December 7, 2006

Pushback Over DMCA Exemption [7:16 pm]

Company Sues Over Cell Phone Rule - pdf

The country’s largest provider of pay-as-you-go mobile services is suing the federal government over a recent ruling that allows people to disable the software that locks cell phones to a particular carrier.

Tracfone Wireless Inc. contends the new exemption to copyright law would make it more difficult to crack down on people who disable the locks and sell the phones at a profit overseas. The complaint, filed Tuesday in U.S. District Court in Florida, seeks to force the U.S. Copyright Office to eliminate the exemption it announced last month.

[...] In most cases, federal law bars people from attempting to break electronic mechanisms for enforcing copyrights. The Library of Congress allowed the exemption at the urging of groups that say companies such as Tracfone are stifling competition and hurting the environment because many of the phones would otherwise be thrown away.

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A Little Overstated, Maybe…. [6:46 pm]

Or maybe not: China’s virtual currency threatens the yuan - pdf [via Salon's How The World Works]

As if Chinese leaders did not have enough of a headache trying to manage the country’s rising but still undervalued currency in the testy world of international trade, now the growing popularity of virtual money enters the already complex equation.

The so-called “QQ” coin - issued by Tencent, China’s largest instant-messaging service provider - has become so popular that the country’s central bank is worried that it could affect the value of the yuan. Li Chao, spokesman and director of the General Office of the People’s Bank of China (PBOC), has expressed his concern in the Chinese media and announced that the central bank will draft regulations next year governing virtual transactions.

Public prosecutor Yang Tao issued this warning: “The QQ coin is challenging the status of the renminbi [yuan] as the only legitimate currency in China.” In an article published recently in the Nanfang Daily, the prosecutor wrote that the central government would act to “limit the application of QQ coins” and assure that their use is restricted to the virtual world.

Tencent argues that Yang and the PBOC are overreacting, and some Internet analysts agree. Nevertheless, there is no question that the virtual-currency trend is catching on in China, and the endgame is unclear.

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OT: For Readers of Cadillac Desert [11:51 am]

Or lovers of Chinatown: In Owens Valley, water again flows - pdf

The event marked a brief detente in historic water wars that have boiled in the Owens Valley since the early 1900s, when Los Angeles city agents posed as ranchers and farmers to buy land and water rights in the valley. Their goal was to build an aqueduct that would help transform Los Angeles into a metropolis.

The stealth and deception became grist for books and movies that portrayed the dark underbelly of Los Angeles’ formative years.

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CNN Pushing The Copyright Maximalists’ View [7:58 am]

A student passed this on to me (thanks, Shirley!) (sorry, I’ve been laid low by the brutal cold that seems to be rampaging through MIT this month) — looks like the UK is not going to kowtow to the copyright maximalists when it comes to music copyright terms: Aging rockers set to lose copyrights - pdf

When British finance minister Gordon Brown stands up to make his pre-budget speech next week, aging rockers Cliff Richard, The Beatles and The Rolling Stones might do well to tune in.

Not normally the stuff of rock’n'roll, Wednesday’s address looks set to reject music industry calls for an extension of copyright on sound recordings to 95 years from 50, meaning veteran acts’ early hits could soon be free for all to use.

[...] David Arnold, who composed the scores for four James Bond movies, argues that the 50-year copyright limit discriminates against performers and record companies.

“I don’t think anyone involved in music’s creation can understand how, after a certain amount of time, it stops being yours and starts being everyone else’s,” he told Reuters.

“We need to do the groundwork so there is an element of protection for artists and record companies who take a risk with an artist,” he added. “That’s if we value the entertainment industry and value music in our society.”

Richard has said he would like to see copyright protection for singers and record labels extended, pointing out that songwriters enjoy protection for their lifetime plus 70 years.

In the United States, copyright protection is 95 years.

Industry bodies like the British Phonographic Industry (BPI) argue that the failure to extend protection on old hits will jeopardize investment in future talent.

Puh-leeze!! We all know the marginal value of a discounted cashflow (see the Eldred discussions). At a discount rate of 5%, the difference between the NPV of a fixed cash flow of 50 years and 95 years is 7.83% (by the way, the difference between the NPV of 50 years and a perpetual cashflow is 8.72%).

So here’s the question — if we believe that copyright is supposed to reward creativity, are we really expected to believe that over 92.2% of *anyone’s* creative content is entirely his or her own? With no use or application of any prior art at all? Really? (Note that, at higher discount rates, the hurdle rate is even greater. At 10%, it’s over 99%. That means that, after 50 years, over 99% of the possible NPV has been collected. Why should they get any more?)

For more background, see the report that has gotten this all going, Gowers Review of Intellectual Property This bit from the Executive Summary gives you a good sense of the perspective that the report takes:

E.9 Balanced and flexible rights should enable consumers to use material in ways that do not damage the interests of rights holders and will help ensure that citizens have trust in the system. They will enable cultural institutions to preserve our heritage, and help research institutes to further knowledge by using ideas protected by others. The Review recommends:

  • proposing an ‘orphan works’ provision to the European Commission. This will make it easier for creative artists to re-use ‘orphan’ copyright protected material (for which no author can be found), thus unlocking previously unusable material;

  • introducing a limited private copying exception, which will allow consumers to format shift legitimately purchased content, for example music from a CD to an MP3 player. This will allow consumers to use copyright protected material in a manner which does not damage the interests of rights holders;

  • clarifying the research exception. This will create greater scope for research on protected material by universities and business and expand the stock of knowledge; and

  • enabling libraries to copy and format shift master copies of archival works. This will prevent valuable cultural artefacts from deteriorating because they exist only on outdated formats.

A summary discussion on the Open Rights Group blog. Also, Lessig’s summary; note the Reuters news piece recounting the UK music industry blowback (as well as indicating Reuters’ leanings): Help! Ex-Beatle Paul demands copyright fair play pdf

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