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The University of Texas at Dallas, P.O. Box 830688, Richardson, Texas 75083-0688

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News contact: Steve McGregor, UTD, (972) 883-2293, [email protected]

U. T. Dallas Economist to Join Harvard Debate
On Intellectual Property Rights in Cyberspace

Are Music Downloaders Criminals or Targets of Persecution?

Dr. Stan Liebowitz

RICHARDSON, Texas (Aug. 25, 2003) - A debate is raging in the worlds of entertainment, law and technology: when "Little Johnny" downloads his favorite rap tune from the Internet for free, is he engaging in a criminal act or is he simply reaping the benefits of being connected to Cyberspace? Should he be prosecuted or would that amount to persecution by overzealous, greedy corporate interests?

The debate is by no means solely an intellectual one -huge sums of money may be at stake, not to mention the definition of legal rights in the evolving digital domain.

The conflict will be showcased next month at a one-day forum at Harvard University in Cambridge, Mass., entitled "Digital Media in Cyberspace: The Legislation and Its Business Effects." The event, to be held Sept. 18, is sponsored by the Berkman Center for Internet & Society at Harvard Law School and Gartner/G2, the research arm of the business consulting firm Gartner, Inc.

The invitation-only conference will feature presentations by leading entertainment and media executives, civil liberties advocates, attorneys and scholars, including Dr. Stan Liebowitz, an economist at The University of Texas at Dallas (UTD) School of Management. The author of the acclaimed book, Re-Thinking the Network Economy: The True Forces that Drive the “Digital Market Place,” Liebowitz has conducted groundbreaking research on the economic effects of piracy on digital media.

The UTD professor of managerial economics will participate in a "point-counterpoint" panel discussion, potentially the conference's most intriguing session. Joining Liebowitz will be Cary Sherman, president of the Recording Industry Association of America, and John Perry Barlow, co-founder and vice chairman of the Electronic Frontier Foundation.

Sherman will represent the viewpoint of the recording industry, which last year sued several individuals, including college students, for illegal copying and distribution of copyrighted music. Those cases were settled for thousands of dollars each. His organization has threatened to bring additional lawsuits against individual computer users whom it claims are involved in substantial amounts of copyright infringement.

Barlow is Sherman's antagonist. His San Francisco-based group - which on its web site claims it is "battling to protect the rights of web surfers everywhere" - is helping defend those being sued by the recording industry.

Liebowitz stakes out the middle ground, saying that the recording industry has "cried wolf" with the introduction of every new technology, but that this time it has been harmed financially by unauthorized and uncompensated copying of music.

"I've conducted what is probably the most comprehensive empirical investigation on the impact of MP3 downloading of music," said Liebowitz. "The results show that the downloading of songs from the Internet is causing real damage to the music industry — a decline of perhaps 25 percent or more in the sale of CDs."

However, rather than "turning a lot of kids into criminals who are not" with thousands of individual lawsuits, Liebowitz proffers a less draconian solution.

"I'm in favor of digital rights management, which is technology that would prevent CDs from being copied," said Liebowitz. "It might require a new generation of CD players before this approach becomes feasible."

As a last resort, Liebowitz would support what is called a compulsory license. Under such a scenario, downloading of songs from the Internet would be permitted, but there would be a tax instituted on the sale of all musical CDs. The tax revenue would then be distributed to various parties in the entertainment industry.

Liebowitz foresees potential pitfalls with such a system, however. Determining who pays for such a system and how much money goes to whom are decisions that should be left to the market and should not be put in the hands of government agencies, he believes.

Then again, perhaps the threat of legal action will deter would-be music pirates, Liebowitz surmised.

"Maybe the recording industry will be successful and scare sufficient numbers of people so that the problem, although not eliminated, is sufficiently diminished," he said.

About UTD
The University of Texas at Dallas, located at the convergence of Richardson, Plano and Dallas in the heart of the complex of major multinational technology corporations known as the Telecom Corridor, enrolls more than 13,000 students. The school's freshman class traditionally stands at the forefront of Texas state universities in terms of average SAT scores. The university offers a broad assortment of bachelor's, master's and doctoral degree programs. For additional information about UTD, please visit the university's Web site at http://www.utdallas.edu.

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This page last updated
August 11, 2003