Alternative compensation system

Various alternative compensation systems (ACSes) have been proposed as ways to allow the widespread reproduction of digital copyrighted works while still paying the authors and copyright owners of those works. This article only discusses those proposals which involve some form of government intervention. Other models, such as the street performer protocol or voluntary collective licenses, could arguably be called "alternative compensation systems" although they are very different and generally less effective at solving the free rider problem.

The impetus for these proposals has come from the widespread use of peer-to-peer file sharing networks. A few authors (eg Gervais 2004) argue that an ACS is simply the only practical response to the situation. But most ACS advocates go further, holding that P2P file sharing is in fact greatly beneficial, and that tax or levy funded systems are actually more desirable tools for paying artists than sales coupled with DRM copy prevention technologies.

Architectural Details

Where Does the Money Come From

Proposals have included targeted levies on internet connections, blank CDs, digital media players, etc (many of these goods are levied various countries' existing private copying schemes); income taxation; or optional payments by users.

In terms of economic theory, consumer "opt in" regimes are very different from universal ones, but depending on how the scheme was administered, the differences might not be so large. For example, if the default option for ISP subscribers was to pay an ACS surcharge, which could be avoided by filing a signed commitment not to make unauthorised downloads from P2P networks, the effects might be quite similar. This scheme however is unsuitable for business owners who maintain free internet connections as incentive for customers. It would then be the responsibility of the business owner to monitor his or her customer's internet use.

Where Does it Go

Various proposals have been made to base the distribution of royalties on measures of consumer downloading, usage or voting.

The computer security issues to be addressed in collecting this data are considerable. The privacy and verifiability obstacles are very similar to those encountered in Internet voting; they may be soluble, but only with hardware assistance not currently available on ordinary PCs. The most practical way to deploy an ACS in the short term would be to collect statistical samples from a much smaller population.

The actual distribution of royalties would likely be carried out by a copyright collecting society.

Advantages and Disadvantages

Alternative compensation systems have two very significant advantages over digital copyright. They do not impose artificial scarcity on copyright works: everyone can download as many songs, ebooks and films as they want (in economic terns, ACS eliminate the deadweight loss of copyright monopolies). They also avoid the very high technological and social costs of digital copyright enforcement.

The two greatest drawbacks of ACSes are the excess burden of the taxation that is collected, and the need to decide what tax/levy rates to use for the system (although methods such as contingent valuation may help a little with that question).

Alternative Compensation Systems in Practice

Canada's private copying levy had the unforeseen result of temporarily creating an ACS for some kinds of P2P downloading; [http://www.cb-cda.gc.ca/tariffs/certified/c13122003-b.pdf] . In BMG v. Doe, a "dictum" suggested that this should also apply to uploading; but the dictum was criticised on appeal.

In France, the December 2005 DADVSI amendments that were passed by the Senate would have created an ACS called a "global license". These amendments were removed before the bill finally became law.

Bibliography

# Baker, D. [http://www.cepr.net/publications/ip_2003_11.htm The Artistic Freedom Voucher: Internet Age Alternative to Copyrights] 2003.
# Copley, D. [http://web.archive.org/web/20010420111434/www.ibslaw.com/melon/archive/701_dime.html "Put a Dime in the Heavenly Jukebox"] , Multimedia & Entertainment Law Online News 7 (701), 2001.
# Eckersley, P. [http://jolt.law.harvard.edu/articles/pdf/v18/18HarvJLTech085.pdf Virtual Markets for Virtual Goods: The Mirror Image of Digital Copyright?] 18 "Harvard Journal of Law and Technology" 85, 2004.
# Fisher, W.W. "Promises to Keep: Technology, Law and the Future of Entertainment", Stanford Univ. Press 2004.
# Gervais, D. "The Price of Social Norms: Towards a Liability Regime for File Sharing", 12 Journal of Intellectual Property Law 39, 2004.
# Liebowitz, S. [http://www.utdallas.edu/~liebowit/intprop/complpff.pdf Alternative Copyright Systems: The Problems with a Compulsory License] , Presened at SERCIAC 2003.
# Love, J. [http://www.nsu.newschool.edu/blur/blur02/user_love.html Artists Want to Be Paid: The Blur/Banff Proposal] 2002
# Netanel, N.W. [http://jolt.law.harvard.edu/articles/pdf/v17/17HarvJLTech001.pdf Impose a Noncommercial Use Levy to Allow Free Peer-to-peer File Sharing] 17 "Harvard Journal of Law and Technology" 1, 2003.
# Stallman, R.M. [http://www.gnu.org/philosophy/dat.html The Right Way to Tax D.A.T] , Wired, 1992.

External links

* Additional references available at [http://crosscommons.org/acs.html Alternative Compensation Systems (ACS)]