Pursuing a Legislative Approach

Like in Korea, American legislators might need to endorse a bill that requires ISPs to send warnings to Internet users every time they are found to violate the copyright laws. After three offenses, their Internet should be cut off. Besides, users would need to pay a fine or additional fee if they want to resume the Internet services. These fees then go directly to the artists or recording label companies.

There are definitely many positives to increase ISPs accountability. It makes sense for ISPs to be burdened with the enforcement and payment to music companies. The online black market for music is so pervasive that some estimate that it accounts for 95 percent of Internet traffic in the night hours (Castle at al., 2008). Hence, it is less likely that recording companies would be able to do anything unless ISPs are fully cooperated. Besides, since ISPs serve as the medium and benefactor for the increase in the Internet use, it seems feasible that the violators pay the ISPs for their illegal music downloading.

Some negatives would exist for ISPs cooperation. The cost sustained by ISPs is estimated to be significant (Seidenberg, 2010). High cost will be a deterrent for ISPs to participate willfully and would suggest they lobby against requiring them to do anything and increasing their liability. Another problem with having ISPs charge a fee is that the actual payment and royalty fees would be hard to assess.

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Conclusion

The U.S. should solve the Internet piracy dilemma due to job loss, government tax loss and music industry revenue loss by implementing additional provisions regarding ISPs responsibility. However, civil rights endorse personal privacy of every individuals. In order to avoid privacy violations, the ISPs might need to build a software program that would detect only music downloading actions. Music companies should also need to support ISPs companies by offer them some financial incentives. That might be to give the ISPs a certain percentage of total fine they impose upon violators. This action would alleviate the accountability burden that recording companies put on the ISPs. Neutralizing two major negatives of the legislative implementation proposal will make this plan more viable.

Doing Nothing

By Jimmy Hoesan

Do nothing is also one alternative that government and artists should consider. Online piracy has caused decrease in music sales by an average of 7% per year (Sinha & Mandel, 2008). This is happened to well-known artists. On the other hand, online piracy could have a strong network effects which benefits new-come artists. Some customers who pirate would have bought the music album. The result of this network effects can significantly increase the market size, therefore the customers who download music for free can benefit the artists by increasing the size of potential market (Jain, 2008). Artists could easily get famous because online piracy. Even though later on the artists’ music royalty would be decreased, online piracy was helping them to be well-known in the music industry. By doing nothing, both sides benefit each other.

IFPI said that fighting piracy should be a government job and might be very costly. According to one study, fighting piracy infringers may cost as much as £365 million (approximately US$ 596 million) per year and it will be a top problem (Anderson, 2009).

Adopting a Music Tax Approach

By Chao-Hsuan Wu

We are living in a free download era. Although record companies loss money from CD sales, they can earn money from concerts or diverse merchandises. Record music has become a tool to get people pay for concerts or related products. However, record companies still need find ways to guarantee their revenues. In fact, there is no ways that can totally prohibit illegal download and ensure revenue to music industry. In fact, research pointed out that a choice between downloading a new album for free and paying 5 dollars, only 18.3 percent, or less, chose to pay the 5 dollar. (Arrington, 2008).

Music tax may be an effective way to create guaranteed revenue. If people can pay few dollars, they can download all music and put it into their iPod, Mp3 and their cars. The Songwriters Association of Canada called for a mandatory 5 dollar per month ISP music tax before. Although the idea just began, it may be the solution to solve deficits problems. (Arrington, 2008).

However, some people doubts that the music tax will kill music innovation. Because everyone is asked to pay music tax, less competition in music industry will lead to remove creative innovation. Composers will not be reluctant to pay more time and cost to make good music due to ensured revenue. Besides, if music tax can help music industry get stable revenue, other people could get into the industry to share the market. In the end, music industry still has to collapse or crash. (Arrington, 2008).

Assigning a Dedicated Government Agency

One of the main issues with enforcement of digital copyright laws is the lack of a dedicated agency to deal with the issue. Currently, multiple agencies are roughly defined to deal with music piracy, namely ICE, the Patent Trade Office (PTO), the Federal Bureau of Investigation (FBI), and the Department of Commerce.

A specific organization should be created to deal with the problem. The organization could be called the Intellectual Property Enforcement Agency (IPEA) and its only task would be the prosecution of people who are downloading or sharing music. Additionally, the agency could also focus on the education of the general public as to the country’s music copyright laws and penalties.

This solution’s main advantage would be a focused and dedicated approach to enforcement of copyright laws. The organization would also not be affected by shifts in resources suffered by the FBI and ICE. The conflict in resources usually causes these agencies to have inconsistent results when prosecuting and investigating file sharing. The IPEA could also be able to train more technical staff to deal with a crime that is less likely to  require the normal resources of the day-to-day field operations of the FBI or ICE. Another advantage would be the ability of the IPEA to target both sharers and more importantly downloaders because of superior technology and focus. One other incentive for the government to increase enforcement would be the increase in tax revenue. According to RIAA, “a loss of $422 million in tax revenues, $291 million in personal income tax and $131 million in lost corporate income and production taxes” ( RIAA, 2010).

The main disadvantage is that the creation of one more government agency adds more overhead to the government as a whole. Additionally, funding of the new agency would be difficult to swallow given the current economic climate. American tax payers may be more inclined to let the RIAA fund its own lawsuits rather than involve the U.S. government any more than the government already does. This method also largely ignores the international factor involves in music piracy and the lack of jurisdiction and enforcement in those countries.

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