Law in the Internet Society

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JustinColanninoFirstPaper 21 - 14 Jan 2010 - Main.JustinColannino
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Ice-Water, Digital Distribution, and Social Costs

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One of the properties of the internet is that any two people are able to send bit streams to each other at zero cost. A side effect of this property is that people distribute copyrighted music, movies, and books to each other without seeking or obtaining permission of the copyright holder. Many authors (and entertainment executives) complain granting the right to collect rent in exchange for each distribution of the work is necessary for authors to recoup the cost (and maybe more) of the time and effort spent writing, and to control the presentation and context of their works.
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A property of the internet is that any two people are able to send bit streams to each other at no cost. A side effect of this property is that people distribute copyrighted music, movies, and books to each other without seeking or obtaining permission of the copyright holder. Many authors (and entertainment executives) complain that granting the right to collect rent in exchange for each distribution of the work is necessary for authors to recoup the cost (and maybe more) of the time and effort spent writing, and to control the presentation and context of their works.
 I support author rights, and recognize the importance of even aesthetic contributions. The most valuable time of my day as a law student are the hours I spend listening to music while I read - it keeps me focused, gives me ideas, and calms me down. A problem we face as we transition to an internet society is ensuring that the authors we read and the musicians we like have enough money so that they will continue devoting most of their time creating works to educate, inspire, and entertain us.
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However, if we decide as a society to reject alternative methods of providing compensation and stay the course so that the way we provide compensation and recognition is to allow authors to control and sell their distribution rights absolutely, even when making an additional copy is free, then I think that we owe it to ourselves to recognize the social costs imposed by such a system. This essay will proceed by observing how the distribution right fundamentally alters the distribution properties of works representable in digital form. Taking this observation, it will explore how a system that does not interfere with frictionless distribution could enhance our form of self-government.
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However, if we decide as a society to reject alternative methods of providing compensation and stay the course so that the way we provide compensation and recognition is to allow authors to control and sell their distribution rights absolutely, even when making an additional copy is free, then we owe it to ourselves to recognize the social costs imposed by such a system. This essay will proceed by observing how the distribution right fundamentally alters the distribution properties of works representable in digital form. Taking this observation, it will explore how a system that does not interfere with frictionless distribution could enhance our form of self-government.
 

Phase Transitions and Charging for Distribution

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A useful way of illustrating the cost of rents on distribution is through the concept of phase transitions. A phase transition can generally be thought of as an abrupt change in the behavior of a system at a critical point. In physical science, the most common example of a phase transition is the difference between water molecules at < 0C, ice, and water molecules at > 0C, water. Not limited to physical science, other examples of systems possessing a phase transition include certain NP-Complete problems and distributed wireless networks.
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A useful way of illustrating the cost of rents on distribution is through the concept of phase transitions. A phase transition can generally be imagined as an abrupt change in the behavior of a system at a critical point. In physical science, the most common example of a phase transition is the difference between water molecules at < 0C, ice, and water molecules at > 0C, water. Not limited to physical science, other examples of systems possessing a phase transition include certain NP-Complete problems and distributed wireless networks.
 
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The marginal cost of distributing goods also has a phase transition centered around the critical point of zero: goods with marginal cost = 0 have different properties than goods with a marginal cost > 0. Eben put forward a few propositions about the different properties of goods above and below this critical point, and I would like to recall/reemphasize two. First, when marginal cost of reproduction and distribution is equal to zero, goods are less likely to be lost because most of the copies distributed will be controlled by a different entity and freely able to be redistributed. This allows seekers to find the good in many locations, and prevents loss through distributed storage. Second, and more importantly, zero marginal cost allows a copy to easily be distributed to anyone interested, for free.
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The marginal cost of distributing goods also has a phase transition centered around the critical point of zero: goods distributable with marginal cost = 0 have different properties than goods distributable with marginal cost > 0. Eben put forward a few propositions about the different properties of goods above and below this critical point, and I would like to recall/reemphasize two. First, when marginal cost of reproduction and distribution is equal to zero, goods are less likely to be lost because most of the copies distributed will be controlled by a different entity and freely able to be redistributed. This allows seekers to find the good in many locations, and prevents loss through distributed storage. Second, and more importantly, zero marginal cost allows a copy to easily be distributed to anyone interested, for free.
 Allowing rent to be charged for each distribution destroys these properties. When an author charges rent for a physical copy of her book, album, software, or movie it is a mere percentage increase in the marginal cost, with a similar effect on the distribution of the work as giving someone who wanted cold water a glass at 5C instead of 3C. However, when an author charges rent on a digital copy, something that otherwise would have marginal cost zero, the effect on distribution changes dramatically: anyone interested can no longer obtain the work for free, and the good may be lost if the centralized distributor is no longer interested in making it available at any price. In our water analogy this would be like giving someone who wanted to ice skate a pool full of really cold water. It is cold, it is water, but you can't skate on it because it lacks the fundamental properties of ice.

Revision 21r21 - 14 Jan 2010 - 16:43:18 - JustinColannino
Revision 20r20 - 05 Dec 2009 - 15:27:27 - JustinColannino
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