Peer-to-Peer networks no place for Gov't

USA Today (Society for the Advancement of Education), April, 2005

Recent controversies over file-sharing and copyright policy have spawned hot debate in the courts and the halls of Congress, but a study issued by the Cato Institute, Washington, D.C., argues that government interference in Peer-to-Peer (P2P) networks would hinder technological evolution. A better recipe, suggests the report, would be for government to step aside and allow the market to find a solution through digital rights management (DRM).

In "Peer-to-Peer Networking and Digital Rights Management: How Market Tools Can Solve Copyright Problems," Michael A. Einhorn and Bill Rosenblatt illustrate how P2P technology and DRM can coexist peacefully in a market system, essentially quashing the complaints of consumer advocates who argue that DRM puts too much control in the hands of copyright holders.

"By preserving property rights made possible through new market techniques, DRM encourages producers to innovate because they are more certain of an eventual reward," the authors contend. As evidence, they offer the case of iTunes, Apple's pay-per-download music service that launched in 2003. "The percentage of U.S. downloaders who actually paid for a song at one point or another increased from eight percent to 22% in the first 12 months after the launch of iTunes."

Einhorn and Rosenblatt maintain that these market operations are preferable to government technology controls or mandatory compulsory licensing schemes for both producers and consumers. They feel that "an overly protective system of copyright is a detriment in the eyes of consumers who have grown accustomed to a range of copying capabilities, legally fair or not.

"The government should act to protect property rights, including copyrights, but it should not pick winners or discourage any technology from competing in the new marketplace."