Aero and the Politics of Copyright

Ho hum, yet another blockbuster IP case. This one involves a company (Aero) that used tiny antennas to re-broadcast TV content that cable companies thought they had exclusive control over. The US Supreme Court said it looks like Aero was taking property, so it must be so. So “no no” to Aero and  “bye bye” to Aero style services. Meanwhile,  the networks and cable providers (the folks who are responsible for your huge cable bills) uncork the Dom Perignon.

It is not hard to figure out why Aero was popular – cable bills are outrageously high and Aero was a lot cheaper. But shouldn’t we have to pay these amounts if we want “quality content”? Wasn’t Aero’s re-broadcast system “stealing”? The weird thing is that you can’t answer these questions without some background in law and tech.

How about a primer?

Here is my added two cents about the legal issues in the Aero case: from a strictly legal point of view (lawyer chit chat), the underlying law is a mess. It is arcane, complex and logically inconsistent. In other words, the interpretation of law advanced by the Supreme Court had to rest on policy grounds. What is that? They should have decided which interpretation would give a better result, keeping the intention of the law drafters in mind. So to understand what is going on, we need to discuss the underlying policies involved.

Okl. Let’s take a first step to sorting this out – contrary to what some may argue, copyright does not arise from divine right or some deep seated sense of justice or morality. It is a right created by Congress a long, long time ago for specific reasons. What reasons?  Writers complained that they needed the revenue from selling their books to survive. Without this revenue, they would not create and we would not get great summer reading. Charles Dickens, for example, was aghast that he could not stop US publishers from counterfeiting his novels for sale in the US. Errr … not that Dickens was actually starving. But that’s not the point! And this idea applied equally to other artists. No one wants to starve brilliant artists to death, so it was thought that something should be done. But there was a problem. The public benefits from cheap and rapid transmission of ideas.  Check out Matt Ridley’s TED talk on how the exchange of ideas makes humans who we are.  The more rights one gave to the poor artists, the less exchange the rest of us would get. Nicht gut! So these interests had to be balanced. And that is what the original law tried to do.

But something happened. Copyright holders began to understand that re-broadcast rights were highly valuable. One could make money re-issuing a book. Then things got much more interesting in the 20th century. First, a new technology (player pianos) made it possible to re-broadcast songs. Hmmm .. strange. Meanwhile, movie makers were just maing money from the box office. Not bad, but what happened after the buzz was over? TV came along, and they found they could grant licenses for re-broadcast of movies for TV again, again and again. Additional boatloads of money! Then came the sale and rental of video cassettes (remember those monsters?). Then came DVD. Now we have streaming. Boom! And btw, what about the “starving artists” or yore? Well, the artists who are lucky enough to work with these corporations don’t starve. Far from it. Just ask George Clooney, Brad Pitt, Beyonce or any other of that cast of characters. But sadly, the vast majority of working artists can only dream of making those types of connections and the money that goes with them. They have rights, but that is about it.

In short, the re-broadcast business is a very, very big deal. It is big business. And the mindset of this business model is simple:  if others can re-broadcast, your rights are worth less. So re-broadcast rights must be protected. To give you an idea of how deep set this mindset is, consider this: a trade association recently claimed in litigation that royalties should be paid each and every time a short music ringtone plays on a mobile phone. Notice, this is not the full song — just a snippet. Nor can the caller know he or she would be incurring a charge. Nor could the recipient control the number of calls. And was the recipient really listening to the tune anyway? No matter! Well, this particular claim was rejected, but you get the idea. And it is a totally logical idea if you profit from protected re-broadcast rights. And that is how we got to where we are today.

A quick detour: Is this so bad? We get lots of content. What is the problem? Lawrence Lessig brings this out rather well

The problem is that we now rely more and more on the internet as a sharing tool. We are moving away from a society where broadcasters monopolized our attention (and could charge for it) to a society where we converse via content exchange. And the more we do so, the more we will bump into the corporate interests of entities who feel the urgent need to restrict sharing. Before the internet, expanding corporate interests to restrict re-broadcast didn’t matter very much. It matters much more now.

So back to the Aero case. Check out some recent commentary on the Area decision

Jeff John Roberts via GigaOm – the decision sets back TV innovation for a decade

Derrick Harris via GigaOm – possible further restrictions from Aero for content storage

Fred Wilson – effect on streaming

These comments represent tech thinking. They imagine a future digital utopia where internet tears down the barriers created by pre-digital era business models. Will we get there? A few things are clear. First, lawyers are not leading the way for better policy. That goes, even for the supposedly great and mighty minds on the US Supreme Court. Nor should we expect much from Congress. Why not? Well, for one, there is the never ending scorched earth politics of the Republican Party. But just as important, lawmakers are also not in the front line when it comes to internet trends.

So whatever will happen is more likely to be dictated from private actors. What societal trends can we detect? People like streaming content into mobile devices via internet and they don’t want to pay huge fees for it. So the Aero case is not likely to be the last shot in the war between corporate interests seeking to protect re-broadcast rights and those who seek to profit from offering cheaper and more readily available variants. The copyright wars are far from over. There is a second and more hopeful idea as well. As web business models develop, we can see more clearly that there are other ways to make money without charging for re-broadcast. Not to go too deeply into this, but Google does not need to charge you each time you do a search. It has other ways of making huge money from your search activity. Similarly, over time, the information flow connected to re-broadcast may have more value than the licensing fees currently available to a more limited audience. If this lightbulb is lit, you can say goodbye to re-broadcast charges.

Assuming the above is correct, we should find a solution, right? Will we? And if so, how quickly? Good questions!

So let the games continue!

 

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