THE HARVARD LAW SCHOOL ASSOCIATION PRESENT: INTERNET LAW DISCUSSION

a transcript of Berkman Center professors Terry Fisher, Jonathan Zittrain, and Charles Nesson speaking at a Harvard Law School alumni association event.

MENDELSON: Yes. So I get to introduce the introducers, and so first of all, on behalf of Latham and Watkins I welcome you all to this event, another HLS.Net-sponsored event. . . . Alex [Macgillivray] is going to introduce our speakers, and all I will say further is that I had the pleasure of having dinner with our three distinguished speakers last night, and all I can say is I felt like as a first-year law student. (laughter) Yes, and that says Ė

MACGILLIVRAY: That bad, huh?

MENDELSON: Itís a pretty bright group, let me tell you. So with that, Alex Macgillivray.

MACGILLIVRAY: Thank you, Alan. First of all, I wanted to thank Alan and also Cathy Henry whoís also instrumental in organizing this event, and having our wonderful food. And now that I left Wilson, Sonsini I can say that our spread there was far insuperior to what was offered here. (laughter) And for making it so easy to for us to have this event here.

Ö. By way of introduction, the only thing I guess I will say is that these three professors are a main part of the reason that I went to Harvard Law School. Certainly part of the reason that the Berkman Center [for Internet and Society] is making waves in almost every single aspect of Internet law today, including at least, for me personally, being a rather elusive and intelligent speaker of what the problems of people are. And so they do that for almost everyone, in terms of the Internet space.

I wanted to just start the conversation by stating that theyíre here because of iLaw. So maybe, Terry [Fisher], if you can tell us a little bit about what iLaw is and why this group should really pony up some money to go next year. (laughter) . . . .

FISHER: So Internet law Ė the question is where did the Internet law program come from? So what do you say? Well, it's a five day, intensive course on Internet law. All aspects of Internet law. Its principal collaborators are the three of us plus Yochai Benkler, whoís now a faculty member at Yale, and Larry Lessig you all know, now teaching at Stanford. So the five of us are the principals, but as the programís evolved, we draw to each of our sessions various visiting folk.

It grew out of courses that we put together at Berkman Center--Charlieís original idea, as many things at the Berkman Center is Charlieís original idea, to teach courses online involving different aspects of Internet law. The one that I was most heavily involved in involved intellectual property in cyberspace. Shari Landry, in back there, was the critical person in launching two yearís worth of intellectual property in cyberspace courses. They got bigger and bigger and bigger, so I think the last one had about 1500 people worldwide for about a seven-week course.

So after we tried out this online mode of instruction for a while, using some of Jonathan [Zittrainís] software, I had the idea that it might be useful to teach a combination online and in-person course on all aspects of Internet law, not just intellectual property. Not just privacy, or communications regulation. Put them all together.

So the original theory was to have a six-week ramp up on online instruction, then an intense five-day session in person. Itís gradually become focused more and more on the five-day in-person phase.

So we taught the first one of these in Cambridge a little over two years ago. Weíve done one in Singapore a year and a half ago, then one back in Cambridge last summer, then one in Rio this march, and this is the fifth one here.

They have gradually evolved over time. The subjects have slowly changed. Thereís a good deal more in telecommunications regulations stuff now than there use to be. This one here, Larry Lessig, has taken a principal hand in shaping, so it has a different pedagogy than before. It seems to be working pretty well. I must say that itís just as exhausting as always, so by Wednesday night, weíre looking forward to Friday. (laughter) So that's a basically what it is.

MACGILLIVRAY: So one thing I noticed, having a dialogue, especially today, was a discussion about music. And I know to conduct competing plans to me. Professor Nesson, if you could talk a little bit, first of all, about your plan in terms of the future of music online and whether copyrightís dead, and needs to be (inaudible).

NESSON: Well, the last session today was one that Jonathan moderated, and it was Ė itís a tension between Terry and me. Terry, his major work, really, is trying to figure out what a new world of copyright would look like on the assumption that the existing world was kind of busted, and that the record industry, by reason of the peer-to-peer networks, is heading towards the tank. And Iím looking at that same problem, and I'm not quite ready to say that the recording industry is dead. In fact, my view of it is that they've just begun to fight, and are gaining both sophistication and the tools to do it.

So that was a kind of tension that Jonathan was exploring, and that seems like a good excuse to pass it to you. (laughter)

ZITTRAIN: I wish that they had started asking you guys (inaudible). (laughter)

NESSON: I should say that we had this wonderful dinner at Alan's house where this actually broke out last night and started, and we continued it during the day, thanks very much for the conversation we had at dinner last night, Alan.

MACGILLIVRAY: So the atmospherics of this conversation often take the form of Professor Fisher proposing his plan, and you critiquing and you critiquing and bringing up your plan. So I wanted to really push you, at least a little bit, to positively state your plan before Professor Fisher.

NESSON: All right. Iím not against Ė Terry Ė Terryís Ė heíll speak for himself, but his vision of the future is one that takes into account the downsides of the present system, and the positive aspects that Internet could offer a world of much more open information. His problem, as far as I see it, is how he gets there, and that means giving up, to a large extent, on where the recording industry, the movie industry now is in terms of the kind of protections they have.

My particular interest at the moment is in techno-defense, specifically the ability of the recording to protect its material online by a combination of legal attacks using the tools that the courts and the Congress are capable of offering. Spoofing. If you go to KazaA today and you try to download Justin Timberlake and the Black Eyed Peas ďWhere is the Love,Ē which is hot, hot, hot, you will get nothing but spoofs, and you can try very hard. Actually, I wonít say absolutely nothing but spoofs. After 45 minutes of trying, I finally got a real one.

ZITTRAIN: Is it Ė that's leading to Charlieís Law Review article ďWhere is the ĎWhere is the Loveí?Ē

NESSON: Where is it? (laughter) Exactly. And the third string in the bow is interdiction, which is not yet a reality, but which is right on the horizon, and that is the capacity of the recording industry to identify people who are offering copyrighted music through their shared files on KazaA and like networks, and take it. And take it at some volume and such intensity that no one else can get in the line.

So a combination of legal approach, spoofing and interdiction, I think, is very likely to be enough in the current state of the cyber warfare between the peer-to-peer networks and the proprietary forces, to create an environment in which there will be a serious inducement for loads of people to look for more convenient ways to get music.

And in the environment where I-Tunes is coming along, and other business models are coming along, which are offering much more realistic ways, realistic in the sense of expectations of users to take music, I think there's a real opportunity for the music industry to push people back, away from the idea that music is something that you get for free to something that you get for cheap.

Now thatís in tension with Terry. Terryís got a model that, I donít dispute, would be better if Ė I know, thereís problems with it. I donít want to invalidate his particular model, but the direction heís going in is full of really good thought about how things could be improved by the Internet. The problem is getting there means killing the existing system, and so weíre in a little bit of tension, because I'm thinking the existing system has got more life in it than a lot of people are giving it credit for at the moment.

Itís sort of like the idea that the RIAA and the MPAA are just kind of getting up to speed in terms of sophistication to the point where they can put on a real coordinated combined legal and techno fight.

PALFREY (Executive Director of Berkman Center): Iím not confident if youíve answered yet how this discussion works. What is your plan? To get this three part strategy to where it succeeds. Where will we be? Would we be better off, or would we just have chaos?

NESSON: I have to say, that at the end of today's session, a guy named Jeremy Williams, whoís the lead IP counsel for Warner Films, made a statement that makes a lot of sense to me. He basically said, it's possible to think of these things in black and white terms. Either we reestablish the old environment just as we imagined it, or we imagine crushing it and going to a new environment. But itís also possible to imagine a kind of process where we recognize itís techno-warfare. Thereíll be some progress here, thereíll be some games, theyíll be some this. That it's a transitional kind of enterprise.

PALFREY: Transitional or Ė(inaudible)?

NESSON: I Ė I donít know. I mean, I love Ė Iím going to pass back to you. I love his celestial jukebox. It makes sense in terms of the efficiencies of how you can use the medium. I think that itís just a challenge that everyone sees that thereís got to be better business models than exists now. The problem is that getting to them means that there are lot of people who have established stakes, established self interests that somehow need to transition to the future. And if it takes some time to do it, and if thereís some back and forth rather than a sudden disruption, that seems to me to be a reasonable thing.

I am not a moralist in this. One of the questions I like to ask is Ė and I asked this today of a guy named Fred Lohman, whoís EFF. If you could snap your fingers and eliminate all illegal file sharing, at no cost to anybody and no imposition to anybody, would you do it? Itís kind of the question of are you a copyright radical or not.

ZITTRAIN: Which is the copyright radical position?

NESSON: Yeah, yeah, yeah. (laughter)

MACGILLIVRAY: Once again, Professor Nesson is not the radical, is NOT a radical. (laughter) So Professor Fisher, how do we avoid the war of the Black Eyed Peas, and more importantly, how do I get my crystal clear Justin Timberlake song while still making sure that Justin has enough money?

FISHER: Well, the context of this is that there has been, as Iím sure all of you are well aware, an intensifying crisis in the music industry for the last two or three years, and itís beginning to engulf the film industry. So the same disease is beginning to affect film.

Iíve been mulling over this problem for the last couple of years. Wrote a short piece on this three years ago, and for a conference that Berkman organized, and then have been gradually building on that piece of writing into whatís now a book draft that I hope to finish by this fall. The first half of the book is a diagnosis of the crisis, and the second half of the book is a series of three alternative remedies that, in my view, are gradually more radical and better.

So what Charlieís focused on in these remarks, and actually last night and today, is the last. The third of the three alternative models. I should say parenthetically, that itís quite interesting that for a substantial period of time, I, like many other people, have observed Charlie as regularly in the position of on the edge. Charlie is knocking over the idols, pushing the boundaries of the possible. And to have outflanked Charlie on the left, to me, puts me in an amusing, satisfying position (laughter) (inaudible) for a change. (laughter) So Iím going to have to say I enjoy it. (laughter)

So these are Ė the tail end of this book, the back half of the book, involves three different models of how the music industry and the entertainment industry in general can be reconstructed.

The first of those models involves more effective definition and enforcement of property rights, and the catalyzation of a new set of business models that are only feasible in the shadow of strengthened property rights, which I actually think would be a better situation than we currently stand.

So Charlieís recommendation emerged with growing intensity in the last couple of weeks. Theyíre actually fully consistent with Chapter 4 in my book, the first of these models, and thereís a series of sketches of business models in that chapter consistent with intensified, more effective enforcement of the prohibitions of peer-to-peer copying, of which I think you could probably say the Apple I-Tunes initiative is a lead example.

So I donít think it would be terrible to move in this direction. Actually it would be better than where we currently stand. But it would be unfortunate, on balance. Better than where we currently are, but far less good than the place we could be.

So in particular, Charlieís solution, the record companiesí salvation, if it were implemented, would re-enforce, solidify, stabilize, preserve for some substantial period of time an arrangement in which music continues to be sold through sales of individual objects containing individual songs.

Now, the objects might be CDs, they might be DVD audios, they might be individual downloads. But sales of things, which in my view, is less desirable than a world in which all of us have unlimited access to the world of the entertainment in convenient digital form, and pay flat fees for it. Thatís a much preferable state of affairs. And itís possible to construct such a state of affairs in a fashion that will not only preserve, but even increase the revenues enjoyed by creators, on one hand, while reducing dramatically, but cost paid by consumers at the other, and reducing, not eliminating, the role of the intermediaries to control the repertoire of the musical so-called products available to the public. All of those are feasible. They wonít happen if we stick with and reenforce using the tools of the either copyright law or technology. Theyíre distinct business products.

So I wonít pause to talk about the second of the two approaches, the intermediate one. I will instead talk about the last. The last is the one that generates the most Ė some people inspired enthusiasm and others inspired resistance.

So the last of the suggestions that target much of Charlieís criticism, contemplates a government-administered tax and royalty system that would combine four activities. One is registration, in which the creators of entertainment products would voluntarily register them with the copyright office and receive in return a 10-digit, unique, file number that they would include in the name of digital files circulated on the Internet. Thatís step one. Step two is a taxation system imposed upon the gizmos, the electronic devices used to gain access to digital entertainment, plus broadband ISP access, specifically a tax of approximately $4 per month on top of the fee being $40 paying for much of the broadband access.

If you combine those things, and surprisingly enough, you would have about $2.5 billion. What would you do with the $2.5 billion? Well, the next step is you count the frequency with which digital products, songs or films, are being consumed, and then you distribute the money in proportion to the frequency of consumption.

So itís a government-administered tax and royalty system that preserves the central principle of the American entertainment industry, which is a consumer sovereignty. You make as much money as consumers value your product. It is driven by consumersí taste, not government administratorsí judgement concerning the merits of particular ventures. But it processes the money, not through sales, this is a mandatory taxes, and then smorgasbord-style, eat as much as you want consumption. Thatís the central idea. And Charlie is right in observing that implementation of it, more particularly, getting it adopted by Congress, would be quite challenge.

And so much of my work recently, in trying to refine Chapter 6, which this proposal embodies, is preparing, and conceivably implementing, through the Berkman Center, a plan for a demonstration project in which you establish, on a voluntary basis, such a system, not initially through government edict, but through a subscription model, in which a sizable group of artists are persuaded this is the wave of the future, and persuaded to volunteer to place their works into the portfolio, and an appropriately sizable group of consumers are persuaded to subscribe, to pay voluntarily for the subscription fees, rather than involuntarily in the form of taxes for the right to participate.

Critical mass is the main objective here. You have to have quite a sizable group of artists and quite a sizable group of consumers to get it off the ground. But once off the ground, if we can show that it works, and is superior to the existing copyright system, then it may be plausible to persuade another national government to adopt it as an alternative to the copyright system. Once in place, then you lift the copyright law as applied to online distribution of music. You replace the current system altogether. So peer-to-peer systems, download systems, the celestial jukebox, which is interactive streaming, will all be lawful. The net result is, artists make more money than now, consumers pay less. They get more music and more films more cheaply, more conveniently.

MACGILLIVRAY: And why arenít you still worried about free-riders?

FISHER: In the intermediary voluntary model, I am worried about free-riders. Thatís one of the advantages of a compulsory government system is it doesnít have free-riders.

MACGILLIVRAY: So maybe you could use Charlieís techniques to police that.

FISHER: To kill the free-riders.

MACGILLIVRAY: Kill the free-riders. (laughter) But I mean, even in the place where youíre getting to, what happens to the people who want to ride free, either by not having a broadband connections, or getting their broadband connection somewhere else.

FISHER: Definitely public, if itís a voluntary contribution system. On this, however, I have some faith Ė I cling to two facts that give me some hope for the plausibility of a voluntary system. The first is, the amount of money at stake is quite small. Four bucks a month, in addition to your $40 a month broadband fees, will get you unlimited music and films. This is when the systemís fully operational. In the ramp-up stage, when the repertoireís smaller, thereíll be smaller fees. Not a lot of money. That's one fact.

The other fact is many people polled during the height of the Napster boom responded that if they were confident, one, that the money would not be exorbitant, two, that it would go to the artists, they would be happy to pay a modest subscription fee to participate in Napster, which was the then dominant system offering unlimited access to digital entertainment.

So I think actually that people now would, a sizable group of people would, enough to get the system off the ground, would pay modest subscription fee, for the right to participate in the system and gain convenient access to music that they could obtain for free elsewhere. (inaudible) Charlieís (inaudible). You go.

QUESTION FROM AUDIENCE: What kind of intrigues me about your system is that everybodyís paying the same, so in essence, the people who donít really use this pretty much and thatís the reasonís itís so cheap, underwriting all the people who do use it. Right?

And I guess what I wonder about is how do you sell that, because, in essence, what you are doing is in a world where nobody wants to pay taxes for essential social services, youíre getting those same people to underwrite the music usages of a 14-year old on a Napster basis.

FISHER: Itís definitely true. Big cross subsidizes is the way an economist would describe it. Thatís right. And associated distortions associated with such cross subsidies. Now, we tolerate such cross subsidies in lots of other circumstances, the simplest one, the glaring example, in property taxes and school funding. So itís all over the place. But still, compared to the current model, more cost than it's worth. So why would people be willing to accept it nevertheless? Because the cost savings are huge. . . . It's true that that many people would be paying more than what seems their fair share if they interviewed their neighbors. The cost savings, made possible about the system, should, I think, make most people tolerate it.

QUESTION FROM AUDIENCE: I donít quite understand how the math could work. When you ask the record industry is getting more than theyíre getting now. If the average household on average is spending at half as much, how do you generate enough to pay off regular stuff.

FISHER: Thatís a very good question. Well, in part because, weíre quite quickly going to get to the point where Iím going to say go to Tfisher.Org and read Chapter 6. (laughter) But not to punt too quickly here. It turns out that of the $18 suggested retail list price of a CD in the United States, you could save through Internet distribution of unencrypted files approximately two-thirds of that cost.

So you remove from the system approximately two-thirds. Now, Iíve described an arrangement in which the first year, youíd save 90%. That's a transitional situation. It would Ė the cost savings would diminish, meaning that you would rise the level of paying one-third of which youíre currently paying for entertainment rather than one-tenth. Still, it's only one-third, and you get vastly more, so much more.

DAVID HORNIK (AUDIENCE): We were investors in Listen.com, which builds the celestial jukebox, and we have taken the same surveys and we determined the same thing, that people were willing to pay a reasonable price to have access to everything in a reasonable way.

MACGILLIVRAY: Itíll cost you a lot more than it cost Terry, though. (laughter).

HORNIK: Yes. No. I cannot go to jail. Yes, we discovered that, thatís partially true, and in fact, real numbers just (inaudible) the company, and theyíre betting on that being the case. But what I think we also discovered in connection with Listen, and what was made available by record companies to listen versus what they made available to Apple with, as far as I-Tunes, is that having access to Listen online is insufficient. That as you say, unfettered access is what people really want, and they're willing to pay for unfettered access, but theyíre not willing to pay for fettered access for streaming at sub-optimal bit rates and all that stuff.

Iím not convinced that we need a legislative system. I had recently a conversation with the gentleman who had the unenviable job of being head of digital rights management for all of Disney, and he is supposed to herd music and big film, MTV into some conclusion about what they should do with respect to digital rights management.

And what I reminded him was that after a relatively period of short time ago, when someone proposed something very radical at Disney Video. Which was to make a video, a childís video, available for $19.99 as opposed to the $60 that they were charging. And she was heretic at the time for proposing it, but they let her do it for one title for some short period of time. And the number of videos they sold was massive, because there wasnít Ė it turned out there was incredible hype Ė price discrimination, and it became the model that saved Disney by re-offering low-priced videos en masse.

I went up, and the message I gave to him was, this is a digital media. There will always be people who are willing to pay for the convenience and for the quality of service, and there will always be people who have more time than money and would be willing to work around. Use this efficiency as the net, the two-thirds cost savings, which will increase over time, to make available unfettered access, and let the business model evolve. And that will make more money. More stuff will be distributed. Some stuff will be stolen, as we experience with software, but ultimately, it will be a healthier system, and there will be new forms of distribution, new revenue sources, etc.

So I actually think thatís the most radical, because itís basically saying, look, just let the cat out of the bag, and you'll be OK. Right? There is no one in the industry willing to say, yes.

Now this gentleman, in a conversation, one-on-one, was willing to say to me, yes, I get it. Iím with you. But they are not. Right? When I talk to the movie folks, it scares the crap out of them. When I talk to music people, they are hoping that most movie folks think see what it did to us.

So in any event, but I do think that, the efficiency of distribution is the answer (inaudible). The ability to tap may give them some more comfort that theyíre not going to lose money, but my strong suspicion is that by simply making it available in some reasonable form that they will increase the amount of money they make up increasingly.

FISHER: Yes, itís conceivable, in which case, what I describe is the transitional demonstration project, may not be the transitional demonstration project. It may demonstrate so well that you don't need to fold it then ultimately into a legislative solution. You just let it survive on its own as a new business model.

HORNIK: Yes, I think thatís possible. I think it would be especially likely to unfold that way if the person supplying the entertainment is not an intermediary with all of the baggage that the intermediaries are now carrying, but is the original creator. Itís easier to locate the original creator in a music contest than in film, but still, itís a more advantageous position presented (inaudible).

MACGILLIVRAY: So that brings up a good point. So we have two panelists who are arguing very strongly with each other, and we have one other panelist whoís been arguing very strongly with himself about the digital rights management question. So maybe if you can direct Ė

FISHER: Actually, Jonathan has been arguing in a way that relates to Google.

MACGILLIVRAY: Yes. Certainly, he could present that but (inaudible) (laughter).

ZITTRAIN: Oh, I see.

MACGILLIVRAY: So actually, why donít you start with Professor Nesonís question, and then you could make a move into Google.

ZITTRAIN: Well, hereís how I try to tie them together. Itís by the way, amazing. It feels just like a classroom that no oneís in the front row of course. Thereís a front row of seats so that there can be a second row that people can sit in otherwise (inaudible) together.

MACGILLIVRAY: Itís even more like a law school classroom because there are tape records here.

ZITTRAIN: Thatís right. What strikes me most when I see terry's presentation as we the full bore of it today, bore as in full bore, but as in Ė (laughter). Let me just be clear. (inaudible) (laughter) Well, they do say puns are the lowest form of pastry. (laughter) So anyway, what strikes me is that the amount of money at stake is $1.2 billion. And that's still, Dr. Evil aside, it sounds like a lot of money, $1.2 billion a year.

On the other hand, the making of The Lord of the Rings, $300 million. Right? Thatís one movie, which was a decent movie, donít get me wrong, but wow. Worldwide shopping cart theft, how much per year? $800 million in stolen shopping carts. And yet, somehow you donít see the relative subcommittee of the committee of Congress convening a hearing and saying, what are we going to do, they're sucking us dry as they take our shopping carts away.

And it just leads me to think that one of the most interesting aspects of Internet law is how much it represents the collision of the mercenary and the spiritual. A collision of information as idea, as shared culture, as the building blocks of a free society, and information as commodity, as a thing you buy and sell, and harness to drive the revolution. Right? .COM is, in large part, treating the stuff as stuff as you buy and sell, or at least are able to put some price tag on in an ad model, so that you moved product. And what weíve just been witnessing is the collision of these things.

And so many of the problems are problems for us because our intuitions get pulled in both directions. We support property. I mean, we were founded on property rights. The business of America is business, and at the same time, we support free speech. It seems to most of us wrong that the Girl Scouts, should even in theory, have to pay to sing a song around a campfire. It just doesn't make sense, despite the admonition of the COO of ASCAP, which was they buy twine and glue for their crafts, they can pay for their music as well. Which was very quickly followed by a press release: ASCAP clarifies position on music in Girl Scout camps. No, no, no, we didnít mean that at all. A dollar a year they can pay us just to show that they do owe us, but not a lot.

So anyway, itís that collision that I think is providing so much of the energy in the field, and the energy here in the music debate as we see the, I guess, punitively, the lefties among us saying itís all about freedom and speech, and I want to be able to create derivative words. And even copy other peopleís work. Itís not hurting anybody. Iím just sharing it, and they keep it, and I get it, and how is that stealing, with the idea that itís taking money out of peopleís pockets, and this is the engine that has been driving the advance.

So the segue over to the Google is, Google is both a cultural phenomenon right now. Itís the site you love to love, and at the same time, it's business. And as a business, it is entitled, expected to make private decisions about what to put in its index and what not, and let the market discipline it. That's the way we let businesses rise and fall. Any other way seems wrong and inefficient.

But when you see that Google, in its discretion as a business, is accepting phone calls collect from the German government. We don't know who within in the German Ė [cell phone rings] Öthat's probably the German government calling right now. But within the German government, somebody calls and says, hey, get rid of the following sites in Google.de, which is where you are redirected if you are in Germany and ask for Google.com, and Google does it.

And do we know what sites are missing? Well, we can play 20 questions. Thatís what we did to some consternation of Google, asking Google.com and Google.de for whole bunches of sites, and comparing the lists with the discrepancies. But itís kind of funny that weíre treated as a natural phenomenon that has to be elicited with data when, if Alex felt like it, he could just tell what they wonít. Come on Alex, tell us.

So that to me is part of the interesting thing. And I donít mean unduly except maybe for entertainment purposes, to single out Google. They are largely the good guys in this. Theyíre trying to muddle through, and it's just not at the top of their list as a business to sort out the free speech implications of filtering out some white supremacy sites from the German version of Google, but you see it repeated again and again.

The Intel v. Hamedi case just came down, argued by Bill McSwain, an alumnusÖof my Internet and Society class. [Spoken to Terry Fisher] I donít know if he was in your IP class. He learned about the case in the class. Did a clinical in the Berkman Center clinical program, which he helped write an amicus brief, and then by the time he was out of school, Ken Hamedi was really looking for a lawyer, having alienated his previous lawyers, and Bill took him on, and Bill actually argued this in front of the California Supreme Court. I think it was his first oral argument ever anywhere, and he won. So we were hoping that that trial would work for Larry too. (laughter) But that didnít help as much, that it was his first time. So Ė I think it was his second. He had done the Court of Appeals.

So anyway, thatís to me what part of the fun is, and it is to me a really deep question, this collision between what we know and trust as the market, the commodity, and it truly is. It isnít just speech. It is a product. It is something that you buy and sell and label and more power to it. And the speech as something that seems so much more fundamental still to life than the products you put into a shopping cart.

MACGILLIVRAY: So maybe you can give just a little bit more background. I donít know if everyone has seen the Intel-Hamedi case. It might be worth just giving us sort of a short description of what was there so we can (inaudible). Has everybody seen the Intel/Hamedi case. Yes. OK. So forget about it. If you havenít Ė

FISHER: How did you know? Did they just commune with you?

MACGILLIVRAY: No, a few people said no.

FISHER: OK. Well, why donít you share the background on that case.

ZITTRAIN: Right. So Ken HaMedi used to work for Intel under something of a cloud, disputed circumstances. His full-time job appears now to be pestering Intel and telling them how bad they are. He created a Website, among others, called FaceIntel.Com, which details all sorts of allegations about Intel being a bad employer. And it turns out not many people visited FaceIntel. It was sort of a very niche kind of interest site. And he started e-mailing his former colleagues at Intel with updates to the site. And he said, if you don't want to be on my list, let me know, Iíll take you off my list. And by all accounts, when people e-mailed him individually, he did take them off the list. He then got a note from Intel that said on behalf of all the employees at Intel, please take us all off your list. And he declined.

And, of course, Intel, not wanting to tell their own employees, you are no longer permitted to go to this site, or to receive e-mail from him, because, of course, it would then become the hottest property in Intel, tried to stop Ken through technical means from sending these newsletters. It was about four times a year. It's not like an everyday spam advertising Nigeria banking dollars.

And Ken found ways around it. He changed his AOL account from hotpants14 to 15 and suddenly the filter was broken. (laughter) And then it went over to the lawyers, which brought suit in California State Court for trespass. Trespass to chattels, interference with the chattel, which is the e-mail server, even though, of course, there is no appreciable load on the server that it can't handle. Nothing goes slower because of Kenís e-mail. So in a way, it seems to me, the actual trespass to chattel in question were the employees. Youíre ruining our employeeís concentration. Youíre burdening their time. The employees are our chattel and you are messing with them. Stop it. (laughter) But they didnít make that argument (inaudible) fortunately before the court.

So anyway, the district court and the appellate court had the idea that this was trespass and Ken was injuncted, if I can say that as a verb.

NESSON: Enjoined. (laughter)

ZITTRAIN: Thank you. Ken was enjoined in the form of an injunction from going to any computer in the world, and in the two fields, putting any address @intel.com. And that was the case. And it went on appeal, and 4-3 California Supreme Court actually said, it ain't trespass, because itís not actually burdening the computer. And there were some speech interests in here we actually think were significant.

.... He actually chartered the Pony Express to deliver boxes of the e-mails to Intel. Heís a master of publicity. His motto, I think, is the price of Ė what is it? The price of freedom is eternal publicity. (laughter) So he chartered some horses by Pony Express to deliver the e-mails, which were accepted by the guy at Intel, the security guard who promptly threw them all away.

MACGILLIVRAY: So before I open it for broader questions, I wanted to introduce John Paltrey, who is the executive director of the Berkman Center right now, and put him a little bit on the spot. You've got a group here that you can now introduce to, and a group that certainly asks me and asks it themselves, what can we do to help, what can we do to help the current Berkman projects? What can we do to help current Berkman students? Obviously, Anders [Yang] tells us all to give some money, but other than that, what can we do.

NESSON: Let me turn the question around, HLS.Net, that seems like a wonderful thing to me, the idea that thereís actually a group of Harvard Law School graduates who are technology focused out here, what can we do to help you? I mean, it seems like an amazing thing that you exist and Iíd love to see you exist more and somehow flourish. And Iím sure that there would be mutual benefit in it somewhere. I donít know exactly where, but Ė

MACGILLIVRAY: So I guess the first thing to say is that the Berkman Center already does helps us host the HLS.Net site. Provides us with resources in terms of programming and space. Itís very useful, and that your being here today is a big help to us to try to build up our membership and give them interesting things to do and see, and if anybody else has any questions, getting those questions answered might be a big help.

EHRLICH: I would say to your point, Charlie, that serving as a bridge between the students and the professionals that are out here would be helpful, because I think there are a lot of people, when I was in law school, in terms of people who work in this field, who work in telecommunications, or technology areas, is very difficult to make that connection.

So one of the things we really want to do is provide that resources for actually establishing the (inaudible) database of the people who work in the area, not only just for people who work here, but also students, for example, who want to come out, who are interested in talking to alumni, who are general counsels for academia, or work for law firms (inaudible) technology.

So to the extent that you can promote awareness about it, make people Ė let them know that there is this resource that they turn to for advice, or contact for information. That would be, I think, extremely helpful.

ZITTRAIN: Even in a downturn, we need fresh chaplains.

NESSON: You mean, like a segment on the [Berkman Center] Website thereís a HLS.Net interviews or, I donít know, something like that.

EHRLICH: But we have that, actually.

NESSON: We will.

EHRLICH: We have our own site which is being hosted there. But that kind of stuff, we have profiles and interviews, and so weíll, Iím sure, be hitting up each one of you before that. But just knowing that youíre interested in doing that is great.

NESSON: Hey, Iíd say weíre open.

MACGILLIVRAY: Does anyone have any questions?

QUESTION FROM AUDIENCE:: I was interested in the most radical, third part of your model, the one that would involve taxation, sort of the governmentís involvement. How would you structure it so that people who have privacy concerns would not feel that they were somehow being tracked or traced every time they did purchase something Ė or not purchased, but every time they took some art off the celestial jukebox.

FISHER: Well, the rough idea, the implementation of itís a little tricky, but the rough idea is that a system of this sort detaches payment from consumption, so that it's Ė suppose that you consume 20 Brittany Spears songs and you donít want the world to know.

NESSON: Why not?

FISHER: Thereís no reason for the system to know that. All it needs to know to appropriately compensate Brittany Spears is that 20 of her songs were consumed by somebody. So thereís no need in the system to monitor any individual consumersí behavior. So the counting would be done at the level of the provider.

So if you downloaded your 20 Brittany Spears songs from Brittany Spearsí Website, she would keep track 20 downloads and just report that to the appropriate agency. If instead you obtain them through a peer-to-peer network, like KazaA. KazaAís already volunteered to provide to an appropriate tribunal a list of what songs are taken, and with what frequency.

AUDIENCE: My question is, does you system extend to pornography?

FISHER: Does my system extend to pornography?

AUDIENCE: Yes.

FISHER: It encompasses anything. It's consumer driven.

AUDIENCE: So you are imagining a national tax system that supports pornography.

FISHER: That's the current copyright system.

NESSON: Iím not calling my opponent a pornog! (laughter)

FISHER: Exactly.

EHRLICH: What if you flip it around? What about lawful intercept of sort of tracking it for law enforcement interests to actually want to track communication. Youíre now, in theory, taking Ė al-Qaida could put a CD of bombing plans, and make it available to people, and all of a sudden, youíve got this centralized system. Itís untracked completely, and letís say youíre law enforcement. But if you want data to track, whoís downloading bomb-making plans from al-Qaida, youíre now, in theory, putting the service provider, where you said, I thought you said was that the service providerís a choke point in terms of maybe tracking mechanism, but it doesnít fall under CALEA. Do you change the law now to accommodate lawful law enforcement interests?

FISHER: Well, do you change it. I thought youíre going to finish your last sentence exactly the opposite way. Do you change the law so as to ensure that under this regime, the gathers of the information donít provide to the government information concerning whoís consuming this. That would seem to be conceivable and appropriate response to the privacy concern, rather than the Ė

EHRLICH: No, I was flipping it. Iím saying, think of law enforcement interests in this case, not just ensure privacy, but how do you insure that law enforcementís able to carry on their goal in this system, which is now, in theory, unregulated, or completely doesnít track movements at all, but law enforcement feels the need to be able to track whoís downloading essentially that information. You go to get a handle on it, but thereís no law governing it, because it would fall under Killea.

FISHER: Well, in this sense, it wouldnít be, as a practical matter, any better or worse than the current arrangement, and my sense is, if I suppose, one wanted, for reasons completely independent of copyright law, to tilt the opportunity for surveillance in the government's direction, one could under this system, or one could in the absence of this system. But that seems to me orthogonal to the copyright question.

Now thereís a different problem latent in this system. Itís actually related to your question earlier on. Is to the extent one is counting just the provision of copies. Thereís an incentive in this regime for ballot stuffing on the part of the artists Ė have an interest in exaggerating the frequency with which their works are downloaded. That's tricky to deal with from either a legal or a technical standpoint.

Itís actually, computer scientists and Ė one of the great things about the Internet, hereís just an anecdote. Because Iíve posted the Ė there's actually currently a draft of the chapter that contains this idea on my Website. And it talks about it at a couple of different places. But I basically left it on my Website. I get about five e-mails a day commenting on it.

Now, four of those are unhelpful, meaning that they say things Iíve heard before. But typically some have some great new ideas. And so some computer science graduate student in Australia e-mailed me recently. I am (inaudible) discussed to the ballot stuffing problem in the chapter, and wrestled with some not terribly satisfactory solutions to it. He's got a great technical fix, or at least what seems at first blush to be a technical fix.

So the opportunity for getting input and refining ideas by just making them available for a while, anyway, on a Website, seems quite valuable. Anyway, that's a problem. The ballot stuffing challenge is an issue that has to be addressed, either with legal prohibitions, analogous to the security laws, or a better technical solution that would detect Ė

AUDIENCE: Apart from technical ballot stuffing, would it be OK in your view for basically 21st century payola where a record company says download the latest song, which contains the secret word of the day, with which you can enter the sweepstakes to win a new Mazda. At that point, everybodyís downloading because they want to just hear the secret word of the day.

FISHER: Well, it would be quite hard to prevent, but no, it seems to me to a distortion of the system. What the system ought to be doing is tracking the consumption of entertainment Ė

AUDIENCE: For its own sake?

FISHER: For its own sake. Because the goal is, the underlying goal is to approximate a world in which artists are paid in portion to the demand of consumers for their creations. And this is a distortion of it. Now, this suggests two things. The first is, itís an approximation, but on the other hand, the current systemís only an approximation of the ideal consumer cyber deal.

The second point is, for some reason, Jonathanís completely into payola today, so I made a comment about payola in a lecture this morning, and since then, variations on the theme of Ė letís see, who gets to bribe whom under this regime. (laughter) I mean, yes. (laughter)

AUDIENCE: It sounds an awful lot like a utility. So another model is where you merely license the content. (inaudible) buy broadband services, and then allowing them to activate a signed compact with the copyright holder who then determine how then to distribute a (inaudible). So then you have limited type, but still donít have a government entity actually operating publicly, figuring out the size of the pie and how it should be (inaudible).

FISHER: Well, this is actually interesting. I thought you were going to say something slightly different in which case, I was going to have a quick answer, and say, oh, that's Chapter 5. That's (inaudible). (laughter) But actually, no, this is a different model.