Law in the Internet Society

Ice-Water, Digital Distribution, and Social Costs

JustinColannino

"As the self-governing community seeks, by the method of voting, to gain wisdom in action, it can find it only in the minds of its individual citizens. If they fail, it fails."

-- Alexander Meiklejohn

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.

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

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.

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.

The Social Costs of Charging For Distribution

The fact that these properties are lost by allowing authors to charge rent on distribution has little consequence if we do not think that they are worthwhile to have. However, these properties have the potential to increase the effectiveness of our system of government. When we decided that ours would be a government by the people, we all took on the responsibility of governing, and took an interest in the education and development of ourselves and all of our fellow citizens. Every time we are confronted with a problem in this system the solution must come from us; we are all we have.

The different properties of writings, music, or video which can be distributed at marginal cost zero and those which can not has implications on the behavior of this political system. When authors seek rent through the distribution right, there is an artificial cost applied to reading, watching, or listening. This barrier effects the reach of the works among the citizens, prohibiting access to those who will not or can not pay rent. Writings may even be lost completely to society if an injunction against their distribution is granted on behalf of the right holder. These barriers place constraints on the ability of citizens to learn and develop through digesting works, constraints which could be removed for digital goods with a different mode of artist compensation.

Removing these constrains might achieve a different type of phase transition in our political economy. As Meiklejohn noted in the quote at the beginning of this essay, in self-government wisdom in action can only be found in the minds of individual citizens. If we remove the barriers to development and education for us all, the structure of how our political system behaves will be altered and unexpected solutions may be, and are more likely to be, reached.


Justin,

I think you've presented a very thoughtful paradigm through which we can view some of the ideas Eben has been presenting to us in class. I'm not sure that I have any comments on the ideas as you present them, but I will offer some literary advice, as it were.

I think your paper would be much, much stronger if you could rework, or indeed, entirely eliminate the first three paragraphs. Your idea is strong enough to stand without so much introduction. It's irrelevant to the reader that you listen to music when you study, and quite frankly, so too are what the class objections to Eben's ideas were, since you don't actually address them explicitly. I think your paper loses some punch by presenting itself as a response to things that happened in class, rather than as ideas that are valuable and important in their own right. A more formal approach would be better. Of course, your paper can and probably should incorporate ideas from class discussion. But you lose some power as a writer communicating to a reader when you rely too heavily, or at least explicitly, on that. If you could drop the first three paragraphs, and instead roadmap more clearly your argument, I think this would be a much stronger work.

On a more substantive note, I'd like to see more information about phase transition. Can you point to other phase transitions in our society? (This is perhaps what I mean by more formal. You could introduce your ideas with something about other phase transitions, given the reader a context that isn't depended on his a) having been in class or b) knowing you as a person).

There's a lot of value here to work with, so some reworking to make sure that value is seen would be a good thing for all of us.

-- DanaDelger - 18 Nov 2009

Justin,

In your opening section you indicate that there were two objections to free distribution that were raised in class: (1) incentive for creation and; (2) control by authors. The way I read your essay you then primarily set forth some disadvantages of controlled distribution, as well as benefits of free distribution, to society as a whole. I was not satisfied, however, that you addressed the incentive or control issues other than to close by indicating that solutions to those issues may be easily reached if barriers to distribution and education related thereto were removed.

I would suggest that your essay is fine and addresses some valid problems and costs associated with restricted distribution and that part can stand on its own. However, if so, I would alter the opening section so that you do not imply that you are going to address issues of incentive and control; or, alternatively I believe it would be a stronger essay if you do want to address those issues to more fully develop why they are not necessary or how substitutes for restricted distribution to provide for such incentive and control could be accomplished. If your thesis is that incentive and control would be reduced in a free distribution model but the benefits derived from such model would outweigh those costs I would like to see that drawn out a little more clearly as well.

-- BrettJohnson - 22 Nov 2009

Brett and Dana,

Thanks for your comments. I think the two of you are right that the way I introduce this topic leaves a bit to be desired, and that a more focused approach would be useful to the reader. Dana - the part about listening to music at home is there to try demonstrate briefly how valuable I find writings and music. I put it in to try to build agreement with skeptical readers. I am going to explore other ways of achieving this, so I would appreciate your comments on my next revision once I've finished it.

Brett - in terms of the incentive to create and control of the work those statements are included to introduce the topic. I don't think that I can draw them out more fully in this space and still make the point that I want to make. I know that Bradley Mullins is looking at alternatives. And others exist such as merchandising or patronage. When I revise the introduction I will keep in mind that I don't want to lead the reader down the wrong path.

-- JustinColannino - 23 Nov 2009

Justin,

While I didn't comment on the first revision of your paper, my sentiments were very similar to what Dana mentioned. Your latest revision is much, much cleaner. Getting rid of the references to "what the class thought" etc, now gives this paper much more professional legitimacy (if you get what I mean). Very well done in that respect.

As far as substantive comments, I feel that the first paragraph of the "Social Costs" section is a bit grandiose and rhetorical. Especially the last few lines and the "we are all we have" line. This is something I'd expect to hear in an Obama speech, but I think the rhetoric effect is unnecessary and ineffective here, given your audience.

Other than that, I think you're off to a very good start. I especially enjoyed the implementation of the "phase shifting" analogy, as you articulated it well and it presented it in a way that made a lot of sense.

-- EdwardBontkowski - 24 Nov 2009

Justin,

I think you are making real progress and, as Dana noted, the phase transitions analogy is a clever and illustrative one. I have only a few brief comments.

I thought the last paragraph of the section on phase transitions and charging was a little bit confusing. I read it twice and got it, but I didn't get it on the first pass.

As I read your essay, it seems it recognizes initially that we would be denying authors something by not letting them impose rent on MC=0 goods, but goes on to conclude that such denials are appropriate given the benefits to society we would realize by removing the barriers that rent imposes on those who cannot pay. I understand your space limitation response to Brett, and so I get why you are focusing more on the "benefits received" side than diving into the "denying author's rent" side. But if the fundamental premise is we should sacrifice some of A's and B's gains (authors' rents on MC=0 goods) to achieve greater gains for Q, R, S, T, and Z (society, and especially those who cannot pay the rents), an extra line somewhere highlighting the trade off directly would help. I can see at least two prime places for it, if you wanted to add such a line. The first is the final line of the piece. A second would be transitioning into the second paragraph of Part III, "The Social Costs of Charging For Distribution."

The essay is looking good. Nice work. I hope these comments are helpful.

-- BrianS - 24 Nov 2009

Brian,

Thanks for commenting.

This is likely my fault in for not being clearer in the introduction, but I am not trying to say that we should shift gains from authors to society. What I hope I do say is that if we decide to continue granting these rights to artists (instead of alternatives) we should recognize how it fundamentally alters the system of how works are distributed, at significant cost. I will take a hard look at the introduction to see if I can make the point clearer the next time I revise. I think part of the problem is that I feel like I need to provide context for the reader by way of introduction to the concept of MC=0 and how that is changing the industry before launching into my analysis, which may set the wrong context for the point in the third introductory paragraph. If you have some thoughts, I would love to hear them.

-- JustinColannino - 24 Nov 2009

 

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