Freedom to Tinker

I have gotten several interesting responses to my posting on compulsory licensing of music.

Ernest Miller at LawMeme offers a tongue-in-cheek response. (At least I think it’s tongue-in-cheek.) He says that the same logic that supports compulsory licensing of music would also support compulsory licensing of pornography (requiring everybody to pay a tax to support pornographers).

Adam Shostack offers some good criticisms of compulsory licensing. He writes

The first [criticism] boils down to the ugly details of compulsory licenses. What do those who connection share do? Net cafes? In Pakistan? Do they pay $5USD a month? What can I then do with my music? What if I don’t keep any music that I don’t buy; do I still pay the tax?

Good point. All of these issues would have to be negotiated, and we know the result would be non-ideal. The strongest claim that can be made here is that the existing system has serious problems with compliance and enforcement, and the compliance issues with compulsory licensing, while real, aren’t any worse and might actually be better.

Adam also argues that DRM-style technology regulation, as in the Hollings CBDTPA, would be required to enforce a compulsory license. (He even makes a sharp but good-natured wisecrack about starting up “Ed’s Hit List.”) I disagree with him here. The plan would require collecting a tax on technology devices (or Internet service) but once you paid your tax you would be home free, to do whatever you want with your technology. In my view there would be less call for technology mandates in a world of compulsory licensing.

Finally, Adam writes

The second reason that compulsory licensing is a bad idea is that it freezes progress. In a fairly few years, the labels have moved from no negotiation to PressPlay. We’ve had fascinating ideas about how to reformulate copyright from Jessica Litman. We’re likely to have more. But a compulsory licensing scheme will freeze progress way too early.

Another good point. If we keep blundering along on the current path, we might eventually discover a better solution. A compulsory license would lock us into a poor solution, whose only possible virtue is that it isn’t quite as bad as the current state.

In response to these suggestions, let me just reiterate that I am not advocating compulsory licensing. I wasn’t just being ironic when I said it was a “bad idea” and “hard to stomach.” The fact that it is getting any serious consideration says a lot about the magnitude of our current problems.

On Monday I attended a workshop to discuss compulsory licensing of music. A compulsory license might work like this: a small “tax” is added to the cost of Internet connections and/or computers and/or electronic devices that record and play music. In exchange for paying this tax, everybody gets free access to all the music they want, with no limits on sharing or redistribution. (Napster becomes legal.) The tax revenue is split up among musicians, songwriters, etc., based on how often each piece of music is played (as determined by statistical sampling). The average person would end up paying about $5 a month. (At present, there are no serious compulsory licensing proposals on the table, only a few trial balloons.)

There are plenty of reasons to dislike this proposal. It’s a non-market approach, based on a tax-and-redistribute model. It makes the price of music a political issue, rather than something to be worked out consensually between buyers and sellers. And a politically viable version of it would necessarily lock in much of the economic inefficiency in today’s music business.

Despite all this, compulsory licensing may be a bad idea whose time has come. The conventional wisdom is that compulsory licenses only make sense in markets that are disfunctional; and there is strong evidence of disfunction in the market for music today. Too many customers get their music illegally and refuse to pay; almost all artists are dirt-poor, and even the rich ones tend to see the system as unfair; and the greatest music distribution vehicle ever invented – the Internet – is vastly underexploited. Everybody in the business feels hemmed in and threatened. By all rights, this ought to be the best time in history to be a musician, a songwriter, or a music fan; but the reality is not so grand.

I’m conflicted about this. Philosophically and politically, I find compulsory licensing hard to stomach. And yet I have a nagging suspicion that it’s the only way out of the mess we’re in.