Inside the Recording Industry's New Antipiracy Campaign

Thursday, April 12, at 12 noon, U.S. Eastern Time

Cary H. Sherman is president of the Recording Industry Association of America, by far the largest trade group representing American record companies. Before he joined the RIAA, Mr. Sherman was a specialist in intellectual-property law for Arnold & Porter, a law firm in Washington, D.C. Under his leadership, the trade group has designed an aggressive campaign to curtail music piracy on campus networks, and has appealed to lawmakers for help in recruiting colleges to fight illegal music downloading.

A transcript of the chat follows.

Dan Carnevale (Moderator):
    Welcome to today's Brown Bag. The file-sharing issue has been a hot topic for years, and I'd like to thank Cary Sherman for taking the time today to answer your questions and respond to your concerns.

Without further delay, let's get started.

Cary H. Sherman:
    Before turning to the first question, let me take the opportunity to thank you for allowing me to talk with you about an issue that is critical to us, and to answer the questions you may have.

We understand how difficult this issue is for college administrators. And we truly respect the values that universities bring to this debate, and their desire to balance their role as educators with the freedom of their students to learn for themselves. Our companies HAVE transformed how they do business, making available everything they possibly can on as many platforms as possible. But we are still suffering from a pervasive mindset that "if it's online and available, it's free for the taking." That mindset is damaging not just to us, but to countless others who want to build legitimate businesses online. And it devalues not just music, but intellectual property generally -- and it is intellectual property that is the basis for our economic future as a nation. I truly believe that teaching cyber-ethics is a critical role for universities to play in the 21st century, and the prevalence of illegal downloading on college campuses is an ideal "teachable moment." The only question is how it's going to be taught.

Question from Lewis Hyde, Berkman Center, Harvard Law School:
    The recording industry regularly asks colleges to police their students in regard to infringement. Why is it the task of colleges to do this police work, rather than the police?

Sharing files over the internet is not illegal per se; that depends on what's in the file and on what it is being used for. An accusation of music piracy is not a proof of music piracy: questions of evidence, and of fair use, and of educational exceptions to infringement come into play.

If colleges "pass along messages" that direct students to "pay lump sums to record companies," colleges become an arm of the recording industry, bypassing their educational role (teaching about fair use, for example) and bypassing legal due process, if in fact there is a criminal charge to be made.

For these reasons I believe that colleges should decline this RIAA request. How would Mr. Sherman respond to the background assumption here, that the industry, the colleges, and law enforcement are distinct institutions, and that there is good reason to keep their separate roles clear?

Cary H. Sherman:
    Lots of questions in here, but let me try to respond generally. First, we do not ask colleges to police their students. But we do expect colleges to be proactive in educating their students about illegal downloading, about their network "acceptable use" policies, in enforcing their policies and the law when violations are brought to their attention, and in offering legitimate alternatives so students can get music legally rather than illegally. We also believe that colleges should consider technical measures to impede illegal use of campus networks, by filtering out infringing transmissions. This would benefit colleges by preserving their bandwidth for legitimate academic purposes (especially important when estimates of illegal use go as high as 90% of available bandwidth), and it would send the right message to students that illegal behavior is not acceptable. There are many schools that use technical measures to ferret out plagiarism -- why should they use technical measures to at least inhibit illegal downloading?

You say that sharing files over the Internet is not illegal per se, and this is of course true. But a "filter" (such as that marketed by Audible Magic" would only prevent illegal transmissions and nothing else.

As for asking colleges to pass along messages, we are not asking them to tell their students what to do -- just to give us an opportunity to convey our message to their students directly, leaving it up to the student how to proceed. A university can encourage students to retain counsel, or even provide counsel, to advise on whether the student's behavior might qualify as fair use. But let's be honest -- every court that has looked at the fair use question in the context of illegal downloading has concluded that the doctrine doesn't apply, and it's going to be a very exceptional case where it does. It's a little misleading to suggest to students that downloading entire copies of songs may be a fair use.

Final point: Sure, the industry and colleges are distinct institutions (law enforcement isn't really relevant here because there haven't been criminal proceedings for p2p on college campuses at this point). But that doesn't mean they don't share a common interest in teaching that music, movies, academic writings and all other forms of intellectual property have value and that it's both illegal and immoral to take it without paying for it.

Question from Dan Carnevale:
    Are most colleges choosing to pass the pre-litigation notices on to students?

Cary H. Sherman:
    To date, virtually all colleges have chosen to pass along the pre-litigation letters. One school has publicly declined to do so. Frankly, it seems to me that a school is not doing its students a favor when it deliberately withholds information that that student may want, and denies its students the opportunity to decide for themselves how to handle an impending lawsuit.

Question from Dan Carnevale:
    And are students who get the notices actually choosing to settle out-of-court?

Cary H. Sherman:
    So far, 198 students have settled from the first round of pre-lawsuit letters. Obviously, many students are choosing to settle rather than face a lawsuit. We think that speaks to the clarity of the law and students' understanding that they've been caught in a clear case of infringement. Hopefully, other students will get the message that illegal downloading carries real risks.

Question from Middle Tennessee State University:
    P2P file sharing has "substantial non-infringing uses" that today's music business students must be free to explore. The RIAA's campaign of lawsuits and pressure on higher education is overbroad. Where does Mr. Sherman expect the next generation of industry leaders to come from if they do not have unfettered access to the technologies impacting the industry today?

Cary H. Sherman:
    Unfettered access to technology is valuable, but that doesn't equate with unfettered right to steal. Of all people, music business students should understand the need for creators of music to be compensated, or else there is no business for them to join.

There has never been a worse time to get into the music business than right now. Songwriters in Nashville are at half the level they used to be, and their royalties are too. The "For sale" and "For rent" signs on Music Row tell the story. Music business students need to set an example of what is appropriate behavior online.

Dan Carnevale (Moderator):
    We're about half way through the chat. Keep those questions coming.

Question from Casey Green, The Campus Computing Project:
    The RIAA has engaged in an aggressive media and Congressional campaign targeting colleges and college students when ample evidence confirms that consumer ISPs (for example AT&T, Comcast, TimeWarner and Verizon, among others) play a much larger role as conduits for illegal P2P traffic. For example, fully 94 percent of RIAA's 8400 "John Doe" legal filings in 2004-05 were NOT college students.

Why has the RIAA avoided pursuing consumer ISP for their role P2P traffic? Why does the RIAA believe that colleges and universities should be held to a higher standard when ample evidence confirms that colleges are far more responsible about intellectual property and P2P issues than consumer ISPs?

Cary H. Sherman:
    We have asked consumer ISPs to pass along infringement notices to their customers, and those requests are still being considered. And a number of large commercial ISPs have sent educational messages to their subscribers. But let's face it -- an ISP has a fundamentally different relationship with its customer than a university with its students. Universities aren't mere providers of network services -- they are educators who provide network access as part of an educational mission.

Moreover, we're finding that the problem of illegal downloading is more prevalent on college campuses than the rest of the population. More than half of college students surveyed said that they download movies and music illegally. and 2/3 of the music acquired by college students was obtained illegally. College students have always been an incredibly important demographic -- they were the biggest music fans, and the biggest music buyers. They're probably still the biggest fans, but their among the smallest buyers of music. Music acquisition is up, but payment is down.

Question from Dan Carnevale:
    The University of Nebraska at Lincoln made headlines when it tried sending the RIAA a bill, citing processing costs for all of the copyright-infringement notices the trade group had sent to the institution. I'm assuming you won't be paying that, but it does raise an important question: Should colleges be responsible for the cost of tracking down file-sharing students?

Cary H. Sherman:
    Universities sought, and obtained, the protection of the Digital Millennium Copyright Act when it was enacted in 1998. Universities are treated as "ISPs" under that legislation. That gives them numerous safe harbors from possible copyright liability, but it also gives them certain legal obligations. One of those obligations is to take action to eliminate infringement when they become aware of it.

We go to a great deal of trouble and expense to identify infringement taking place, and it doesn't seem unreasonable to ask universities to do their part -- the part contemplated in legislation they supported -- to eliminate the infringement. And that's separate and apart from the obligations as educators to instill values in their students that will prepare them for the real world once they graduate.

Question from Jonathan Curtiss:
    Are RIAA pre-litigation letters to be considered DMCA cease and desist notices?

Cary H. Sherman:
    This is an interesting question, and it has been raised with us by counsel at a couple of universities. We believe that the pre-litigation letters can be considered DMCA notices, but to avoid any doubt, we are going to revise the letters going forward so that this is more clear. Obviously, we want the infringement to stop when we send the pre-litigation letter. But we also want the evidence of the infringement to be preserved, so that it is available as evidence in the lawsuit. So our letters will be both DMCA notices and "preservation of evidence" notices, which ask students to discontinue the infringing activity but to preserve the evidence of prior actions.

Question from University of Free Speech:
    The RIAA is targeting college students, who are very unlikely to have the wherewithal to mount a legal defense. Aren't you cherry-picking easy settlements to bolster the image of these suits, given the recent legal defeats you've suffered trying to sue grown-ups?

In the end, these suits are a simple money grab -- to the tune of $100 million so far?

And please explain the rationale behind pursuing people sharing music deliberately leaked by the band Nine Inch Nails at their concerts to promote an upcoming album.

Cary H. Sherman:
    First, there is hardly a money grab. This program COSTS us money; it's not a profit center. But we do it because we need to create risk for stealing music. I don't know where your $100 million figure came from, but it is totally imaginary.

We're targeting college students because they account for an undue percentage of the problem. Also, the habits they form in college will be with them for a lifetime. They have as much wherewithal to mount a legal defense as anyone else, maybe more. There are lots of attorneys who defend these cases pro bono, and that's just fine.

I don't know why you think we've suffered legal defeats recently. There have been some cases involving dismissals of the original defendants as we amend the complaint to name the responsible party in the household (generally one of the kids or a friend), but those are not defeats, those are the judicial system at work.

Question from Robyn, Washington, D.C.:
    Why in general is targeting universities so important that all of these initiatives are being taken? Also, how is the RIAA able to find all of these individual students to send notices to? Thanks!

Cary H. Sherman:
    We find these students the same way any other member of the public would find them -- by going on the internet in search of illegal downloads. And we're focusing on universities for all the reasons previously explained in answers to earlier questions.

Question from Jeff, liberal arts college:
    We find our students arrive with habits already well-developed regarding use of email, file sharing, web access, et al. Doesn't the educational (culture shift) need to be targeted in new or different ways that caters to the teenage culture, as much as to college students? How are RIAA and other agencies getting the message out to that younger age group?

Cary H. Sherman:
    A very good point. Universities have inherited this problem, they haven't caused it. And that's why we've initiated a number of educational programs for grades 3-6, 6-8 and high schools (in addition to universities). For example, the Close-Up Foundation has added the issue of illegal file-sharing to its annual publication of educational issues, and that's a great opportunity for students to think critically about the impact of what they're doing. And Close-Up does a wonderful job in presenting all facets of the issue (fair use, etc.). Another program is iSafe, which is a nationally recognized Internet safety program in schools across the country. They've added intellectual property to their curriculum, because it goes to the rights and wrongs of Internet use.

Question from Dan Coates, SurveyU.com (survey researcher):
    When students are asked, they feel that current laws are not in step with culture and technology. Does the recording industry see any downside to prosecuting an activity that practically every college student (98%) has done at some point?

Long term, is this good for business?

Cary H. Sherman:
    The attitudes you describe are among the most difficult challenges we face, and we understand that. Hopefully, as students become more aware of the value of intellectual property -- maybe when they create their own and begin to understand what it feels like when somebody takes it without permission or compensation -- they will begin to feel otherwise. (One clever grade school program has students in a class create a musical recording, and then another student takes it and hands it in for credit. What an interesting way to teach kids the value of intellectual property.)

No question, this is a long-term issue that will take years of effort. And new business models are emerging every day that may make this issue less relevant (we hope!). But no matter how the business models may evolve, they will still require a fundamental respect for the property rights of others to work. And at bottom, the program we're pursuing is teaching that property rights have value and need to be respected.

Question from Jeff, liberal arts college:
    You write "So our letters will be both DMCA notices and 'preservation of evidence' notices, which ask students to discontinue the infringing activity but to preserve the evidence of prior actions. " We have different obligations under 512(a) and 512(c), particularly since most of the p2p content doesn't reside on our servers but on individual computers. Can you clarify what you expect our action to be in relation to each of these sections of the law?

Cary H. Sherman:
    I'd be happy to have our General Counsel get in touch with you to respond to your legal questions. Please feel free to give us a call.

Question from University of Free Speech:
    Your recent emphasis on file sharing internal to campuses leads one to ask why not allow this type of sharing to be freed in return for a compulsory licensing fee? That would be a legitimate exchange which would benefit both sides in this situation. Students could share among themselves, which would provide a wider audience for your product while still compensating you somewhat.

Cary H. Sherman:
    This requires a longer answer than I can reasonably type. But very quickly:

Almost all copyright owners dislike compulsory licensing schemes, because government regulation has never outperformed the marketplace in terms of economic efficiency. This is especially true for a medium like the internet, which changes every few months and assumptions and decisions made before will have to be changed on the fly. Government regulatory decisions are usually years out of date by the time they are made.

Furthermore, a compulsory license for music would invite a compulsory license for all cultural works that can be digitized -- movies, software, videogames, books. After all, if you can't control piracy of music, isn't that also true of movies and other content that can be digitized? Would you really want the government to regulate the price that is paid for the entire cultural output of the United States? And would you want the government to decide how the money should be allocated? (Hint: I predict Eminem wouldn't get as much as the marketplace pays him now.)

And what about the international implications? Everyone in the rest of the world would take our music for free while taxpayers in the US pay a compulsory license fee? And how much would it be? I assure you it wouldn't be as much as the marketplace pays.

Cary H. Sherman:
    You've asked a whole lot of really good questions -- thoughtful, cogent, articulate. That's what makes this such an interesting issue to address, because there are so many ways to look at it. At bottom, though, we hope that higher ed will look at this as an opportunity to communicate important values to students. Universities probably create more intellectual capital than the rest of the economy. They have a huge stake in ensuring that intellectual property is valued. Your students are almost certain to work in an intellectual-property-related industry, rather than manufacturing. Our future depends on our intellectual property being respected, not just in the US, but in China and Korea and everywhere else. We need to start teaching those lessons at home, now.

Thanks for listening, and thanks for participating.

Dan Carnevale (Moderator):
    That's all the time we have for today's chat. Sorry we could not get to everyone's question. Thanks again to Cary Sherman for his answers. If you would like to continue the discussion, please visit the Chronicle Forums to carry on the conversation there.

And join us next week, when our Brown Bag guest will be David Wippman, Cornell's vice provost for international relations, who will discuss the internationalization of universities.