It is a peculiar world indeed, where I find myself agreeing with Henry Ergas, but this report of his and Allan Fels' submission to the recent copyright discussion indicates that they have taken a very sensible approach!
Perhaps we will get back to a rational discussion where interests are balanced and considered, rather than one where the interests of a small group of copyright holders override any other consideration...
-- Stephe
From CommsDay 12.9.2014
Ergas, Fels blast gov’t copyright proposals on economic grounds
A pair of well-known economists have attacked the federal government’s proposed online copyright protection regime on economic grounds – arguing “significant” social costs balanced against “dubious” community- wide benefits.
Professors Henry Ergas and Allan Fels prepared a submission to the government’s discussion paper for the digital policy group of the Australian Interactive Multimedia Industry Association, which represents firms like Google, Yahoo and Ebay as well as other digital content, services and apps companies. They took what they described as a “law and economics” perspective instead of a purely legal approach to the issue, analysing the potential costs and benefits for the broader Australian community rather than just impacts for copyright owners and ISPs.
“The implications of the government’s proposals are not clear‐cut, and they may in fact lead to greater legal uncertainty,” said Ergas (pictured) and Fels. “And the economics of copyright are such that the proposals are not likely to reduce piracy, and instead may lead only to increased costs for Australians which significantly outweigh any theoretical benefits to copyright holders.”
The duo noted that the proposed new regime would essentially require service providers to “police
their customers’ copyright infringements,” adding to their regulatory burdens. They argued that proposed extension of authorisation liability would make ISPs more likely to implement termination policies – with associated risk of erroneous terminations, imposing costs on consumers. And they said that, in placing at least some of the costs of copyright protection onto ISPs and shifting them off rights holders, the proposals risked creating “an incentive for rights holders to over-use measures, including triggering them in many low value cases” – creating inefficiencies.
On the benefits side of the equation, Ergas and Fels were less than convinced. “A fundamental proposition in the economics of copyright... is that the gain to rights holders, from stricter enforcement of copyright on works that already exist, is less than the costs that stricter enforcement imposes on all parties, including consumers of the illegal product. Therefore, there is no net benefit to the community as a whole from enhanced enforcement unless the prospect of higher income sufficiently increases the incentive to create and distribute new creative works,” they said. “Although the government asserts there are reasonable steps ISPs could take which would reduce piracy further, and refers to overseas graduated response schemes, it presents no evidence for its assertions and does not report on the effectiveness of the measures adopted overseas.”
“The balance of evidence is that actions against illegal downloads have produced small and sometimes quite temporary boosts to legitimate revenue streams.”
“Whether stricter enforcement is desirable depends on whether the benefits from potentially increased incentives to create exceed the almost certain costs of inefficient consumption and the additional regulatory burden of enforcement. More protection is not always socially beneficial – the incremental costs and benefits must be weighed up,” concluded the duo. “Indeed, awareness of this balancing has always been at the heart of the copyright regime... however, the government’s proposals do not appear to be based on any such careful balancing. Their costs are significant while the community-wide benefits are dubious – it is not clear whether the proposals will do much to reduce piracy and significantly increase the incentives for creators. Certainly the government presents no evidence that the proposed polices are likely to produce net benefits.”
“The government’s review should therefore focus on the wider question of whether there is a case to be made for increasing the degree of copyright protection... the government needs to identify and weigh up the costs and benefits of introducing a stricter enforcement regime and assess each of its policy proposals accordingly.”
via Petroc Wilton, CommsDay
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