--- Date: Tue, 19 Feb 2002 10:51:48 -0500 To: declanat_private From: Jonathan Zittrain <zittrainat_private> Subject: Eldred v. Ashcroft goes to Supreme Court Declan, The Supreme Court has granted cert in Eldred v. Ashcroft, taking up our challenge to the Sonny Bono Copyright Term Extension Act of 1998, which among other things retroactively extended the term of copyright for existing works by another 20 years, to 95 years. The case will likely be argued sometime next fall. See <http://cyber.law.harvard.edu/cc/> for a history of the case, though it's not yet updated to reflect today's decision. ...JZ --- Subject: re: back of the envelope copyright analysis Date: Wed, 20 Feb 02 14:36:31 -0600 From: Zimran Ahmed <zahmedat_private> To: <declanat_private> Hi Declan: As the Supremes looking into the constitutionality of the Sonny Bono copyright extension act, I thought you might be interested in a quick back of the envelope analysis I did not the cost of copyright on society. And while retroactive copyright extension clearly does nothing "promote the progress of science and useful arts", I also try to quantify what a "limited time" might be. At author life (70 yrs) +70 years, at 5% discount, the net present value of "limited time" is 99.9% equal to "unlimited time". All the best, Zimran ******** http://www.winterspeak.com/columns/022002.html The copyright tax Wednesday Feb 20th, 2002 Jim Valenti asked Lawrence Lessig "who does it harm if Mickey Mouse is under copyright for 1,000 yrs?" Lessig struggled to answer, but here's some math that points us in the right direction. Let's look at music sales. This year, $763M CDs were sold in the US, average price $15. Price elasticity for CDs (in New Zealand--all I could find on google) is -0.5. Assume it's the same in the US. Marginal cost for music (a la Napster) is $0 (note--this is marginal cost, not average variable cost, so chill out about up front costs). You do the math and come up with the following graph: Graph: http://www.winterspeak.com/cdtax.gif What does this mean? If music was available at marginal cost, total good to society would be $25,740M, all of it going to consumers. As things stand, society only gets $22,890M, split evenly between producers and consumers. There's a dead weight loss (i.e. money that's burnt to collect this "tax") of $2,857M. This means that market for music is $2,857M smaller than it would be in an efficient market. This is equivalent to a copyright tax rate of about 12% (income tax efficiency is about 20% I think). So, for CDs, you can claim each additional year of copyright costs society $2,857M in dead weight loss. But this is just for a single year. Copyright currently lasts for authors life plus 70 years (and counting). So, let's treat this as a 140 year annuity of $2,857M at a 5% discount rate. Calculating the present value gives you: 19.978 * $2,857M = $57,078M. This is the present value of the cost to society of a 140 year copyright tax. Coming back to Valenti, if this was increased to 1000 years, it would cost society approximately the same amount, since costs that far in the future are so deeply discounted they fall to zero (i.e. present value multiplier at 1000 years = present value multiplier at infinite years = 20). So from a financial standpoint, the length of copyright currently might as well be infinite, as it costs society approximately that much. This clearly goes against the "for limited duration" section in the constitution. So when someone asks you "who does extending copyright hurt?" you can answer "everyone, to a tune of about $3B a year just for music." You could also add that the economic length of copyright is currently essentially infinite. Any argument for extending copyright further is about control, not incentive to produce, since it's impossible to increase the incentive to produce any more. --- From: GerardPerat_private Date: Thu, 21 Feb 2002 08:38:46 EST Subject: FYI: Copyright Royalty Fees for webcasting To: declanat_private, politechat_private CC: ratkinsonat_private Perhaps your readers are interested in this. ref: http://www.loc.gov/copyright/carp/webcasting_rates.html Rates and Terms for Statutory License For Eligible Nonsubscription Services to Perform Sound Recordings Publicly by Means of Digital Audio Transmissions ("Webcasting") and to Make Ephemeral Recordings of Sound Recordings On February 20, 2002, the Copyright Arbitration Royalty Panel ("CARP") delivered its report recommending rates and terms for the statutory license for eligible nonsubscription services to perform sound recordings publicly by means of digital audio transmissions ("webcasting") under 17 U.S.C. §114 and to make ephemeral recordings of sound recordings for use of sound recordings under the statutory license set forth in 17 U.S.C. §112. (Read details on proceeding.) Appendix A of the report sets forth the royalty rates recommended by the CARP. Appendix B of the report sets forth the terms recommended by the CARP to govern the statutory license. The CARP report will be reviewed by the Copyright Office, which will recommend to the Librarian of Congress whether to accept, reject or modify the rates and terms set forth in the report. The Librarian must accept or reject the report no later than May 21, 2002. ------------------------------------------------------------------------- POLITECH -- Declan McCullagh's politics and technology mailing list You may redistribute this message freely if you include this notice. Declan McCullagh's photographs are at http://www.mccullagh.org/ To subscribe to Politech: http://www.politechbot.com/info/subscribe.html This message is archived at http://www.politechbot.com/ -------------------------------------------------------------------------
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