July 15, 2024

Archives for December 2004

Holiday Hiatus

I’m taking a holiday break from blogging. I’ll be back in early January.

When Is a "Network" Not a Network?

Last week, in response to the MPAA lawsuits against BitTorrent trackers, I wrote that it’s impossible to sue BitTorrent itself, because it is nothing but a communications protocol. Michael Madison was skeptical, which was a fair response given what little I had written on the subject. Let me say a bit more, to clarify.

Opponents of P2P technologies often make the rhetorical move of calling the thing they oppose a “network.” The word carries connotations – especially for nonexperts – of a physical contrivance that is operated by some organization. Think of the old phone system, or the electrical power grid. Somebody has to build and manage all that equipment. The implication is that there is somebody in charge who can supervise the use of the network. Read the plaintiffs’ briefs in the Grokster case and you’ll see many references to a “network” that is “operated” by the defendants.

Computer scientists sometimes use the word “network” to refer to something more virtual. Others are now using “network” in this sense, as when people talk about the social network of friendships among the residents of a small town. Nobody owns and operates the social network. There is nobody you can sue to shut it down, because it’s not a network in the same sense the power grid is.

A communications protocol is an agreement or convention about how computer systems can cooperate to accomplish some task. It isn’t owned or operated by anybody. (People might own copyrights or patents relating to a protocol, but let’s set aside that possibility for now.) There’s a sense in which English or any other human language is a kind of protocol that people use to cooperate with each other. Again: nobody owns, operates or controls the English language, and there is nobody you can sue to shut it down. This isn’t to say that you can’t punish misuses of English, such as fraud or criminal conspiracies that use the language; but punishing misuse is not the same as attacking the language itself.

Given a lawsuit about a particular technology, how can we tell whether that network is more like the power grid or more like a social network? Here I think the Grokster courts have gotten it right. Rather than arguing over what is a “network,” or what “network” means anyway, they looked at the nature of the technology and the defendant’s control or influence over it. That is, as lawyers say, a fact-intensive inquiry.

The MPAA, in suing the operators of BitTorrent trackers rather than trying to attack the BitTorrent protocol itself, seems to be recognizing this distinction. That in itself good news.

P2P in 15 Lines of Code

TinyP2P is a functional peer-to-peer file sharing application, written in fifteen lines of code, in the Python programming language. I wrote TinyP2P to illustrate the difficulty of regulating peer-to-peer applications. Peer-to-peer apps can be very simple, and any moderately skilled programmer can write one, so attempts to ban their creation would be fruitless.

For more information about TinyP2P, see http://www.freedom-to-tinker.com/tinyp2p.html.

MPAA Sues BitTorrent Trackers

The MPAA has announced lawsuits against the operators of P2P index servers, such as BitTorrent trackers, according to a Wired News story by Xeni Jardin.

A BitTorrent tracker keeps track of who is downloading and/or uploading a particular file, and makes this information available to others who want to find the file. The suits will presumably allege that the person running the tracker knew that the people downloading the file were infringing, and knew that the tracker was facilitating those illegal downloads, and yet the person ran the tracker anyway.

Previously, copyright owners had considered suing the operators of Kazaa supernodes, which also provide index information. As I wrote previously, suing supernode operators would have been a bad idea, because ordinary user machines silently volunteer to be supernodes, often without their owner’s knowledge. It’s one thing to sue somebody for setting up an index for a given file; it’s another thing entirely to sue somebody who didn’t even know that his machine was providing index information.

The good news is that we seem to be avoiding the worst-case scenario, which is a blanket lawsuit trying to shut down BitTorrent entirely. Such a suit would be unwarranted, as there is nothing about BitTorrent’s design that seems aimed to facilitate infringement. BitTorrent is designed to allow efficient distribution of large files. If that by itself were enough to get somebody sued, then things would be pretty bad.

Of course, it’s hard to see how one could sue BitTorrent. How do you sue a communications protocol? You can sue the person who designed the protocol, but the protocol itself can’t be undesigned. Nor can the technical community unlearn the lessons it has learned.

Should the U.S. Allow Region Coding?

On Friday I wrote about DVD region coding, which allows the manufacture of DVDs that (in theory) can only be played in certain regions of the world. U.S. public policy, in the form of the Digital Millennium Copyright Act (DMCA), plays an important role in shoring up the region coding mechanism. Is this good public policy? Should the U.S. want DVDs to be region coded?

Let’s look at the economic effects of region coding. These days, the main effect is to allow the studios to price discriminate by selling the same DVD at a different price in the U.S. than overseas. Generally, we can expect the U.S. price to be higher – let’s assume the price is Pu in the U.S. and Po overseas. If it weren’t for region coding, this differential pricing would be hard to sustain, because people could buy DVDs cheaply overseas and resell them in the U.S. Region coding prevents this kind of reimportation.

(Similar issues arise in the debate over drug reimportation, where we also see U.S. producers wanting to price discriminate, and reimportation posing a threat to that price discrimination strategy. The drug reimportation issue is more difficult – there, policy decisions take on a moral dimension, because drug pricing is literally a life and death issue for some patients.)

If region coding were abolished, then the U.S. price and the overseas price for a DVD would equalize, at a level below the current U.S. price and above the current overseas price. The studios could no longer price discriminate, and so would be worse off. U.S. consumers would be better off – they would spend fewer total dollars on DVDs, and would get more DVDs for those dollars. Overseas customers would see a price increase, and so would be worse off. Total welfare would decline, with the gains of U.S. consumers outweighed by the losses of U.S. studios and overseas consumers.

But we shouldn’t expect U.S. policy to care much about the welfare of overseas consumers. And if we focus only on the impact on U.S. people and companies, then region coding doesn’t look nearly as good – it looks like a deliberate policy of boosting DVD prices in the U.S. Indeed, region coding acts just a like a tariff of Pu-Po dollars on each reimported DVD. If we didn’t have region coding, would Congress enact such a tariff? I doubt it.

(Note: My analysis above assumes that all movie studios are located in the U.S., so that the U.S. economy captures all of the producer-side benefits of price discrimination. If overseas studios use region coding to boost their prices in the U.S., this hurts U.S. consumers while providing no countervailing U.S. benefit, so region coding looks even worse.)

(Another note: Some readers may object that the U.S. shouldn’t be so selfish as to ignore the welfare of people outside its borders. Point taken. But surely you would agree that, whatever level of U.S. aid to the world community is appropriate, that aid should be used to attack a problem more pressing than the high price of DVDs.)