From 13 May BUSINESS WEEK:

Lawrence Lessig: The “Dinosaurs” Are Taking Over

If the media giants have
their way, the Net freedom fighter says, content will be rigidly controlled
and innovation stifled

Who should control the Internet?
If Stanford University law professor Lawrence Lessig is right, the Internet
will soon belong to Hollywood studios, record labels, and cable operators
— corporate giants that he says are trying to cordon off chunks of the
once-open data network. Lessig’s mission is to stop them. At age 40, he’s
already the Net’s most famous freedom fighter. Since 1995, he has been
a seminal thinker on many of the Digital Age’s most important battles —
the AOL-Time Warner merger, Napster, and the Microsoft antitrust case.

In his latest book, The Future
of Ideas: The Fate of the Commons in a Connected World, Lessig argues that
imminent changes to Internet architecture plus court decisions that restrict
the use of intellectual property will co-opt the Net on behalf of Establishment
players — and stifle innovation. On Apr. 29, Lessig spoke with BusinessWeek
Online Technology reporter Jane Black about what he sees as some disturbing
trends. Here are edited excerpts of that conversation:

Q: You argue that the Internet’s
popularity as a new medium is a result of its open architecture. How do
you see this changing? And are the changes a threat to e-business?

A: There are two places
where it’s changing. One is at the physical level of the network. As we
move from narrowband to broadband [access to the Net], broadband operators
are developing technology that gives them control over applications and
content on the network.

    Cable
companies, for example, have a view of what the network should be used
for. And they’re beginning to pick and choose what kinds of content will
flow quickly as a way of favoring — or not favoring — content providers.
For instance, perhaps cable companies can make it more difficult [for Web
sites] to use streaming video if that interferes with their video business.
It’s your father’s AT&T all over again: They, not the user, decide
what the network should be.

Q: What’s the result of a
controlled network?

A: The cost of innovation
goes up significantly. Before, you just had to worry about complying with
basic network protocol. Now you have to worry about making your program
run on the full range of proprietary systems and devices connected to the
network. Before, the network would serve whoever and whatever people wanted
it to. Soon, you will need the permission of network owners.

    Think
about other platforms in our lives, like the highway system. Imagine if
General Motors could build the highway system such that GM trucks ran better
on it than Ford trucks. Or think about the electrical grid. Imagine if
a Sony TV worked better on it than a Panasonic TV. The highway and electricity
grids are all neutral platforms — a common standard that everyone builds
on top of. That’s an extraordinarily important feature for networks to
have.

Q: And the second change
that threatens e-business?

A: Dominant media is a huge
threat. [Record labels and Hollywood studios] make their money because
of the control they assert over the production and distribution of artists’
work. In the music business, a handful of companies control more than 80%
of the music in the world. These companies control not just distribution
but a market where artists have to sell their souls to a record label just
to have a right to develop music that can be distributed.

    That’s
the model for the last century. The economic reasons that might have justified
that tightly controlled structure have disappeared. The Internet can support
much greater competition in production and distribution than [is possible
with] the dominant five companies. The record labels have launched lawsuits
against every company that has a model for distributing [music and entertainment]
content they can’t control. That has sent a clear message to venture capitalists:
Don’t deploy a technology that we don’t approve of, or we will sue you
into the Dark Ages.

    The result
is that the field has been left to dinosaurs. There would have been more
chips, computers, and devices to deliver content if Congress had been more
keen to allow innovation to occur. We’ve given
control over the future to exactly the wrong people. And before
we know it, the possibility for innovation will have disappeared.

Q: Why is it so difficult
to head off these moves?

A: One reason is that Washington
surrounds itself with the same people all the time — [Motion Picture Association
of America President] Jack Valenti and [Recording Industry Association
of America President] Hillary Rosen. They’ve succeeded in making Washington
believe this is a binary choice — between perfect protection or no protection.
No one is seriously arguing for no protection. They are arguing for a balance
that avoids the phenomenon we are seeing now — one where the last generation
of technology controls the next generation of industry.

    In fact,
there are lots of solutions that would promote innovation. For example,
Congress could do what it has always done — establish a flat compulsory
licensing fee [such as the one radio stations pay to music publishers for
playing their songs] so that any company can compete in the marketplace.
That’s what Napster [the free-music sharing Web site the recording industry
sued out of existence] asked Washington for all along — a compulsory license.
That could deal with 80% of the problem of existing content.

    But these
solutions are never recognized because, while the future under perfect
competition would produce an industry with much greater income to artists
and greater opportunities to consumers, the fact is that the concentrated
players are going to lose.

    The
problem is, we’ve given control of the future to the people who will lose
even under the best possible plan. It’s like giving the communists
control over the future of the new Russia. Congress continues to have them
come down and testify. And they step forward and say they want communism
to be protected for the next 100 years.

Q: The current debate over
Web radio is a good example. New fees that the U.S. copyright office has
mandated threaten to put small Webcasters out of business.

A: Web radio is a perfect
example. In the course of its testimony before the CARP hearings [the Copyright
Arbitration Royalty Panel, the government group responsible for setting
compulsory license fee for Webcasters] the RIAA argued that higher rates
would reduce the number of competitors to four or five big players. That’s
their model: To wipe out diversity and get back to a place where only a
few people control delivery.

    I understand
why they want that. But I don’t understand why Congress is giving it to
them. And it’s not just the fees that are ridiculously high — it’s the
data collection that has been mandated [by CARP and is awaiting approval].
If the RIAA has its way, Webcasters would have to report every song that
every listener heard. In essence, it asks to create a national police state
of music listening by forcing Webcasters to collect data and turn it over
to copyright holders. My question is: Why? It kills competition and the
development of niche markets. This is a classic example where the legal
process is being used to destroy creativity and innovation.

Q: What should Washington
do?

A: First in context of copyright,
Congress should pass low fixed compulsory license fees for distribution
of [music and entertainment] content on the Web. Those fees should not
be tied to reporting every usage on the Web. They should be determined
the same way they are now for radio — according to a sampling that gives
some idea of what music is being played.

    Second,
Congress should repeal the 1998 DMCA [Digital Millennium Copyright Act,
which, among other things makes it a crime to circumvent copyright-protection
technology]. We have no reason to believe that the market won’t work well
enough to prevent abuse. We don’t need the federal government threatening
prosecution.

    Finally,
Congress needs to not pass new legislation, like the [recently introduced]
Hollings’ bill that would mandate a police state in every computer [by
requiring that copyright-protection mechanisms be embedded in PCs, CD players,
and anything else that can play, record, or manipulate data]. (See BW Online,
3/27/02, “Guard Copyright, Don’t Jail Innovation.”)

Q: Do we need a new definition
or vision of copyright and intellectual property in order for e-business
to move forward?

A: We don’t need a new vision.
We just need to recognize what the traditional vision has been. The traditional
vision protects copyright owners from unfair competition. It has never
been a way to give copyright holders perfect control over how consumers
use content. We need to make sure that pirates don’t set up CD pressing
plants or competing entities that sell identical products. We need to stop
worrying about whether you or I use a song on your PC and then transfer
it your MP3 player.

COURTESY I. ROGERS!