that their approach will be effective at catalyzing innovation, anything that does get built, will be owned by them.

This is precedent for this, the 1956 hush-a-phone case.  A Hush-A-Phone was a device that, when placed on an AT&T phone, could allow for a more private conversation and could allow for a speaker to be heard more clearly if they were in a noise location.  AT&T filed to the FCC to have the device declared illegal because they claimed that nobody should be able to augment their phones.  The FCC tool 8 years to agree with AT&T and the courts took four years to overturn it.  So, Hush-A-Phone was out of business for 12 years, after having manufacuted their device for 25 years.  The details of the case are worth looking over (a nice synopsis on the Susan Crawford Blog here) but ultimately it is the same equation.  We own the equipment and we will dictate how it is used.   

The telecoms believe in a market model where innovation is successful when it becomes marketable.  The social production model, the model largely pioneered be the open source movement, can only flourish in an environment where the Internet is standard, neutral environment where anyone can learn the rules.  I believe that social production has the potential to provide a series of efficiencies that could dramatically improve the way services are provided, they way work gets done, the way people connect to each other.  Social production, a nonmarket, non-revenue driven process, is the reason why net neutrality is a good thing and it is the reason why those that stand to earn the most by creating market based tools fight so hard against it.