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« In the wake of Grokster, is BitTorrent bulletproof? | Main | A proposed new US copyright model »

August 27, 2004

Comments

In responding to Judge Posner's comment, I estimated 25,000,000 users with 500 suits a year at an average cost of $5000 per suit (similar results to your estimation). I lowered both numbers because (a) its unclear how many non-trivial users of P2P there are in the wild, (b) I'm assuming most accused people will simply settle up front for a few thousand dollars given the paucity of reasonable defenses (wasn't my IP, open WIFI connection, unauthorized user/hacker, fair use, or your copyright is invalid or even more unlikely, unenforceable) to copyrighted file sharing under modern U.S. copyright law.

I do not believe its possible to change the network externalities as to make the potential costs outweigh the benefits (at least without adding ISP liability back into the mix or changing the structure of the internet) because of its international nature. DeCSS will always be available from non-DMCAish countries. File sharing will always be available outside US and European borders, and IP based geographical discrimination is a weak enforcement mechanism at best.

But I digress.

I agree with you that copynorms are different for the new generation. For pretty much everyone (including a suprising number of IP lawyers) under 30, the copyright norms are substnatially different than the copyright law, perhaps because we are the first generation that has grown up with copyright law interfering and intervening in our daily lives. People literally feel the dead weight loss from paying for obviously overpriced music licenses, and the FTC has repeatedly confirmed these concerns. People feel frustration when they can't copy their legal music to the "wrong" portable player, or to CD.

The result of a civil campaign will be ineffective. The results of a criminal campaign -- unless very selective -- will be disasterous because it will cause exactly the type of political backlash that neither the industry nor the DOJ wants.

I still maintain the best solution is a "speeding ticket for the internet." If caught, you get a small fine (but greater than the cost of legal downloading), processed administratively but with defenses available. The economics of this work out much better: If there are 25,000,000 file sharers, and 10% of them -- 2,500,000 -- get tickets for $500 each, then the average cost per sharer is now $50. Suddenly, casual sharing isn't valuable anymore but larger sharers won't be moved. Of course, when you look at this type of system and juggle the numbers what you've actually created is a CARP-style universal royalty that is payed by "lottery" of who gets a ticket rather than by RAND licensing. So maybe we're back where we started and we should all go back to playing music on LPs, or better yet, player pianos. In either case, the present situation of suing kids in federal court or sending the DOJ after kids like they were mobsters or terrorists is ridiculous and risks altering the copynorms for a larger population.

Professor Solum, you bring up the free rider problem and ask why P2P users share at all. You're right on target with your idea of the social norms of the P2P community encouraging users to share. The subculture of P2P has its own mechanisms for policing users and persuading them to share. A few examples:

1. Back in the "old days" of pirate FTP sites or direct-dial BBS systems (pre-Napster), users who wanted access to the community's library of files were often required to upload some unique files themselves. A ratio system is common, for example a user is allowed to download 20MB of files for every 1MB uploaded. Actually, even today some segments of the sharing community enforce mandatory user contributions. The Justice Department's high profile raids on August 25 dealt with a Direct Connect private network that required users to share a set amount if they wanted access to the network's files.

2. Peer (to peer) pressure. Contempt from fellow users for "leeching" is widespread among the high-tech crowd. Message boards and chat rooms reinforce the social message - we like people who share, we will not accept you if you don't share. Even the websites and documentation of P2P applications themselves plead with users to be good citizens in the sharing community by uploading to others. Kazaa users who adhere to the principle that sharing is good/leeching is bad have been known to check for available files from a user who attempts to download from them. If the user is not sharing any files, they will be cut off and/or blacklisted.

3. New applications of technology require users to upload as an inherent condition of using the P2P system. BitTorrent is the classic example. To download a file, the technology requires simultaneous uploading of pieces of the same file. BitTorrent also has an incentive system - users receive higher download speeds in direct proportion to the amount of upload bandwidth they are willing to use to share with others. If everyone uploads, everyone gains. Users have a technological incentive to share. See my post on the Copyfutures blog for my detailed view of the BitTorrent technology.

Finally, we can use an economic view to figure out why P2P users share when they could freeload. I am not discussing the more general economic question of whether to use P2P or not (risk of getting caught and penalized vs. benefit of downloading). I'll leave that interesting topic for others to discuss.

My specific point as related to economic analysis is that we can gain insight into why people who have already made the decision to use P2P don't freeload. The user believes that the cost of sharing some files is less than the expected beneifts of being a part of the file sharing community. Among other things, costs include storing files, ripping songs from CDs, taking the time to put the files in a public directory, giving the files coherent names, and suffering slower internet speeds due to use of bandwidth for uploading. Perhaps the benefit comes from getting access to more material (the ratio system discussed above), maybe it comes from making friends (or conversely, not making enemies) in the community who will be sources of future files, or maybe the benefit is just the intrinsic pleasure of sharing.

Given that the P2P user base has ballooned from what it used to be (in the days of BBS, Hotline and others), we are now faced with millions of Americans who think P2P is okay. At least it's acceptable enough that the social norm is that P2P users are still "good people" unlike murderers, rapists and the like.

It seems that the record industry should be against criminal prosecutions. Why? There's a likelihood that criminal prosecutions will fail.

Given the large P2P user base, and that the social norms do not align with copyright law, many Americans are unlikely to see prison time and/or large fines as appropriate sanctions... especially when the defendant is in grade school. We saw this when the RIAA's suits targeted children. And the cases settled. Why?

First, as a defendant, it isn't worth fighting. You have the RIAA and all of their lawyers versus the little guy. Most little guys know they don't stand a chance. Besides, settling for a few grand is cheaper than hiring a defense attorney.

But another danger in letting the case go to trial is that the RIAA might lose (hence, the RIAA is also willing to settle). Even if the record companies prove their cases, but the danger of jury nullification is growing at the same rate that the P2P networks are growing. The RIAA is facing a situation where there may be several jurors on a panel who's norms don't agree with the law. And many of them might be sitting in that box thinking about what they (or their kids) do online. In their minds, they'll take a few logical steps and visualize themselves in the defendant's chair.

This danger grows by leaps and bound when you consider criminal sanctions. You only need one juror to say "not guilty" and the case is over. Again, given the current copy norms, this is likely, especially if the jurors begin to consider the fact that a P2P user may end up with a harsher sentence than a rapist. Jury nullification could become the next form of civil disobedience.

When the first jury returns a "not guilty" verdict, it will hit the news, and it will hit hard. The evening news will make people realize they can deviate from the judge's instructions without a trip to the Star Chamber. If the momentum grows and juries refuse to convict, the whole concept of criminal prosecution will backfire. P2P users will be content knowing they no longer face criminal prosecution because their peers will never convict. After all, the the P's in P2P are the same P's that make up our jury pools.

(And so, we need to make sure we are careful in choosing our first defendants!)

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