I think that EFF's proposed filesharing plan, A Better Way Forward: Voluntary Collective Licensing of Music File Sharing, is definitely a step forward in the discussion, but as I've discussed in this space before, I still have a few concerns about its success. See, Thoughts on the EFF P2P Solution White Paper and Victory for EFF Creates Problems for EFF's Filesharing Solution. Two recent articles raise further concerns.

Broadband Price Sensitivity

C|Net News has published a commentary from Forrester Research regarding broadband pricing (In broadband game, price beats speed). The study shows a high degree of price sensitivity for broadband subscribers, who favor slower DSL connections at $10-$20 less per month than higher speed cable broadband:

• Today's broadband adopters are more price-sensitive. Two factors motivate new subscribers the most: Being offered a discount package of broadband and other services, and the loss of free dial-up service. With 43 percent of new subscribers motivated by a discount package, that motivation now exceeds the promise of greater speed for multimedia.
• Tomorrow's adopters will be even more mainstream. Recent broadband subscribers are lower-income and less technology-optimistic than more tenured ones--exactly the types of consumers who are more price-sensitive and need less speed. This trend will continue: Consumers who plan to sign up for broadband in the next year will be even lower-income and no more technology-optimistic than today's new subscribers and will continue to prioritize price over speed.

This may mean additional difficulty in convincing ISPs to adopt blanket licenses for their customers that would add ~$5/month to their bills. Many of the mainstream broadband subscribers aren't going to be very interested in filesharing and will likely prefer to opt for an ISP that is cheaper and doesn't automatically incorporate the proposed music license. Free riders, who want to download without uploading, will also tend to choose the cheaper ISPs. Of course, ISPs that do adopt the blanket licenses get a double bandwidth whammy, since much of the downloading will be coming from them and not from the non-music-licensed ISPs.

Audible Magic for Artist Compensation Measurements

EFF's Ren Bucholz on his Trubble blog ("your cultural bloodbank"), writes about the potential for Audible Magic's music fingerprinting technology (which is being touted by the RIAA as a P2P filter) to be used to "interoperate with relatively open networks to determine fair compensation for artists" (Acoustic Fingerprinting and the Future of P2P). In other words, the technology would be great for Nielsen-like measurement of file transfers on P2P networks, which could then be used to help determine artist compensation. Indeed. However, this creates a Catch-22 for any P2P software company that implements this.

As I discussed earlier (Audible Magic's Sleight of Hand) with Derek Slater (Spin on Audible Magic), Audible Magic-style filtering (or compensation measurement) requires some element of centralization in order for the system to work. The P2P client has to send information (such as the music's "fingerprint") to the central Audible Magic servers for checking/recording.

Unfortunately, centralization of this sort leads to liability for P2P companies under the Napster doctrine, see EFF's What Peer-to-Peer Developers Need to Know about Copyright Law. Having set up Audible Magic to record file transfers for artist compensation, it is likely that P2P companies would be further burdened to use Audible Magic-like technology to filter video files, photos, software and other file types frequently shared via P2P.

This is an inherent problem for EFF's solution. Any P2P software company that incorporates centralized elements to facilitate musician compensation may consequently find themselves vulnerable to lawsuits from photographers, programmers and the MPAA.