The Electronic Frontier Foundation's Fred von Lohmann has weighed in on the controversy surrounding the expected Warner Music proposal to allow ISPs to pay a license fee in exchange for the unlimited right of their customers to download music, in any format, using any protocol. In a nutshell, the proposal is fair and works if ISPs can sign up voluntarily because they want to offer a "download all the music ever made" service; it's a problem if the ISPs are forced to pay a tax, whether or not they want to offer the service.
Voluntary for Music Fans. People who do not share music shouldn't have to pay for a license they don't need. After all, we don't have a "music tax on restaurants." Restaurants are free to experiment with no music, public domain music, or CC music, as they see fit. Internet users should have the same freedom. But this means that there will still be some enforcement against those who don't pay but keep downloading. That seems fair, and enforcement to get people to become paying subscribers will look very different from today's "mount a few heads on spikes to scare the rest" approach being used by the RIAA and MPAA.
Voluntary for Artists. Artists shouldn't be forced to participate if they don't want to. That said, the vast majority of creators and rightsholders will likely opt in, rather than opt to sue individual Internet users. After all, 99% of all songwriters are members of one of the three performing rights organizations (PROs) we have today. It sure beats having to find and sue every radio station every time it plays your song.
Not a Collecting Society, but Collecting Societies. Freedom of choice for artists only means something if they have options to choose among. Competition is critical to keeping collecting societies honest and transparent. If you compare the three PROs that service songwriters in the US to the unitary, government-backed collecting societies in the rest of the world, our system wins hands down on these fronts.
Voluntary for ISPs. There is no need to force ISPs to offer blanket sharing licenses to music fans. Some ISPs will voluntarily bundle the license with their offerings ("buy the all-you-can-eat music package for $5 more"), some ISPs may choose not to. Universities might choose to buy campus-wide licenses in bulk in order to stop the RIAA's college litigation campaign. Software companies like LimeWire might choose to bundle the license fee into their software, paid either by subscription fees or advertising. At the end of the day, it's the individual fan who needs the license, and she should have lots of ways to buy it.
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