Intellectual property as theft

I’ve been dipping into a new (and free to download but you can choose to support it by paying for a paperback or Kindle copy from Amaxon) book by Rufus Pollock, The Open Revolution. I’m not great at reading whole books online, hence the dipping. What I’ve read, though, I really like. It states: “This book is about making as much as possible of that information available to as many people as we can, since wealth, information and the opportunity to create them are now profoundly entwined”  – the information in question being private, digitally recorded and stored information, anything that could be patented or copyrighted.

The book starts by underlining that any property rights – and all economists agree well-defined property rights are fundamental to economic growth – are defined by politics and law and social norms. The argument that the intellectual property rights that currently prevail are problematic for the digital economy has been made before, and is forcefully made again here. The book argues for ‘open information’, that “can be universally
and freely used, built upon and shared.

The book looks at patent and copyright protection, and draws the link to the accumulation of significant digital market (and political) power. It then jumps from the unquestioned powers such as Google and Facebook to a chapter on music streaming and Spotify – a marvellous service and one that can hardly be described as exercising undue power, especially when facing up against the recording industry titans. Pollock argues for replacing Spotify’s commercial model, which involves it in policing copyright protection, with a state-sponsored streaming model whereby governments collect a tax and allow citizens to access any streamed music:

“With no fee per track and no limitation on use, this all-you-can-eat buffet is a prototype for how one aspect of the Open world would operate. Money would of course have to be collected somehow to fund it, but instead of ten dollars a month to Spotify, this
could be a special fee incorporated in your taxes or added to your internet or mobile bill. This money would then be distributed according to usage, through remuneration rights fees.”

Subscription models are also of course all-you-can-eat ones and so similarly fit well the low or zero marginal cost economics of online. The difference between Spotify and this government-sponsored version of music streaming is scale: the more users pay, the lower the average fee. This is the rationale for public service broadcasting, so in effect we already have this model in the UK. My household pays an absolutely bargainiferous £2.89 per week to have access to a vast array of content for which the BBC has dealt with all the IP negotiations. I’m a huge fan of this model. But I don’t see why poor old Spotify – another marvellous service – should be prevented from asking for £10 a month for its streaming services.

So I’m with the book on the over-reach of IP laws in the digital age. I’d strongly argue for intense regulatory scrutiny of the advertising funded model of Google and Facebook, which might force them to an alternative business model – a flat fee, and utility regulation for some of their services perhaps. Some jurisdictions have started inquiries into the online ads market, almost a duopoly. But I’m not persuaded  public versus private ownership and control of the access services is the central issue. For sure, given that digital goods are essentially public goods and natural monopolies, there’s a free riding issue which argues for tax financing, but the first step must be to tackle the ridiculous IP laws.

There’s also a deeper question, I think, which is what one is paying for when it comes to fees to access digital content. The book argues: against “restrictions on which BBC programmes are freely accessible (having, of course, been paid for by the British public) and when, and where, to digital watermarks, paywalls around newspapers…”

Well, I happen to know something abuot restrictions on online acccess to BBC programmes, having chaired the original iPlayer approval process. One source of restriction is indeed a byzantine set of rights – different broadcast platforms in different countries may have specific rights to certain ‘windows’ or time periods. The licence fee payer in these cases has only paid for limited access rights, much as one might wish the limits to be less retrictive and the costs lower. Another source of restrictions was the desire on launching the BBC’s online services not to foreclose potential competing services, a worthy application of competition policy, and also not to cannibalise too quickly the BBC’s own linear services and commercial offer. These restrictions have been relaxed over time. The licence fee also buys not just the intangible asset of programmes – and I’m all for making the archive as freely available as possible – but also the continuing costs of investing in new content. The high initial fixed costs have to be covered. Similarly, I’m all in favour of newspaper paywalls – how else is new journalism going to get financed?

Anyway, this is as far as I’ve got. It is – as will be obvious – a stimulating read, although some of this will be familiar to those who have engaged with the ‘open’ argument before (eg James Boyle’s The Public Domain or Lawrence Lessig’s Free Culture). I’d be interested to hear other people’s reactions to these arguments. Although quibbling, I’m broadly very sympathetic to them. I’ll be buying a hard copy to read it properly….