Published May 24, 2008Every month, this column attempts to provide useful information about the music business. But while covering royalties and music publishing and tips on how to buy a van have immediate practical applications, my dear musician-readers contemplating this months topic are probably thinking, "What the fuck? As out-there as it may sound, net neutrality is three seconds away from being one of the Most Important Issues Facing the Music Business. Heres why.
Tim Wu, a professor at Columbia Law School, coined the term "network neutrality about eight years ago. He described it as a design principle of the internet: "The idea is that a maximally useful public information network aspires to treat all content, sites, and platforms equally. In the public forum, "net neutrality has mostly come to signify the principle that broadband carriers and ISPs must refrain from using their technical controls and their market power to influence how or when we use the internet. The nets fundamental protocols were specifically designed to ship packets of info without regard to provenance and content. Part of the reason why the internet has become, in the scant 20 years of its existence, the most powerful communications tool ever invented is because it is largely inherently neutral to both user technologies and to content. But the gateway to the net as well as its pipelines are controlled by private corporations, who have on occasion used their powers to censor content or to frig with competitors.
Here in Canada, weve seen Telus block public access to a website supporting Telus workers in a labour dispute against it. Not cool. Weve also seen Shaw (which provides telephone and internet services) charge its customers a $10 "quality of service fee for using competitor Vonages VoIP phone services. Also not cool. Lately, and perhaps most uncool, weve seen Bell Canada do away with unlimited access plans, steer new customers into capped plans and bump existing customers out of the unlimited access they already enjoy by any means necessary. Bell is not coincidentally engaged in "traffic shaping slowing down and restricting the pipe at peak or specific hours which has the immediate effect of choking traffic to file sharing sites and limiting peer-to-peer activity in general.
How is this a problem? For starters, BitTorrent is a legal site so legal that the hardly-groundbreaking CBC uses BitTorrent to make its TV series Canada's Next Great Prime Minister available for download. Another problem is that it kills competition among smaller ISPs, who buy their bandwidth from the pipe owners. If they start throttling the pipes, those smaller ISPs will be faced with a whole lotta irate customers through no fault of their own.
For the music business, the failure of net neutrality presents several big problems. Musicians are at the vanguard of digital distribution of music files, video files, and other space-gobbling content. Traffic throttling will almost certainly result in placing severe limitations on the amount and kind of content musicians can put out there and its pretty likely that musicians will then be forced into partnering with businesses that have fewer limits and greater access, no doubt for a fee, to get their gear online. Another issue is that, as covered recently in this column, we are seeing a whole new universe of music-related business models, and we need to see some predictability in terms of licensing methods and how artists and copyright owners get paid. One of the most compelling proposals is that P2P music sharing should be rendered commercially viable and copyright-legal by the imposition of a blanket license that would be paid at the gate (i,e., through the ISPs). Institutionalized throttling would take this plan out at the knees.
Another problem is that record labels, distributors and retail chains who are already in desperate jeopardy cant compete with ISPs and cellular providers who, having launched their own music stores, have all the incentive in the world to steer music consumers to their own services rather than open the pipe for folks to shop elsewhere.
What is to be done about net neutrality has until very recently been the subject of great and fierce debate at an intellectual level only. A few weeks ago, however, the Canadian Association of Internet Providers (CAIP) filed an injunction with the CRTC, asking them to put the brakes on Bells traffic-throttling activities. Among other things, the CAIP alleged that Bell is laying the groundwork for a tiered-access system, in which premium-paying customers would get access to premium content at premium delivery rates, while everyone else would eat poo. The CRTC refused the injunction, but agreed that there is a serious issue in play and asked both parties to provide more information so that it can study the impact of traffic shaping and eventually issue a rule or two.
"The CRTC has to determine what proper network maintenance means. Thats really the whole issue, according to Walter McDonough, General Counsel for the Future of Music Coalition (see Meet & Greet). "Theres a difference between the ISPS trying to get a handle on the network because it cant handle all these video files, as opposed to throttling the network to exclude content. Ten years from now, if the infrastructure is built up, they may be able to handle massive amounts of video. So there is a legitimate issue, but whats a legitimate way to handle problems with the network as opposed to simply excluding things? If you give someone unlimited power to throttle the network, thats also unlimited power to censor and to exclude.
The response of key players in the Canadian music industry is as yet unclear. "Its fair to say that many industry participants will wait to see what is in the new Copyright Act should it be introduced in the spring, to see what impact it will have on the issue, said CIRPA president Duncan McKie.
McKie is referring to proposed changes modelled on the American Digital Millennium Copyright Act (DMCA), which call for a much heavier-handed approach to interpreting what kind of content uses are protected by copyright. At the same time a Canadian DMCA would accord "safe harbour status to service providers to shelter them from a potential onslaught of copyright litigation provided they act quickly to block infringing and illegal actions on their networks. A Canadian DMCA could impact net neutrality by putting police power in the hands of the networks, while providing ISPs with strong incentives to prefer privately-negotiated content distribution deals over the chaos of user-generated traffic. The bottom line is that musicians have come to rely on the net as their number one go-to distribution and marketing tool. The net got that way by being neutral to all comers. Whether you were a platinum seller on Universal, or a couple of unknown basement-dwellers, your video had an equal chance of going viral. Without net neutrality, all the good pipe will get eaten up by whoever has the power to make the deal. Which sounds a lot like the payola days all over again.