The Revolution Will Be Downloaded

By Jan Frel, AlterNet. Posted April 20, 2005.

In the 1980's, Jack Valenti, Hollywood's top lobbyist in D.C., declared that "the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone." At the time, there was a panic in the film and TV industry that VCRs and their record buttons would allow consumers to avoid advertising and copy programming without paying for it. The studios would go bankrupt overnight! Hollywood assembled legions of attorneys and took its battle all the way to the Supreme Court, which ruled that there was nothing inherent in VCRs that encouraged copyright infringement. Consumers were allowed to have their record buttons after all. Good thing for Hollywood too.

Twenty years later, revenues from videotapes and DVDs amount to double what the film industry gets at the box office -- over $25 billion. Mark Cooper, director of research for the Consumer Federation of America, writes that Hollywood's initial fears in the face of a new distribution technology is hardly different from the piracy panic surrounding the invention of the telegraph in the 1870s. News organizations at the time feared that other outlets would use telegraphs to steal information from each other. This too, was eventually resolved in the courts, and the newspapers did very well by the telegraph.

Cooper sees the same trend of piracy panic underway in the recording industry's battle against online file-sharing programs: a fearful attempt to control the rise of a new means of content distribution.

The recording industry won its first battle in 2001 against the file-sharing site Napster, in a case that went to the 9th Circuit Court of Appeals. The Court ruled that the Napster's means of file sharing encouraged illegal copyright infringement -- Napster connected consumers to one another, allowing them to share content -- and eventually the site was shut down. The post-Napster generation of file-sharing programs have gotten around this by setting up a system that allows for the exchange of files without storing them on a central network. Users who sign up on the same peer-to-peer system can access and download the files of any other user. The film and music industry filed a case against Grokster, one of the more popular peer-to-peer sharing sites, in the 9th Circuit last year. The 9th Circuit ruled in favor of Grokster using the same logic the courts had made for VCRs back in the '80s. The recording industry appealed the ruling.

The Supreme Court has already heard arguments in the Grokster case and a ruling is expected in June. AlterNet spoke on the phone with Mark Cooper from his Washington D.C. offices about the Grokster case in the wider context of the future of peer-to-peer file sharing, and whether it will enrich the recording industry or cause its demise.

You say that the court battles over file-sharing technologies represent a debate about progress, not piracy. But isn't the legal basis of these court cases like Grokster about piracy?

The recording and film industry has tried to frame this as a debate about piracy and copyright infringement. They've got into a major piracy panic. But the Supreme Court justices made clear in their questioning that [the] technological progress question is at least as important -- if not more important than the piracy question.

The recording industry killed off the first generation of peer-to-peer communication with [the] likes of Napster, but they haven't been able to kill off the second generation. The irony is that last year they started to make lots of money using virtually the same technology they've taken to court. The record companies took about six years to figure out that they could sell singles online. And they sold more singles last year than they've sold in over 20 years, so in a certain sense, the cat is out of the bag. It's clear that it's very low cost. And that's what this is about. The recording companies lost control of the technology to distribute content.

There's a lot of arguments being made about the advantages of not clamping down on peer-to-peer networks; that doing so will hamper technological innovation, hurt consumers, or punish innocent parties. But what's the argument that's going to win in the Supreme Court?

The justices clearly are thinking about two things in their questioning. They clearly don't want to undermine technology and the incentive to invent new technologies for distribution. The other thing they're saying is that you can clearly invent business models that infringe copyright that allow for the download of songs that aren't warranted. What may happen here is that the recording industry is so upset about the technology that they rushed to the Supreme Court without having a case on whether or not Grokster was infringing on their copyright; you know, was it an inducement to infringe, and so what the Supreme Court may say is that technology is not guilty, but that businesses designed to infringe copyrights are, and then tell the 9th Circuit to look at the rest of the case.

Jan Frel is a former associate editor for AlterNet and TomPaine.com, and a contributing editor to Personal Democracy Forum

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