Ole, a Canadian independent record label, put forward an often-heard and much disputed proposal to enhance record label revenues: Ole wants ISPs to surveil Canada’s digital networks for copywritten works. In the record label’s filing on July 12 for the Digital Economy Consultations, entitled “Building Delivery Systems at the Expense of Content Creators,” Ole asserts that ISPs are functioning as “short circuits” and let music customers avoid purchasing music on the free market. Rather than go to the market, customers are (behaving as rational economic actors…) instead using ISP networks to download music. That music is being downloaded is an unquestionable reality, but the stance that this indicates ISP liability for customers’ actions seems to be an effort to re-frame record industries’ unwillingness to adopt contemporary business models as a matter for ISPs to now deal with. In this post, I want to briefly touch on Ole’s filing and the realities of network surveillance for network-grade content awareness in today market. I’ll be concluding by suggesting that many of the problems presently facing labels are of their own making and that we should, at best, feel pity and at worst fear what they crush in their terror throes induced by disruptive technologies.
Ole asserts that there are two key infotainment revenue streams that content providers, such as ISPs, maintain: the $150 Cable TV stream and the $50 Internet stream. Given that content providers are required to redistribute some of the $150/month to content creators (often between 0.40-0.50 cents of every dollar collected), Ole argues that ISPs should be similarly required to distribute some of the $50/month to content creators that make the Internet worth using for end-users. Unstated, but presumed, is a very 1995 understanding of both copyright and digital networks. In 1995 the American Information Infrastructure Task Force released its Intellectual Property and the National Information Infrastructure report, wherein they wrote;
…the full potential of the NII will not be realized if the education, information and entertainment products protected by intellectual property laws are not protected effectively when disseminated via the NII…the public will not use the services available on the NII and generate the market necessary for its success unless a wide variety of works are available under equitable and reasonable terms and conditions, and the integrity of those works is assured…What will drive the NII is the content moving through it.
Of course, the assertion that if commercial content creators don’t make their works available on the Internet then the Internet will collapse is patently false.
As written about by Middleton in “What if there is no killer application?“, an early study in Littleton about how individuals use high-speed networks in the mid-90s found that customers were most engaged with amateur content production (i.e. that of their neighbours) and entranced by the communicative possibilities made available through broadband (i.e. e-mail and mailing lists). In essence, from this we can suggest that the empirical study demonstrated that the ideological and financial values placed on commercial cultural artifacts by bureaucrats and commercial content producers is less obvious than they (loudly) state. Further, the value of commercial content is arguably diminished even more in an environment where people spend increasing amounts of time engaging with the generative elements of the Internet, often referred to as amateur-dominated social media environments. In essence, the undertone that ISPs can only sell their data transmission services because of commercial content is at the very least shaky, and more likely to be empirically unsupportable if posed as a strong correlation between the value of transmission capabilities and commercial content availability.
Depressingly, Ole believes that a broadcast-based (historical) business model should be imposed on ISP transmission-based companies in an effort to regenerate the value of their (now somewhat devalued) intellectual properties. Specifically,
The ISP business model for the Internet could and should mimic that of Cable/ TV. Modern technology allows the ISP to identify what content is being used and then they can allocate the appropriate share to the creator or supplier of that content.
This would put ISPs in the situation of somehow being liable to the collection societies, and also require substantial telecommunications investment in labour and sunk capital to establish an (ineffective) network surveillance policy designed to monitor the amount of copywritten content flowing across Canada’s networks. Most likely, such a proposal would turn ISPs into content police and require the use of some kind of packet inspection equipment to survey Canadians’ data traffic, pick out that which is believed to be infringing, and pay some kind of monthly tax for the transport of customers’ content. This amounts to a suggestion that ISPs become content police on the basis that only by doing so would they evade being identified as encouraging copyright infringement. Ole is intimating that ISPs must implement surveillance one the networks if they are to avoid third-party liability.
There are systems on the market that claim they can analyze data traffic to develop ‘piracy’ indexes. CView is used by Virgin in the UK (though we’ve no idea how effective it is) and Audible Magic has been successful in forcing some ISPs and campuses to adopt their technology. In most cases, such content analysis technologies require the offloading of data traffic suspected of being infringing in high-traffic networks, doing a one-way hash of the data, checking the hash against known copywritten files’ signatures, and then aggregating the overall amount of infringement and particular cases of infringement on a per-file basis. This is substantial overhead for any party, especially one that is just trying to move data from one place to another. Moreover, any such massive dragnet analysis of content raises real questions of whether ISPs could then be considered ‘transport’ facilities; while presently there is substantial monitoring for particular protocol types, Canadian ISPs are not searching for particular content-types. This is an important distinction, insofar as ISPs can understand what application-types are generating traffic on their networks but not what those application-types are actually being used to transmit and receive. For all Canadian ISPs know, Canadians might have some strange obsession with massive downloading and sharing of Linux .ISO files and the entire Canadian population actually avoids downloading copywritten music.
There continue to be doubts concerning whether any kind of massive copyright-analysis engine could work – prominently by companies that actually sell the solutions and those that would be responsible for deploying these fears – and further whether such engines could ever competently detect fair use/fair dealing of some material. YouTube’s algorithms are relatively notorious for censoring uses of copywritten material falling under fair use and fair dealing provisions; what guarantee do citizens have that any algorithmic surveillance and monitoring system deployed on communicative networks would avoid the YouTube problem? Should the content creator-owner get restitution for fair dealing of works? How would this be adjudicated – by determining where the data was to and from (i.e. if to an educational institution, we must assume that it’s for fair dealing research purposes) or on a case-by-case challenge basis? Moreover, doesn’t the provision of funds for fair dealing uses modify the provisions of fair dealing, insofar as content creator-owners would receive a fiscal benefit even for fair dealing whereas presently fair dealing falls outside of their revenue traps?
Of course, even the suggestion that Canadian ISPs should be required to cough up money to content creator-owners is absurd in the face of a recent Federal Court of Appeals ruling that asserted that ISPs are not broadcasters. The question of ISPs’ status was punted to the Court by the CRTC, who wanted judicial guidance before it proceeds to determine whether ISPs can be legally required to establish copyright levies. Since ISPs fall under the Telecommunications, and not Broadcasting Act, they are seen as solved involved in providing,
the mode of transmission, they have no control or input over the content made available to Internet users by content producers and as a result, they are unable to take any steps to promote the policy described in the Broadcasting Act or its supporting provisions. Only those who “transmit” the “program” can contribute to the policy objectives.
Under this decision, so long as ISPs are not involved in discriminating against any particular content and thus making an input into the content made available on the Internet to and by users (i.e. so long as Canadian ISPs adhere to a form of network neutrality), any levy-based system is dead. The very system that Ole is advocating for has already fallen before the Court of Appeals.
Now, out of all of this, we might be expected to feel poorly for the content creator-owners that depend on selling and licensing content for their commercial success. I think that if we look at the history of these companies’ digital involvement, however, we quickly disenchant ourselves of this position. Major labels refused to license recordings to Napster and subsequently engaged in what Jessica Litman refers to as a process of “suing upstart new businesses into bankruptcy” to try and stem the Internet as a disruptive factor in their businesses. This saw content creator-owners financially assassinate Napster, Scour.com, iCraveTV, RecordTV, mp3.com, Aimster, Grokster, Streamcast, KaZaA, and others. Authors have gone after Google for the mere action of scanning books for search index purposes, a purpose that would enable authors to sell additional texts when the texts appeared through a Google book search. That the copying a text, even for fair-use purposes, is grounds for massive legal obstruction speaks volumes of content creator-owners general willingness to genuinely deal with the digital reality they are immersed in. Broadly, instead of working to establish a marketplace for digital manifestations of content creator-owner works there have been, and continue to be, mass efforts to shut down marketplaces that don’t grant total control to content owner-creators and their associated companies. As such, customers have become used to going to illicit sites that offer superior selection with fewer restrictions than label offerings. This indicates a failure in big content’s rent-seeking business model and the truth that modern customers are rational economic actors. It does not indicate that ISPs are somehow required to prop-up a rent-seeking model, nor a moral deficit on the part of customers.
Labels were, and remain, in a state of ontological insecurity that accompanies their plunging into a decade-long existential crisis: how can they maintain their rent-seeking behaviour in the face of disruptive technologies. Answers to this existential question are out of reach of most companies on the basis that their perception of the world markets preclude taking risks that could see a (necessary) cannibalization of short-term revenue streams for long-term survival. Unfortunately, while adherence to historical models was effective last decade in colonizing their futural existences – in assuring them of how to approach the world and guarantee particular revenue streams – that old model leaves them grasping at new rent-seeking behaviour instead of adopting novel business strategies. While we can all appreciate just how devastating existential crises can be on a personal level, when we consider the multi-billion dollar record industry we tend to have far less sympathy. Just as you or I are unable to let a crisis linger for a decade – we go to a therapist, get straightened out, and get back on our way – neither can these companies. At best we might feel pity as we watch them wallow in their crisis. At worst, we fear what they might crush as they roll around on the ground like starving dinosaurs and demolish other elements of civil society in their throes of panic and fear aimed at extinguishing the generativity seen as endangering their ontological security. They’ve already made a mess of copyright and cultural transmission possibilities; let’s hope they don’t damage the conditions of democratic communication itself while they’re working out their problems.