One need not cheer Grokster. Much of what went on there was indeed illicit. But there are two key things to understand about peer-to-peer networks. The first is that they are hard to police. They have multiple nodes. That is why they work. It means they will have both infringing and noninfringing uses, and the noninfringing uses will be centrally connected to our deepest values of free speech and cultural decentralization.

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The second feature of peer-to-peer networks is even more basic.

They are networks and thus subject to the laws of network economics. In short, they only work well if many people use them. A person who uses a peer-to-peer system that no one else uses is in the position of the person who owns the only fax machine in the world. Peer-to-peer networks provide cheap and unregulable audiovisual or data-heavy "speech" to a ma.s.s audience. And if the past is any guide, those networks will also carry large amounts of illicit material, just as photocopying machines (and VCRs) are widely used to violate copyright. The Grokster case makes it harder, but not impossible, to have successful, widely used peer-to-peer systems that are not themselves illicit. If they are widely used, there will be infringing content. If you try to police them and filter them, you will know more about that infringing content and thus might be liable--that was the point of the Napster case. If you do not, you will be failing to take precautions. That was the point of the Grokster case. What is a poor peer-to-peer network to do?

Apart from making sure that the last four letters of your service's name are not "-ster," I am hard-pressed to advise you.

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A decision does not need to make an activity illegal in order to impede it. It only needs to make it uncertain. Already, for example, the free--and so far as I could tell, entirely well- meaning--service "bonpoo," which allowed you to send large file attachments to many people at once, has shut down all of its capabilities except photo transfer. That is simply one trivial instance of a larger harm. Lots of new communications technologies will remain undeveloped because of the uncertainties left by this ruling.

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My colleague Jennifer Jenkins gave one useful hyperbolic ill.u.s.tration, drawing on earlier work by the Electronic Frontier Foundation: if one were launching the iPod today, it is not clear how it would fare under Grokster's standard. Of course, there is no danger that the iPod will be challenged. It has become respectable and the music companies ended up sanctioning it. But how does it fare if we simply apply the tests laid down in the Grokster case? There is Apple's "tainted" advertising campaign, urging users to "Rip, Mix, and Burn." Does this not suggest complicity, or even intent? There is the fact that the iPod does not restrict itself solely to proprietary formats protected by digital rights management. It also allows uncontrolled MP3 files despite the fact that this format is "notoriously" used to transfer files against the wishes of the copyright owner. This, surely, is a "failure to police." And finally, there is the fact that it would cost about $10,000 to fill an iPod with songs downloaded from iTunes. Clearly Apple must be aware that much of the music that fills iPods is illicitly copied. They are profiting from that fact to drive demand for the product, just as Grokster was profiting from the attractions of illicit traffic to drive people to use their service!

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No one is going to sue Apple now, of course. In fact, established players in the marketplace are probably fairly safe (and have better lawyers). But what if a product as good as the iPod were being developed now by some upstart company? What if it were no more and no less likely to be used for infringing purposes? Would the business plan ever see the light of day? Or would it be quietly smothered due to legal uncertainty? I have little sympathy for Grokster the company, but the decision that doomed it is a bad piece of technology policy.

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There is a second reason to dislike the Grokster decision.

Despite some of the angst-ridden announcements made when the decision was handed down, the Supreme Court has not killed peer- to-peer systems. The concept is far too well entrenched. But the decision will mean that there are fewer of them that are widely used, easy to operate, and made by responsible and reputable people you can trust. This will probably lessen, but not end, illicit copying online. But that effect comes with a price--it makes our communications architecture a little bit more tightly controlled, reducing but not removing the availability of methods of ma.s.s distribution that are entirely outside centralized public or private control. It is another--relatively small--step toward an Internet that is more like cable TV or iTunes, a one-way flow of approved content. One might decide that such a price was well worth paying. But where is the limiting principle or end point of the logic that led to it?

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There is no provision in U.S. statutory copyright law that imposes liability for contributory or vicarious infringement.

None. The patent statute has such a provision; not the Copyright Act. The courts have simply made the scheme up themselves. Then they made up limitations--such as Sony--in order to rein it in. In Grokster, the Supreme Court went further. It made up a new type of "inducement" liability. Fine. As I have tried to indicate here, the decision is not as dreadful as it is reputed to be.

But so long as there is any unregulated s.p.a.ce in our communications network, some portion of it will have illicitly copied content on it. The more the system is free of central control, the more it is open to use by any citizen, the cheaper it gets--all very desirable characteristics--the more illicit content there will be. That is the premise of the Internet Threat--the belief that control must rise as copying costs fall.

I have tried here to suggest an alternative interpretation, the Sony Axiom: without a strong internal set of limitations over copyright, cheaper copying and the logic of the Internet Threat will always drive us toward giving control over our communications architecture to the content industries.

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There was one particularly striking moment in the Napster oral argument. The lawyer for the recording companies was arguing that Napster was illegal. The judges interrupted, as they often do, and there was a back-and-forth debate about the likely reach of any ruling that would shut down Napster. "I am not trying to say the Internet is illegal," said the lawyer. There was a pause as everyone weighed those words carefully.

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My response would be "Really? Why not?" The logic of the Internet Threat leads to the position that a network is either controlled or illegal. The better and cheaper the network, the tighter the control needed. The Internet itself could have been designed differently. There could have been more centralized control, filtering of content, a design based on one-way transmission, closed protocols that allow users only a limited number of options. Indeed there were such systems--the national French Minitel system is an example. The Internet represents the opposite set of choices--freedom from centralized control, absence of intervention. In a famous article, Saltzer, Reed, and Clark provided the argument that an "end-to-end" network that is "dumb" and leaves processing to the "ends"--the smart terminals at either end of the wires--will be stable and robust.31 But it will also be remarkably uncontrolled and it will lower global copying costs close to zero for digital content. It is that principle that has made it successful. To put it tersely: the logic of the Internet Threat runs in exactly the opposite direction to the Internet itself. The logic of control is not the logic of the Net.

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Here is one last thought experiment. Apply the same test I suggested for the iPod to the Internet itself.32 Imagine you knew nothing of the Net. (Those of you who are over twenty-five may actually be able to remember when you knew nothing of the Net.) Imagine that you are sitting in a room somewhere discussing--perhaps with a group of government bureaucrats or some policy a.n.a.lysts from the Commerce Department--whether to develop this particular network. The scientists are enthusiastic. They talk of robustness and dumb networks with smart terminals. They talk of TCP/IP and HTML and decentralized systems that run on open protocols, so that anyone can connect to this network and use it any way they want to. You, of course, know nothing about the truly astounding outburst of creativity and communication that would actually flower on such a system, that would flower precisely because it is so open and no one country or company controls it or the protocols that run it. You do not know that millions of people worldwide will a.s.semble the greatest factual reference work the world has ever seen on this network--often providing their information for free out of some bizarre love of sharing. You do not know about Amazon.com or Hotornot.com or the newspapers of the world online, or search engines, automatic page translation, plug-ins, or browsers. You cannot imagine free or open-source software being a.s.sembled by thousands of programmers worldwide. E-mail is only a dimly understood phenomenon to you. Teenagers in your world have never heard of instant messaging--a nostalgic thought.

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As the scientists talk, it becomes clear that they are describing a system without centralized direction or policing.

Imagine that your decision is framed by the logic of control I have described in this chapter, by the fears that the content industry has had for at least the last thirty years--by the logic of the suit they brought in Sony. Imagine, in other words, that we make the up-or-down decision to develop the Internet based on the values and fears that our copyright policy now exhibits, and that the content industries have exhibited for thirty years.

There is no way, no way at all, that a network like it would ever be developed. It would be strangled at birth. You would be told by the lawyers and policy wonks that it would be a haven for piracy and illegality. (And it would be, of course--though it would also be much, much more.) You would be told that the system needed to be designed to be safe for commerce or it would never attract investment, that it would need to be controlled and centralized for it to be reliable, that it would need to be monitored to stop it being a hotbed of crime. With the copyright lawyers in the room, you would end up designing something that looked like cable TV or Minitel. The Internet would never get off the ground.

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The Internet is safe now, of course, because it developed so fast that it was a reality before people had time to be afraid of it. But it should give us pause that if we had our current guiding set of policy goals in place, our a.s.sumption that cheaper copying means we need greater regulation, we would never have allowed it to flourish. As Jessica Litman points out, we are increasingly making our decisions about technology and communications policy inside copyright law. We are doing so according to the logic of control that I have sketched out in this chapter. But the logic of control is a partial logic. It blinds us to certain possibilities, ones that have huge and proven potential--look at the Internet.

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The law has not been entirely one-sided, however. The Sony case drew a line in the sand which promised to halt the inevitable drift toward greater and greater control over communications technology by content owners. It turned out the heavens did not fall. Indeed, the content companies thrived. Perhaps that line was drawn in the wrong place; reasonable people can disagree about that. But Grokster smudges the line without drawing a clear new one. If that new line is drawn according to the logic of control, what technologies will we never see? Could they be technologies that would transform our lives as unimaginably as the Internet has since 1995?

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I have described the story line--the cl.u.s.ter of metaphors and images and concerns--that pervades our copyright policy. I labeled it "the Internet Threat." In the next chapter, I discuss an alternative story line, a different way of understanding our current policies. The subject of that story line is the best- known example of contemporary attempts to control the digital world, the Digital Millennium Copyright Act or DMCA.

Chapter 5: The Farmers' Tale: An Allegory 1

Imagine that a bustling group of colonists has just moved into a new area, a huge, unexplored plain. (Again, a.s.sume the native inhabitants have conveniently disappeared.) Some of the colonists want to farm just as they always did in the old country. "Good fences make good neighbors" is their motto.

Others, inspired by the wide-open s.p.a.ces around them, declare that this new land needs new ways. They want to let their cattle roam as they will; their slogan is "Protect the open range." In practice, the eventual result is a mixture of the two regimes.

Fields under cultivation can be walled off but there is a right of pa.s.sage through the farmers' lands for all who want it, so long as no damage is done. This means travelers do not need to make costly and inefficient detours around each farm. In the long run, these "public roads" actually increase the value of the private property through which they pa.s.s. They also let the ranchers move their cattle around from one area of pasture to another. The ranchers become strong proponents of "public, open highways" (though some people muse darkly that they do very well out of that rule). Still, most people want open highways; the system seems to work pretty well, in fact.

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Two new technologies are introduced. First, the automobile is developed. Now thieves can drive through the farmers' fields, stop quickly to grab some corn or a lettuce, and be back on the highway before they can be caught. Of course, the farmers' costs have also fallen dramatically; now they have tractors to work their fields and trucks to take their products to distant markets. The farmers do not dwell on the benefits of the new technology, however. Understandably, they focus more on the profits they could reap if they could get all the advantages of the technology and none of its costs. They demand new legal protections aimed at producing that result. "What's good for agriculture is good for the nation," they say. But now comes the second technological shock--the development of barbed wire. The cost of erecting impa.s.sable barriers falls dramatically. The farmers begin to see the possibility of enclosing all of their land, roads and fields alike. This will help them protect their crops from pilfering, but it will also allow them to charge people for opening the gates in their fences--even the gates on public roads. That is a nice extra revenue stream which will, the farmers say, "help encourage agriculture." After all, more fences mean more money for farmers, and more money for farmers means they can invest in new methods of farming, which will mean everyone is better off, right?

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What is to be done? a.s.sume that each side presents its case to the legislature. There are three obvious possibilities: 4

First, the legislature can simply tell each side to work it out amongst themselves. The law will continue to forbid trespa.s.s, but we are neither going to make it a crime to put up a barbed wire fence if it blocks legitimate public rights of way nor to make it a crime to cut a barbed wire fence, unless the fence cutter is also a trespa.s.ser. The farmers can attempt to enclose land by putting barbed wire around it. Ranchers and drivers can legally cut those fences when they are blocking public rights of way. Trespa.s.s remains trespa.s.s, nothing more.

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Second, the legislature could heed the ranchers' fears that barbed wire will permit the farmers not only to protect their own land, but to rob the public of its existing rights of way, turning open highways into toll roads. (The ranchers, of course, are more concerned with the rights of cattle than people, but most drivers agree with them.) As a result, the state could forbid the erection of a barbed wire fence where it might block a public right of way--cla.s.sing it as a kind of theft, perhaps.

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Third, the legislature could take the farmers' side. Theorizing that this new automobile technology presents "a terrible threat to agriculture, because of rampant crop piracy," the state could go beyond the existing law of trespa.s.s and make it a crime to cut barbed wire fences wherever you find them (even if the fences are enclosing public lands as well as private, or blocking public roads). To back up its command, it could get into the technology regulation business--making the manufacture or possession of wire cutters illegal.

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The state picks option three. Wire cutting becomes a crime, wire cutters are cla.s.sed with lock picks and other "criminals'

tools," and the people who make wire cutters are told their business is illegal. A storm of protest arises in the rural driving community. The wire cutter manufacturers claim that their products have lots of legitimate uses. All to no avail: the farmers press on. They have two new demands. Cars should be fitted with mandatory radio beacons and highways put under constant state surveillance in order to deter crop theft. In addition, car trunks should be redesigned so they can hold less--just in case the owner plans to load them up with purloined produce. Civil libertarians unite with car manufacturers to attack the plan. The farmers declare that the car manufacturers are only interested in making money from potential thieves and that the civil libertarians are Nervous Nellies: no one has anything to fear except the criminals. "What's good for agriculture is good for the nation," they announce again. As the barbed wire gates swing shut across the highways of the region, the legislature heads back into session.

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BETWEEN PARANOIA AND REALITY: THE DMCA 9

I have argued that confusing intellectual property with physical property is dangerous. I stand by that argument. Yet a.n.a.logies to physical property are powerful. It is inevitable that we attempt to explain new phenomena by comparing them to material with which we are more familiar. While the content companies'

tales of "theft" and "piracy" are the most prevalent, they are by no means the only such a.n.a.logy one can make. In this chapter I try to prove that point.

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The Farmers' Tale is my allegorical attempt to explain the struggle over the single most controversial piece of intellectual property legislation in recent years, the Digital Millennium Copyright Act, or DMCA.1 The DMCA did many things, but for our purposes its crucial provisions are those forbidding the "circ.u.mvention of copyright protection systems," the technological measures that copyright holders can use to deny access to their works or control our behavior once we get access. These measures include encryption, controls on how many times a file can be copied, pa.s.sword protection, and so on.

Copyright protection systems are, in other words, the digital equivalent of barbed wire, used to add an additional layer of "physical" protection to the property owner's existing legal protection. But, unlike barbed wire, they can also control what we do once we get access to the property.

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The rules that forbid circ.u.mvention of these systems are logically, if not elegantly, referred to as the anticirc.u.mvention provisions. They are to be found in Section 1201 of the Copyright Act, an ungainly and lumpily written portion of the law that was inserted in 1998 as part of the complex set of amendments collectively referred to as the DMCA.

I will explain the significance of these rules in a moment. My hope is that the a.n.a.logy to the Farmers' Tale will make them a little easier to understand--at least for those of you for whom talk of digital rights management, anticirc.u.mvention provisions, and network effects is not second nature.

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Notice the differences between this allegory and the "Internet Threat" story line I described in the last chapter. There are two sets of bad guys in the Farmers' Tale. The greedy thieves (who are still thieves in this story--not heroes) and the greedy farmers who use a genuine if indefinite "threat" posed by a new technology to mask a power grab. The Internet Threat is the story of an industry devastated by piracy, in desperate need of help from the state to protect its legitimate property interests. By contrast, the Farmers' Tale is the story of a self-interested attempt not only to protect property but to cut off recognized rights of public access in a way that will actually make the whole society worse off. The legitimate role of the state in protecting private property has been stretched into an attempt to regulate technology so as to pick winners in the marketplace, enriching the farmers at the expense of consumers and other businesses. In the long run this will not be good for business as a whole. A patchwork of private toll roads is an economic nightmare.

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That is not the most worrying part of the story: the farmers'

proposals are moving in the direction of regulating still more technology--the mandatory radio beacons and constantly monitored roads conjure up a police state--and all to protect a bunch of hysterical vegetable growers whose political clout far outweighs their actual economic importance.

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Both the Internet Threat and the Farmers' Tale are, of course, ways to understand what is currently going on in the intellectual property wars. In the digital realm, the part of the farmers is played by the content companies, the recording industry a.s.sociations, the movie and software trade groups.

Pointing to the threat of digital piracy, they demanded and received extra legal protection for their copyrighted content.

Unlike earlier expansions--longer copyright terms, more stringent penalties, the shrinking of exceptions and limitations, expansions in copyrightable subject matter--this was not a protection of the work itself; it was a protection of the digital fences wrapped around it, and a regulation of the technology that might threaten those fences.