Thursday, October 31, 2013
Wednesday, October 30, 2013
Tuesday, October 29, 2013
Monday, October 28, 2013
Friday, October 25, 2013
Thursday, October 24, 2013
FSF President Randolph May Testifies in House Hearing on the Evolution of Wired Communications Networks
Yesterday, Free State Foundation President Randolph J. May testified before the House Subcommittee on Communications and Technology. The topic of the Subcommittee hearing was “The Evolution of Wired Communications Networks,” and the object of the session was to discuss proposals on how to best facilitate and complete the transition from copper-based time-division multiplexed ("TDM") services to digital broadband Internet Protocol (“IP”) services. Mr. May testified in favor of a free-market oriented approach to the transition, which would promote continued investment in the new networks, and remove unnecessary roadblocks to development and build-out. Mr. May testified that the FCC should not apply the out-dated public utility-style common carrier model to new IP-based networks: “The FCC and Congress should not look at the inevitable IP-transition just as an opportunity to implement a new free market-oriented regime fit for the digital age. Given the stakes, implementing such a new paradigm should be viewed as a necessity.”
Monday, October 21, 2013
Anyway, it's "A New FCC or Same Old, Same Old Week – In Spades." So, let's get down to work.
Wednesday, October 16, 2013
Thursday, October 10, 2013
A market is truly free when creators and producers can choose whether or not to sell their services or products and can set thesale prices they believe will give them a sufficient return. In a free market, government doesn't tell creators and producers that they must sell their services or products. Nor does government tell creators and producers the prices they must charge for their products or services.
When it comes to copyrighted music, the market isn't that free. Forced access mandates and rate controls are imposed on music composers and performers. Government regulations require copyrighted music be made available for sale. And in many instances, government sets the backstop royalty price that commercial music service providers can pay in order to transmit copyrighted music.
A bill just introduced in Congress would bring some needed free market reforms to federal policy regarding royalties for copyrighted music. H.R. 3219, "The Free Market Royalty Act," removes government forced access mandates and rate controls. Introduced by Rep. Melvin Watts, H.R. 3219 would make the market for copyrighted music more free. Congress should consider this bill or similar bills favorably.
I summarized the case against compulsory licensing and rate controls in my blog post, "Congress Should Make Way for a Free and Disruptive Digital Music Market." There I explained:
[T]he current compulsory licensing and ratemaking regulation for digital music content regulation tends to foster a market environment that is inhospitable to experimentation and to further waves of innovation. Government-prescribed rules constrain or even displace the risk-taking and knowledge-based decisions of diverse market providers. The difficulty is that when regulation prompts providers to forego promising innovations, the opportunity costs to consumer welfare are impossible to measure.
Forced access and rate regulations of digital music are particularly unjustifiable in light of today's market conditions. Long gone are the days when radio and cassette tapes were the only ways to access music. CDs and vinyl are still widely available for music aficionados, along with broadcast radio. But consumers now have ample choice among cable music services, satellite radio, online on-demand services, as well as webcasting services relying on ad-based or subscription models.
A most welcome provision of H.R. 3219 would put an end to Copyright Act Section 114's compulsory licensing. Under the bill, music copyright holders would no longer be required to license their copyrighted music for public performances by commercial music services providers.
H.R. 3219 would also end over-the-air broadcasters' privileged position vis-à-viscommercial music service providers that use different transmission technologies and business models. Current law allows broadcasts of copyrighted music content without any need for copyright holders' mutual agreement.
Instead, H.R. 3219 would authorize broadcasters and non-interactive music services to collectively negotiate with SoundExchange – a common agent for copyright holders – for licenses to perform copyrighted music content. SoundExchange would serve – or rather would continue its existing service – as the collector of negotiated royalties and distributor of payments to copyright holders, featured performing artists and non-featured performing artists. Under the bill, where public radio fails to obtain licensing through negotiation, it would have opportunity to petition the Copyright Royalty Board for a rate proceeding under the "willing buyer/willing seller" standard contained in existing copyright law.
From a free market perspective, one may legitimately question H.R. 3219's provision expressly recognizing SoundExchange as the entity for collective negotiations between music copyright holders and music service providers. One might also question the bill's provision dividing up royalty receipts between copyright holders, featured performing artists, and non-featured performing artists. Keep in mind, however, that in these respects H.R. 3219 carries forward existing law. On balance, the bill is deregulatory in thrust. Where it changes the law, it ultimately does so in a free market direction.
One can hypothesize a future free market reform that goes a step beyond H.R. 3219 and simply allows for collective negotiation by interested parties but stops there. Yet even if H.R. 3219 leaves further reform work to be done, Rep. Watt's bill deserves praise forthe progress it would make towards realizing a truly free market for copyrighted music.
As I wrote in my Perspectives from FSF Scholars paper, "Putting Music Copyright Policy on a Free Market Footing":
Part and parcel of any legislative deliberations regarding reform to the existing music copyright royalties system should be concrete steps to eliminate compulsory licensing and ratemaking in order to finally transition to a free market for music in which copyright holders and users are all treated equally, regardless of the underlying technology involved.
H.R. 3219 succeeds by these standards. It would eliminate compulsory licensing and rate controls for public performances of copyrighted music content by commercial music service providers. And the bill would treat all music services equally.
Wednesday, October 09, 2013
I was pleased to see Derek Slater's blog initiating a series of pieces on the progress of the Google Fiber projects in the Kansas City, Austin, and Provo (Utah) areas, and hopefully elsewhere too. This first piece in this new "Going Behind the Scenes" series is about how Google is trying to work with municipal governments to get the fiber deployments underway without unnecessary delay. As Mr. Slater explains -- and he is someone who knows the challenges -- the main areas of discussion with the cities involve access to existing infrastructure, access to existing infrastructure maps, and expediting construction permits.
The country can benefit from more, faster deployment of high-capacity broadband facilities, and the municipalities need to do their part by streamlining and expediting their legacy processes, wherever possible, to expedite such deployment.
From my perspective Google's entry into the broadband provider marketplace is positive -- as long as other similarly situated broadband providers, such as Time Warner Cable and Verizon and all the rest, can avail themselves of the same local streamlined, expedited processes available to Google.
I think more competition is better, so I'm glad Google is building out high-capacity broadband infrastructure. And Derek Slater and the Google Fiber team deserve credit for leading the way in getting some local governments to reform their processes and for sharing what they are learning the rest of us.
Sunday, October 06, 2013
Thursday, October 03, 2013
Mr. Hurwitz explored whether broadband Internet providers are part of a two-sided market (or could be, absent the FCC rules), and how this factor will affect the development of the broadband Internet market – and ultimately how it affects consumers. He argues that whether ISPs are part of a two-sided market or not, “today’s broadband Internet market is precisely the sort of market in which the FCC’s ‘prophylactic’ approach is inappropriate.” Instead, the broadband Internet market is one in which “we should seek out opportunities to experiment with multisided price structure – and even reward firms for taking the risk of experimenting – in order to maximize the value of the Internet to consumers.” Overall, Mr. Hurwitz finds that the Commission’s Open Internet rules hinder the development of the Internet marketplace and result in harm to consumers.
If you had not had the opportunity to read the full piece, it is well worth exploring this clear and useful explanation of one fascinating element of the Open Internet debate.