CDT: Stick & Carrot for the Digital Consumer

The US civil liberties and public policy organization The Center for Democracy and Technology (CDT) has released a policy paper today called Protecting Copyright and Internet Values [PDF]. The CDT believes that there is a path forward in the polarized copyright debate and argues that three components are essential to come to a satisfactory balance for all stakeholders:

• Punish the bad actors: setting examples to discourage infringement
• Digital Rights Management (DRM): a light, consumer friendly version
• Copyright education: "Reaching young consumers is particularly important"

The CDT calls this the "carrot-and-stick approach". A method that brings the image of a donkey to mind, but the CDT is actually talking about consumers. Some organisations and individuals with more "unbalanced" views about the internet and copyright might say this paper treats consumers as donkeys and consumers must be donkeys to follow the policy it sets forth. I wouldn't go that far, though I think the CDT offers more stick than carrot.

The stick of punishment is vastly gripped by the CDT. It is clear about its position on the RIAA and MPAA lawsuits against individual file-sharers and p2p networks like Grokster: they are bad actors and the first should be punished for infringement and the second for inducing this infringement. It calls the lawsuits "a dinner‐table conversation for families all over the world". It must realize that those families also dwell in the sensationalistic stories of the RIAA/MPAA suing dead people and prosecuting grandma's and children. To prevent "a consumer backlash" the CDT stresses the importance of due process and the acceptance of "fair settlements" ($4000) by copyrightholders. It offers no solutions for the current cost of litigation, which makes "due process" a hollow phrase for individuals and makes $4000 dollars look like a fair settlement indeed.

Digital Rights Management is hailed as providing price differentiation and extended consumer choices. To achieve this the CDT argues that "content owners are generally within their rights to put out restrictive DRM. In a functioning market, DRM that fails to provide an attractive bundle of rights at an attractive price will fail." This promise has accompanied DRM from the start, but until now consumers are more than often confronted with several issues pointed out by the CDT: privacy, transparency, informed purchasing decisions, and something it calls "First Amendment uses of content". This refers to the fair uses of (online) review and commentary, political ads and scholarly use. With this phrasing the CDT seems to want to avoid the inclusion of the fair use of private copying. It is mentioned nowhere in the paper, while it is a hot consumer issue related to DRM (see e.g. DMCRA deliberations). Maybe it is too much to ask from a small, general policy paper like the CDT's, but a balance for all stakeholders asks for more than (rightfully) raising (some) consumer interests, while taking the premise that restrictive DRM is okey since the market will fix it.

The paper breaths a fear of governmental intervention, e.g. ISP blocking and filtering mandates and technological mandates. These surely are worrisome, and the CDT has used its stick to fight them in the past (e.g. Pennsylvania child porn case). However, it seems to envision that the market will provide consumers with a juicy carrot if mostly left to itself. That can do, if at the same time consumer interests are safeguarded by both copyright and consumer protection laws and technology. Till that time it's hard to blame some unbalanced people for not eating the carrot and balking at the stick.

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Later Ernest Miller at The Importance Of... analyses the CDT paper in more depth and also thinks it offers more stick than carrot. He notes that the paper doesn't mention the Digital Millenium Copyright Act (DMCA) once. That's indeed a (conscious?) omission, which is more striking than the lack of reference to the Digital Media Consumers' Rights Act (DMCRA) I pointed to. The last would update the DMCA to to treat users not just like mere consumers but more like, what Miller calls, "citizen-creators" (implementing a fair use circumvention right).

Miller also higlights a sentence that seems more clear now: "Other legal tools, such as consumer protection laws, should be used aggressively against those who trick others into violating copyright law." That is, to my reading, consumer protection law should be used to battle copyright infringement, not so much to protect consumer interests. This stand may explain why consumer protection law is not applied to what it is relly ment for: protection against possible (DRM) intrusion in consumer interests related to privacy, transparency and (sale) contracts, among others. I'm not that familiar with the US situation, but Europe has a fairly fragmented collection of consumer protection law that could be applicable on DRM issues. (For a short overview I shamelessly plug INDICARE'S Report + Update, specifically chapter 3 [PDFs]).

In the comments to Miller's post, Seth Finkelstein explains why CDT's treatment of the interests of consumers/creator-citizens is so shallow:

It's important to understand that CDT is basically a business-oriented policy organization, mostly telecomm. Not that that's a bad thing per se. But that's what they are.

The report is "balanced", from their perspective - it's balanced between the interests of the business of big copyright-owners, and in the interests of the business of big tech/bandwidth companies. These are somewhat in conflict, and CDT outlines the issues.