2. Changing the Network Infrastructure– Threats and Possibilities Alex Alben Nobember 6, 2003

3. PRESENTATION NAME Page 2 The Old Wide World of Global Media

4. PRESENTATION NAME Page 3 Is the Old Distribution Model Broken? Moving toward 1 billion Internet enabled users around the world– with at least 30% enabled to access audio-visual media. Digital Media distribution across borders breaks the territorial model that has prevailed for over 100 years. Consumer identity is “territorial” and emphasizes different legal regimes: U.S. vs. EU vs. China

5. PRESENTATION NAME Page 4 Have the Pirates Won? Industry estimates of losses due to Conventional Means of Piracy: Film-- $3 Billion annual (MPAA) from $40 Billion revenue Music-- $4.2 Billion annual (RIAA/IFPE) from $32 Billion global revenue Software-- $13-15 Billion annual (BSA/SIAA)

6. PRESENTATION NAME Page 5 Today’s Legitimate Marketplace: Category Books Music Video Streaming Services Ease of Use yes no yes Privacy Trusted Sellers maybe Price Point Perceived Value no maybe

7. PRESENTATION NAME Page 6 Goals of the DMCA Make the Internet safe for digital distribution of valuable IP (music, movies, software programs). Harmonize American law with Berne Convention. Preserve the “copyright balance” in a new medium.

8. PRESENTATION NAME Page 7 The DMCA in Practice

9. PRESENTATION NAME Page 8 DMCA in Practice– The Good The Safe Harbor for ISP’s –Legacy of the Netcom case– “Notice and Take Down” –Has worked well in the ISP context Proper enforcement of the DMCA –RealNetworks v. Streambox RIAA vs. Verizon –User privacy vs. DMCA subpoena power

10. PRESENTATION NAME Page 9 DMCA in Practice– The Bad Free Speech and the DMCA: –The DVD-CSS distribution cases –How do you stop redistribution of a tool that does bad things without also controlling linking? The DeCSS Hack –Prosecution in Norwegian court –Economic harm? –Pointed out interoperability issues

11. PRESENTATION NAME Page 10 DMCA in Practice– The Ugly Internet Radio Royalties: –Process took three years to reach a result –Rates for Internet radio 7-10 times higher than performance rates for terrestrial radio –CARP process is broken Unexpected uses of the DMCA: –Lexmark v. Static Control, Skylink v. Chamberlain –Was the DMCA meant to cover any product that could be wrapped in a technical protection measure?

12. PRESENTATION NAME Page 11 Two Visions of Fair Use The Valenti School: The anti-circumvention rules stand apart, because distribution of a circumvention tool under a “fair use” safe harbor would lead to wide-spread disregard for copy protection. The Boucher School: The anti-circumvention rules should be subject to a fair use test, allowing consumers to selectively break protection measures as long as their underlying behavior is legal.

13. PRESENTATION NAME Page 12 The Future Legislative battle over meaning of “fair use” will continue. Sony “non infringing use” test will not be used to shut down peer-to-peer technologies. Expansion of the DMCA to aftermarket products must be curtailed. Online– piracy will only decline when legitimate services offer equivalent products

14. PRESENTATION NAME Page 13 The New Wide World of Digital Media