Signal or Noise: the Future of Music on the Net

MP3 stands for “MPEG 1 (Moving Picture Experts Group 1), audio layer 3,” and is a technique designed to compress bulky files of digitized music to facilitate ease of download and storage for bandwidth- and disk space-starved music fans. (While MP3 can be used for any digital audio, such as audiobooks, this paper focuses on the controversies that have arisen to date involving its facilitation of music transmission.)

Unlike its precursors, like RealAudio, MP3 compression technology allows a user to download near-CD quality digitized sound recordings quickly and to store them using minimal disk space. This presents the possibility—a threat or opportunity, depending on your point of view—of users being able to compile enormous libraries of pirated songs and store them indefinitely, using only a small fraction of their hard drives. The files can also be easily attached to an email and sent to any number of friends or uploaded to other websites.

The real threat to the recording industry, as the issue has been cast thus far, is that each successive copy is identical to the original; there is no loss in fidelity no matter the generation of the copy. It was precisely for this reason that the recording industry so vehemently opposed the introduction of DAT technology in the late 1980s, and succeeded in the passage of the Audio Home Recording Act of 1992. Back in the days when the worst damage a wannabe music pirate could do was to dub his Aerosmith cassette and make copies for his friends, the industry did not worry as much about serial copying of copyrighted music. The marginal cost of making copies was constricted by the price of cassette tapes—not expensive, but enough to limit truly mass-scale copying for all but the most dedicated—and each successive copy was of poorer quality than the last. There was little market for a second-, third-, or fourth-generation scratchy home recording.

With the advent of MP3 and related technologies, that has all changed. According to a recent report by Jupiter Communication, the Internet music industry is predicted to hit $1.6 billion by 2002, and somewhere in the vicinity of 500,000 MP3s are out there on the Web. Granted, making and listening to MP3s requires a computer and software, but the requisite software is available for free download from the Internet, along with simple instructions for its use. In addition, electronics hardware manufacturers have been quick to introduce portable MP3 players, which can be used to play the music anywhere, eliminating the need to listen to the music while sitting at one's computer.

Largely due to this ease of transmission, the underground movement in pirated MP3s has grown in spectacular fashion. Some speculate that more than 90% of MP3s currently in circulation were obtained without the copyright owner's permission. The industry, most notably through the RIAA, has responded by waging an all-out war on MP3s, constantly monitoring the web for signs of insurgence and sending cease and desist letters to the operators of infringing sites. They are also trying to shut the system down at the source, filing suit against manufacturers of MP3 players, considering action against search engines that help find MP3s, lobbying for favorable legislation, and working feverishly to develop a competing proprietary standard which can be more easily managed. (See below, “The Future,” for a description of the Secure Digital Music Initiative.)

This war has very much been cast as a battle between the industry on one side and the artists and their fans on the other. (For an insider’s account of this conflict, see below, Beau Brashares, “15 MB of Fame.”) Artists claim that the current system, whereby they receive only pennies on the dollar for CD sales, is archaic, and that the Internet now provides a distribution medium which should allow them to distribute their songs directly to their fans, cutting out the middleman.

Music fans insist that paying $17.99 for a CD which costs only a fraction of that to make is a rip-off, and they cite the low royalties to artists as another reason for their ire. In some convolution of logic akin to a shoplifter's justification of only stealing from big businesses, they seem to be saying that it's OK to take the music because the sellers are making too much money from them. The backup argument when this one fails is that they would pay for the MP3s if only the record companies would make more of them available for purchase. Since they don't, the only way to get their favorite tracks on MP3 is doing what the industry condemns as piracy.

Although the RIAA says differently, it's not incredibly easy to get pirated MP3s these days. A threshold problem is one of bandwidth. Using a dial-up connection and a 56K modem, it can take as much as half an hour to download a single song. This can be enough to deter all but the most dedicated would-be pirates from copying more than a song or two. (Of course, as high-speed connections become more prevalent, this hurdle will come down.) Then there's the problem of actually finding an MP3 you desire. As an interactive example, visit an MP3 search engine like <http://oth.net> and enter the name of your favorite band. After wading through the search results to find a page in English, you will likely have trouble connecting to it. (A search site like AudioGalaxy tells you what percentage chance there is of connecting to a given download site).

Many sites are "ratio sites," meaning you must first upload an MP3 song before the site will allow you to download one. Other sites simply provide links to places where particular songs may be downloaded. You'll find now that most of those links lead nowhere—the sites have up and vanished. Chances are that if you click on any of hundreds of site links you will receive a notice from the ISP that the site you are looking for no longer exists. (If, however, the song does begin to download, please click "cancel" immediately or else you are in danger of copyright infringement, and I may be in danger of contributing to your infringement.) Sometimes the URL still points to a page, but the page no longer provides MP3s.

This is by no means to suggest that pirated MP3s cannot be had, and that they aren't being had, but to show some of the limitations of the actual process which must be followed. One reason for the widespread disappearance of pirate sites is due to the efforts of copyright owners and industry groups who inundate the owners of these sites with cease and desist letters threatening further legal action. The letters alone, and the implied or explicit threats they contain, are generally enough to cause many site operators to close up shop. When cease and desist letters don't work, legal action often can. In the case of A&M Records Inc., et. al. v. the Internet Site Known As Fresh Kutz, (District Court -Southern District of California -Decided- June 9, 1997) Case No.: 97-CV-1099H (JFS), the website operators were unknown and never even showed up to court, but the site came down nonetheless.

This does not mean that these disappearing sites have not reconstituted themselves on other nodes of the web. It is possible, even likely, that the threat of sanction has exacerbated the underground mentality that tends to find ways to route around authority.

So what does the law say? The law of music publishing on the Internet is still in its infancy, and is extremely complex. This section will give an overview of the relevant law, as well as links to commentators' views and interpretations. It is beyond the scope of this effort to provide a comprehensive exposition and interpretation of the law. Rather, the information and links below will provide the knowledge and tools by which you may make an informed interpretation of your own. As with any legal matter, each side states that the law clearly supports its point of view. You decide.

[Note: This section addresses a number of common legal questions that arise regarding the making, distributing, or playing of MP3s based on the relevant U.S. legislation, statutes, and case law.]

As a threshold matter, the rights of artists, publishers, and record companies (the copyright holders) are constitutionally protected in the U.S. under the provisions of the Copyright Act of 1976, 17 U.S.C. §§ 101 et. seq. (The Act). The Act provides protection for “original works of authorship fixed in any tangible medium of expression, currently known or later developed, from which the work can be perceived, reproduced or otherwise communicated, either directly or indirectly, with the aid of a machine or device.” (17 U.S.C. § 102(a))

The Act vests ownership of the copyright in the artist or artists (17 U.S.C. § 201(a)), although the artist may freely transfer those rights, in which case the recipient of the transfer may exercise all transferred rights and the artists retains only rights specifically not transferred. (17 U.S.C. § 201) [Readers familiar with non-U.S. intellectual property laws will note that this differs from the practice in many countries, where certain rights are considered inalienable and remain forever with the creator.] In the case of songs and recordings, artists often transfer their exclusive interest in the copyrights to their creations to music publishers and record companies. [In certain cases, these third parties can be considered the original copyright holder of the creation, if the song as a work made for hire (17 U.S.C. § 201(b)), created "by an employee within the scope of his or her employment" (17 U.S.C. § 101).]

Copyright ownership in musical works is often a multilayered proposition, with several entities negotiating different portions of ownership for differing consideration. This multi-tiered ownership is further complicated by the fact that the various manifestations of a musical work each carry their own bundle of rights and ownership. To get a better sense of who owns what, see the explanatory material accompanying the descriptions of rights below.

The exclusive rights granted to the copyright holder are found in 17 U.S.C. § 106 (pertinent rights in boldface)

Subject to sections 107 through 120, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

Note that there is a distinction between "copies" and "phonorecords" in the statutory language. According to the definitions of the Act (17 U.S.C. § 101), "copies" are "material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term ''copies'' includes the material object, other than a phonorecord, in which the work is first fixed." In the world of copyrighted music, this "copy" would refer to the sheet music on which a song is based. It is at this level that we speak of "musical compositions" which are owned by the composer or lyricist who wrote the words.

"Phonorecords'' are "material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term 'phonorecords' includes the material object in which the sounds are first fixed." Phonorecords, therefore, are physical objects, such as tapes, CDs, and albums. The law is interpreted to include digital manifestations of phonorecords, such as a CD compressed into MP3 format and distributed on the Web. Record companies who fix sound recordings into CDs, tapes, etc. are usually the copyright owners in phonorecords.

Another distinction is that of "sound recordings," which are defined as "works that result from the fixation of a series of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other phonorecords, in which they are embodied." (17 U.S.C. § 101) The copyright holder in a sound recording is the performer whose performance is fixed, or the record company that fixes the sounds in the recording, or both.

These distinctions are important, because they are associated with different rights. For instance, the exclusive rights granted to copyright holders in a sound recording are limited to clauses 1, 2, 3, and 6 of §106, and don't include clause 4's right of public performance. (17 U.S.C. § 114(a)) Even among those rights covered, there are further restrictions. (17 U.S.C. § 114(b))

Confused? You're in good company. This rights structure is perplexing to most people, even the experts. To compound the issue even further are the various organizations which exist to monitor use of musical works and to collect and distribute the royalties to the entities discussed thus far. The music publishers and writers derive a substantial portion of their income from licensing performance rights. There are three mammoth groups that handle the majority of this licensing, the American Society of Composers, Authors, and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC. (Yes, just SESAC.) For a commission on the royalties, these organizations lobby for favorable legislation, monitor for potential copyright infringement (and send cease and desist letters or file suit against infringers), and enter into licensing agreements on behalf of their members, collecting and remitting royalties. Record companies, publishers, and performers who rely on mechanical royalties (derived from the distribution right in phonorecords), turn to the Harry Fox Agency to perform similar functions. And with the recent grant of digital transmission performance rights to owners of sound recordings (discussed more fully below), the RIAA has begun to handle much of the associated licensing.

Anyone who violates the bundle of exclusive rights associated with the copyright is considered an infringer, and faces injunctive sanctions as well as potential civil or criminal liability. (17 U.S.C. §§ 501 et. seq.) Although the copyright owners have standing to file any suit or complaint, the previously mentioned performers' rights organizations will often do this on their behalf.

It is this complex and carefully refined system which MP3 pirates disregard and disrupt. While it seems clear that the law prohibits copying and distributing copies of musical works without first obtaining the permission of the owner (and making the appropriate licensing arrangements), the technology and terminology that surrounds MP3 use holds great potential for confusing the uninitiated about whether they are in fact in violation of the existing legal rules. Because the law does not provide a seamless web leading to inexorable conclusions, this document can at best set forth the relevant legislation and commentary on which the future resolution, whatever it may be, of the current legal debates will rely.

In 1992, Congress passed the Audio Home Recording Act (AHRA) (17 U.S.C. §§ 1001-1010). This legislation was enacted at least partly in response to pressure from the recording industry, which was concerned about the introduction of DAT recording devices (the first commercial distribution of a device which allowed for serial copying of music in digital form, i.e. without quality degradation in successive copies). The new law also clarified the status of home audio copying, an issue left unresolved by the Supreme Court's landmark decision in Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984), which proclaimed the legality of home video copying for "time-shifting" purposes (taping a broadcast program to watch at a later time, then erasing the copy so as not to build a "library" of copyrighted works). Under the AHRA, one is not liable for copyright infringement for making, importing, or distributing a "digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium" or for using any of these devices or media to create personal, noncommercial recordings. (17 U.S.C. § 1008)

To compensate copyright holders for the copying that was expected to ensue, the statute provides that manufacturers and distributors of digital audio recording devices and blank digital tapes must pay a percentage-based royalty to the Copyright Office to be pooled and shared among artists, music publishers, and record companies. (17 U.S.C. § 1004) The AHRA also mandates that any digital audio recording device or digital audio interface device must conform to the Serial Copy Management System (SCMS) or some other approved system which prevents copying of copies. (17 U.S.C. § 1002)

This Act, which amended sections 106 and 114 of the Copyright Act (17 U.S.C. §§ 106(6) and 114), represents the first time public performance rights in sound recordings have been offered protection. Copyright holders in sound recordings now have the exclusive right "to perform the copyrighted work publicly by means of a digital audio transmission." This allows the record companies who hold the rights in sound recordings to collect a royalty on digital "performances" of the sound recording (according to ASCAP, this applies to digital "transmissions," which is interpreted to include downloading, uploading, and streaming).

The Digital Millenium Copyright Act further amended section 114 to "allow a nonexempt, eligible nonsubscription transmission services and a pre-existing satellite digital audio radio service to perform publicly a sound recording by means of certain digital audio transmissions, subject to notice and record keeping requirements." Those notice and record keeping requirements, however, took into account only the industry as it stood in 1995 when the DPRSRA was passed, and provided only that the three eligible services then in existence could file notice within 45 days from the enactment of the notice rule. To rectify this, the Copyright Office promulgated an interim rule amending 37 CFR Part 201 on September 14, 1999 (64 FR 49671). This amendment extends the notice filing period for newly-eligible nonsubscription transmission services in service prior to the passage of the DMCA to October 15, 1999.

Another effect of the DPRSRA on the Internet music industry is that the compulsory license for making and distributing phonorecords (17 U.S.C. § 115) now applies to digital delivery of phonorecords.

What this means for operators of websites who wish to provide their users with MP3 files, either by streaming or downloading, is that they must first obtain a license by paying a fee to the appropriate agency. A performing rights organization such as ASCAP can issue a blanket license which will cover performances of all the music in its collection. Recently, ASCAP signed a groundbreaking deal with MP3.com that did precisely that. However, the implementation of this Act means, there are now three potential tiers of licensing with which the hapless would-be music distributor would do well to become familiar: the license for performing the work (the same as in the non-Internet world, and handled by an organization like ASCAP, BMI, or SESAC); the license for the digital performance right in the sound recording (often being handled by RIAA now); and the license for the distribution right in the phonorecord (a mechanical royalty like those handled by the Harry Fox Agency). The industry catchphrase these days is "one-stop shopping" and it doesn't exist. One must negotiate separate licenses on all three levels or risk the possibility of suit.

The NET, enacted in December 1997, attempted to crack down on computer-based piracy by instituting criminal penalties for copyright infringement by electronic means under 18 U.S.C. § 2319. A trader in illegal MP3s could get up to 6 years in prison (for a second offense—up to 3 years for a first) and/or pay a hefty fine for distributing as little as $1000 worth of music. The law also amended the Copyright Act's definition of "financial gain" (17 U.S.C. § 101) to include "receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works." This places under the Act's ambit the MP3 "ratio sites" which require a user to upload a file before being able to download one, as well as trading areas dealing in authorized copies.

First introduced in 1994, this statute (18 U.S.C. § 2319A) criminalizes the "unauthorized fixation of and trafficking in sound recordings and music videos of live musical performances"—what music fans have always referred to as "bootlegs," ostensibly after the practice of hiding a tape recorder somewhere on one's person at a concert, to later copy and distribute the tape. The statute was updated in 1997 as part of the No Electronic Theft Act to allow the offended copyright holder to submit a victim's impact statement of economic harm prior to sentencing the convicted infringer. The statute also authorizes U.S. Customs to seize bootlegs at the border like any other contraband, to counteract importation from countries with little or no protection for taping of live performances.

Again, things are not as clear as they may seem from reading the law. Far from prohibiting bootlegging of their performances, there are many bands that actually encourage the practice as a promotional tool, a way of bonding with their fans. Included in this category are popular groups such as the Grateful Dead, Blues Traveler, and the Dave Mathews Band. If, however, you think it's OK to then encode your "authorized" bootleg of one of these bands and distribute it over the Web, think again. The RIAA, in its ever-present watchdog role, has worked hard to shut down bootleg sites as quickly as they arise.

In October 1998, Congress passed the DMCA, an implementing legislation for the WIPO treaties. This is a multi-part piece of legislation addressing many aspects of copyright law.

There is a provision in the Act that makes it illegal to so much as link to infringing material. This has fueled the RIAA's efforts to prevent MP3 search engines such as Lycos from operating. While the Act exempts search engines from liability for linking to pirated material, the exemption applies only to those search engines that do so unknowingly. Since the vast majority of MP3 files are still unauthorized copies, it's unlikely that a court would accept that the linking was done without substantial knowledge. Currently, RIAA and Lycos are discussing the issue.

Other significant points for online music are the Act's strong prohibition against devices which circumvent copyright management technology (which was questioned by some as being unnecessary after the No Electronic Theft Act), and its provisions for liability of ISPs who host infringing material. Critics have said that the language which limits ISP liability only upon compliance (by pulling the user's account after being notified) chills protected speech as well as unprotected speech by fostering a "guilty until they prove themselves innocent" approach to shutting down sites.

The control measures have also been criticized for interfering with legitimate exemptions from infringement, discussed next.

All of the foregoing details much about the rights of the various parties involved in a music copyright on the Internet. However, in keeping with the purpose of copyright law, which is to secure a limited monopoly as an incentive to create, there are a few exceptions to the rights granted to copyright holders, one of the most important of which is the fair use exception. (17 U.S.C. § 107) This section provides for a limited amount of copying for the purposes of "criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research." There is no bright line rule which can allow one to determine if an anticipated use is fair, but courts use section 107's balancing test which looks at four factors:

1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

3. the amount and substantiality of the portion used in relationto the copyrighted work as a whole; and

4. the effect of the use upon the potential market for or value of the copyrighted work.

Legislation, like the DMCA, dealing with online copyright issues has been extensively criticized as trampling upon this crucial exception. It has traditionally been a fair use of a copyrighted work to reverse engineer a computer program for purposes of interoperability, but no longer is under the DMCA if the computer program contains any security measures intended to prevent such procedures. Also, the fair use doctrine is the rock upon which much of the education community is built. Legislation like the DMCA, which makes “hacking” lock-up technologies illegal even if the use to which the locked-up material would be put is legal provides no safe havens within which researchers may work without running afoul of the law. While language was added to allow limited copying of programs in order to make interoperability technically possible, the Act still prohibits the manufacture of the type of equipment necessary to perform this function. Critics point out that prohibiting hardware which has substantial non-infringing uses undermines the Supreme Court's reasoning in Sony v. Universal Studios because it effectively prohibits permitted actions. It remains to be seen how this will play out in the courts. Stanford's Fair Use site, <http://fairuse.stanford.edu>, provides extensive information on this and other issues related to this doctrine.

Another significant exception which may prove important in the case of downloaded music is the First-Sale Doctrine (17 U.S.C. § 109), which allows a person who has legally obtained a copy of a phonorecord to sell or dispose of it without authorization from the copyright holder. Currently, if you buy a CD from the store, you are free to give it to a friend or sell it to a used CD store. You paid for it, you may dispose of it as you wish. However, the restrictions of the DMCA, and the protections being built into MP3 copyright protection mechanisms, will make such a transfer both illegal and impossible. Like the fair use implications, it remains to be seen how this will end up. In the meantime it is the subject of heated debate and merits attention.

It is likely that MP3 is going to be around for a while. At least, that is, until something bigger, better, or just different comes along and captures our attention. Meanwhile, several organizations are working to make sure that they provide that something different—in the form of an audio compression format which incorporates copyright management characteristics. The best known of these bodies is the Secure Digital Music Initiative, a group of more than 200 of the industry's heaviest hitters sharing a common goal—to stop MP3 piracy. The group, which began in December 1998 and has been the subject of much controversy in its short life, recently announced that it has developed specifications for a new download format which members believe will strike a balance between their interest in protection with the fans' interest in high-quality, low-cost music.

Until some new standard is in place, copyright owners will continue to use existing technology like watermarking to track unauthorized uses of their material.

This approach, however, remains subject to the vagaries of the law. As we have seen throughout this work, that law is complex and confusing. MP3 as a viable commercial medium is not likely to flourish until both the technology and the law are addressed and brought into harmony with one another. Lobbying efforts would be well directed at this point at clarifying the existing law, rather than trying to create new ones. If copyright owners are truly interested in ensuring compliance, they should do their best to make sure that full information is easily accessible to all, in a language that the average young person wanting to get an MP3 can understand.

In the increasingly acrimonious battle between the recording industry and MP3.com, the Recording Industry Association of America (RIAA) filed suit against the online music provider in a New York federal district court this past January, alleging massive copyright infringement stemming from the company’s new service, My.MP3.com. The new service allows subscribers to create a personal online jukebox from the company’s database of 45,000 CDs, the copyrights to which are owned by the member companies of RIAA (including Sony, Universal, BMG, Warner, EMI, and other major labels). If the suit is successful, damages could run as high as $6.75 billion.

At the center of the dispute are the two key features of My.MP3.com, Instant Listening and Beam-It. The former gives consumers instant access to CDs purchased through any of MP3.com’s online retail partners. Once the customer’s credit card is cleared and the purchase complete, that CD’s songs are digitally transferred into the customer’s private account on My.MP3.com, allowing the customer to listen to the new CD before the physical version arrives in the mail. Beam-It allows similar access to any already-owned CD; the customer need only insert a CD into the CD-ROM drive and ‘beam’ it to MP3.com. The site reads the CD’s WAV files and places a ready-made digital copy into the customer’s online collection. The service does not require proof of ownership, only access to the CD—whether original or copied (though the terms of the service agreement do require the customer to attest that the CDs are her own). Once the files are in the individual’s personalized online collection, a user can access them on demand without ever again needing the physical CD.

Since there is no mechanism through which the consumer can upload or copy her own CDs onto My.MP3.com, the digital music files transferred into individual accounts come from copies in the company’s massive database, not from customer-owned recordings. This tension between ownership of form and reproduction of content is certain to be the heart of the litigation. The Copyright Act of 1971 prohibits the copying of a recording by anyone but the holder of the copyright, and although an exception created by the Audio Home Recording Act of 1992 allows consumers to copy music for personal use, that exception is specifically limited to individual consumers.

Legal analysts disagree on likely defense strategies for MP3.com. Andrew Bridges, the attorney who successfully defended Diamond Multimedia against a similar suit by RIAA in 1999, suggests that MP3.com portray its case in terms of online consumers’ rights to innovative technologies. In a comment to The Industry Standard, Bridges explained, “The question is, is it fair for consumers to find ways of listening to music that they have already paid for, in a different format, without having to pay for it again?”[1] An alternative defense strategy relies on the doctrine of fair use, a narrow exception to copyright laws, which allows for the unauthorized reproduction of copyrighted material under certain circumstances. Whether those circumstances are present here is unclear. Nevertheless, MP3.com CEO Michael Robertson hinted at a blend of the two defenses: “[T]o whom does the music belong? When a consumer buys a CD, does the industry get to tell the consumer where she can listen to her music? The type of technology that she can use to play the CD? What about the fair use rights of the consumer…? Is it all about forcing consumers to use out-dated technologies to induce yet another CD sale?”[2]

Whether MP3.com stands a chance is another question. “I don’t know what MP3.com was thinking,” comments Entertainment Law Reporter editor Lon Sobel. “I couldn’t imagine how they thought that what it was doing was legal.”[3] Bob Cohn, chairman of Emusic.com, was equally pessimistic about MP3.com’s chances: “It’s a textbook case of mass copyright infringement. You can’t do this, it’s silly.”[4] Ironically, one of the most charitable assessments of MP3.com’s new service came from someone in the recording industry. Jeremy Silver, VP of new media for EMI Music, referred to the personal online library as a “genius idea…It fulfills our aspirations that we’ve had for a long time.” However, Silver also noted that in the absence of permission from the copyright owners, My.MP3.com involved “clear copyright infringements.”[5]

The battle between RIAA and MP3.com is not limited to the courts. In an open letter to MP3.com CEO Michael Robertson, RIAA CEO Hilary Rosen wrote, “[Y]our company’s violation of the copyright law is brazen on its face. Simply put, it is not legal to compile a vast database of our member’s sound recordings with no permission and no license. And whatever the individual’s right to use their own music, you cannot exploit that for your company’s commercial gain.”[6] But that may be just the point. In response, Robertson wrote, “Our service is nothing more than a virtual CD player. It is a new and innovative technology that lets people listen to their music. We have every intention of fighting your efforts to dictate the way people can use their music. . . . Only the person who buys the CD is entitled to listen to that music through our service. That’s it. Your argument is that technology companies cannot facilitate that use. Why? Because you apparently believe that you have the right to control the content even after the user buys it. We disagree.”[7]

Perhaps out of tenacity or desperation, MP3.com has filed its own suit against RIAA in a California Superior Court, seeking unspecified damages for what it alleges amount to unfair business practices, defamation, trade libel, and interference with prospective economic advantage. The complaint alleges that Rosen, RIAA, and 20 unnamed “co-conspirators” made disparaging statements to MP3.com’s financial partners, investment bankers, and advertising clients, as well as to managers, agents, and artists in the music industry, warning them that MP3.com commits “theft and exploitation” and advising them, “[d]on’t get ripped off.”[8] More seriously, the complaint alleges that Rosen, RIAA, and the unnamed co-conspirators “used their influence and the implied threat of adverse commercial consequences to persuade or induce these individuals and businesses to discontinue or not to engage in business relationships with MP3.com.”[9] A trial date has not been set.

With all the major labels poised to enter the online music market this year, both suits will have a significant impact on the future relationship between the music industry and services such as My.MP3.com. A finding of copyright infringement would likely spell the end for the online company. Its eight million registered users might just have to turn back to the major labels themselves, change their musical tastes, or else take matters into their own hands. In any event, both suits are sure to be closely watched by consumers’ rights advocates and copyright advocates alike. For more information and continuing coverage, visit www.MP3.com or www.RIAA.com.

The Great 8 Controversies That Are Shaping the Online Media World

by Alon Neches, HLS ’01

The explosion in online music has sent shockwaves throughout the music and film industries. Online music sales, including both sales of conventional media and digital downloads, are projected to hit $2.6 billion by 2003, or 14 percent of the U.S. market.[10]

However, only $147 million of this is expected to come from downloaded music.[11] Piracy has made a tremendous body of music available for free over the Internet. The recording industry estimates that pirated music in the form of counterfeit CD's and downloaded music already costs it $4.5 billion in lost revenue every year. The corresponding figure for lost revenue due to piracy by the motion picture industry stands at $3 billion per year.[12]

These dizzying figures have already made important impacts in the media industries In business, many industry insiders saw the Time-Warner/AOL merger as largely driven by Time-Warner's realization that it needed an online distribution channel and method for its media content to compete in the Information Age.[13] The legal cases and controversies below also promise to play an important role in shaping the music industry of the 21^st century.

Recording Industry Association of America v. Diamond Multimedia Systems, 180 F.3d 1072 (9^th Cir. 1999)

Originally filed in October 1998, the Diamond Multimedia case was the first major case surrounding online music filed by the Recording Industry Association of America (RIAA). The RIAA claimed that Diamond's Rio MP3 player violated the Audio Home Recording Act (AHRA), 17 U.S.C.A. §100,1 because it was a "digital audio recording device" which did not have any system for preventing copying of copies, and thus of protecting the copyrights of the music that it reproduced. Both the District Court and the Ninth Circuit Court of Appeals ruled that the Rio MP3 player did not fall under the AHRA because it recorded music from a computer hard drive, which unlike an audio compact disc typically contained more than just sounds.[14]

Instead of appealing to the Supreme Court, the parties reached an amicable settlement in August 1999. Although terms of the settlement were not disclosed, both parties stipulated an earnest desire to turn digital distribution of music into a viable business.[15]

The Diamond Multimedia dispute is notable just as much for its resolution as for any copyright issues it presented. Both parties represent business interests looking to use the Internet as a viable distribution channel from which to garner revenue. Also, both realized that cooperation in working toward a technology that could help protect copyrights online was much more profitable than pursuing adversarial litigation against one another.

In December 1999, the RIAA sued Napster, a fledgling company that distributes software that allows an ever-growing community of music enthusiasts to search for and download music from one another's computers. Napster claims that because it does not host any content nor tracks any of the exchanges made by Napster music community members, it does not violate any copyright laws. Napster also asserts that its software was developed as a tool for up and coming artists to find listeners and vice-versa.[16]

The RIAA contends that Napster's software is a "burglar's tool" that allows Net users to download songs by top-selling artists freely, thus making copies without paying legally mandated royalties and costing the recording industry tremendous revenue losses.[17] The RIAA's case faces some important legal hurdles. First, the Digital Millennium Copyright Act (DMCA) creates a safe harbor for online sites and services that desist from copyright-infringing acts upon notice. Furthermore, the Telecommunications Act of 1996 protects Internet Service Providers from liability for any legal improprieties committed by third parties over the ISP's network under certain circumstances.[18]

The Napster case raises the important question of liability for companies that only provide software or services that enable online music exchange but do not themselves actually reproduce or distribute any of the music. Also, Napster's software allows for identification of the ISP numbers of its members, which could create the potential for prosecution of the individuals that use Napster's software.

In October 1999, an independent security analyst discovered that RealNetworks had assigned each of the users who registered its popular Real Jukebox software a global unique identification number (GUID) and was using that number to track music listening patterns. Although RealNetworks claimed that the data was only used for aggregation purposes, GUID technology potentially enabled RealNetworks to create personal profiles for identified individuals that included everything from listening preferences to credit card numbers.[19] This type of data collection was in direct contradiction to RealNetworks’ stated privacy policy.

The same day The New York Times reported this story, RealNetworks released a patch for its software that allowed RealJukebox users to block transmission of their personal information, and amended its privacy statement to give its software users a more detailed description of what data might be collected about them. These corrective actions did not stop two separate class-action suits from being filed against RealNetworks. The first, a $500 million suit filed in California Superior Court, claimed RealNetworks violated California's unfair business practices law. A second, federal class action suit, filed in the Eastern District of Pennsylvania, claims that RealNetworks violated the federal Computer Fraud and Abuse Act and state privacy and consumer protection laws.[20]

This controversy underscores the importance of privacy issues on the Internet. Privacy concerns arising out of such situations have prompted the Federal Trade Commission to examine online profiling. In a study underwritten by the FTC and DoubleClick, a majority of respondents stated a preference for targeted advertising and personalized Net service, but over 92% of those surveyed stated that privacy on the Internet was a concern for them, and 67% of respondents were "very concerned" about potential abuses arising from the use of their personal information.[21]

University of Oregon Student Convicted Under the No Electronic Theft (NET) Act

In November 1999, University of Oregon student Jeffrey Levy pled guilty to violating the NET Act, thus becoming the first person to fall within its scope. Levy drew the attention of university administrators when his website began sending out 1.7 Gigabytes of information over the course of several hours. After University administrators contacted the FBI, Levy's computer was searched.

According to the prosecuting attorney, Levy had illegally posted approximately $70,000 worth of copyrighted material on his site, including 1,000 MP3 files.[22] The NET makes it illegal to reproduce or distribute copyrighted materials worth more than $1,000.[23] For Levy, the maximum penalty could have been three years in prison and a $250,000 fine. Due to his cooperation, he received two years of probation and a limit on his Internet access.

Levy's case signifies a new commitment by law enforcement authorities to use the tools at their disposal to uphold copyright and intellectual property laws. Beyond the NET, proposals for new sentencing guidelines may make the sanctions for violating copyright laws more severe. Furthermore, the Department of Justice, the Customs Service, and other agencies have recently announced an intellectual property rights initiative that is aimed specifically at entertainment software pirates.[24]

Seventy-One Students at Carnegie Mellon University Reprimanded for MP3 Use

In October 1999, administrators at Carnegie Mellon University randomly searched 250 student files and punished 71 students for illegally sharing MP3 files across the school's intranet. Although some the files searched were password protected, all of the students had made their passwords available in public files.[25] The students were stripped of their Internet access and were required to attend a 90-minute lecture on copyright laws and infringement.

This case highlights the potential liability of universities for the actions of their students. According the DMCA, universities are protected from prosecution for copyright infringement only if they take action when notified of potential copyright violations. Universities that fail to do so may face entity level liability.[26]

For the many artists who have regular conflicts with their recording studios over sharing profits, online music distribution offers an appealing option. Artists such as the Beastie Boys, David Bowie, and Chuck D have all publicly stated their intention to use the Internet as a distribution channel for their music. Last May, Chuck D's group Public Enemy released its new album, There's a Poison Goin' On, online through the website Atomic Pop. Visitors can purchase the CD online or download the music digitally. Bowie and Chuck D have both released singles online.

These artists view music distribution over the Internet as a way to capture a larger proportion of the profits from their music.[27] As stated by Chuck D, "It used to be all about the triple R -- radio, retail, record companies. The Internet means you don't need them nearly as much. I'm going to use it not just for myself, but to help out some newer artists who are doing their thing."[28]

At the moment, most industry insiders see MP3 technology as most useful for independent record labels looking for cost effective methods of distributing their distributing their music. Piracy issues currently preclude large recording companies from embracing online distribution.

In January, Norwegian police arrested and charged 16-year-old Jon Johansen with copyright infringement and gaining unauthorized access to data and software. Johansen had posted a program called DeCSS that breaks the encryption on DVDs and allows them to be copied and converted into other types of operating systems.[29] With the proliferation of DeCSS, the Motion Picture Association of America filed a lawsuit in New York against various individuals who it considered instrumental in DeCSS's rampant spread throughout the Internet. On January 20, U.S. District Judge Lewis Kaplan granted a preliminary injunction and ordered the hackers to take down its DeCSS posting or potentially face sanctions under the DMCA.[30]

Proponents of the code claim that the purpose of DeCSS is to allow the playback of DVDs on operating systems not supported by the Motion Picture Association of America, which will in turn lead to better and cheaper DVD players due to increased competition in their production.[31] The main alternative operating system that these programmers seek to introduce into the DVD fold is Linux. To date, DVDs are not manufactured with the capability of being played on Linux machines.

Although video and DVD pirating may seem to make little impact in highly developed markets such as the United States, the consequences can be very real in developing markets. For example, a recent study by the Film and Video Industry Association of Malaysia shows that 80 cinema screens at 58 locations have ceased operations in the past two years, partially due to the prevalence of pirating.[32] At the same time, in the United States, DVD hacking is probably not occurring nearly on the scale of music piracy. The average DVD is 5 gigabytes in size—a prohibitively large file to download no matter the speed of your Internet connection. Furthermore, blank DVDs usually cost more than DVD movies.[33]

ICraveTV is a Toronto-based company that broadcasts live programs from 17 U.S. and Canadian television stations, including affiliates of the four major United States networks. Thirteen movie and broadcasting companies, along with both the National Football League and the National Basketball Association, have filed suits to stop ICrave from broadcasting their copyrighted material.[34]

For its part, ICrave claims that its free web broadcasts are intended only for Canadian Internet users and that their broadcasts are legal in Canada. However, movie and broadcasting executives claim that ICrave’s security measures are inadequate to ensure that non-Canadians are excluded from the site. On February 8, 2000, U.S. District Judge Donald Ziegler issued a preliminary injunction against ICraveTV because its security measures did not bock access for U.S. viewers.

The movie and broadcast industry sees this case as a benchmark for protecting intellectual property on the Internet. Movies and broadcast programming derive their revenues from advertisers. If the same content was freely available on the Internet, these industries could lose both advertisers and the viewers those advertisers seek to reach.[35]

The Economy of Ideas: A Framework for Patents and Copyrights in the Digital Age.
(Everything you know about intellectual property is wrong.)

By John Perry Barlow
Cognitive Dissident, EFF Co-Founder, and Fellow, Berkman Center for Internet & Society

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of everyone, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density at any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.

Throughout the time I've been groping around Cyberspace, there has remained unsolved an immense conundrum that seems to be at the root of nearly every legal, ethical, governmental, and social vexation to be found in the Virtual World. I refer to the problem of digitized property.

The riddle is this: if our property can be infinitely reproduced and instantaneously distributed all over the planet without cost, without our knowledge, without its even leaving our possession, how can we protect it? How are we going to get paid for the work we do with our minds? And, if we can't get paid, what will assure the continued creation and distribution of such work?

Since we don't have a solution to what is a profoundly new kind of challenge, and are apparently unable to delay the galloping digitization of everything not obstinately physical, we are sailing into the future on a sinking ship.

This vessel, the accumulated canon of copyright and patent law, was developed to convey forms and methods of expression entirely different from the vaporous cargo it is now being asked to carry. It is leaking as much from within as without.

Legal efforts to keep the old boat floating are taking three forms: a frenzy of deck chair rearrangement, stern warnings to the passengers that if she goes down, they will face harsh criminal penalties, and serene, glassy-eyed denial.

Intellectual property law cannot be patched, retrofitted, or expanded to contain the gasses of digitized expression any more than real estate law might be revised to cover the allocation of broadcasting spectrum. (Which, in fact, rather resembles what is being attempted here.) We will need to develop an entirely new set of methods as befits this entirely new set of circumstances.

Most of the people who actually create soft property—the programmers, hackers, and Net surfers--already know this. Unfortunately, neither the companies they work for nor the lawyers these companies hire have enough direct experience with immaterial goods to understand why they are so problematic. They are proceeding as though the old laws can somehow be made to work, either by grotesque expansion or by force. They are wrong.

The source of this conundrum is as simple as its solution is complex. Digital technology is detaching information from the physical plane, where property law of all sorts has always found definition.

Throughout the history of copyrights and patents, the proprietary assertions of thinkers have been focused not on their ideas but on the expression of those ideas. The ideas themselves, as well as facts about the phenomena of the world, were considered to be the collective property of humanity. One could claim franchise, in the case of copyright, on the precise turn of phrase used to convey a particular idea or the order in which facts were presented.

The point at which this franchise was imposed was that moment when the "word became flesh" by departing the mind of its originator and entering some physical object, whether book or widget. The subsequent arrival of other commercial media besides books didn't alter the legal importance of this moment. Law protected expression and, with few (and recent) exceptions, to express was to make physical.

Protecting physical expression had the force of convenience on its side. Copyright worked well because, Gutenberg notwithstanding, it was hard to make a book. Furthermore, books froze their contents into a condition that was as challenging to alter as it was to reproduce. Counterfeiting or distributing counterfeit volumes were obvious and visible activities, easy enough to catch somebody in the act of doing. Finally, unlike unbounded words or images, books had material surfaces to which one could attach copyright notices, publisher's marques, and price tags.

Mental to physical conversion was even more central to patent. A patent, until recently, was either a description of the form into which materials were to be rendered in the service of some purpose or a description of the process by which rendition occurred. In either case, the conceptual heart of patent was the material result. If no purposeful object could be rendered due to some material limitation, the patent was rejected. Neither a Klein bottle nor a shovel made of silk could be patented. It had to be a thing and the thing had to work.

Thus the rights of invention and authorship adhered to activities in the physical world. One didn't get paid for ideas but for the ability to deliver them into reality. For all practical purposes, the value was in the conveyance and not the thought conveyed.

Now, as information enters Cyberspace, the native home of Mind, these bottles are vanishing. With the advent of digitization, it is now possible to replace all previous information storage forms with one meta-bottle: complex—and highly liquid—patterns of ones and zeros.

Even the physical/digital bottles to which we've become accustomed, floppy disks, CD-ROM's, and other discrete, shrink-wrappable bit-packages, will disappear as all computers jack in to the global Net. While the Internet may never include every single CPU on the planet, it is more than doubling every year and can be expected to become the principal medium of information conveyance if, eventually, the only one.

Once that has happened, all the goods of the Information Age—all of expressions once contained in books or film strips or records or newsletters—will exist either as pure thought or something very much like thought: voltage conditions darting around the Net at the speed of light, in conditions which one might behold in effect, as glowing pixels or transmitted sounds, but never touch or claim to "own" in the old sense of the word.

Some might argue that information will still require some physical manifestation, such as its magnetic existence on the titanic hard disks of distant servers, but these are bottles that have no macroscopically discrete or personally meaningful form.

Some will also argue that we have been dealing with unbottled expression since the advent of radio, and they would be right. But for most of the history of broadcast, there was no convenient way to capture soft goods from the electromagnetic ether and reproduce them in anything like the quality available in commercial packages. Only recently has this changed and little has been done legally or technically to address the change.

Generally, the issue of consumer payment for broadcast products was irrelevant. The consumers themselves were the product. Broadcast media were supported either by selling the attention of their audience to advertisers, using government to assess payment through taxes, or the whining mendicancy of annual donor drives.

All of broadcast support models are flawed. Support either by advertisers or government has almost invariably tainted the purity of the goods delivered. Besides, direct marketing is gradually killing the advertiser support model anyway.

Broadcast media gave us another payment method for a virtual product in the royalties which broadcasters pay songwriters through such organizations as ASCAP and BMI. But, as a member of ASCAP, I can assure you this is not a model that we should emulate. The monitoring methods are wildly approximate. There is no parallel system of accounting in the revenue stream. It doesn't really work. Honest.

In any case, without our old methods of physically defining the expression of ideas, and in the absence of successful new models for non-physical transaction, we simply don't know how to assure reliable payment for mental works. To make matters worse, this comes at a time when the human mind is replacing sunlight and mineral deposits as the principal source of new wealth.

Furthermore, the increasing difficulty of enforcing existing copyright and patent laws is already placing in peril the ultimate source of intellectual property, the free exchange of ideas.

That is, when the primary articles of commerce in a society look so much like speech as to be indistinguishable from it, and when the traditional methods of protecting their ownership have become ineffectual, attempting to fix the problem with broader and more vigorous enforcement will inevitably threaten freedom of speech.

The greatest constraint on your future liberties may come not from government but from corporate legal departments laboring to protect by force what can no longer be protected by practical efficiency or general social consent.

Furthermore, when Jefferson and his fellow creatures of The Enlightenment designed the system that became American copyright law, their primary objective was assuring the widespread distribution of thought, not profit. Profit was the fuel that would carry ideas into the libraries and minds of their new republic. Libraries would purchase books, thus rewarding the authors for their work in assembling ideas, which otherwise "incapable of confinement" would then become freely available to the public. But what is the role of libraries if there are no books? How does society now pay for the distribution of ideas if not by charging for the ideas themselves?

Additionally complicating the matter is the fact that along with the physical bottles in which intellectual property protection has resided, digital technology is also erasing the legal jurisdictions of the physical world, and replacing them with the unbounded and perhaps permanently lawless seas of Cyberspace.

In Cyberspace, there are not only no national or local boundaries to contain the scene of a crime and determine the method of its prosecution, there are no clear cultural agreements on what a crime might be. Unresolved and basic differences between European and Asian cultural assumptions about intellectual property can only be exacerbated in a region where many transactions are taking place in both hemispheres and yet, somehow, in neither.

Even in the most local of digital conditions, jurisdiction and responsibility are hard to assess. A group of music publishers filed suit against Compuserve this fall for it having allowed its users to upload musical compositions into areas where other users might get them. But since Compuserve cannot practically exercise much control over the flood of bits that pass between its subscribers, it probably shouldn't be held responsible for unlawfully "publishing" these works.

Notions of property, value, ownership, and the nature of wealth itself are changing more fundamentally than at any time since the Sumerians first poked cuneiform into wet clay and called it stored grain. Only a very few people are aware of the enormity of this shift and fewer of them are lawyers or public officials.

Those who do see these changes must prepare responses for the legal and social confusion that will erupt as efforts to protect new forms of property with old methods become more obviously futile, and, as a consequence, more adamant.

Humanity now seems bent on creating a world economy primarily based on goods that take no material form. In doing so, we may be eliminating any predictable connection between creators and a fair reward for the utility or pleasure others may find in their works.

Without that connection, and without a fundamental change in consciousness to accommodate its loss, we are building our future on furor, litigation, and institutionalized evasion of payment except in response to raw force. We may return to the Bad Old Days of property.

Throughout the darker parts of human history, the possession and distribution of property was a largely military matter. "Ownership" was assured those with the nastiest tools, whether fists or armies, and the most resolute will to use them. Property was the divine right of thugs.

By the turn of the First Millennium A.D., the emergence of merchant classes and landed gentry forced the development of ethical understandings for the resolution of property disputes. In the late Middle Ages, enlightened rulers like England's Henry II began to codify this unwritten "common law" into recorded canons. These laws were local, but this didn't matter much as they were primarily directed at real estate, a form of property that is local by definition. And which, as the name implied, was very real.

This continued to be the case as long as the origin of wealth was agricultural, but with dawning of the Industrial Revolution, humanity began to focus as much on means as ends. Tools acquired a new social value and, thanks to their own development, it became possible to duplicate and distribute them in quantity.

To encourage their invention, copyright and patent law were developed in most western countries. These laws were devoted to the delicate task of getting mental creations into the world where they could be used—and enter the minds of others—while assuring their inventors compensation for the value of their use. And, as previously stated, the systems of both law and practice that grew up around that task were based on physical expression.

Since it is now possible to convey ideas from one mind to another without ever making them physical, we are now claiming to own ideas themselves and not merely their expression. And since it is likewise now possible to create useful tools that never take physical form. we have taken to patenting abstractions, sequences of virtual events, and mathematical formulae--the most un-real estate imaginable.

In certain areas, this leaves rights of ownership in such an ambiguous condition that once again property adheres to those who can muster the largest armies. The only difference is that this time the armies consist of lawyers.

Threatening their opponents with the endless Purgatory of litigation, over which some might prefer death itself, they assert claim to any thought that might have entered another cranium within the collective body of the corporations they serve. They act as though these ideas appeared in splendid detachment from all previous human thought. And they pretend that thinking about a product is somehow as good as manufacturing, distributing, and selling it.

What was previously considered a common human resource, distributed among the minds and libraries of the world, as well as the phenomena of nature herself, is now being fenced and deeded. It is as though a new class of enterprise had arisen which claimed to own air and water.

What is to be done? While there is a certain grim fun to be had in it, dancing on the grave of copyright and patent will solve little, especially when so few are willing to admit that the occupant of this grave is even deceased and are trying to up by force what can no longer be upheld by popular consent.

The legalists, desperate over their slipping grip, are vigorously trying to extend it. Indeed, the United States and other proponents of GATT are making adherence to our moribund systems of intellectual property protection a condition of membership in the marketplace of nations. For example, China will be denied Most Favored nation trading status unless they agree to uphold a set of culturally alien principles that are no longer even sensibly applicable in their country of origin.

In a more perfect world, we'd be wise to declare a moratorium on litigation, legislation, and international treaties in this area until we had a clearer sense of the terms and conditions of enterprise in Cyberspace. Ideally, laws ratify already developed social consensus. They are less the Social Contract itself than a series of memoranda expressing a collective intent that has emerged out of many millions of human interactions.

Humans have not inhabited Cyberspace long enough or in sufficient diversity to have developed a Social Contract that conforms to the strange new conditions of that world. Laws developed prior to consensus usually serve the already established few who can get them passed and not society as a whole.

To the extent that either law or established social practice exists in this area, they are already in dangerous disagreement. The laws regarding unlicensed reproduction of commercial software are clear and stern . . . and rarely observed. Software piracy laws are so practically unenforceable and breaking them has become so socially acceptable that only a thin minority appears compelled, either by fear or conscience, to obey them.

I sometimes give speeches on this subject, and I always ask how many people in the audience can honestly claim to have no unauthorized software on their hard disks. I've never seen more than ten percent of the hands go up.

Whenever there is such profound divergence between the law and social practice, it is not society that adapts. And, against the swift tide of custom, the Software Publishers' current practice of hanging a few visible scapegoats is so obviously capricious as to only further diminish respect for the law.

Part of the widespread popular disregard for commercial software copyrights stems from a legislative failure to understand the conditions into which it was inserted. To assume that systems of law based in the physical world will serve in an environment that is as fundamentally different as Cyberspace is a folly for which everyone doing business in the future will pay.

As I will discuss in the next segment, unbounded intellectual property is very different from physical property and can no longer be protected as though these differences did not exist. For example, if we continue to assume that value is based on scarcity, as it is with regard to physical objects, we will create laws that are precisely contrary to the nature of information, which may, in many cases, increase in value with distribution.

The large, legally risk-averse institutions most likely to play by the old rules will suffer for their compliance. The more lawyers, guns, and money they invest in either protecting their rights or subverting those of their opponents, the more commercial competition will resemble the Kwakiutl Potlatch Ceremony, in which adversaries competed by destroying their own possessions. Their ability to produce new technology will simply grind to a halt as every move they make drives them deeper into a tar pit of courtroom warfare.

Faith in law will not be an effective strategy for high tech companies. Law adapts by continuous increments and at a pace second only to geology in its stateliness. Technology advances in the lunging jerks, like the punctuation of biological evolution grotesquely accelerated. Real world conditions will continue to change at a blinding pace, and the law will get further behind, more profoundly confused. This mismatch is permanent.

Promising economies based on purely digital products will either be born in a state of paralysis, as appears to be the case with multimedia, or continue in a brave and willful refusal by their owners to play the ownership game at all.

In the United States one can already see a parallel economy developing, mostly among small fast moving enterprises who protect their ideas by getting into the marketplace quicker then their larger competitors who base their protection on fear and litigation.

Perhaps those who are part of the problem will simply quarantine themselves in court while those who are part of the solution will create a new society based, at first, on piracy and freebooting. It may be that when the current system of intellectual property law has collapsed, as seems inevitable, that no new legal structure will arise in its place.

But something will happen. After all, people do business. When a currency becomes meaningless, business is done in barter. When societies develop outside the law, they develop their own unwritten codes, practices, and ethical systems. While technology may undo law, technology offers methods for restoring creative rights.

It seems to me that the most productive thing to do now is to look hard into the true nature of what we're trying to protect. How much do we really know about informaiton and its natural behaviors?

What are the essential characteristics of unbounded creations? How does it differ from previous forms of property? How many of our assumptions about it have actually been about its containers rather than their mysterious contents? What are its different species and how does each of them lend itself to control? What technologies will be useful in creating new bottles to replace the old physical ones?

Of course, information is, by its nature, intangible and hard to define. Like other such deep phenomena as light or matter, it is a natural host to paradox. And as it is most helpful to understand light as being both a particle and a wave, an understanding of information may emerge in the abstract congruence of its several different properties that might be described by the following three statements:

Freed of its containers, information is obviously not a thing. In fact, it is something that happens in the field of interaction between minds or objects or other pieces of information.

Gregory Bateson, expanding on the information theory of Claude Shannon, said, "Information is a difference which makes a difference." Thus, information only really exists in the delta. The making of that difference is an activity within a relationship. Information is an action that occupies time rather than a state of being which occupies physical space, as is the case with hard goods. It is the pitch, not the baseball, the dance, not the dancer.

Even when it has been encapsulated in some static form like a book or a hard disk, information is still something that happens to you as you mentally decompress it from its storage code. But, whether it's running at gigabits per second or words per minute, the actual decoding is a process that must be performed by and upon a mind, a process that must take place in time.

There was a cartoon in the Bulletin of Atomic Scientists a few years ago which illustrated this point beautifully. In the drawing, a holdup man trains his gun on the sort of bespectacled fellow you'd figure might have a lot of information stored in his head. "Quick," orders the bandit, "Give me all your ideas."

Sharks are said to die of suffocation if they stop swimming, and the same is nearly true of information. Information that isn't moving ceases to exist as anything but potential...at least until it is allowed to move again. For this reason, the practice of information hoarding, common in bureaucracies, is an especially wrong-headed artifact of physically based value systems.

The way in which information spreads is also very different from the distribution of physical goods. It moves more like something from nature than from a factory. It can concatenate like falling dominos or grow in the usual fractal lattice, like frost spreading on a window, but it cannot be shipped around like widgets, except to the extent that it can be contained in them. It doesn't simply move on. It leaves a trail of itself everywhere it's been.

The central economic distinction between information and physical property is the ability of information to be transferred without leaving the possession of the original owner. If I sell you my horse, I can't ride him after that. If I sell you what I know, we both know it.

Stewart Brand is generally credited with this elegant statement of the obvious, recognizing both the natural desire of secrets to be told and the fact that they might be capable of possessing something like a "desire" in the first place.

English Biologist and Philosopher Richard Dawkins proposed the idea of "memes," self-replicating, patterns of information that propagate themselves across the ecologies of mind, saying they were like life forms.

I believe they are life forms in every respect but a basis in the carbon atom. They self-reproduce, they interact with their surroundings and adapt to them, they mutate, they persist. Like any other life form they evolve to fill the possibility spaces of their local environments, which are, in this case the surrounding belief systems and cultures of their hosts, namely, us.

Indeed, the sociobiologists like Dawkins make a plausible case that carbon-based life forms are information as well, that, as the chicken is an egg's way of making another egg, the entire biological spectacle is just the DNA molecule's means of copying out more information strings exactly like itself.

Like DNA helices, ideas are relentless expansionists, always seeking new opportunities for lebensraum. And, as in carbon-based nature, the more robust organisms are extremely adept at finding new places to live. Thus, just as the common housefly has insinuated itself into practically every ecosystem on the planet, so has the meme of "life after death" found a niche in most minds, or psycho-ecologies.

The more universally resonant an idea or image or song, the more minds it will enter and remain within. Trying to stop the spread of a really robust piece of information is about as easy as keeping killer bees South of the Border. The stuff just leaks.

If ideas and other interactive patterns of information are indeed life forms, they can be expected to evolve constantly into forms that will be more perfectly adapted to their surroundings. And, as we see, they are doing this all the time.

But for a long time, our static media, whether carvings in stone, ink on paper, or dye on celluloid, have strongly resisted the evolutionary impulse, exalting as a consequence the author's ability to determine the finished product. But, as in an oral tradition, digitized information has no "final cut."

Digital information, unconstrained by packaging, is a continuing process more like the metamorphosing tales of prehistory than anything that will fit in shrink wrap. From the Neolithic to Gutenberg, information was passed on, mouth to ear, changing with every re-telling (or re-singing). The stories that once shaped our sense of the world didn't have authoritative versions. They adapted to each culture in which they found themselves being told.

Because there was never a moment when the story was frozen in print, the so-called "moral" right of storytellers to keep the tale their own was neither protected nor recognized. The story simply passed through each of them on its way to the next, where it would assume a different form. As we return to continuous information, we can expect the importance of authorship to diminish. Creative people may have to renew their acquaintance with humility.

But our system of copyright makes no accommodation whatever for expressions that don't at some point become "fixed" nor for cultural expressions which lack a specific author or inventor.

Jazz improvisations, standup comedy routines, mime performances, developing monologues, and unrecorded broadcast transmissions all lack the Constitutional requirement of fixation as a "writing." Without being fixed by a point of publication the liquid works of the future will all look more like these continuously adapting and hanging forms and will therefore exist beyond the reach of copyright.

Copyright expert Pamela Samuelson tells of having attended a conference last year convened around the fact that Western countries may legally appropriate the music, designs, and biomedical lore of aboriginal people without compensation to their tribe of origin since that tribe is not an "author" or "inventor."

But soon most information will be generated collaboratively by the cyber-tribal hunter-gatherers of Cyberspace. Our arrogant legal dismissal of the rights of "primitives" will be back to haunt us soon.

With the exception of the rare classic, most information is like farm produce. Its quality degrades rapidly both over time and in distance from the source of production. But even here, value is highly subjective and conditional. Yesterday's papers are quite valuable to the historian. In fact, the older they are, the more valuable they become. On the other hand, a commodities broker might consider news of an event that is more than an hour old to have lost any relevance.

In most cases, we assign value to information based on its meaningfulness. The place where information dwells, the holy moment where transmission becomes reception, is a region that has many shifting characteristics and flavors depending on the relationship of sender and receiver, the depth of their interactivity.

Each such relationship is unique. Even in cases where the sender is a broadcast medium, and no response is returned, the receiver is hardly passive. Receiving information is often as creative an act as generating it.

The value of what is sent depends entirely on the extent to which each individual receiver has the receptors...shared terminology, attention, interest, language, paradigm...necessary to render what is received meaningful.

Understanding is a critical element increasingly overlooked in the effort to turn information into a commodity. Data may be any set of facts, useful or not, intelligible or inscrutable, germane or irrelevant. Computers can crank out new data all night long without human help, and the results may be offered for sale as information. They may or may not actually be so. Only a human being can recognize the meaning that separates information from data.

In fact, information, in the economic sense of the word, consists of data that have been passed through a particular human mind and found meaningful within that mental context. One fella's information is all just data to someone else. If you're an anthropologist, my detailed charts of Tasaday kinship patterns might be critical information to you. If you're a banker from Hong Kong, they might barely seem to be data.

With physical goods, there is a direct correlation between scarcity and value. Gold is more valuable than wheat, even though you can't eat it. While this is not always the case, the situation with information is usually precisely the reverse. Most soft goods increase in value as they become more common.

Familiarity is an important asset in the world of information. It may often be the case that the best thing you can do to raise the demand for your product is to give it away.

While this has not always worked with shareware, it could be argued that there is a connection between the extent to which commercial software is pirated and the amount that gets sold. Broadly pirated software, such as Lotus 1-2-3 or WordPerfect,becomes a standard and benefits from Law of Increasing Returns based on familiarity.

Regarding my own soft product, rock and roll songs, there is no question that the band I write them for, the Grateful Dead, has increased its popularity enormously by giving them away. We have been letting people tape our concerts since the early seventies, but instead of reducing the demand for our product, we are now the largest concert draw in America, a fact that is at least in part attributable to the popularity generated by those tapes.

True, I don't get any royalties on the millions of copies of my songs that have been extracted from concerts, but I see no reason to complain. The fact is, no one but the Grateful Dead can perform a Grateful Dead song, so if you want the experience and not its thin projection, you have to buy a ticket from us. In other words, our intellectual property protection derives from our being the only real-time source of it.

The problem with a model that turns the physical scarcity/value ratio on its head is that sometimes the value of information is very much based on its scarcity. Exclusive possession of certain facts makes them more useful. If everyone knows about conditions that might drive a stock price up, the information is valueless.

But again, the critical factor is usually time. It doesn't matter if this kind of information eventually becomes ubiquitous. What matters is being among the first who possess it and act on it. While potent secrets usually don't stay secret, they may remain so long enough to advance the cause of their original holders.

In a world of floating realities and contradictory maps, rewards will accrue to those commentators whose maps seem to fit their territory snugly, based on their ability to yield predictable results for those who use them.

In aesthetic information, whether poetry or rock 'n' roll, people are willing to buy the new product of an artist, sight-unseen, based on their having been delivered a pleasurable experience by previous work.

Reality is an edit. People are willing to pay for the authority of those editors whose filtering point of view seems to fit best. And again, point of view is an asset that cannot be stolen or duplicated. No one but Esther Dyson sees the world as she does and the handsome fee she charges for her newsletter is actually for the privilege of looking at the world through her unique eyes.

In the physical world, value depends heavily on possession, or proximity in space. One owns that material that falls inside certain dimensional boundaries and the ability to act directly, exclusively, and as one wishes upon what falls inside those boundaries is the principal right of ownership. And of course there is the relationship between value and scarcity, a limitation in space.

In the virtual world, proximity in time is a value determinant. An informational product is generally more valuable the closer the purchaser can place himself to the moment of its expression, a limitation in time. Many kinds of information degrade rapidly with either time or reproduction. Relevance fades as the territory they map changes. Noise is introduced and bandwidth lost with passage away from the point where the information is first produced.

Thus, listening to a Grateful Dead tape is hardly the same experience as attending a Grateful Dead concert. The closer one can get to the headwaters of an informational stream, the better his changes of finding an accurate picture of reality in it. In an era of easy reproduction, the informational abstractions of popular experiences will propagate out from their source moments to reach anyone who's interested. But it's easy enough to restrict the real experience of the desirable event, whether knock-out punch or guitar lick, to those willing to pay for being there.

In the hick town I come from, they don't give you much credit for just having ideas. You are judged by what you can make of them. As things continue to speed up, I think we see that execution is the best protection for those designs that become physical products. Or, as Steve Jobs once put it, "Real artists ship." The big winner is usually the one who gets to the market first (and with enough organizational force to keep the lead).

But, as we become fixated upon information commerce, many of us seem to think that originality alone is sufficient to convey value, deserving, with the right legal assurances, of a steady wage. In fact, the best way to protect intellectual property is to act on it. It's not enough to invent and patent, one has to innovate as well. Someone claims to have patented the microprocessor before Intel. Maybe so. If he'd actually started shipping microprocessors before Intel, his claim would seem far less spurious.

It is now a commonplace to say that money is information. With the exception of Krugerands, crumpled cab-fare, and the contents of those suitcases which drug lords are reputed to carry, most of the money in the informatized world is in ones and zeros. The global money supply sloshes around the Net, as fluid as weather. It is also obvious, as I have discussed, that information has become as fundamental to the creation of modern wealth as land and sunlight once were.

What is less obvious is the extent to which information is acquiring intrinsic value, not as a means to acquisition but as the object to be acquired. I suppose this has always been less explicitly the case. In politics and academia, potency and information have always been closely related.

However, as we increasingly buy information with money, we begin to see that buying information with other information is simple economic exchange without the necessity of converting the product into and out of currency. This is somewhat challenging for those who like clean accounting, since, information theory aside, informational exchange rates are too squishy to quantify to the decimal point.

Nevertheless, most of what a middle class American purchases has little to do with survival. We buy beauty, prestige, experience, education, and all the obscure pleasures of owning. Many of these things can not only be expressed in non-material terms, they can be acquired by non-material means.

And then there are the inexplicable pleasures of information itself, the joys of learning, knowing, and teaching. The strange good feeling of information coming into and out of oneself. Playing with ideas is a recreation which people must be willing to pay a lot for, given the market for books and elective seminars. We'd likely spend even more money for such pleasures if there weren't so many opportunities to pay for ideas with other ideas.

This explains much of the collective "volunteer" work that fills the archives, newsgroups, and databases of the Internet. Its denizens are not working for nothing, as is widely believed. Rather they are getting paid in something besides money. It is an economy that consists almost entirely of information.

This may become the dominant form of human trade, and if we persist in modeling economics on a strictly monetary basis, we may be gravely misled.

How all the foregoing relates to solutions to the crisis in intellectual property is something I've barely started to wrap my mind around. It's fairly paradigm-warping to look at information through fresh eyes--to see how very little it is like pig iron or pork bellies, to imagine the tottering travesties of case law we will stack up if we go on treating it legally as though it were.

As I’ve said, I believe these towers of outmoded boilerplate will be a smoking heap sometime in the next decade and we mind miners will have no choice but to cast our lot with new systems that work.

I’m not really so gloomy about our prospects as readers of this jeremiad so far might conclude. Solutions will emerge. Nature abhors a vacuum and so does commerce.

Indeed, one of the aspects of the electronic frontier that I have always found most appealing--and the reason Mitch Kapor and I used that phrase in naming our foundation--is the degree to which it resembles the 19th Century American West in its natural preference for social devices which emerge from it conditions rather than those which are imposed from the outside.

Until the West was fully settled and "civilized" in this century, order was established according to an unwritten Code of the West that had the fluidity of etiquette rather than the rigidity of law. Ethics were more important than rules. Understandings were preferred over laws, which were, in any event, largely unenforceable.

I believe that law, as we understand it, was developed to protect the interests that arose in the two economic "waves" which Alvin Toffler accurately identified in The Third Wave. The First Wave was agriculturally based and required law to order ownership of the principal source of production, land. In the Second Wave, manufacturing became the economic mainspring, and the structure of modern law grew around the centralized institutions that needed protection for their reserves of capital, manpower, and hardware.

Both of these economic systems required stability. Their laws were designed to resist change and to assure some equability of distribution within a fairly static social framework. The possibility spaces had to be constrained to preserve the predictability necessary to either land stewardship or capital formation.

In the Third Wave we have now entered, information to a large extent replaces land, capital, and hardware, and as I have detailed in the preceding section, information is most at home in a much more fluid and adaptable environment. The Third Wave is likely to bring a fundamental shift in the purposes and methods of law that will affect far more than simply those statutes that govern intellectual property.

The "terrain" itself--the architecture of the Net--may come to serve many of the purposes that could only be maintained in the past by legal imposition. For example, it may be unnecessary to constitutionally assure freedom of expression in an environment that, in the words of my fellow EFF co-founder John Gilmore, "treats censorship as a malfunction" and re-routes proscribed ideas around it.

Similar natural balancing mechanisms may arise to smooth over the social discontinuities that previously required legal intercession to set right. On the Net, these differences are more likely to be spanned by a continuous spectrum that connects as much as it separates.

And, despite their fierce grip on the old legal structure, companies which trade in information are likely to find that in their increasing inability to deal sensibly with technological issues, the courts will not produce results that are predictable enough to be supportive of long-term enterprise. Every litigation becomes like a game of Russian roulette, depending on the depth the presiding judge’s clue-impairment.

Uncodified or adaptive "law," while as "fast, loose, and out of control" as other emergent forms, is probably more likely to yield something like justice at this point. In fact, one can already see in development new practices to suit the conditions of virtual commerce. The life forms of information are evolving methods to protect their continued reproduction.

For example, while all the tiny print on a commercial diskette envelope punctiliously requires much of that who would open it, there are, as I say, few who read those provisos, let alone follow them to the letter. And yet, the software business remains a very healthy sector of the American economy.

Why is this? Because people seem to eventually buy the software they really use. Once a program becomes central to your work, you want the latest version of it, the best support, the actual manuals, all privileges that are attached to ownership. Such practical considerations will, in the absence of working law, become more and more important in important in getting paid for what might easily be obtained for nothing.

I do think that some software is being purchased in the service of ethics or the abstract awareness that the failure to buy it will result in its not being produced any longer, but I'm going to leave those motivators aside. While I believe that the failure of law will almost certainly result in a compensating re-emergence of ethics as the ordering template of society, this is a belief I don't have room to support here.

Instead, I think that, as in the case cited above, compensation for soft products will be driven primarily by practical considerations, all of them consistent with the true properties of digital information, where the value lies in it, and how it can be both manipulated and protected by technology.

While the conundrum remains a conundrum, I can begin to see the directions from which solutions may emerge, based in part on broadening those practical solutions that are already in practice.

I believe one idea is central to understanding liquid commerce: Information economics, in the absence of objects, will be based more on relationship than possession.

One existing model for the future conveyance of intellectual property is real time performance, a medium currently used only in theater, music, lectures, stand-up comedy and pedagogy. I believe the concept of performance will expand to include most of the information economy from multi-casted soap operas to stock analysis. In these instances, commercial exchange will be more like ticket sales to a continuous show than the purchase of discrete bundles of that which is being shown.

The other model, of course, is service. The entire professional class—doctors, lawyers, consultants, architects, etc.—are already being paid directly for their intellectual property. Who needs copyright when you're on a retainer?

In fact, this model was applied to much of what is now copyrighted until the late 18th Century. Before the industrialization of creation, writers, composers, artists, and the like produced their products in the private service of patrons. Without objects to distribute in a mass market, creative people will return to a condition somewhat like this, except that they will serve many patrons, rather than one.

We can already see the emergence of companies that base their existence on supporting and enhancing the soft property they create rather than selling it by the shrink-wrapped piece or embedding it in widgets.

Trip Hawkins' new company for creating and licensing multimedia tools, 3DO, is an example of what I'm talking about. 3DO doesn't intend to produce any commercial software or consumer devices. Instead, they will act as a kind of private standards setting body, mediating among software and device creators who will be their licensees. They will provide a point of commonalty for relationships between a broad spectrum of entities.

In any case, whether you think of yourself as a service provider or a performer, the future protection of your intellectual property will depend on your ability to control your relationship to the market--a relationship that will most likely live and grow over time.

The value of that relationship will reside in the quality of performance, the uniqueness of your point of view, the validity of your expertise, its relevance to your market, and, underlying everything, the ability of that market to access your creative services swiftly, conveniently, and interactively.

Direct interaction will provide a lot of intellectual property protection in the future, and, indeed, it already has. No one knows how many software pirates have bought legitimate copies of a program after calling its publisher for technical support and being asked for some proof of purchase, but I would guess the number is very high.

The same kind of controls will be applicable to "question and answer" relationships between authorities (or artists) and those who seek their expertise. Newsletters, magazines, and books will be supplemented by the ability of their subscribers to ask direct questions of authors.

Interactivity will be a billable commodity even without authorship. As people move into the Net and increasingly get their information directly from its point of production, unfiltered by centralized media, they will attempt to develop the same interactive ability to probe reality which only experience has provided them in the past. Live access to these distant "eyes and ears" will be much easier to cordon than access to static bundles of stored but easily reproducible information.

In most cases, control will be based on restricting access to the freshest, highest bandwidth information. It will be a matter of defining the ticket, the venue, the performer, and the identity of the ticket holder, definitions that I believe will take their forms from technology, not law.

Cryptography, as I've said perhaps too many times, is the "material" from which the walls, boundaries--and bottles--of Cyberspace will be fashioned.

Of course there are problems with cryptography or any other purely technical method of property protection. It has always appeared to me that the more security you hide your goods behind, the more likely you are to turn your sanctuary into a target. Having come from a place where people leave their keys in their cars and don't even have keys to their houses, I remain convinced that the best obstacle to crime is a society with its ethics intact.

While I admit that this is not the kind of society most of us live in, I also believe that a social over-reliance on protection by barricades rather than conscience will eventually wither the latter by turning intrusion and theft into a sport, rather than a crime. This is already occurring in the digital domain as is evident in the activities of computer crackers.

Furthermore, I would argue that initial efforts to protect digital copyright by copy protection contributed to the current condition in which most otherwise ethical computer users seem morally untroubled by their possession of pirated software.

Instead of cultivating among the newly computerized a sense of respect for the work of their fellows, early reliance on copy protection led to the subliminal notion that cracking into a software package somehow "earned" one the right to use it. Limited not by conscience but by technical skill, many soon felt free to do whatever they could get away with. This will continue to be a potential liability of the encryption of digitized commerce.

Furthermore, it's cautionary to remember that copy protection was rejected by the market in most areas. Many of the upcoming efforts to use cryptography-based protection schemes will probably suffer the same fate. People are not going to tolerate much which makes computers harder to use than they already are without any benefit to the user.

Nevertheless, encryption has already demonstrated a certain blunt utility. New subscriptions to various commercial satellite TV services sky-rocketed recently after their deployment of more robust encryption of their feeds. This, despite a booming backwoods trade in black decoder chips conducted by folks who'd look more at home running moonshine than cracking code.

Another obvious problem with encryption as a global solution is that once something has been unscrambled by a legitimate licensee, it may be openly available to massive reproduction.

In some instances, reproduction following decryption may not be a problem. Many soft products degrade sharply in value with time. It may be that the only real interest in some such products will be among those who have purchased the keys to immediacy.

Furthermore, as software becomes more modular and distribution moves online, it will begin to metamorphose in direct interaction with its user base. Discontinuous upgrades will smooth into a constant process of incremental improvement and adaptation, some of it man-made and some of it arising through genetic algorithms. Pirated copies of software may become too static to have much value to anyone.

Even in cases such as images, where the information is expected to remain fixed, the unencrypted file could still be interwoven with code which could continue to protect it by a wide variety of means.

In most of the schemes I can project, the file would be "alive" with permanently embedded software that could "sense" the surrounding conditions and interact with them, For example, it might contain code that could detect the process of duplication and cause it to self-destruct.

Other methods might give the file the ability to "phone home" through the Net to its original owner. The continued integrity of some files might require periodic "feeding" with digital cash from their host, which they would then relay back to their authors.

Of course files that possess the independent ability to communicate upstream sound uncomfortably like the Morris Internet Worm. "Live" files do have a certain viral quality. And serious privacy issues would arise if everyone's computer were packed with digital spies.

The point is that cryptography will enable a lot of protection technologies that will develop rapidly in the obsessive competition that has always existed between lock-makers and lock-breakers.

But cryptography will not be used simply for making locks. It is also at the heart of both digital signatures and the afore-mentioned digital cash, both of which I believe will be central to the future protection of intellectual property.

I believe that the generally acknowledged failure of the shareware model in software had less to do with dishonesty than with the simple inconvenience of paying for shareware. If the payment process can be automated, as digital cash and signature will make possible, I believe that soft product creators will reap a much higher return from the bread they cast upon the waters of Cyberspace.

Moreover, they will be spared much of the overhead that presently adheres to the marketing, manufacture, sales, and distribution of information products, whether those products are computer programs, books, CD's, or motion pictures. This will reduce prices and further increase the likelihood of non-compulsory payment.

But of course there is a fundamental problem with a system that requires, through technology, payment for every access to a particular expression. It defeats the original Jeffersonian purpose of seeing that ideas were available to everyone regardless of their economic station. I am not comfortable with a model that will restrict inquiry to the wealthy.

The future forms and protections of intellectual property are densely obscured from the entrance to the Virtual Age. Nevertheless, I can make (or reiterate) a few flat statements that I earnestly believe won't look too silly in fifty years.

And finally, in the years to come, most human exchange will be virtual rather than physical, consisting not of stuff but the stuff of which dreams are made. Our future business will be conducted in a world made more of verbs than nouns.

This expression has lived and grown to this point over the time period and in the places detailed above. Despite its print publication here, I expect it will continue to evolve in liquid form, possibly for years.

The thoughts in it have not been "mine" alone but have assembled themselves in a field of interaction that has existed between myself and numerous others, to whom I am grateful. They particularly include: Pamela Samuelson, Kevin Kelly, Mitch Kapor, Mike Godwin, Stewart Brand, Mike Holderness, Miriam Barlow, Danny Hillis, Trip

Hawkins, and Alvin Toffler.However, I should note in honesty that when Wired sends me a check for having temporarily "fixed" it on their pages, I alone will cash it . . . .

Last semester, seeking a break from law school, I sat in on an undergraduate class on elementary music theory. The first day the instructor covered the basic concepts of rhythm, then moved on to polyrhythms—complex arrangements of multiple rhythmic lines. To demonstrate a particular point, the professor wrote out two series of notes side by side on the chalkboard. On his cue, the students on the left half of the class clapped the rhythm on the left; a couple of bars later, the right half of the class joined in, following the other notated rhythm. For a few seconds it was pure cacophony—as if we had all just burst into applause—but soon a strong rhythm emerged. As the feeling in my hands and arms, and the thunder in my ears, made their way into my guts, I began to make out the relationship between the two series. Soon I recognized the same pattern represented in the two lines of symbols on the chalkboard. It was a kind of revelation, linking the visceral with the cerebral. Banging my hands together and grinning stupidly, I felt a little like a caveman who’d just made the connection between physical phenomena and written language.

As the group found its groove, the professor let us continue clapping without his or a metronome’s aid. He simply stood back and watched—wearing, it seemed to me, a slight smirk. Which triggered a second epiphany: my music teacher was practicing law.

No doubt he would wince at the thought. (Just as you, the reader, might be wincing now—particularly if you’re not a lawyer.) But what is law but the regulation of human behavior? With no more than a string of written symbols, and a dose of institutional authority, my music prof had gotten a class full of adults to behave exactly as he wanted—indeed, to clap like kindergarteners. For a moment, he was king; the students were his willing musical subjects; and the written symbols, a rhythmic decree.

It was an unusual and paranoid insight to make, I’ll admit. (What I had perceived as a smirk was more likely the pleased smile of a teacher who’d gotten a point across.) But at the time I was reading an unusual and paranoid book—Code and Other Laws of Cyberspace, by Lawrence Lessig. Lessig, who is the Berkman Professor of Law at Harvard Law School, argues that in the digital world, computer code has as much power to regulate human behavior as law, if not more. The written language of computer software—the ones and zeros that make up object code, the mutant English that comprises most source code—may control online human behavior more effectively than any plain-language statute. Lessig, a true believer in law and due process, calls for society to view this phenomenon with suspicion, fearing that we may be unwittingly ceding political control over to computer code and its authors.

With Lessig’s thoughts soaked into my subconscious, I somehow regarded the notes on the chalkboard as a rudimentary computer program. Likewise, I saw the group of clapping students as a giant machine, a human player-piano simply executing what the punch card, and its composer, had dictated. All of which may help explain why I had the eerie and absurd vision of music teacher-as-despot: I had adhered to his will, expressed in the notes on the board. I had relinquished control of my behavior to a set of abstract figures. In a way, I had experienced what Lessig has called—in a very different context, of course—the “Tyranny of Code.”

Doubtless experiences like mine are not foreign to professional musicians, particularly orchestral musicians. The notion of a “tyrannous” or “authoritarian” conductor is familiar, even for the average music fan who, like me, is largely ignorant of classical music. These days a composer seldom gets to conduct his own piece, as my music teacher/tyrant had.[36] Classical music often has its own kind of “separation of powers”: usually, a conductor merely interprets and performs another composer’s score, making him more combination textualist judge/ruthless executive than dictator. Contrasted with the conductor, then, the composer is music’s equivalent of a one-person legislature. If the composer is feeling generous, she might include an occasional cadenza, a brief opportunity for the musician to act on his or her own volition (also known as improvisation). Or she might employ “grace notes,” notes with no rhythmic value that the musician, or the conductor through the musician, can emphasize as much or as little as he wants. Grace notes are a rough analog to the legislative practice of leaving certain matters up to “judicial discretion” or subject to negotiation by private parties. To this extent, grace notes give the musician a small measure of freedom.

Yet grace notes can also be a way for a composer to give merely the impression of freedom. In my music class, for example, we once listened to the introduction to Stravinsky’s Rite of Spring. The intro, which features a whimsical oboe flitting around in a high register at an uncertain tempo, sounds as if it’s been improvised. But when you look at the sheet music, the first few bars are deliberately laid out and peppered with strategic grace notes. To a certain extent, then, it is indeed improvised—different musicians will play it slightly different ways under different conductors. But it is improvised, paradoxically, just as Stravinsky wanted it.

The notion of improvisational music must have sounded as mad to early European classical musicians as democracy did to their monarchical rulers. If each musician, or citizen, were left to his or her own will, would not chaos and discord necessarily follow?

Not necessarily, as jazz, and universal suffrage, would later show us. In terms of a musician’s individual freedom, jazz is as far from classical music as American democracy is from the rule of the Czars or Louis XIV. Like American democracy, jazz is usually based on some underlying text or score—a kind of constitution—by which the players are restricted at a fundamental level. But within its parameters, each musician is more or less free to interpret and create the music as he wishes—to put in his two-cents worth in the formation of the piece. Lead instruments (horns, guitar, voice) usually enjoy more freedom than rhythm instruments (drums, bass), but in most pieces each usually gets its turn to freestyle. And in some kinds of jazz, as in the closing passages of some Dixieland numbers, nearly everyone improvises at the same time, with surprisingly coherent and harmonic results.

Classical music’s reluctance to embrace improvisation is understandable. Apart from the notorious egos of conductors and composers, there’s the simple problem of managing dozens of musicians in the same room. Note that some of the freedom enjoyed by jazz ensembles stems in part from their smaller size—there is simply less likelihood of discord the fewer players you’ve got. Usually, the most improvisational acts have no more than five or six musicians. In this small setting, there’s little need for rules or hierarchy, or even sheet music. As Charlie Parker advised his bebop band, “Fuck what’s written down.”[37]

The larger the group gets, though, the greater need there is for some musical anchor, and for formal leadership. Witness the “big band” phenomenon, or some of Gil Evans’ later experiments with jazz orchestration.[38] It was still jazz, but the written music played a much more important role, as did the band’s leader, who often stood before the group like a more laid-back version of the European conductor. (There are exceptions to the rule, of course, on both extremes: the late Sun Ra’s Arkestra sometimes featured up to 80 musicians improvising simultaneously, and the average string quartet is as faithful to the score as a symphony orchestra. Still, it’s a useful concept.)

The notion of a group’s freedom being a function of its size also carries over into governance. Political thinkers like Montesquieu believed democracy could only work at a very local level, and that the larger a sovereign state became, the more its citizens would have to yield power to a central authority.[39] The American system of federalism inherited a strain of this principle. The Framers conceived of the notion of “dual sovereignty,” under which the states would preserve their own governmental identities, and citizens could elect leaders with local ties and interests. And admirers of a strong dual system often refer to the states as “laboratories” of the law—small, flexible legal workshops where innovative policies or jurisprudential theories can be tested and compared to those of neighbor states.

We reject kings, presidents, and voting. We believe in rough consensus and running code.

The peculiarities of the Internet Engineering Task Force (IETF) make for a good case study of how the social interactions found in music and law have analogues in the digital realm. The IETF modestly describes itself as “a loosely self-organized group of people who make technical and other contributions to the engineering and evolution of the Internet.”[40] In fact, the group does much more than merely contribute to the Internet’s development: it creates the stuff that makes the Internet tick, the standard networking protocols that make the Net’s many-to-many communication possible. For example, the IETF is responsible for SMTP, or Simple Mail Transfer Protocol, the fundamental transmission subsystem that helps email travel across the Net reliably and efficiently.[41]

Despite its daunting responsibilities, the IETF conducts itself with the same informality and lack of orthodoxy as a commune or primitive village, (or to return to the music metaphor, a small group of jamming musicians). On the one hand, the IETF slogan’s denunciation of “kings and presidents” evokes the spirit of radical anti-Federalists of the late 18^th-Century United States, or of certain anarcho-utopian movements of the 20^th Century.[42] On the other, its “rough consensus and running code” language calls to mind the ethos of jazz improvisation. The Internet’s relentless growth, like a fast-moving jazz number, leaves no time for voting and due process—choices about what policy to construct, or what note to lay down, must be made on the fly. The IETF even makes its decisions by ear: “Rough consensus” is measured by a “hum” vote; if a significant buzz fills the room, the measure passes.

Whether in technology, music, or law, however, the appeal of informal decision-making is often misleading. Such procedures can be much less democratic than they might first appear. Where there are no written rules, natural leaders’ powers are usually left unchecked. “Soft” authority like the power of persuasion, or for that matter, coercion, tends to rule. Here, again, I will summon the ghost of Charlie Parker to make my point, with Miles Davis acting as the medium. Miles’ recollection of Bird’s management style shows that playing by the seat of your pants isn’t necessarily a formula for musical democracy:

“I loved the way Bird [relied on improvisation] . . . When that shit works, man, it’s a motherfucker. But if you get a group of guys who don’t understand what’s happening, or they can’t handle all that freedom you’re laying on them, and they play what they want, then it’s no good.”[43]

Miles’ quote illustrates how informality can be insidiously autocratic—freedom becomes something you lay on people. But it also shows how decision-making by group improvisation (or rough consensus, whatever you want to call it) only functions when it’s an exclusive group. Bird let you play what you wanted to play, provided that you played what he wanted to hear—and you played it superbly. Likewise, the IETF may fancy itself a radical bottom-up organization, but its notion of “rough consensus” certainly isn’t measured against a society-wide standard that includes engineers and lay people alike. To put it another way: I would get laughed out of an IETF meeting as quickly as I would a Charlie Parker jam session.

To some extent, then, it seems that the informal ensemble model of social interaction only works when the players are of similar sophistication. All are welcome to contribute, provided all are sufficiently skilled. Political theorists might call this technocracy, rule by experts. Or it might be a particular strain of meritocracy—after all, jazz musicians and programmers are often self-taught, and come from a wide range of socio-economic backgrounds. But it is not democracy. Perhaps that’s not such a bad thing; maybe we as a society should defer to our aesthetic and technical high priests on such matters. But here the jazz-tech comparison yields to an important distinction: unlike music, the consequences of code extend past the aesthetic realm into the socio-political. While Bird’s band’s decisions may only play on my emotions, coders with a public charge, like the IETF, affect my online existence—and without my consent.

Mention the word “standard” to a jazz musician, and he’ll think “My Funny Valentine,” “Love for Sale,” or “Summertime.” Mention it to an Internet engineer, and you’ll get “TCP,” “IP,” and, for that matter, “MP3.” Yet the two meanings of the word have more in common than these hypothetical responses might suggest. In the Internet context, a “standard” is a universal (or near-universal) technological protocol that facilitates interconnectivity. In jazz, a standard is an old, familiar pop song that allows disparate musicians to play together. As Bill Crow puts it in his book, Jazz Anecdotes,

In both cases, then, standards are tools that ease communication across different contexts. They create what economists call a “network effect”—roughly, a benefit based on the prevalence of the standard, not any inherent characteristic of it. An oversimplified but helpful example: your telephone is useful only to the extent other people have telephones.

It’s an imperfect analogy, concededly. The standards created by the IETF operate at much more fundamental level than the cover tunes shared by the world’s jazz musicians. Internet jargon helps shed light on this difference: jazz standards are “content”—non-functional information that is communicated—while Internet protocols comprise the medium itself, the infrastructure by which “content” is passed along. A closer analogy to the standards set by IETF would be the convergence of written musical symbols early in modern music’s development. Given digital technology’s relatively recent birth, the IETF could be better described as creating the Internet’s equivalent of staff lines, clef symbols, and notational values.

Despite the imperfect parallel, this discussion of standards serves as a good launching point for some legal lessons that technology might learn from music.

Jazz standards don’t only promote communication between musicians. They also serve as fodder for new versions of old songs, thematic backbones that musicians can adopt, adapt, and make their own. Billie Holiday’s cover of “Love for Sale” is sultry and mischievous, for example, while piano great Art Tatum’s solo version scampers up and down the keyboard like a child goofing on the stairs.

This customizable nature of jazz standards calls to mind a rough but apt analogy in the world of coding: “open source.” Open source software is software whose underlying source code is both freely available and freely modifiable. That is, users have access to the written instructions that underlie a certain piece of software and are free to alter that code to suit their purposes.

Open-source is important because, to fully understand how a piece of software works, programmers usually need access to the program’s source code. In some instances, they might succeed in “reverse engineering” a particular program—the digital equivalent of taking apart a transistor radio to see how it functions. In jazz (and many other forms of non-classical music), musicians learn songs in a roughly similar way, disassembling and reconstructing a song by ear without ever seeing its sheet music. Yet a program’s inner workings are often more opaque than those of piece of music. And given the increasing prevalence of certain technological protections, and the existence of legal barriers, reverse engineering is often not an option for the intellectually curious coder.

In contrast to open-source software is “proprietary” code. This more traditional model of software publishing is premised on the notion that a program’s code is its source of financial value to the author, and should therefore be kept confidential. Open-source advocates complain that proprietary code “is generally built according to a predetermined plan that leaves little room for deviation or innovation.”[45] Apart from inhibiting customization and the progress of computer science, argue open-source proponents, proprietary code facilitates monopolistic practices, which lead in turn to higher prices and reduced choices for software consumers.

Indeed, notable monopolist Microsoft is the most prominent practitioner of proprietary coding. Judge Thomas Penfield Jackson, the Federal judge who held Microsoft in violation of U.S. antitrust law this November, is now considering remedies for the company’s unfair trade practices. Some legal commentators have called for Jackson to force Microsoft to abandon its proprietary-code ways. This proposed remedy is known as “compulsory licensing.” Under such a regime, Microsoft would be obliged to make the source code for its Windows operating system available to other software makers at a fair price. This would, in a way, amount to compelling Microsoft to practice open-source coding, which, contrary to many misconceptions, relies on a complex system of similar licenses.[46]

Ordering Microsoft to publish its code may seem like a radical solution to some. Yet a lesson from the music context indicates that compulsory licensing is really nothing new.

Few people outside the music and entertainment law industries know about a curious exception to copyright law’s protection of musical compositions. Section 115 of the U.S. Copyright Act essentially forces the owner of the rights to a musical composition to allow any musicians to record his or her own version of the song, in exchange for a fair royalty arrangement.[47] The rationale for this so-called “cover license” is, like open-source licensing, based in some notion of free expression. As a leading intellectual property textbook puts it, one reason for Section 115 is “the individuality in expression that inevitably occurs during a particular performance of a prewritten musical work.”[48]

Yet the cover exception has as much to do with net social welfare as it does individual interests. The public debate over Section 115, found in the statute’s legislative history, is telling in this regard. Created in 1909, the exception survived the 1967 revision of the copyright laws despite some legislative scrutiny. One particular section of the 1967 debate merits close attention:

“[T]he record producers argued vigorously that the compulsory license system must be retained. They asserted that the record industry is a half-billion-dollar business of great economic importance in the United States and throughout the world; records today are the principal means of disseminating music, and this creates special problems, since performers need unhampered access to musical material on nondiscriminatory terms. Historically, the record producers pointed out, there were no recording rights before 1909 and the 1909 statute adopted the compulsory license as a deliberate anti-monopoly condition on the grant of these rights. They argued that the result has been an outpouring of recorded music, with the public being given lower prices, improved quality, and a greater choice. The position of the record producers is that the compulsory license has avoided antitrust problems that have plagued the performing rights field, and for the same reasons has been adopted (and recently retained) in a number of foreign countries. They maintained that the dangers of monopolies and discriminatory practices still exist, and repeal would result in a great upheaval of the record industry with no benefit to the public.”[49] (emphasis added)

What’s striking about this passage, apart from its relevance to the software antitrust debate of today, is that the Section 115 exception was viewed as beneficial to both consumers and the music industry. Indeed, the lobbying efforts of the record industry itself were largely responsible for this softening of intellectual property rights in music.

Note that the compulsory license applies only to the underlying composition, not the sound recording of the song itself. So while Miles Davis could cover, record, and sell his version of “Time After Time”—a song originally put on the charts by pop singer Cindy Lauper—he could not have pressed and sold copies of Lauper’s recording of the song. In the software context, this principle would mean that a coder could copy and modify Windows’ source code but would be barred from copying the Windows CD-ROM or sharing it with friends.

Musicians looking for songs to cover often have an alternative to turning to the Section 115 “cover license.” They can simply choose songs in the public domain—pieces whose limited copyright protection has expired. This is the case with some jazz standards, which musicians can re-arrange, record, or perform without paying a cent to the authors of the compositions (which may seem harsh until we consider that few, if any, authors even live to see the end of copyright’s near century-long duration).

Programmers, whose profession has only existed for a couple of decades, have no such luxury. Even the first, most rudimentary mainstream software from the late 70s and early 80s will enjoy copyright protection into the late 21st Century. This, plus the absence of any “cover license” exception for software, means that programmers are barred by law from modifying and improving upon a particular program’s code, unless a it is offered as open source. Some commentators fear that these obstacles are impeding the growth of computer science.

Among other concerned observers, Jonathan Zittrain—Executive Director of the Berkman Center—has called for an unorthodox solution that serves as a simple alternative to a compulsory licensing scheme. Zittrain argues that legal protection for software should be of a shorter duration than for traditional forms of intellectual property, given the high turnover rate for innovation in the computing context:

“Intellectual-property protection for all computer software, including operating systems, should be drawn much more in line with its shelf life. Before the Smithsonian is preparing a display for a piece of software, the government-granted intellectual-property monopolies, such as copyright and patent, should lapse.”[50]

This proposal amounts to nudging software out of the intellectual property nest and into the public domain much earlier in its life-cycle than currently policy dictates. The idea is that such programs should, like an old pop tune, become public property for the coding community to learn from and improve upon.

It may be that the market for open source will address these problems by itself. The recent rash of IPOs by companies offering services or products related to Linux, a prominent open-source operating system, indicates that the market solution is not altogether far-fetched. Yet while we’re waiting for the answer to that riddle, time is ticking away—and a real-space week is a cyber-space year. It is impossible to measure the amount of innovation that might be lost under the current legal regime. Perhaps the law should take a cue from its earlier experiences with the growth of music and apply them to the software context. Such a legal experiment might well result in “an outpouring of code, with the public being given lower prices, improved quality, and a greater choice.”

The Word:
A glossary of terms from music, law, and technology.

Compiled by Shoshana Lopatin ‘00 and Talia Milgrom-Elcott ‘02

The Online Artist is the Empowered Artist: An EFF Correspondent Expresses Her Views on Artists and the Net

By Heidi Kriz,
Special to EFF's Campaign for Audiovisual Free Expression June 1999

Becoming an artist in today's society requires an almost Herculean effort of will and endeavor. With the dismantling of the National Endowment of the Arts, the lack of a cohesive support structure for developing artists, and an increasing focus in society on making money, not art, this leaves very little recourse for the starving artist to do anything other than, well, starve.

But then, like a technological super hero to save the day, along comes a new tool that some say democratizes and even revolutionizes the recording industry. It's MP3, a technology that shrinks audio files down to a tenth of their original size, allowing up-and-coming musicians who lack that crucial component for success—exposure, and the chance to cultivate an audience—to slap their tunes on the Internet for anyone else to download and enjoy.

It's the perfect opportunity for good, old-fashioned, all-American entrepreneurship—for artists to stand a chance of breaking into the music business without having to chain themselves to a rock for attention. Or more significantly—chain themselves to a binding, lengthy, and often inequitable recording contract, that record companies often cajole first time artists into signing. Of course, the free distribution of MP3 technology could also crack wide open the music market place.

Which is exactly why the big name record companies want to kill MP3. Or at least get it in a serious chokehold. Right now the major recording labels currently control 90 percent of the music distributed globally—and they would like to keep it that way.

Ironically, the record industry is crying foul in the guise of claimed concern over the intellectual property rights of the musical artists.

The major labels are attempting to impose their own, alternative, closed format technology on the Internet. While much of the specifications are cloaked in secrecy, it appears that the major labels are trying to insist that anyone who licenses their closed technology will not be able to build equipment that handles free audio as well. The goal of this strategy is to hold out big name recording acts as an "incentive" to force consumers and hardware Manufacturers to acquiesce to the demands of big labels if they want to hear Madonna in the new media.

Members of the record industry are also trying to intimidate MP3 producers and open format search engines by threatening nasty lawsuits against them. The Recording Industry Association of America, along with the International Federation of the Phonographic Industry, have sued Fast Search and Transfer, the company Yahoo! hired to give their audience the ability to search for MP3 on the web. Finding legal culpability for companies who list or link to music Websites is tantamount to finding liability with the phone company for listing businesses in the phone book where illegal activity is taking place.

RIAA has also tried to go after Diamond Multimedia Systems, makers of the Rio MP3 player, which enables PC users to listen to MP3 files when they are away from their computers. The RIAA claimed such devices should provide for an automatic royalty payment to the industry association to compensate them for lost profits. But in a recent court decision, a federal appellate court soundly rejected all of the RIAA's claims against the Rio MP3 player.

The RIAA is trying to have the final, exclusive say in what format would be the required technology for all audio distribution. If they get their way, this would mean that recording artists and songwriters would not be able to choose the means of distribution of their own work. Those who owned the formatting technology, which, if they get their way, would be the large record companies, would then have control over who could legally copy any audio works.

There is much potential for abuse here, both in terms of censorship, and in terms of constriction of the marketplace. Here's an example:

EFF believes that smart artists are thinking outside the box. That they realize that they can make the MP3 technology work for them, instead of against them. For example, they can spotlight a single off a new album, in much the same way it works now with radio stations—but over the Internet, the artist is reaching an exponentially multiplied audience.

Take the classic Grateful Dead example, often invoked by John Perry Barlow, Dead lyricist and EFF co-founder. At first, in the seventies, the Grateful Dead attempted to crack down on zealous fans recording their concerts, and then selling and distributing the bootleg tapes all over the world. But then the band figured out it was actually good for business, that the bootlegging network was actually good for business—and helped enlarge the Deadhead community.

"By the time (the band died) we were able to fill any stadium in America, any time we wanted," Barlow has pointed out.

Profit margin is also huge concern for an artist at any level, but especially for one just busting into the business. Right now, the typical contract deal for a new artist goes something like this: the artist agrees to a deal where she doesn't even begin to see a profit unless her CD sells at least 500,000 copies. Even then, she will likely earn only about $1 per CD. And if she doesn't sell at least 100,000 CD's often big companies will drop her anyway.

The musician who sells artist-to-fan direct, over the Internet, can earn $7-10 a CD, and can actually make living selling far fewer CD's. Not to mention the fact that SHE maintains control of the distribution of her art.

Artists should also keep in mind the issue of easy accessibility. Fans aren't going to like clambering over all sorts of gratuitous, newfangled technological barriers, to get to the new Alanis Morrisette single on the other side. And this especially goes for a single by a new you-haven't-heard-of-us yet band. The RIIA and the like are looking to encrypt songs on the Internet—the medium, which is supposed to be one of ultimate convenience. But with the implementation of encrypted songs on the Internet, well, consequently, schlepping his butt down to Tower Records instead is going to look more and more attractive to Joe Fan. With encryption, everybody would have to an encryption key to access the music. If a fan loses his encryption key, or his hard drive , there goes his music collection. Also passwords can be tedious and clumsy—and off-putting to the average consumer.

Besides which, as we've seen, with the hacking of systems and sites at the highest levels (like the CIA!) the issue of encryption as security has been flouted over and over again; a crack in the code can almost always be found.

So there are many reasons why artists of all level of celebrity and success should support MP3 technology, not fear it. And why they should stand up to the self-interested tyranny of the big recording studios.

In many ways, it is a David and Goliath battle, and MP3 technology aimed at just the right spot on the Goliath's forehead, is like the rock in David's slingshot.

15 MB of Fame
A Music Industry Insider (and Law School Student) Gives His Perspective on How the Net Will, and Won’t, Improve the Lives of Artists

by Beau Brashares, HLS ‘00

Beau Brashares spent several years performing and recording with a band. Periodically, he also contributed production, mixing, and programming to other people’s music. During one demoralizing stretch, where he found himself working on television spots concerning cereal, pants, and beer, he panicked and signed up for law school.

The Internet is supposed to kill a lot of things we’ve gotten sick of, and give birth to better things in their places. And if there's one thing almost everybody wants to see killed and replaced, it's the music industry. We've come to think of it as no more than a collection of tin-eared con-men who suck the passion out of good artists and assault us with the music of bad ones. The chorus is being swelled by almost every voice in the media and on the street:

Hey, MP3! Bring on the meritocracy of a Web-based musical marketplace, the infinite digital menu of styles and sounds, the music of the new millennium accompanied by the dying gasps of meat-space show-biz cartels.

Beneath the rousing din of all this revolutionary fervor, some of the parade's spectators may be asking two basic questions. One, is the traditional music business really that bad? And two, is it really going to change that much? At the risk of sounding sour note, I'm afraid the answers are: one, oh yes; two, probably not.

Why is the record business so unpopular? To begin with, it is not exactly a free and efficient market. The mainstream music industry is controlled by a cartel of five major labels: Warner, Sony, Universal, EMI, and BMG. Last January, Warner agreed to merge with EMI, so very soon there will be only four. Over the years, these major labels have woven symbiotic relationships with related businesses that also have a limited number of players: radio, television and music retailers chief among them, but also the music press, entertainment law firms, merchandising companies, and major performance venues. These relationships form a circular web of coercive pressure that is used to atomize and disempower the artists, agents, or minor labels that don't buy in. It's a lot like professional sports was before the advent of free agency. If an athlete didn’t like the lowball deal he was offered, he was welcome to try another league.

Even as these near-impenetrable networks are supposedly being threatened by new technological developments, the old-guard music business is doing just fine. It is reported to have sold 755 million units in 1999, which was 6.4% more than the previous year. But if you talk to the artists, they sound as underpaid and embittered as ever. Despite the calculated displays of glamorous excess used to market them, many of today's rock stars are essentially living on nothing but loans from their labels, and yesterday's rock stars are living by delivering pizzas. Above all, the vast majority of artists you would love to hear will never be rock stars at all. What gives?

There's a saying among musicians: before you sign a record deal, get out your dictionary and look up the word “recoupable.” Recoupables have been a part of major label contracts forever, and they work like this: your band has paid its dues, generated a buzz, and potentially stands ready to reap the benefits of this work in the mainstream marketplace. A label approaches you and says, we’ll spend maybe a hundred thousand on recording and releasing your record. We own the masters. You get roughly a tenth of the money we make from selling it, but all the money we spend on recording, on manufacturing, on promotion, on touring, on deli trays for the music writers is taken out of your tenth. If the record looks like a hit, the label will keep spending the band’s small share on more pressing, promoting, and so on. Why not? Once the act is selling, it behooves a label to spend as much of the band's future income as possible and reap virtually all the returns. This is why a major release frequently needs to sell 500,000 copies—go gold—before sales proceeds begin reaching the band's pockets.

And while the labels lack imagination in most respects, they are notoriously creative when it comes to accounting. All in all, the deal offered to artists by a major record label is, you get the glory, and we get the money.

But what glory! The fans, the groupies, the various and sundry inebriants at one's very fingertips! How many teenagers, as they and their hormone-charged bandmates shake the shingles off their parents' garages, care about whether they will be making a living when they are 30? I know I didn't (and I'm not). Rock music has never been about amassing a sensible investment portfolio, and so long as there are young people starting bands, there will be coercive record contracts awaiting them. They'll get a slim chance at glory, while someone else will get the money.

How did such a one-sided arrangement become the norm? Well, it used to make more sense. Until recently, it was very expensive to make and sell a record, and only a well-capitalized conglomerate could afford the recording, manufacturing, distribution, and marketing of a large-scale release. With so much at risk, labels had to cover the stiffs with a heaping helping from the hits. But the circumstances that gave rise to this arrangement have been changing for a while now. For one thing, records have become a lot cheaper to record. For less than twenty grand you can buy an Alesis ADAT, a Macintosh running Digidesign's ProTools, and a Mackie mixer—the same setup used to record Alanis Morrisette's monstro-smash, Jagged Little Pill.

Records have also become much cheaper to manufacture. Though the labels happily doubled the retail price of an album when they moved to the Compact Disc format, CDs are much cheaper to make than vinyl was. Even small-batch commercial houses that advertise in the back of music magazines will press up your CDs for 53 cents apiece.

But there's still the matter of distribution. Even as recording and manufacturing costs have come down to earth, distribution has continued to be a matter of wresting precious shelf space in street-front music stores. Since only the majors consistently have had the muscle to accomplish this with the big retail chains, even the so-called “independent” labels have had to sneak under the umbrella of the majors to reach mainstream consumers. Thus, even though a potential hit record can now be tracked and pressed by almost anyone, the major labels have maintained a hammerlock on the channels by which the product reaches the consumer.

All that's about to change, at least according to the Internet evangelists. Already, online stores like CD-Now have overcome real estate limitations, and will happily ship your obscure independent release for a reasonable fraction of the revenue. But such online retailers have so far gained only 1% of the music market, having failed to offer the drastic savings on big sellers necessary to lure more consumers from the stores. Not to worry, though, because the Internet’s big gun—digital delivery of the music itself—is only starting to be aimed at the retailers. Once high-bandwidth connections become ubiquitous in the homes of consumers, music distribution will finally be free from the tyranny of brick and mortar record shops, and in turn the whole conspiracy of the record label overlords will crack like a CD jewel box . . . Right?

Well, don’t quit your day job. Bands are indeed flocking to the Internet with hopes of bypassing the major label formula for success, but so far the music-buying public is bypassing them. For example, there are 40,000 hopefuls featured on MP3.com, the biggest online aggregator of unsigned bands. Despite access to a vast audience—supposedly a half-million people visit MP3.com daily—the most successful of these web-based purveyors are selling less music online than the most dismally unsuccessful major-label acts sell at Wal-Mart. Reports are that while the free downloads are humming, MP3.com has been selling only about one CD per month for every two bands that use its service. And while that's better than nothing, the site isn’t doing it for free. Besides charging a fee to be listed in their directory, MP3.com frequently requires artists to sign over all the rights to the recordings made available for download on the site, so that not a cent of publishing royalties are paid to the artist, even if the song somehow becomes a runaway smash. But we’re still waiting for that big breakthrough act to emerge from Internet, uncompromised by the greedy major label machine. It certainly could happen, but considering that every band uploads on the hope that it will, perhaps we ought to be hearing about some of them by now.

So the Internet music revolution is not revolutionizing the balance of power just yet. Though most bands do not thrive under a traditional record deal, almost none of them survive without one. The relationship between major labels and artists still brings to mind what a down-and-out ex-boxer once said about promoter Don King: “Sure he ripped me off, but I sure wish he'd rip me off again.” What’s even more worrisome for artists finding disappointment with the Internet is that, apart from some piracy-related lawsuits, the big labels haven't even seriously tried to squash it yet. When the majors finally agree on standards and get their own Internet businesses up and running, their outlook may be better than ever. They have accumulated a massive storehouse of intellectual capital, most of which will be just as good an investment in the new economy as it was in the old. One record executive, who asked not to be identified, put it this way:

“It's shocking how good labels are at what they do... Every release is researched to within an inch of its life, and the level of demographic detail they have is amazing. If a rock band needs to burnish its bad-boy image, their label will tell them to start a bonfire at a music festival. It's all very calculated and it results show up in record sales...”

Indeed, many of today's major artists owe their success to the fact that a well-connected and well-capitalized label chose to ignore a thousand other acts and carpet-bomb the marketplace with that artist's music. Sites like MP3.com, even with their “featured artist” selections, lack this kind of filtration and emphasis, which listeners have unfortunately come to expect. It is a paradox: consumers say they want musical variety, but then they spend most freely where artistic diversity is almost non-existent. Most of them don’t bother to dig for the gems even when given the chance by the Internet, keeping talented web-based artists behind the counter at the local TCBY. Meanwhile songs that could make your day or reduce you to tears simply wither on the vine, smothered by the all-out marketing assaults of Britney Spears or N'Sync.

While we're on the subject of chirpy teenaged phenomena, it is worth noting that their recent success has caused an army of worthy acts to accumulate at the margins of the marketplace. As the majors have worked these obscenely lucrative teen popsters, they have been systematically cutting loose the more offbeat acts that used to round out their rosters. So the offbeat bands take a chance on the Internet, because in these hard times it's all they've got. Some of them are almost getting by, particularly those who previously built a fan base with major releases. John Hall, mastermind of 80s eccentrics King Missile (remember their unlikely hit, “Detachable Penis”?), is no longer signed to Atlantic, but offers old fans new material on his website. “I sell my CDs on a webpage—they send me a check and I send them a CD. Pretty primitive.” And pretty small-time, though Hall is doing a lot better than most unsigned artists online.

You would think with enough artists like John Hall kicking around the web, the medium should mount a serious challenge to the homogeneous product emanating from the big five. It should, but if it does it won't be for long. As soon as Hall or anyone else starts to see Internet sales pick up, the major labels will be ready and able to co-opt the cyber-alternative music market in a drumbeat. They've been masters of capturing the competition before, as the aforementioned anonymous record executive gloats: Major labels now influence almost everything that happens in music—every radio station, every print publication, and every show. A lot of the things that used to belong to indie music, like college radio, or events like CMJ or North By Northwest, are now under the control of the majors... They do what they have to do to adapt, and this Internet thing is no different.

Though still on the sidelines, you can be sure that the labels have their collective ear against the MP3 bandwagon, listening for a jingle of revenue. When they hear it, they will jump aboard with the volume knob on 10. Indeed, if the majors went out today and skimmed the cream off the Internet talent pool (such as it is), you wouldn't likely see a single act turn them down. But by all accounts, they are not signing bands off the Internet. Rather than step in now and spend money to develop such acts, it seems the labels prefer to wait until the fruit is more ripe for cherry-picking.

So why do the majors still wield such leverage, and why isn’t the Internet helping, even a little, to free the long-suffering artists? There’s tons of music already out there on the Net; it’s already cheaper, if not free, and you don't even have to get off your ass to go to a show or a record store. What's more, everybody's tired of the old order, and there's a ton of money flowing from equity investors who want in on the new one. What do labels know that websites don't?

One thing they know is that context sells records. Internet promotion and distribution services like MP3.com, and most of the artists that use them, are underestimating the very central role of context in the pop music experience. It works like this: most of us, even if we won't fall for the commercial hype, don’t like a song simply because it's inherently good. Rather, we respond to an elaborate matrix of cultural reference points that surround and inform the music. A band breaks out of obscurity because there is an elusive “something” that converges from such elements as its visual style, the impact of its stage show, and the way in which it feeds off “the scene” in its home community. If these elements are in place, a band often can go quite far before producing a decent recording or a catchy song. That's why labels will never sign a band before attending a show in the group's hometown—they want to watch the audience. That's also why when you sign with a major label, the first order from your new bosses is: tour, tour, tour.

An anecdote to illustrate the context factor: about a dozen years ago I received a demo tape by a new band that was supposed to be “the buzz” in their hometown of Los Angeles. I thought it sounded appallingly bad. It was as if someone was attempting to copy the then-unavoidable Guns & Roses, but couldn't sing in tune or play in time. The hype had me curious though, and since they put me on the guest list for one of their shows, I went. It was Halloween night, and the band was called Jane's Addiction. From the moment I walked into the nightclub, it was clear that I had entered the absolute epicenter of all that was cool. The exuberant roar generated by the band, rippling through the ultra-hip audience, the whole event had that unmistakable, magical vibe that makes all your critical faculties melt away and turns you into a fan. Suddenly, every shortcoming I'd identified on tape became a very deliberate departure from convention, all ingeniously orchestrated into a fresh and powerful statement.

I don't think such an experience is possible online. No matter how detailed the digital presentation gets, you just won't be able to...smell it. That intangible, hair-on-the-back-of-your-neck dimension that transforms the offensive into the sublime will almost certainly be lacking as you click along in the comfort of your home.

Along with its limited ability to promote musicians, the Internet is missing something that is central to the selling of music as well. Digital delivery, for all its convenience and cheapness, does not provide the tactile rush of peeling the shrink-wrap off an eagerly awaited release. A fan draws pleasure from an imaginary reciprocity with her favorite artists; she understands it as a two-way relationship. She wants to physically take hold of, and possess, the record, the sticker, and the T-shirt that comes...from them. A fan wants a totemic representation of her auditory communion with kindred souls, and an invisible sequence of zeros and ones piped in from a server somewhere doesn't cut it. That's why people buy CDs instead of simply taping them, and why people download a pirated MP3 file and still go out and buy the CD it came from. The label:

The swagger of a typically smug record man, to be sure, but one who also understands something about the culture of music that the current Internet cheerleaders may have missed.

Let's not go too far, though. There are some very clever people, many of whom have launched successful acts in real space, working to make the online music huge.

And they have some easy targets to start with; certain aspects of the traditional music business are looking wobbly and archaic already. Take commercial radio, for instance. It still functions as a primary music marketing device for major labels, but only because nothing better is out there yet. As John Hall predicts, “Radio as we know it will go down the toilet. There’s very few stations possible, and the interests of their content providers and their advertisers are diverging so much. The labels are trying to sell records to teenagers, and the advertisers are trying to sell cars to middle-aged commuters.”

Another area where change might be due is pricing. The days of the $15 CD may be numbered, if only because developing tastes and the freedom of digital delivery will favor individual songs rather than whole albums. “The album is kind of a 70s concept,” says Joe Rosenthal, an editor at Rolling Stone who follows Internet music closely. “It's going to be hard to force consumers to buy a whole album in the digital format.” Indeed, the album format was largely dictated by the practical demands of manufacturing and stocking vinyl records. Those economic limitations will be disappearing, and many fans will get their songs from pirate sites unless labels allow them to buy singles at an attractive price.

Despite the continuing leverage of labels, there will also be pressure exerted on them by their top artists, who can dangle the prospect of Themself.com to get a bigger cut. “Leaving the label looks attractive when they're only giving you ten percent,” says Hall. “You'd be better off selling one-ninth as many records on your own site and keeping all the money.”

Following this logic, artists who have attained household-name status in the old system could be the ones who truly make out in the new one. Because while the Internet has shown little promise for developing a new act's market, it sure shows promise for selling to a market that already exists.

But major labels will be glad to modify their model here and there if there’s money to be made. They will respond to pressure from consumers and established artists, but they will pass that pressure on to the artists who lack leverage, as they have always done. It’s likely that all this talk of the major labels being doomed is just so much wishful thinking. And no wonder; there are a lot of wishful people out there: the ripped-off musicians, the frustrated and overcharged consumers, and most vocally, the Internet entrepreneurs who want a piece of the action. Next time you read another article about how the Internet is certain to turn the music business upside down, reversing the positions of the historical haves and have-nots, take note of who is telling you all this. Chances are it's someone who's trying to sell you a little real estate on their hype-driven website.

Okay, so maybe the Internet isn't going to fling new stars into the skies and make a bundle for every band that deserves an audience. But maybe the revolution isn't going to be about money and fame anyhow. Every kid who starts a band isn't banking on being a rock star, and every rock star isn't in it for the big bucks and big crowds. There's all that other stuff: the joy of making noise for an audience, the rush of knowing that somewhere, people who you've never met are listening to you. It's these simple pleasures that launched a thousand garage bands, and still drive the indie-rock industry.

The Internet might enhance these pleasures for many musicians, and might make them available to many others who otherwise would miss out completely. Take it from musician Michael Dean, who has been everything from an indie-rock darling, to a major-label artist, to a one-man musical Web enterprise. Dean reports that MP3 files get downloaded from his sprawling webpage around 200 times per week, but like most other musicians on the Web, he is not actually able to sell anything. “But that isn't why I make music these days,” says Dean. “To me it’s sort of like how Maximum Rock and Roll [a seminal punk fanzine] was in the beginning. I used to get a kick out of the little letters with a five-dollar bill carefully concealed for an order of my 7" vinyl. I was and still am losing money, but I get a kick out of seeing ‘Venezuela’ and ‘India’ on the download hitlogs.”

When you think about it, a music business full of Michael Deans might truly be a revolutionized one. The glossy pop acts will go on as before, groomed and marketed so as to transfer millions from the pockets of teenagers to the pockets of record companies. And no doubt there will still be radio stations (broadcast or webcast, either way) that won't play anything not pressed on them by labels, record stores (real or virtual) that won't promote anything not played on the radio, and live venues (on the street or the Web) that won't give a gig to anyone not sold in record stores. But for everyone else, there will be a little corner of cyberspace where you can find almost everything the traditional music industry ever offered—songs, pictures, quotes, videos—in short, a complete musical experience. The only thing that will separate the minuscule players from the megastars will be the number of people observing.

We’ve all heard that tired quote from Andy Warhol about future people all getting to be famous for fifteen minutes. But maybe he was a little off—perhaps everyone in the future will be famous on 15MB of a hard drive, somewhere out in the vast expanses of cyberspace.

The End of SDMI

By Eric Scheirer, Technology Correspondent, MP3.com, Oct. 15, 1999

I don't mean to say that the Secure Digital Music Initiative group will disband soon. On the contrary, it looks like they are ready to redouble their efforts, issue a bunch more press releases, publish some more specifications and keep trumpeting their version of the future of online music. They are more committed than ever to their goal of providing a secure mechanism for the protection of artists! (Just ask them).

But just making news and publishing specifications was never the goal of SDMI. The real goal was to bring the technology industry into the cartel owned by the major labels, to create an alliance that guaranteed the majors a continuing near-monopoly over musical content and its distribution. And now it's clear that this unlikely, loftier ambition will never be achieved.

I'll go into the reasons behind the failure of SDMI in this column. But I should say up front that I think, in the abstract, a standard that can provide security over the transmission and playback of digital music is a good thing. I’m not against secure music at all. As Hilary Rosen, president of the Recording Industry Association of America (RIAA) and SDMI good cop (Cary Sherman is the bad cop) is fond of saying, the choice of a business model for each piece of music should be left up to the musician. If you want to give away your tracks for free, that's cool. If you want to charge $200 per listen, that's cool too. The decision should be yours alone.

SDMI was never just about providing security options to the musician, though. It was about providing security options that were controlled by the music industry, which is a much different thing. And this would mean that the option to distribute music security would become yet another "negotiable" clause between the artist and the record label.

We've all seen the history of these negotiable clauses--it's the same story as merchandising rights, ownership of the master recording, and now Internet domain names. The label puts out a take-it-or-leave-it offer where the musician has to give up these rights in exchange for the recording contract. If the musician objects, he is shown the door, and the next unsigned band in line is offered the same deal.

This is how the music industry leverages its distribution cartel into contracts that are unfair to musicians. There's always another band ready to sign that take-it-or-leave-it deal.

The online digital music revolution threatened to change that. Since music websites started providing an alternate distribution channel for those bands that reject the contract, the weight the labels could throw around was getting smaller. The solution--a wise one--is to get the technology companies into bed with the record industry. If there were a widely adopted technology for security that was controlled by the industry, then this big lever could be restored, since only those distributors they approved could send out content to play on the popular machines.

What the RIAA and its members failed to realize is that to make this story real, they had to keep the technology companies happy. The tech industry could see what was happening in the online music space, and they wanted to make sure they maintained the opportunity to make real businesses--hardware, software and services--from it.

The RIAA (I'm only speculating here, I don’t have a secret mole in the music industry) thought that their huge tracts of content, and the prospect of making it available online, would keep the tech folks docile. But the consumer-electronics industry knows a hard lesson that the RIAA has yet to learn: Regardless of the business model, it has to start with value to the consumer. The majors believed that just providing content is value that should be good enough for anyone.

But the techies know that what is driving digital download today are flexibility, options and customization. This is exactly what the record industry doesn’t want--a world in which consumers are empowered to make their own buying decisions, and find their own ways of listening and relating to music. The tech industry consulted their strategists and decided they had to do what they do best--give consumers what they want. And this means that the SDMI spec wasn’t going to cut it.

When I try to read the SDMI Portable Device specification 1.0--the only thing SDMI has produced so far--I see the fingerprints of the conflict among the major labels and the technology companies everywhere.

Even in the introductory parts, we read that the record industry "has identified the lack of an open and interoperable standard for security as the single greatest impediment to the growth of legitimate markets." And that the technology companies developing new devices "has realized that an important part of these device is the presence (or absence) of adequate security." What a difference in spin!

Having some experience in creating standards, I can hear in my mind the argument that must have led to this phrasing. There was no way, even in an introduction (actually, this is part of the Antitrust Statement) that the tech companies were going to buy into the idea that security is an essential part of a good consumer device. And so they put in a sentence of their own--and it disagrees with the attitude presented in the previous sentence.

If the two sides couldn’t even agree, in the introduction, on whether security is essential or not, it's no wonder that the hard questions are tripping them up.

There are so many things in the PD specification that are blatantly against the interests of technology companies that I can hardly believe they approved it. Maybe it's just that they realized the spec would be a paper tiger, and with no plan to actually build SDMI devices, they just resigned themselves to letting the music-industry lawyers put in whatever they wanted.

What all this adds up to is something I’ve heard from several SDMI participants: To most technical companies, stamping their player "not SDMI compliant" would likely be better marketing practice than playing by the rules set by the RIAA.

Right now, almost every day, we see an announcement that another company is shipping a cool new music product, and taking a "wait-and-see" attitude toward SDMI. On alternate days, we learn that a music company is teaming up with an online distributor to sell music in a format yet to be determined.

What it all adds up to is this: The floodgates are opening. Portable devices will be huge for Christmas this year; they will all play MP3, and none of them will be SDMI-compliant in any way that matters. (Some probably will be stamped "SDMI", but that doesn’t mean anything by itself).

And so the remaining question is: What will happen to all that content the majors are sitting on? Will they finally realize the business potential it represents, with or without "security"? Or will they continue tilting at the windmill of piracy, hoping that some magic bullet (today watermarking, tomorrow quantum cryptography!) will come along that will make them feel all better?

I've learned to stop trying to predict what the music industry is going to do. Your guess is as good as mine.

[1] Lessley Anderson, “To Beam or Not to Beam,” The Standard (visited February 9, 2000) <http://www.thestandard.com/article/display/1,1151,9251,00.html>.

[2] Michael Robertson, Open Letter to RIAA, (visited Feb. 9, 2000) <http://www.mp3.com>.

[3] “Recording Big-Wigs Sue: MP3.com Plays the Blues,” The Standard (visited February 9, 2000) <http://www.thestandard.com/article/display/1,1151,9090,00.html>

[6] Hilary Rosen, “RIAA Lawsuit Letter to MP3.com,” (visited February 10, 2000) <http://www.MP3.com/response2.html>.

[7] Michael Robertson, “MP3.com Response to RIAA Lawsuit Letter,” (visited February 10, 2000) <http://www.MP3.com /response.html>.

[8] MP3.com Staff, Your Music, Your Rights, (visited February 9, 2000) <http://www.MP3.com/news/546.html>.

[10] See James Harding, “Companies and Finance: International,” The Financial Times (London), Jan. 22, 2000, p. 20.

[12] See Benny Evangelista, “Digital Dupes; Movies, Music Industries Try to Keep Pirated Copies from Spinning Out of Control,” The San Francisco Chronicle, Jan. 31, 2000, p. B1.

[13] See Michael Stroud, “A Music Industry Death Knell?,” Wired News (Internet), Jan. 11, 2000.

[14] See Recording Industry Association of America v. Diamond Multimedia Systems, 180 F.3d 1072 (9^th Cir. 1999).

[15] See Doug Reece, “RIAA/Diamond Settle Lawsuit,” Aug. 4, 1999, <http://www.mp3.com/news/306.html>.

[16] Courtney Macavinta, “Recording Industry Sues Music Start-Up, Cites Black Market,” December 7, 1999, <http://news.cnet.com/news/0-1005-200-1485841.html?tag=st.ne.1002>.

[19] See Courtney Macavinta, “RealNetworks Puts a Patch on Privacy Concerns,” Nov. 1, 1999, <http://news.cnet.com/news/0-1005-200-1426571.html>.

[20] See Courtney Macavinta, “RealNetworks Faced with Second Privacy Suit,” Nov. 10, 1999, <http://news.cnet.com/news/0-1005-200-1435099.html?tag=st.cn.1>.

[21] Courtney Macavinta, “Truste Reports on RealNetworks as FTC Examines Net Privacy,” Nov. 8, 1999, <http://news.cnet.com/news/0-1005-200-1431844.html?tag=st.cn.1>.

[22] See Jennifer Sullivan, “MP3 Pirate Gets Probation,” Wired News (Internet), Nov. 29, 1999, <http://www.wired.com/news/print/0,1294,32276,00.html>.

[23] See Dara Colwell, “Pirates at the Dock,” SF Weekly, Sept. 15, 1999.

[24] See Testimony of Jeremy Salesin, General Counsel and Director of Business Affairs for Lucasarts Entertainment Company, LLC, Federal Clearing House Congressional Testimony, Oct. 15, 1999.

[25] See Kristen Philipkoski, “The Student Jukebox Sting,” Nov. 9, 1999, <http://www.wired.com/news/culture/0,1284,32444,00.html>.

[26] See Dana Pasternak, "Universities Target Student MP3 Copyright Infringement," The Daily Princetonian, Nov. 17, 1999.

[27] See Darran Gardner, "There's No Music Like E-Music," The Sunday Herald, Jan. 30, 2000, p. 22.

[28] Amy Doan, "Digital Dreams," Forbes, Jan. 24, 2000, p. 132.

[29] See Courtney Macavinta, “Teen Charged In Connection With DVD Cracking Tool,” Jan. 25, 2000, <htttp://news.cnet.com/category/0-1005-200-1531192.html>.

[30] See Declan McCullagh, “Judge Rags on DVD Hackers,” Wired News (Internet) Feb. 3, 2000, <http://www.wired.com/news/print/0,1294,34091,00.html>.

[31] See Matt Lazier, “Lawsuit Names California College Student for Publicizing Encryption Code,” The Tribune/Knight-Ridder Tribune Business News, Feb. 7, 2000.

[32] See Shareem Amry, “Cinema Operators Reel Under Piracy,” New Straits Times, Feb. 8, 2000, pg. 12.

[33] See John Stamp, “Breaking DVD Encryption,” Los Angeles Times, Feb. 3, 2000, pg. B8, Letters Desk.

[34] “Website Sued Over TV Rebroadcasts,” USA Today, Jan. 20, 2000, <http://www.usatoday.com/life/cyber/tech/cth190.htm>.

[35] “TV Giants Win Round Against ICraveTV,” USA Today, Feb. 8, 2000, <http://www.usatoday.com/life/cyber/tech/cth302.htm>.

[36] According to composing great Aaron Copland, creation and interpretation “were usually performed, in pre-Beethoven days, by a single individual. The composer was his own interpreter; or, as frequently happened, interpreters wrote music for their own instrument. But nowadays, as we all know, these functions are more usually separated . . . Consequently [there is] need of a middleman, a talented reader who can arouse response in an audience by the public reading of the composer’s message.” Copland, Music and Imagination, (1952), p. 57.

[37] Miles Davis with Quincy Troupe, Miles: The Autobiography, (1989), p. 89.

[38] Classic examples of Gil Evans’ orchestrated jazz include his collaborations with Miles Davis on the albums Miles Ahead, Porgy & Bess, and Sketches of Spain.

[39] For a different reading of Montesquieu’s views, see Alexander Hamilton, The Federalist No. 9, pp. 74-76, in which Hamilton famously re-casts Montesquieu as a forefather of federalism.

[40] Internet Engineering Task Force Website <http://www.ietf.org/tao.html#What_Is_IETF>.

[41] See Simple Mail Transfer Protocol, RFC 821, Internet Engineering Task Force, <ftp://ftp.isi.edu/in-notes/rfc821.txt>.

[42] For a good overview of this ideology in a particular context (the Spanish Civil War), see generally George Orwell, Homage to Catalonia; Ramon J. Sender, Requiem for a Spanish Peasant.

[44] Bill Crow, Jazz Anecdotes (1990), p. 143.

[45] Paul Wallich, “The Best Things in Cyberspace are Free,” Scientific American, <http://www.sciam.com/1999/0399issue/0399cyber.html> (visited Feb. 15, 2000).

[46] For a more complete explanation of this licensing system, see Chris DiBona, Sam Ockman and Mark Stone (eds), Open Sources: Voices from the Open Source Revolution, Sebastopol (CA): O'Reilly and Associates, Inc. (1999). <http://www.oreilly.com/catalog/opensources/book/perens.html> (visited Feb. 5, 2000).

[48] Robert P. Merges, Peter S. Menell, Mark A. Lemley, & Thomas M. Jorde, Intellectual Property in the New Technological Age (1997), p. 383.

[49] Copyright Law Revision, House Report No. 83, Committee on the Judiciary, 90^th Congress, 1^st Session, 1967, p. 66.

[50] Zittrain, “The Right Microsoft Remedy—And Beyond,” IntellectualCapital.com, Nov. 8, 1999, <http://www.intellectualcapital.com/issues/issue320/item7253.asp>

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