All Things Digital

Back in 2000-2001, when the Recording Industry Association of America was still trying to recover from its CD price-fixing scheme with poorly reasoned justifications for CD price inflation (”Listen, if CD prices were governed by the Consumer Price Index, you’d be paying $33.86 for them instead of $12.75!”), a little company called Napster came calling. Napster had pioneered a new Internet distribution model for digital media that was revolutionizing the music industry, and it hoped to partner with RIAA member labels to create a subscription-based service.

At the time, Napster had some 20 million users worldwide and was essentially the de-facto file-sharing standard. Had the RIAA labels agreed to the alliance, they might have turned peer-to-peer distribution into a new and powerful business model, one with low distribution and marketing costs and a fast developing user base. But they didn’t. They chose another route.

Big mistake. Along came Gnutella. And increased broadband penetration and cheaper storage. Along came Kazaa. And then came BitTorrent. And, well, look at the industry now.

Given such history, it’s difficult to look at the recording industry’s plan to have a monthly fee added to consumers’ internet-service bills and not shake your head in wonderment.

Portfolio.com reports that Edgar Bronfman Jr.’s Warner Music Group (TWX) has indeed hired veteran industry consultant Jim Griffin (no relation to Peter, right?) to quarterback a plan under which consumers pay an Internet-access surcharge of $5 a month for the collective right to freely share music. Those fees would be pooled and divvied up among artists and their labels.

“Ideally, music will feel free,” says Griffin. “Even if you pay a flat fee for it, at the moment you use it there are no financial considerations. It’s already been paid for.”

Ah- charge everyone for all music. So it is Monetization Without Representation. OK. But what gives the music industry the right to tax all broadband users because it suspects some of them might illegally share its content? And if the music industry deserves that right, then doesn’t the film industry deserve it as well? And the publishing industry? And any other industry that might benefit from such a tax?

As David Barrett, engineering manager for peer-to-peer networks at Web content-delivery giant Akamai (AKAM), notes Griffin’s plan is problematic. And desperate.

Said Barrett:, “It’s too late to charge people for what they’re already getting for free. This is just taxation of a basic, universal service that already exists, for the benefit a distant power that actively harasses the people being taxed without offering them any meaningful representation.”

Thought the principle of liability was well settled? Think again. The judge presiding over Atlantic v. Howell has ruled in favor of the Recording Industry Association of America, finding that making content available for distribution over an Internet connection is in and of itself a copyright infringement –regardless of whether that content is ever distributed.

A bit of background: In 2006 the RIAA sued Pamela and Jeffrey Howell for copyright infringement, accusing the pair of “making copyrighted works available” over a peer-to-peer network. The RIAA had no evidence that the Howells ever transferred content to a third party. It did, however, have screen shots of their Kazaa account. And that was proof enough for the court to grant its motion for summary judgment against them. “It is no defense that a Kazaa user did not directly oversee the unauthorized distribution of copyrighted material,” the judge wrote, noting that “the mere presence of copyrighted works in a shared folder is enough to trigger liability.”

So even though the RIAA couldn’t prove the Howells distributed files illegally, the mere fact that they owned a computer with a shared-files folder on it that contained copyrighted files “made available” over an Internet connection was enough to constitute infringement of the “distribution” rights under the Copyright Act.

Essentially, the Howells have been found criminally liable for what they might have done. Which is an unsettling thought in a Dick-ensian (Philip K.) sort of way. But not for the RIAA which, thanks to this ruling, no longer has to work quite so hard to provide proof of violation in these cases.

“Plaintiffs wish to establish two violations of copyright law when a person both downloads and uploads sound recordings via the Internet,” the Computer & Communications Industry Association and US Internet Industry Association wrote in an amicus brief filed in Elektra v. Barker, another RIAA “making available” case. “Proof of the download violation may be relatively straightforward when a plaintiff can establish that a recording has been copied to a person’s computer. Proof of a violation by uploading cannot, however, be established merely by showing the availability of files for potential uploading. A plaintiff must establish a connection to someone else’s actual download. That requires a plaintiff to establish a connection between an uploader and a corresponding downloader, to establish the facts of an actual transaction between the two. Although such proof may require investigation, a plaintiff should not be relieved of its burden. Since copyright holders may (and often do) seek statutory damages of up to $150,000 per work infringed, see 17 U.S.C. §504(c)(2), without having to prove actual harm, for such remedies they should be required to furnish allegations and proof of actual violations.

“The remedies provide an adequate incentive for a proper investigation. Amici believe that plaintiffs want to invoke the concept of ‘making available’ instead of the statutory elements of a section 106(3) distribution because plaintiffs perceive that the investigations needed for proper allegations and proof of uploading liability (as contributory infringement liability for another’s download) are burdensome.”