EC's Reding: Government should act as broker for media downloads

In a speech delivered this morning in Brussels before the Lisbon Council, the European Commissioner for Telecoms and Digital Media, Viviane Reding, raised a point she's made before: that one reason piracy is so rampant on the Internet is because rights holders and media publishers have yet to produce a viable, desirable alternative for media consumers. This time, the phrase Comm. Reding used to describe piracy was "sexy."

But in a novel addition to her ongoing effort to produce a policy she calls Digital Europe, Reding suggested that her government could assist rights holders and publishers, enabling them to spend more time and resources developing that "sexier" alternative. Specifically, she proposed a system whereby the EU government could serve as the online clearinghouse for intellectual property rights covering the entire continent.

"We could facilitate the licensing of intellectual property rights for online services covering the territory of all 27 EU Member States," the commissioner stated this morning. "Today, right holders and online service providers need to spend far too much time and money on the administration of rights, instead of investing this money in attractive services. And consumers often cannot access online content if uploaded in another Member State. For online content in a single market of 27 Member States, economies of scale and consumer-friendly solutions will require a much simpler and less fragmented regulatory framework than the one of today. We had a similar problem when commercial satellite TV started more than 30 years ago. As right clearance for this per se cross-border service became increasingly complex, Europe developed the Cable and Satellite Directive and introduced a simplified system of rights clearance for the whole of Europe. I believe it is now time to develop similar solutions for the evolving world of online content."

Reding acknowledged the widening extremity of the gap between both sides of the intellectual property argument, between rights holders who compare downloaders to terrorists and pirates who flaunt their ability to pilfer terabytes of IP without consequence.

"In my view," she remarked, "growing Internet piracy is a vote of no-confidence in existing business models and legal solutions. It should be a wake-up call for policy-makers. If we do not, very quickly, make it easier and more consumer-friendly to access digital content, we could lose a whole generation as supporters of artistic creation and legal use of digital services. Economically, socially, and culturally, this would be a tragedy. It will therefore be my key priority to work, in cooperation with other Commissioners, on a simple, consumer-friendly legal framework for accessing digital content in Europe's single market, while ensuring at the same time fair remuneration of creators. Digital Europe can only be built with content creators on board; and with the generation of digital natives as interested users and innovative consumers."

Reding's history of legislation has been to give private interests a mandate to obtain a key business objective, wait for business to meet that objective, and then step in and take over the job if business takes too long -- to "take the thing in hand," as the Commissioner herself puts it. That was certainly the case last year when the EC pushed through the DVB-H standard for mobile broadcasting, despite European technology companies that were losing faith in that standard.

"It is...regrettable that we currently have an extremely polarized debate on the matter: While many right holders insist that every unauthorized download from the Internet is a violation of intellectual property rights and therefore illegal or even criminal, others stress that access to the Internet is a crucial fundamental right," stated Commissioner Reding this morning. "Let me be clear on this: Both sides are right. The drama is that after long and often fruitless battles, both camps have now dug themselves in their positions, without any signs of opening from either side."

With respect to the IP debate, the problem Reding faces is that member states continue to assert their respective patent and copyright systems, often making it impossible for an online service to negotiate the licensing red tape. This is often the case, for instance, when the publisher of a song is in one state, the rights holder in another, the performer in another, the Web site making the song available in yet another, the ISP in still another, and the Web user being anywhere else in the world. In a best-case scenario for rights management services, that could amount to seven transfers, all of which could legally be eligible for royalties transactions.

From Reding's vantage point, it's no wonder that some services such as The Pirate Bay flagrantly bypass the entire IP rights system -- not even legitimate services can make sense of it. A single live clearinghouse may give publishers the opportunity to try workable business models that may actually be affordable for legitimate consumers, while being innovative enough to compete.