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April 29, 2004

ACLU Challenges National Security Letters

The ACLU announced today that it filed a lawsuit April 6th bringing a constitutional challenge to provisions of the PATRIOT act that allow the FBI, without individualized suspicion of any connection to terrorism or espionage, to subpoena information without a warrant, without judicial scrutiny, and under a gag order prohibiting the recipient of this “National Security Letter” from disclosing to anyone — even their lawyer — the fact that the information had been disclosed.

Why didn’t they announce their suit until today? The Government was trying to keep it secret. Not even the fact of the constitutional challenge to the provision was to be public. Through negotiations, the ACLU was able to get the government to allow them to announce the suit and post a redacted compaint.

Reading a complaint in a pending constitutional case that has big sections blacked out in marker is sort of a chilling experience.

There’s only one thing to do.

Instant Concert Recordings

The past few weeks have seen two telling developments in the nascent market for instant concert recordings — official, legal bootlegs distributed to concertgoers just minutes after the last encore.

First, the Pixies got back together. Their first show in twelve years was played at the Fine Line in downtown Minneapolis. I couldn’t get tickets — the show sold out in seconds. But a company called DiscLive contracted with the promoters to record the show and sell limited-edition CDs of it right afterward. Only 1,000 copies were made, and those copies are selling for large sums on eBay. This is a fantastic service, and well worth the $25 cost to concertgoers.

Even better, though, is the secondary effect. After the Pixies’ Fine Line concert, everybody wanted to hear that bootleg. (Are they any good any more? Is their heart in it, or is this just for the money?) And what do we do when everybody wants the same data at the same time? That’s right — we use BitTorrent. In a convergence of some of my favorite technologies, a link to the .torrent file for FLACs of the Pixies show appeared on the twin_cities community on LiveJournal pretty quickly after the concert. Because everybody was downloading it at once, I had it within an hour. (The show was pretty good, by the way.)

The second development is an announcement by a company similar to DiscLive called eMusic Live. As DiscLive is to medium- and large-scale concerts, eMusic Live is to small indie clubs. Instead of having a staff of people to pop CDs in and out of drives, eMusic Live happens with just one operator. Instead of CDs, the music os recorded onto little USB flash drives — the kind a lot of people have on their keychains already. The music costs $10, and they’ll sell you a flash drive for $20 if you don’t already have one. Pretty cool. Most peopel are just gonna rip the DiscLive CDs anyway, so distributing the MP3s on flash drives is more convenient. And it eliminates the cost of CD blanks, CD cases, and hundreds of CD drives at the venue; all they need is a little kiosk with a USB port on the front for you to plug your flash drive into. The only drawback is that these are MP3s, not full-quality CD audio. The article says 110 minutes of audio fit into 128MB flash drives, and that puts the bit rate somewhere between 128kbps and 192kbps — good, but not great.

Companies are finally capitalizing on what nonprofit sites like eTree and Grateful Dead tape traders have known for years — there’s a lot of value in being able to listen again to concerts attended in the past. They’re monetizing memories, but they’re adding value.

April 23, 2004

Ernie Miller on Diebold’s Memo Suppression Attempts

Not only did Diebold’s internal memos leak, but memos from their law firm, Jones Day, that dealt with their legal position leaked, too. Ernie Miller has the story. The attempts at prior restraints are understandable damage-control, but regrettable nonetheless.

April 19, 2004

CD-Rs Become Better Substitutes for CDs

I’m sure this has been going on for a long time, but it’s recently become clearer and clearer that the utility gap between noncommercial copies of music and commercial copies of music is closing. Some evidence:

  • The availability of big scans of album art on the web. If you’re making a CD-R copy of a commercially released album, you’re a few clicks away from high-resolution image files of the album art. A few more clicks, and your printer spits out pretty good color reproductions of the CD tray insert and album cover. There are specific sites for this sort of thing, but the Google image search works just fine, both for popular and back-catalog discs. You can even find scans of the CD itself, for convenient label printing.
  • The availability of lossless compressed audio files on P2P networks. As hard drive and bandwidth limitations decrease, the necessity of the 10:1 compression provided by 128kbps MP3s lessens. New formats, like APE and FLAC, give about 2:1 compression with no loss of sound quality at all; the audio data that comes out of the decoder is bit-for-bit the same as the audio data that went in. This means that albums take up about 250MB instead of 50MB, but when hard drives are as dirt cheap as they are now, it hardly matters. ZIP files containing FLACs of entire albums, along with high-res scans of the album art and CD label, are pretty widely available on eMule and via BitTorrent, though the mainstream P2P networks have yet to catch on. For these downloads, the loss of utility when one downloads instead of purchasing is much smaller.

The Strumpf-Oberholzer analysis will only hold so long as the difference between noncommercial and commercial copies is large, as it has been in the past. As gamma decreases — as noncommercial copies become more and more perfect substitutes for commercial copies — the number of lost sales due to downloading will increase. The fact that the cognoscenti can do this now suggests that, globally, gamma is likely to decrease in the future. This may not happen for a long time, since right now it takes a lot of know-how to find perfect copies and scans, download them, burn a CD, and print album art and label.

But I would have said the same thing about P2P in general in 1997.

The Changing Face of Noncommercial Copying

Copyright holders have, in practice, always more or less ignored noncommercial copying. Sure, “Home Taping Is Killing The Music Industry … And It’s Illegal,” but they weren’t suing anybody. Why has noncommercial use become a ‘problem’ so recently? If the RIAA could agree to immunize consumers from suits arising out of home taping in 1992, why can’t they do the same now? Why can’t we just agree on a small revision to the Audio Home Recording Act that brings MP3s and CD-Rs into the fold?

It’s because technology has fundamentally changed noncommercial use of copyrighted works. Before the Internet, no matter what you did, there was a practical limit to how far removed any incident of noncommercial use could be from a commercial use. You could copy cassette or reel-to-reel tapes, but only for a few generations before they became unlistenable; you could make as many tapes of your LPs as you wanted, but you still had to buy the LP. Noncommercial use was always sufficiently dependent on commercial use that regulating commercial use was enough. We can take this back further to the player piano and sheet music — they enabled noncommercial public performances, but someone still had to buy the piano roll or the sheet music commercially. They key fact here is that player piano rolls, sheet music, and LPs could not be the product of noncommercial copying; the equipment involved was out of reach of anyone without a profit motive. In this context, the late-80s DAT panic becomes easier to understand; this was the first hole in the wall between high-volume, multi-generation commercial duplication and low-volume, one-generation noncommercial copying. The solution in 1992 was to plug the hole with technology, and force DAT machines to emulate the then-standard LP-to-cassette regime, in which the consumer could make unlimited first-generation copies, but second-generation copies would be of reduced quality.

Now, obviously, the cat is forever out of the bag with regard to duplication. The remove between any act of commercial copying and acts of noncommercial copying is unlimited. Regulation of commercial copying, which always seemed to work before, is no longer an effective method of compensating copyright holders for noncommercial uses of their works.

This is an actual problem for the record companies. A bit-for-bit CD-R of a commercially released album copied by a friend is a close substitute for the purchased album. A downloaded MP3 is a much worse substitute, but it is a substitute. Even if, as the Strumpf paper suggests, we might be able to eliminate downloads from the equation, we’re still left with CD-Rs (which, I heard somewhere, the RIAA knows are a bigger problem than MP3s but which they can’t do anything about).

How do we proceed? We can change the technology to fit the law, or we can change the law to fit the technology. Changing the technology to fit the law won’t work. The best you’ll get is “speed bumps”, and I think designers of such systems underestimate the widespread availability of the local computer whiz kid.

So I think the only solution left is to change the law to recognize the new face of noncommercial copying. We still have a choice — we can sue teenagers, or we can collect money from teenagers’ parents. I think we should license, even if it means a box of 50 CD-Rs costs $50 instead of $5 and broadband Internet access costs $50 a month, not $40.

April 16, 2004

BayStar Redeems SCO Shares; Stock Tanks

BayStar Capital, a fund heavily invested in SCO (whose involvement was lined up by Microsoft), has pulled out of SCO stock. The stock has tanked (down about 20% in the past two days, 13% today).

BayStar is making vague allegations of a breach of one of the contracts governing securities transactions between BayStar and SCO. If SCO breached, this gives BayStar the right to redeem all of its shares and get out of its invesement in SCO. The vagueness of the allegations makes me think that BayStar just wants out fast, any way it can get out, and will be more specific about the breach once its lawyers find one.

Bravo, BayStar.

April 12, 2004

Felten’s P2P GUT

Ed Felten, a professor at Princeton active in the “freedom-to-tinker” movement, has posited a Grand Unified Theory of Peer-to-Peer File Sharing. It brings together the results of all of the recent studies of P2P usage and its effect on CD sales.

The studies show that (1) when asked, people who admit to file-sharing buy fewer CDs, and (2) based on time-series correlation of downloads and CD sales, downloads have no effect on CD sales. These results seem contradictory, but Felten’s theory explains both.

Under Felten’s GUT, there are two kinds of P2P users: Free-riders and Samplers. Free-riders are mostly younger and less risk-averse; they admit to file sharing and they buy less CDs because of it, downloading most of the music they listen to. Samplers are mostly older and more risk-averse; they don’t admit to file sharing, and they buy more CDs because of file sharing, buying CDs of music they listen to (which they find out about via downloads). Because P2P causes more CD sales to samplers and less CD sales to free-riders, the net effect is zero, as Strumpf and Oberholzer-Lee found.

The key data we’re missing that would tell us whether Felten’s theory is correct is a simple correlation between number of downloads and number of CD sales across genres. It seems that Samplers would be more likely to listen to jazz than Free-riders, for instance, and Free-riders would be more likely to listen to music that everyone agrees is teenybopper crap — say, Hilary Duff. I suspect that his findings would hold, at least in large part.

April 7, 2004

Gmail Fracas

This whole Gmail fracas seems a bit out of proportion.

Google has announced a webmail service that would choose which text ads to place on the page by the same methods it uses for all its other pages — by looking at the content of the page. Yes, this means that, on some level, some program is “reading your email”. But that’s true anyway; emails don’t get displayed without going through some program or another. The concern arises because the ad-picking program picks the ads based on the content of the email, interpreting the message instead of just displaying it.

Google has given every indication that they will inform users prominently of what’s going on, as they do with the current Google Toolbar product. The installation program for Google Toolbar gives users the choice of providing or not providing information about the web page they’re viewing. This choice comes after a brief and clear explanation of the privacy implications of the choice, and an admonition in big red letters saying, “Please read this carefully. It’s not the usual yadda yadda.”

Even before the release of Gmail, privacy groups are up in arms. In this letter to Google executives, they demand that Google suspend implementation of the context-based email ads and clarify notices about how information will be shared within Google.

The letter raises a number of concerns:

  • That information on what ads were served might be available to law enforcement after obtaining a court order. (But law enforcement can already access the text of the emails themselves after obtaining a court order, so how is this different?)
  • That Google might correlate ad data from Gmail with data from the Google search engine or Orkut, its social networking service. (But Google has said it intends not to do so, and seems likely to include a promise to this effect in its Gmail privacy policy.)
  • That if consent to the parsing of emails to choose ads is not obtained after clear notice, Google might be in violation of EU regulations. (But, as noted above, Google has given such clear notice in the past and appears likely to do so in this case as well.)
  • That Gmail will set a precedent that data mining in consumer email communications is acceptable, and that some other, less scrupulous firm will correlate and data-mine for profit with impunity. (But Google has no duty to prevent its competitors from being jerks, and I doubt that Gmail makes the large-scale privacy violations inherent in aggregation and correlation of email content any more or any less likely.)

Unstated but implied in the letter is the idea that Gmail users might not be found to have a reasonable expectation of privacy in their emails, since they willingly allowed their use for commercial purposes. If a court so found, Gmail emails might be available to law enforcement without a court order. However, the chances of this finding are very, very small; a court would be more likely to see the AdWords parsing as analogous to spam filtering.

While I agree that Google needs to be clear about what data it will collect and how it will use those data, I find these complaints premature.

April 6, 2004

More Canadian Goodness

Canada’s house of commons has rejected the Lucy Maud Montgomery Copyright Term Extension Act, which would have extended the copyright term for unpublished works of certain deceased authors . . . like Lucy Maud Montgomery, author of Anne of Green Gables.

Canadians: What can’t they do right?

This would not have been nearly as bad as the Sonny Bono Act is, since it only deals with unpublished works of dead authors. But it’s more transparently a payoff to the heirs of a single copyright holder than the Sonny Bono CTEA was.

Via Larry Lessig

April 5, 2004

RIAA Does Improperly Joined

The judge presiding over the RIAA lawsuit against 203 Comcast subscribers in the Eastern District of Pennsylvania has ruled that the RIAA must bring separate lawsuits for each defendant, and cannot join all of the defendants in a single action.

Each Defendant will also likely have a different defense. Comcast subscriber John Doe 1 could be an innocent parent whose internet access was abused by her minor child, while John Doe 2 might share a computer with a
roommate who infringed Plaintiffs’ works. John Does 3 through 203 could be thieves, just as Plaintiffs believe, inexcusably pilfering Plaintiffs’ property and depriving them, and their artists, of the royalties they are rightly owed. Given this
panoply of facts, law, and defenses, the Court does not see any reason to vacate its March 5, 2004, Order. Wholesale litigation of these claims is inappropriate, at least with respect to a vast majority (if not all) of Defendants. Joinder is improper.
Defendants 2 through 203 shall be severed.

Hooray for Rule 21. This won’t kill these ill-advised suits, but it will slow them down and make them more expensive. This will also get us the first verdict sooner — and nobody likes uncertainty over which way the questions of law here will go. The faster we get to the appellate level with the question of whether uploaders are contributorily infringing or merely “making available,” the better.

Disclaimer Haiku:
West wind seems to say,
"This is not legal advice;
I'm not your lawyer."

(And if you're a client with whom I have a preexisting attorney-client relationship, this still isn't legal advice.)

In case you're wondering, this blog is also not intended as advertising, as a representation of anything but my personal opinion, or as an offer of representation.

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