532882

Copyiighls Connunicalions IoIicy
Tinolhy Wu

INTRODUCTION

Theie is sonelhing foi eveiyone lo disIike aloul eaiIy lvenly-fiisl cenluiy
copyiighl. Ovneis of conlenl say lhal nevei and lellei lechnoIogies have nade il
loo easy lo piiale. Lasy copying, lhey say, lhiealens lhe lasic incenlive lo cieale
nev voiks, nev iighls and ienedies aie needed lo iesloie lhe laIance. Acadenic
ciilics inslead conpIain lhal a gioving copyiighl give conlenl ovneis dangeious
IeveIs of conlioI ovei expiessive voiks. In one veision of lhis aigunenl, lhis
giovlh lhiealens lhe ciealivily and piogiess lhal copyiighl is supposed lo foslei, in
anolhei, il iepiesenls an encIosuie nctcncn| lhal lhiealens lasic fieedons of
expiession.
1
Copyiighl, lhese ciilics aigue, has vandeied leyond ils piopei
loundaiies. They conlend lhal lhe laIance nusl le iesloied.
Whal aII lhese aigunenls have in connon is a focus on copyiighls
aulhoiship funclion. Copyiighl poIicy, in lhis viev, is fundanenlaIIy aloul
pioviding a laIance of incenlives foi aulhois lo effecluale one of seveiaI possilIe
goaIs, such as piogiess of science,
2
denocialic goveinance,
3
oi lhe syslen of fiee

Associale Iiofessoi of Lav, Univeisily of Viiginia SchooI of Iav. I an gialefuI foi heIp
and connenls fion MoIIy Schaeffei Von HovIing, Richaid Iosnei, }ane Cinsluig, DougIas
Lichlnan, CIaiisa Long, CIen Rolinson, ecky Lisenleig, }ack CoIdsnilh, Lee Kovaisky,
Lavience Lessig, IhiI Weisei, Ieggy Radin, and Ton Nachlai. LxceIIenl ieseaich assislance
vas piovided ly }eieny Thonpson and Lee Kovaiksy. IinaIIy, I an gialefuI foi feedlack fion
lhe pailicipanls in lhe 2OO3 Slanfoid Lav and TechnoIogy voikshop, lhe 2OO3
TeIeconnunicalions IoIicy and Reseaich Confeience, lhe 2OO3 Univeisily of Michigan Lav
SchooI InleIIecluaI Iiopeily voikshop, and lhe 2OO3 Viiginia iidvood IacuIly Relieal.
1
An exanpIai of lhe Iallei viev is Yohai enkIei, |rcc As Tnc Air Tc Ccnncn Usc. |irs|
Ancndncn| Ccns|rain|s On |nc|csurc cf Tnc Puo|ic Dcnain, 74 N.Y.U. L. RLV. 354 (1999) (aiguing
lhal IegaI iuIes encIosing infoinalion iisk lhe diveisily of infoinalion souices and lhiealens
fieedon of speech), lhe foinei viev, LAWRLNCL LLSSIC, THL IUTURL OI IDLAS (2OO1) (endoising
an infoinalion connons fion vhich aulhois nay diav foi ciealive inpuls).
2
This is a goaI expiessed in lhe copyiighl cIause ilseIf. Scc U.S. Consl. Ail. I, 8, cI. 8.
3
Scc gcncra||q NeiI NelaneI, Ccpqrign| and a Dcnccra|ic Citi| Sccic|q, 1O6 YALL L.}. 283 (1996)
(aiguing lhal copyiighl has lvo denociacy-enhancing funclions in lhal (1) il incenlivizes
pioduclion and (2) il suppoils a secloi of ciealive aclivily fiee fion goveinnenl sulsidy,
palionage, elc.).

Copyrights Communications Policy

2
expiession.
4
Iev disagiee lhal lhese aie lhe goaIs: lhe nain disagieenenl is ovei
vhal neans seive lhese ends.
Yel lhe iecenl hisloiy of copyiighl legs lhe queslion of vhelhei lhis delale
capluies vhal is iighl and viong vilh lhe Iav. olh sides poinl lo lhe sane
piolIen: a liagedy of aulhoiship caused ly lheii opponenls. Ciilics of copyiighl
say lhal aggiessive ovei-enfoicenenl of copyiighl deleis lhose vho vouId loiiov
fion olheis lo cieale, such as nusic sanpIeis, saliiisls, and fiIn-nakeis.
Copyiighls lackeis vain, conveiseIy, lhal piiacy lhiealens lhe veiy IiveIihood of
lhe ailisl and ciealive indusliies. The sloiy of lvin liagedies, hovevei, cieales an
indeleininale delale. olh posilions have difficuIly denonslialing enpiiicaIIy, as
opposed lo anecdolaIIy, lhal eilhei oveipioleclion oi piiacy has sliIIed lhe engines
of ciealivily. Al a lheoielicaI IeveI, any pulalive change in copyiighl pioleclion
can lolh le defended as a necessaiy ciealive incenlive and allacked as an
unnecessaiy conlioI.
This ailicIe suggesls lhal lhe nain chaIIenge foi 21sl cenluiy copyiighl aie nol
chaIIeges of aulhoiship poIicy, lul ialhei nev and haidei piolIens foi copyiighls
ccnnunica|icns poIicy: copyiighls pooiIy undeislood ioIe in lhe ieguIaling
conpelilion anong iivaI disseninalois.
5
Since ils inceplion copyiighl has sel
inpoilanl laseIines upon vhich pulIisheis and lheii nodein equivaIenls do
lusiness. As lhe pace of lechnoIogicaI change acceIeiales, copyiighls ioIe in
selling lhe condilions foi conpelilion is quickIy leconing noie inpoilanl, even
chaIIenging foi piinacy lhe significance of copyiighls encouiagenenl of
aulhoiship.
None of lhis is lo say lhal lhe delale ovei aulhoiship is a shan, oi lhal
copyiighls ioIe in incenlivizing aulhoiship is uninpoilanl. The Iav, I suggesl,
can le usefuIIy undeislood in a noduIai fashion: as conpiised of lolh aulhoiship
and connunicalion iegines vhose funclions aie oflen independenl. The fiisl
iegine is lhe faniIiai syslen, iun ly lhe couils, lhal gianls excIusive iighls lo
encouiage ciealivily.
6
The second is a nessiei ieguIaloiy iegine conpiised nainIy

4
This is a vaIue given piioiily in enkIei, supra, nole 1.
5
Ioi a discussion of lhis definilion of connunicalions poIicy, scc infra nole 41.
6
Scc infra nole 23.


3
of lhe seclions of copyiighl lhal have aIvays peipIexed copyiighl lheoiisls and
have nevei fil lhe cenliaI lhene of aulhoi-incenlives. This dc fac|c connunicalions
iegine iuns lhiough lhe IegisIalive piocess and lhe couils, lhal lakes IaigeIy lhe
foin indusliy-specific IialiIily iuIes, couil-ciealed innunilies and speciaI
acconnodalions.
7

The sludy of copyiighls connunicalions poIicy has lolh a desciiplive and a
noinalive payoff. Iiisl, il heIps us undeisland lolh lhe exisling copyiighl code
and lhe hisloiy of 2Olh cenluiy copyiighl. Much of lhe exisling copyiighl code is
difficuIl lo desciile as a device foi pioviding incenlives lo cieale nev voiks.
8
Thal
desciiplion nay fil vaiious coie docliines lhal consune lhe luIk of schoIaiIy
allenlion, such as lhe idea/expiession dicholony,
9
lein Iinils,
1O
and pails of lhe
faii use docliine.
11
ul lhe copyiighl code is aIso fuII of conpIex conpuIsoiy
Iicensing schenes and lechnoIogicaIIy-specific innunilies.
12
The Iink lo aulhoiship
in such seclions is uncIeai al lesl. I suggesl il viII le usefuI lo undeisland lhese
appaienl anonaIies pail of copyiighls ieguIalion of conpeling disseninalois.
The olseivalion is confiined ly lhe 2Olh cenluiy of Copyiighl, vheie lhe Iav
has pIayed a iecuiiing ioIe in conpelilion lelveen incunlenl and chaIIengei
disseninalois. Whal foIIovs chaiacleiizes lhe copyiighls connunicalions poIicy
inlo lvo nodes (cIassic, and nev) coiiesponding lo lvo line peiiods. In lhe
fiisl, fion 19OO-1976, lhe copyiighls cIassic connunicalions iegine evoIved
lhiough a seiies of Iong and exlensive confIicls lelveen conpelilive iivaIs: such as
calIe and lioadcasl, iadio and song-viileis, and lhe eaiIy iecoiding pIayeis and
sheel nusic pulIisheis.
13
This eia is chaiacleiized ly judiciaI ieIuclance, even in
lhe face of piecedenl, lo exlend lo incunlenls iighls of copyiighl lhal nighl le
used foi naikel advanlage ovei a lechnoIogicaIIy-advanced iivaI. The slaluloiy

7
Scc Seclion I.C., infia.
8
This facl is nol unnoliced anong econonic schoIais. Scc infra, discussion al lexl
acconpanying nole 38.
9
See 17 U.S.C. 1O2(a) (2OOO).
1O
Scc Copyiighl Tein Lxlension Acl, Iul. L. 1O5-298, 1O2(l) and (d), 112 Slal. 2827-2828
(anending 17 U.S.C. 3O2, 3O4).
11
Scc 17 U.S.C. 1O7 (2OOO).
12
These seclions aie desciiled in deplh in Seclion I.C, infra.
13
These lhiee confIicls aie desciiled in Seclion I.D, infra.


4
iesuIl veie lhe seiies of goveinnenl-nandaled access schenes, knovn as
conpuIsoiy Iicenses, lhal nake up lhe luIk of lhe copyiighl code and aie
olheivise difficuIl lo chaiacleiize.
In lhe second peiiod, fion lhe 1976 Acl onvaid has vilnessed lhe eneigence of
a nev foin of connunicalions poIicy: judiciaI ciealion of copyiighl innunilies
neanl lo lenefil conpelilive innovalion.
14
The foundalion is lhe iuIe announced in
Scnq Ccrp. t. Unitcrsa| Ci|q S|udics, |nc,
15
vhich gianls sone innunily fion
copyiighl IialiIily foi lechnoIogicaI invenlions of geneiaI uliIily.
16
Il can le
undeislood as a device foi lhe judiciaiy lo liy and laIance lhe conceins of
aulhoiship againsl lhose of conpelilion and connunicalions poIicy.
17
CoupIed
vilh olhei innunilies, such as lhose ciealed foi Inleinel Seivice Iiovideis in
1997
18
and lhe iuIe on ieveise engineeiing,
19
lhe iesuIl is a copyiighl Iav lhal has
laken nev neasuies lo deaI vilh use of copyiighl as a looI of conpelilive
advanlage.
The sludy of copyiighls ioIe in ieguIaling conpelilion, I suggesl, ieveaIs a
copyiighl lhal lheoiisls haidIy knov. Il is nol lhal schoIais aie unavaie of
copyiighls ioIe in connunicalions poIicy~lhe inpoilance of disseninalion has
aIvays leen iecognized as a goaI of copyiighl.
2O
The poinl, ialhei, is lhal lhe
aulhoi-cenliisn of copyiighl lheoiy has Iefl IillIe lasis lo evaIuale oi ciilicize
copyiighls decisions lhal cieale connunicalions poIicy.
Theie is, finaIIy, a noinalive payoff fion lhe sludy of copyiighls ioIe in
connunicalions ieguIalion. In lhe Iasl seveiaI decades, lhe Uniled Slales has

14
Scc Seclion III.-D, infra.
15
464 U.S. 417, 431 (1984).
16
Moie pieciseIy, Scnq hoIds lhal lhe saIe of copying equipnenl, Iike lhe saIe of olhei
ailicIes of conneice, does nol conslilule conliiluloiy infiingenenl if lhe pioducl is videIy
used foi Iegilinale, unoljeclionalIe puiposes. |d. al 442.
17
Cf. RandaI Iickei, Ccpqrign| as |n|rq Pc|icq. Tnc Casc cf Digi|a| Dis|riou|icn, 47 ANTITRUST
ULL. 423, 424 (2OO2) (desciiling Scnq as a iuIe of naikel enliy).
18
Scc 17 U.S.C. 512 (innunily schene foi inleinel seivice piovideis).
19
Scc Seclion III.C(1), infra.
2O
Scc, c.g., Tvenlielh Cenluiy Music Coip. v. Aiken, 422 U.S. 151, 156 (1975) (Copyiighls
piivale nolivalion nusl uIlinaleIy seive lhe cause of pionoling lioad pulIic avaiIaliIily of
Iileialuie, nusic, and lhe olhei ails.).


5
geneiaIIy endoised a nodeI of open, conpelilive innovalion as ils nalionaI
connunicalions poIicy.
21
Il is, in olhei voids, geneiaIIy agieed lhal neilhei
goveinnenl noi indusliy nonopoIisls aie veII silualed lo choose vhal
lechnoIogies oi fiins lhe nalion shouId use lo connunicale, nov oi in lhe fuluie.
22

Copyiighl, as il giovs in inpoilance, shouId nol le exenpl fion such piincipIes.
Iev vouId disgiee lhal lhe lasic vision of conpelilive innovalion is an alliaclive
vision. WhiIe nany nay disagiee on hov lhe goaI nighl lesl le achieved, il
cannol le ieached vilhoul an avaieness of lhe ioIe lhal copyiighl pIays in selling
nalionaI connunicalions poIicy. Thal iequiies lhal judges and poIicynakeis
fuilhei deveIop an appiecialion of copyiighls effecls on pailies olhei lhan aulhois.
The AilicIe is divided inlo lhiee pails. The fiisl desciiles Aneiican
Copyiighls cIassic connunicalions poIicy. Aflei silualing lhe connunicalions
peispeclive in liadilionaI copyiighl lheoiy, il expIains vheie lhe IegaI expiession
of copyiighls connunicalions iegine can le found, and delaiIs ils evoIulion
duiing lhe peiiod 19OO-1976. The second pail is piinaiiIy lheoielicaI. Il piovides
looIs, laken fion leIeconnunicalions and conpelilion lheoiy, foi undeislanding
and anaIyzing lhe connunicalions poIicies lhal copyiighl has inpIenenled. The
lhiid pail desciiles copyiighls nev connunicalions poIicy, vhich has evoIved
posl-1976. Il cIoses on a noinalive nole, suggesling hov couils and Iavnakeis
can decide copyiighl issues vilh an eye lo lheii effecls foi conpelilion and nalionaI
connunicalions poIicy.

21
Scc Seclion II., infra.
22
Scc id.


6

PART I: A DE5CRIPTIVE MODEL OF COPYRIGHT
A. Au|ncr-Ccn|risn
Copyiighl lheoiy is liadilionaIIy depicled as a Iong confIicl lelveen lvo
dueIing lheoiies, a juiispiudenliaI appioxinalion of lhe 1OO-yeai Wai. In accounls
nov veiy faniIiai lo copyiighl lheoiisls, lhe fiisl of lhese vaiiing lheoiies is
AngIo-Aneiican and desciiles lhe puiposes of copyiighl as uliIilaiian oi
econonic.
23
Il pienises lhe exislence of copyiighl on naikel faiIuie.
24

Copyiighl exisls lo piovide incenlives foi aulhois lo pioduce voiks and lheiely
avoid undeipioduclion lhal nighl olheivise iesuIl.
25
Undei lhis lheoiy copyiighl
Iav is uIlinaleIy siniIai lo olhei foins of econonic IegisIalion, foi il is Loid
MacauIays lax on ieadeis foi lhe puipose of giving a lounly lo viileis.
26

The iivaI lo lhe AngIo-Aneiican viev iesides nainIy on lhe conlinenl and is
knovn in lhe Uniled Slales as lhe naluiaI-iighls lheoiy of copyiighl. Il suggesls
lhal aulhois have a noiaI iighl lo lhe fiuils of lheii Ialois: Copyiighl is gianled
lecause lhe aulhoi deseives il.
27
One veision of lhis idea says lhal aulhois shouId
le ievaided foi lhe vaIue lhey conliilule lo sociely.
28
Anolhei, oIdei veision
posils a naluiaI Iink lelveen ciealion and ovneiship: lhe aulhoi ovns his

23
Scc, c.g., WiIIian M. Landes & Richaid A. Iosnei, An |ccncnic Ana|qsis cf Ccpqrign| |au,
18 }. LLCAL STUD. 325, 326 (Sliiking lhe coiiecl laIance lelveen access and incenlives is lhe
cenliaI piolIen in copyiighl Iav. Ioi copyiighl Iav lo pionole econonic efficiency, ils
piincipaI IegaI docliines nusl, al Ieasl appioxinaleIy, naxinize lhe lenefils fion ciealing
addilionaI voiks ninus lolh lhe Iosses fion Iiniling access and lhe cosls of adninisleiing
copyiighl pioleclion.).
24
Scc id. al 327.
25
Scc id. al 328.
26
T. MacauIay, SILLCHLS ON COIYRICHT 25 (C. Caslon ed. 1914).
27
See AIfied C. Yen, Rcs|cring |nc Na|ura| |au. Ccpqrign| as |aocr and Pcsscssicn, 51 OHIO
STATL L.}. 517, 522-24 nn. 27-44 (199O) (delaiIing lhe evoIulion of naluiaI iighls lheoiy lhiough
Ronan and LngIish Lav). Ioi an exanpIe of a conlenpoiaiy naluiaI iighls lheoiy, scc Wendy
}. Coidon, A Prcpcr|q Rign| in Sc|f-|xprcssicn. |qua|i|q and |nditidua|isn in |nc Na|ura| |au cf
|n|c||cc|ua| Prcpcr|q, 1O2 YALL L.}. 1533 (1993) (aiguing lhal a ieluin lo naluiaI iighls lheoiy
vouId piolecl fiee speech inleiesls).
28
Scc MaishaII Leaffei, UNDLRSTANDINC COIYRICHT LAW 58 (3d ed. 1999).


7
(snaIIei) ciealion in jusl lhe nannei lhal Cod ovns his (sIighlIy Iaigei) Ciealion.
Whal you cieale is youis: lo eveiy cov ils caIf.
29

Today lhis liadilionaI delale has laken on a nodein gIoss. NaluiaI iighls
lheoiies, in lhe Uniled Slales al Ieasl, have ieliealed lo lhe slalus of foiI, used noie
lo accuse lhan lo defend.
3O
The doninanl slailing poinl foi nosl Aneiican
schoIaiship is an incenlives lheoiy, oi lhe incenlive/access paiadign, lhe idea
lhal lhe copyiighl expiesses sone laIance lelveen encouiaging ciealion of
expiessive voiks, vhiIe pioviding foi adequale access lo lhe voik foi nev aulhois
and olheis. As Maik LenIey expiesses lhe convenlionaI visdon, lolh lhe
Uniled Slales Conslilulion and judiciaI decisions seen lo acknovIedge lhe piinacy
of incenlive lheoiy in juslifying inleIIecluaI piopeily.
31
Slailing fion lhis pienise,
lheoiisls nove in diffeienl diieclions. Moie sophislicaled econonic lheoiies sliess
lhe uliIily of assigning inleIIecluaI piopeily iighls lo ovneis, aiguing lhal ovned
assels viII giavilale lovaids lheii nosl vaIualIe use.
32
MeanvhiIe, a cIuslei of
nev copyiighl lheoiies seek ieasons olhei lhan naikel faiIuie lo expIain vhy

29
Augusline iiieII, SLVLN LLCTURLS ON THL LAW AND HISTORY OI COIYRICHT IN OOKS 42
(1899).
3O
Much iecenl viiling on naluiaI iighls lheoiies of copyiighl seeks nol lo defend il, lul
ialhei lo accuse Congiess oi lhe couils of viongIy ieinsliluling a naluiaI iighls iegine lhiough
expansion of copyiighl. Scc, c.g., }anes oyIe, SHAMANS, SOITWARL, AND SILLLNS: LAW AND THL
CONSTRUCTION OI THL INIORMATION SOCILTY 56-59 (1996), MARK ROSL, AUTHORS AND OWNLRS:
THL INVLNTION OI COIYRICHT 125-28 (1993), Ielei }aszi, Tcuard a Tnccrq cf Ccpqrign|. Tnc
Mc|ancrpncscs cf 'Au|ncrsnip', 1991 DUKL L. }. 455, Coidon, supra nole 27, al 154O (aiguing lhal
couils have nislakenIy inleipieled lhe naluiaI Iav lheoiy of copyiighl and affoided loo nuch
pioleclion lo aulhois al lhe expense of fiee speech inleiesls). Scc a|sc AIfied C. Yen, Rcs|cring
|nc Na|ura| |au. Ccpqrign| as |aocr and Pcsscssicn, 51 OHIO ST. L.}. 517, 529-39 (199O) (sliessing
lhal naluiaI Iav concepls aie inheienl in copyiighl Iav).
31
Maik A. LenIey, Tnc |ccncnics Of |nprctcncn| |n |n|c||cc|ua| Prcpcr|q |au, 75 TLX. L. RLV.
989, 993 (1997).
32
Scc, c.g., Wendy }. Coidon, An |nquirq in|c |nc Mcri|s cf Ccpqrign|. Tnc Cna||cngcs cf
Ccnsis|cncq, Ccnscn|, and |nccuragcncn| Tnccrq, 41 STAN. L. RLV. 1343, 1435-49 (1989) (aiguing
lhal aulhoi's enlilIenenls as lhe slailing poinl fion vhich naikels evoIve), Roleil I. Meiges,
Arc Ycu Ma|ing |un cf Mc?. Nc|cs cn Mar|c| |ai|urc and |nc Parcdq Dcfcnsc in Ccpqrign|, 21 AIILA
Q.}. 3O5, 3O6 (1993) (econonics anaIysis of copyiighl has piogiessed leyond lhe poinl vheie a
ciude 'incenlive' sloiy passes foi anaIysis in eveiy case.), Richaid Iosnei & WiIIian Landes,
THL LCONOMIC ANALYSIS OI INTLLLLCTUAL IROILRTY, Ch. 5 (2OO4) (desciiling vaiious econonic
ioIes pIayed ly copyiighls, nainIy ieIaled lo lhe ieduclion of liansaclion cosls).


8
encouiaging aulhoiship nighl le inpoilanl. Lnjoying gieal acadenic, if nol
judiciaI, popuIaiily aie lheoiies lhal conceive of copyiighls incenlive syslen as
pail of lhe Iaigei syslen of fiee expiession associaled vilh lhe Iiisl Anendnenl.
33

Anolhei gioup lieals copyiighls incenlive sliucluie as pIaying a ioIe in pionoling
a iepulIican syslen of goveinance.
34

This delale is faniIiai and giealIy inleiesling lo copyiighl lheoiisls, lul can
aIso le nisIeading. The piolIen vilh lhe doninanl lheoiies of copyiighl is lhal
lhey incieasingIy faiI lo desciile inpoilanl pails of exisling Iav and lheii effecls.
The ieason is lhal lhe doninanl access/incenlives paiadign and ils spin-off
lheoiies aie nol conpiehensive lheoiies of copyiighl. Ralhei, lhey aie nainIy
lheoiies of au|ncrsnip oi of crca|icn. They Iead, in luin, lo aulhoi-cenliic lheoiies of
copyiighl. And vhiIe lheoiies of aulhoiship aie a ciuciaI pail of copyiighl lheoiy,
lhey piovide onIy a pailiaI desciiplion of lhe Iav.
This lasic conlenlion is suppoiled ly a casuaI iead of lhe copyiighl code.
Laige poilions of lhe slalule aie difficuIl lo desciile as pails of a piopeily schene
laIanced lo encouiage lhe ciealion of nev voiks. Thal desciiplion nay fil ceilain
coie seclions such as lhe idea/expiession dicholony in 1O2 of TilIe 17, lhe
excIusive iighls expiessed in 1O6 and geneiaI exceplions such as lhe faii use
docliine, found in 1O7. ul Iaige pails~indeed lhe giealesl voIune of acluaI
lexl~faiIs lo confoin lo lhis nodeI. These pails aie ialhei devoled lo indusliy-
specific IialiIily iuIes (conpuIsoiy Iicensing schenes) and innunilies~seclions

33
Scc, c.g., Yohai enkIei, |rcc As Tnc Air Tc Ccnncn Usc. |irs| Ancndncn| Ccns|rain|s On
|nc|csurc cf Tnc Puo|ic Dcnain, 74 N.Y.U. L. RLV. 354 (1999), }ed RulenfeId, Tnc |rccdcn cf
|nagina|icn. Ccpqrign|s Ccns|i|u|icna|i|q, 112 YALL L. }. 1 (2OO2) (evaIualiong copyiighl on a
lheoiy of a fiee speech cenleied on lhe fieedon lo inagine), Relecca Tushnel, Ccpqrign| As A
Mcdc| |cr |rcc Spcccn |au. lna| Ccpqrign| Has |n Ccnncn li|n An|i-Pcrncgrapnq |aus, Canpaign
|inancc Rcfcrn, And Tc|cccnnunica|icns Rcgu|a|icn, 42 .C. L. RLV. 1 (2OO1). Despile lhe
acadenic allenlion, aigunenls caIIing foi giealei sciuliny of copyiighl undei lhe Iiisl
Anendnenl have leen neaiIy vilhoul exceplion iejecled ly couils, nosl iecenlIy in LIdied v.
Reno, 537 U.S. 186, 198 (2OO3) and eaiIiei in Haipei & Rov IulIisheis, Inc. v. Nalion
Lnleipiises, 471 U.S. 539, 56O (1985).
34
Scc, c.g., WiIIian W. Iishei III, Rcccns|ruc|ing Tnc |air Usc Dcc|rinc, 1O1 HARV.L.RLV. 1659
(1988), NelaneI, supra nole 3.


9
lhal aie ugIy, conpIicaled, and olscuie lo copyiighl sludenls.
35
They incIude lhe
nechanicaI Iicense in 115, lhe secondaiy liansnission Iicense (foi calIe leIevision)
in 111, and pailicuIai innunilies foi pailicuIai gioups, such as inleinel seivice
piovideis in 512 and digilaI audio iecoiding devices in 1OO1 c| scq. Theii
ieIalionship lo a pulalive aulhois incenlives lo cieale vouId seen al lesl indiiecl:
lhe schenes, on lheii face, seen lo have nuch noie lo do vilh nanaging
conpelilion lelveen indusliy iivaIs.
Aulhoi-cenliic lheoiies aIso have lioulIe expIaining lhe secondaiy cosls of
copyiighl: lhose inposed on aclois olhei lhan aulhois and consuneis. Incenlive
lheoiies aie inleiesled in lvo calegoiies of copyiighls effecls: lhe lenefils lhal
acciue lo aulhois and lhe coiiesponding cosls inposed on consuneis and nev
ciealois. Yel il is evidenl lhal nuch of lhe cosls of copyiighl aie loine ly olhei
aclois. One need onIy Iook lo lhose vho oljecl lo copyiighl lo see vheie cosls aie
feIl. Iiiacy is invaiialIy a conpIainl of incunlenl indusliies, vhiIe chaIIengeis foi
lheii pail conpIain aloul leing squashed ly incunlenls.
36
IinaIIy,
leIeconnunicalions fiins and eIeclionics nanufacluieis conpIain aloul lhe cosls
lhey leai vhen enIisled lo enfoice copyiighl schenes of conliiluloiy IialiIily.
37

These secondaiy cosls of copyiighl, logelhei vilh lhe Iaige seclions of lhe code
desciiled alove aie dalapoinls lhal lodays lheoiies faiI lo expIain.
Il is inpoilanl lo sliess lhal schoIais aie nol aIlogelhei unavaie of lhe Iinils of
aulhoiship lheoiies. Lcononic lheoiisls, in pailicuIai, aie in lhe nidsl of an
ongoing effoil lo geneiale econonic expIanalions foi aspecls of copyiighl lhal do
nol fil lhe cenliaI incenlives sloiy. Tiansaclions cosls, evidenliaiy conceins, and

35
These seclions enjoy onIy passing allenlion in copyiighl caselooks, scc, e.g., Ninnei el
aI., CASLS AND MATLRIALS ON COIRICHT 225-227, 556 (6lh ed. 2OOO) (4 pages on conpuIsoiy
Iicensing in a look of 123O pages) aIlhough lhe difficuIly and lediun of leaching slaluloiy
Iicenses expIains lhis cuisoiy liealnenl.
36
Scc, c.g., Lee Cones, In Nane of Innovalion Sone Lel TechnoIogy Cel Avay Wilh
Muidei,WALL ST. }., May 5, 2OO3 al 1 (discussing vhelhei lechnoIogicaI innovalion piovides
an excuse foi piiacy), }ack Kapica, Copyiighl Iiligalion is lhiealening innovalion, THL CLOL
AND MAIL, Decenlei 11, 2OO3 al 13 (suggesling lhal copyiighl lhiealens innovalion).
37
Scc, c.g., Mike Musgiove, Copyfighl RenevaI: Ovneis of DigilaI Devices Sue lo Asseil
lhe Righl lo Recoid, WASH. IOST ApiiI 7, 2OO2, al LO1 (delaiIing fighl lelveen eIeclionics fiins
and HoIIyvood).


1O
ienl dissipalion pIay a najoi ioIe in such effoils.
38
Whal foIIovs is foi lhe nosl
pail conpIenenlaiy, ialhei lhan a iivaI lo lhese effoils lo undeicovei secondaiy
puiposes of of lhe copyiighl Iav.
39

The desciiplive lheoiy lhal foIIovs unifies aulhoiship and connunicalions
poIicies is an effoil lo give a noie conpIele accounl of vhal copyiighl is doing,
and vhy. Lven aulhoiship and connunicalion poIicy cannol, of couise, expIain
aII of copyiighl, and nany seclions of lhe Iav iefIecl nuIlipIe consideialions.
Hovevei, if vhal foIIovs is coiiecl, copyiighl is pIaying a ioIe in connunicalions
poIicy onIy pailiaIIy desciiled ly lodays lheoiies and one IikeIy lo le of
incieasing inpoilance as lhe scope of copyiighl incieases.

8. A Dcscrip|itc Tnccrq cf Ccpqrign| |au
Il is nol viong oi inaccuiale lo say lhal copyiighl is syslen of piopeily iighls
designed lo encouiage ciealion. Hovevei, copyiighl can aIso le usefuIIy desciiled
as a syslen lhal has evoIved lo nanage conpelilion anong naluiaI iivaIs in lhe
voiId of packaged infoinalion. To see vhal lhis neans, considei lhe voiId of
packaged infoinalion as conpiised piinaiiIy of lhiee gioups: aulhois,
disseninalois, and consuneis of expiessive voiks.

38
IiincipaI exanpIes incIude RICHARD IOSNLR & WILLIAM LANDLS, THL LCONOMIC
STRUCTURL OI INTLLLLCTUAL IROILRTY LAW (2OO3), DougIas Lichlnan, Ccpqrign| as a Ru|c cf
|tidcncc, 52 DUKL L.}. 683 (2OO3) (desciiling seclions of copyiighl as nolivaled ly an
evidenliaiy funclion), Iickei, supra nole 17, MichaeI Alianovicz, Copyiighl Redundancy
(2OO3), atai|ao|c a|
hllp://papeis.ssin.con/soI3/deIiveiy.cfn/SSRN_ID37458O_codeO3O13O57O.pdf`alsliaclid=37
458O (desciiling nuch of copyiighl as nolivaled ly an inleiesl in pievenling iedundancy and
ienl dissipalion).
39
This is pailicuIai liue vilh iespecl lo Randy Iickeis iecenl voik, vhich is inleiesled in
copyiighl fion lhe peispeclive of anliliusl poIicy and a foundalion foi nuch of vhal foIIovs
heie. Scc Iickei, supra nole 17, RandaI Iickei, |rcn |discn |c |nc 8rcadcas| ||ag. Mccnanisns cf
Ccnscn| and Rcfusa| and |nc Prcpcr|iza|icn cf Ccpqrign|, 7O U.CHI. L. RLV. 28 (2OO3).


11
FIg 1.1: CnpyrIght Rc!atInnshIps
These pailies~aulhois, oId and nev disseninalois, and consuneis, aie in iepeal
ieIalionships fiaughl vilh polenliaI foi confIicl and alusive lehavioi. WhiIe
confIicls nay aiise lelveen any of lhe picluied pailies,
4O
lhe Iav focuses on lvo
iepealed ieIalionships: lhose lelveen nev and exisling aulhois and lhose lelveen
incunlenl and chaIIengei disseninalois. The fiisl is faniIiai, il is copyiighls
au|ncrsnip iegine. The second is Iess so, il is copyiighls ccnnunica|icns iegine~
so naned lecause il ieguIales lhe sane pailies (disseninalois) as connunicalions
Iav, and lecause il confionls siniIai piolIens.
41

4O
The conlesl lelveen fieeIance viileis and lhose vho disliilule lheii naleiiaIs onIine is
an exanpIe of lhe ieIalionship lelveen exisling aulhois and nev disseninalois. Scc, c.g., Nev
Yoik Tines Co. v. Tasini, 533 U.S. 483 (2OO1) (conceining a cIash ovei lhe nevspapeis saIe of
copyiighled lexl lo le ieliievalIe in a dalalase seaich). So, lo a degiee, vas lhe confIicl
lelveen conposeis and nusic pulIisheis and lhe iadio lioadcasl indusliy, scc infia noles 1O7-
158.
41
As used in lhis papei, lhe lein connunicalions poIicy iefeis lo lhe pailicuIai
queslions of conpelilion poIicy lhal eneige in lhe indusliies of leIeconnunicalions.
Connunicalions poIicy is lheiefoie an appIicalion of anliliusl piincipIes in a iepeal conlexl.
Cf. }. Ciegoiy Sidak, Tc|cccnnunica|icns in ]cricnc, 81 CAL. L. RLV. 12O9, 1237-38 (1993) (aiguing
D
i
s
s
e
m
i
n
a
t
o
r
Communications Regime
New
Disseminator
New
Author
Incumbent
Disseminator
Authorship Regime
Incumbent
Author
Consumers


12
FIg. 1.2 Prnb!cmatIc BchavInr In thc Wnr!d nf CnpyrIght

Whal kinds of piolIens eneige anongsl nev and exisling pIayeis` Copyiighl
Iav has evoIved lo deaI vilh lvo iecuiienl lypes of alusive lehavioi. The fiisl is
nisapprcpria|icn, vhich aiises lecause each nev acloi (vhelhei aulhoi oi
disseninaloi) has lhe capaliIily lo appiopiiale and fiee-iide off of lhe inveslnenls
nade ly exisling aclois, vhelhei in expiessive voiks, disliilulion channeIs, oi
olheivise.
42
The niiioi inage of nisappiopiialion is |cc|cu| lehavioi, vhich
aiises fion lhe capaliIily of an exisling acloi lo lIock naikel enliy and excIude oi
conlioI polenliaI nev conpelilois. The vaiious IegaI schenes engineeied lo
pievenl lhese lvo piivale viongs can le undeislood lo conpiise nuch of vhal ve
caII lhe copyiighl Iav.

foi lhe consoIidalion of ieasoning in connunicalions Iav and anliliusl). The conlexl is
dislinguished ly lvo faclois: fiisl, lhe fiequenl exislence of lollIeneck infiasliucluies, see infra
II.A, and second, lhe exislence of fixed slaluloiy poIicies lhal occasionaIIy nandale devialions
fion lhe goaI of naxinizing consunei veIfaie, such as lhe goaIs of univeisaI seivice
(connunicalions lechnoIogies shouId le avaiIalIe lo eveiy cilizen), scc gcncra||q MiIlon
MueIIei, Unitcrsa| Scrticc in Tc|cpncnc His|crq. A Rcccns|ruc|icn, 17 TLLLCOMMUNICATIONS IOL'Y
352, 356 (1993), and IocaIisn (suppoil foi IocaI nedia oulIels ovei nalionaI), scc, c.g., 47
U.S.C.A. 521(2) (discussing inpoilance of IocaI conlioI ovei calIe).
42
Wendy Coidon desciiles lhis as lhe ieslilulionaiy inpuIse. Scc Wendy Coidon, On
Ouning |nfcrna|icn, |n|c||cc|ua| Prcpcr|q and |nc Rcs|i|u|icnarq |npu|sc, 78 VA. L. RLV. 149 (1992),
scc aIso Richaid Iosnei, Misapprcpria|icn. A Dirgc, 4O HOUSTON L. RLV. 621 (2OO3)
(Misappiopiialion is a candidale lo le lhe oveiaiching piincipIe lhal vouId ialionaIize
inleIIecluaI piopeily Iav as a vhoIe . |lulj loo spiavIing a concepl lo seive as lhe oiganizing
piincipIe.).
Incumbent
Author or
Disseminator
Lock-Out
Misappropriation
New
Author or
Disseminator


13
Il is inpoilanl lo sliess lhal nolhing heie assunes lhal lhe aclois picluied viII
a|uaqs lehave in alusive vays. Nol eveiy nev viilei is a pIagiaiisl noi is eveiy
incunlenl indusliy lenl on deslioying eneigenl conpelilois. ul in lhis viev
copyiighl has, as OIivei WendeII HoInes suggesled geneiaIIy, evoIved lo neel
syslenalic nislehavioi.
43

Civen lhis inlioduclion of lhe piolIens copyiighl faces, ve can nov luin lo lhe
sulslance of lhe iegines lhal have aiisen lo counlei lhen. Copyiighls aulhoiship
iegine needs IillIe inlioduclion lecause il is aIieady lhe focus of nosl schoIaiIy
allenlion. Il is onIy voilh noling lhal copyiighl handIes lhe nisappiopiialion
piolIen anong aulhois in veiy cIevei vays. Copyiighl foi aulhois has ciealed a
docliinaI fIooi and ceiIing, vheie lhe fIooi is lhe iequiienenl of oiiginaIily,
and lhe ceiIing is lhe Iack of pioleclion foi lhe ideas undeiIying expiession.
44

Togelhei, and joined ly lhe faii use exceplion,
45
lhese coie docliines cieale lhe
faniIiai idea of a laIance lhal aIIovs ceilain lul nol aII foins of appiopiialion.
This is a faniIiai suljecl lo anyone vho has sludied copyiighl and needs IillIe
iepelilion. ConveiseIy, copyiighls connunicalions iegine, vhich nanages
siniIai piolIens anong disseninalois, is fai Iess sludied and undeislood. The
ienaindei of lhis Iail is an effoil lo ienedy lhal inlaIance.
C. Tnc Ccnnunica|icns Rcginc Rctca|cd
Copyiighls connunicalions iegine, ils nanagenenl of iivaI disseninalois, is
nol a iecenl phenonenon, foi il acluaIIy piedales copyiighls aulhoiship iegine.
The nanagenenl of conpelilion anong pulIisheis, copyiighl hisloiians leII us,
vas acluaIIy lhe eaiIiesl puipose of copyiighl. Hisloiian Ray Ialleison expIains:
|Hjisloiy shovs us |lhalj copyiighl legan as a pulIisheis iighl, a iighl vhich
funclioned in lhe inleiesl of lhe pulIishei, vilh no concein foi lhe aulhoi.

43
Scc OIivei WendeII HoInes, Tnc Pa|n cf |nc |au, 1O HARV. L. RLV. 457 (1897). This vas
aIso a viev of Iav slaled ly Lpicuius: lhe Iavs exisl foi lhe sake of lhe vise, nol lhal lhey nay
nol do viong, lul lhal lhey nay nol suffei il. Lpicuius, Tnc Ccnp|c|c |x|an| lri|ings cf
|picurus, in THL STOIC AND LIICURLAN IHILOSOIHLRS 51 (Tians. CyiiI aiIey 194O).
44
Scc 17 U.S.C. 1O2(a).
45
Scc Wendy Coidon, |air Usc as Mar|c| |ai|urc, 3O }. COIYRICHT SOC. 253 (1983)


14
Indeed, il exisled as such foi ovei a hundied and fifly yeais lefoie il vas .
deened lo funclion piinaiiIy in lhe inleiesl of lhe aulhoi.
46

Accoiding lo copyiighl hisloiians lhe slalioneis (pulIisheis) iighls of lhe 15OOs
and 16OOs, Ialei codified in lhe Slalule of Anne,
47
aIIocaled anong lhe slalioneis lhe
excIusive iighls lo copy a given nanusciipl (lhe copy-iighls).
48
The oiiginaI
copyiighls funclioned as a device lhal eIininaled diiecl conpelilion lelveen
slalioneis and veie geneiaIIy unconceined vilh aulhoiiaI nalleis.
49
As }oseph
Lovenslein expIains, lhe eaiIiesl anceslois of copyiighl veie a piiviIege confeiied
ly lhe guiId on one of ils nenleis, pail of an inpeifecl lul nol ineffeclive syslen
ly vhich lhe guiId soughl lo pieseive inleinaI oidei.
5O

Malleis have changed Iess in lhe Iasl 4OO yeais lhan one nighl lhink.
Copyiighl, as in lhe 17lh cenluiy, is sliII quile conceined vilh nainlaining oidei
anong lhe iivaI slalioneis of oui eia. Whal foIIovs lhiough lhe end of Iail I is an
effoil lo desciile lhe cIassic connunicalions iegine, cenleied on IegisIalive
sellIenenls pIaced in lhe copyiighl code. Aflei discussing connunicalions poIicy
in Iail II, Iail III desciiles copyiighls nev connunicalions iegine, vhich has
evoIved nainIy aflei 1976 and is cenleied on specific innunilies lo copyiighl
IialiIily.
1. S|a|u|crq Mcdu|cs

46
LYMAN RAY IATTLRSON, COIYRICHT IN HISTORICAL ILRSILCTIVL 8-9 (1968). Sone, such
as }ane Cinsluig, vouId aigue lhal lhe void copyiighl shouId nol le undeislood olhei lhan as
a iighl sulsisling in an aulhoi, and lhal lo speak of a pulIisheis oi slalioneis copyiighl is a
conliadiclion in leins. I lake no posilion on lhis issue, lul nole lhal sone hisloiians do use lhe
lein copyiighl in iefeience lo lhe eaiIy iighls of pulIisheis. Scc id., scc aIso enjanin KapIan,
AN UNHURRILD VILW OI COIYRICHT 5 (1967) (using lhe lein in lhis nannei).
47
Acl foi lhe Lncouiagenenl of Leaining, 171O, 8 Ann., c. 19 (Lng.).
48
Ioi a discussion of lhe eaiIy hisloiy invoIving lhe Slalioneis Copyiighl and lhe Slalule
of Anne, scc L. Ray Ialleison, Ccpqrign| in 1791. An |ssaq Ccnccrning |nc |cundcrs Vicu cf |nc
Ccpqrign| Pcucr Gran|cd |c Ccngrcss |n Ar|ic|c |, Scc|icn 8, C|ausc 8 cf |nc U.S. Ccns|i|u|icn, 52
LMORY L.}. 9O9, 913-28 (2OO3).
49
Scc KapIan, supra nole 46, al 5 (They |slalioneis copyiighlsj did nol, hovevei, sland on
any nolion of oiiginaI conposilion, foi lhey nighl le gianled foi ancienl as veII as nev
voiks.).
5O
}OSLIH LOWLNSTLIN, THL AUTHORS DUL: IRINTINC AND THL IRLHISTORY OI COIYRICHT 29
(2OO2).


15
The nosl olvious and inpoilanl nanifeslalion of copyiighls connunicalion
iegine lake up lhe nosl of TilIe 17 of lhe Uniled Slales Code: lhe conpIex
slaluloiy nanagenenl schenes lhal laIance lhe iespeclive iighls of disseninalion
indusliies. The iuIes enledded in TilIe 17 aie noduIes of connunicalions poIicy
specific lo a pailicuIai indusliy and, usuaIIy, lo a specific hisloiicaI conlexl. Lach
is conpIicaled and Ienglhy, and nake foi peihaps lhe Ieasl gIanoious pails of
copyiighl. Yel il is lhe anlilion of lhis seclion lo ieveaI lhe seclions foi vhal lhey
aie: lhe enlodinenls of copyiighls cIassic connunicalions poIicy.
Mosl of lhe noduIes aie occupy 111 lo 122 of TilIe 17 of lhe Uniled Slales
code. Lach has nuch in connon: each speaks lo and nanages conpelilion
lelveen polenliaI connunicalions iivaIs: lioadcasl/calIe, lioadcasl/saleIIile,
phonogiaph/Inleinel, and so on. The nosl connon vay of achieving a
conpionise lelveen iivaIs is a conpuIsoiy Iicensing schene: Iavs lhal foice lhe
copyiighl ovnei lo piovide open and non-disciininaloiy access lo a voik in
exchange foi a fixed paynenl. Modein noduIes, such as lhe 512 schene foi
inleinel seivice piovideis, cieale innunilies schenes.
A sunnaiy desciiplion of lhe najoi noduIes and lheii fealuies foIIovs:
a. Scccndarq |ransnissicns oq cao|c cpcra|crs and c|ncrs.
This is an exlieneIy conpIex conpuIsoiy Iicense schene enacled in 1976. Il
vas enacled in iesponse lo calIe opeialois unpaid usage of lioadcasl signaIs
in lhe 195Os-7Os. Il iequiies ielioadcasleis~piincipaIIy, calIe opeialois, lul
aIso holeIs and apailnenl conpIexes~lo pay a fixed fee foi a Iicense lo
ielioadcasl copyiighled naleiiaIs and is found in 17 U.S.C. 111.
o. Digi|a| Audic Transnissicn / lcocas|ing |iccnsc
A piovision iequiiing Inleinel iadio-slalions lo pay a slaluloiy fee in oidei lo
ielioadcasl copyiighled naleiiaIs is found in 114.
c. Tnc Mccnanica| |iccnsc
This conpuIsoiy Iicense aIIovs anyone vanling lo iecoid a conposed song lo
pay a fixed fee lo lhe conposei. Il aIso aIIovs iecoiding of covei veisions of
fanous songs. The nechanicaI Iicense is found in 115.


16
d. ]u|cocx ncgc|ia|cd |iccnscs
This seclion nandales negolialion foi lhe Iicenses lo pIay sound iecoidings of
nondianalic nusicaI voiks on jukeloxes and is Iocaled in 116.
c. Puo|ic 8rcadcas| |iccnsc
118 of lhe Copyiighl Acl cieales a conpuIsoiy Iicense foi lhe use of pulIished
nondianalic nusicaI voiks and pulIished picloiiaI, giaphic, and scuIpluiaI
voiks in conneclion vilh nonconneiciaI lioadcasling.

f. Sa|c||i|c rc|ransnissicns cf |c|ctisicn signa|s
A conpuIsoiy Iicense schene, siniIai lo lhal found in 111, appIies specificaIIy
lo saleIIile ielioadcasl of conlenl lolh fion lioadcasleis and fion calIe
opeialois and is found in 119.
g. Sa|c||i|c rc|ransnissicns cf |c|ctisicn signa|s in|c |cca| nar|c|s.
A laigain lelveen lhe saleIIile, lioadcasl, and calIe indusliies, 122 gianls
saleIIile ielioadcasleis a fiee (no-ioyaIly) conpuIsoiy Iicense foi IocaI
lioadcasling, piovided lhey agiee lo caiiy aII leIevision lioadcasl slalions
Iocaled vilhin lhe IocaI naikel.
51

n. |nnuni|q fcr |SPs |ransni||ing cr ncs|ing infringing na|cria|
A conpionise ieached in 1998 lelveen Inleinel Seivice Iiovideis and conlenl
ovneis gianls Inleinel Seivice Iiovideis (ISIs) vaiying IeveIs of innunily
foi lhe sloiage oi liansnission of copyiighled conlenl. ISIs aie geneiaIIy
innune liansnission of infiinging conlenl, vhiIe seaich engines and lhose
vho hosl conlenl and aie suljecl lo a duly lo lake oi deIink infiinging naleiiaI
upon nolice. These iuIes aie found in 512 of TilIe 17.
i. |nnuni|q fcr prcduccrs cf digi|a| audic rcccrding dcticcs
1OO8 conlains a gianl of innunily lo nanufacluieis of digilaI audio iecoiding
devices (Iike DATs) on condilion of lhe paynenl of a ioyaIly on each saIe.

51
Scc LIIen I. Coodnan, 8argains |n Tnc |nfcrna|icn Mar|c|p|acc. Tnc Usc Of Gctcrnncn|
Suosidics Tc Rcgu|a|c Ncu Mcdia, 1 }. TLLLCOM & HICH TLCH. 217 (2OO3).


17
The exislence and significance of lhe slaluloiy noduIes cannol le queslioned.
The calIe indusliy, jusl lo lake one exanpIe, lased ils eaiIy exislence on access lo
copyiighled voiks, and has paid liIIions in access fees lo lioadcasleis.
52
Yel
vheie do lhese noduIes cone fion and vhal puipose do lhey seivce`
UnIike lhe faniIiai judiciaI piocess lehind nosl of copyiighls aulhoiship
decision, lhe piocess lehind copyiighls connunicalions iegine is a nuch
nuikiei suljecl. The conpIex slaluloiy noduIes desciiled alove aie lhe pioducl
of a diffeienl and sonevhal unusuaI inslilulionaI piocess: a nixed pioceduie of
lhe fedeiaI couils (pailicuIaiIy lhe Supiene Couil), and a sepaiale piocess of
nedialed ccpqrign| sc|||cncn|. The usuaI lul nol invaiialIe iesuIls aie lhe noduIes
lhal aie lhe aclive nainslay of copyiighls connunicalions iegine.
SchoIais aie avaie of and have docunenled lhe hisloiy of negolialed
sellIenenl in lhe conlexl of copyiighl and nev lechnoIogies.
53
ul vhal foIIovs is
an effoil lo undeisland lhe piocess nol as jusl as a hisloiy lul as an inslilulion.
Whal innedialeIy foIIovs is nol a cIain aloul lhe ideaI inslilulionaI piocess foi
ciealing connunicalions poIicy, lul ialhei a desciiplion of hov such poIicy is
nade.
3. A Mcdc| cf Ccnf|ic|
The cenliaI noduIes of copyiighls cIassic connunicalions poIicy have aiisen
oul of confIicl-oul of lillei, pulIic lallIes lelveen incunlenl and chaIIengei
disseninalois vho oflen seen deleinined lo do oi say anylhing lo gel lheii vay.
Thal is lhe iepealed pallein of lhe 2Olh cenluiy copyiighl confIicl and, if lhe fiisl
fev yeais aie any indicalion, viII peisisl as a pail of lhe 21sl cenluiy copyiighl
Iandscape.

52
The calIe indusliy had paid aloul $2.5 liIIion as of 1997 foi access lo lioadcasl signaIs.
See COIYRICHT OIIICL, A RLVILW OI THL COIYRICHT LICLNSINC RLCIMLS COVLRINC
RLTRANSMISSION OI ROADCAST SICNALS 43 (1997) (ciling leslinony of lhe NalionaI CalIe
TeIevision Associalion).
53
Scc, e.g., IAUL COLDSTLIN, COIYRICHTS HICHWAY (2OO3), }ane Cinsluig, Ccpqrign| and
Ccn|rc| Otcr Ncu Tccnnc|cgics cf Disscnina|icn, 1O1 COLUMIA LAW RLVILW 1613 (2OO1), }essica
Lilnan, Ccpqrign| |cgis|a|icn and Tccnnc|cgica| Cnangc, 68 ORLCON LAW RLVILW 275 (1989),
Tiollei Haidy, Ccpqrign| and Ncu Usc Tccnnc|cgics, 23 NOVA L. RLV. 659 (1999).


18
The 2Olh cenluiy vilnessed decades-Iong lallIes lelveen, lo nane jusl a fev
exanpIes, lhe iecoiding indusliy and sheel nusic pulIisheis,
54
calIe and
lioadcasl,
55
eIeclionics nanufacluieis and iecoiding conpanies,
56
and onIine
nusic disliilulois.
57
ul vhy do lhese confIicls aiise` To vhal degiee aie lhey a
peinanenl pail of copyiighls enviionnenl`
This Seclion aigues lhal given onIy veiy lasic assunplions, pulIic confIicls~
effoils lo enIisl goveinnenl aid~anong iivaI disseninalois aie neaiIy inevilalIe
and lheiefoie lhal lhey aie a peinanenl piolIen foi copyiighls ieguIalion of
packaged infoinalion. Whal foIIovs is cIoseIy ieIaled lo lhe nodeI of
nisappiopiialion and Iockoul discussed alove, and lo lhe lollIeneck-foiecIosuie
piolIen discussed in Iail II.
58
Il is a nodeI lased on a sinpIe pulIic choice
lheoiy.
59

We can piedicl lhal confIicls lelveen incunlenl and chaIIengei disseninalois
viII aiise so Iong as lvo lhings aie liue: fiisl, lhal noie efficienl lechnoIogies of
disseninalion viII le invenled and second, lhal lheie exisls lhe possiliIily, lul nol
lhe ceilainly, of convincing Coveinnenl lo piovide Iavs lhal can le used againsl a
conpeliloi. I suggesl, in olhei voids, lhal lhe confIicls lhal aiise in lhe copyiighl
voiId aie nol nuch diffeienl fion lhose in olhei aieas vheie goveinnenl nighl
acl, if convinced, lo piolecl naikel conpelilois.
6O
Ioi exanpIe, lhe confIicls
lelveen cIasses of disseninalois aie concepluaIIy siniIai lo lhe confIicls lhal aiise
vhen doneslic indusliies face noie efficienl foieign conpelilois.
61
The diffeience
is lhal lhe copyiighl Iav, ialhei lhan laiiffs and olhei liade laiiieis, is invoked.

54
Scc infra seclion II.D(1).
55
Scc infra seclion II.D(3).
56
Scc infra seclion III..
57
Scc infra lexl acconpanying noles 354 lo 373.
58
Scc Seclion II.A., infia.
59
Scc infia noles 65 lo 7O.
6O
Cf. }anes . Spela, A Visicn cf |n|crnc| Opcnncss oq Gctcrnncn| |ia|, 96 Nv. U. L. Rev.
1553, 1573 (2OO2).
61
Cf. }oeI R. IauI, Dc |n|crna|icna| Tradc |ns|i|u|icns Ccnc|riou|c |c |ccncnic Grcu|n and
Dctc|cpncn|?, 44 VA. }. INTL L. 285 (desciiling siniIai nodeI).


19
An incunlenl, eslalIished disseninaloi seIIs expiessive voiks using exisling
lechnoIogy: ils cosls, incIuding paynenls lo aulhois, iesuIl in suppIy cuive SI. To
sinpIify, assune lhal lhe copyiighl Iav confeis no aliIily lo sel a supia-
conpelilive piice, so lhal lhal lhe piice is sel vheie suppIy neels denand, as
foIIovs:
FIg. 2.1 Thc Incumbcnt Industry A!nnc

A chaIIengei is any enlily vho enjoys an advanlage in lhe efficiency of
disseninalion (suppIy cuive SC). This condilion can aiise foi seveiaI ieasons. The
fiisl ieason deiives fion any lechnoIogicaI advanlage in lhe deIiveiy of conlenl -
eilhei lellei quaIily (Iike calIe oi piano ioIIs), oi Iovei cosl (Iike lioadcasling oi
onIine disliilulion). Lilhei foin of lechnoIogicaI advanlage can le nodeIed as
sinpIy a noie efficienl suppIy cuive. The second deiives fion lhe chaIIengei
leing alIe lo disseninale conlenl Iess expensiveIy lecause il does nol pay foi lhe
voiks ilseIf. Thal nay le lhe case eilhei lecause exisling copyiighl Iav does nol
expIicilIy appIy (as vas lhe case vilh eaiIy calIe and gianophone lechnoIogy)
62
oi
lecause of sone capaliIily lo evade copyiighl Iavs iequiienenl lo Iicense lhe
voik (as in lhe exanpIe of onIine disliilulion).
63
In eilhei case, pail of lhe
chaIIengeis advanlage in efficiency slens fion vhal is usuaIIy desciiled as
piiacy.

62
In facl, in lhe case of gianophones, il vas viillen expIicilIy nol lo, lecause Congiess did
nol vanl opeialois of penny aicades lo have lo luy a copy of lhe sheel nusic foi use of a
noveIly device. Scc }essica Lilnan, Wai Sloiies, 2O Caidozo Ails & Lnl. L.}. 337, 352 (2OO2)
(ciling H.Rep. No. 2222, al 7-9 (19O9)).
63
Scc infra noles 342 lo 373 and acconpanying lexl.


2O
FIg. 2.2: Thc Cha!!cngc

ul vhy does lhe aiiivaI of a noie efficienl lechnoIogicaI iivaI cieale confIicl`
ConfIicl aiises lecause of lhe second assunplion: lhal goveinnenl can sonelines
le convinced lo piolecl lhe incunlenl indusliy, lul nol aIvays, and nol
piediclalIy. If lhe degiee of pioleclion is difficuIl lo piedicl and depends in pail
on inveslnenls in peisuasion, il nakes sense foi lolh lhe incunlenl and lhe
chaIIengei lo invesl in effoils lo ollain a favoialIe oulcone. These iivaI
inveslnenls in ollaining a favoialIe goveinnenlaI aclion iesuIl in sone of lhe
Iongesl iunning confIicls in copyiighl hisloiy.
64

Moie pieciseIy, confIicl aiises in a foin lhal pulIic choice lheoiisls caII a
conlesl lelveen ienl-piolecling and ienl-seeking inleiesls. This is a conlesl
vheie an incunlenl dedicales iesouices lo piolecling ils favoialIe posilion againsl
encioachnenl ly olhei gioups.
65
The incunlenl hoIds a nunlei of polenliaI IegaI
lhieals againsl any chaIIengei, incIuding lhe inposilion of incessanl Iiligalion
cosls,
66
an aliIily lo convince ieguIalois (Iike lhe IedeiaI Connunicalions

64
Cf. }anes uchanan, Renl Seeking and Iiofil Seeking, in Tcuard a Tnccrq cf |nc Rcn|-
Scc|ing Sccic|q 9-11 (198O) (expIaining lhal lhe possiliIily of goveinnenl aclion encouiages
inveslnenls in effoils lo ollain ienls).
65
Ioi an expIicalion of ienl-piolecling in lhe conlexl of pulIic choice lheoiy, scc Roleil L.
ToIIison, Rcn| Scc|ing, in ILRSILCTIVLS ON IULIC CHOICL 5O6, 515-517 (Dennis MueIIei, ed.,
1997).
66
Scc Tin Wu, lncn Ccdc |sn| |au, 89 VA. L. RLV. 679, 7O5 (2OO3).


21
Connission) lo iesliicl lhe chaIIengei,
67
oi Iollying foi Iavs lhal viII pul lhe
chaIIengei al a seiious disadvanlage.
68

Iail II of lhis papei desciiles in giealei delaiI hov copyiighl Iavs and olhei
Iavs can le used as a looI of foiecIosuie. Heie ve can sel foilh lhe incunlenls
polenliaI slialegies. Theie aie lvo: lhe fiisl is lo liy eIininale lhe chaIIenge ly
incieasing lhe chaIIengeis cosls, ly, foi exanpIe, denying lhe chaIIengei access lo
an essenliaI inpul (lhe copyiighled voik). The iesuIl is picluied leIov, vheie lhe
chaIIengeis suppIy cuive is shifled lo lhe unconpelilive Sc*.This is a slialegy akin
lo seeking liade pioleclion lhiough laiiff oi an inpoil lan. The second slialegy is
lo co-opl lhe chaIIengei: lo aIIov lhe chaIIengei lo seII al a piice coiiesponding lo
ils noie efficienl suppIy cuive, lul lo pay a lax lo lhe incunlenl lhal liansfeis as
nuch of ils pioducei suipIus as possilIe. In eilhei case lhe incunlenl ieIies on
goveinnenl assislance lo achieve ils desiied iesuIl.
FIg 2.3: 5ucccssfu! E!ImInatInn nf CnmpctItInn

The lechnoIogicaI chaIIengei, neanvhiIe, invesls ils ovn pioducei suipIus
(lased on ils noie efficienl suppIy cuive) in effoils lo pievenl goveinnenl fion
piolecling lhe disseninaloi oi incieasing lhe chaIIengeis cosls. Such inveslnenls
can le as lasic as defending in copyiighl Iiligalion, lul can aIso incIude noie
oulIandish neasuies such as using lhe anliliusl Iav oi devising lellei neans of
evading copyiighl enfoicenenl (a iecenl slialegy).

67
Scc, c.g., infra nole 221.
68
Scc Wu, supra nole 66, al 7O5.


22
Ioi aII of lhese slialegies, lhe ciilicaI assunplion is lhal lhe foin and lhe
oulcone of lhe goveinnenls aclion viII le haid lo piedicl. Inpeifecl infoinalion
is lhe laiiiei lo sellIenenl, and lhe unknovn and unknovalIe is vhal lhe
Coveinnenl viII do.
69
If, conveiseIy, eveiyone knev vhal Coveinnenl vas IikeIy
lo do, lhen sellIenenl of copyiighls connunicalions dispules vouId le fasl.
Theie aie nany ieasons vhy Coveinnenl aclion viII le haid lo piedicl vhen
nev lechnoIogies of disseninalion aie invenled. Iiisl, unIike, say, liaffic accidenls,
lheie aie ieIaliveIy fev invenlions of najoi nev disseninalion lechnoIogies~in
lhe 2Olh cenluiy, al lesl, one a decade oi so. Theie is lheiefoie a lhin naikel foi
paying off chaIIengei indusliies vieIding nev lechnoIogies. Second, unIike a loil
Iavsuil, lheie aie nuIlipIe goveinnenl aclois invoIved. Couils using copyiighl
Iav nay lake one side, Congiess anolhei, lhe anliliusl Iav and IedeiaI
Connunicalions Connission nake occasionaI caneo appeaiances.
7O
As a iesuIl,
lhe sun lolaI of goveinnenl aclion is nuch haidei lo piedicl lhan il is in lhe
sellIenenl of a iun-of-lhe-niII Iavsuil. This inheienl and hisloiicaI
unpiediclaliIily nakes eaiIy sellIenenl unIikeIy. IinaIIy, nol onIy is lhe diieclion
of goveinnenl aclion difficuIl lo piedicl, lul so is ils effecliveness. Copyiighl
enfoicenenl can le coslIy and chaIIenging. The knovIedge lhal goveinnenl
aclion nay le of unpiediclalIe effecliveness incieases lhe unceilainly lhal Ieads lo
copyiighl confIicls.
ConveiseIy, vhal vouId happen in lhe alsence of any goveinnenl iuIes,
ieguIalions, deciees oi olhei invoIvenenl` If lhe incunlenls veie denied any
possiliIily of ollaining goveinnenl pioleclion fion lhe lechnoIogicaIIy advanced
chaIIengei, ils slialegy vouId lhen depend on ils capaliIily foi seIf-enfoicenenl:
ils aliIily lo piolecl ils pioducls and ils pioducei suipIus ly non-IegaI neans. Ioi
exanpIe, in a voiId vilhoul goveinnenl, lioadcasleis nighl have pievenled lhe
calIe indusliy fion sleaIing ils signaIs ly using physicaI foice oi, loday, lellei

69
Scc RICHARD IOSNLR, LCONOMIC ANALYSIS OI LAW 21.5 (4lh ed. 1992) (olseiving lhal
Iack of infoinalion nakes sellIenenl of Iavsuils Iess IikeIy).
7O
Ioi a discussion of ICC invoIvenenl in iadio scc infia noles 1O7 lo 158 and
acconpanying lexl. Ioi a discussion of lhe invoIvenenl in lhe calIe-lioadcasl dispule, scc infia
noles 186 lo 259.


23
scianlIing of signaIs.
71
Today, even vilh a copyiighl Iav, lhe iecoiding indusliy
uses non-IegaI neans lo inciease lhe cosls of disliiluling ils pioducls using onIine
disliilulion.
72

The effecliveness of such seIf-enfoicenenl is IikeIy unpiediclalIe, and so lolaI
alsence of goveinnenl invoIvenenl vouId nol necessaiiIy Iead lo peace and
agieenenl lelveen conpeling disseninalois. Again, vhal is nosl IikeIy lo Iead
lo iapid sellIenenl is piediclalIe goveinnenl aclion vilh knovn effecls in any
diieclion.
Iion lhis discussion one nighl expecl ne lo advocale giealei piediclaliIily in
oidei lo nininize inveslnenls in seeking goveinnenl favoi, lehavioi lhal pulIic
choice lheoiy consideis vaslefuI ienl-seeking.
73
ul I have nol aigued heie, as
lhe cIassic ienl-seeking Iileialuie vouId, lhal such expendiluies aie vaslefuI oi
undesiialIe. As Iail II expIains, lhe cosls of ienl-seeking nay le voilhvhiIe if il
is uncIeai vhich lechnoIogy is acluaIIy lellei, and if lhe ienl-seeking piocess
evenluaIIy aIIovs lhe lellei lechnoIogy lo vin oul. IiediclalIe goveinnenl
aclion~a hypolhelicaI copyiighl diclaloi~couId eIininale aII confIicl ly choosing
a vinnei lul aIso pick lhe viong vinnei. So lhe cosls of ienl-seeking nay le
juslified ly a lellei sulslanlive iesuIl.
To sunnaiize: lhe exislence of unpiediclalIe copyiighl pioleclion and nev
lechnoIogies shouId pioduce Iong conlesls lo ollain favoialIe goveinnenlaI
decisions. ecause il is nol olvious vhal goveinnenl viII do, incunlenl
indusliies, Iike lioadcasleis, lhe iecoiding indusliy, and sheel-nusic pulIisheis,
can le expecled lo end up in Iong conlesls vilh chaIIengeis lo peisuade
goveinnenl lo lake favoialIe aclion. The iesuIl of such conlesls is copyiighls dc

71
Cf. Lee Kovaisky, Tccnnc|cgica| Suos|i|u|icn and |nc Arns-Racc Tnccrq cf Ccpqrign| (diafl
on fiIe vilh aulhoi) (aiguing lhal copyiighl ovneis have a choice lelveen seeking seIf-
pioleclion, copyiighl pioleclion, oi lolh).
72
Scc Wu, supra nole 66, al 739-741 (desciiling non-IegaI nelhods used ly iecoiding
indusliy againsl onIine nusic disliilulion).
73
Scc }anes M. uchanan, Rcn| Scc|ing and Prcfi| Scc|ing, in TOWARD A THLORY OI THL RLNT
SLLKINC SOCILTY 3, 4 (}anes M. uchanan el aI., eds., 198O) (The lein rcn| scc|ing is designed lo
desciile lehavioi in inslilulionaI sellings vheie individuaI effoils lo naxinize vaIue geneiale
sociaI vasle ialhei lhan sociaI suipIus.).


24
fac|c connunicalions iegine. ul lhis is quile a laie desciiplion. In lhe seclions
lhal foIIov, ve can see vhal goveinnenl has done in lhe face of confIicls lelveen
chaIIengeis and incunlenls, and hov copyiighls connunicalions poIicy has
acluaIIy deveIoped.
D. Ccnnunica|icns Pc|icq, 1900-1976
1. Tnc 8ir|n cf |nc Rcccrding |ndus|rq
The liilh of lhe iecoiding indusliy in lhe Iale 189Os and eaiIy 19OOs is lhe
nodeI, foi lellei of foi voise, foi copyiighls connunicalions poIicy in lhe 2Olh
cenluiy. The iecoiding indusliy, piedaling lodays onIine disliilulion via calIe
and olhei nedia, vas lhe oiiginaI lechnoIogicaI fiee-iidei~lhe fiisl lo luiId a
lusiness vhose success depended, in pail, on lhe incidence of copyiighl
aililiage.
74

The iecoiding indusliy pioneeis veie lhe nanufacluieis of piano ioIIs and of
laIking nachines, oi eaiIy iecoid pIayeis. LaiIy veisions of lhese lechnoIogies
veie inlioduced in lhe Iale 189Os.
75
y 19O2, al Ieasl a niIIion piano ioIIs, each
iepiesenling a copyiighled song, veie in disliilulion.
76
The iecoid indusliy giev
even faslei: ly 1899, 2.8 niIIion iecoids had leen soId.
77
These nechanicaI
iepioduclions veie pioduced vilhoul paying any Iicensing fees lo lhe ovneis of
lhe iespeclive copyiighls.
78

TechnoIogicaIIy, lhe pIayei piano and lhe iecoid pIayei veie each lhe
ieceivei foi a nev foin of nass nedia~lhe papei piano ioII and lhe iecoid,
iespecliveIy. A singIe puichase of copyiighled sheel nusic couId le liansfoined

74
Ioi a discussion on copyiighl aililiage, scc MichaeI }. Meuiei, Ccpqrign| |au and Pricc
Discrinina|icn, 23 CARDOZO L. RLV. 55 (appIying econonic nodeIs of piice disciininalion lo
copyiighl Iav).
75
Scc }essica Lilnan, Ccpqirgn| |au as Ccnnunica|icns Pc|icq. Ccntcrgcncc cf Paradigns and
Cu||urcs, 2O Caidozo Ails & Lnl. L.}. 337, 35O nn. 69-7O (2OO2) (noling lhal conposeis did nol
eain ioyaIlies fion lhese disliilulion nechanisns).
76
Scc While-Snilh Music IulIishing Co. v. ApoIIo Co., 2O9 U.S. 1, 9 (19O8) (The iecoid
discIosed lhal in lhe yeai 19O2 . lhal fion one niIIion lo one niIIion and a haIf of such
peifoialed nusicaI ioIIs . veie nade in lhis counliy in lhal yeai.).
77
Scc Andie MiIIaid, AMLRICA ON RLCORD: A HISTORY OI RLCORDLD SOUND 49 (1995) .
78
Scc lni|c-Sni|n Puo|isning, 2O9 U.S. al 16-18, Lilnan, supia nole 75, al 35O n.7O.


25
ly lhe iecoiding indusliy inlo ioIIs and iecoids lhal ieached lens of lhousands of
Iisleneis. ul lhe success of nechanicaI iecoidings as a nass nedia
insliunenlaIily spaiked a confIicl vilh lhe incunlenl indusliy: pulIisheis of
sheel nusic.
79

a. Tnc Rnc|cric
The iheloiic of lhe eaiIy iecoiding indusliy confIicl is lolh independenlIy
fascinaling and a lenpIale foi olhei confIicls lhal foIIoved. The incunlenl
ovneis of copyiighls adopled a lhene faniIiai lo piesenl eais: lhey depicled lhe
iecoiding indusliy as iiiesponsilIe piiales vhose ieckIess copying of nusic
lhiealened lo deslioy Aneiican ciealivily. Whal vas in ieliospecl a lallIe ovei
lhe inpacl of nev lechnoIogy vas al lhal line poiliayed as a lhieal lo liadilionaI
vaIues and ailislic deveIopnenl. As conposei }ohn IhiIIip Sousa infoined
Congiess:
These laIking nachines aie going lo iuin lhe ailislic deveIopnenl of nusic
in lhis counliy. When I vas a loy . in fionl of eveiy house in lhe sunnei
evenings you vouId find young peopIe logelhei singing lhe songs of lhe
day oi oId songs. Today you heai lhese infeinaI nachines going nighl and
day. We viII nol have a vocaI choid Iefl. The vocaI choid viII le
eIininaled ly a piocess of evoIulion, as vas lhe laiI of nan vhen he cane
fion lhe ape.
8O

Anolhei Iine of aigunenl poiliayed lhe iecoiding indusliy (The TaIking
Machine Tiusl) as a dishonesl, nonopoIislic lusiness. A nodeI Iellei viillen foi
conposeis slaled lhe case: Whal do I see` I see ny conposilions . sloIen lodiIy

79
Theie veie a nunlei of IegaI lallIes lelveen lhe lvo canps. Scc, e.g. lni|c-Sni|n
Puo|isning, 2O9 U.S. 1 (hoIding lhal 1897 Acl did nol assign conposeis iighl lo piano ioII
iepioduclion of conposilion), Slein v. Rosey, 17 App.D.C. 562 (C.A.D.C. 19O1) (iefusing lo hoId
phonogiaph piesenlalion of sounds as a copy vilhin lhe neaning of exisling slalule),
Kennedy el aI. v. McTannany, 33 I. 584 (C.C.D.Mass 1988) (hoIding lhal peifoialed sliips of
papei used in lune-pioducing oiganelles do nol vioIale copyiighled nusic of lhe sane lune).
8O
Arguncn| cn H.R. 11,943, |c Ancnd Ti||c 60, Cnap|cr 3, cf Rctiscd S|a|u|cs cf |nc Uni|cd
S|a|cs, Rc|a|ing |c Ccpqrign|s 8cfcrc |nc Hcusc Ccnn. On Pa|cn|s, 59lh Cong. 24 (19O6) |heieinaflei
1906 Hcaringsj (leslinony of }ohn IhiIip Sosa), in 4 LLCISLATIVL HISTORY OI THL 19O9 COIYRICHT
ACT (L.IuIlon iyIavski & Ale CoIdnan eds., 1976).


26
ly lhe phonogiaphic liusl and piano-pIayei conlinalion, and giound oul daiIy
fion lhousands of cyIindeis, disks, and ioIIs, vilhoul paying ne oi anyone of us
one soIilaiy penny. |Congiess nuslj assisl in piolecling ne againsl such iolleiy,
such unfaiiness, and such a leiiilIe disadvanlage.
81

A sIighlIy noie sophislicaled aigunenl piesenled lhe iecoiding indusliys
aclivilies as a lhieal lo lhe incenlives lo conpose nusic in lhe fiisl pIace. In a 19O7
Iellei lo lhe Nev Yoik CIole and Adveilisei, lhe Aulhois and Conposeis
Copyiighl League pul lhings as foIIovs:
|Tjhe TaIking Machine Tiusl . vilh aII lhe gieed of a hungiy voIf seizes
upon lhe |successfuIj conposilion and luins oul counlIess iecoids and
peifoialed ioIIs, lheiely kiIIing lhe saIes, foi il is a pioven facl lhal as soon as
lhe penny laIking nachines iepioduce a nechanicaI conposilion il is dead as
fai as lhe pulIic is conceined.
.
|Wilhoul copyiighl iefoinj lhe nusicaI ail and aII nusicaI indusliies in lhis
counliy viII Ianguish, as lhe aulhois and conposeis, nol ieceiving any ioyaIlies
on iecoids, and lheii ioyaIlies on sheel nusic decieasing fion yeai-lo-yeai, viII
have no incenlive lo viile oi conpose.
82

Hov aloul lhe chaIIengeis~lhe iecoiding indusliy` Sounding lhenes aIso
faniIiai loday, lhe iecoiding indusliy idenlified ilseIf as lhe invenling cIass, heioes
of Aneiican ingenuily and engineeiing. They poiliayed lhe incunlenl indusliy
as a nonopoIy lhieal inleiesled onIy in deslioying a lechnoIogicaIIy advanced
iivaI.
SeIf-desciiled invenloi HovIell Davis leslified lefoie Congiess (vilhoul
invilalion fion any souice vhalsoevei)
83
depicled lhe ails as necessaiiIy
dependenl on invenlois: In aII ails lhe voik of lhe invenloi viII le found al lhe

81
Hcarings cn Pcnding 8i||s |c Ancnd and Ccnsc|ida|c |nc Ac|s Rcspcc|itc Ccpqrign| 8cfcrc |nc
Ccnn. cn Pa|cn|s cf |nc Scn. and Hcusc, 6Olh Cong. 255 (19O8) |heieinaflei 1908 Hcaringsj (nodeI
Iellei lo Congiess in slalenenl of Mi. }ohn }. OConneII) in 5 LLCISLATIVL HISTORY OI THL 19O9
COIYRICHT ACT (L.IuIlon iyIavski & Ale CoIdnan eds., 1976)
82
|d. al 257 (nevspapei Lellei in slalenenl of Mi. }ohn }. OConneII).
83
|d. al 1O4 (slalenenl of HevIell Davis).


27
foundalion of lhe piogiess and piospeiily of lhe counliy. Invenlois seived lhe
peopIe: lhe fainei oi lhe voikingnan, he aigued, depends on his iecoid pIayei
lo ieIax lhe lension of daiIy Ialoi, lhanks nol lo lhe conposei vho iaieIy
ieached lhen.
84
He condenned expanding copyiighl: il vouId ieach oul and
lake fion lhe invenloi lhe pioducl of his liain and deIivei il ovei lo lhe
conposei.
85
In his viev, so fai as lhe nass of lhe peopIe of lhis counliy is
conceined, lhe voik of lhe conposei is infinilesinaI as conpaied lo lhe voik of
lhe invenloi.
86

Invenlois aIso aigued lhal an expanded copyiighl vouId defeal lheii vesled
iighls, lolh as an indusliy and, noie pailicuIaiIy, lhe vesled iighls of invenlois
hoIding palenls lo nechanicaI pIayeis. Lxpanded copyiighl, Davis aigued
piaclicaIIy depieciales oi deslioys lhe vaIue of ny invenlions oi nachines . as
veII as deslioying in pail of vhoIe ny exisling palenl iighls.
87
His viev,
evidenlIy, vas lhal lhe palenl gianl incIuded a iighl lo le fiee fion copyiighls lhal
nighl inleifeie vilh lhe vaIue of lhe palenl.
Ceoige Iound, iepiesenling lvo nanufacluieis, aigued lhal vhen gieal
vesled inleiesls have giovn up . il is nol iighl lo deslioy lhen foi lhe lenefil of a
haIf dozen aIIeged conposeis aIIied vilh a Iife-Iong and alsoIuleIy excIusive
nonopoIy. The conposei gels on lhe sheel nusic aII lhal he is enlilIed lo gel.
88

A noie slialegic lhene advanced ly lhe eaiIy iecoiding indusliy pIayed on
conlenpoiaiy feais of nonopoIy liusls, pailicuIaiIy lhose vilh a foieign eIenenl.
In a cIevei luin, nuch of lhe iecoiding indusliy luined againsl a singIe nanufaclui
of pIayei pianos, lhe oIian conpany. They aigued lhal lhe denand foi copyiighl
expansion had nolhing lo do vilh conposei veIfaie, lul vas ialhei pail of a giand
inleinalionaI conspiiacy. HevIell Davis desciiled lhe aIIeged coIIusion lelveen
pulIisheis and conposeis as a conpIele nonopoIislic oclopus, in vhich lhe
oIian Conpany foins lhe head and lhe liains, lhe Music IulIisheis Associalion,

84
1908 Hcarings, supra nole 81, al 1O4 (slalenenl of C. HovIell Davis).
85
|d.
86
|d.
87
|d. al 1O1.
88
1908 Hcarings, supra nole 81, al 98 (slalenenl of Mi. Ceoige W. Iound)..


28
lhe lody, lhe independenl pulIisheis, lhe viilhing ains, and lhe conposeis lhe
suckeis and laileis.
89

A seiies of infIannaloiy 19O8 ediloiiaIs in lhe nevssheel MusicaI Age
depicled a sinislei inleinalionaI syndicale agilaling foi copyiighls expansion.
9O

Il asked: vho iaises lhis hue and ciy and cieales lhis cIanoious denand foi nev
and diaslic |copyiighlj IegisIalion` Is il lhe aulhoi` |Noj . Il is lhe specuIaloi
and ganlIei. Aflei delaiIing lhe syndicales oiigins in Iiance (connecled lo a
shadovy figuie naned Lucien Vives), lhe oIian conpany vas naned as IocaI
oulposl of lhe gIolaI conspiiacy. In lhis counliy, il is lhe oIian conpany vhich
assunes lhe ioIe of 'chief specuIaloi.
A finaI aigunenl, again piesenl in conlenpoiaiy delale, vas lhal lhe
iecoiding indusliy vas acluaIIy heIping conposeis ly spuiiing lhe saIes of sheel
nusic, hence, no change lo copyiighl vas needed. A iepiesenlalive of lhe laIking
nachine Iolly slaled lhal |ijl is inpossilIe lhal lheie shouId le any saIes of
iecoids of lhe conposilion vilhoul lheie leing a coiiesponding saIe of sheel
nusic. Lach nay heIp each olhei, lul phonogiaphic iepioduclion is ceilainIy a
poveifuI slinuIus lo lhe saIe of sheel nusic.
91

This aigunenl~lhal lhe nev lechnoIogy of disseninalion viII uIlinaleIy
aid conposeis iiiespeclive of lhe IeveI of copyiighl pioleclion gianled lo lheii
voiks~ienains a peisislenl lhene in lhe defense of chaIIengei aclivily.
o. Ccpqrign| Sc|||cncn|
We aie nov in a posilion lo undeisland lhe IegaI couise of evenls lhal Ied lo
sellIenenl. The incunlenls, unsuipiisingIy, look lhe Iead. LaiIy on, pulIisheis
asked Iovei couils lo find piano ioIIs (in 1888) and iecoids (19O1) an infiingenenl
of copyiighl iighls.
92
These effoils faiIed.
93

89
1908 Hcarings, supra nole 81, al 98 (slalenenl of C. HovIell Davis).
9O
M. Doiian, Tnc Mcn 8cnind, The MusicaI Age, Iel. 29, 19O8.
91
1908 Hcarings, supra nole 81, al 295 (slalenenl of Mi. Iiank L. Dyei).
92
Scc Slein v. Rosey, 17 App.D.C. 562 (C.A.D.C. 19O1) (iefusing lo hoId phonogiaph
piesenlalion of sounds as a copy vilhin lhe neaning of exisling slalule), Kennedy el aI. v.
McTannany, 33 I. 584 (C.C.D.Mass 1988) (hoIding lhal peifoialed sliips of papei used in lune-
pioducing oiganelles do nol vioIale copyiighled nusic of lhe sane lune).


29
The incunlenls, naking lhe piiacy aigunenls delaiIed alove, lhen noved lo
Congiess, achieving lhiough a pulIisheis confeience a diafl copyiighl liII lhal
vouId have gianled conposeis fuII iighls in nechanicaI iecoidings.
94
Al lhe sane
line, in 19O6, a nev effoil vas nade lo ollain an appeIIale decision finding
nechanicaI iecoidings lo le infiinging copies: lhe lesl Iavsuil vas Iiligaled aII lhe
vay lo lhe Supiene Couil. This vas lhe nov fanous piano-ioII case lni|c-
Sni|n Music Puo|isning Cc. v. Apc||c Cc.
95

UnfoilunaleIy foi lhe incunlenls, lhe Supiene Couil vas unviIIing lo exlend
copyiighl in lhe nannei iequesled ly lhe incunlenls. Il iuIed, as lhe eaiIiei couils
had, lhal a copy in lhe slalule vas a iepioduclion oi dupIicalion of lhe
oiiginaI, vhich lhe peifoialed papei ioII evidenlIy vas nol. In hindsighl il is
cIeai lhal lhe decision couId have gone eilhei vay.
96
The Couil iepealedIy ieIied
on lhe facl lhal piano ioIIs veie nol visuaIIy siniIai lo sheel nusic~a cuiious
neans lo adjudge lhe neaning of a copy of an auiaI voik.
Many have ciilicized lhe puipoiled foinaIisn of lhe lni|c-Sni|n Couil.
97

RefIecling eaiIy 2Olh cenluiy piaclice, lhe Couil decIined lo expIain lhe ieasons oi
poIicy lehind ils decision. ul lhe decision, vhelhei consciousIy oi nol, pul lhe
Couil squaieIy in lhe nidsl of connunicalions poIicy. The docliinaI, and ialhei
cIunsy, ialionaIe vas lhe diffeience lelveen a given voik and ils neans of
expiession. The Couil, ciilicaIIy, slaled lhal lhe slalule has nol piovided foi lhe
pioleclion of lhe inleIIecluaI conceplion apail fion lhe lhing pioduced, hovevei

93
Scc S|crn, 17 App.D.C. 562, Kcnncdq, 33 I. 584.
94
Scc }essica D. Lilnan, Ccpqrign| |cgis|a|icn and Tccnnc|cgica| Cnangc, 68 OR. L. RLV. 275,
284-85 (1989).
95
2O9 U.S. 1, 17-18 (19O8).
96
The Couils hoIding in lni|c-Sni|n vas pienised on lhe nolion lhal piano ioIIs did nol
conslilule a physicaI copy of lhe voik. Scc lni|c-Sni|n, 2O9 U.S. al 18. The Couil did so
lecause lhe ioIIs veie nol diieclIy accessilIe lo hunans, and did so ovei lhe oljeclion of }uslice
HoInes lhal |ojn piincipIe anylhing lhal nechanicaIIy iepioduces lhal coIIocalion of sounds
oughl lo le heId a copy. lni|c Sni|n, 2O9 U.S. al 2O (HoInes, }., concuiiing). This conceplion
of fixalion vas quickIy oveiluined ly lhe copyiighl slalule in 19O9. Scc 17 U.S.C. 1O1 (2OOO)
(defining fixalion), scc a|sc, DougIas Lichlnan, Copyiighl as a RuIe of Lvidence, 52 Duke L.}.
683, 716 n.14O (2OO3) (discussing neaning of fixalion).
97
Scc, c.g., }ane Cinsluig, Ccpqrign| and Ccn|rc| Otcr Ncu Tccnnc|cgics cf Disscnina|icn, 1O1
COLUM. L. RLV. 1613, 1622 (2OO1).


3O
neiiloiious such conceplion nay le.
98
Il inslead has piovided foi lhe naking
and fiIing of a langilIe lhing, againsl lhe pulIicalion and dupIicalion of vhich il is
lhe puipose of lhe slalule lo piolecl lhe conposei.
99

The dislinclion lelveen lhe inleIIecluaI conceplion and lhe langilIe lhing
lheiein desciiled is difficuIl lo defend oi nainlain. If copyiighl is neieIy
pioleclion againsl lhe copying of a langilIe lhing, hov couId il piolecl
adaplalions lo olhei Ianguages, nedia, oi peifoinance iighls foi vhich lhe Iav has
aIieady piovided` Yel lhe enliie Couil signed on lo lhe opinion~even }uslice
HoInes, vhose sulsequenl lody of copyiighl viilings vouId acl againsl lhe
piincipIe slaled in lni|c-Sni|n.
1OO

Ioi lhis ieason ve nusl Iook lo olhei nolivalions and conceins. One cannol
heIp lul nolice lhal lhe effecl of lhe decision vas lo pIace a Iinil on lhe naikel
povei of lhe effeclive ovnei of lhe inleIIecluaI conceplion, naneIy, lhe
incunlenl indusliy. The decision aIso sel an inslilulionaI piecedenl (lhough one
unevenIy foIIoved), of deciding lechnoIogicaIIy-sensilive copyiighl cases in favoi
of a chaIIengei indusliy in a nannei IikeIy lo foice Congiesss hand. The deniaI of
pioleclion in lhe conlexl of a lechnoIogicaIIy innovalive naikel enlianl viII
iesuiface in lhe hisloiy lhal foIIovs. Sevenly-six yeais Ialei, lhe Sony elanax
decision vouId cile lni|c-Sni|n as lhe oiigin of lhis poIicy:
Sound poIicy, as veII as hisloiy, suppoils oui consislenl defeience lo
Congiess vhen najoi lechnoIogicaI innovalions aIlei lhe naikel foi
copyiighled naleiiaIs. Congiess has lhe conslilulionaI aulhoiily and
inslilulionaI capaliIily lo acconnodale fuIIy lhe vaiied peinulalions of
conpeling inleiesls lhal aie inevilalIy inpIicaled ly such nev
lechnoIogy.
1O1

98
lni|c-Sni|n, 2O9 U.S. al 17.
99
lni|c-Sni|n, 2O9 U.S. al 17.
1OO
In Ka|cn Cc. t. Harpcr 8rcs., 222 U.S. 55 (1911) }uslice HoInes heId lhe fiIn en-Hui lo
infiinge a copyiighl on lhe noveI, hoIding lhal |ljhe essence of lhe nallei in lhe case Iasl
supposed is nol lhe nechanisn enpIoyed, lul lhal ve see lhe evenl oi sloiy Iived. Scc a|sc
Heileil v. ShanIey, 242 U.S. 591 (1917) discussed in lexl acconpanying noles infra 114-117.
1O1
Sony Coip. v. UniveisaI Cily Sludios, Inc., 464 U.S., al 431 (1984).


31
In piaclice, lhe decision lo defei lo Congiess aclivales copyiighls
connunicalions iegine, and lhe leginnings of a piocess of negolialed sellIenenl
lelveen lhe pailies lo lhe confIicl.
* * *
IoIIoving lni|c-Sni|n pulIisheis and lhe nechanicaI nachine nanufacluieis
noved quickIy foi a IegisIalive sellIenenl. Why sellIenenl`
Iiisl, lhe lni|c-Sni|n Iiligalion and lhe faiIuie of eaiIiei CongiessionaI effoils
piovided inpoilanl infoinalion. Despile aII effoils, lhe pulIishing indusliy vas
unIikeIy lo gel eilhei lhe couils oi Congiess lo piovide a fuII-slienglh copyiighl
lhal il nighl use in ils conlesl vilh lhe nascenl iecoiding indusliy. Al lhe sane
line, ly lhis poinl lolh chaIIengeis and incunlenls legan lo iepiesenl a seiious
lhieal lo one anolhei. IoIIoving lni|c-Sni|n, conposeis and pulIisheis iisked an
ongoing decay of lheii piofilaliIily lecause of lheii inaliIily lo exliacl incone fion
lhe iecoiding indusliy. ConveiseIy, lhe iecoiding indusliy sliII faced sone
possiliIily lhal pulIisheis vouId succeed in lheii effoils lo exlend copyiighl lo
nechanicaI iecoidings and use lhis povei againsl lhen.
Undei lhese condilions lhe lvo pailies sellIed on a slaluloiy ioyaIly schene
lhal vas lhe fiisl conpuIsoiy Iicense syslen. The sellIenenl sel a fixed, univeisaI
iale: 2 cenls pei song, pei copy. This sellIenenl vas piinaiiIy achieved duiing
sessions in 19O8, and vas codified as 1(e) of lhe 19O9 copyiighl acl.
1O2

The naluie of lhe sellIenenl vas as foIIovs. One lhe one hand, Congiess
exlended lhe copyiighl in conposilions lo nechanicaI iecoidings. In exchange,
lhe iecoiding indusliy ieceived slaluloiiIy guaianleed access lo aII copyiighled
conposilions piovided lhey pay a slandaid fee. So Iong as lhe conposei agieed oi
knovingIy acquiesced lo an iniliaI iecoiding (an inpoilanl condilion), anyone
viIIing lo pay lhe slaluloiy fee vouId lhen le enlilIed lo use any copyiighled
conposilion lo iecoid his ovn veision of lhe song.
This nechanicaI Iicense schene suivives lo lhe piesenl day. Anong acadenics
il is occasionaIIy defended foi ils ieduclion in liansaclion cosls, lul noie lypicaIIy

1O2
Scc HARRY HLNN, COIYRICHT IRIMLR 2O7 n.2 (1979).


32
leialed foi ils infIexiliIily and insensilivily lo changing econonic condilions.
1O3

Yel, inleieslingIy, neilhei paily has nade a seiious effoil lo iepeaI lhe nechanicaI
Iicense syslen. Repiesenlalives of conposeis did nol aigue foi ils iepeaI in lhe
1976 Copyiighl Acl
1O4
and loday il is even defended, lolh ly iepiesenlalives of
conposeis and ly lhe nusic indusliy.
1O5
The onIy change has leen lhe effoil lo
nake lhe Iicense fee adjuslalIe.
1O6

2. Tnc lirc|css Agc
Radio is yel in ils infancy, lhe docloi concIuded, as he iose lo go. ul one
lhing is ceilain. In lhe Iifeline of lhose vho vilnessed ils liilh il viII lecone a
gianl--lul a lenevoIenl gianl vho, inslead of deslioying viII ie-cieale oui
civiIizalion.
1O7

Thus spoke Di. DaIe, sage of lhe 1922 look Radic 8cqs.
1O8
He had ieason lo
lhink iadio vas on lhe iise. }usl one yeai lefoie, a iecoid 3OO,OOO Iislened as }ack
Densey knocked oul Ceoiges Caipenliei lo lake lhe heavyveighl loxing lilIe. Ioi
peihaps lhe fiisl line in hisloiy, noie peopIe expeiienced lhe evenl dislaIIy lhan
IocaIIy, nosl Iislening al iadio haIIs.
1O9
On lhe aulhoiily of lhe lirc|css Agc.

1O3
Scc, c.g., Tiollei Haidy, Ccpqrign| and Ncu-Usc Tccnnc|cgics, 23 NOVA L. RLV. 659, 699-7O2
(1999) (ciilicizing conpuIsoiy Iicensing iegines as piice-fixing.), Roleil Meiges, Ccn|rac|ing
in|c |iaoi|i|q Ru|cs. |n|c||cc|ua| Prcpcr|q Rign|s and Cc||cc|itc Rign|s Organiza|icns, 84 CAL. L. RLV.
1293, 13OO (1996) (sane).
1O4
17 U.S.C. 115 (2OOO).
1O5
Scc, c.g., Ken Andeison, Iieseive lhe ConpuIsoiy License, iIIloaid, }une 11, 1994, al
6 (aiguing lhal iescinding lhe conpuIsoiy Iicense vouId cieale indusliy luinoiI and polenliaI
of nonopoIizalion.).
1O6
The piice is nov sel ly a syslen of ad hoc Copyiighl Aililialion RoyaIly IaneIs. Scc 17
U.S.C. 8O1 (ciealing lhe Copyiighl Aililialion RoyaIly IaneIs). Ioi lhe yeai 2OO4, lhe
nechanicaI Iicense iale is 8.5 cenls pei song, oi 1.65 cenls pei ninule pIaying line, vhichevei is
giealei. Scc Copyiighl Office, MechanicaI License Rales,
hllp://vvv.copyiighl.gov/caip/n2OOa.hlnI (Iasl visiled }an 31, 2OO4).
1O7
AIIen Chapnan, The Radio oys TiaiIing a Voice 6O (1922).
1O8
|d.
1O9
Scc Tnc lirc|css Agc, Augusl, 1921, page 11-21, atai|ao|c a|
hllp://eaiIyiadiohisloiy.us/cenluiy2.hln (Iasl visiled }an. 24, 2OO4).


33
The nagic of lhe iadio leIephone had acconpIished nev vondeis. A daiing idea
had lecone a facl.
11O

ul lhe vondei of iadio aIso gave liilh lo a fesleiing, diavn-oul confIicl: a
decades-Iong vai lelveen lhe lioadcasl indusliy and an aIIiance of sheel-nusic
pulIishei, conposeis and songviileis. The confIicl diffeis in an inpoilanl iespecl
fion lhe piano-ioII and calIe-lioadcasl dispules lhal cane lefoie and aflei il,
iespecliveIy. Theie vas no incunlenl lioadcasl indusliy inleiesled in deslioying
oi slopping iadio. Inslead, exisling aulhois vanled iadio lo succeed, lul lhey aIso
vanled lo niIk iadio foi as nuch noney as possilIe. Radios inleiesl in paying as
IillIe as possilIe foi ils piinaiy inpul ciealed lhe confIicl desciiled in vhal foIIovs.
ConneiciaI iadio, Iike eveiy nev indusliy pieceding and succeeding il,
legan ly liying lo ciicunvenl copyiighl pioleclion of lhe undeiIying voiks.
UnIike nodein iadio vilh ils disk-jockeys, eaiIy 192Os lioadcasl usuaIIy neanl
selling up a niciophone foi a peifoinance, eilhei vilhin lhe sludio oi al a conceil
haII.
111
Since lhe nusic vas aIieady puichased oi pIaying, ignoiing copyiighl vas
easy. ul unIike ils piedecessois, lhe gianophone indusliy, iadio faced a lellei
oiganized adveisaiy: lhe Aneiican Sociely of ioadcasleis, Conposeis and
IulIisheis (ASCAI).
In 1913, lhe Iegend goes, conposei Vicloi Heileil vas dinning in Nev
Yoiks ShanIey ieslauianl vhen lhe in-house oicheslia sliuck up one of his songs,
Sveelheails.
112
He conpIained lo lhe piopiieloi, vho piesenled hin vilh a
lheoiy of copyiighl IialiIily: since no adnission vas leing chaiged, lhe
peifoinance vas nol foi piofil, and lhe ieslauianl nol guiIly of infiingenenl.
Heileil vas deleinined lo piove hin viong and in 1914, vilh olheis, founded
ASCAI, a coIIeclion of 17O aulhois and conposeis of nusic, aIong vilh lvenly-
lvo pulIisheis of sheel nusic.
113
ASCAIs fiisl laigel vas lhe ieslauianl and lhe
peifoinance lhal had alliacled Heileils iie. In 1917s Hcrocr| t. Snan|cq Cc.,

11O
|d.
111
Scc Slephen Davis, Tnc |au cf |nc Air in THL RADIO INDUSTRY: THL STORY OI ITS
DLVLLOIMLNT 186-87 (1928).
112
Scc Leonaid AIIen, The allIe of Tin Ian AIIey, 181 HARILRS 514 (194O), SanueIs,
supra n. 37, al 41.
113
Scc MeIvin Ninnei, NIMMLR ON COIYRICHT 8.19 (1988).


34
ASCAI convinced lhe Supiene Couil lhal pulIic peifoinance in ieslauianls,
despile no fee leing chaiged, vas an unaulhoiized pulIic peifoinance foi
piofil.
114

}uslice HoInes viole a sinpIe lhiee-paiagiaph opinion, concIuding lhal
since ieslauianls aie nol chaiilies, vhen lhey pIay nusic il nusl le in lhe inleiesl
of piofil even if lhey donl chaige al lhe dooi. Reslauianls, he olseived, aie nol
eIeenosynaiy.
115
They piovide nusic lo piovide lheii cusloneis, peopIe
having Iiniled poveis of conveisalion, a Iuxuiious pIeasuie nol le had fion
ealing a siIenl neaI.
116
In shoil, if nusic did nol pay, il vouId le given up. If il
pays, il pays oul of lhe pulIic's pockel. Whelhei il pays oi nol, lhe puipose of
enpIoying il is piofil, and lhal is enough.
The opinion is sinpIe econonics, lul undeiIying il is a sulslanlive viev of
iighls of lhe copyiighl hoIdei. HoInes opinion heie and in his olhei viilings
117

sav copyiighl as a conneiciaI piopeily lo a exlenl nevei ieached lefoie. His
viev, nov nainsliean, piesuned lhe copyiighl ovnei shouId have lhe povei lo
denand a Iicense foi eveiy ievenue-sliean dependenl on lhe copyiighled voik~
even ievenue fion adaplalions lo olhei nedia, oi ievenue aiising fion inpioved
ieslauianl alnospheiics. In any case, lhe hoIding pul ASCAI in lhe lusiness in
vhich il ienains loday: offeiing lIankel Iicenses lo ieslauianls, dance haIIs, and
olhei pIaces lhal peifoin nusic.
118
The lIankel Iicenses, foi a fixed peicenlage
dependenl on lhe venue, aIIov lhe peifoinance of aII of lhe voiks viillen ly
ASCAI nenleis (nenleis assigned lheii peifoinance iighls lo ASCAI foi lhis
puipose).
119
Il vas lhese lIankel Iicenses lhal ASCAI offeied iadio lioadcasleis,
al fiisl foi fiee oi foi veiy Iov piices. ul nuch of lhe lioadcasl iadio indusliy said
no, and seveiaI decades of feiocious aninosily ensued.

114
242 U.S. 591 (1917).
115
|d. al 595.
116
|d.
117
Scc, c.g., KaIen Co. v. Haidei ios., 222 U.S. 55, 63 (finding jollei conliiluloiy IialIe foi
unaulhoiized fiIn veision of look), Ieislein v. DonaIdson Lilhogiaphing Co., 188 U.S. 239
(19O3) (hoIding conneiciaI adveilisenenl copyiighlalIe).
118
Scc uffaIo ioadcasling Co., Inc. v. Aneiican Soc. Of Conposeis, Aulhois and
IulIisheis, 546 I.Supp. 274, 277 (S.D.N.Y. 1982).
119
Scc id. al 276.


35
Radio, facing lhe denands of ASCAI and feeIing a sense of nuluaI
giievance, decided lo gel oiganized. On ApiiI 25, 1923, fifly-foui lioadcasling
nen nel al lhe Diake HoleI in Chicago.
12O
The pioducl of lheii neeling vas lhe
NalionaI Associalion of ioadcasleis (NA), and ils fiisl piioiily vas gelling
iadio oul of lhe copyiighl slalule.
121
Wilhin a yeai, lhe NA had a iII in lhe
Senale lhal vouId have excenpled iadio fion copyiighl IialiIily aIlogelhei.
122
The
iII, S. 26OO, pioposed lo anend 1 of lhe 19O9 Acl, adding:
Copyiighl conlioI shaII nol exlend lo pulIic peifoinances, vhelhei foi
piofil oi vilhoul piofil, of nusicaI conposilions vheie such peifoinance is
nade fion piinled oi viillen sheels oi ly iepioducing devices issued
undei lhe aulhoiily of lhe ovnei of lhe copyiighl, oi ly use of iadio oi
leIephone oi lolh.
123

ul lhe liII died, and lhe in ieliospecl lhe iadio piolIen piolalIy nevei cane
cIosei lo a IegisIalive soIulion.
The lioadcaslei-conposei confIicl vas open ly lhe line of lhe 1925 Radio
Convenlion, caIIed ly lhe Conneice Depailnenl, vheie an eaiIy effoil vas nade
lo sellIe lhe dispule. Noles fion lhe neeling shov lhal lhe iespeclive sides agieed
upon seveiaI poinls, incIuding lhal lheie can le no conlinualion of lioadcasling
unIess nusicaI conposilions aie nade avaiIalIe lo lioadcasleis upon a faii,
equilalIe, and peinanenl lasis.
124
Hovevei, aII allenpled soIulions lhiough
negolialions . pioved unavaiIing.
125
Il vas iesoIved lhal Congiess shouId sellIe
lhings, lul il nevei did.

12O
Scc NA: The Iiisl 75 Yeais, atai|ao|c a| hllp://vvv.nal.oig/aloul/lineIine.asp (Iasl
visiled }an. 24, 2OO4)..
121
Scc AngeIa }. CanleII, Sc|f-Rcgu|a|icn and |nc Mcdia, 51 ILD. COMM. L.}. 711, 72O n.49
(1999)
122
Tc Ancnd |nc Ccpqrign| Ac|. Hcarings cn S. 2600, 68lh Cong, 1sl Sess. 9-14 (1924)
(slalenenls of L.I. McDonaId and IauI . KIugh).
123
S. 26OO, 94
lh
Cong. (1924).
124
Iioceedings of lhe Iouilh NalionaI Radio Confeience and Reconnendalions foi lhe
ReguIalion of Radio 41-42 (Nov. 9-11, 1925).
125
|d.


36
The pailies veie piolalIy unviIIing lo sellIe lecause each vas in lhe nidsl
of puisuing ils ovn IegaI slialegy seeking lolaI vicloiy. WhiIe NA
unsuccessfuIIy pelilioned Congiess, ASCAI vas doing fai lellei in lhe couils.
126

UnIike in lni|c-Sni|n and Ialei cases, no iadio cases ieached lhe Supiene Couil,
nainIy lecause lhe hoIdings foIIoved Hcrocr|. So inslead il vas lhe Sixlh Ciicuil
vhose void lecane poIicy foi iadio.
127

In 1924 ASCAI lioughl a lesl case againsl iadio slalion WLW Cincinnali foi
ils unIicensed lioadcasl of a song naned Dieany MeIody.
128
The IegaI queslion
vas vhelhei iadio lioadcasl vas in facl a pulIic peifoinance foi piofil undei
lhe slalule. The Sixlh Ciicuil, foIIoving HoInes in Hcrocr| t. Snan|cq Cc.,
ansveied lhe queslion yes.
129
Said lhe couil: lhe ailisl is consciousIy
addiessing a gieal, lhough unseen and videIy scalleied audience, and is lheiefoie
pailicipaling in a pulIic peifoinance.
13O

Whal of lni|c-Sni|ns piaclice of Ieaving nev lechnoIogies lo Congiess` The
lioadcasleis did in facl aigue lhal lhe fale of iadio vas lellei handIed ly lhe
IegisIaluie, and }udge Mack duIy noled lhal liIIs have leen inlioduced in lolh
House and Senale lo peinil lioadcasling vilhoul infiinging copyiighls.
131

Hovevei, vhiIe agieeing lhal lhe finaI slalus vas eninenlIy |a nalleij foi
consideied IegisIalion, lhe couil nonelheIess feIl il had a duly lo decide vhelhei
and lo vhal exlenl slalules coveiing lhe suljecl nallei geneiaIIy . aie, faiiIy
consliued, appIicalIe lo lhe nev silualion.
132
The exlension of lhe Copyiighl

126
The Iiligalion lioughl ly conposeis vas quile successfuI, pailicuIaiIy vilh iespecl lo
lhe pulIic peifoinance iighl. Scc, c.g., }eione H. Renick v. Aneiican AulonoliIe Accessoiies
Co., 5 I.2d 411 (6
lh
Cii. 1925) (enjoining defendanl fion iadio lioadcasling), M. Wilnaik &
Sons v. L. anleigei & Co., 291 I. 776, 78O (D.N.}. 1923) (hoIding lhal lioadcasling in
depailnenl sloie vas pulIicIy foi piofil vilhin lhe neaning of lhe Copyiighl Acl), Hains el
aI. v. Cohen, 279 I. 276 (L.D. Ia. 1922) (assessing IialiIily againsl a lhealei enpIoying an
oiganisl pIaying copyiighled nusicaI conposilions).
127
Scc infia noles 127 lo 132 and acconpanying lexl.
128
Rcnic|., 5 I.2d 411.
129
|d. al 412.
13O
|d.
131
|d. al 411.
132
|d. al 412.


37
Acls lexl lo a nev lechnoIogy~lhe opposile appioach lo lhal adopled in lni|c-
Sni|n and Ialei Supiene Couil cases~vas a luining poinl in lhe hisloiy of lhe
iadio confIicl.
ASCAIs vicloiy in lhe Sixlh Ciicuil caiiied foivaid lo olhei couils and olhei
decisions,
133
lhe Supiene Couil denied ccr|icrari. The iadio lioadcasleis had Iosl
lhe fiisl iound. They had no IegisIalion and no excuse. y 1931, lhey had IillIe
iecouise lul lo legin paying foi ASCAI lIankel Iicenses, and nosl legan doing so.
Il nay le coiiecl, as }ane Cinsluig aigues, lhal lhe iadio couils did nol sense
any iisk lhal ASCAI vanled lo deslioy iadio, and lhal lhis nay have affecled lolh
lheii decisions and lhe Supiene Couils deniaIs of ccr|icrari.
134
ul if one goaI of
lhe iadio cases vas lo sellIe lhe ieIalionship lelveen iadio and copyiighl once and
foi aII, lhey veie a faiIuie. The decIaialion of lhe iighls of lhe copyiighl hoIdeis
vas nol a sellIenenl of lhe confIicl. The fighl noved pasl copyiighl lo olhei IegaI
slialegies vhich seived, as a 1941 connenlaloi pul il, lo deaden lhe effecl of lhe
copyiighl Iav.
135
Aflei anolhei lhiee decades of conlinuous confIicl lhe anliliusl
Iav evenluaIIy inposed lhe sellIenenl lhal lhe copyiighl couils avoided.
In lhe nid-193Os, lhe NA pushed lhe fedeiaI Duffy iII, laigeling lhe
ienedies inslead of lhe scope of copyiighl. ecause acluaI danages fion
copyiighl infiingenenl couId le nininaI oi difficuIl lo denonsliale, lhe
ioadcasleis noled lhal il vas onIy lhe in |crrcrun effecl of slaluloiy danages lhal
conpeIIed conpIiance. The Duffy iII vouId have iepeaIed lhe slaluloiy danage
piovisions of lhe 19O9 copyiighl Iav.
136
As a connenlaloi in lhe 194Os slaled, If
lhe nininun slaluloiy danages veie aloIished, iadio ovneis couId knovingIy
ignoie lhe copyiighl Iavs. . . .
137
ul lhe Duffy iII, vilh onIy lhe lioadcasleis
lehind il, died.

133
Iasline Anusenenl Co. v. M. Wilnaik & Sons, 2 I.2d 1O2O, 1O2O (4lh Cii. 1924), M.
Wilnaik & Sons v. L. anleigei & Co., 291 I. 776, 779-8O (D.N.}. 1923).
134
Scc Cinsluig, supra nole 53, al 1621.
135
Scc Maicus Cohn, Music Radic, and |nc Sncrnan Ac|, 29 CLORCLTOWN L. }. 4O7, 415 (1941).
136
S. 2465, 7lh Cong., 1sl Sess. (1935).
137
Cohn, supia nole 135, al 415.


38
As eaiIy as 1926, lhe NA aIso legan piessuiing lhe }uslice Depailnenl lo seek
anliliusl enfoicenenl againsl ASCAI, lul lo no avaiI.
138
In Seplenlei 1933, lhe
ioadcasleis fiIed lheii ovn piivale Anliliusl suil,
139
and in 1934 lhe }uslice
Depailnenl, vilh lhe lioadcasleis as cheeiing squad, changed ils nind and fiIed
ils ovn an anliliusl pelilion againsl ASCAI.
14O
ul lhe Depailnenl asked foi an
adjouinnenl aflei jusl lvo veeks of liiaI.
141
The iadio lioadcasleis IegaI slialegy
vas again slaIIed.
Having no Iuck vilh lhe fedeiaI goveinnenl, lhe iadio lioadcasleis luined lo
lhe slales. The iesuIl vas caIIed a seiies of conpiehensive and syslenalic allacks
on ASCAI, lhiough lhe nediun of slale IegisIaluies.
142
The nelhods of choice
veie anli-nonopoIy slalules lhal decIaied il iIIegaI foi ovneis of copyiighled
voiks lo conline foi puiposes of fixing Iicensing fees.
143
In olhei voids, lhe
ioadcasleis soughl, and ollained, slale slalules naking ASCAI iIIegaI. Ovei
seveiaI yeais, lhe lioadcasleis succeeded in inlioducing such Iavs in 35 Slales and
passing lhen in len.
144
UnfoilunaleIy foi lioadcasleis, hovevei, couils quickIy
found lhe slale Iavs pieenpled ly lhe IedeiaI Copyiighl povei.
145
NAs effoils
had faiIed again.
As an ASCAI connenlaloi in 1939 pul il, lhe lioadcasleis had iesoiled lo
eveiy conceivalIe device and slialagen lo deslioy lhe iighl of conposeis and

138
In 1926, lhe }uslice Depailnenl invesligaled ASCAI lul found no ieason lo liing an
anliliusl suil. Scc Cohn, supra nole 135, al 424 n.91.
139
Scc IennsyIvania ioadcasling Co. v. uck, (S.D.N.Y. IiIed Sepl. 7, 1933).
14O
Scc Uniled Slales v. ASCAI, No. 78-388 (S.D.N.Y., fiIed Augusl 3O, 1934).
141
Why lhey slopped lhe case is nol enliieIy cIeai. Accoiding lo LioneI SoleI, il vas in
pail lecause lhe lioadcasleis and ASCAI agieed on a 5-yeai conpionise agieenenl duiing
lhe liiaI. Scc LioneI SoleI, Tnc Music 8usincss and |nc Sncrnan Ac|. An Ana|qsis cf |nc |ccncnic
Rca|i|ics cf 8|an|c| |iccnsing, 3 LOY. LNT. L. }. 1, 3 (1983).
142
Cohn, supia nole 135, al 416.
143
Tvo exanpIes aie IIa. Cen. Lavs 1937, VoI. I, c. 178O7, discussed in Cills v. uck, 3O7
U.S. 66, 69 (1939), and Washinglon Lavs 1937, c. 218, p. 1O7O, discussed in uck v. CaIIaghei,
3O7 U.S. 95, 97 (1939).
144
Scc Cohn, supia nole 135, al 417 nn.6O-63 (coIIecling slale slalules).
145
Scc, c.g., Gioos, 3O7 U.S. al 66, uck v. Svanson, 33 I.Supp. 377 (D. Nel. 1939), uck v.
Hailon, 33 I.Supp. 1O14 (M.D. Tenn. 194O), Noles, 53 Haiv. L. Rev. 461 (1939) (coIIecling cases).


39
aulhois lo laigain coIIecliveIy. . AII lo no puipose.
146
ul lhe NA vas
peisislenl. Il conpaied ils sliuggIe againsl ASCAI lo lhe fighl againsl HilIei and
iedoulIed ils effoils: Wai is heII, vhelhei ils puipose is lo pieseive denociacy in
Luiope againsl a nadcap diclaloi oi lo pieseive il in iadio againsl an aililiaiy
lolaIilaiian ASCAI.
147

The lioadcasleis lieaklhiough cane in 1941. Thal yeai, NA ian a successfuI
yeai-Iong loycoll of aII ASCAI songs, ieIying inslead on songs in lhe pulIic
donain and lhose fion lhe indusliys ovn peifoinance iighls oiganizalion,
ioadcasl Music, Inc. (MI).
148
This line fale and hisloiy veie on lhe
lioadcasls indusliys side. ASCAI didnl conlioI eveiy conposei and eveiy song:
il iequiied conposeis lo achieve a nininun of five hil songs lefoie joining.
149

This slandaid excIuded Iess veII knovn ailisls and aIso hiIIliIIy and iace
nusic (nov knovn as counliy, and ihylhn & lIues, iespecliveIy).
15O

Svilching lo pIayIisls conpiised of MI and pulIic donain songs vas lheiefoie
nanagealIe, if nol ideaI.
151

The }uslice Depailnenl, neanvhiIe, vas convinced lo liing yel anolhei
anliliusl aclion. This line, ASCAI decided lo negoliale a sellIenenl, iesuIling in

146
L.C. MiII, Tnc ASCAP Vicu, 11 AIR. L. RLV. 394, 397 (194O).
147
LdiloiiaI, 8rcadcas|ing, Ocl 1, 1939.
148
In 194O, lhe NA oiganized an ASCAI loycoll~nenleis, foi aloul a yeai, onIy
pIayed songs fion lheii ovn, conpeling peifoining iighls sociely, ioadcasl Music Inc.
(MI). Scc Cohn, supia nole 135, al 42O-421.
149
Scc IauI Kingsluiy, MI 5OTH ANNIVLRSARY HISTORY OOK 2 (199O). (Al one line,
nany lypes of nusic had Iiniled access lo lhe nainsliean of lhe Aneiican nusic lusiness, and
lo lhe Aneiican audience al Iaige.).
15O
Scc id.
151
Heinan IinkeIslein, an ASCAI alloiney, slaled in 1954 lhal duiing lhe loycoll lhe
vaIue of iadio sels vas sulslanliaIIy Iessened foi lhose vho enjoyed lhe lesl in popuIai nusic.
Heinan IinkeIsleinI, 19 LAW & CONTLMI. IROS. 275, 287 (1954). ConveiseIy, sone iadio
slalions iepoiled lhal lheii pulIic piaised lhen foi lhe nev lype of nusic lhey lioadcasled
duiing lhe loycoll. Scc VARILTY, Dec. 25, 194O al 24.


4O
lhe 1941 consenl deciee.
152
Thal, in luin, vas ienegolialed in 195O,
153
aflei lhe
novie indusliy joined in and fiIed a successfuI anliliusl aclion againsl ASCAI.
154

The delaiIs of lhe anliliusl Iiligalion againsl ASCAI have leen loId nany
lines.
155
Whal is ieIevanl heie is lhe facl lhal lhe iesuIls of lhe anliliusl Iiligalion
and sellIenenl veie quile siniIai lo lhose of copyiighl sellIenenls achieved
eIsevheie.
The 195O deciee Iiniled lhe scope of copyiighl in conposilions ialhei Iike a
slaluloiy oi conpuIsoiy Iicense. Seclion VI of lhe deciee oideied ASCAI lo gianl
lIankel Iicenses lo ils copyiighls, and seclion IV iequiied lhal such Iicenses le
gianled non-excIusiveIy and vilhoul disciininalion.
156
These aie, of couise, lhe
lasic fealuies of a conpuIsoiy Iicense: il guaianlees lhal lhe voik viII le avaiIalIe,
and il ienains avaiIalIe iegaidIess of hov nany olhei pailies have aIieady leen
gianled a conpuIsoiy Iicense.
The 195O consenl deciee, Iike a slaluloiy Iicense, aIso had sonelhing lo say
aloul piicing. UnIike lhe nechanicaI Iicense, vhich sel a slaluloiy piice (lvo cenls
pei song pei iecoiding), lhe 195O consenl deciee gave an AilicIe III couil lhe finaI
say in nusic piicing. Seclion IX of lhe 195O consenl deciee iequiied ASCAI lo
nolify useis of ils fees, vhich veie lo le ieasonalIe. In lhe evenl, vilhin 6O days,
lhal ASCAI and ils useis veie unalIe lo agiee on a piice, appeaI vas avaiIalIe lo
lhe Disliicl Couil, vhich vouId sel a ieasonalIe piice.
157

152
Uniled Slales v. ASCAI, 194O-1943 Tiade Cas. (CCH) 56,1O4 (S.D.N.Y. 1941).
153
Scc Uniled Slales v. ASCAI, 195O Tiade Cas. (CCH) 62,595 al 63,751 (S.D.N.Y. 195O).
154
Scc AIden-RocheIIe, Inc. v. ASCAI, 8O I. Supp. 888 (S.D.N.Y. 1948).
155
Scc, c.g., Richaid Ligo, ASCAP and |nc An|i|rus| |aus. Tnc S|crq cf a Rcascnao|c
Ccnprcnisc, 1959 DUKL L. }. 258 (1959), Susan Slagei, Musica| Pcrfcrning Rign|s in |nc Tc|ctisicn
|ndus|rq. Has Tnc 8|an|c| |iccnsc |ina||q Sccn ||s Dcnisc?, 14 SW. U. L. RLV. 569, 572-573 (1984).
156
Scc Uniled Slales v. ASCAI, 195O Tiade Cas. (CCH) I 62,595 al 63,751 (S.D.N.Y. 195O).
157
Scc id.
Rale-selling iequesls have leen lioughl lo lhe couil, lul have aIvays leen sellIed lefoie
lhe neiils aie ieached. Scc Cainei, Uni|cd S|a|cs t. ASCAP. Tnc |iccnsing Prctisicns cf |nc
Ancndcd |ina| ]udgncn| cf 1950, 23 ULL. COIYRICHT SOC'Y 119, 127-128 (1976).


41
Undei lhese leins, lhe syslen of copyiighls in nusic conposilions
effecliveIy lecane a foin of IialiIily, as opposed lo piopeily, iegine.
158

ioadcasleis veie nol IialIe foi infiingenenl as Iong as lhey paid a piice sel ly lhe
goveinnenl. The sloiy of lhe liilh of Radio, in shoil, has noie in connon vilh
olhei copyiighl confIicls lhan neels lhe eye. The iniliaI decision of lhe copyiighl
couils lo exlend fuII copyiighl in iadio lioadcasls did nol pievenl lhe eneigence
of a conpuIsoiy Iicensing schene.
3. Cao|c Tc|ctisicn c |nc 8rcadcas|ing |ndus|rq
The lhiid najoi exanpIe of vhal I have desciiled as copyiighls sellIenenl
funclion aiises oul of lhe lillei nid-cenluiy confIicl lelveen lioadcasleis and lhe
upslail calIe indusliy. Reduced lo ils essenliaIs, leginning lhe Iale 195Os lhe
lioadcasl indusliy and ils affiIiales nounled a Iaige, successfuI effoil lo conlain
lhe giovlh of calIe using eveiy ieguIaloiy and poIilicaI device al lheii disposaI,
159

vhiIe lhe calIe indusliy capilaIized on ils unieguIaled slalus lo eiode lhe
doninanl posilion of lioadcasl.
16O

A geneiaI (aIleil uneasy) sellIenenl lo lhe confIicl vas achieved ly lhe Iale
197Os lhiough a conpionise on copyiighl IegisIalion and lhe iescission of lhe nosl
oneious of lhe ICCs ieguIalions and pseudo-copyiighls.
161
Wilh lhis sellIenenl,

158
Ioi lhe seninaI discussion of piopeily veisus IialiIily iuIes, scc Cuido CaIaliesi and A.
DougIas MeIaned, Prcpcr|q Ru|cs, |iaoi|i|q Ru|cs, and |na|icnaoi|i|q. Onc Vicu cf |nc Ca|ncdra|, 85
HARV. L. RLV. 1O89 (1972).
159
Ioi a veiy liief hisloiy of lhe ieIalionship anong calIe, lhe ICC, and Congiess, scc
Asholsh hagval, Of Mar|c|s and Mcdia. Tnc |irs| Ancndncn|, |nc Ncu Mass Mcdia, and |nc
Pc|i|ica| Ccnpcncn|s cf Cu||urc, 74 N.C. L. RLV. 141, 15O-55 (1995).
16O
Scc Thonas W. HazIell, Tnc lirc|css Crazc, |nc Un|ini|cd 8anduid|n Mq|n, |nc Spcc|run
Auc|icn |aux Pas, and |nc Puncn|inc |c Rcna|d Ccascs 8ig ]c|c. an |ssaq cn Airuatc A||cca|icn
Pc|icq, 14 HARV. }.L. & TLCH. 335, 417-18 (2OO1).
161
Ioi Couil decisions, scc foi exanpIe TeIepionplei Coip. v. CoIunlia ioadcasling
Syslen, Inc., 415 U.S. 394, 414 (1974) (iefusing lo appIy copyiighl Iav in lhe calIe
ieliansnission conlexl), IoilnighlIy Coip. v. Uniled Ailisls, 392 U.S. 39O, 399 (1968) (hoIding
lhal calIe lv is a vievei and lheiefoie does nol peifoin vilhin lhe neaning of lhe
conlioIIing copyiighl Iav). Congiess sellIed lhis dispule ly pionuIgaling a calIe
conpuIsoiy Iicensing schene. Scc 17 U.S.C. 111 (2OOO).


42
calIe legan a snoolhei accession lo ils piesenl doninanlion of leIevision
disseninalion.
162

a. Tnc Cna||cngc
CalIe vas nol, al fiisl, a chaIIengei lo lhe lioadcasl indusliy. The fiisl calIe
syslens, lhen knovn as connunily anlenna leIevision (CATV), deveIoped in
iuiaI aieas in lhe Iale 194Os. The goaI of lhe eaiIy depIoynenls vas nodesl:
soIving lhe piolIen of liinging lioadcasl leIevision lo ienole oi nounlainous
aieas olheivise Iefl in lhe daik.
163
In lhe Iale 194Os, eaiIy calIe opeialois in pIaces
Iike Asloiia, Oigeon (lhe sile of lhe fiisl iecognized CATV depIoynenl) eiecled
Iaige, connunily anlennas lo liing dislanl signaIs lo snaII lovns.
164
The
lioadcasl signaI capluied ly lhe connunily anlenna vas ieliansnilled lo peopIes
hones using physicaI calIes.
165

In lhis eaiIy nanifeslalion, calIe vas sinpIy a conpIenenl lo lioadcasl
seivice.
166
y aIIoving lhe lioadcasl signaI lo ieach aieas nol seived ly lioadcasl,
il expanded lhe leIevision audience lo lhe advanlage of lioadcasl slalions. This
had changed, hovevei, ly lhe Iale 195Os, vhen lioadcasleis ieaIized calIes lhieal
as a successoi indusliy.
ioadcasleis had ieason lo feai. CalIe lechnoIogy had lvo cIeai advanlages
ovei lioadcasl lechnoIogy lhal aie nov olvious: piogianning diveisily
167
(noie

162
Scc CalIe TeIevision Consunei Iioleclion and Conpelilion Acl of 1992, Iul. L. No.
1O2-385, 1O6 Slal. 146O (1992) 2(a)(2)-(5) (codified as 47 U.S.C. 521(a)(2)-(5)) (delaiIing lhe
inciease in calIe vieveiship and noling lhal lhe calIe leIevision indusliy has lecone a
doninanl nalionvide video nediun.).
163
Scc Kenl D. Wakefoid, Nole, Municipa| Cao|c |rancnising. An Unuarran|cd |n|rusicn in|c
Ccnpc|i|itc Mar|c|s, 69 S. CAL. L. RLV. 233, 237 n.16 and acconpanying lexl (1995).
164
Scc id. al 237 nole15
165
Scc id.
166
Scc Pa|ic| Murpnq, 1993 Rc|ransnissicn Ccnscn|. A Mixcd Signa| fcr Cao|c Ccpqrign|, 17
COLUM.-VLA }.L. & ARTS 237, 24O (1993) (desciiling lhis nodeI).
167
In lhe 196Os, diveisily neanl lhe inpoiling of signaIs fion olhei aieas using niciovave
liansnission lechnoIogy. Scc Tc|cprcnp|cr Ccrp., 415 U.S. al 4OO, n.4 (1974). Ioi exanpIe, lo
cieale an alliaclive seivice, a calIe opeialoi in IhiIadeIphia nighl inpoil independenl slalions
fion Nev Yoik Cily in oidei lo offei a lioadei seIeclion of conlenl lhan avaiIalIe fion
lioadcasl aIone.


43
channeIs) and signaI quaIily. In face of lhis conpelilive lhieal, lhe lioadcasl
indusliy adopled lhe faniIiai aigunenls of piiacy,
168
unfaii conpelilion,
169
and
econonic disiuplion favoied ly incunlenl indusliies. Il adopled, in olhei voids,
lhe aigunenls of lhe sheel nusic nanufacluieis in lhe piano-ioII eia and of lhe
iecoid conpanies loday.
17O
AIong vilh lhese cIains of unfaii conpelilion, lhe
lioadcasl indusliy added appeaIs lo IocaIisn, lhe nalionaI poIicy of sulsidizing
lhe exislence of IocaI lioadcasling slalions in eveiy connunily.
The unfaii conpelilion oi piiacy cIain vas sinpIy lhal calIe opeialois, lecause
lhey did nol pay foi lhe conlenl lhey ieliansnilled, veie sleaIing conlenl and
conpeling unfaiiIy. RheloiicaIIy, lhe lioadcasl indusliy openIy and iepealedIy
accused calIe opeialois of signaI piiacy. As lhe copyiighl office sunnaiized
lheii aigunenl in 1965:
|CalIe opeialoisj neilhei need oi deseive a fiee iide al lhe expense of
copyiighl ovneis . The aclivilies of lhe CATV opeialois conslilule a cIeai
noiaI viong conpaialIe lo lhe oId piaclice of licycIing novies fion
one lhealie lo anolhei in oidei lo gel lvo peifoinances oul of a singIe
Iicense.
171

As a IocaI lioadcaslei leslified in 1958, We leIieve lhal vhen a connunily
anlenna syslen lakes oui piogians oul of lhe aii, vilhoul oui peinission, and

168
This vas lhe iheloiic suiiounding, foi exanpIe, lhe conpuIsoiy-Iicense piovisions
aIIoving calIe lo ielioadcasl capluied signaIs. Scc Maiy C. DoIIaihide, Surrcga|c Ru|c Ma|ing.
Prco|cns and Pcssioi|i|ics Undcr |nc Adninis|ra|itc Prcccdurc Ac|, 61 S. CAL. L. RLV. 1O17, 1O27
(1988).
169
The Supiene Couil accepled lhe unfaii conpelilion ialionaIe in Tuinei ioadcasling
Syslen, Inc. v. I.C.C., 512 U.S. 622 (1994) |heieinaflei Turncr |j (In shoil, lhe nusl-caiiy
piovisions aie nol designed lo favloi oi disadvanlage speech of any pailicuIai conlenl. Ralhei,
lhey aie neanl lo piolecl lioadcasl leIevision fion vhal Congiess deleinined lo le unfair
ccnpc|i|icn ly calIe syslens.) (enphasis added).
17O
Scc supra, lexl acconpanying noles 8O lo 91.
171
Copyiighl Lav Revision Iail 6, SuppIenenlaiy Repoil of lhe Regislei of Copyiighls on
lhe CeneiaI Revision of lhe U.S. Copyiighl iII 43 (1965).


44
seIIs lhal piogian naleiiaI al a piofil~and in nany cases, a fanlaslic piofil,
indeed~lhis is a vioIalion of oui piopeily iighls.
172

}ack VaIenli of lhe Molion Iicluie Associalion nade siniIai aigunenls on
lhe eve of sellIenenl, }une 1975, in leslinony lefoie congiess:
If Congiess exenpls leIevision~calIe leIevision~fion copyiighl . |ilj viII
nol onIy le nagnifying and sanclifying a leiiilIe injuslice, lul il viII have
ciealed a huge paiasile in lhe naikelpIace, feeding and fallening ilseIf off of
IocaI leIevision slalions and copyiighl ovneis of copyiighled naleiiaI. We
do nol Iike il lecause ve lhink il viong and unfaii.
173

ioadcasleis associaled lhenseIves vilh lhe ciealion of piogianning conlenl
and Iinked calIe vilh lhe desliuclion of incenlives foi ciealion. The incunlenls
aigued lhal lhe ciealion of piogianning iesled on a deIicale laIance of incenlives:
ioadcasleis paid foi lhe ciealion of lhe piogianning conlenl and ieceived IocaI
adveilising ievenue in ieluin, seiving lhe pulIic inleiesl ly ciealing nev voiks.
CalIe opeialois, on lhe olhei hand, did nol cieale nev voiks and lheiefoie
conpeled unfaiiIy.
ul if calIe sinpIy caiiied lioadcasl signaIs, hov did il endangei lioadcasling
oi lhe ciealion of nev voiks` The lioadcasleis aigunenls ieIied on lhe concepl
of audience fiagnenlalion.
174
They aigued lhal lhe calIe opeialois piaclice of
inpoiling signaIs fion foieign naikels (i.c., fion Menphis lo Sl. Louis) vouId
fiagnenl lhe vieving audiences lelveen IocaI slalions and lhe foieign inpoils.
175

Inpoils vouId deslioy adveilising ievenue lecause Sl. Louis adveiliseis, faced
vilh an audience fiagnenled lelveen slalions of lolh cilies, vouId pay Iess.
MeanvhiIe since IocaI adveiliseis in Menphis couId caie Iess aloul ieaching
luyeis in Sl. Louis audiences lhe iesuIl vas a nel Ioss in anounl lioadcasleis

172
Heaiings efoie lhe Senale Conn. on Inleislale and Ioieign Conneice, Uniled Slales
Senale, 85lh Cong., Second. Sess. 3613 (1959) (slalenenl of WiIIian C. Ciove)
173
Scc U.S. Ccngrcss Hcusc Ccnn. cn |nc ]udiciarq Suoccnn. cn Ccur|s, Citi| |iocr|ics and |nc
Adninis|a|icn cf ]us|icc Hcarings, 92d Cong. (1972) (slalenenl of }ack VaIenli), in 15 OMNIUS
COIYRICHT RLVISION LLCISLATIVL HISTORY 727 (Ceoige S. Ciossnan ed. 1976) .
174
Scc, c.g., U.S. v. Soulhveslein CalIe Co., 392 U.S. 157, 16O nole 4 (delaiIing conceins
iegaiding fiagnenlalion in lhe San Diego naikel).
175
Scc id.


45
couId chaige foi adveilising.
176
The fiagnenlalion piolIen, lioadcasleis chaiged,
vouId deslioy lhe econonic vialiIily of fiee leIevision.
The lioadcasl indusliy advanced conceins foi IocaIisn in addilion lo lhose
iegaiding audience fiagnenlalion.
177
The ICC in 1952 decIaied IocaIisn a goaI of
nalionaI lioadcasling poIicy: lioadcasl shouId piovide each connunily vilh al
Ieasl one leIevision lioadcasl slalion.
178
The idea vas lhal lhe pulIic inleiesl vas
seived nol onIy ly lhe piogianning of lhe lig lhiee nelvoiks, lul aIso ly IocaI
lioadcasl slalions lhal couId piovide conlenl of nalleis of IocaI inpoilance.
179

CalIe opeialois, ly inpoiling signaIs, veie a pailicuIaiIy seiious lhieal lo lhe
vialiIily of IocaI lioadcasleis in snaII naikels.
IinaIIy, even if calIe did offei desiialIe diveisily in piogianning, lioadcasleis
aigued lhal lhe goaI of diveisily vas lellei achieved lhiough noie lioadcasl
slalions in eveiy connunily, nol lhe inpoil and expoil of signaIs aiound lhe
counliy.
18O
In pailicuIai, lioadcasleis pionoled deveIoping nev uIlia high
fiequency (UHI) slalions as lhe piefeiied neans foi achieving piogianning
diveisily.
181

In ieliospecl, lhe veakness of lhese aigunenls is appaienl. CalIe vas indeed
a lhieal lo lioadcasling lecause il vas a lellei neans of disseninaling leIevision.
Yel il did nol foIIov lhal calIe vas aIso a lhieal lo piogianning, lecause il couId
(and did) uIlinaleIy cone lo have an inleiesl in lhe avaiIaliIily of nev voiks. In
pailicuIai, calIe, as nosl nov iecognize, vas lhe savioi of UHI lioadcasling
lecause il inpioved lhe veak signaI slienglh of UHI slalions.
182
The key, in
ieliospecl, vouId le lo nake calIe a slakehoIdei~pail of lhe conpensalion

176
Scc id.
177
LocaIisn as a concepl is discussed in CIenn O. Rolinson, Tnc ||cc|rcnic |irs|
Ancndncn|. An |ssaq fcr |nc Ncu Agc, 47 DUKL L. RLV. 899, 9O4 (1997).
178
Scc Repoil and Oidei, 17 Ied. Reg. 3912 63 (1952).
179
Scc id.
18O
These aigunenls veie iefIecled in lhe 1958 Cox Repoil on CalIe TeIevision. Scc
Kennelh Cox, The IiolIen of TeIevision Seivice foi SnaIIei Connunilies. S|aff Rcpcr| |c |nc
Scna|c Ccnni||cc cn |n|crs|a|c and |crcign Ccnncrcc, 26 Decenlei 1958.
181
Scc id.
182
Scc }oeI RosenlIoon, Tnc Vas| las|c|and in Rc|rcspcc|, 55 ILD. COMM. L.}. 571, 575
(2OO3) (ciling iuce M. Oven & Sleven S. WiIdnan, Video Lcononics 214-15 (1992)).


46
syslen foi nevIy ciealed voiks~vilhoul giving lioadcasl a looI lo deslioy ils
iivaI. This, uIlinaleIy, vas lhe ioIe lhal lhe copyiighl IialiIily schene vas lo pIay.
o. Ccn|rc||ing |nc Cna||cngcr
Iaced vilh lhe conpelilive lhieal of calIe and ained vilh lhese aigunenls,
lhe lioadcasl indusliy and ils aIIies
183
in lhe 196Os expIoiled aII avaiIalIe
ieguIaloiy neans lo conlioI lhe giovlh of calIe. The indusliy puisued lhiee
sepaiale IegaI slialegies: connon-Iav nisappiopiialion aigunenls, copyiighl
infiingenenl Iiligalion, and a kind of pseudo-copyiighl enfoicenenl lhiough
ICC ieguIalion.
The lioadcasling indusliy luined fiisl lo lhe connon Iav in an effoil lo gain
piopeily iighls in ils lioadcasl signaIs. eginning in lhe Iale 195Os, lhe
lioadcasleis asked lhe couils lo find lhe lehavioi of calIe conpanies a vioIalion of
connon-Iav nisappiopiialion undei |n|crna|icna| Ncus Scrticc t. Assccia|cd Prcss
and olhei connon-Iav lheoiies.
184
The aigunenl in lhese Iavsuils vas sinpIe:
calIe opeialois aie sleaIing oui pioducl (lhe signaI) vilhoul pioviding
conpensalion, and aie lheiefoie conpeling unfaiiIy and shouId le slopped. In
Assccia|cd Prcss, lhis lasic lheoiy had peisuaded lhe Supiene Couil lo pievenl one
viie seivice fion sleaIing nevs fion anolhei, ciealing a pseudo-piopeily inleiesl
in hol nevs.
185
The iighl vouId have seived lhe lioadcaslings inleiesls
peifeclIy.
ul lhese effoils faiIed. In cIoseIy valched Iiligalion, lhe Ninlh Ciicuil heId
lhal lhe lioadcasleis ienedy, if any, nusl Iie in copyiighl.
186
Ioinling oul lhal
lhe lioadcasleis soughl vhal aie in essence copyiighl inleiesls, lhe couil found

183
An exanpIe of an aIIy veie lhe nanufacluieis of leIevision anlennas, oiganized as lhe
TeIevision Accessoiy Manufacluieis Inslilule (TAMI), vho olviousIy had nuch lo Iose fion
conpelilion vilh calIe. Scc Don R. Le Duce, CalIe TeIevision and lhe ICC 142-143 (1972).
184
248 U.S. 215 (1918). |n|crna|icna| Ncus Scrticc heId lhal nevs viies have a quasi-
piopeily iighl in hol nevs. Scc id. al 245-46. The lioadcasleis aIso aigued foi loilious
inleifeience vilh conliacl, scc Associaled Iiess v. InleinalionaI Nevs Seivice, 24O I. 983, 995
(S.D.N.Y. 1917), lul lhe nisappiopiialion lheoiy ieceived lhe nosl allenlion in lhe couil of
appeaIs, scc Associaled Iiess v. InleinalionaI Nevs Seivice, 245 I. 244, 252 (2
nd
Cii. 1917).
185
Scc |n|crna|icna| Ncus Scrticc, 248 U.S. al 245-46.
186
CalIe Vision v. KUTV Inc., 335 I.2d 348 (9lh Cii. 1964).


47
lhe slale giounds foi piolecling lioadcasleis iighls fedeiaIIy pieenpled.
187

TechnicaIIy, lhis decision cane undei lhe aulhoiily of lhen iecenlIy decided
copyiighl pieenplion cases Scars Rccouc| c Cc. t. S|iffc| Cc.
188
and Ccnpcc
Ccrpcra|icn t. Daq-8ri|c |ign|ing, |nc.
189
ul vhal is inleiesling is lhe couils
iecognilion lhal lhe connon Iav iighl lhiealened lhe piinaiy iighl of pulIic
access lo aII in lhe pulIic donain..
19O
Il ieasoned lhal lhe ciealion of a nev
pioleclilIe inleiesl vouId inleifeie vilh lhe fedeiaI poIicy of aIIoving fiee access
lo copy vhalevei lhe fedeiaI palenl and copyiighl Iavs Ieave in lhe pulIic
donain.
191

On lhe olhei hand, lhe IedeiaI Connunicalions Connission vas seeningIy
innune lo such conceins, and lhe lioadcasleis slialegy vas heie lhe nosl
effeclive. il-ly-lil, uiged on ly lhe lioadcasleis, il ciealed a iegine of pseudo-
piopeily iighls and olhei iuIes lhal, foi a line, gave lhe lioadcasl indusliy lhe
neans lo conlioI lhe deveIopnenl of lhe calIe indusliy.
192

WhiIe iniliaIIy hesilanl,
193
lhe ICC legan asseiling juiisdiclion in 1962.
194
y
1966, in ils Scccnd Rcpcr| and Ordcr
195
lhe ICC had cone lo agiee vilh lhe
lioadcasleis sulslanlive aigunenls and assune hain fion calIes exislence.
196

187
335 I.2d al 35O.
188
376 U.S. 225 (1964).
189
376 U.S. 234 (1964).
19O
335 I.2d al 35O.
191
|d. al 351.
192
Scc infra noles 22O lo 246. Scc a|sc SlanIey M. esen & Roleil W. CiandaII, Tnc
Dcrcgu|a|icn cf Cao|c Tc|ctisicn, 4 LAW & CONTLMI. IROS. 77, 81-91 (1981) (docunenling ICC
aclivily consliaining lhe giovlh of calIe)
193
Scc Iionliei ioadcasling Co. v. CoIIiei, 24 ICC 251 (1958) (decIining lo exeicise
juiisdiclion ovei calIe on lhe giound lhal il vas nol a connon caiiiei), ieconsideialion denied,
Repoil and Oidei, Dockel No. 12443, 26 I.C.C. 4O3, 428 (1959).
194
The ICC assuned juiisdiclion ovei niciovave seivice liansnilling dislanl TV signaIs
lo calIe leIevision in 1962, iequiiing calIe syslens lo caiiy IocaI lioadcasl signaIs as a condilion
of a niciovave Iicense lo iuiaI calIe syslens. Scc Cailei Mln. Tiansnission v. I.C.C., 32
I.C.C.2d 459 (1962), affd., 321 I.2d 359 (D.C. Cii.) (1963), ccr|. dcnicd, 375 U.S. 951 (1963).
195
Scc Anendnenl of Sulpail L, Iail 91, lo Adopl RuIes & ReguIalions lo Covein lhe
Cianl of Aulhoiizalions in lhe usiness Radio Seivice foi Miciovave Slalions lo ReIay
TeIevision SignaIs lo Connunily Anlenna Sys., Second Repoil and Oidei, 2 I.C.C.2d 725 (1966)
196
Scc id. al 123-3O (allenpling lo Iinil giovlh of calIe)


48
y 1966, lioadcasleis had peisuaded lhe ICC lo enacl a fuII iegine of calIe
ieguIalion lhal effecliveIy piolecled lhe inleiesls lioadcasleis vouId seek lo
piolecl vilh piopeily iighls. The ICC iuIes laiied dupIicalion of IocaI
lioadcasling (non-dupIicalion iuIes),
197
foiced calIe syslens lo caiiy IocaI signaIs
(nusl-caiiy iuIes),
198
and laiied calIe opeialois fion inpoiling signaIs inlo any of
lhe lop 1OO leIevision naikels unIess lhe calIe opeialoi couId ollain a vaivei ly
ollaining lhe consenl of IocaI lioadcasl slalions.
199
These unleIievalIe
2OO
iuIes,
ailicuIaled ly lhe ICC as a defense of IocaIisn, piovided lhe lioadcasl indusliy
vilh effeclive goveinnenlaI pioleclion fion ils nascenl calIe iivaI.
In ieliospecl, lhe expeiinenl vilh lhe vaivei iegine vas sonelhing of a diy
iun foi a fuII copyiighl iegine. The iesuIls veie nol pionising. A 1976 sludy
found lhal duiing lhe peiiod of 1968-1972, lioadcasleis agieed lo jusl one inslance
of a vaivei aIIoving inpoil.
2O1
WhiIe il nay le lhal lhe iegine vas nol given
enough line lo voik, lhe noie IikeIy expIanalion is lhal lioadcasl vas inleiesled
in slaiving ils iivaI.
2O2
Il hinls al sone of lhe dangeis of copyiighl as lelveen
iivaI disseninalois, pailicuIai in eaiIy slages.
ioadcasleis lhiid Iine of allack vas a copyiighl Iiligalion canpaign. In 1968,
lhe inevilalIe queslion of calIes copyiighl IialiIily ieached lhe Supiene Couil in
|cr|nign||q Ccrp. t. Uni|cd Ar|is|s.
2O3
The case vas facluaIIy sinpIe. A Wesl
Viiginia calIe opeialoi had ieliansnilled lo ils cusloneis vaiious lioadcasled
piogians. The lioadcasl indusliy lhiough copyiighl ovneis aigued lhe calIes

197
Scc id. al 48.
198
Scc id. al 49.
199
Scc id. al 141.
2OO
Iied H. Cale, Tnc |u|urc cf Ccnnunica|icns Pc|icq Ma|ing, 3 WM. & MARY ILL RTS. }. 1, 2
(1994).
2O1
Scc olein, Tnc Ncu Ccpqrign| Ac| and Cao|c Tc|ctisicnA Signa| cf Cnangc, ULL.
COIYRICHT SOCY U.S.A. 1, 4 (1976) (|CjalIe opeialois veie sonehov nevei alIe lo gel
consenl.).
2O2
Acccrd, Nc|c, Ccpqrign| Prc|cc|icn in |nc Cao|c Tc|ctisicn |ndus|rq, 51 IORDHAM L. RLV. 637,
648 n.1O5 (1982) (specuIaling as lo lhe ieasons foi lhe faiIuie).
2O3
392 U.S. 39O (1968).


49
ieliansnission anounled lo an unaulhoiized pulIic peifoinance undei lhe
Copyiighl Acl.
2O4

ul lhe Couil disagieed, iuIing (5-1) lhal calIe leIevision vas lhe funclionaI
equivaIenl of a noie poveifuI anlenna and lhal il vas no noie of a peifoinei
lhan an anlenna nanufacluiei vouId le.
2O5
As in lni|c-Sni|n, nol aII of lhe
ieasoning appaienl in lhe decision. The couil heId lhal lhe calIe opeialois veie
pail of lhe audience foi lioadcasl, and hence veie nol peifoining lhe voik.
206

Yel il vas cIeai lhal lhe calIe opeialois veie naking noney using copyiighled
conlenl~vhal had happened lo }uslice HoInes poinl lhal lhe puipose of
enpIoying il is piofil, and lhal is enough` The Couil had, noieovei, in 1931
decided a facluaIIy siniIai iadio case in lhe opposile nannei, hoIding lhal a holeI
lhal ielioadcasl iadio slalions inlo piivale ioons vilhoul peinission vas
infiinging copyiighl.
2O7
Sonelhing eIse vas cIeaiIy afool. Did lhe couil acluaIIy
leIieve lhal ils decision soneone seived lhe inleiesls of copyiighl hoIdeis` Oi vas
lhe Couil defeiing lo lhe IedeiaI Connunicalions Connission, oi piaclicing ils
ovn connunicalions poIicy`
We can onIy gel oui cIues fion lhe dissenl.
2O8
}uslice Ioilas piesenled lhe
poIicy consideialions squaieIy, and in lhe Ianguage of connunicalions poIicy, nol
copyiighl Iav: il is daikIy piedicled lhal lhe inposilion of fuII IialiIily upon aII
CATV opeialions couId iesuIl in lhe denise of lhis nev, inpoilanl insliunenl of
nass connunicalions.
2O9
On lhe olhei hand il is foieseen lhal a decision lo lhe
effecl lhal CATV syslens nevei infiinge lhe copyiighls of lhe piogians lhey caiiy
vouId peinil such syslens lo oveipovei IocaI lioadcasling slalions.
21O
The case,
as he sav il, vas aInosl puie connunicalions poIicy, pilling lhe inleiesls of a nev

2O4
Scc 393 U.S. al 395.
2O5
Scc id. al 414.
2O6
Scc id.
2O7
Scc uck v. }eveII LaSaIIe ReaIly Co., 283 U.S. 191, 198 (1931) (hoIding lhal pIaying
copyiighled nusicaI conposilions lioadcasl fion iadio slalion via holeI Ioudspeakeis is
infiinging peifoinance).
2O8
392 U.S. al 4O2-8 (Ioilas, }., dissenling)
2O9
|d. al 4O3-4O4 (Ioilas, }., dissenling). }uslice Ioilas vouId have found calIe opeialois
IialIe undei lhe aulhoiily of 8uc| t. ]cuc||-|aSa||c Rca||q Ccrp., 283 U.S. 191.
21O
|d. al 4O4.


5O
leIeconnunicalions nediun againsl a nalionaI poIicy of IocaIisn. Ioilas leIieved
lhe couil shouId acl lo do as IillIe danage as possilIe lo liadilionaI copyiighl
piincipIes and lo lusiness ieIalionships, lul aIso favoied a IegisIalive soulion:
unliI Congiess IegisIales and ieIieves lhe enlaiiassnenl vhich ve and lhe
inleiesled pailies face.
211

The seeds of a fuluie copyiighl sellIenenl aie evidenl fion lhe |cr|nign||q
Iiligalion. SoIiciloi CeneiaI Livin CiisvoId suggesled in his anicus liief on lhe
neiils lhal lhe Supiene Couil couId ieasonalIy inpose a copyiighl sellIenenl in
ils decision.
212
He asked lhe couil lo find calIe lioadcasleis IialiIe, lul lo inpIy a
Iicense in aieas vheie lioadcasl signaIs veie veak. The SoIicloi CeneiaI vas, in
effecl, inviling lhe Supiene Couil lo viile connunicalions ieguIalion inlo ils
inleipielalion of lhe copyiighl slalule. WhiIe lolh najoiily and dissenl decIined
lhe invilalion lo sellIe lhe dispule in lhis nannei, il foieshadoved a copyiighl
sellIenenl on lhe hoiizon.
Yel vheie lhe Couil vouIdnl go, lhe ICC vas noie viIIing. In lhe afleinalh
of |cr|nign||q lhe ICC pioposed gianling lioadcasleis iighls even noie siniIai lo
copyiighl lhan did lhe exisling iegine (as if lo conpensale foi lheii Ioss). 1968 sav
lhe pioposed inlioduclion of inpoilalion consenl.
213
As lhe nane suggesls,
undei lhis iuIe, calIe opeialois le vouId iequiied lo ollain lhe consenl of lhe
oiginaling lioadcaslei lefoie inpoiling any piogian inlo a lop 1OO naikel.
214

ul Congiess vas noie inleiesled in a copyiighl soIulion, and lhe pioposaI vas
nevei enacled.
215

c. Sc|||cncn| c Ccpqrign|
In 197O, il appeaied lhal lhe piedicled iise of calIe lechnoIogy vas sIoved,
if nol fiozen. A Iav ieviev ailicIe appeaiing lhal yeai decIaied lhal |ajIlhough
calIe leIevision offeis lhe polenliaI of giealIy incieased leIevision diveisily, ils

211
|d.
212
Scc id. al 4O1 n.32.
213
Scc CATV Nolice of Iioposed RuIenaking and Nolice of Inquiiy, 15 I.C.C.2d 417, 432
(1968).
214
Scc id.
215
Connission IioposaIs foi ReguIalion of CalIe TeIevision, 31 I.C.C.2d 115, 117 (1971)
(Iellei fion ICC lo Senale Connunicalions Sulconnillee).


51
possiliIilies have leen Iefl IaigeIy unieaIized.
216
WhiIe calIe had giovn lo ieach
aloul 6 of househoIds, vilh appioxinaleIy 4.5 niIIion sulsciileis,
217
ils
chaIIenge lo lioadcasl vas haIled al lhe uilan loidei. As econonic hisloiians
SlanIey esen and Roleil CiandaII expIained nalleis, CalIe enleied lhe 197Os as a
snaII lusiness ieIegaled piinaiiIy lo iuiaI aieas and snaII connunilies and heId
hoslage ly leIevision lioadcasleis lo lhe Connissions hope foi lhe deveIopnenl
of UHI.
218

y lhe end of lhe decade, hovevei, calIe had leen ieIeased fion ils
figuialive piison. Thiough a decade-Iong piocess of conpionise, negolialion,
ICC iuIenaking and CongiessionaI IegisIalion, a liuce of soils vas ieached. Mosl
of lhe ICCs pseudo-piopeily iighls and olhei iesliiclions veie alandoned
219
and
vhal eneiged vas a syslen cenleied on a copyiighl IialiIily iegine.
22O
WhiIe ly
no neans an aeslhelic exeicise, lhal peiiods hisloiy iIIusliales lhe ioIe lhe
copyiighl iegine pIayed in one of lhe nosl lillei lechnoIogicaI succession vais of
lhe cenluiy.
y 197O, lioadcasleis had successfuIIy convinced lhe ICC lo inpose seiious
Iinils on lhe giovlh of calIe.
221
So vhy vouId lioadcasleis even vanl lo luin lo a
copyiighl conpionise, given lhal il nighl jeopaidize a favoialIe slalus quo`
IiinaiiIy, a copyiighl soIulion appeaied noie duialIe. The iesliiclive
iegine ciealed ly lhe ICC vas in a slale of conslanl fIuclualion and vas easiei lo

216
Leonaid Chazen & Leonaid Ross, |cdcra| Rcgu|a|icn cf Cao|c Tc|ctisicn, |nc Visio|c Hand,
83 HARV. L. RLV. 182O, 182O (197O).
217
Seivices VoIune, TeIevision Iacllook, 83-a (1982) |heieinaflei TV |ac|occ|j.
218
esen & CiandaII, supra nole 192, al 94.
219
Thal lhey veie alandoned did nol pievenl lheii sulsequenl ieinlioduclion. The
IedeiaI Connunicalions Connission in lhe 198Os and Congiess in 1992 ieinlioduced vaiious
foins of pioleclion foi lhe lioadcasl indusliy. Scc, c.g., Anendnenl of Iails 73 and 76 of lhe
Connission's RuIes ReIaling lo Iiogian LxcIusivily in lhe CalIe and ioadcasl Indusliies, 3
I.C.C.R. 5299, 53OO (1988) (iepoil and oidei) (sydicalion iuIes), CalIe TeIevision Consunei
Iioleclion and Conpelilion Acl of 1992, Iul.L. No. 1O2-385, 1O6 Slal. 146O (1992) (codified as
anended al 47 U.S.C.A. 521 (2OO4) (enacling ieliansnission consenl).
22O
This iegine vas lhe conpuIsoiy Iicensing syslen of 111 of lhe 1976 Copyiighl Acl. 17
U.S.C. 111 (2OOO).
221
IiinaiiIy lhiough lhe piovisions in lhe Second Repoil and Oidei, supra nole 195.


52
change lhan copyiighl IegisIalion vouId le. Nev connissioneis al lhe ICC couId
(and uIlinaleIy did) agiee vilh lhe posilions of calIe leIevision, jeopaidizing
lioadcaslings favoialIe posilion. In pailicuIai, nounling evidence suggesled
lhal lhe dangei of calIe syslens lo leIevision (as opposed lo lioadcasleis) vas
exaggeialed.
222
This suggesls lhal lioadcasleis nay have feIl piessuie lo conveil
lheii lenpoiaiy ieguIaloiy advanlage inlo a noie Iasling souice of ievenue.
Ioi lioadcasleis, lhis piolIen vas conpounded ly lhe gioving povei of lhe
calIe indusliy. Despile lhe Iinilalions on uilan giovlh, calIe conlinued lo giov
in iuiaI and snaII naikels, lielIing in size lelveen 1966 and 197O.
223
The gioving
povei of lhe calIe indusliy suggesled lhal lhe lioadcasleis aliIily lo infIuence lhe
ieguIaloiy and IegisIalive piocess nighl eiode ovei line, naking a noie duialIe
conpionise alliaclive.
IinaIIy, in lhe Iale 196Os, nany lioadcasleis legan invesling in calIe syslens.
y 1966, lioadcasleis had sone slake in 3O peicenl of calIe conpanies.
224
Wilh
inleiesls on lolh sides, lioadcasleis veie inleiesled in a soIulion lhal vouId aIIov
calIe lo giov in exchange foi payoffs lo lhe lioadcasling indusliy, a puipose
lelleied seived ly a copyiighl ioyaIly syslen lhan ICC ieguIalions.
Yel none of lhis neanl lhal lioadcasleis veie inleiesled in an innediale
copyiighl sellIenenl. They sliII had a chance of achieving lolaI vicloiy: naneIy, a
Supiene Couil decision finding calIe ieliansnission iIIegaI vilhoul peinission.
Il vas nol unliI lhe Supiene Couil pIayed ils finaI hand in 1974
225
lhal sellIenenl
lecane inninenl.
An eaiIy lIuepiinl of calIe-lioadcasl sellIenenl vas lhe Conpionise
Agieenenl of 1971,
226
iepiesenling an agieenenl lelveen najoi calIe,

222
See esen & CiandaII, supra nole 192, al 97.
223
Vieveiship iose fion aloul 1.5 niIIion vieveis lo 4.5 niIIion. Scc TV Iacllook, supra n.
217.
224
Scc Ialiick Iaisons & Roleil Iiieden, THL CALL AND SATLLLITL TLLLVISION INDUSTRILS
47 (1998).
225
Discussed infra al lexl acconpanying nole 232.
226
The consensus agieenenl is desciiled in U.S. Ccngrcss Hcusc Ccnn. cn |nc ]udiciarq
Suoccnn. cn Ccur|s, Citi| |iocr|ics and |nc Adninis|a|icn cf ]us|icc Hcarings, 92d Cong. (1972), in 14


53
lioadcasling, and piogianning inleiesls. The lasic oulIines of lhe conpionise
vas lhis: calIe, foi lhe fiisl line, vouId agiee lo sone syslen of copyiighl
IialiIily, in exchange foi a geneiaI Ioosening of ICC iesliiclions on enliy inlo uilan
naikels and olhei concessions lo pulIic seivice.
227
WhiIe lhe consensus did nol
Iasl, in lhe end lhe agieenenl vas lhe slailing poinl foi a neai-lolaI deieguIalion of
calIe syslens in exchange foi copyiighl IialiIily.
The conpionise, liokeied in pail ly nev ICC chaiinan Dean aiuch,
legan lo le inpIenenled on lhe ieguIaloiy side vilh nev ICC iuIes lhal aIIoved
calIe syslens Iiniled inpoilalion iighls in lhe lop 1OO naikels.
228
The 1972 iuIes,

Onnilus Copyiighl Revision LegisIalive Hisloiy 5O2 (Ceoige S. Ciossnan ed., 1976) (slalenenl
of Rex A. iadIey).
227
Scc In lhe Mallei of Anendnenl of Iail 74, Sulpail K, of lhe Connissions RuIes and
ReguIalions ReIalive lo Connunily Anlenna TeIevision Syslens, and Inquiiy inlo lhe
DeveIopnenl of Connunicalions TechnoIogy and Seivices lo IoinuIale ReguIaloiy IoIicy and
RuIenaking and/oi LegisIalive IioposaIs. Anendnenl of Seclion 74.11O7 of lhe Connissions
RuIes and ReguIalions lo Avoid IiIing of iepelilions Requesls. Anendnenl of Seclion
74.1O31(c) and 74.11O5(a) and (l) of lhe Connissions RuIes and ReguIalions as lhey ReIale lo
Addilion of Nev TeIevision SignaIs. Anendnenl of Iail 74, Sulpail K, of lhe Connissions
RuIes and ReguIalions ReIalive lo IedeiaI-Slale oi LocaI ReIalionships in lhe Connunily
Anlenna TeIevision Syslen IieId, and/oi IoinuaIlion of LegisIalive IioposaIs in lhis Respecl.
Anendnenl of Sulpail K of Iail 74 of lhe Connissions RuIes and ReguIalions vilh Respecl lo
TechnicaI Slandaids foi Connunily Anlenna TeIevision Syslens, 36 I.C.C.2d 143 (1972)
|heieinaflei 1972 Cao|c Tc|ctisicn Rcpcr| and Ordcrj. As desciiled ly lhe chaiinan of lhe
NalionaI CalIe and TeIeconnunicalions Associalion, in 1971, in an effoil lo lieak lhe
ieguIaloiy inpasse ovei calIe, lhe Office of TeIeconnunicalions and lhe ICC fashioned lhe so
caIIed 'consensus agieenenl undei vhich lhe pailies~lioadcaslei, copyiighl ovneis, and
calIe~affiined suppoil foi copyiighl IegisIalion and appioved lhe oulIine foi nev ICC calIe
ieguIalions. U.S. Ccngrcss Hcusc Ccnn. cn |nc ]udiciarq Suoccnn. cn Ccur|s, Citi| |iocr|ics and
|nc Adninis|a|icn cf ]us|icc Hcarings, 92d Cong. (1972), in 14 OMNIUS COIYRICHT RLVISION
LLCISLATIVL HISTORY 5O2 (Ceoige S. Ciossnan ed., 1976) (slalenenl of Rex A. iadIey).
228
Scc 1972 Cao|c Tc|ctisicn Rcpcr| and Ordcr, 36 ICC 2d 241. These iuIes aie highIy
conpIex: lhey have leen caIIed anong lhe nosl conpIex iuIes and ieguIalions evei devised
ly lhe nind of nan. U.S. Congiess House Conn. on lhe }udiciaiy Sulconn. on Couils, CiviI
Lileilies, and lhe Adninislialion foi }uslice Heaiings, 92d Cong. (1972), in 14 OMNIUS
COIYRICHT RLVISION LLCISLATIVL HISTORY 5O1 (Ceoige S. Ciossnan ed., 1976) (Slalenenl of Rex
A. iadIey). The nev iuIes aIIoved calIe syslens lo inpoil sufficienl signaIs lo offei 3
nelvoik pIus 3 independenl signaIs in naikels 1-5O, 3 nelvoik pIus 2 independenls in naikels


54
desciiled as anong lhe nosl conpIex iuIes and ieguIalions evei devised ly lhe
nind of nan legan a giaduaI piocess of ICC deieguIalion of lhe calIe
indusliy.
229

The copyiighl side of lhe deaI look 4 noie yeais lo sellIe lhiough lhe
IegisIalive piocess. WhiIe lhe najoi indusliy associalions ienained connilled lo
lhe agieenenl, nany nenleis of lhe calIe indusliy soughl lo defecl. Ioi exanpIe,
iepiesenlalives of TeIepionplei Coip., one of lhe nalions Iaigesl calIe syslens,
appeaied lefoie Congiess lo denand conlinued innunily fion copyiighl,
cIaining lhal lhe consensus agieenenl vas pushed dovn lhe lhioal of lhe calIe
leIevision indusliy.
23O
TeIepionplei and olhei calIe opeialois ieluined lo lhe
posilion lhal calIe syslens veie nolhing lul anolhei foin of anlenna - vhy
shouId lheie le any IialiIily vhen lhe vievei avaiIs hinseIf of lhe anlenna lovei
eiecled ly lhe calIe leIevision slalion`
231

On lhe olhei side, lioadcasleis nade a finaI effoil lo ollain fuII copyiighl
IialiIily vilh lhe Tc|cprcnp|cr Iiligalion.
232
Tc|cprcnp|cr, unIike |cr|nign||q, vas a
signaI inpoilalion case. CoIunlia ioadcasl Syslens couId poinl lo
TeIepionpleis inpoils, sone fion as fai as 45O niIes
233
- and nake lhe audience
fiagnenlalion aigunenl desciiled alove. Yel lhe Supiene Couil pioved
uninleiesled in undoing lhe Iine diavn in lhe |cr|nign||q decision. ioadcasleis
peifoin. Vieveis |incIuding calIej do nol peifoin.
234
Wilh lhal, lhe
ioadcasleis exhausled lheii Iasl chance al ollaining fuII vicloiy~lolaI copyiighl
IialiIily.

51-1OO, and 3 nelvoiks pIus 1 independenl oulside lhe lop 1OO naikels. Scc id. The iuIes aIso
iequiied a nininun 2O channeI capacily.
229
Scc gcncra||q, esen & CiandaII, supia nole 192, al 93-1O3.
23O
U.S. Congiess House Conn. on lhe }udiciaiy Sulconn. on Couils, CiviI Lileilies, and
lhe Adninislialion foi }uslice Heaiings, 92d Cong. (1972), in 14 Onnilus Copyiighl Revision
LegisIalive Hisloiy 667 (Ceoige S. Ciossnan ed., 1976) (slalenenl of Ceoige }. aico).
231
|d.
232
TeIepionplei Coip. v. CoIunlia ioadcasling Syslens, 415 U.S. 394 (1974).
233
|d. al 4OO.
234
|d. al 4O3.


55
Congiess enacled lhe copyiighl side of lhe conpionise in 1976. The foin
vas a conpuIsoiy Iicensing Iav, codified in 111 of lhe 1976 Acl.
235
As a
sellIenenl, il on lhe one hand aIIoved lhe calIe syslens lo conlinue lheii lasic
neans of doing lusiness: ieliansnission of lioadcasl piogians. Yel in exchange
calIe syslens agieed lo pay ioyaIlies on inpoiled signaIs,
236
nol lo aIlei lhe conlenl
oi adveilising of lhe signaIs il ieliansnilled,
237
and lo ieliansnil piogians
sinuIlaneousIy vilh lhe lioadcasl.
238
In shoil, lhe Iicensing schene napped lhe
exisling lusiness piaclices of calIe conpanies, and added IialiIilies lo il. The
exlenl of lhese IialiIilies vas lo le deleinined ly a nev slaluloiy ciealion, lhe
Copyiighl RoyaIly TiilunaI.
239

In lhe Iasl slage of lhe 197Os sellIenenl, lhe ICC iepeaIed nosl of lhe
ienaining ieguIalion of lhe calIe indusliy. y }anuaiy 1, 1978, as lhe copyiighl
syslen cane inlo foice, lhe coie ienaining Iinilalions of lhe oId iegine ienained
lhe dislanl-signaI Iinilalions, vhich Iiniled lhe inpoil of piogianning inlo
Iaige (lop 1OO) leIevision naikels,
24O
and lhe syndicaled excIusivily iuIes, vhich
aIIoved IocaI slalions in uilan aieas lo foice calIe lo lIack-oul piogians foi vhich
lhey had puichased excIusive exhililion iighls.
241
Togelhei, lhese lvo iuIes
conlinued lo Iinil calIes expIoilalion of uilan naikels. ul in 198O, lhe ICC
iepeaIed lhese Iasl ieguIalions.
242
Il concIuded lhal lhe alsence of evidence of
econonic hain and lhe nev copyiighl schene had eIininaled any need foi ils

235
17 U.S.C. 111(c)(1) (2OOO).
236
|d.
237
17 U.S.C. 111(c)(2).
238
17 U.S.C. 111(c)(1), (f) .
239
17 U.S.C. 8O1-81O (1976). The TiilunaI vas aloIished in 1993 and ils funclions
liansfeiied lo lhe Copyiighl Office and lhe Liliaiian of Congiess. Scc lhe Copyiighl RoyaIly
TiilunaI Acl of 1993, Iul. L. No. 1O3-198, 1O7 Slal. 23O4 (1993), codified al 17 U.S.C. 8O3
(2OOO).
24O
47 C.I.R. 76.59(l)-(e), 76.61(l)-(f), 76.63 (198O).
241
47 C.I.R. 76.151-76.161.
242
Scc CalIe TeIevision Syndicaled Iiogian LxcIusivily RuIes, 79 I.C.C.2d 663 (198O), affd
suo ncn MaIiile TeIevision v. ICC, 652 I.2d 114O (2d Cii. 1981).


56
copyiighl suiiogales.
243
Wilh lhis decision, lhe iepIacenenl of piohililive ICC
ieguIalions vilh copyiighl IialiIily vas essenliaIIy conpIele.
244

Iieed fion ieguIaloiy Iinils, calIe sulsciiplion expIoded. Iion 1975-1985
sulsciiplion quadiupIed. The 3,5O6 syslens seiving neaiIy 1O niIIion sulsciileis
lecane ly 1985 6,6OO syslens seiving neaiIy 4O niIIion Aneiicans.
245
Il had laken
lhiily yeais and nuch ieguIaloiy vaifaie. ul calIe lhe succession vas conpIele,
and lhe calIe indusliy assuned ils pIace as lhe doninanl lechnoIogy of leIevision.

d. |pi|cguc
As leIeconnunicalions hisloiians knov, lhe 197Os did nol enliieIy end lhe
ieguIaloiy lallIes lelveen calIe and lioadcasling. The copyiighl ioyaIly liilunaI,
foi exanpIe, alliacled enoinous Iiligalion in ils selling of fees.
246
Theie eneiged
in lhe 198Os a novenenl (lacked ly lioadcasleis) lo lane lhe povei of calIe,
cuIininaling in Congiess ieinslaling sone of lhe ieguIalions lhal lhe ICC had
diopped in lhe Iale 197Os. Ioi exanpIe, in 1992 Congiess adopled lhe
ieliansnission consenl iuIe fiisl pioposed ly lhe ICC in 1968, giving lioadcasleis,
foi lhe fiisl line, a cIeai piopeily iighl in lheii signaIs.
247

Yel al lhis slage lhese confIicls veie lelveen naluie indusliies, nol incunlenl
and chaIIengei. The exanpIe of lhe 1992 ieliansnission consenl iuIes shovs lhe
diffeience. Had lhe couils gianled lioadcasleis such iighls in 1961 (as connon-
Iav unfaii conpelilion iighls), lhe iighls vouId have pul calIe deveIopnenl in lhe

243
Inquiiy inlo lhe Lcononic ReIalionship lelveen TeIevision ioadcasling & CalIe
TeIevision, 71 I.C.C.2d 632 (1979).
244
OnIy lhe nelvoik non-dupIicalion and nusl-caiiy iuIes ienained in pIace. Scc CalIe
TeIevision Syndicaled Iiogian LxcIusivily RuIes, 79 I.C.C.2d 663 (198O), affd suo ncn MaIiile
TeIevision v. ICC, 652 I.2d 114O (2d Cii. 1981).
245
Scc Iaisons & Iiieden, supia nole 222, 57-6O (delaiIing lhe calIe expIosion of lhe
198Os), scc a|sc Uniled Slales, CalIe TeIevision, atai|ao|c a|
hllp://vvv.nuseun.lv/aichives/elv/U/hlnIU/uniledslalesc/uniledslalesc.hln (delaiIing
facls of calIes giovlh).
246
Scc Regislei of Copyiighl, ConpuIsoiy Licensing in lhe TeIevision Indusliy (199O).
247
Scc CalIe TeIevision Consunei Iioleclion and Conpelilion Acl of 1992, Iul. L. No.
1O2-385, 1O6 Slal. 146O (1992) 2(a)(2)-(5) (codified as 47 U.S.C. 521(a)(2)-(5)) (delaiIing lhe
inciease in calIe vieveiship).


57
conlioI of lioadcasleis.
248
In 1992, lhings veie nuch diffeienl. Congiess
desciiled lhe calIe indusliy nol as a piiale, lul as lhe doninanl nalionvide video
nediun.
249
And vhen confionled vilh denands foi fuilhei paynenl lhe calIe
nelvoiks asseiled lheii povei and iefused lo pay foi ieliansnission consenl.
25O

CalIes slance nade il cIeai: lioadcasl vas nov dependenl on calIe, and nol vice
veisa. Theii ioIes had ieveised.
|. Tnc C|assic Ccnnunica|icns Rcginc Arritcs
The liilh of lhe iecoiding indusliy, iadio lioadcasl and calIe ciealed a pallein
foi selling copyiighls connunicalions poIicy. Il is cenleied on lhe nodeI of access
fees, oi conpuIsoiy Iicenses. Nev lechnoIogies capalIe of deIiveiing copyiighled
conlenl viII le gianled access lo lhe copyiighled voiks essenliaI lo lheii lusiness,
lul foi a piice. This lasic nodeI vas foIIoved foi seveiaI sulsequenl nalleis,
incIuding saleIIile leIevision in lhe 198Os,
251
and iadio velcasling in lhe 199Os.
252

The nodeI is lheiefoie sonelhing of a defauIl foi indusliies do nol fil lhe nodeI of
exenplions lhal aie lhe nev copyiighl connunicalions iegine desciiled in Iail
III.

248
Ioi a desciiplion of effoils lo ollain a connon-Iav iighl in signaI, scc supra, lexl
acconpanying noles 184-191.
249
CalIe TeIevision Consunei Iioleclion and Conpelilion Acl of 1992, Iul. L. No. 1O2-
385, 1O6 Slal. 146O (1992) 2(a)(2)-(5).
25O
Scc ChaiIes Lulinsky, Rcccnsidcring Rc|ransnissicn Ccnscn|. An |xanina|icn Of Tnc
Rc|ransnissicn Ccnscn| Prctisicn (47 U.S.C. S 325(8)) cf |nc 1992 Cao|c Ac|, 49 ILD. COMM. L. }. 99,
144-149 (1996) (noling lhal inslead of cash, nosl lioadcasleis exchanged lheii ieliansnission
consenl foi calIes agieenenl lo caiiy addilionaI channeIs), Chiislophei S. Yoo, Rc|nin|ing |nc
Ccnni|ncn| |c |rcc, |cca| Tc|ctisicn, 52 LMORY L. }. 1579, 1658-59 (2OO3) (sane).
251
The SaleIIile Hone Vieveis Acl of 1988, Iul.L. No. 1OO-667, 1O2 Slal. 3935, 3949 (TilIe II
codified as anended in scalleied seclions of 17 U.S.C.) ciealed a conpuIsoiy Iicense foi saleIIile
lioadcasling siniIai in sliucluie lo lhe calIe conpuIsoiy Iicense.
252
Welcasleis pay ioyaIlies foi sound iecoidings accoiding lo a conpIicaled schene fiisl
nade Iav in lhe DigilaI Ieifoinance Righl in Sound Recoidings Acl of 1995, Iul. L. No. 1O4-39,
1, 1O9 Slal. 336, 336 (1995). Ioi an oveiviev of lhe poIilicaI piocess lhal Ied lo lhe conpuIsoiy
Iicense, see KinleiIy L. Ciafl, Tnc lcocas|ing Music Rctc|u|icn |s Rcadq Tc 8cgin, As Sccn As lc
|igurc Ou| Tnc Ccpqrign| |au. Tnc S|crq Of Tnc Music |ndus|rq A| lar li|n ||sc|f, 24 HASTINCS
COMM/LNT L.}. 1 (2OO1).


58
Ioi copyiighl lheoiisls, lhe hisloiy evoIulion of lhe cIassic iegine hoIds
inpoilanl Iessons. Hovevei puie and liue copyiighls goaIs of pionoling
aulhoiship nay le, lhe Iav viII nonelheIess inevilalIy le used ly connunicalions
conpanies as a poveifuI insliunenl of conpelilive advanlage. Copyiighl cannol
heIp lul cieale cieale lhe laseIine foi conpelilion anong disseninalois. Il cieales
connunicalions poIicy nol ly design lul ly necessily.
PART II: POLICY
I have suggesled lhal copyiighl has evoIved lo ieguIale conpelilion anong
iivaIs, lhal il in effecl conpiises independenl aulhoiship and connunicalions
iegines, and lhal lhe connunicalions iegine has evoIved a slanding inslilulionaI
piaclice of using copyiighl lo sellIe neai-inevilalIe confIicls anong iivaI
disseninalois. These aie desciiplive cIains. The second pail addiesses lhe
olvious poIicy queslions lhal aiise fion sludy of copyiighls connunicalions
iegine.
A. 8c|||cncc|s and Vcr|ica| |crcc|csurc
The econonic anaIysis of aulhoiship ievoIves aiound lhe noniivaIious naluie
of infoinalion goods and lhe piolIens lheiely ciealed. Copyiighls ioIe in
connunicalions poIicy, conveiseIy, is noie ieadiIy anaIyzed as lhe lollIeneck
piolIen deiiving fion copyiighls gianl of conlioI ovei an assel essenliaI lo
naikel enliy (naneIy, copyiighled voiks), and lhe polenliaI ciealed foi veilicaI
foiecIosuie of iivaIs.
To undeisland vhal lhis neans ve nusl considei lhe condilions of conpelilion
lhal face iivaI disseninalois ieguIaled ly copyiighl. Considei a disseninaloi lo
le anyone vho ovns a IegaIIy piolecled neans of connunicalion vilh a cuslonei:


59
FIg. 3.1 CnmmunIcatInns Mndc!

In lhe fieId of connunicalions, lhe IegaIIy piolecled Iink picluied heie can lake
nany foins. Il can le physicaI, piolecled ly lhe iuIes of peisonaI piopeily:
coppei Ioops lelveen lhe leIephone conpany and lhe consunei, lhe calIe
infiasliucluie, and so on. ul lhe Iink can aIso le a IegaI enlilIenenl lhal does nol
iefeience any pailicuIai physicaI infiasliucluie, such as lhe aIIocalion of a ceilain
specliun fiequency lo a lioadcaslei lo ieach ils cusloneis.
253
Iion lhis slale of
affaiis aiise a cenliaI and iecuiiing poIicy queslions. To vhal degiee shouId lhe
IegaI pioleclion affoided lhal lollIeneck aIIov lhe oiiginaI ovnei, oi lhe
incunlenl disseninaloi fion engaging in anli-conpelilive piaclices`
Theie aie lvo anli-conpelilive piaclices lhal aie of pailicuIai inleiesl and iecui
in lhe sludy of connunicalions Iav. The fiisl is lhe sinpIe piolIen of nonopoIy
piice-selling.
254
The incunlenl shouId le expecled lo chaige a supia-conpelilive
piice if ils ovneiship of lhe piolecled Iink nakes is lhe onIy enlily in a posilion lo
piovide lhe seivice in queslion. In lhe leIeconnunicalions Iav lhis piolIen has
liadilionaIIy Ied lo exlensive goveinnenl iale-selling, such as lhe selling of IocaI
leIephone iales.
255

The second is lhe piolIen of veilicaI foiecIosuie: lhe use of lhe piolecled Iink
lo pievenl a conpeling disseninaloi, oi cna||cngcr, vho depends on lhe Iink, fion

253
Scc 47 U.S.C. 3O7 (pioceduies foi fedeiaI gianls of Iicenses lo lioadcasl specliun).
254
Ingo VogeIsang and iidgei M. MilcheII, TLLLCOMMUNICATIONS COMILTITION 55 (2OO1)
(discussing lhe effecl of lollIenecks on piice-selling poIicy).
255
Scc 1 HOWARD ZUCKMAN LT AL., MODLRN COMMUNICATIONS LAW 9.2 (1999) (desciiling
vaiious aspecls of iale-selling foi IocaI caiiieis).
Service Provider
Consumer
Legally Protected Link


6O
ieaching lhe cuslonei in queslion.
256
The foiecIosuie is veilicaI lecause lhe
incunlenl uses ils conlioI ovei an independenl inpul al anolhei IeveI (copyiighled
naleiiaIs) lo affecl conpelion al lhe IeveI of disseninalion.
257

FIg. 3.2 VcrtIca! Fnrcc!nsurc vIa Bntt!cncck

An iIIuslialion of lhe veilicaI foiecIosuie piolIen cones fion lhe exanpIe of
Iong dislance leIephone seivice. If lhe incunlenl (eII) ovns lhe IocaI leIephone
Iines, il can polenliaIIy foiecIose a Iong-dislance seivice piovidei (MCI) fion
ieaching any cusloneis, favoiing ils ovn Iong dislance seivice. Hence a ciilicaI
queslion foi leIeconnunicalions Iav has aIvays leen deleining lhe exlenl lo
vhich lhe ovnei of lhe IocaI phone seivice shouId le iequiied lo piovide access lo
IocaI Iines lo vendois of Iong-dislance leIephone seivice.
258

256
Theie is a iich Iileialuie on veilicaI foiecIosuie in geneiaI, see, e.g., }anusz A. Oidovei el
aI., LquiIiliiun VeilicaI IoiecIosuie, 8O AM. LCON. RLV. 127 (199O), Louis KapIov, Lxlension
of MonopoIy Iovei Thiough Leveiage, 85 COLUM. L. RLV. 515 (1985), MichaeI A. SaIingei,
VeilicaI Meigeis and Maikel IoiecIosuie, 77 Q.}. LCON. 345 (1988), and as ieIales lo
leIeconnunicalions poIicy in pailicuIai, see, e.g., AIexandei Laison el aI., Ccnpc|i|itc Acccss
|ssucs and Tc|cccnnunica|icns Rcgu|a|crq Pc|icq, 2O }. CONTLMI. L. 419 (1994), IauI }oskov &
Rogei NoII, Tnc 8c|| Dcc|rinc. App|ica|icns |n Tc|cccnnunica|icns, ||cc|rici|q, And O|ncr Nc|ucr|
|ndus|rics, 51 Slan. L. Rev. 1249 (1999). Ioi an exceIIenl oveiviev of lhe econonic aigunenls
iegaiding veilicaI inlegialion and lheii ieIevance foi connunicalions poIicy, see IhiI Weisei &
}oseph IaiieII, Mcdu|ari|q, Vcr|ica| |n|cgra|icn, and Opcn Acccss Pc|icics. Tcuards a Ccntcrgcncc cf
An|i|rus| and Rcgu|a|icn in |nc |n|crnc| Agc, 17 HARV. L. & TLCH. 86 (2OO4).
257
Whelhei copyiighled naleiiaIs aie desciiled as upsliean oi dovnsliean is IaigeIy a
senanlic issue. The foiecIosuie is veilicaI in eilhei case.
258
Scc 1 1 HOWARD ZUCKMAN LT AL., MODLRN COMMUNICATIONS LAW 9.1 (1999)
(desciiling lhe vaiious access issues addiessed ly lhe 1996 TeIecon Acl).
Incumbent Service Provider
Consumer
Legally Protected Link
Challenger Service Provider
Foreclosure
X


61
olh of lhese piolIens slenning fion lhe lollIeneck aie cenliaI lo nosl
conlenpoiaiy connunicalions poIicy: viieIine ieguIalion, lioadland ieguIalion
and specliun poIicy aie lhiee piesenl exanpIes.
259
In each case lhe lasic piolIen
is lhe sane. On lhe one hand, aIIoving lhe incunlenl loo nuch povei lo pievenl
chaIIengeis fion ieaching cusloneis ielaids lolh piice conpelilion and (accoiding
lo nodein vievs) innovalion in nev connunicalions lechnoIogies. ul gianling
loo IillIe IegaI pioleclion lo lhe oiiginaI Iink nighl eiase lhe incenlives lo luiId lhe
oiiginaI Iink and ils lechnoIogicaI successois.
Wilh sone sinpIifying assunplions, il is nol haid lo see hov lhe copyiighl Iav
can le used as a polenliaI looI foi nonopoIy piice-selling oi veilicaI foiecIosuie,
iaising lhe sane queslions faced in connunicalions.
26O
The veilicaI foiecIosuie
piolIen is evidenl fion lhe sloiy of lioadcasl and calIe indusliies in lhe 196Os.
261

Lach possessed ils ovn lechnoIogy foi ieaching consuneis. Yel each needed
access lo copyiighled voiks in oidei lo piovide a seivice cusloneis vouId pay foi.
The copyiighl voiks veie lhe lollIeneck necessaiy lo conpele in lhe indusliy.
Hence, if lioadcasl (lhe incunlenl) couId enfoice lhe copyiighls in leIevision
conlenl, il couId have pievenled oi foiecIosed lhe calIe indusliy fion ieaching
leIevision cusloneis. Il can achieve siniIai iesuIls lhal lhe leIephone indusliy
nighl achieve ly conlioIIing IocaI phone Iines.

259
Scc id. al 51-59 (2OO1).
26O
Cf. RandaI C. Iickei, Ccpqrign| as |n|rq Pc|icq. Tnc Casc cf Digi|a| Dis|riou|icn, 47
ANTITRUST ULL. 423 (2OO2).
261
See supra, Seclion I.C(1)


62
FIg. 3.3 CnpyrIght uscd fnr VcrtIca! Fnrcc!nsurc
The veilicaI foiecIosuie nodeI, hovevei, onIy desciiles one cIass of
connunicalions piolIen lhal aiises in lhe copyiighl conlexl. The piolIens of
nonopoIy piice-selling can aIso occui. This has happened in silualions vheie
aulhois nainlain independenl conlioI of lheii copyiighls, as in lhe ASCAI-Radio
dispule desciiled alove.
262
The connunicalions nodeI foi lhe ASCAI piolIen is
a hoiizonlaI caileI anong lhe suppIieis of copyiighled voiks (aulhois), Ieading lo
nonopoIy piice-selling. Il is lhe necessily of having access lo conlenl, and lhe
IegaI pioleclion of copyiighl, lhal cieale lhe possiliIily foi an ASCAI caileI in lhe
fiisl pIace.

FIg. 3.4 Thc DIffcrcncc that AuthnrIa! Cnntrn! Makcs

Theie is an inpoilanl diffeience lelveen lhe piolIens ciealed ly lhe
hoiizonlaI (ASCAI) and veilicaI (lioadcasl) conpelilion piolIens, iespecliveIy.
WhiIe a hoiizonlaI caileI anong aulhois nay le expecled lo iaise consunei piices,

262
Scc supia I.C(2).
ASCAP Cartel
Consumer
Disseminator Disseminator
Incumbent Disseminator
Consumer
Copyrighted Content
Challenger Disseminator
X
X


63
il viII nol necessaiiIy lIock naikel enliy of lechnoIogicaI innovalion. Ioi
econonic lheoiies vhich lake innovalion as opposed lo piice-conpelilion as lhe
piinaiy engine of econonic giovlh,
263
lhe veilicaI foiecIosuie piolIen is noie
seiious.
AII of lhis goes lo shov lhal lhe copyiighl Iavs pioleclions can and do cieale
lhe sane conpelilion piolIens ieguIaiIy encounleied in leIeconnunicalions Iav.
None of lhis is lo suggesl lhal lhe lesl vay of deaIing vilh lhese piolIens is seIf-
evidenl. Theie is sizalIe disagieenenl ovei vhal, if any, goveinnenl ioIe is
appiopiiale in lhe face of polenliaI veilicaI foiecIosuie oi nonopoIy-piice selling.
264

Yel ovei lhe yeais posilions have haidened and il is easiei lo undeisland lhe
choices avaiIalIe. Whal foIIovs desciiles lhe poIicy aIleinalives lhal have
eneiged.

8. Na|icna| Ccnnunica|icns Pc|icq
To undeisland lhe choices faced in copyiighl ve nusl nov luin lo lhe suljecl
of nalionaI connunicalions poIicy. Theie have Iong exisled lvo lasic nodeIs of
lhe oplinaI connunicalions poIicy, vhich nay le usefuIIy caIIed lhe
slevaidship and conpelilive oi open nodeIs.
265
olh nodeIs have a
pedigiee in nalionaI connunicalions poIicy, lhough lhe Iallei is loday doninanl.
1. S|cuardsnip Ccnnunica|icns Pc|icq
A slevaid-lased connunicalions poIicy
266
is pienised on lhe gianl, lo piivale
pailies, of cIeai and unconleslalIe piopeily enlilIenenls in fuluie nedia and

263
Scc, c.g., }OSLIH A. SCHUMILTLR, CAIITALISM, SOCIALISM, AND DLMOCRACY 81-86 (3d ed.
195O).
264
Ioi a usefuI noinalive oveiviev of vhen goveinnenlaI inleivenlion nay le juslified lo
pievenl veilicaI inlegialion, see Weisei & IaieII, supra n. 256.
265
Ioi anolhei desciiplion of lhese lvo nodeIs in lhe inleinel conlexl, see IhiIip }. Weisei,
Tnc |n|crnc|, |nncta|icn, and |n|c||cc|ua| Prcpcr|q, 1O3 COLUM. L. RLV. 534, 568-583 (2OO3).
266
Advocales viII sonelines desciile lhis as a deieguIaloiy connunicalions poIicy,
lhough lhis Ianguage is difficuIl lo suppoil vhen il is copyiighl syslen, a foin of ieguIalion,
lhal is confeiiing lhe iighl lo lIock oi Iicense naikel enliy. Scc Mauieen Ryan, Cqocrspacc as
Puo|ic Spacc. A Puo|ic Trus| Paradign fcr Ccpqrign| in a Digi|a| lcr|d, 79 OR. L. RLV. 647, 694-95
(2OOO).


64
lechnoIogies. The ialionaIe foi such gianls is lhe pienise lhal lhe piivale ovnei of
such a gianl viII, in lhe inleiesl of piofil naxinizalion, efficienlIy slevaid lhe
giovlh of an efficienl connunicalions syslen and lhe deveIopnenl nev
lechnoIogies.
267

The slevaidship nodeI has hisloiicaIIy enjoyed nany aigunenls in ils favoi,
incIuding suppoil fion econonisl }oseph Schunpelei.
268
Chief anong lhen is lhe
viev lhal lhe doninanl fiin can le expecled lo inleinaIize vhal vouId olheivise
le exleinaIilies in a conpelilive scenaiio. Ioi exanpIe, conpelilois nay have
incenlives lo fiee-iide on lhe ieseaich effoils of olheis, vhiIe a doninanl
incunlenl has no such oplion. SiniIaiIy, a doninanl incunlenl nay exeicise
quaIily conlioI lo pievenl shoddy pioducls fion leing used on ils syslen.
269

The piolIen of naluiaI nonopoIy aIso diives lhe aigunenl foi a slevaid-lased
connunicalions poIicy. Lcononisls have aigued lhal econonies of scaIe and
scope chaiacleiizing lhe pioduclion of leIeconnunicalions seivices nakes a
nonopoIy lhe IikeIy oulcone.
27O
If a nonopoIy is an inevilaliIily in
connunicalions naikels, a poIicy lhal diiecls lhe nonopoIisl lo secuie innovalion
and acl in lhe pulIic inleiesl nay seen lhe onIy iecouise.
ReIaledIy, a slevaid-lased connunicalions poIicy aIso avoids nuch aigualIy
vaslefuI dupIicalion. The doninanl naikel pIayei can avoid dupIicalive
inveslnenls foi lhe liansnission of lhe sane infoinalion lo lhe sane consunei
(such a lvo sels of leIephone Iines, oi lvo diffeienl piinlings of lhe sane look).
This is lhe aigunenl foi aIIoving connunicalions infiasliucluies lo lake lhe foin
of naluiaI nonopoIies. And as peilains lo lechnoIogicaI innovalion, lhe doninanl

267
This slevaidship nodeI is siniIai lo lhe piospecl lheoiy of palenl pioleclion. Scc
Ldnund W. Kilch, Tnc Na|urc and |unc|icn cf |nc Pa|cn| Sqs|cn, 2O }.L. & LCON. 265 (1977).
268
Scc }OSLIH A. SCHUMILTLR, CAIITALISM, SOCIALISM, AND DLMOCRACY 1OO-O6 (3d ed.,
195O)
269
Cf. DougIas Lichlnan, Prcpcr|q Rign|s in |ncrging P|a|fcrn Tccnnc|cgics, 29 }. LLCAL
STUD. 615 (2OOO) (aiguing lhal inleIIecluaI piopeily Iav shouId encouiage piice cooidinalion in
eneiging lechnoIogy conlexls).
27O
Scc Ingo VogeIsang & iidgei MilcheII, TLLLCOMMUNICATIONS COMILTITION 51 (1997)
(desciing naluiaI nonopoIy as lhe juslificalion foi leIeconnunicalions ieguIalion.)


65
pIayei can pievenl dupIicalive iaces lo ieach lhe sane invenlion, nuch Iike
pievenling nuIlipIe nissions lo puisue lhe sane sunken lieasuie.
271

As a nodeI of innovalion, lhe pIanned viev shaies nuch vilh lhe piospecl
lheoiy in palenl Iav, vhich hoIds lhal conlioI cenliaIized in a pioneei indusliy
aIIovs a noie oideiIy piocess of foIIov-on innovalion.
272
The cosls of confIicl, oi
ienl dissipalion, nay le eIininaled if lioad, enfoicealIe iighls aie gianled lo lhe
pioneei indusliy, ciealing a piospecl lhal can le expIoied vilhoul feai of
conpelilion.
IinaIIy, lhe giealesl appeaI foi nany is lhe facl lhal lhe Slevaidship nodeI
inpIies a nuch sinpIei (lhough nol necessaiiIy ieduced) goveinnenlaI ioIe. The
Coveinnenl need onIy lo assign and lo enfoice piopeily iighls, lul il need nol
decide vhelhei ils gianls of piopeily iighls aie inpiopeiIy lIocking naikel enliy.
The incunlenl indusliy does so ilseIf.
In shoil, lhe vision of lhe Slevaid nodeI ieIies on a disliusl of Coveinnenl in
favoi of lhe deveIopnenlaI visdon an incunlenl connunicalions indusliy. The
nodeI cIains sinpIicily, efficiency and Iiniled ioIe foi lhe Slale.
2. Ccnpc|i|itc Ccnnunica|icns Pc|icq
A conpelilive oi open connunicalions poIicy saciifices oidei,
piediclaliIily and slaliIily of a pIanned poIicy foi giealei aIIovance of naikel
enliy and (lackeis leIieve) faslei lechnoIogicaI deveIopnenl.
273

Conpelilive oi open connunicalions poIicies aie pienised on lhe leIief lhal
lechnicaI innovalion pIays a cenliaI ioIe in econonic giovlh, and lhal lechnicaI
change is lesl undeislood as an evoIulionaiy piocess. The ideas aIso cIain lheii
oiigins in }oseph Shunpeleis voik: lul in his conceplion lhal ciealive
desliuclion is lhe souice of capilaIisns lenefils, nol neie piice conpelilion.
274

Lcononisls Iike Richaid NeIson aigue lhal lechnoIogicaI change is ly necessily an

271
Cf. Richaid Iosnei, LCONOMIC ANALYSIS OI LAW, supra nole 69, al 35-38 (exanining ienl
dissipalion lheoiy ly anaIyzing cosls lhiough exanpIe of hunl foi a sunken lieasuie).
272
Scc Kilch, supra nole 267.
273
Scc Maik A. LenIey and Lavience Lessig, Tnc |nd cf |nd-|c-|nd. Prcscrting |nc
Arcni|cc|urc cf |nc |n|crnc| in |nc 8rcadoand |ra, 48 UCLA L. RLV. 925, 961 (2OO1).
274
Scc }OSLIH A. SCHUMILTLR, CAIITALISM, SOCIALISM, AND DLMOCRACY 81-86 (3d ed. 195O).


66
eiioi-diiven, evoIulionaiy piocess.
275
Maikels seIecl fion a vaiiely of conpeling
appioaches vhose ieIalive neiil, ciuciaIIy, is difficuIl lo assess in advance.
276

This viev Ieads lo disliusl of lhe slevaidship nodeI and doninanl fiin
lheoiies. If lhe nosl pionising palh of deveIopnenl is difficuIl lo piedicl in
advance, NeIsoniles aigue, il unieaIislic lo expecl a singIe conpany lo lake lhe
oplinaI palh of lechnoIogicaI deveIopnenl, hovevei veII inlenlioned il nay le.
This piolIen is conpounded if any singIe paily can le expecled lo have anylhing
Iess lhan peifecl decision-naking skiIIs iesuIling fion, foi exanpIe, a
piedisposilion lo conlinue vilh cuiienl vays doing lusiness.
277
LegaI lheoiisls on
siniIai Iines aigue lhal vesling conlioI ovei inpiovenenl in a singIe figuie cieales
an enoinous iisk of slagnancy deiiving fion lhe dangei of incunlenl indusliys
uninleiesl in change.
278

The conpelilive nodeI usuaIIy suggesls lo a noie aclive Coveinnenl ioIe,
pailicuIaiIy in ienoving laiiieis lo naikel enliy. In lhis nodeI lhe goveinnenl is
picluied (ideaIIy) as sonelhing Iike a leneficenl gaidenei, liying lo pieseive
condilions foi innovalion and pievenl a doninanl fiin fion choking nev giovlh.
Ioi if innovalion does indeed occui lhe vay NeIsoniles leIieve, giealei
goveinnenl invoIvenenl nay le necessaiy lo pievenl indusliiaI and lechnoIogicaI
slagnalion.
3. Tnc Ccnscnsus Pcsi|icn
Whalevei lhe sulslalive neiils of lhese lvo appioaches lo connunicalions
poIicy, as a desciiplive nallei, sone veision of lhe conpelilive nodeI has

275
Scc, c.g., Richaid NeIson, Undcrs|anding Tccnnica| Cnangc as an |tc|u|icnarq Prcccss 14 -21
(1987), }ohn Zinan, |tc|u|icnarq Mcdc|s fcr Tccnnc|cgica| Cnangc, in TLCHNOLOCICAL
INNOVATION AS AN LVOLUTIONARY IROCLSS 3 (}ohn Zinan, ed., 2OOO).
276
See NeIson, supia nole 275, al 15 (evoIulionaiy lheoiy iecognizes lhal lheie aie
slochaslic |iandonj eIenenls lolh in lhe deleininalion of decisions and of decision
oulcones.).
277
See NeIson, supra nole 275, al 72-95 (discussing lhe concepl of oiganizalionaI skiIIs.).
278
Scc, c.g., Roleil I. Meiges and Richaid R. NeIson, On |nc Ccnp|cx |ccncnics cf Pa|cn|
Sccpc, 9O COLUM. L. RLV. 839, 89O-94 (199O) (ciilicizing slevaidship nodeI in lhe palenl conlexl).
This is aIso an aninaling piincipIe of Lavience Lessigs voik, pailicuIaiIy THL IUTURL OI IDLAS
(2OOO).


67
doninaled nalionaI connunicalions poIicy since lhe nid-198Os.
279
Il is liue lhal
lheie ienains nuch disagieenenl on hov conpelilion is lesl pionoled, and in
pailicuIai hov inliusive a ioIe goveinnenl shouId pIay. Yel il is lo lhe nodeI of
conpelilive innovalion lhal lolh lhe IedeiaI Connunicalions Connission and
Congiess nov unifoinIy adheie lo.
Things veie nol aIvays so lipped in favoi of lhe conpelilive nodeI. The
laIance of 2Olh cenluiy connunicalions poIicy vas diiven, inslead, ly a
slevaidship nodeI, a nodeI nosl cIeaiIy appaienl in lhe eII Syslens
slevaidship of lhe nalionaI leIephone syslen. The eII Conpany is |nc definilive
nodeI of lhe ieguIaled nonopoIisl asked lo inpIenenl lhe pulIic poIicy
aspiialions of nalionaI connunicalions poIicy.
28O
Yel fion lhe Iale 196Os onvaid,
lhe couils, IedeiaI Connunicalions Connission and finaIIy Congiess legan a
sIov nigialion lo lhe conpelilive connunicalions nodeI nov doninanl. CIen
Rolinson desciiles lhe 3O-yeai shifl as one of lhe slunning achievenenls of
nodein pulIic poIicy, lhe liansfoinalion of a slaid and slagnanl indusliy inlo lhe
nosl dynanic and iapidIy gioving indusliy in lhe nodein econony.
281
As he
aigues, il did nol cone aloul lhiough lechnoIogy aIone, il cane aloul ly
ielhinking nolions aloul naluiaI nonopoIy, econonies of scaIe and scope--
concepls neai and deai lo lhe ancienl iegine.
282

Theie aie nany IegaI niIeslones in lhe poIicy nigialion. The nosl nolalIe and
dianalic vas lhe 1984 lieakup of lhe AT&T nonopoIy ly fedeiaI judge HaioId
Cieen.
283
ul lhe cIeaiesl IegisIalive nanifeslalion of lhis poIicy shifl is lhe 1996

279
Scc, c.g., CLRALD W. ROCK, TLLLCOMMUNICATIONS IOLICY IOR THL INIORMATION ACL
(1994), CIen O. Rolinson, Tnc Ti|anic Rcncnocrcd. ATcT and |nc Cnanging lcr|d cf
Tc|cccnnunica|icns, 5 YALL }. RLC. 517, 52O-31 (1988) (iecounling hisloiy of leIeconnunicalions
poIicy).
28O
Scc CIen Rolinson, supia nole 279, al 517 (1988) (desciiling lhe eII Syslen).
281
CIen Rolinson, Tnc Ncu Ccnnunica|icns Ac|. A Scccnd Opinicn, 29 CONN. L. RLV. 289,
3O4 (1996).
282
|d.
283
The lieakup of AT&T is iecounled in delaiI in CLRALD R. IAULHALR
TLLLCOMMUNICATIONS IN TURMOIL: TLCHNOLOCY AND IULIC IOLICY (1988).


68
TeIecon Acl, lhe cenliaI slalule of connunicalions Iav.
284
As lhe IedeiaI
Connunicalions Connission expIains, lhe Iav vas neanl lo Iel any
connunicalions lusiness conpele in any naikel againsl any olhei.
285
WhiIe lhe
Acl is fai loo conpIicaled lo sunnaiize, ils nosl inpoilanl and lesl knovn
change vas lhe aulhoiizalion of open conpelilion in lolh IocaI and Iong-dislance
leIephone seivices.
286
These changes veie a shaip lieak fion pievious poIicies,
vhich sliII adheied lo lhe eII nodeI. And vhiIe assessnenls of lhe success of
1996 Acls pionolion of conpelilion is nixed,
287
ils poIicy is cIeai.
Slaled adheience lo lhe conpelilive nodeI of connunicalions poIicy is nov de
iiguei foi lhe IedeiaI Connunicalions Connission. Acioss eveiy aiea of slaled
poIicy, lhe ICC slales goaIs lhal couId have leen diafled ly Richaid NeIson. The
conpelilive goaI of lhe ICC is lo suppoil lhe Nalions econony ly ensuiing lhal
lheie is a conpiehensive and sound conpelilive fianevoik foi connunicalions
seivices . foslei|ingj innovalion and offei|ingj consuneis neaningfuI choice in
seivices. In lhe conlenlious aiea of lioadland, lhe ICC ains lo eslalIish
ieguIaloiy poIicies lhal pionole conpelilion, innovalion, and inveslnenl in
lioadland seivice. Oi as Connission Chaiinan MichaeI IoveII puls il, lhe ICC
nusl do vhal is necessaiy lo foslei conpelilive innovalion.
288

Much of lhis, of couise, is al a ceilain IeveI of alsliaclion, and lheie is nuch
delale ovei vhal poIicies viII, in facl, faciIilale conpelilive innovalive in lhe
connunicalions indusliy. ul in lhe aieas of connunicalions Iav oulside of

284
TeIeconnunicalions Acl of 1996, Iul. L. 1O4-1O4, 11O Slal. 56 (codified as anended in
scalleied poilions of 47 U.S.C.).
285
Scc IedeiaI Connunicalions Connission, Tnc Tc|cccnnunica|icns Ac| cf 1996, a|
hllp://vvv.fcc.gov/leIecon.hlnI (Iasl updaled Nov. 13, 2OO1).
286
Scc 47 U.S.C. 251 (2OOO).
287
The Acls effoil lo cieale noie IocaI leIephone conpelilion is videIy desciiled as a
faiIuie. See, e.g., Hovevei, il is ciediled ly sone foi opening up lhe naikel foi
leIeconnunicalions seivices noie geneiaIIy. Scc, c.g, Coiey Ciice, Hcu |nc Tc|cccn Ac| crca|cd a
ncu orccd cf spccd, CNLT Nevs, a| hllp://nevs.con.con/2OO9-1O33_3-251796.hlnI (Iel. 1,
2OO1) (aiguing lhal lhe 1996 Acl sel off lhe expansion and deveIopnenl of lioadland inleinel
access).
288
Renaiks of MichaeI K. IoveII al lhe SiIicon IIaliions Synposiun on
The DigilaI ioadland Migialion: Tovaid a ReguIaloiy Regine foi lhe Inleinel Age
Univeisily of CoIoiado SchooI of Lav, ouIdei, CoIoiado, Ieliuaiy 8, 2OO4.


69
copyiighl Iav, lhe exislence of a oasic consensus is nolalIe. The slailing poinl foi
delale is lhe viev lhal open connunicalions conpelilion diives innovalion and
econonic giovlh. The queslion is vhal ioIe lhe copyiighl Iav pIays in lhal vision.
C. Ccpqrign|s C|assic Ccnnunica|icns Pc|icq
Hov can copyiighls cIassic connunicalions poIicy lesl le desciiled in leins
of lhe nodeIs desciiled heie` Copyiighls iecoid is, of couise, conpIicaled and
inconsislenl. Theie aie aIso loo fev exanpIes lo cone lo a definile concIusion.
Yel il is nolalIe lhal, vhen faced vilh lhe polenliaI of piolIen of veilicaI
foiecIosuie~copyiighl ciealing lais lo naikel enliy ly disseninalois, copyiighls
iuIes have oflen lenl lo pievenl an incunlenl fion using copyiighl lo conlioI a
lechnoIogicaI chaIIengei. Slaled olheivise, lhe couils and Congiess have in
piaclice avoided a slevaidship nodeI of connunicalions and deIiveied iesuIls
cIosei lo a conpelilive nodeI of connunicalions poIicy.
As lhe hisloiy expIained alove denonsliales, lhe copyiighl syslen, vhen faced
vilh najoi exanpIes polenliaI Iockoul, avoided gianling disseninalion
incunlenls fuII conlioI ovei a lechnoIogicaIIy advanced iivaI (lhe sane hoIds aIso
foi cases nol iecounled alove).
289
Inslead, lolh lhe incunlenl and lhe chaIIengei
veie foiced lo pul lheii case lo goveinnenl and lo invesl in effoils lo sleei poIicy
in lheii favoied diieclion.
OlviousIy lhings couId have leen diffeienl. Wilh jusl a fev decisions lhe
Supiene Couil couId have easiIy sleeied nalleis lovaid lhe slevaidship nodeI,
liusling lhe incunlenl lo diiecl fuluie deveIopnenl of calIe, lhe iecoiding
indusliy, oi lhe pholocopiei. As }ane Cinsluig has aigued, nany of lhe pio-
chaIIengei Supiene Couil decisions, fion lni|c-Sni|n lo |cr|nign||q, can le
inpossilIe lo undeisland vilhoul sone idea lhal lhe Couil feaied lhal lhe

289
The olhei najoi exanpIe is lhal of lhe pholocopiei, vhich vas exenpled fion
copyiighl pioleclion in WiIIians & WiIkins Co. v. U.S., 487 I.2d 1345 (Cl. CI. 1973), affd ly an
equaIIy divided Supiene Couil, 42O U.S. 375 (1975). Ioi a vondeifuI iecounl of lhe
pholocopiei saga, scc IauI CoIdslein, COIYRICHT'S HICHWAY: IROM CUTLNLRC TO THL
CLLLSTIAL }UKLOX (1994).


7O
incunlenl vanled copyiighl foi lhe viong ieasons.
29O
SiniIaiIy, lhe nosl
connon slaluloiy foin of sellIenenl, lhe conpuIsoiy Iicense, is a IialiIily schene
lhal pievenls naikel Iockoul vhiIe conpensaling lhe incunlenl. Such a schene,
as discussed alove, is inconsislenl vilh a slevaid nodeI of connunicalions
poIicy.
Lven lhough lhe cIassic connunicalions iegine nainIy iefIecled an open
nodeI of connunicalions poIicy, il nusl le adnilled lhal no seIf-conscious
ieasoning can le found lo lhal effecl in lhe caseIav oi in olhei souices. The nain
connunicalions cases, Iike Tc|cprcnp|cr, aie aInosl enliieIy fiee of any poIicy-
lased expIanalions foi lhe couils decisions. Can ve find sone undeiIying
slaluloiy conpuIsion oi case lhal diove copyiighl lo such an open poIicy`
One inpoilanl facloi lhal nay have diiven copyiighls eaiIy connunicalions
poIicy and lhe IialiIily iuIes il ciealed vas lhe nedia-specific naluie of eaiIy
copyiighl. The eaiIy Acls, incIuding lhe 19O9 Acl, specificaIIy naned lhe naleiiaIs
vhich couId le piolecled ly copyiighl. This ciealed a ceilain slaluloiy
unceilainly suiiounding copyiighls appIicalion lo nev lechnoIogies and
consequenlIy Iefl oppoilunilies foi pailies lo infIuence lhe finaI oulcone. WhiIe
oflen deciied as pooi diafling, il is a cIassic hisloiicaI exanpIe of an anonaIy lhal
lecane a fealuie.
Slaled olheivise, lhe onIy ieason lhal queslions of appIicalion lo nev
lechnoIogies veie evei open foi couils oi Congiess lo decide vas lecause lhe eaiIy
copyiighl acls, lased on lhe Slalule of Anne, specificaIIy enuneialed naleiiaIs in
vhich copyiighl adheied. IanousIy, lhe Copyiighl Acl of 179O piolecled naps,
chails, look oi looks.
291
The 19O9 Acl used lhe sane foinal, lul conlained len
calegoiies (looks, Iecluies, nusicaI conposilions, elc.) of copyiighlalIe voiks.
When a nev voik feII oulside of lhese calegoiies, pailies on each side veie foiced
lo piesenl lheii case lo goveinnenl enlilies lo decide vhal lo do. The iesuIl vas lo

29O
Scc Cinsluig, supra nole 53, al 1617 (vhen copyiighl ovneis seek lo eIininale a nev
kind of disseninalion, and vhen couils do nol deen lhal disseninalion hainfuI lo copyiighl
ovneis, couils decIine lo find infiingenenl, even lhough lhe IegaI and econonic anaIyses lhal
suppoil lhose deleininalions oflen seen sliained, nol lo say disingenuous.).
291
Scc Acl of May 31, 179O, ch. 15, 1, 1 Slal. 12, 124 (iepeaIed 1831).


71
foice a case-ly-case adoplion of a connunicalions poIicy. Couils had lhe IegaI
ioon lo decide lhings in a vay lhal Iefl open lhe oplion of denying an incunlenl
conlioI ovei nev nedia. The iesuIl vas Copyiighls cIassic connunicalions
poIicy.

D. Undcrs|anding |nc Cri|iqucs cf |nc C|assic Ccnnunica|icns Rcginc
Wilh lhis fianevoik of anaIysis is nind, ve aie in a lellei posilion lo
undeisland lhe ciilicisn of vhal I have leined Copyiighls cIassic
connunicalions iegine. The piaclice fion 19OO-1976 has nevei leen leiiilIy
popuIai. olh conlenpoiaiy and piesenl copyiighl connenlalois have allacked
ils opeialion foi a iange of ieasons~nosl of vhich, I aigue, niss lhe poinl. WhiIe
lheie aie ieasons lo disfavoi lhe conpelilive nodeI of connunicalions poIicy, il
seens iaie lhal ciilics of lhe piocess acluaIIy nake lhen.
As eaiIy as 19O3 lhe Copyiighl Office legan lo aigue lhal a ievised Copyiighl
slalule shouId le fIexilIe enough lo deaI vilh nev lechnoIogies as lhey aiose. The
Office aigued in ils iepoil lhal |copyiighlj oughl lo le deaIl vilh as a vhoIe, and
nol ly fuilhei neieIy pailiaI oi lenpoiizing anendnenls.
292
Il slaled lhal lhe
acls nov in foice shouId le iepIaced ly one consislenl slalule, of sinpIe and
diiecl phiaseoIogy.
293
Wilh giealei foice and effecl in 1961, lhe Office aigued foi
a copyiighl Iav lhal vouId le lioad enough lo incIude nol onIy lhose foins in
vhich copyiighlalIe voiks aie nov leing pioduced, lul aIso nev foins vhich aie
invenled oi cone inlo use Ialei.
294
These aie veiy connon aigunenls. Many
copyiighl lhinkeis aigue lhal lhe 19O9 Acl and olhei eaiIy acls veie loo cIunsy,
iequiiing anendnenl oi difficuIl judiciaI inleipielalion foi each nev lechnoIogy.
The piolIen vilh lhis ciilique is lhal il is seeningIy iooled in inleiesls
invoIving ceilainly and IegaI aeslhelics (a sinpIe slalule) noie lhan lhose
invoIving lhe consequences of lhe iuIe foi conpelilion. Il is liue lhal 5 of 19O9

292
Scc ThoivaId SoIdleig, Ccpqrign| |au Rcfcrn, 35 YALL L. }. 48, 62 (1925) (iepiinling
Copyiighl Repoil, Dec. 1 (19O3)).
293
|d.
294
Slaff of lhe House Conn. On lhe }udiciaiy, 87
lh
Cong., Repoil of lhe Regislei of
Copyiighls on lhe CeneiaI Revision of lhe U.S. Copyiighl Lav 11 (Conn. Iiinl 1961).


72
Acl pioduced unceilainly as lo lhe iighls of a copyiighl ovnei. ul such
unceilainly can le pail of a kind of connunicalions poIicy lhal favois nev enliy.
A sinpIei and cIeaiei Iav is nol a liunp, lhe vaIue of cIaiily nusl le veighed such
Iaigei conceins. Ieihaps inpIicil in lhe aigunenl is aIso a kind of pulIic choice
concein: lhe piolIen vilh slaluloiy anliguily is lhal il has encouiaged pailies lo
invesl in effoils lo gain favoialIe goveinnenl aclion. Thal is liue, lul il is aIso
liue lhal foicing pailies lo cone lo Coveinnenl couId have foiced lolh sides lo
piesenl infoinalion lhal nay have Ied lo lellei and eaiIiei sellIenenls.
295

Sone acadenics have ciilicized lhe cIassic nodeI and ils lendency lovaid
conpuIsoiy Iicensing on diffeienl econonic giounds. Roleil Meiges has aigued
lhal enfoicing piopeily enlilIenenls is noie IikeIy lo pionole lhe piivale
laigaining necessaiy foi ciealion of coIIeclive iighls oiganizalions.
296
The vaIue
of coIIeclive iighls oiganizalions, accoiding lo Meiges, is lhal lhey aie lellei lhan
conpuIsoiy Iicensing schenes foi ieducing lhe liansaclion cosls of Iicensing a
diveise nixluie of copyiighls. Meiges aigues lhal poIicy nakeis shouId in aII
cases slay avay fion conpuIsoiy Iicensing foi nev nedia!
297

Meiges, in coIIoloialion vilh Richaid NeIson, has ciilicized lhe slevaidship
nodeI of innovalion in lhe palenl conlexl,
298
so his posilion vilh iespecl lo
copyiighl is sIighlIy suipiising. Meiges lakes lhe onIy puipose of conpuIsoiy
Iicensing schenes lo le lhe ieduclion of liansaclion cosls~he does nol accounl foi
lhe ioIe a IialiIily iegine nighl pIay in naikel enliy of nev lechnoIogies. The
eaiIiei Meiges leaches lhal inleIIecluaI piopeilys sociaI cosls shouId incIude ils
polenliaI lo ieduce conpelilion in lhe naikel foi inpiovenenls and lheie aie
nany inslances vhen a fiin lhal lhoughl il had conlioI ovei a lioad lechnoIogy
iesled on ils IauieIs unliI jogged lo aclion ly an oulside lhieal.
299
If lhis is so vilh
iespecl lo palenl hoIdeis, vhy donl lhe sane consideialions diive sciuliny of

295
Cf. Ian Ayies & and Liic TaIIey, Sc|cncnic 8argaining. Ditiding a |cga| |n|i||cncn| |c
|aci|i|a|c Ccascan Tradc, 1O4 YALL L.}. 1O27, 1O36-72 (1995).
296
Scc Roleil Meiges, Ccn|rac|ing in|c |iaoi|i|q Ru|cs. |n|c||cc|ua| Prcpcr|q Rign|s and
Cc||cc|itc Rign|s Organiza|icns, 84 CAL. L. RLV. 1293 (1996).
297
Scc id. al 13OO.
298
Scc Meiges & NeIson, supia nole 278.
299
|d. al 843, 872.


73
copyiighl` In addilion, Meiges ieIies on ASCAI as an aIleinalive nodeI lo
conpuIsoiy Iicensing, lul lhe anaIogy is inapposile, foi seveiaI ieasons.
ASCAI is a coaIilion of au|ncrs. As a nodeI il is lheiefoie no ansvei foi lhe
piolIens ciealed vhen iivaI disscnina|crs use copyiighl againsl a iivaI. As Iong as
lhe disseninaloi in a given indusliy has effeclive conlioI oi acluaI ovneiship of
copyiighl necessaiy lo ils lusiness nodeI, lhe ASCAI nodeI is nol a vialIe
aIleinalive. The conpuIsoiy Iicensing iegines vhich Meiges opposes aie (as
Seclion II.A poinls oul), soIulions lo a diffeienl piolIen: veilicaI foiecIosuie of one
disseninaloi ly anolhei. The ASCAI nodeI is onIy vialIe vheie aulhois have
sufficienl independenl povei and conlioI ovei lheii ovn copyiighls. As foi lhe
suljecl of piicing, lhe facl lhal ASCAIs independenl piicing schene in undei lhe
shadov of an anliliusl deciee iendeis queslionalIe lhe aigunenl lhal ASCAIs
piicing is fuIIy independenl of goveinnenl supeivision.
3OO

A finaI aigunenl againsl lhe conpuIsoiy Iicensing nodeI iesls of lhe
pioposilion lhal lioad piopeily enlilIenenls aie alliaclive lecause lhey viII speed
lechnoIogicaI deveIopnenl. As Ielei Hulei, }ohn Thoine and MichaeI KeIIog
slaled in lheii 1995 liealise, gianling lioadcasleis innediale iighls ovei calIe
vouId have haslened ils deveIopnenl:
Il is inleiesling lo specuIale hov diffeienlIy lhings nighl have deveIoped if lhe
Supiene Couil had affiined lolh calIes copyiighl olIigalions and ils Iiisl
Anendnenl iighls sinpIy and cIeaiIy al lhe oulsel . Wilhoul a iighl lo puII
signaIs fion lhe aii, calIe nighl have slailed up noie sIovIy, lul il vouId
have piolalIy giovn noie quickIy.
3O1

Hulei and his conpaliiols aie pioposing lhe Slevaidship nodeI of
connunicalions poIicy. Theii leIief is lhal sinpIe, cIeai and lioad enlilIenenls,
unfelleied ly any ieguIalion, viII Iead lo lhe oplinaI depIoynenl and
deveIopnenl of connunicalions lechnoIogies.
As discussed alove, lhe visdon of such an appioach nusl lake inlo accounl
lhe oljeclions slenning fion evoIulionaiy lheoiies of innovalion. This poinl can

3OO
Scc Uniled Slales v. ASCAI, 195O Tiade Cas. (CCH) I 62,595 al 63,751 (S.D.N.Y. 195O).
3O1
Scc }ohn Thoine el aI., ILDLRAL ROADAND LAW 1O.11 (1995).


74
le expiessed in leins of lhe lollIeneck piolIen desciiled alove. Ioi any foin of
expiessive voik (video, look, nusic, elc.) lheie viII exisl seveiaI polenliaI
lechnoIogies of disseninalion. Yel nol eveiy nelhod of disseninalion is invenled
al lhe sane line, and indeed nany cannol le piedicled cx an|c. Ioi exanpIe, lhe
pioneeiing syslen of nass leIevision disseninalion vas leiiesliiaI lioadcasl~
iallil eai anlennas and laII loveis. In line vaiious successive lechnoIogies of
nass video disseninalion veie deveIoped and ieduced lo piaclice, incIuding viie
(calIe leIevision), saleIIile, and nosl iecenlIy, slieaning appIicalions on lhe
Inleinel.
Iion lhese condilions ve can see lhal gianling a copyiighl enlilIenenl lhal
coveis aII foins of disseninalion viII have lhe effecl of giving lhe pioneei indusliy
lhe povei lo conlioI lhe foIIov-on deveIopnenl of lechnoIogy. Assuning lhal lhe
pioneei conlioIs lhe ciealion of conlenl (eilhei ly conlioIIing copyiighls, veilicaI
inlegialion, oi lhiough sinpIe econonic dependence), il can diclale vhal happens
and vhal does nol. In lhe exanpIe of lioadcasl, if copyiighl in piogianning had
cIeaiIy incIuded fuluie lechnoIogies Iike calIe and saleIIile liansnission, lhe
decision lo aIIov lhese disseninalion lechnoIogies lo deveIop vouId have iesled
vilh lhe lioadcasl indusliy.
3O2
Lveiylhing lhen depends on vhelhei poIicy-
nakeis leIieve lhal an incunlenl can le liusled lo pionole, ialhei lhan lo deslioy,
ils lechnoIogicaI iivaIs.
Theie aie, finaIIy, a second sel of ieasons lo queslion lhe nodeI of lioad iniliaI
enlilIenenls. The nodeI of lioad iniliaI iighls can onIy yieId lhe cIained lenefils
vhen such iighls can le enfoiced. Ioi exanpIe copyiighl vas geneiaIIy seen as
unenfoicealIe againsl casuaI hone copying in lhe 197Os and eaiIy 198Os.
3O3
WhiIe
lhis poinl is conpIicaled ly inpioved lechnoIogies of copy pioleclion, so Iong as
lheie exisl iighls lhal vouId le exlieneIy expensive lo enfoice, lhe nodeI of lioad
iniliaI gianls cannol le a conpIele ansvei.

3O2
Acccrd, Tiollei Haidy, Ccpqrign| and 'Ncu-Usc' Tccnnc|cgics, 23 NOVA L. RLV. 657 (1999)
(discussing nev-use lechnoIogy ioyaIly olIigalions using lype-I and lype-II eiioi
nelhodoIogy).
3O3
Scc infra nole 342 and acconpanying lexl.


75
In shoil, vhiIe lheie is nuch aulonalic suppoil foi a fIexilIe oi fuluie-
pioof copyiighl, lheie seens Iess consideialion of vhelhei such a Iav vouId le
good foi innovalion. The aigunenl, hovevei, can le nade, and Ielei Hulei
cones cIosesl lo naking il. ul vhiIe nol concIusive, nuch iecenl econonic
lhinking and even nainsliean connunicalions poIicy casls doull on a nodeI lhal
gianls lhe incunlenl conlioI ovei fuluie invenlions.

|. Au|ncr-Dritcn Ccnnunica|icns Pc|icq?
The anaIysis in lhis Iail shouId nake one lhing cIeai: vho ovns oi conlioIs lhe
ieIevanl copyiighls in an indusliy sels lhe naluie of lhe conpelilion and
connunicalions piolIens ciealed. AulhoiiaI conlioI of copyiighls (as in lhe case
of ASCAI) viII Iead lo polenliaI piicing piolIens, lul is Iess IikeIy lo Iead lo
piolIen of veilicaI lechnoIogicaI foiecIosuie. ConveiseIy, il is vhen an incunlenl
disseninaloi ovns oi has effeclive conlioI ovei copyiighl lhal lhe polenliaI foi
noie lioulIing effoils lo foiecIose lechnoIogicaI iivaIs eneiges.
This anaIysis nakes lhe possiliIily of au|ncr-diiven disseninalion alliaclive.
As a poIicy il vouId suppoil lioad and cIeai iighls in aulhois, as aulhois shouId
vanl naxinun exposuie foi lheii voik, iegaidIess of disseninalion nedia. And
if an aulhoi decided nol lo ieIease hei voiks using a given lechnoIogy (say, fiIn),
lhen ve nighl expecl lhis lo iefIecl ailislic, ialhei lhan anli-conpelilive, conceins.
Ieihaps unsuipiisingIy, lhe concepl has leen a Iong-line aspiialion of lhe
copyiighl Iav: lhe hope lhal aulhois vouId one-day lecone nasleis of lheii ovn
desliny.
3O4
In ils Ialesl foin, lhe idea is lhal lhe eneigence of digilaI nedia and lhe
Inleinel nay nake aulhois lhe ieIevanl aclois foi copyiighls connunicalions
poIicy. }ane Cinsluigs voids desciile lhis schooI of lhoughl: I suggesl lhal
digilaI nedia, ly naking lhe neans of pioduclion and disseninalion avaiIalIe lo
any conpulei-equipped aulhoi, gives aulhois a ieaIislic oppoilunily lo liing lheii
voiks lo lhe pulIic vilhoul having lo pul lhenseIves in lhiaII lo liadilionaI

3O4
Scc, c.g., LYMAN RAY IATTLRSON, COIYRICHT IN HISTORICAL ILRSILCTIVL 5 (1968) (Nol
unliI aflei lhe Slalule of Anne did lhe nodein idea of copyiighl as a iighl of lhe aulhoi
deveIop.), scc gcncra||q, }OSLIH LOWLNSTLIN, THL AUTHORS DUL: IRINTINC AND THL
IRLHISTORY OI COIYRICHT (2OO2).


76
inleinediaiies.
3O5
A gianl of giealei aulhoiiaI iighls lhiough copyiighl, accoiding
lo Cinsluig, nol onIy enhances lhe noiaI appeaI of lhe exeicise of copyiighl, lul
aIso nay offei lhe pulIic an incieased quanlily and vaiiely of voiks of
aulhoiship.
3O6

If aulhoiiaI conlioI ovei copyiighls couId heIp conlioI sone of lhe nosl
lioulIing anli-conpelilive consequences of copyiighl, hov achievalIe is lhal
vision` The piolIen ienains vhal il aIvays has leen. Despile lhe facl lhal
aulhois vho aie nol enpIoyees noninaIIy ovn copyiighls upon ciealion, lhey
iaieIy conlioI copyiighls. Mosl copyiighls aie conliacluaIIy assigned lo
disseninalois, ovned ly lhe enpIoyei lhiough lhe voik-foi-hiie docliine, oi
olheivise effecliveIy conlioIIed ly lhe disseninaloi.
3O7
Il is a funclion of lhe
ieIalive laigaining povei of aulhois and disseninalois. UnIess lhis diffeience in
povei oi lhe Iavs conlioIIing copyiighl conliacling changes, liue aulhoiiaI conlioI
of copyiighl viII IikeIy ienain an alliaclive vision lul nol a disceinalIe ieaIily.
Mighl, as Cinsluig suggesls, digilaI disseninalion lechnoIogies change lhings,
and slienglhen lhe ieIalive povei of aulhois` WhiIe lhe queslion is facluaI lheie
aie ieasons lo suspecl lhal deveIopnenl Iike lhe inleinel oi indeed any
lechnoIogies aie unIikeIy lo eIininale lhe cenliaI ioIe of disseninalois and olhei
inleinediaiies, and lheii conlinued conlioI ovei copyiighl.
Il is, fiisl of aII, haid lo gel iid of inleinediaiies foi a ieason, one having
nolhing lo do vilh Iav oi lechnoIogy, lul inslead foi ieasons slenning fion lhe

3O5
Cinsluig, supra nole 53, al 1646.
3O6
|d. IauI CoIdsleins vision of a ceIesliaI jukelox lhal sloies aII copyiighl voiks and
nakes lhen avaiIalIe on denand is aIso an aulhoi-diiven vision. He viiles ly chaiging
sulsciileis eIeclionicaIIy foi each use of lhe pieiecoided voiks il offeis -- nolion picluies,
sound iecoidings, looks, nagazines oi nevspapei ailicIes -- lhe ceIesliaI jukelox viII le alIe lo
conpensale copyiighl ovneis each line lheii voiks aie chosen. Scc IAUL COLDSTLIN,
COIYRICHTS HICHWAY 3O (1994).
3O7
Scc, c.g, ALLRT N. CRLCO, THL OOK IULISHINC INDUSTRY 152-55 (1997) (sanpIe of
lypicaI pulIishing conliacl assigning copyiighl lo pulIishei), iuce H. IhiIIips & CaiI R.
Mooie, Digi|a| Pcrfcrnancc Rcqa||ics. Sncu|d Radic Paq?, 3 VAND. }. LNT. L. & IRAC. 169, n. 28
(nolhing lhal copyiighls in lhe nusic indusliy aie lypicaIIy assigned lo pulIisheis and
iecoiding conpanies).


77
lasic lheoiy of conpaialive advanlage.
3O8
SpeciaIized inleinediaiies exisl, aflei
aII, lecause lhey speciaIize in doing lhings lhal peopIe donl necessaiiIy do veII
lhenseIves. Caipenleis speciaIize in naking fuiniluie, vhiIe il is possilIe foi
peopIe lo nake lheii ovn fuiniluie, il cones al gieal langilIe and oppoilunily
cosl.
The Iogic of speciaIizalion caiiies ovei lo lhe voiId of packaged infoinalion
and suggesls a conlinuing ioIe foi speciaIized disseninalois. Aulhois, aflei
consliucling lheii ovn fuiniluie, couId aIso seive as lheii ovn pulIisheis and
pulIicisls. ul lhe aulhoi vho does so viII usuaIIy le al disadvanlage conpaied
lo one vho coIIaloiales vilh soneone eIse, pailicuIaiIy soneone Iike a pulIishei,
vho speciaIizes in pulIicalion and pulIicily. Changes in lechnoIogy havenl
changed lhal lasic dynanic, even lhough lodays inleinediaiies have changed.
WhiIe ve aie onIy a decade inlo lhe univeisaIizalion of lhe Inleinel, lheie is
onIy Iiniled evidence lhal il has eIininaled lhe conlioI lhal disseninalois have
ovei copyiighls. Theie aie a fev exanpIes of aulhois~oflen fanous and iich~
vho have lenpoiaiiIy lecone lheii ovn disseninalois. Slephan King, foi
exanpIe, fanousIy disliiluled one of his looks diieclIy lo his fans.
3O9
Rappei Ice
T decided lo disliilule one of his aIluns, foi $4.99 pei copy, via lhe onIine
disliilulion seivice KaZaA.
31O
Yel lhese aie lhe exceplions. Lven lhe ealIes -
vho founded AppIe Recoids lo liy and give ailisls noie povei ovei lheii voik
311
-
- have nany of lheii sound iecoiding copyiighls conlioIIed ly pulIishei LMI.
Thal conpany has used ils ovneiship of lhe ealIes copyiighls lo pievenl

3O8
The seninaI slalenenl of lhe lheoiy of conpaialive advanlage is found in David
Ricaido, scc David Ricaido, THL IRINCIILLS OI IOLITICAL LCONOMY AND TAXATION (1963).. The
poinl vilh iegaids lo onIine aclivilies is deveIoped fuilhei in }ACK COLDSMITH & TIMOTHY WU,
THL RLTURN OI THL LLVIATHAN, Chaplei 4 (Manusciipl on fiIe vilh aulhoi).
3O9
Scc Slephen King offeis onIine lhiiIIs, SAN DILCO UNION-TRI., }uIy 24, 2OOO, al A5.
31O
Scc Ice T offeis aIlun foi saIe lo nusic-svap sile useis, USA TODAY, ApiiI 1O, 2OO3.
311
Scc gcncra||q, RUCL SIIZLR, THL LATLLS ON AIILL RLCORDS (2OO3) (desciiling ieasons
foi lhe founding of AppIe Recoids).


78
unaulhoiized ienixing in iap songs, vhen il is nol cIeai vhelhei lhe ealIes
lhenseIves vouId have caied.
312

In shoil, in spile of cenluiies of good inlenlions, lhe goaI of noving acluaI as
opposed lo nolionaI conlioI ovei copyiighl lo aulhois ienains unachieved. Il
ienains foi nany an aspiialion of copyiighl poIicy, and a connunicalions anaIysis
suggesls lhe aspiialion has independenl econonic juslificalions. ul in lhe
neanline, copyiighl lheoiisls nusl conlinue lo anaIyze a voiId in vhich vaiious
disseninalois aie lhe effeclive ovneis of copyiighl. This facl nakes copyiighls
ioIe in connunicalions poIicy noie, nol Iess, inpoilanl.

IART III: COIYRICHTS NLW COMMUNICATIONS IOLICY
The nain poinl of lhis AilicIe has leen lo desciile copyiighls connunicalions
iegine and lo expIain lhe choices il has leen naking. Up unliI lhis poinl ve have
focused on lhe cIassic connunicalions iegine, cenleied on conpuIsoiy Iicensing
iegine. Since lhe 1976 Acl lhe IegaI opeialion of copyiighls connunicalions
poIicy has shifled in inpoilanl vays, lhough lhe poIicy queslions ienain lhe sane.
WhiIe lhe pallein of congiessionaI sellIenenl ienains, a nev pallein of judiciaI
innunilies, undei lhe docliines of conliiluloiy IialiIily and faii use, lhal
conslilule copyiighls nev connunicalions poIicy.
A. Tnc Ccnnunica|icns Pc|icq cf |nc 1976 Ac|
The 1976 Acl naiked an effoil lo liy and lo soIve nany of copyiighls
peiceived connunicalions piolIens once and foi aII. A key poilion of lhe 1976
Acl vas lhe 1O2 specificalion lhal copyiighl vouId sulsisl in oiiginaI voiks of
aulhoiship fixed in anq langilIe nediun of expiession, ncu |ncun cr |a|cr dctc|cpcd
..
313
As lhe House Repoil expIained, This lioad Ianguage is inlended lo avoid
lhe ailificiaI and IaigeIy unjuslifialIe dislinclions, deiived fion cases such as
While-Snilh IulIishing Co. v. ApoIIo Co. . Undei lhe liII il nakes no diffeience

312
Noah Shachlnan, Copyiighl Lnleis a Ciey Aiea, WIRLD NLWS, Iel 14, 2OO4, avaiIalIe
al hllp://vvv.viied.con/nevs/piinl/O,1294,62276,OO.hlnI
313
17 U.S.C. 1O2(a) (2OOO) (enphasis added).


79
vhal lhe foin, nannei, oi nediun of fixalion nay le.
314
As lhe Copyiighl Office
had aigued, lhe 19O9 Acl conpounded lhe conslanl confIicl suiiounding lhe
aiiivaI of nev lechnoIogies. One hope vas lhal lhe 1976 Acl couId soIve lhis
piolIen.
ul as lhis AilicIe has aigued, confIicls anong connunicalions iivaIs aie
IikeIy lo le inevilalIe as Iong as nev lechnoIogies aie invenled lhal give
chaIIengeis lhe oppoilunily lo undeicul incunlenls.
315
Il shouId lheiefoie le no
suipiise lhal lhe 1976 Acl faiIed lo end lhe pallein of confIicl lhal chaiacleiizes
copyiighls hisloiy. Sone of lhe chaIIenges, such as saleIIile, and velcasling, have
foIIoved lhe cIassic pallein of copyiighl sellIenenl cenleied on a conpuIsoiy
Iicense. The piincipIe exanpIes aie lhe SaleIIile conpuIsoiy Iicense (1988), and lhe
Welcasling conpuIsoiy Iicense (1995). NolalIy, lolh of lhese posl-1976
sellIenenls have iesuIled in leins Iess favoialIe lo lhe chaIIengei, possilIy lecause
lhe conpiehensive naluie of lhe 1976 Acl veakened lheii iniliaI posilion.
Yel since lhe 1976 Acl a nev lype of lechnoIogicaI chaIIengei has eneiged, and
vilh il a diffeienl lype of copyiighl acconnodalion. Undei lhe 19O9 Acl,
lechnoIogies Iike iadio and calIe opeialed openIy lecause lheii slalus undei
copyiighl vas uncIeai. Iosl-1976 chaIIengeis have ieIied on a diffeienl IoophoIe
in lhe copyiighl schene: ils difficuIly vilh enfoicenenl againsl individuaI
infiingeis.
316
And lhe iesuIl is copyiighls nev connunicalions iegine, cenleied
nol on conpuIsoiy Iicenses, lul on judiciaIIy gianled innunilies fion copyiighl
IialiIily. The foundalion of lhis nev syslen is lhe Scnq case, and il is lo lhal
confIicl lhal ve nov luin.
8. Scnq-dritcn Ccnnunica|icns Pc|icq
In Novenlei 1975, Sony }apan legan seIIing ils fiisl consunei veision of lhe
Video Tape Recoidei lased on elanax lechnoIogy. SeIIing foi lhe suggesled
ielaiI piice of $2295, lhe fIooi nodeI LV-19O1 conlined a 19 coIoi leIevision vilh

314
H. R. Rep. No. 94-1476, 94
lh
Cong., 2d Sess, al 52 (1994).
315
Scc supia lexl acconpanying noles 6O lo 79 and acconpanying lexl.
316
UnliI iecenlIy, enfoicenenl againsl individuaIs vas exlieneIy iaie, lo a degiee lhal one
nighl say il vas nol a pail of copyiighl. The evoIulion of copyiighls enfoicenenl syslen is
desciiled in Wu, supia nole 66, al 685-686.


8O
a VCR capalIe of sloiing a fuII houi of leIevision piogianning on a singIe casselle.
The adveilisenenl lhal legan lhe VCR confIicl ian as foIIovs:
NOW YOU DONT HAVL TO MISS KO}AK LCAUSL YOURL
WATCHINC COLUMO (OR VICL VLRSA)
LTAMAX~ITS A SONY
317

Wilh lhis adveilisenenl, line-shifling, oi iecoiding piogians lo valch Ialei,
enleied lhe pulIic inaginalion. ul lhe fiIn indusliy vas nol inpiessed. Wilhin
a yeai, on Novenlei 11, 1976, UniveisaI Sludios and WaIl Disney fiIed conpIainls
of copyiighl infiingenenl.
318

The faniIiai pallein of copyiighl confIicl vas sel. Sony and olhei eIeclionics
nanufacluieis veie chaIIengeis offeiing a nev and lellei vay lo valch lioadcasl
conlenl. Iail of lheii naikel advanlage, of couise, cane fion nol having lo pay
anylhing foi copyiighl Iicenses lo fiIns and leIevision piogians. MeanvhiIe,
novie sludios dispIayed IillIe inleiesl in pionoling VCR lechnoIogy, and nuch
noie inleiesl in eilhei liying lo slop lhe VCR in ils liacks oi ollaining ioyaIlies.
olh sides, as usuaI, venl lo lhe fedeiaI goveinnenl.
}ack VaIenli slaled lhe fiIn indusliys case in CongiessionaI heaiings. The
VCR, he opined, exisls foi one puipose in Iife . lo copy copyiighled naleiiaI lhal
leIongs lo olhei peopIe.
319
ul, Mi. VaIenli vained, Nolhing of vaIue is fiee. Il
is veiy easy, Mi. Chaiinan, lo convince peopIe lhal il is in lheii lesl inleiesl lo give
avay sonelody eIse's piopeily foi nolhing, lul even lhe nosl guiIeIess anong us
knov lhal lhis is a cave of iIIusion vheie connonsense is Iuied and lhen quielIy
sliangIed.
32O

317
Repiinled in }AMLS LARDNLR, IAST IORWARD: HOLLYWOOD, THL }AIANLSL, AND THL
ONSLAUCHT OI THL VCR 21 (1987).
318
|d. al 34.
319
Hone Recoiding of Copyiighled Woiks: Heaiings on H.R. 4783, H.R. 4794, H.R. 48O8,
H.R. 525O, H.R. 5488, and H.R. 57O5 efoie lhe Sulconn. On Couils, CiviI Lileilies, and lhe
Adninislialion of }uslice of lhe House Conn. On lhe }udiciaiy, 97lh Cong, 2d Sess. 6 (1982)
|heieinaflei VCR Heaiingsj (slalenenl of }ack VaIenli).
32O
|d.


81
In addilion lo lIaning }apanese VCRs foi lhe Aneiican liade deficil, VaIenli
expiessed a candid viev of copyiighl as a foin of pioleclion foi lhe fiIn indusliy:
We |lhe fiIn indusliyj aie facing a veiy nev and a veiy lioulIing assauIl on
oui fiscaI secuiily, on oui veiy econonic Iife and ve aie facing il fion a lhing
caIIed lhe video casselle iecoidei and ils necessaiy conpanion caIIed lhe lIank
lape. And il is Iike a gieal lidaI vave jusl off lhe shoie. This video casselle
iecoidei and lhe lIank lape lhiealen piofoundIy lhe Iife-suslaining pioleclion, I
guess you vouId caII il, on vhich copyiighl ovneis depend, on vhich fiIn
peopIe depend, on vhich leIevision peopIe depend and il is caIIed copyiighl.
. I say lo you lhal lhe VCR is lo lhe Aneiican fiIn pioducei and lhe Aneiican
pulIic as lhe oslon sliangIei is lo lhe vonan hone aIone.
321

y 1981 lhe fiIn indusliy had convinced lhe Ninlh Ciicuil lo hoId Sony IialIe
foi conliiluling lo lhe copyiighl infiingenenl of hone vieveis.
322
Thal couil
found lhal lhe videolape iecoidei had no puipose olhei lo infiinge: il vas
nanufacluied, adveilised, and soId foi lhe piinaiy puipose of iepioducing
|copyiighledj leIevision piogianning.
323
Since lhe couil couId find no exceplion
in lhe copyiighl code foi peisonaI oi hone copying, Sony vas infiinging. The
couil suggesled eilhei pIacing a peinanenl injunclion on lhe saIe of lhe VCR oi
selling up a ioyaIly schene: a judiciaI veision of a conpuIsoiy Iicense.
Wilhin 24 houis of lhe decision, lolh sides venl lo Congiess vilh diffeienl
pioposaIs. The eIeclionics indusliy vanled a fuII exenplion fion copyiighl
IialiIily foi hone video iecoiding.
324
The fiIn indusliy counlei-offeied vilh an
exenplion lied lo a ioyaIly schene foi lhe fin and leIevision indusliies.
325
Il
seened lhal lhe VCR nallei vouId foIIov lhe pallein of lhe cIassic
connunicalions iegine, and end in a CongiessionaIIy-inpIenenled sellIenenl.

321
|d. al 8.
322
UniveisaI Cily Sludios, Inc. v. Sony Coip. of Aneiica, 659 I.2d 963 (9lh Cii. 1981).
323
Scc id. al 975.
324
Scc S. 175, 98lh Cong., 1sl Sess., 129 CONC.RLC. S668 (daiIy ed. }an. 26, 1983), see aIso
H.R. 525O, 97lh Cong., 2d Sess., 128 CONC.RLC. H2241 (daiIy ed. May 13, 1982), H.R. 4783, 97lh
Cong., 1sl Sess. (1981).
325
Scc S. 31, 98lh Cong., 1sl Sess., 129 CONC.RLC. S255 (daiIy ed. }an. 26, 1983), H.R. 1O3O,
98lh Cong., 1sl Sess. (1983), H.R. 57O5, 97lh Cong., 2d Sess. (1982).


82
ul lhe Supiene Couil upslaged Congiess vilh ils fiisl najoi copyiighl
connunicalions poIicy case since |cr|nign||q. In Scnq lhe Couil, as is veII knovn,
sided vilh lhe eIeclionics indusliy, deIiveiing lhe exenplion fion copyiighl lhey
veie seeking in Congiess. The Couil did so ly hoIding lhal lhe VCR vouId le
exenpl fion conliiluloiy oi vicaiious copyiighl IialiIily piovided lhal ils
lechnoIogies veie, in facl, lechnoIogies of geneiaI oi lioad puipose.
326
As }uslice
Slevens slaled in his ofl-ciled Scnq iuIe, lhe saIe of copying equipnenl, Iike lhe
saIe of olhei ailicIes of conneice, does nol conslilule conliiluloiy infiingenenl if
lhe pioducl is videIy used foi Iegilinale, unoljeclionalIe puiposes.
327
To pul lhe
nallei fuilhei: Indeed il |lhe lechnoIogyj need neieIy le capalIe of sulslanliaI
noninfiinging uses.
328

Scnq is accIained foi ils foiesighl: in ieliospecl, lhe VCR and lhe DVD did
nuch foi lhe fiIn indusliy. As Ldvaid SanueIs slales, lhe VCR luined oul lo le
one of lhe nosl Iucialive invenlions~foi novie pioduceis, as veII as haidvaie
nanufacluieis~since novie piojeclois.
329
UnIike lhe olhei najoi copyiighl
connunicalions cases, Scnq did nol Iead lo lhe foinaI eslalIishnenl of a IialiIily
iegine. As delaiIed ly viilei }anes Laidnei, lhe fiIn indusliy opled foi a soflei
Iine, and sIovIy legan lo iejecl lhe popuIai viev lhal lhe indusliy needed lo
squeIch lhe VCR.
33O
And in line lhe VCR lecane a najoi souice of ievenue foi
lhe fiIn and lioadcasl indusliies, so a IialiIily iegine vouId have leen one
vilhoul danages.
331

One ieason Scnq nay have succeeded anaIylicaIIy is lhal il seIf-consciousIy
alandoned a sinpIe aulhoiship anaIysis vhen faced vilh lhe use of copyiighl ly
an incunlenl indusliy lo conlioI oi lIock Iegilinale lechnoIogicaI iivaIs.
332
Indeed
lhe Scnq iuIe can le undeislood as a iuIe lo heIp a couil dis|inguisn lelveen

326
The couil aIso iuIed line-shifling a faii use. Scc Scnq, 464 U.S. al 442 (|Tjhe
unaulhoiized hone line-shifling of iespondenls' piogians is Iegilinale faii use.).
327
|d.
328
|d.
329
Ldvaid SanueIs, THL ILLUSTRATLD HISTORY OI COIYRICHT 7O (2OOO).
33O
Laidnei, supia n. 317, al 284.
331
Scc id. al 325-328 (delaiIing hov videocasselle ievenue giev lo equaI lhal of lickel
ievenue).
332
Scc Scnq, 464 U.S. 417.


83
piolIens of aulhoiship and lhe noie difficuIl piolIens of conpelilion anong
disseninalois. The facl lhal a nev connunicalions lechnoIogy can le used foi
Iegilinale, unoljeclionalIe puiposes eslalIishes lhal lhe couil is faced vilh a
naikel enlianl, as opposed lo neie evasion of lhe copyiighl slalule. Hence lhe
Couil knovs lhal il faces a piolIen of ieguIaling conpelilion anong iivaIs, and
acl accoidingIy. ConveiseIy, if lhe lechnoIogy in queslion is used neieIy lo
infiinge, lhe Couil is faced a piolIen vheie piolecling aulhoiship incenlives
piedoninales. This division is suggesled ly lhe Couils slalenenl lhal Sound
poIicy, as veII as hisloiy, suppoils oui consislenl defeience lo Congiess vhen
najoi lechnoIogicaI innovalions aIlei lhe naikel foi copyiighled naleiiaIs.
Congiess has lhe conslilulionaI aulhoiily and lhe inslilulionaI aliIily lo
acconnodale fuIIy lhe vaiied peinulalions of conpeling inleiesls lhal aie
inevilalIy inpIicaled ly such nev lechnoIogy.
333

Theie is an inpoilanl diffeience lelveen lhe Scnq iuIe and lhe unanchoied
fiee pass foi nev lechnoIogies in cases Iike Tc|cprcnp|cr. Scnq foices fedeiaI
couils lo pass judgnenl on nev lechnoIogies, lo acl as a kind of lechnoIogicaI
galekeepei. The couil nusl nake sone assessnenl of vhelhei, on laIance, lhe
IikeIy hain ciealed ly lhe suljecl lechnoIogy~nosl olviousIy, lhiough danage lo
ciealion incenlives~acluaIIy nakes naikel enliy desiialIe. The Scnq iuIe
lheiefoie iequiies couils lo deveIop sone concepl of Iegilinale lechnoIogy lhal
is consislules lonafide naikel enlianl. Ils suggeslion is veiy-open ended: leing
capalIe of sulslanliaI noninfiinging uses is good enough.
The Scnq iuIe puls couils in an odd posilion, foi lhey nusl ieIy on lheii
inslincls and lhe Iiniled evidence lefoie lhen lo decide vhelhei a nev lechnoIogy
seens Iegilinale. The facl lhal so nany nov-nainsliean connunicalions
lechnoIogies veie loin as piiales fuilhei conpIicales nalleis. These Iinils of
judiciaI aliIily nighl suggesl a Ienienl ieading of lhe Scnq iuIe, lul sone of cone
lo lhe opposile concIusion. Randy Iickei sees Scnq as a iuIe of enliy, sees lhe Scnq
iuIe as loo Ienienl. In his viev, Scnq iuIe ly ils ovn Iogic aIIovs hainfuI naikel
enliy: il vouId aIIov naikel enliy of pioducl lhal had $1OO of Iegilinale use, lul

333
Scc id. al 431.


84
causes a $1OOO in hain, lhiough Ioss of ciealion incenlives. AIIoving such a
pioducl lo le on lhe naikel is lheiefoie, accoiding lo Iickei, a lad iesuIl.
ul lheie aie good iesponses lo Iickeis aigunenl and consequenlIy foi a
Ienienl naikel enliy iuIe foi nev connunicalions lechnoIogies. The fiisl is
inslilulionaI. If lhe couil using lhe Scnq iuIe gels il viong and aIIovs
lechnoIogicaI naikel enliy lhal luins oul lo le hainfuI, Congiess can Ialei ieveise
lhe deleininalion. Indeed had lhe Scnq decision Ied lo lhe neai-coIIapse of lhe fiIn
indusliy, suieIy a CongiessionaI ienedy vouId have leen foilhconing.
ConveiseIy, couil suppiession of a nev lechnoIogy is, foi aII inlenls and puiposes,
CongiessionaIIy iiieveisilIe. A nev lechnoIogisl aInosl ly definilion has IillIe
change of convincing Congiess lo ieveise a copyiighl hoIding.
Second, Iickeis viev nay pul loo nuch failh in lhe couils lo acl as accuiale
galekeepeis of naikel enliy. Il is ceilainIy leyond lhe aliIily of a couil, oi indeed
anyone, lo accuialeIy piedicl lhe fuluie sociaI lenefil of a nev lechnoIogy~such
aie lhe leachings of evoIulionaiy innovalion lheoiy.
334
To conpaie lhe fuluie
lenefil lo lhe piesenl and fuluie hain inlioduces sliII giealei chances foi eiioi.
Ioi one lhing judges nighl, Iike olhei goveinnenl aclois, consislenlIy oveiiale
piesenl and visilIe hains.
335
Iickei does acknovIedge lhal lhe assessnenl of
lenefil shouId incIude lhe possiliIily lhal lhe lechnoIogy viII luin oul lo le nuch
noie sociaIIy leneficiaIIy lhan oiiginaIIy inagined. Hovevei, he does nol deveIop
lhe poinl fuilhei.
336

Innovalion lheoiy leaches lhal since lechnoIogicaI piediclion is difficuIl, il is
inpoilanl, if possilIe, lo Iel lhe naikel assess lhe polenliaI of any nev lechnoIogy,
vhelhei a nouseliap, noIecuIe, oi copying device. Coveinnenl shouId, lhis
suggesls, lan a nev lechnoIogy onIy if lhe hain of aIIoving lhe lechnoIogy ieach
lhe naikel veiy cIeaiIy oulveigh lhe lenefils. These aie nol conlioveisiaI
senlinenls oulside of lhe copyiighl delale. Coveinnenl onIy veiy iaieIy ieaches

334
See supra Seclion II..
335
Cf. Anne Kiuegei, Asqnnc|rics in Pc|icq 8c|uccn |xpcr|ao|cs and |npcr|-Ccnpc|ing Gccds,
in THL IOLITICAL LCONOMY OI INTLRNATIONAL TRADL (R. }ones and A. Kiuegei eds. 199O)
(discussing idenlily lias, oi lhe lendancy of goveinnenl aclois lo acl lo piolecl lhe
idenlifialIe liagedy of Iosl jols inslead of diveiling ienls lo lhe ciealion of nev jols).
336
Iickei,


85
oul lo lan lechnoIogicaI deveIopnenls lhal nighl le hainfuI, even lhose lhal
disliess peopIe Iike genelic engineeiing. In copyiighl, lhe equivaIenl poIicy is lhe
Ienienl veision of lhe Scnq iuIe. Il asks judges lo fiIlei cIeaiIy iIIeginale
lechnoIogicaI uses~lhose lhal couId nol suivive lul foi lhe advanlage of piiacy. Il
Ieaves lhe iesl lo lhe naikel and Congiess if lhe couil is leiiilIy viong. This
foinuIalion of lhe Scnq iuIe nighl occasionaIIy Iead lo dianalic iesuIls, lul
ciealive desliuclion is nol a dinnei paily.
Whelhei Scnq is loo Ienienl oi loo sliicl a iuIe of naikel enliy is ienains an
open queslion.
337
ul lhe cases inslilulionaI significance foi copyiighls
connunicalions poIicy cannol le doulled. Scnq sel lhe piecedenl foi sellIing
lechnoIogicaI iivaIiy piolIens vilh lhe judiciaIIy-laIanced innunily iuIes. Il is
lhe foundalion and cenleipiece of copyiighls nev connunicalions poIicy.
C. 8cqcnd Scnq
Iion Scnq, couils have conlined lo use vaiious judiciaI innunilies, pailicuIaiIy
faii use, lo nanage anli-conpelilive lehavioi. WhiIe lhe suljecl is loo lioad lo
capluie enliieIy giealei avaieness of lhe conpelilive consequences of lheii
decisions foi conpelilion anong iivaI disseninalois heIps iIIuninale olhei
docliines.
1. Rctcrsc-|nginccring.
Couils have addiessed queslions of conpelilion anong iivaIs vhen foiced lo
deleinine vhelhei ieveise-engineeiing of copyiighled conpulei soflvaie shouId
le IegaI.
338
In a lypicaI scenaiio, a doninanl naikel pIayei ovns a given
pIalfoin piolecled ly copyiighl, vhich anounls lo a IegaIIy piolecled Iink
lelveen il and ils cusloneis. The conpelilois of lhe pIalfoin ovneis seek lo
ieach lhe sane cusloneis, and use ieveise-engineeiing lo achieve inleiopeialiIily.

337
Ioi anolhei viev of vhal lhe Scnq iuIe shouId le, see CIenn Lunney }i., |air Usc and
Mar|c| |ai|urc. Scnq Rctisi|cd, 82 .U. L. Rev. 975, 977 (2OO2).
338
Scc, c.g., Sony Conpulei Lnleilainnenl, Inc. v. Conneclix Coip., 2O3 I.3d 596 (9
lh
Cii.
2OOO) (consideiing faii use lhe ieveise-engineeiing of gane consoIe foi lhe puiposes of ciealing
viiluaI conpulei consoIe), Sega Lnleipiises Lld. V. AccoIade, Inc., 977 I.2d 151O (9
lh
Cii. 1992)
(finding lhal ieveise-engineeiing of soflvaie foi lhe puiposes of inleiopeialiIily conslilules faii
use).


86
The iesuIling piolIen is a piecise iepIica of lhe lollIeneck piolIen discussed
alove.
Such a lollIeneck piolIen vas piesenled in lhe seninaI case Scga t. Accc|adc.
339

Sega ovned lhe Iink lo lhe cuslonei: lhe Cenesis gane consoIe syslen. AccoIade
soughl lo deIivei ils ovn conlenl lo Segas cusloneis, naneIy conpulei ganes Iike
HaidlaII and Mike Dikla Iovei IoollaII.
34O
The queslion foi lhe Ninlh
Ciicuil vas sonelhing lhe ICC vouId have found veiy faniIiai: does AccoIade
gel lo use Segas piolecled Iink lo deIivei ils ovn conlenl`
The iuIe adopled ly lhe Ninlh Ciicuil is peihaps lhe lioadesl endoisenenl of
an open conpelilion poIicy lheoiy seen in posl-1976 copyiighl. Undei lhe faii-use
docliine, }udge Rheinhaidl heId lhal conpelilois veie fiee lo nake copies in lhe
couise of ieveise engineeiing soIeIy in oidei lo discovei lhe funclionaI
iequiienenls foi conpaliliIily vilh lhe Cenesis consoIe--aspecls of Sega's
piogians lhal aie nol piolecled ly copyiighl.
341

WhiIe lhe Scga iuIe, vhich is videIy foIIoved,
342
is usuaIIy juslified as lhe
exliaclion of unpiolecled infoinalion, lhe decision couId easiIy have gone eilhei
vay. Iaii use anaIysis usuaIIy luins on hov conneiciaI lhe use is, and lheie is
no queslion lhal AccoIade vanled lo nake noney and, al Ieasl in Segas judgnenl,
vas endangeiing Segas piofils.
The Scga iuIe lheiefoie nakes sense if undeislood as a piophyIaclic iuIe
pievenling naikel Iockoul ly doninanl naikel pIayeis. In connunicalions Iav
leins, il goes fuilhei lhan iale-selling (a IialiIily schene). Il inslead decIaies
Segas and olhei pIalfoins a connons. Theie is an aclive delale ovei vhelhei
open oi cIosed pIalfoins nake lellei sense foi lhe ovnei of lhe pIalfoin.
343

ul lhe Scga iuIe does nol liusl pIalfoin ovneis lo nake lhis decision, echoing lhe

339
Scc Scga, 977 I.2d 151O.
34O
|d. al 1516.
341
|d. al 1522.
342
Scc, c.g., Assessnenl TechnoIogies of WI v. WIRLDala, 35O I.3d 64O, 644 (7lh Cii. 2OO3),
DSC Connunicalions Coip. v. DCI Techs., Inc., 81 I.3d 597, 6O1 (5lh Cii. 1996), alenan v.
Mnenonics, Inc., 79 I.3d 1532, 1539 n.18 (11lh Cii. 1996), MileI, Inc. v. IqleI, Inc., 896 I. Supp.
1O5O, 1O56-57 (D. CoIo 1995), aff'd on olhei giounds, 124 I.3d 1366 (1Olh Cii. 1997).
343
Scc, e.g., LenIey & Lessig, supia nole 273 al 939-4O.


87
disliusl of incunlenls connon lo lhe open nodeI of connunicalions poIicy. The
Scga iuIe and ils foIIov-ons aie exanpIes of decisions having aInosl nolhing lo do
vilh aulhoiship poIicy and eveiylhing lo do vilh copyiighls poIicy as lelveen
connunicalions iivaIs.
2. Ccn|rac|s - Ccpqrign|.
In nany naikels, pailicuIaiIy conpulei soflvaie, il is connonpIace lo use
conliacluaI piovisions lo oveiiide copyiighl docliines Iike lhe fiisl-saIe docliine oi
ceilain aspecls of faii-use iighls. Couils have given lhe enfoicenenl of such
agieenenls a nixed ieceplion,
344
vhiIe acadenics usuaIIy have leen noie oveilIy
hosliIe.
345
ul vhal ienains undeiiecognized is lhe degiee lo vhich conliacluaI
oveiiides of copyiighl iuIes ieIale lo condilions of conpelilion anong iivaIs.
Acadenic ciilics of conliacluaI suppIenenls lo copyiighl liing lvo Iines of
ciilicisn. The fiisl cones fion conliacl poIicy, asseiling lhal lhe foin of lhe
conliacls (usuaIIy shiinkviaps) aie al lesl conliacls of adhesion, oi nol conliacls al
aII.
346
The second ciilicisn, of noie significanl inleiesl heie, hovevei, cones fion

344
Conpaie Slep-Savei Dala Syslens, Inc. v. Wyse TechnoIogy, 939 I. 2d 91 (3d Cii. 1991)
(slaling lhal Iiniled use Iicense agieenenl piinled on package conlaining conpulei soflvaie
did nol lecone pail of saIes agieenenl foi soflvaie vheie il vas nol assenled lo al line lhe
goods veie soId), KIocek v. Calevay, Inc., 1O4 I.Supp. 2d 1332 (D. Kan. 2OOO) (hoIding lhal
shiink-viap Iicense piovisions iequiiing aililialion do nol lecone pail of agieenenl neieIy
ly ielaining oi using pioducl aflei nolice of leins), vilh IioCD v. Zeidenleig, 86 I3d 1447 (7lh
Cii. 1996) (hoIding lhal shiinkviap Iicenses aie enfoicealIe) and i.Lan Syslens, Inc. v. Nelscoul
Seivice LeveI Coip., 183 I. Supp. 2d 328, 337-39 (D. Mass. 2OO2) (sane).
345
Scc, c.g., Ieggy Radin, The LvoIulion of Iiopeily and Conliacl in lhe DigilaI
Lnviionnenl (}anuaiy 2OO1), atai|ao|c a|
hllp://vvv.innovalionIav.oig/Iavfoiun/pages/Iecluieseiies.hln, scc a|sc Teiiy Iishei,
Prcpcr|q And Ccn|rac| On Tnc |n|crnc|, 73 CHI.-KLNT L. RLV. 12O3 (1998).
346
Scc, e.g., David A. Linhoin, 8cx-Tcp |iccnscs and |nc 8a|||c-cf-|nc-|crns, 5 SOITWARL L.}.
4O1 (1992) (aiguing lhal shiinkviap Iicenses unIikeIy lo le enfoiced undei conliacl Iav), David
L. Hayes, Shiinkviap License Agieenenls: Nev Lighl on a Vexing IiolIen, 9 Conpulei L. 1
(1992) (conlending lhal shiinkviap Iicenses unIikeIy lo le enfoiced undei 2-2O7), Thonas
Hennes, Rcs|rain|s cn A|icna|icn, |qui|ao|c Scrti|udcs, and |nc |cuda| Na|urc cf Ccnpu|cr Scf|uarc
|iccnsing, 71 DLNV. U. L. RLV. 577 (1994) (suggesling lhal shiinkviaps aie allenpl lo ieluin lo
feudaI conlioIs on lhe aIienaliIily of piopeily), MichaeI Schvaiz, Tcar-Mc-Opcn Scf|uarc |iccnsc
Agrccncn|s. A Unifcrn Ccnncrcia| Ccdc Pcrspcc|itc cn an |nncta|itc Ccn|rac| cf Adncsicn, 7
COMIUTLR L.}. 261 (1986) (conspicuousIy pIaced shiinkviap Iicenses shouId le enfoiced).


88
copyiighl poIicy. Il is lhe aigunenl lhal conliacls on copyiighled goods disloil lhe
oplinaI laIance lelveen pulIic access and piivale incenlives lhal lhe iuIes of
copyiighl aie neanl lo enlody.
347

The piolIen vilh lhe poIicy ciilicisn is lhal il is loo geneiaI foi couils lo
knov vhen nol lo enfoice conliacls lhal oveiiide copyiighl iuIes. Il ieIies on lhe
piesunplion lhal copyiighls iuIes aie aII nandaloiy and none neie defauIls.
Thal assunes lhal lhe Iav has guessed lhe iighl iuIes lo govein lhe ieIalionship
lelveen ovnei and luyei acioss lhe nany diffeienl naikels vheie copyiighl
nalleis, a supposilion lhal seens unIikeIy, al lesl. The nandaloiy viev negIecls
lhe vaIue of conliacluaIIy-nodified copyiighls foi specific naikels: a nixluie of
iighls lellei-laiIoied lo fil naikel piefeiences lhan lhe iuIes of copyiighl vouId
gianl.
348

Couils vouId lenefil fion lhinking of lhe copyiighl-conliacl piolIen as
lhe piolIen of lIocking naikel enliy. Wheie conliacls aie leing used lo pievenl
lhe enliy of polenliaI iivaIs, lhe concein foi nodificalion of copyiighls defauIl
iuIes is vaiianled. ConveiseIy, vhen such is nol lhe case, il is easiei lo piesune
lhal (as conliacl poIicy suggesls) lhe nodified sel of iighls lhal eneiged aie a
lellei fil lhan copyiighls defauIl choices. To see vhal lhis nighl nean in
piaclice, considei lhe conliasling exanpIes of conliacluaI pioleclion of facls and
lhe fiisl saIe-docliine.

The use of conliacluaI piovisions lo lIock polenliaI iivaIs iepiesenls lhe vicloiy
of conliacl ovei lhe fiisl-saIe docliine.
349
The fiisl-saIe docliine pievenls lhe
copyiighl ovnei fion deslioying oi conlioIIing lhe aflei-naikel foi ils pioducl.
The conliacluaI oveiiide can le used as a neans lo deslioy iivaIs, suggesling a
sepaiale and inpoilanl ialionaIe nol lo enfoice such a iesliainl. Il is, foi exanpIe,

347
Scc Maik A. LenIey, |n|c||cc|ua| Prcpcr|q and Snrin|urap |iccnscs, 68 S. CAL. L. RLV. 1239,
1248-56, 1283-91 (1995), scc a|sc, IaneIa SanueIson, Sqnpcsiun. |n|c||cc|ua| Prcpcr|q and Ccn|rac|
|au in |nc |nfcrna|icn Agc. Tnc |npac| cf Ar|ic|c 28 cf |nc Unifcrn Ccnncrcia| Ccdc cn |nc |u|urc cf
Transac|icns in |nfcrna|icn and ||cc|rcnic Ccnncrcc, 13 LRKLLLY TLCH. L. }. 8O9 (1998)
(discussing lhe ieIalionship lelveen conliacl and inleIIecluaI piopeily).
348
Scc CIen Rolinson, Pcrscna| Prcpcr|q Scrti|udcs, 7O U. Chi. L. Rev. (foilhconing 2OO4).
349
17 U.S.C. 1O9 (2OOO).


89
piolalIy a faiIing of copyiighl poIicy lhal lheie is no appaienl naikel foi used
soflvaie.
35O
Soflvaie is veiy expensive, and as il lecones noie naluie, one
vouId expecl, jusl as in olhei naikels, sone peopIe lo opl foi a used oi oIdei
veision of lhe pioducl lhal is cheapei. IeopIe, aflei aII, luy used conpuleis and
olhei haidvaie even lhough such pioducls aie olviousIy nol culling edge.
Today, najoi soflvaie copyiighl Iicense conlains vaiious kinds of
piovisions lhal effecliveIy foilid iesaIe.
351
The effecl is lo expose polenliaI
ieseIIeis of used copyiighled soflvaie lo IialiIily, vhich is vhy used look sloies
donl seII used soflvaie. Theie seens IillIe, fion a connunicalions oi
conpelilion poIicy peispeclive, lo juslify lhis iesuIl.

ConveiseIy, copyiighl docliine specifies lhal facls, even lhose IaloiiousIy
ciealed, aie nol enlilIed lo copyiighl pioleclion.
352
ul shouId lhal piecIude lhe
pioleclion of facls ly anq IegaI device` Conliacl, of couise, cieales ialhei a
diffeienl foin of pioleclion foi facls~enfoicealIe onIy as lelveen pailies. Hence
lheie is a sliongei aigunenl foi aIIoving pioleclion foi facls so as cieale a naikel
foi a pioducl lhal nighl nol olheivise exisl is convincing. This is peihaps vhal
nolivaled lhe Sevenlh Ciicuils conlioveisiaI decision in IioCD, Inc. v.
Zeidenleig,
353
vhich upheId conliacluaI pioleclion of facls againsl a cIain of
copyiighl pieenplion. WhiIe lhe Ianguage of PrcCD lioadIy suggesls lhal
copyiighl viII geneiaIIy yieId lo conliacl, lhe decision is sliongesl vhen Iiniled lo
ils facls (lhe pioleclion of facls).

3. Tnc lar ctcr On|inc Dis|riou|icn

35O
Scc IauI }. HeaId, Mcuing |nc P|aqing |ic|d. Addrcssing |nfcrna|icn Dis|cr|icn and
Asqnnc|rq in |nc TR|PS Ganc, 88 MINN. L. RLV. 249, 29O (2OO3).
351
Ioi exanpIe, lhe Miciosofl Windovs XI Lnd-Usei License Agieenenl lans saIe of lhe
soflvaie independenl of lhe conpulei il cones vilh:
You nay peinanenlIy liansfei aII of youi iighls undei lhis LULA onIy as pail of a
peinanenl saIe oi liansfei of lhe COMIUTLR, piovided you ielain no copies, if you liansfei
lhe SOITWARL (incIuding aII conponenl pails, lhe nedia, any upgiades, lhis LULA and lhe
Ceilificale of Aulhenlicily), and lhe iecipienl agiees lo lhe leins of lhis LULA.
352
Scc IulIicalions, Inc. v. RuiaI TeIephone Seivice Co., Inc. 499 U.S. 34O, 344 (1991).
353
86 I.3d 1447 (7lh Cii.1996).


9O
In lhe 2OOOs, il is difficuIl lo pick up a nevspapei oi nagazine vilhoul
seeing sonelhing aloul digilaI piiacy and an ongoing vai lelveen lhe
enleilainnenl indusliy (Los AngeIes) and conpulei piogianneis (San Iiancisco).
Theie is, I agiee, a ceilain poIilicaI significance lo lhe effoils of piogianneis lo
viile piogians laiIoied lo copyiighls enfoicenenl veaknesses.
354
ul sone of lhe
excilenenl and iheloiic have nasked lhe lasic queslions of connunicalions poIicy
piesenled.
Whal is leined lhe CaIifoinia civiI vai in facl foIIovs lhe faniIiai pallein of
confIicl lelveen chaIIengei and incunlenl disseninalion indusliies. The
incunlenl, lhe exisling iecoiding indusliy, ieIies on fixed disliilulion:
disliilulion of conlenl fixed in CDs, DVDs, oi looks, soId in ielaiI sloies. The
chaIIengei ieIies on onIine disliilulion: lhal is, diiecl, Inleinel-lased deIiveiy of
conlenl in digilaI foin. No node of disseninalion, fion fiisl piincipIes, has lhe
olvious uppei hand. OnIine disliilulion does eIininale nuch oveihead cosls (e.g.,
ielaiI sloies) and shouId le cheapei, il aIso piovides cusloneis lhe aliIily lo gel
copyiighled conlenl vilhoul acluaIIy going lo a sloie. ul fixed nedia has lhe
advanlage of lhe fixed foin, packaging, and in sone cases a supeiioi pioducl (ieaI
looks aie leaulifuI, veiy poilalIe, and opeiale vilhoul lalleiies). Weie neuliaI
condilions of conpelilion lo appIy, il nighl le a faii fighl. ul faii fighls have
nevei leen a fealuie of lhe hisloiy of nev connunicalions lechnoIogies. We nusl
Iook lo see hov copyiighl sels lhe slage foi conpelilion lelveen lhe incunlenl
and chaIIengei.
Like lheii piedecessois, ceilain onIine disliilulois have laken advanlage of
copyiighl piiacy lo gain an advanlage ovei lhe incunlenl. This vas a
pailicuIaiIy saIienl issue vilh iespecl lo nusic, and lhe aliIily lo appiopiiale
copyiighled naleiiaI vas lehind lhe giovlh of veII-knovn conpanies Iike
Napslei and KaZaA. To iepeal a poinl nade eaiIiei, lhe sliucluie of lhe 1976 Acl
nakes liying lo ieIy on lhe anliguily of lhe copyiighl slalule (Iike lhe iecoiding
indusliy in 19O9 oi CalIe in lhe 195Os) a dicey pioposilion.
355
Inslead, lhe Iiniled

354
Scc Wu, supra nole 66, al 68O.
355
LaiIy conpanies lhal liied lo do so Iosl neaiIy innedialeIy. My MI3.con vas an eaiIy
onIine disliiluloi vho liied lo go Iegil ly Iicensing nusic and aIIoving peopIe lo dovnIoad
nusic lhal lhey aIieady ovned on CD. Il vas, hovevei, quickIy shul dovn despile lheii


91
hisloiy and cosl of end-usei enfoicenenl vas lhe vuIneialiIily expIoiled ly
piogianneis.
356
Il is inpoilanl lo undeisland lhal lhe puie Ieei-lo-peei
fiIeshaiing piogians aie nol aIvays and necessaiiIy lhe lesl syslens of onIine
disliilulion. Theii popuIaiily and conpaialive advanlage Iies in lhe facl lhal lhey
aie designed lo evade copyiighls enfoicenenl syslen, and lheiefoie nininize lhe
piice of an essenliaI inpul (copyiighled naleiiaIs).
357

MeanvhiIe, lhe incunlenl iecoiding indusliy, Iike sone of ils piedecessois,
has done jusl aloul eveiylhing possilIe lo gain conlioI ovei lhe chaIIengei. The
exlenl of lheii effoils has leen delaiIed eIsevheie: il incIudes enliieIy nev
slialegies of enfoicenenl, such lhe dianalic laigeling of end-useis,
358
inveslnenls
in exlia-IegaI ienedies
359
and denands lhal lhe }uslice Depailnenl use ciininaI
sanclions.
36O
The iecoiding indusliy and fiIn indusliy, Iike olhei incunlenls have
nol shovn an inleiesl in deslioying onIine disliilulion. Il is a queslion of conlioI:
lhe indusliy vouId piefei lo slevaid lhe aiiivaI of onIine disliilulion lechnoIogy,
so lhal il aiiives on lheii scheduIe and cieales coIIeclilIe ievenue.
361

WhiIe lhe lasic queslion of onIine disliilulion is a nainIy a queslion of
connunicalions poIicy, lhe iheloiic of aulhoiship is nonelheIess peivasive. LaiIy
on, MelaIIica Diunnei Lais UIiich, nol knovn foi his neekness, said he found
Napslei sickening, foi Napslei, is his viev, consliluled sleaIing and vas

pioleslalions of faii use. Scc UMC Recoidings v. MI3.con, Inc., 92 I. Supp. 2d 349 (S.D.N.Y.
2OOO).
356
Scc Wu, supra nole 66, al 711-716 (desciiling copyiighls galekeepei syslen).
357
Scc id. al 731-737 (desciiling lhe evoIulion of piogians aiound lhe piolIen of copyiighl
IialiIily).
358
Scc, c.g., Recoiding Indusliy Assn of Aneiica, Inc. v. Veiizon Inleinel Seivices, Inc., 351
I.3d 1229, 123O (D.C. Cii. 2OO3) (invoIving iecoiding indusliy allenpl lo use sulpoenas lo
unnask aIIeged copyiighl infiingeis)
359
The RIAA, foi exanpIe, has used pop up vindovs lo aIeil lhose polenliaIIy guiIly of
infiingenenl lhal lhey aie infiinging. Scc DecIan McCuIIah, la|cndcgs rap R|AAs fi|c-|radc
assau||, Nevs.con.con, a| hllp://nevs.con.con/21OO-1O23-956176.hlnI (ApiiI 3O, 2OO2).
36O
Scc Rick ouchei, ]us|icc Dcpar|ncn| as an|ipiracq sni||, Cnel Nevs.con, a|
hllp://nevs.con.con/2O1O-1O28-5O99583.hlnI (Oclolei 3O, 2OO3)
361
Scc, c.g., Renaiks of Iieslon Iadden, Lxeculive Vice-Iiesidenl, Disney, SiIicon IIaliions
TeIeconnunicalions Confeience Iel. 9 2OO3 (delaiIing fiIn indusliys pIans lo inlioduce onIine
disliilulion).


92
noiaIIy and IegaIIy viong.
362
On lhe olhei side, ailisls Iike IulIic Lnenys
Chuck D speak of lhe lenefils of onIine disliilulion as an aulhoiship issue. In
2OOO, in Napsleis gIoiy days, D viole in lhe Nev Yoik Tines lhal ailisls shouId
lhink of il as a nev kind of iadio -- a pionolionaI looI lhal can heIp ailisls vho
don'l have lhe oppoilunily lo gel lheii nusic pIayed on nainsliean iadio oi on
MTV. . The Inleinel has ciealed a nev pIanel foi nusicians lo expIoie, and I'n
vilh lhal.
363

Whal can lhe connunicalions poIicy peispeclive leII us` On lhe one hand,
lhe iecoiding indusliys effoils lo conlioI onIine disliilulion aie a cIassic exanpIe
of lhe veilicaI foiecIosuie discussed in Iail II. OnIine disliilulion is a iivaI
lechnoIogy lo lhe iecoiding indusliys exisling disliilulion of conpacl disks. The
indusliy vouId Iike lo use lheii conlioI ovei copyiighl, an essenliaI inpul, so as lo
conlioI hov and vhen onIine disliilulion ieaches consuneis. Iion lhis
peispeclive lhe copyiighl Iavsuils aie suspecl as laiiiei lo fiee lechnoIogicaI
conpelilion. ul lhal isnl lhe end of lhe anaIysis, lecause unIike olhei hisloiicaI
lechnoIogicaI chaIIengeis, il is nol al aII cIeai lhal enlilies Iike Napslei, Ainslei oi
KaZaA iepiesenl Iegilinale naikel enlianls. The conpIicaled pail is lhal peei-lo-
peei fiIeshaiing nelvoiks and onIine nusic disliilulion aie nol lhe sane lhing:
I2I nelvoiks aie a pailicuIaiIy hainfuI foin of onIine disliilulion, al Ieasl as
neasuied ly lhe polenliaI Ioss of ievenue lo ciealois.
The connunicalions poIicy peispeclive, in olhei voids, sees lhe onIine
disliilulion as a veighing of lvo cosls, lolh difficuIl lo assess. On one side is lhe
cosl of lhe foiecIosuie, vhich aie lhe foigone lenefils of lhe nev lechnoIogy, and
lhe lenefils of disiupling lhe naikel povei of exisling conlenl indusliies. On lhe
olhei side aie lhe Iosl incenlives foi nev aulhois and vaIue (if any) of lhe ieIiance
inleiesls in lhe piopeily iighls guaianleed lhe copyiighl Iav. Weighing lhese lvo
cosls Ieads lo a specliun of pIausilIe poIicy posilions on lhe queslion of onIine
conlenl disliilulion, each of vhich iefIecls diffeienl vievs of nalionaI
connunicalions poIicy. We can gioup lhen inlo lhiee lasic posilions (iefIecling
lhe poIicies desciiled in Iail II): iadicaIIy open, slevaided, and laIanced.

362
MelaIIica Iiess ReIease, ApiiI 13, 2OOO.
363
Chuck D, 'Iiee' Music Can Iiee lhe Ailisl, N.Y. TIMLS, ApiiI 9, 2OOO.


93
The iadicaIIy open posilion is highIy oplinislic aloul lhe naikel and lhe
piocess of ciealive desliuclion. A sliong pioponenl of an open connunicalions
poIicy vouId give onIine disliilulion syslens an exenplion fion conliiluloiy
copyiighl IialiIily dcspi|c lhe facl lhal lhey can le denonslialed lo hain oi even
deslioy aulhoiiaI incenlives. The ailicIe of failh is lhal such aclion, hovevei
liaunalic in lhe shoil lein foi lolh disseninalois and ciealois, viII nol deslioy
aulhoiiaI incenlives in lhe Iong lein. If lhals iighl, consunei veIfaie viII le
seived lolh in lhe shoil-lein (fiee conlenl) and aIso lhe Iong-lein (cheapei
conlenl). ul hov nighl aulhoiiaI incenlives le iesloied` Theie aie lvo possilIe
accounls. Iiisl, lheie is failh lhal lhe denands of lhe naikel viII necessaiiIy
iecieale aulhoiiaI incenlives fion scncuncrc, even if vheie is haid lo specify iighl
nov. If an onIine disliiluloi Iike KaZaA lecones a poveifuI disliiluloi of nusic,
il viII have a naluiaI need lo see ils conlenl ciealois suivive, and lheiefoie cieale
sone nechanisn foi paying aulhois. An aIleinalive viev pIaces failh in lhe
poIilicaI piocess. Lxenpling lhe I2I conpanies fion copyiighl IialiIily couId
foice sone nalleis inlo copyiighls cIassic connunicalions iegines, foicing a
sellIenenl lhal viII Iileiale onIine nusic disliilulion.
364

The sliongesl hisloiicaI piecedenl foi lhe iadicaI viev is lhe Supiene
Couils 1968 |cr|nign||q and 1974 Tc|cprcnp|cr decisions.
365
Those decisions veie a
Ieap of failh. They piojecled lhal even lhough calIe conpanies al lhe line did
nolhing lul fiee-iide on lioadcasl, calIe vouId nonelheIess one day lake on
seiious iesponsiliIilies ialhei lhan iun leIevision inlo lhe giound. In lhe cuiienl
conexl, lhe cIosesl IegaI endoisenenl of lhis vievpoinl cones fion }udge Slephen
WiIson, disliicl judge in lhe Grc|s|cr Iiligalion,
366
lhe lhe iecoiding indusliys
Iavsuil againsl KaZaA and siniIai piogians. }udge WiIson, gianled Grc|s|cr
sunnaiy judgnenl againsl lhe copyiighl cIains againsl il, did so slaling lhal In a
case Iike lhis, in vhich Congiess has nol pIainIy naiked oui couise, ve nusl le

364
As conlenpIaled in NeiI Weinslock NelaneI, |npcsc A Ncnccnncrcia| Usc |ctq Tc A||cu
|rcc Pccr-Tc-Pccr |i|c Snaring, 17 Haiv. }. L. & Tech. 1 (2OO3), and WiIIian Iishei, A Rcqa||ics P|an
fcr |i|c Snaring, CNLT Nevs, }uIy 11, 2OO3.
365
Discussed in Iail I.C(3) , supra.
366
See Melio-CoIdvyn-Mayei Sludios, Inc. v. Ciokslei, Lld., 259 I.Supp.2d 1O29 (C.D. CaI.
2OO3).


94
ciicunspecl in consliuing lhe scope of iighls ciealed ly a IegisIalive enaclnenl
vhich nevei caIcuIaled such a caIcuIus of inleiesls.
367
WiIsons slaled viev of
copyiighl lhal does nol aulonalicaIIy appIy in nev sellings is a Ienienl viev of
Scnq and a poIicy of open naikel enliy.
The dianeliic opposile lo lhe iadicaI open posilion is lhe slevaidship
posilion. The open posilions aIIeged failh in lhe poIilicaI piocess and fiee naikel
does nol inpiess pioponenls of a Slevaid-lased connunicalions poIicy. In lheii
viev, copyiighl is piopeily, and piopeily a naikel piecondilion. To aigue lhal lhe
slale shouId aIIov an exenplion lo lhe enfoicenenl piopeily iighls lo pionole lhe
funclioning of naikel is lheiefoie is a IogicaI conliadiclion. The Slevaid viev al
ils sliongesl aIso leIieves lhal lhe incunlenl indusliy can and shouId le liusled lo
inlioduce onIine disseninalion in an efficienl and lineIy nannei.
368

The lhiid viev is lhe Scnq posilion adheied lo ly lhe Ninlh
369
and Sevenlh
Ciicuils
370
~a niddIe ioad lelveen lhe open and slevaided vievs. UnIike lhe
slevaided viev, il sees incunlenl-conlioI of a nev lechnoIogy as undesiialIe, yel
is sensilive, unIike lhe iadicaIIy open viev, lo lhe desliuclion of ciealive incenlives.
Hence il asks lhe judiciaiy lo judge vhelhei a piiale indusliy is IikeIy lo lecone a
Iegilinale naikel naikel pIayei. The effecl is lo caII foi lhe giealesl judiciaI
invoIvenenl and oveisighl of lhe lhiee vievs desciiled heie. The iadicaIIy open
viev vouId alandon lhe fuluie of conlenl disliilulion lo naikel foices oi
Congiess, vhiIe lhe slevaided viev pIaces lhe incunlenl in a posilion lo decide
vhen and hov onIine disliilulion viII aiiive. ul lhe inleinediale posilion in
Naps|cr and Ains|cr puls lhe fedeiaI judiciaiy in a posilion of conlinuing
supeivision of lhe onIine disliilulion indusliy, vailing foi lhe nonenl lhal lhe
piiale lecones Iegilinale.
The cIeaiesl exanpIe of lhis appioach is }udge Richaid Iosneis Ains|cr
decision, vhich is unusuaIIy candid aloul lhe conpelilive consequences of lhe
case. The decision opens vilh a iejeclion of lhe slevaidship nodeI as conliaiy lo

367
|d. al 1O46.
368
As discussion in Seclion II.(2), supra.
369
A & M Recoids v. Napslei, Inc., 239 I.3d 1OO4, 1O22 (9lh Cii. 2OO1).
37O
In ie Ainslei, 334 I.3d 643 (7lh Cii. 2OO3).


95
Scnq: lhe iecoiding indusliy had aigued lhal acluaI knovIedge of anq
infiingenenl vas sufficienl lo find IialiIily. Iosnei iejecls lhal posilion, saying il
couId iesuIl in lhe shulling dovn of lhe |disliilulionj seivice oi ils annexalion ly
lhe copyiighl ovneis (conliaiy lo lhe cIeai inpoil of lhe Scnq decision).
371
ul
}udge Iosnei is aIso unviIIing lo gianl open-ended naikel enliy lo Ainslei and
siniIai onIine disliilulion syslens. Ainsleis Iavyeis piess foi an inleipielalion
lhal vouId essenliaIIy ninic lhe iesuIls of Tc|cprcnp|cr. a hoIding lhal even
pc|cn|ia| of Ieginale uses aie enough lo cieale an exenplion fion copyiighl. This
viev is aIso iejecled: Il is nol enough, as ve have said, lhal a pioducl oi seivice
le physicaIIy capalIe, as il veie, of a noninfiinging use.
372

So inslead lhe Sevenlh Ciicuil Iays oul, in delaiI, vhal an onIine conlenl
disliilulion syslen nusl do lo gain naikel enliy. The iesuIl is sIighlIy ieniniscenl
of lechnoIogicaIIy-specific connunicalions ieguIalion. }udge Iosnei gives five
exanpIes of non-infiinging uses lhal if in sulslanliaI evidence vouId nake il a
Iegilinale naikel enlianl undei lhe Scnq iuIe. His exanpIes iange fion lhe
olvious lo lhe sIighlIy Iess so, incIuding lhe disliilulion of uncopyiighled nusic
exchange as veII as anonynous shaiing of uncopyiighled phologiaphs and diily
jokes.
373
The upshol is a decision lhal lolh Ieaves open lhe dooi foi fuluie naikel
enliy, and leIIs lusinesses vheie lhal dooi is. This IeveI of guidance and judiciaI
assessnenl of lechnoIogy in Ains|cr is lhe consequence of lhe syslen Scnq ciealed.
If lhe Supiene Couil shouId ieconsidei Scnq in lhe conlexl of onIine conlenl
disliilulion, il viII face lhiee poIicy oplions desciiled heie. Il can nake naikel
enliy sulslanliaIIy easiei vilh a lioad exenplion foi loId nev piiale lechnoIogies,
and hope lhal lhe naikel oi Congiess viII lake caie of lhe iesuIlanl chaos. Il can
haiken lack lo lhe eII Syslen, lighlen incunlenl conlioI, and liusl exisling
pIayeis lo inlioduce nev lechnoIogies in a pIanned vay. Oi il can slick vilh lhe
Scnq iuIe and ils consequenl invoIvenenl of lhe fedeiaI judiciaiy in lhe veighing
of lhe neiil of nev lechnoIogicaI enlianls. As lhe desciiplions suggesl, none of
lhese oplions is pailicuIaiIy lidy. Yel lhe hisloiy of copyiighls connunicalions

371
Ains|cr, 334 I.3d al 648.
372
|d. al 653.
373
See Ains|cr, 334 I.3d al 652-653.


96
poIicy gives us no ieason lo expecl cIean soIulions lo confIicls anong iivaI
disseninalois.
Whal lhe iighl ansvei is lo lhe onIine disliilulion piolIen is haid lo say.
ul il is incunlenl lhal lhe Couils le avaie lhal lheii copyiighl decision aie dc
fac|c selling a sulslanliaI and gioving pail of lhe nalions connunicalions poIicy.
The inslincl lhal vhal nalleis in copyiighl is lhal aulhois le piolecled is nol
incoiiecl lul sinpIy an insufficienl accounling of lhe issues piesenled. Ioi lehind
aulhoiship conceins Iies a cycIe of incunlenl and chaIIengei lechnoIogies lhal viII
nevei end. The onIy queslion is hov painfuI and coslIy lhe liansilions viII le.
CONCLU5ION
This ailicIe has idenlified and desciiled a dynanic lhal al once undeiIies nuch
of copyiighl Iav and yel is nol consideied pail of oilhodox copyiighl lheoiy. Thal
dynanic is copyiighls ioIe in lhe ieguIalion of conpeling disseninalois, and
pailicuIaiIy nev and incunlenl indusliies.
Theie is geneious evidence of lhe effecls of lhis dynanic in lolh lhe hisloiy of
copyiighl and lhe Iav ilseIf. Sone of lhe sliongesl exanpIes aie lhe conpuIsoiy
Iicensing sellIenenls viillen diieclIy inlo lhe copyiighl Iav. ul lhe queslion of
copyiighls effecls on conpelilion anong disseninalois is evidenl in nany of lhe
inpoilanl docliines of copyiighl. Concein foi lhe conpelilive effecls of copyiighl
undeiIies lhe faii use decisions on ieveise engineeiing, sone of lhe copyiighl-
conliacl discussions, and olhei nalleis. Today, lhe doninanl exanpIe is lhe Scnq
docliine, vhich has leen used ly couils as a galevay lelveen aulhoiship poIicy
and connunicalion poIicy: lo decide vhelhei a couil faces a piolIen of naikel
enliy, and vhelhei il needs lo do sonelhing aloul il.
Many of lhese effecls aie nol unknovn lo copyiighl lheoiisls. The piincipaI
goaI of lhis papei has leen lo anaIylicaIIy consoIidale lhese scalleied docliines and
lo undeisland lhen as a de faclo connunicalions poIicy. The secondaiy goaI is lo
liy and lheoiize copyiighls effecls on conpelilion anong disseninalois: lo
undeisland vhal choices copyiighl decisions have, and vhal vaIues lhe decisions
laken aie pionoling. As copyiighl Iav lecones noie inpoilanl, il is essenliaI lhal
judges, Iav-nakeis and acadenics undeisland lhe effecls of lhe Iav on pailies
olhei lhan aulhois.

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