Black Monday

As I demonstrated last fall when I predicted a Kerry victory, my powers of prognostication are nothing to write home about. OTOH, I suppose this demonstrates the wisdom of the old saw that you ca’t judge an outcome by oral argument.

We lost Brand X by 6-3. Interesting split that put Scalia and Thomas on opposite sides but, as I have observed in the past, telecom issues do not fall into the neat conservative/liberal divisions everyone is so fond of making.

Grokster also went the other way, with the Court not even remanding for trial.

I will have more later when I have read the decisions. Right now I’m trying to sort things out.

Stay tuned . . .


  1. Michael A. Burstein

    The Grokster decision has certainly surprised me. I found your analysis this past weekend to be quite cogent, and I am amazed that you turned out not to correct.

  2. On closer examination, I may have been right about what the court thought it was doing, but I think they did it wrong.

    As I suggested, they re-affirmed a basic principle about dual use technologies but said that if the company actively marketed them for the illegal use, then the company can be liable. What is surprising is how much emphasis is placed on the second idea. The court makes much of the fact that Grokster and Streamcast marketed their software to former Napster customers to take the place of Napster for illegal file sharing.

    But my very brief review is that they have made it too easy for movie and music companies to file a collorable claim for the purpose of intimdating tech companies. The big losers here are Apple, Tivo, and other companies that want to provide technologies that people want to use so that they can be producers of content themselves. But after this decsion, it will be difficult if not impossible for apple to make it easy to provide tools for editing media without expensive, cumbersome DRM. So consumers will pay higher prices for worse products.

    On the plus side, when we fall suficiently behind countries like Japan and South Korea, Congress may act.

  3. It strikes me that at least Grokster etc. still have their opportunity to defend against the charges of intent when the case returns to the lower courts.

    Brand X, on the other hand, seems to me to be a devastating blow to competition in the field of information delivery. When the most likely result in most markets is the huge monopoly telco facing off with the huge monopoly cable company (with the possible later addition of the huge monopoly power company, if BPL ever becomes viable), real competition is clearly not on. The options don’t seem too hot to me, either (changes at the FCC, to whose soi-disant expert opinions we the people must now defer; legislative opportunities; municipal broadband, large ISPs breaking the cable monopoly by finding a way to build out their own cable systems — have I missed any significant ones?).

    WRT your last sentence, I wouldn’t put it past the Administration to act, aggressively, in some way that includes weaponry or foolishly conceived economic moves.

  4. You may recall my prediction at Contata was that after Raich and Kelo, another bad decision in Grokster was needed to complete the Rule of Three. Once again, silly intuition trumps expert analysis. đŸ™‚

    I haven’t really been following Brand X, but my own immediate reaction is with the long-standing problem of granting local cable monopolies, and that the problem should be fixed on that level, rather than by diddling with what the cable companies can do with their infrastructure. I’m familiar with natural monopoly arguments but have little sympathy for them.

  5. Harold, I look forward to seeing more commentary from you about the Grokster decision.

    For now, from my own layman’s reading of the decision, I don’t see anything wrong with it. The big worry about the case, as I understand it, was that Grokster would be held liable on the grounds that most of their users use the technology for illegal purposes. That would indeed have created difficulties for legitimate technology providers such as Apple.

    I note that only three judges held that Grokster could be held liable on those grounds: Ginsburg, Kennedy and Rehnquist. On Saturday you predicted that only two judges would hold that position: Ginsburg and Kennedy. So you got two out of three right; not a bad prediction :-).

    Anyway, this was a minority position. The court’s decision held Grokster liable because, by targeting former Napster users in their marketing, they actively promoted the illegal use of the technology. I don’t see what’s wrong with that decision. And I don’t see why Apple, or other companies that try to provide technologies to help authors and creators, would have any trouble as a result.

  6. Do I understand correctly that no one has yet been held liable? The Supremes have only determined that Grokster’s behavior does not allow them to be immune from liability by hiding behind the technology as an indirection, and the actual liability is yet to be determined. Yes?

    At first review, this sounds fair enough: incitement to break the law should bring responsibilities. But even this seems to fall when I push on it a bit. For example, if I understand what’s quoted of Larry Lessig, everything fixed in any media is copyrighted, whether the author wants to protect or not. No copies are allowed without permission, and fair use has nothing to do with it (e.g., under DMCA). Now consider how many perfect copies of email are made between the author and the recipient. (I’ll skip the details, but I assure you that it is a LOT.) How many different entities along the chain have broken the letter of the law? Now, are any of these entities liable for having promoted email services? What’s the difference between this and Grokster? One possible differential is that the copyright holders are complaining. But I’ve complained (in writing) about spam, and about my email address being forged to send spam. Is my complaint less significant in law than MGM’s or the RIAA’s? I guess no one has yet used my writing (other than the email address I have chosen for myself) to get through Bayesian spam filters, but maybe that’s only a matter of time.

    I have also suggested on this site (…) that a freedom divided against itself cannot long stand, and have encouraged folks to stretch fair use as far as they – and not the law – feel is right. Am I as liable as Grokster, or am I merely exercising free speech? A possible differential here is that I am not profiting from such advocacy. But suppose I got paid for an article? Or paid for work that results in email being sent?

    Now suppose that the transfer of some of the Grokster bits occurs via SMTP (the protocol by which mail gets propagated) rather than HTTP (or whatever they currently use).

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