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There is no question that Congress and the Judiciary have served these purposes in copyright decisionmaking. In fact, the idea of group compromise is no secret in this field. The 1976 General Revision of Copyright Law calls upon the Register of Copyrights to submit a report to Congress "setting forth the extent to which this section [108] has achieved the intended statutory balancing of the rights of creators, and the needs of users." Thus, the balancing concept is specifically written into law in the photocopying area. Similarly, House Report 94-1476 on page 65 speaks of the definition of "fair use" [Section 107 ) as "balancing the equities."

The setting of the royalty rate for the phonorecord manufacturing license between the 3¢ per musical piece manufactured asked by some representatives of the publishers and writers and the 2¢ requested to be retained by representatives of the record manufacturers, and the further compromise between the Senate-passed royalty fee and the Housepassed royalty fee is an additional example. The statutory balancing of the membership of the National Commission on New Technological Uses of Copyrighted Works is another example; and in the statement contained within House Report 94-1476 on page 360, the Hon. George E. Danielson states (about Section 111) that:

".... the committee has arrived at a solution which I submit
is fair and equitable to both the owners and the users of
copyrighted materials...."

It can be reasonably expected that decisionmaking will continue in a primarily pluralist mode for the foreseeable future in order to resolve disputes in which a balance of equities is the primary consideration. Probably, the Copyright Royalty Tribunal will be aided in its efforts by a rational analysis of economic issues.

6.2.2 The Power Arena Model

Professor Theodore J. Lowi has defined domestic policies as falling into one of three arenas of power: distribution, regulation, or redistribution. Lowi states that:

"distribution (was_T almost the exclusive type of national
domestic policy from 1789 until virtually 1890. Agitation
for regulatory and redistributive policies began at about
the same time, but regulation had become an established fact
before any headway at all was made in redistribution."75

Distributive policies are those decisions that can be made in the short run without regard to limited resources. The standard example is 19th century land policy. Distributive policies are typically capable of

lisaggregation so that what is being distributed can be dispensed in small units. Under distribution, indulged and deprived may be members of the same group (i.e. the winner and loser of a Government contract or grant).

Regulatory decisions normally affect an entire industry and often concern the ability of that industry to do business in the long term. Within the context of the regulatory structure, there may be distributive decisionmaking (e.g. assignment of a TV channel or an airline route), but regulatory decisions typically affect all industry members in a similar manner. Often, the regulatory policies affecting one industry are of little concern to other industries.

The redistributive arena, according to Lowi, involves issues that concern "haves and have-nots, bigness and smallness....."76 Typical issues that appear in the redistributive arena are overall tax policy and policies on unemployment and retirement income. Industry groups concerned with separated regulatory policies are likely to find a common ground in the redistributive arena.

The importance of the power arena model is in what it says about the changing nature of copyright decisionmaking. In 1790 and until about the time that Lowi dates the beginning of regulatory policies, copyright fitted neatly into the distributive arena. The contention among factions was not a primary factor. Clearly, individual copyrights have been and will continue to be dispensed in small units in the short run without regard to limited resources. In fact, copyrights (and patents) may be the ultimate distributive good since originality and creativity are essentially independent of resource constraints (although nurturing these qualities may not be). The increase in registered copyrights and patents does not diminish the stock of un-issued copyrights and patents waiting for new claimants.

While the distribution of copyrights continues, it seems clear that much copyright policymaking since the turn of the century has been in the regulatory arena, and is increasingly so. This has been due to the increasing number of secondary producer groups ("users") who have been contending the boundaries of intellectual property rights with primary producers. Each field of copyright has its own contenders, and major decisions in each field treat all producers in the same way, as the regulatory arena requires. Not surprisingly, Lowi recognizes that his regulatory arena is very close in concept to the pluralist model of policymaking. Another factor causing an increase in regulatory policymaking in copyright is the increase in the sensitivity of public decisionmakers to monopoly and other forms of market failure such as high transaction costs; and the consequent increase in public institutions and mechanisms involved in correcting these market problems. Thus, there are now four compulsory license types within the copyright domain, a Copyright Royalty Tribunal to oversee certain aspects of these licenses, and a Federal court supervising the performing rights area. It remains to be seen if the photocopying problem can be successfully concluded with a collective mechanism that does not involve additional, permanent Federal intervention; and final Congressional action in the area of computerreadable works is yet to come.

Very little about copyright is directly in the redistributive arena unless the truism is cited that, in the long run, all policies are redistributive. It could be said, however, that activities that prevent monopoly pricing of copyrighted works are redistributive since prices affect the ultimate consumer. At the same time, it may be noted that, except for anti-monopoly and infringement prosecution activities in the Department of Justice, the only Executive Branch concern with copyright is as a peripheral policy issue that may affect research through the availability of data and scientific journals, and may affect TỦ viewers in the quality of available programs. There is no administrative "program" about which one could make cost-benefit calculations with concern for objectives achieved in relation to funds spent. Copyright is now primarily a regulatory balancing issue involving producer interests and special classes of users, and is likely to remain so. Congress appears to regard the balancing of equities in copyright as a distinct function reserved to itself.

The future cannot be predicted with any certainty but it is possible that additional technological change, coupled with increases in the costs of resources such as raw materials, may bring copyright policymaking more into the redistributive arena. If that occurs, it is likely to be in a context in which copyright is an element of a more consumeroriented issue, such as "public access to information.


It is most interesting that Lowi dates the beginning of the regulatory policy era at approximately the start of growth in innovations of information technology. The effect of new innovations is to make available new opportunities, which means in economic terms, new industries and increases in investment and employment; but which means in political terms, increases in the number of interest groups and the consequences of their activities.

Furthermore, another effect of new innovations is to make ambiguous the definitions of property rights that were perfectly clear before the innovations. As John Dewey stated many years ago,

"Every thinker puts some portion of an apparently stable
world in peril and no one can predict what will emerge in
its place."77

Thus, "public performance for profit" has an entirely different meaning after the commencement of commercial broadcasting than before. "Fair use" has an entirely different meaning after the diffusion of high speed photocopying than before; "copy" a different meaning after the invention of punch cards and magnetic tape than before.

It seems completely in the spirit of free enterprise for an innovator to attempt to combine a new technology with the new ambiguity or uncertainty it raises in order to develop a new market and a new industry. Should the innovator succeed, a new interest group is formed around the successful technology, but the proliferation of interest groups must generate additional conflict in the contention for the same property right.

Consequently, the nearly inevitable result of the successful introduction of new technology is increased regulation as contenders pursue their rights through the Judiciary and Congress. This is happening with information technology and copyright as it has in other fields. To quote from Professor David Truman in The Governmental Process:

"The causes of this growth [in organized interest groups_I
lie in the increased complexity of techniques for dealing
with the environment, in the specializations that these in-
volve, and in associated disturbances of the manifold expec-
tations that guide individual behavior in a complex and in-
terdependent society. Complexity of technique, broadly con-
ceived, is inseparable from complexity of social structure.."78

Thus, complex ways of using information technology, for example by amplifying distant TV signals and distributing them by cable to viewers, or by abstracting scientific articles, combining them with key words and distributing them to researchers via terminals attached to a computer with a logical query system, must involve complex rules of property rights in a society where such things are important.

By setting priorities that establish the importance of a balance of property rights, rational decisionmakers must then establish a working regulatory system that minimizes transaction costs but allows for the balance of rights established. This may be a complex system of rules, and if the rules appear to be difficult to follow or enforce, perhaps the priorities must be reviewed. Care must be exercised, however, so as not to throw out basic principles simply for the sake of simplification.


In proposing recommendations for the application of copyright to computer-readable works, a set of criteria must be used. It seems reasonable to suggest that the overriding criterion must be "the public interest," however, that may be defined.

One aspect of the public interest is how decisionmaking affects the individual citizen. It has been pointed out earlier in this chapter that in the twentieth century, copyright decisionmaking has involved contending interests groups gathered around different functions related to copyrighted works. The individual citizen, in general, has not been directly involved. Such decisionmaking, not involving the public directly but having an ultimate impact, has concerned some observers. The following statement of concern is by Victor Ferkiss in Technological Man: The Myth and the Reality:

"The danger is not that industrialism has destroyed the
intermediate group in modern democratic society but that
the group is so strong that the individual, instead of
finding freedom in the interstices created by group com-
petition, may be crushed between the contending parties,
or that instead of a dominant total government riding rough-
shod over an inert society, public purposes will be lost
sight of in the feudalistic struggle of competing special

Professor David Truman considered the question raised above and concluded that "multiple memberships in potential groups based on widely held and accepted interests"80 prevents the culmination of a situation such as that suggested by Ferkiss. That is, while groups may contend over specific property rights, the members of the groups share common fundamental views that prevent the erosion of individual rights that would have the effect of hurting everyone. Truman calls these shared attituded the "rules of the game" and quotes others as describing them as a "general ideological consensus" and as "a broad body of attitudes and understandings regarding the nature and limits of authority." As a further description, Truman states that ".... the 'rules' would include the value generally attached to the dignity of the individual human being, loosely expressed in terms of 'fair dealing'...."81 For the purposes of proposing recommendations on computer-readable works, this study has enumerated in Section 1.3 those "Findings of Basic Principles" which it conceives to be the applicable "shared attitudes" and "rules of the game." As stated in Section 1.2, these findings are not be be taken as the final, definitive view. Other analyses may reveal different interpretations. Additional contributions to the literature are welcomed.

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