***More Government is not a Good File-sharing Preventative
WASHINGTON
Recent controversies over file-sharing and copyright policy
have spawned hot debate in the courts and the halls of
Congress, but a study issued today by the Cato Institute
argues that government interference in Peer-to-Peer (P2P)
networks would hinder technological evolution. A better
solution, according to the report, would be for government to
step aside and allow the market to find a solution through
digital rights management (DRM).
In “Peer-to-Peer Networking and Digital Rights Management: How
Market Tools Can Solve Copyright Problems,” Michael A. Einhorn
and Bill Rosenblatt illustrate how P2P technology and DRM can
coexist peacefully in a market system, essentially quashing
the complaints of consumer advocates who argue that DRM puts
too much control in the hands of copyright holders.
“By preserving property rights made possible through new
market techniques, DRM encourages producers to innovate
because they are more certain of an eventual reward,” the
authors argue. As evidence, they offer the case of iTunes,
Apple’s pay-per-download music service that launched in 2003.
“The percentage of U.S. downloaders who actually paid for a
song at one point or another increased from 8 percent to 22
percent in the first 12 months after the launch of iTunes,”
they write.
Einhorn and Rosenblatt argue that these market operations are
greatly preferable to government technology controls or
mandatory compulsory licensing schemes for both producers and
consumers. They write that “an overly protective system of
copyright is a detriment in the eyes of consumers who have
grown accustomed to a range of copying capabilities, legally
fair or not.”
Ultimately, the authors conclude that “the government should
act to protect property rights, including copyrights, but it
should not pick winners or discourage any technology from
competing in the new marketplace.”
Policy Analysis no 534:
www.cato.org/pub_display.php?pub_id=3670
Wave Issue 0508 2/25/05 Article 2-01