The FCC is moving to finalize the rules that will allow radio broadcasters to go digital, thus providing listeners with CD quality over the airwaves, and a new crisis is at hand for the music industry.

A digital audio radio system can be built with the capability to execute a set owner's request to seek a particular song. Key in the request and presto! The ether will be scoured until the piece is found and recorded.

The broadcasters do not see this as a serious threat to their model of sponsored broadcasting. Listening to the radio is connected with driving, and the broadcasters think that a captive audience will keep listening to the drive time mixed format shows and will take pot luck on the music. The recording industry is more concerned, because, obviously, this would be an easier way to acquire music than going to the CD store, logging on to iTunes, or even messing around with KaZaA.

The existence of technology that can identify a particular song amidst all the babble of the electromagnetic spectrum means that another capacity exists, however -- the capability to tag those songs that are copyrighted and deny access to them if the copyright holder objects. The RIAA thinks this blocking technology should be made part of the standard for digital audio broadcasting (DAB).

The FCC Notice of Inquiry, which was approved a couple of days ago and will be public next week, requests information on this issue. The parties have lined up in their usual positions, with the Consumer Electronics Association and such "consumer groups" as Public Knowledge adamantly opposed to any protection.

It is a difficult issue. The logical solution would be for the music copyright holders to refuse to allow transmission of their works unless the broadcasters protected them, and the parties could then hammer it out. This would be the appropriate free market solution. But this is broadcasting, which took a wrong turn toward comprehensive government regulation in the 1920s, and has never since found its way back to rationality.

The FCC has granted a monopoly over DAB to iBiquity, a consortium of broadcasters, so the music copyright holders lack capacity to bargain with various broadcasters to see who will give them a reasonable deal on protection. And if the FCC must be the one to impose any protection, it has always been subject to the winds of politics and pressure more than the realities of the market.

The idea of imposing standards that limit a technology to less than its utmost is unappealing. But what is the alternative? The idea of having technology run so rampant that it destroys all possible ways in which producers of creative work can get paid is even less appealing, at least if one likes to actually listen to music rather than simply contemplate the Platonic ideal of all the wonderful music that would be available over this medium if only anyone had an incentive to produce it.

The question is also coming before the courts, which are being asked to rule that a failure by a conduit of IP to impose available technological measures to protect copyright holders may make the conduit liable for contributing to any copyright violations. See Bill Adkinson's fine paper on Liability of P2P File-Sharing Systems for Copyright Infringement By Their Users (March 2004).

So welcome to the world of DAB, a good candidate for IP policy issue of the year in 2004.

posted by James DeLong @ 3:20 PM | General

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